Dated January 20, 2016
AMENDED AND RESTATED INDENTURE
dated as of August 11, 2011
(as amended and restated as of January 20, 2016
between
GRAN COLOMBIA GOLD CORP.
(as issuer)
and
EQUITY FINANCIAL TRUST COMPANY
(as trustee)
relating to the issuance of
SENIOR UNSECURED CONVERTIBLE DEBENTURES DUE 2018
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Section Page
Article 1 INTERPRETATION ...... 1
1.1 Definitions ...... 1
1.2 Exhibits ...... 16
1.3 Meaning of “outstanding” for Certain Purposes ...... 17
1.4 Interpretation Not Affected by Headings ...... 17
1.5 Extended Meanings ...... 17
1.6 Day Not a Business Day ...... 17
1.7 Currency ...... 17
1.8 Other Currencies ...... 18
1.9 Statutes and Agreements ...... 18
1.10 Invalidity of Provisions ...... 18
1.11 Applicable Law ...... 18
1.12 Entire Agreement ...... 18
Article 2 THE DEBENTURES ...... 18
2.1 Designation and Issuance of Debentures ...... 18
2.2 Description of the Debentures ...... 18
2.3 Form of Debenture Certificates ...... 19
2.4 Ranking ...... 19
2.5 Book Entry Only Debentures ...... 19
2.6 Signatures on Debenture Certificates ...... 20
2.7 Certification ...... 21
2.8 Interest ...... 21
2.9 Issue of Substitutional Debenture Certificates ...... 22
2.10 Option of Holder as to Place of Payment ...... 23
2.11 Record of Payments ...... 23
2.12 Surrender for Cancellation ...... 23
2.13 Right to Receive Indenture ...... 23
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Article 3 REGISTRATION, TRANSFER, EXCHANGE AND OWNERSHIP OF DEBENTURES AND DEBENTURE CERTIFICATES ...... 23
3.1 Registers ...... 23
3.2 Transfer of Debentures ...... 24
3.3 Restrictions on Transfer of Debentures Represented by Global Debenture Certificates ...... 24
3.4 Transferee Entitled to Registration ...... 25
3.5 Closing of Register; Recording of Certain Transfers ...... 25
3.6 Exchange of Debentures Certificates ...... 25
3.7 Ownership and Entitlement to Payment ...... 25
3.8 Evidence of Ownership ...... 26
3.9 No Notice of Trusts ...... 26
3.10 Charges for Transfer and Exchange ...... 26
Article 4 ISSUE AND DELIVERY OF DEBENTURES ...... 26
4.1 Issuance of Debentures ...... 26
4.2 No Debentures to be Issued During Default ...... 27
Article 5 PURCHASE OF DEBENTURES IN OPEN MARKET ...... 27
5.1 Purchase of Debentures ...... 27
5.2 Cancellation of Debentures ...... 27
5.3 Debenture Certificates Repaid in Part ...... 28
Article 6 CHANGE OF CONTROL PURCHASES ...... 28
6.1 Change of Control Purchase ...... 28
6.2 Change of Control Notice ...... 28
6.3 Change of Control Purchase Notice ...... 28
6.4 Procedures for Exercising Change of Control Purchase ...... 29
6.5 Consummation of Change of Control Purchase ...... 30
6.6 Withdrawal of Purchase Notice ...... 30
6.7 Notification by Trustee ...... 30
6.8 Deposit of Change of Control Purchase Price ...... 30
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6.9 Debenture Certificates Purchased in Part ...... 30
Article 7 REDEMPTION OF DEBENTURES ...... 31
7.1 Applicability of Article ...... 31
7.2 Partial Redemption ...... 31
7.3 Notice of Redemption ...... 31
7.4 Debentures Due on Redemption Dates ...... 31
7.5 Deposit of Redemption Monies ...... 31
7.6 Failure to Surrender Debentures Called for Redemption ...... 32
7.7 Cancellation of Debentures Redeemed...... 32
7.8 Effect of Redemption Notice ...... 32
Article 8 CONVERSION OF DEBENTURES ...... 32
8.1 Applicability of Article ...... 32
8.2 Conversion Price ...... 33
8.3 Notice of Expiry of Conversion Rights ...... 33
8.4 Revival of Right to Convert ...... 33
8.5 Manner of Exercise of Right to Convert ...... 33
8.6 Adjustment of Conversion Price ...... 35
8.7 No Requirement to Issue Fractional Common Shares ...... 39
8.8 Corporation to Reserve Common Shares ...... 40
8.9 Cancellation of Converted Debentures ...... 40
8.10 Certificate as to Adjustment ...... 40
8.11 Notice of Special Matters ...... 40
8.12 Protection of Trustee ...... 40
Article 9 WITHHOLDING TAXES/PREPAYMENT OBLIGATIONS ...... 41
9.1 Withholding Taxes ...... 41
Article 10 COVENANTS OF THE CORPORATION...... 41
10.1 Positive Covenants ...... 41
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10.2 Negative Covenants ...... 43
10.3 Maintenance of Offices or Agencies ...... 44
10.4 Money for Payments to Be Held in Trust ...... 44
10.5 Trustee’s Remuneration and Expenses ...... 45
10.6 Not to Extend Time for Payment of Interest ...... 46
10.7 Examination and Audit ...... 46
10.8 No Amalgamation, Merger, Consolidation ...... 46
10.9 Trustee May Perform Covenants ...... 47
10.10 Certificates Relating to Compliance and Default ...... 47
10.11 Financial Statements ...... 47
10.12 2018 Debenture Sinking Fund ...... 47
Article 11 DEFAULTS AND REMEDIES ...... 48
11.1 Events of Default ...... 48
11.2 Notice of Event of Default ...... 49
11.3 Acceleration ...... 50
11.4 Waiver of Event of Default ...... 50
11.5 Enforcement by the Trustee ...... 50
11.6 Suits by Debentureholders ...... 51
11.7 Application of Money ...... 52
11.8 Distribution of Proceeds ...... 52
11.9 Remedies Cumulative ...... 53
11.10 Judgment Against the Corporation ...... 53
11.11 Immunity of Shareholders, Directors and Officers ...... 53
Article 12 CANCELLATION AND DISCHARGE ...... 53
12.1 Cancellation and Destruction ...... 53
12.2 Payment of Amounts Due on Maturity ...... 54
12.3 Repayment of Unclaimed Money ...... 55
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12.4 Discharge ...... 55
Article 13 MEETINGS OF DEBENTUREHOLDERS ...... 56
13.1 Right to Convene Meetings ...... 56
13.2 Notices of Meetings ...... 56
13.3 Chairman ...... 56
13.4 Quorum ...... 56
13.5 Power to Adjourn ...... 56
13.6 Show of Hands ...... 57
13.7 Poll ...... 57
13.8 Voting ...... 57
13.9 Regulations ...... 57
13.10 Corporation and Trustee May Be Represented ...... 58
13.11 Powers Exercisable by Debentureholders by Extraordinary Resolution ...... 58
13.12 Meaning of Ordinary Resolution ...... 60
13.13 Meaning of Extraordinary Resolution ...... 60
13.14 Powers Cumulative ...... 60
13.15 Minutes ...... 60
13.16 Instruments in Writing ...... 61
13.17 Binding Effect of Resolutions ...... 61
13.18 Record Dates ...... 61
Article 14 NOTICES ...... 61
14.1 Notice to the Corporation ...... 61
14.2 Notice to Debentureholders ...... 62
14.3 Notice to the Trustee ...... 62
14.4 When Publication Not Required ...... 62
14.5 Waiver of Notice ...... 62
Article 15 CONCERNING THE TRUSTEE ...... 62
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15.1 Corporate Trustee Required Eligibility ...... 62
15.2 Certain Duties and Responsibilities of Trustee ...... 62
15.3 No Conflict of Interest ...... 63
15.4 Conditions Precedent to Trustee’s Obligation to Act ...... 63
15.5 Resignation and Removal; Appointment of Successor ...... 64
15.6 Acceptance of Appointment by Successor ...... 65
15.7 Trustee May Deal in Debentures ...... 65
15.8 No Person Dealing with Trustee Need Inquire ...... 65
15.9 Investment of Money Held by Trustee ...... 65
15.10 Trustee Not Required to Give Security ...... 66
15.11 Trustee Not Required to Possess Debenture Certificates ...... 66
15.12 Evidence of Compliance ...... 66
15.13 Form of Evidence ...... 66
15.14 Certain Rights of Trustee ...... 67
15.15 Merger, Conversion, Consolidation or Succession to Business ...... 68
15.16 Action by Trustee to Protect Interests ...... 68
15.17 Protection of Trustee ...... 68
15.18 Trustee Not Liable in Respect of Depository ...... 69
15.19 Global Debenture Certificates ...... 70
15.20 Trustee Appointed Attorney ...... 70
15.21 Acceptance of Trusts ...... 70
15.22 No Liability for Certain Deposited Monies ...... 70
15.23 Third Party Interests ...... 70
15.24 Trustee Not Bound to Act ...... 71
15.25 Privacy Laws ...... 71
Article 16 GUARANTEES ...... 71
16.1 Material Subsidiary Guarantees ...... 71
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16.2 Additional Guarantees ...... 71
16.3 Release of Guarantees ...... 71
Article 17 SUPPLEMENTAL INDENTURES ...... 72
17.1 Supplemental Indentures ...... 72
17.2 Effect of Supplemental Indentures ...... 72
17.3 Execution of Supplemental Indentures ...... 73
Article 18 EVIDENCE OF RIGHTS OF DEBENTUREHOLDERS ...... 73
18.1 Evidence of Rights of Debentureholders ...... 73
Article 19 EXECUTION AND FORMAL DATE ...... 73
19.1 Counterpart Execution ...... 73
19.2 Formal Date ...... 73
Exhibit “A” - Form of Debenture Certificate
Exhibit “B” – Form of Guarantee
Exhibit “C” – Permitted Liens
Exhibit “D” – Amount of Indebtedness
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DEBENTURE INDENTURE
THIS AMENDED AND RESTATED INDENTURE, dated as of August 11, 2011, as amended and restated as of January 20, 2016 (and as may be further amended or amended and restated from time to time),
BETWEEN:
GRAN COLOMBIA GOLD CORP.,
a corporation existing under the laws of the Province of British Columbia
(the “Corporation”)
-and-
EQUITY FINANCIAL TRUST COMPANY,
a trust company formed under the laws of Canada under the Trust and Loan Companies Act
(the “Trustee”)
RECITALS
(A) The Corporation created and issued U.S. $80,000,000 aggregate face amount 5.0% Senior Unsecured Silver-Linked Notes (the “Notes”) pursuant to an indenture dated as of August 11, 2011 among the parties hereto (the “Original Indenture”).
(B) The Corporation has duly authorized the creation and issuance of Debentures (as hereinafter defined).
(C) Pursuant to an arrangement under Section 291 of the Business Corporations Act (British Columbia), the holders of the Notes approved the exchange of the Notes for Debentures.
(D) The parties are entering into this Indenture to amend and restate the Original Indenture to provide for the Debentures, all on the terms set forth herein.
NOW THEREFORE THIS DEBENTURE INDENTURE WITNESSES the Corporation and the Trustee agree that the Original Indenture is amended and restated so that it reads as follows for the benefit of each other and for the equal and ratable benefit of the Holders.
Article 1 INTERPRETATION
1.1 Definitions
In this Indenture and in the Debenture Certificates, unless there is something in the subject matter or context inconsistent therewith, the following expressions have the following meanings:
“Affiliate” means, in relation to any Person, an “affiliate” of such Person within the meaning of National Instrument 45-106 – Prospectus and Registration Exemptions.
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“Applicable Law” means, at any time, with respect to any Person, property, transaction, event or other matter, as applicable, all laws, rules, statutes, regulations, treaties, orders, judgments and decrees, and all official requests, directives, rules, guidelines, orders, policies, practices and other requirements of any Governmental Authority relating or applicable at such time to such Person, property, transaction, event or other matter, and also includes any interpretation thereof by any Person having jurisdiction over it or charged with its administration or interpretation.
“Applicable Period” means any period announced by the Board as a period of time for which a cash dividend or distribution will be declared and paid by the Corporation to the holders of all or substantially all of the outstanding Common Shares.
“Authorized Investments” means direct obligations of the Government of Canada or a Province of Canada, or obligations guaranteed or insured by the Government of Canada or a Province of Canada, provided that such obligations mature within one year from the date of acquisition thereof.
“Balance” has the meaning ascribed to such term in Section 12.2.
“Bank of Canada Noon Exchange Rate” means the noon rate of exchange based on Canadian interbank transactions published or quoted by the Bank of Canada for the day in question.
“Bankruptcy Law” means Title 11, U.S. Code, the Bankruptcy and Insolvency Act (Canada), the Companies’ Creditors Arrangement Act (Canada), in each case, as amended, or any similar federal, Canadian, provincial, state or foreign law for the relief of debtors.
“BEO Participants” means institutions that participate directly or indirectly in the Depository’s book entry only registration system for Debentures.
“Bid Expiry Date” has the meaning ascribed to such term in Section 8.6(f).
“Bid Expiry Time” has the meaning ascribed to such term in Section 8.6(f).
“Board” means the board of directors of the Corporation.
“Book Entry Only Debentures” means Debentures that are to be held only by or on behalf of the Depository.
“Business Day” means each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day when banking institutions in Toronto, Ontario or Bogota, Colombia are authorized or obligated by law or regulation to close.
“Canadian Securities Legislation” means all applicable securities laws in each of the provinces and territories of Canada, including, without limitation, the Province of Ontario, and the respective regulations and rules under such laws together with applicable published rules, policy statements, blanket orders, instruments, rulings and notices of the regulatory authorities in such provinces or territories.
“Capital Lease” means, with respect to a Person, a lease or other arrangement in respect of real or personal property that is required to be classified and accounted for as a capital lease on a balance sheet of the Person in accordance with IFRS.
“Capital Lease Obligation” means, with respect to a Person, the obligation of the Person to pay rent or other amounts under a Capital Lease.
“CDS” means the Canadian Depository for Securities Limited and its successors.
“Cash Portion” has the meaning ascribed to such term in Section 12.2.
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“Certified Resolution” means a copy of a resolution certified by an officer of the Corporation to have been duly passed by the Directors and to be in full force and effect on the date of such certification.
"Change of Control" means:
(1) any "person" or "group" of related persons (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act) becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that such person or group shall be deemed to have "beneficial ownership" of all shares that any such person or group has the right to acquire, whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of more than 50% of the total voting power of the Voting Shares of the Corporation (or its successor by merger, consolidation, amalgamation, arrangement or purchase of all or substantially all of its assets); or
(2) the merger, consolidation, amalgamation or arrangement of the Corporation with or into another Person or the merger, consolidation, amalgamation or arrangement of another Person with or into the Corporation or the merger, consolidation, amalgamation or arrangement of any Person with or into a Corporation Subsidiary, unless the holders of a majority of the aggregate voting power of the Voting Shares of the Corporation, immediately prior to such transaction, hold securities of the surviving or transferee Person that represent, immediately after such transaction, at least a majority of the aggregate voting power of the Voting Shares of the surviving or transferee Person; or
(3) the first day on which a majority of the members of the Board are not Continuing Directors or a change of 50% or greater of the nominated slate of directors within six months of the most recently held annual general meeting (except in each case as contemplated in the Corporation's Management Information Circular dated October 27, 2015, the Corporation's Supplemental Management Information Circular dated November 30, 2015 and the Corporation’s press release of December 14, 2015); or
(4) the sale, assignment, conveyance, transfer, lease or other disposition (other than by way of merger, consolidation, amalgamation or arrangement), in one or a series of related transactions, of 50% or greater of the properties and assets of the Corporation and the Corporation Subsidiaries taken as a whole (based upon the Fair Market Value of the properties and assets of the Corporation and the Corporation Subsidiaries) to any Person; provided however, a "Change of Control" shall be deemed not to have occurred if the "person" or "group" of related persons referred to in (1), the Person resulting from the merger, consolidation, amalgamation or arrangement referred to in (2), the Person nominating the new slate of directors referred to in (3) or the Person purchasing the properties and assets referred to in (4), as the case may be, has obtained a credit rating of at least "B" or the equivalent thereof provided by S&P or "B2" or the equivalent thereof by Moody's or "B" or the equivalent thereof by DBRS Limited (or the equivalent thereof by another nationally recognized rating agency, if each of the three named rating agencies cease publishing ratings of investments) on a pro forma post-acquisition consolidated basis and such Person or group of related persons agrees to guarantee the Obligations of the Corporation under the Indenture.
“Change of Control Notice” has the meaning ascribed to such term in Section 6.2(a).
“Change of Control Purchase Date” has the meaning ascribed to such term in Section 6.1.
“Change of Control Purchase Notice” has the meaning ascribed to such term in Section 6.3.
“Change of Control Purchase Price” has the meaning ascribed to such term in Section 6.1.
“Common Share Reorganization” has the meaning ascribed to such term in Section 8.6(a).
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“Common Shares” means common shares in the capital of the Corporation, as such common shares are constituted on the date of execution and delivery of this Indenture; provided that in the event of a change or a subdivision, revision, reduction, combination or consolidation thereof, any reclassification, capital reorganization, consolidation, amalgamation, arrangement, merger, sale or conveyance or liquidation, dissolution or winding-up, or such successive changes, subdivisions, redivisions, reductions, combinations or consolidations, reclassifications, capital reorganizations, consolidations, amalgamations, arrangements, mergers, sales or conveyances or liquidations, dissolutions or windings-up, then, subject to adjustments, if any, having been made in accordance with the provisions of Section 8.6, “Common Shares” shall thereafter mean the shares or other securities or property resulting from such change, subdivision, redivision, reduction, combination or consolidation, reclassification, capital reorganization, consolidation, amalgamation, arrangement, merger, sale or conveyance or liquidation, dissolution or winding-up.
“Consolidated EBITDA” for any period means, with respect to any Person, the Consolidated Net Income of such Person for such period:
(1) increased (without duplication) by the following items to the extent deducted in calculating such Consolidated Net Income:
(a) Consolidated Interest Expense; plus
(b) Consolidated Income Taxes; plus
(c) consolidated amortization, depletion and depreciation expense; plus
(d) consolidated impairment charges; plus
(e) other non-cash charges reducing Consolidated Net Income (other than depreciation, amortization or depletion expense), including any write-offs or write downs (excluding any such non-cash charge to the extent it represents an accrual of or reserve for cash charges in any future period or amortization of a prepaid cash expense that was capitalized at the time of payment) and non-cash compensation expense recorded from grants of stock appreciation or similar rights, stock options, restricted stock or other rights to officers, directors or employees; plus
(f) accretion of asset retirement obligations, net of cash payments for such asset retirement obligations;
(2) decreased (without duplication) by non-cash items increasing Consolidated Net Income of such Person for such period (excluding any items which represent the reversal of any accrual of, or reserve for, anticipated cash charges that reduced Consolidated EBITDA in any prior period); and
(3) increased or decreased (without duplication) to eliminate the following items to the extent reflected in Consolidated Net Income:
(a) any net gain or loss resulting in such period from currency translation gains or losses; and
(b) effects of adjustments (including the effects of such adjustments pushed down to the Corporation and the Corporation Subsidiaries) in any line item in such Person’s consolidated financial statements resulting from the application of purchase accounting in relation to any completed acquisition.
Notwithstanding the foregoing, clauses (1)(b) through (f) above relating to amounts of a Subsidiary of a Person will be added to Consolidated Net Income to compute Consolidated EBITDA of such Person only
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to the extent (and in the same proportion) that the net income (loss) of such Subsidiary was included in calculating the Consolidated Net Income of such Person and, to the extent the amounts set forth in clauses (1)(b) through (f) above are in excess of those necessary to offset a net loss of such Subsidiary or if such Subsidiary has net income for such period included in Consolidated Net Income, only if a corresponding amount would be permitted at the date of determination to be dividended to such Person by such Subsidiary without prior approval (that has not been obtained), pursuant to the terms of its charter and all agreements, instruments, judgments, decrees, orders, statutes, rules and governmental regulations applicable to that Subsidiary or its shareholders.
“Consolidated Income Taxes” means, with respect to any Person for any period, taxes imposed upon such Person, or other payments required to be made by such Person, by any Governmental Authority which taxes or other payments are calculated by reference to the income or profits or capital of such Person or such Person and its Corporation Subsidiaries (to the extent such income or profits were included in computing Consolidated Net Income for such period), including, without limitation, federal, provincial, state, franchise and similar taxes and foreign withholding taxes regardless of whether such taxes or payments are required to be remitted to any Governmental Authority.
“Consolidated Interest Expense” means, with respect to any Person, for any period, the total interest expense of such Person and its consolidated Corporation Subsidiaries, net of any interest income received by such Person and its consolidated Corporation Subsidiaries, whether paid or accrued, plus, to the extent not included in such interest expense:
(1) interest expense attributable to Capital Lease Obligations;
(2) amortization of debt discount (including the amortization of original issue discount resulting from the issuance of Indebtedness at less than par) and debt issuance cost; provided, however, that any amortization of bond premium will be credited to reduce Consolidated Interest Expense unless such amortization of bond premium has otherwise reduced Consolidated Interest Expense;
(3) non-cash interest expense, but any non-cash interest income or expense attributable to the movement in the mark-to-market valuation of Hedging Obligations or other derivative instruments shall be excluded from the calculation of Consolidated Interest Expense;
(4) commissions, discounts and other fees and charges owed with respect to letters of credit and bankers’ acceptance financing;
(5) the interest expense on Indebtedness of another Person that is guaranteed by such Person or one of its Subsidiaries or secured by a Lien on assets of such Person or one of its Subsidiaries;
(6) costs associated with entering into Hedging Obligations (including amortization of fees) related to Indebtedness;
(7) interest expense of such Person and its Subsidiaries that was capitalized during such period; and
(8) the cash contributions to any employee stock ownership plan or similar trust to the extent such contributions are intended to be used by such plan or trust to pay interest or fees to any Person (other than the Corporation and its Subsidiaries) in connection with Indebtedness Incurred by such plan or trust.
“Consolidated Net Income” means, for any period, the net income (loss) of the Corporation and its consolidated Corporation Subsidiaries for such period determined on a consolidated basis in accordance with IFRS; provided, however, that there will not be included in such Consolidated Net Income:
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(1) any net income (loss) of any Person if such Person is not a Subsidiary of the Corporation or that is accounted for by the equity method of accounting, except that:
(a) subject to the limitations contained in clauses (3) through (7) below, the Corporation’s equity in the net income of any such Person for such period will be included in such Consolidated Net Income up to the aggregate amount of cash actually distributed by such Person during such period to the Corporation or any of its Subsidiaries as a dividend or other distribution (subject, in the case of a dividend or other distribution to a Subsidiary of the Corporation, to the limitations contained in clause (2) below); and
(b) the Corporation’s equity in a net loss of any such Person for such period will be included in determining such Consolidated Net Income to the extent such loss has been funded with cash from the Corporation or its Subsidiary;
(2) any gain or loss (less all fees and expenses relating thereto) realized upon sales or other dispositions of any assets of the Corporation or such Subsidiary, other than in the ordinary course of business;
(3) any income or loss from the early extinguishment of Indebtedness or Hedging Obligations or other derivative instruments;
(4) any extraordinary or non-recurring gain or loss;
(5) any unrealized net gain or loss resulting in such period from Hedging Obligations or other derivative instruments;
(6) any net income or loss included in the consolidated statement of operations with respect to non-controlling interests; and
(7) the cumulative effect of a change in accounting principles.
“Contingent Liabilities” means, with respect to a Person, any agreement, undertaking or arrangement by which the Person guarantees, endorses or otherwise becomes or is contingently liable upon (by direct or indirect agreement, contingent or otherwise, to provide funds for payment, to supply funds to, or otherwise to invest in, a debtor, or otherwise to assure a creditor against loss) the obligation, debt or other liability of any other Person (other than by endorsements of instruments in the course of collection) or guarantees the payment of dividends or other distributions upon the shares of any Person. The amount of any contingent liability will, subject to any limitation contained therein, be deemed to be the outstanding principal amount (or maximum principal amount, if larger) of the obligation, debt or other liability to which the contingent liability is related.
“Continuing Directors” means, as of any date of determination, any member of the Board who: (1) was a member of such Board on the Issue Date; or (2) was nominated for election or elected to the Board with the approval of a majority of the Continuing Directors who were members of the Board at the time of such nomination or election.
“Conversion Notice” has the meaning ascribed to such term in Section 8.5(a).
“Conversion Price” means the dollar amount for which each Common Share may be issued from time to time upon the conversion of the Debentures in accordance with the provisions of Article 8.
“Corporate Trust Office” means any of the principal trust offices of the Trustee at which, at any particular time, its corporate trust business relative to this Indenture is administered. At the date hereof, the Corporate Trust Offices of the Trustee are located at 200 University Ave., Suite 300, Toronto, Ontario M5H 4H1.
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“Corporation” means Gran Colombia Gold Corp., a corporation existing under the laws of British Colombia, and its permitted successors and assigns.
“Corporation Counsel” means, at any time, legal counsel retained by the Corporation.
“Corporation Subsidiary” means any Subsidiary of the Corporation or any Subsidiary of such Subsidiary and each of their respective successors and permitted assigns;
“Corporation’s Auditors” means, at any time, a firm of chartered accountants duly appointed as auditors of the Corporation.
“Current Market Price” means, generally, the volume weighted average trading price of the Common Shares on the Exchange for the 20 consecutive trading days ending five trading days preceding the applicable date. If the Common Shares are no longer listed on the Exchange or if no such prices are available “Current Market Price” shall be the fair value of a Common Share as reasonably determined by a third party acceptable to the Trustee and the Corporation.
“Date of Conversion” has the meaning ascribed to such term in Section 8.5(b).
“Debenture Certificate” means:
(a) a certificate issued in the name of a Debentureholder (other than the Depository) evidencing the number of Debentures held by such Debentureholder, in a principal amount equal to the aggregate of the principal amounts of such Debentures, such certificate being in the form of Exhibit A; and
(b) a Global Debenture Certificate.
“Debenture Guarantee” means, individually, any Guarantee of payment of the Debentures and the Corporation’s other Obligations under this Indenture by a Corporation Subsidiary pursuant to the terms of this Indenture and any supplemental indenture thereto, and, collectively, all such Guarantees.
“Debenture Indebtedness” means all present and future debts, liabilities and obligations of the Corporation or a Corporation Subsidiary, as applicable to the Debentureholders under and in connection with this Indenture, any Supplemental Indenture, the Debenture Certificates and the Guarantees, including all principal money owing on the Debentures, the Premium, if any, interest (including interest on overdue principal, the Premium, if any, and interest) and all fees paid and other money from time to time owing pursuant to the terms of this Indenture, the Debenture Certificates and the Guarantees.
“Debentureholder” or “Holder” means, at a particular time, a Person entered in the Register as a holder of one or more Debentures outstanding at such time.
“Debentureholders’ Request” means an instrument signed in one or more counterparts by Debentureholders holding not less than 25% of the aggregate outstanding principal amount of the outstanding Debentures requesting or directing the Trustee to take or refrain from taking the action or proceeding specified therein.
“Debentures” means, individually, any debenture authenticated and delivered under this Indenture, and, collectively, all such Debentures. For all purposes of this Indenture, the term “Debentures” shall also include any debentures to be issued or authenticated upon transfer, replacement or exchange of a Debenture.
“deemed year” has the meaning ascribed to such term in Section 2.8.
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“Deferred Purchase Price Obligation” means, with respect to a Person, an obligation issued, incurred or assumed by the Person in connection with the acquisition by the Person of an asset in respect of the deferred purchase price of the asset.
“Depository” means CDS or such other Person as is designated in writing by the Corporation to act as depository in respect of the Debentures.
“Directors” means the directors of the Corporation or, whenever duly empowered by a resolution of the directors of the Corporation in accordance with Applicable Law, a committee of the Board, and reference to action by the Directors means action by the directors of the Corporation or action by any such committee.
“Distributed Securities” has the meaning ascribed to such term in Section 8.6(e).
“Environmental Laws” means all federal, provincial, state, municipal, country, local and other laws, statutes, codes, ordinances, by-laws, rules, regulations, policies, guidelines, certificates, approvals, permits, consents, directions, standards, judgments, orders and other authorizations, as well as common law, civil and other jurisprudence or authority, in each case domestic or foreign, having the force of law at any time relating in whole or in part to any Environmental Matters and any permit, order, direction, certificate, approval, consent, registration, licence or other authorization of any kind held or required to be held in connection with any Environmental Matters.
“Environmental Matters” means: (a) condition or substance, heat, energy, sound, vibration, radiation or odour that may affect any component of the earth and its surrounding atmosphere or affect human health or any plant, animal or other living organism; and (b) any waste, toxic substance, contaminant or dangerous good or the deposit, release or discharge of any thereof into any component of the earth and its surrounding atmosphere.
“Event of Default” has the meaning ascribed to such term in Section 11.1.
“Excess Cash Flow” means with respect to any fiscal quarter of the Corporation, Consolidated EBITDA for such fiscal quarter minus the sum of the following amounts applicable to such quarter:
(a) all scheduled principal payments made or required to have been made by the Corporation on account of Indebtedness and all interest and financing costs (net of finance income and non-cash accretion of financial obligations);
(b) the portion of capital, development and exploration expenditures not financed under capitalized leases for financial reporting purposes in accordance with IFRS or with proceeds of other Indebtedness incurred substantially concurrently with such expenditures;
(c) consolidated income, capital, equity or wealth tax expenses, or similar instituted by any governmental authority, of the Corporation or any subsidiary to the extent paid in cash;
(d) payment of the Corporation’s contractual obligations under the Frontino health plan, payments of amounts for environmental discharge fees incurred at Gran Colombia Project and payment of amounts due in respect of the Marmato Project mining titles and contract miners’ compensation agreements; and
(e) changes in non-cash working capital as reported in the Corporation’s consolidated financial statements.
“Exchange” means the Toronto Stock Exchange or such other exchange on which the Corporation’s securities are then listed or quoted.
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“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC promulgated thereunder.
“Extraordinary Resolution” has the meaning ascribed to such term in Section 13.13.
“Fair Market Value” means, with respect to any asset or liability, the fair market value of such asset or liability as determined by Senior Management in good faith; provided that if the fair market value exceeds $5.0 million, such determination shall be made by the Board or an authorized committee thereof in good faith (including as to the value of all non-cash assets and liabilities) and if the fair market value exceeds $10.0 million, such determination shall be based upon an opinion or appraisal issued by an Independent Financial Advisor.
“Independent Financial Advisor” means an accounting, appraisal, investment banking firm or consultant to Persons engaged in Similar Businesses of nationally recognized standing that is, in the good faith judgment of the Corporation, qualified to perform the task for which it has been engaged.
“Financial Instrument Obligations” means, with respect to any Person, obligations arising under:
(a) interest rate swap agreements, forward rate agreements, floor, cap or collar agreements, futures or options, insurance or other similar agreements or arrangements, or any combination thereof, entered into or guaranteed by the Person where the subject matter thereof is interest rates or the price, value or amount payable thereunder is dependent or based upon interest rates or fluctuations in interest rates in effect from time to time (but excluding conventional floating rate indebtedness);
(b) currency swap agreements, cross-currency agreements, forward agreements, floor, cap or collar agreements, futures or options, insurance or other similar agreements or arrangements, or any combination thereof, entered into or guaranteed by the Person where the subject matter thereof is currency exchange rates or the price, value or amount payable thereunder is dependent or based upon currency exchange rates or fluctuations in currency exchange rates in effect from time to time; and
(c) any agreement for the making or taking of any commodity swap agreement, floor, cap or collar agreement or commodity future or option or other similar agreement or arrangement, or any combination thereof, entered into or guaranteed by the Person where the subject matter thereof is any commodity or the price, value or amount payable thereunder is dependent or based upon the price or fluctuations in the price of any commodity; or any other similar transaction, including any option to enter into any of the foregoing, or any combination of the foregoing, in each case to the extent of the net amount due or accruing due by the Person under the obligations determined by marking the obligations to market in accordance with their terms.
“Global Debenture Certificate” means a certificate issued in the name of the Depository evidencing all or less than all of the Debentures, in a principal amount equal to the aggregate of the principal amounts of such Debentures, such certificate being in the form of Exhibit A.
“Governmental Authority” means, when used with respect to any Person, any government, parliament, legislature, regulatory authority, agency, tribunal, department, commission, board, instrumentality, court, arbitration board or arbitrator or other law, regulation or rule-making entity having or purporting to have jurisdiction on behalf of, or pursuant to the laws of, Canada, Colombia or any other country in which such Person is incorporated, continued, amalgamated, merged or otherwise created or established or in which such Person has an undertaking, contractual obligation, carries on business or holds property, or any province, territory, state, municipality, district or political subdivision of any such country or of any such province, territory or state of such country.
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“Gran Colombia Project” means the mining rights comprised of one private mining property (RPP 140 Ñemeñeme) and two exploration licenses with a total area of 2,907 ha., located in the municipalities of Segovia and Remedios, Department of Antioquia;
“Guarantees” means the guarantees issued (and amended, if required,) by each Material Subsidiary pursuant to Article 16 guaranteeing the obligations of the Corporation in favour of the Trustee for the benefit of the Debentureholders substantially in the form of the guarantee attached as Exhibit B - Form of Guarantee;
“Hedging Obligations” of any Person means the obligations of such Person pursuant to (1) any interest rate protection agreement, interest rate future agreement, interest rate option agreement, interest rate swap agreement, interest rate cap agreement, interest rate collar agreement, interest rate hedge agreement or other similar agreement or arrangement as to which such Person is party or a beneficiary, (2) any foreign exchange contract, currency swap agreement, futures contract, option contract or other similar agreement as to which such Person is a party or a beneficiary, or (3) any commodity futures contract, commodity swap, commodity option or other similar agreement or arrangement entered into by the Corporation or any of its Corporation Subsidiaries designed to protect the Corporation or any of its Corporation Subsidiaries against fluctuations in the price of commodities actually used in the ordinary course of business of the Corporation and its Corporation Subsidiaries.
“IFRS” means the International Financial Accounting Standards published from time to time by the International Accounting Standards Board.
“includes” or “including” means “includes without limitation” or “including without limitation”, as the case may be.
“Indebtedness” means, with respect to a Person, without duplication:
(a) all the Person’s present and future indebtedness for borrowed money, borrowings of commodities, obligations with respect to bankers’ acceptances and contingent reimbursement obligations relating to letters of credit, letters of guarantee and other financial instruments;
(b) all Financial Instrument Obligations of the Person;
(c) all Deferred Purchase Price Obligations of the Person;
(d) all Capital Lease Obligations and Purchase Money Obligations of the Person; and
(e) all Contingent Liabilities of the Person with respect to obligations of another Person if such obligations are of the type referred to in paragraphs (a) to (d).
“Indenture” means this Indenture as amended or supplemented from time to time pursuant to the terms of this Indenture.
“interest” with respect to the Debentures means interest with respect thereto.
“Interest Payment Date” has the meaning ascribed to such term in Section 2.8.
“Interest Rate” means 1.00% per annum.
“Investment” means any investment, in cash or by delivery of property, made directly or indirectly in any Person whether by acquisition of securities, indebtedness or other obligations or by loan, advance, capital expenditures, capital contribution, granting of financial assistance or otherwise.
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“Issue Date” means the date of this Indenture.
“Lien” means any mortgage, charge, security interest, pledge, lien (statutory or otherwise), hypothec, tax lien, statutory lien, trust or deemed trust, adverse claim, construction lien, materialman’s lien or charge or encumbrance of any kind whatsoever (including any conditional sale or other title retention agreement, any lease in the nature thereof and any agreement to give any security interest).
“Marmato Project” means the Corporation’s gold-silver project located in the municipality of Marmato, Department of Antioquia, Colombia, approximately 120 km south of the city of Medellín, comprised of three adjacent sets of properties (Zona Alta, Zona Baja and Echandia) comprising a total area of 1,198 hectares.
“Material Subsidiary” means (A) Gran Colombia Gold, S.A., Zandor Capital, S.A., Zandor Capital S.A. Sucursal, Sucursal, Zancudo Gold Corp., Zancudo Gold Sucursal, Mazamorras Gold Corp., Mazamorras Gold Sucursal, Medoro Resources (Yukon) Inc., Colombia Gold Ltd. (UK), Colombia Gold AG, Colombia Gold Ltd. (BC), Colombia Gold S.A., Minera Croesus, S.A., Medoro Resources Colombia Inc., Mineros Nacionales, S.A., Barona Cape Ltd., RNC (Colombia) Ltd. and Minerales Andinos De Occidente, S.A. and (B) any wholly-owned Corporation Subsidiaries coming into existence, or acquired, after the date hereof which (i) directly hold interests in mining properties in Colombia, or (ii) constitute part of the chain of ownership from the Corporation to such Corporation Subsidiaries.
“Maturity Date” means, with respect to a Debenture, the date on which the principal of such Debenture becomes due and payable as therein or herein provided, whether at the Stated Maturity thereof or by declaration of acceleration, call for repayment or otherwise.
“Moody’s” means Moody’s Investors Service, Inc. and any successor to its rating agency business.
“Notes” has the meaning ascribed to such term in the first recital above.
“Obligations” means, without duplication, with respect to a Person, all items which, in accordance with IFRS, would be included as liabilities on the liability side of the balance sheet of the Person and all Contingent Liabilities of the Person.
“Officer’s Certificate” means a certificate of the Corporation signed by one officer of the Corporation in his or her capacity as such officer and not in his or her personal capacity.
“Ordinary Resolution” has the meaning ascribed to such term in Section 13.12.
“Original Indenture” has the meaning ascribed to such term in the first recital above.
“Outstanding Balance” has the meaning ascribed to such term in Section 12.2.
“Paying Agent” means a Person authorized by the Corporation to pay the principal amount, Premium, if any, or interest payable in respect of any Debentures on behalf of the Corporation, and may include the Trustee.
“Permitted Encumbrances” means:
(a) Liens for taxes, assessments or governmental charges or claims either: (i) not delinquent; or (ii) contested in good faith by appropriate proceedings and as to which the Corporation or any Corporation Subsidiary shall have set aside on its books such reserves as may be required pursuant to IFRS;
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(b) any interest or title of a lessor under any Capital Lease Obligations of the Corporation or of any Corporation Subsidiary; provided, however, that such Liens do not extend to any property or asset which is not leased property subject to such Capital Lease Obligation;
(c) Liens securing the Permitted Indebtedness referred to in paragraphs (b), (c) and (d) of that definition;
(d) Liens in respect to Purchase Money Obligations of the Corporation;
(e) Liens over cash deposits or similar cash equivalent Investments securing Indebtedness which is Permitted Indebtedness in accordance with paragraph (i) of the definition of Permitted Indebtedness;
(f) Risk Management Liens;
(g) any Lien or deposit under workers’ compensation, social security or similar legislation or in connection with bids, tenders, leases, contracts or expropriation proceedings or to secure public or statutory obligations, surety and appeal bonds or costs of litigation where required by law;
(h) any Lien or privilege imposed by law such as builders’, mechanics’, material-man’s, carriers’, warehousemen’s and landlords’ liens and privileges or any security interest or privilege arising out of judgments or awards with respect to which, at the time an appeal or proceedings for review is being prosecuted and with respect to which it has secured a stay of execution pending such appeal or proceedings for review or collateral has been deposited; or any undetermined or inchoate security interest or privilege incidental to current operations that has not been filed pursuant to law against the Corporation or a Corporation Subsidiary or that relates to obligations not due or delinquent; or the deposit of cash or securities in connection with any security interest or privilege referred to in this paragraph (h);
(i) any right reserved to or vested in any municipality or governmental or other public authority by the terms of any lease, licence, franchise, grant or permit held or acquired by the Corporation or a Corporation Subsidiary, or by any statutory provision, to terminate the lease, licence, franchise, grant or permit or to purchase assets used in connection therewith or to require annual or other periodic payments as a condition of the continuance thereof;
(j) any Lien or right of distress reserved in or exercisable under any lease for rent to which the Corporation or any Corporation Subsidiary is a party and for compliance with the terms of the lease;
(k) any Lien created or assumed by the Corporation or a Corporation Subsidiary in favour of a Governmental Authority when required by the utility, municipality or other authority in connection with the operations of the Corporation or such Corporation Subsidiary;
(l) any reservations, limitations, provisos and conditions expressed in original or subsequent grants from any Governmental Authority;
(m) any minor encumbrance, such as easements, rights-of-way, servitudes or other similar rights in land granted to or reserved by other Persons, rights-of-way for sewers, electric lines, telegraph and telephone lines, oil and natural gas pipelines and other similar purposes, or zoning, restrictive covenants, by-laws or other restrictions applicable to the Corporation’s or a Corporation Subsidiary’s use of real property, that do not in the
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aggregate materially detract from the value of the property or materially impair its use in the operation of the business of the Corporation or such Corporation Subsidiary; and
(n) Liens listed on Exhibit C – Permitted Liens.
“Permitted Excess Cash Flow Investments” means securities issued or directly and fully guaranteed or insured by the Canadian or U.S. government or any agency or instrumentality of Canada or the United States (provided that the full faith and credit of the government of Canada or the United States is pledged in support thereof), having maturities of not more than one hundred and eighty two days from the date of acquisition.
“Permitted Indebtedness” means, without duplication:
(a) the Debenture Indebtedness;
(b) Indebtedness of the Corporation and the Corporation Subsidiaries not otherwise provided for herein which shall not exceed U.S.$40,000,000 in aggregate at any time and, including for purposes of this provision, the Indebtedness of the Corporation and the Corporation Subsidiaries listed on Exhibit D - Amount of Indebtedness;
(c) Indebtedness of the Corporation or any Corporation Subsidiary incurred to finance the development and construction of the Marmato Project;
(d) Indebtedness of the Corporation or any Corporation Subsidiary incurred to finance the expansion of, or capital expenditures on, other site specific projects of the Corporation or any Corporation Subsidiary, including, but not limited to, the Gran Colombia Project;
(e) all Capital Lease Obligations and Purchase Money Obligations of the Corporation and the Corporation Subsidiaries which, excluding Capital Lease Obligations and Purchase Money Obligations relating to mining operations of the Corporation, shall not exceed U.S.$10,000,000 in aggregate at any time;
(f) Obligations in respect of performance and surety bonds and completion guarantees provided by the Corporation or any Corporation Subsidiary in the ordinary course of business;
(g) Obligations of the Corporation or any Corporation Subsidiary in respect of off-take or long-term purchase agreements with third parties in respect of commodities on reasonable commercial terms as if negotiated by Persons dealing at arm’s length (within the meaning of the Income Tax Act (Canada));
(h) Financial Instrument Obligations of the Corporation or a Corporation Subsidiary of the Corporation where the aggregate net amount, if any, which (as of the date of any determination of the amount thereof) would be payable by the Corporation and such Corporation Subsidiary under all agreements evidencing such Financial Instrument Obligations in settlement of obligations arising thereunder as a result of an early termination of all such Financial Instrument Obligations (determined by marking the obligations to market in accordance with their terms), together with all interest, fees and other amounts payable thereon or in connection therewith, does not exceed at any time the principal amount of the Indebtedness to which the Financial Instrument Obligations relates;
(i) any back-to-back loans, being Indebtedness of the Corporation or any Corporation Subsidiary to a financial institution incurred after the Issue Date which is fully offset by an
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investment held by the Corporation or such Corporation Subsidiary at the same financial institution and in an amount equivalent to such Indebtedness;
(j) Obligations or amounts owed by the Corporation or any Corporation Subsidiary to trade creditors, suppliers and service providers and accruals in relation thereto in the ordinary course of business, in each case due and payable or outstanding for less than one year;
(k) factored accounts payable by the Corporation or any Corporation Subsidiary on usual commercial terms;
(l) so long as no Event of Default has occurred and is continuing, Indebtedness incurred in connection with any Investment made by the Corporation or any Corporation Subsidiary in additional mineral resources;
(m) Indebtedness of the Corporation or any of Corporation Subsidiaries which is unsecured and contractually subordinate in right of payment to the prior payment of the Debenture Indebtedness; and
(n) Indebtedness of the Corporation or any of the Corporation Subsidiaries with respect to the debentures issued pursuant to the 2020 Debenture Indenture.
“Person” means an individual, corporation, body corporate, limited partnership, general partnership, joint stock company, association, joint venture, association, company, trust, bank, fund, Governmental Authority or other entity or organization, whether or not recognized as a legal entity.
“Personal Information Form” means the personal information form prescribed by the Exchange.
“Premium” means, with respect to a Debenture at a particular time, the excess, if any, of the then applicable repayment amount of such Debenture over the then repayable principal amount of such Debenture.
“Privacy Laws” has the meaning ascribed to such term in Section 15.25.
“Purchase Money Obligation” means, with respect to a Person, Indebtedness of the Person issued, incurred or assumed to finance all or part of the cost of acquiring any asset for the Person, other than shares, bonds and other Securities, or constructing, installing, improving or expanding any real property or fixtures of the Person, provided that the indebtedness is issued, incurred or assumed within 12 months after such acquisition, construction, installation, improvement or expansion, and the indebtedness secured thereby does not exceed the actual cost of such acquisition, construction, installation, improvement or expansion, and includes any extension, renewal or refunding of any such indebtedness so long as the principal amount thereof outstanding on the date of such extension, renewal or refunding is not increased.
“Purchased Common Shares” has the meaning ascribed to such term in Section 8.6(f).
“Record Date” means the date for determining the Debentureholders entitled to receive payment of interest on an Interest Payment Date, which date shall be the fifth Business Day prior to such Interest Payment Date or such other date as shall be specified in a Certified Resolution delivered to the Trustee;
“Redemption Date” has the meaning ascribed to such term in Section 7.3.
“Redemption Notice” has the meaning ascribed to such term in Section 7.3.
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“Redemption Price” means, in respect of a Debenture, the principal amount plus accrued and unpaid interest up to (but excluding) the Redemption Date fixed for such Debenture, payable on the Redemption Date.
“Register” has the meaning ascribed to such term in Section 3.1.
“Registrar” has the meaning ascribed to such term in Section 3.1.
“Risk Management Lien” means any Lien on cash or marketable securities of the Corporation or a Corporation Subsidiary granted in connection with any foreign exchange, interest rate or commodity price risk management agreements, including Swaps, or in connection with physical delivery commodity price risk management agreements provided that, if such Lien is granted in connection with any foreign exchange, interest rate or commodity price risk management agreements, including Swaps, such Lien only secures obligations under such foreign exchange, interest rate or commodity price risk management agreements, or if such Lien is granted in connection with such physical delivery commodity price risk management agreements, such Lien only secures the obligations of the Corporation or Corporation Subsidiary to deliver or take delivery of the subject commodity or to make a payment at a future date pursuant to such arrangements.
“Securities” means stocks, shares (including, for greater certainty, preferred shares), units, instalment receipts, voting trust certificates, bonds, notes, debentures, other evidences of indebtedness, or other documents or instruments commonly known as securities or any certificates of interest, shares or participations in temporary or interim certificates for, receipts for, guarantees of, or warrants, options or rights to subscribe for, purchase or acquire any of the foregoing.
“Securities Act” means the Securities Act (Ontario).
“Senior Management” means the chief executive officer and the chief financial officer of the Corporation.
“Similar Business” means any business conducted or proposed to be conducted by the Corporation and the Corporation Subsidiaries on the Issue Date or any other business that is similar, reasonably related, incidental or ancillary thereto.
“Spinoff Securities” has the meaning ascribed to such term in Section 8.6(e).
“Spinoff Valuation Period” has the meaning ascribed to such term in Section 8.6(e).
“Stated Maturity” or “Stated Maturity Date” means the date fixed and specified in a Debenture as the date on which the balance of the principal of such Debenture is due and payable.
“Subsidiary” means, in relation to any Person, a “subsidiary” of such Person within the meaning of National Instrument 45-106 – Prospectus and Registration Exemptions.
“Supplemental Indenture” means an indenture supplemental to this Indenture pursuant to which, among other things, the provisions of this Indenture may be amended.
“Swaps” means any transaction which is a rate swap transaction, basis swap, forward rate transaction, commodity swap, commodity option, equity or equity index swap, equity or equity index option, bond option, interest rate option, foreign exchange transaction, cap transaction, floor transaction, collar transaction, currency swap transaction, cross-currency rate swap transaction, currency option, forward sale, exchange traded futures contract, agreement for the purchase, sale or transfer of any commodity or any other commodity trading transaction (whether settled by physical delivery or otherwise) or any other similar transaction (including any option with respect to any of these transactions or any combination of these transactions).
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“S&P” means Standard & Poor’s Rating Services, and any successor to its rating agency business.
“Time of Expiry” the earlier of (i) the Business Day immediately preceding the Stated Maturity of the Debentures, and (ii) if the Debentures are called for redemption by notice to the Holders of Debentures in accordance with Section 7.3 of the Indenture, on the Business Day immediately preceding the date specified by the Corporation for redemption of the Debentures.
“Trading Period” has the meaning ascribed to such term in Section 12.2.
“Trustee” means the Person named as the “Trustee” in this Indenture, until a successor of such Person shall have become such pursuant to the applicable provisions of this Indenture, and thereafter “Trustee” shall refer instead to such successor Trustee.
“Trustee Counsel” means, at any time, legal counsel retained by the Trustee, which may not be counsel to the Corporation.
“Voting Shares” means shares in the capital of a corporation having voting power under ordinary circumstances to vote in the election of directors of the corporation.
“VWAP” means, for the Common Shares, the per Common Share volume-weighted average price on the Exchange in respect of the relevant period, calculated by dividing the aggregate sale price of all Common Shares sold on the Exchange by the total number of Common Shares sold during the relevant period; provided, however, that if such volume-weighted average price is unavailable “VWAP” means the average of the market value of one Common Share during the relevant period as determined by a nationally-recognised investment bank selected by the Corporation for this purpose, using a volume- weighted method and converted, if necessary, into Canadian dollars at the relevant exchange rate. In each case, the “VWAP” will be determined without regard to after-hours trading or any other trading outside of the primary trading session.
“2020 Debenture Indenture” means the indenture dated October 30, 2012, as amended and restated as of the date hereof, between Gran Colombia Gold Corp., as issuer, the Guarantors (as defined therein) and Equity Financial Trust Company, as trustee, relating to the issuance of Senior Secured Debentures due January 2, 2020, as amended and supplemented from time to time.
“2018 Debenture Sinking Fund” has the meaning ascribed to such term in Section 10.12(a).
1.2 Exhibits
The following Exhibits are incorporated into and form part of this Indenture:
Exhibit “A” – Form of Debenture Certificate
Exhibit “B” – Form of Guarantee
Exhibit “C” – Permitted Liens
Exhibit “D” – Amount of Indebtedness
In the event of any inconsistency between any of the Sections of this Indenture and any of the provisions of any of the Schedules which are annexed to this Indenture, the Sections of this Indenture shall prevail to the extent of the inconsistency.
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1.3 Meaning of “outstanding” for Certain Purposes
Every Debenture certified and delivered by the Trustee hereunder shall be deemed to be outstanding until it is cancelled or delivered to the Trustee for cancellation or money for the payment thereof has been set aside pursuant to Article 12, provided that:
(a) if a new Debenture Certificate has been issued in substitution for a Debenture that has been mutilated, lost, stolen or destroyed, only the new Debenture Certificate shall be counted for the purpose of determining the Debentures outstanding; and
(b) for the purpose of any provision of this Indenture entitling Holders of outstanding Debentures to vote, sign consents, requisitions or other instruments or take any other action under this Indenture or to constitute a quorum at any meeting of Debentureholders, Debentures owned directly or indirectly by the Corporation or any Affiliate of the Corporation shall be disregarded, provided that:
(i) for the purpose of determining whether the Trustee shall be protected in acting and relying on any such vote, consent, requisition or other instrument or action or on the Debentureholders present or represented at any meeting of Debentureholders constituting a quorum, only the Debentures which the Trustee knows are so owned shall be so disregarded; and
(ii) Debentures so owned that have been pledged in good faith other than to the Corporation or an Affiliate of the Corporation shall not be disregarded if the pledgee shall establish to the satisfaction of the Trustee the pledgee’s right to vote, sign consents, requisitions or other instruments or take such other actions free from the control of the Corporation or any Affiliate of the Corporation.
1.4 Interpretation Not Affected by Headings
The division of this Indenture into Sections and clauses, the provision of a table of contents and the insertion of headings are for convenience of reference only and shall not affect the construction or interpretation hereof.
1.5 Extended Meanings
In this Indenture, unless otherwise expressly provided herein or unless the context otherwise requires, words importing the singular number include the plural and vice versa; words importing gender include the masculine, feminine and neuter genders; references to “Indenture”, “this Indenture”, “hereto”, “herein”, “hereof”, “hereby”, “hereunder” and similar expressions refer to this Indenture, and not to any particular Section, clause or other portion hereof, and include all Schedules and amendments hereto, modifications or restatements hereof, and any and every Supplemental Indenture; and the expressions “Section”, “clause” and “Schedule” followed by a number, letter, or combination of numbers and letters refer to the specified Section or clause of or Schedule to this Indenture.
1.6 Day Not a Business Day
If any day on which an amount is to be determined or an action is to be taken hereunder is not a Business Day, then such amount shall be determined or such action shall be taken at or before the requisite time on the next succeeding day that is a Business Day.
1.7 Currency
Except as otherwise provided herein, all references to “U.S.$” are to lawful money of the United States.
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1.8 Other Currencies
For the purpose of making any computation under this Indenture any currency not denominated in U.S.$ shall be converted into U.S.$ at the Bank of Canada Noon Exchange Rate on the date on which such computation is to be made.
1.9 Statutes and Agreements
Each reference in this Indenture to a statute is deemed to be a reference to such statute as amended, re- enacted or replaced from time to time. Each reference in this Indenture to an agreement is deemed to be a reference to such agreement as amended, supplemented, amended and restated or otherwise modified from time to time.
1.10 Invalidity of Provisions
Each provision in this Indenture or in a Debenture Certificate is distinct and severable and a declaration of invalidity or unenforceability of any such provision by a court of competent jurisdiction shall not affect the validity or enforceability of any other provision hereof or thereof.
1.11 Applicable Law
This Indenture and the Debenture Certificates shall be governed by, and construed in accordance with, the laws of the Province of Ontario and the federal laws of Canada applicable therein without giving effect to any choice or conflict of law provision or rule (whether of the Province of Ontario or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the Province of Ontario.
1.12 Entire Agreement
This Indenture constitutes the entire agreement between the parties hereto and shall supersede and replace any and all prior agreements between the parties hereto relating to the subject matter set forth herein.
Article 2 THE DEBENTURES
2.1 Designation and Issuance of Debentures
There is hereby created a series of Debentures to be issued pursuant to this Indenture designated as the “Senior Unsecured Convertible Debentures due 2018”. The Debentures shall be issued in U.S.$1.00 principal amount denominations, and shall bear interest on the outstanding balance of the principal in accordance with the terms of the Debentures.
2.2 Description of the Debentures
The aggregate principal amount of Debentures that may be issued under this Indenture is U.S.$71,168,174.00. The Debentures originally issued hereunder shall be dated on the Issue Date. The Debentures shall be senior unsecured obligations of the Corporation and, subject to Article 6 and Article 7, shall become due and payable, together with all accrued and unpaid interest thereon, on August 11, 2018. The Debentures shall be subject to repurchase by the Corporation as provided in Article 5 and Article 6. The Debentures shall not be redeemable by the Corporation, other than as provided in Article 7. The Debentures shall be convertible into Common Shares or other securities of the Corporation, as provided for in Article 8, and in the Debentures.
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2.3 Form of Debenture Certificates
The Debenture Certificates shall initially be in the form attached hereto as Exhibit A.
If a beneficial owner of a Debenture is ineligible to be a beneficial owner under a Global Debenture Certificate, the Debenture Certificate shall be in fully registered form and shall be issued to the beneficial owner of such Debenture or its nominee.
The Debenture Certificates may be engraved, lithographed, printed, mimeographed or typewritten, or partly in one form and partly in another, as the Corporation may determine, provided that if a Debenture is issued in mimeographed or typewritten form, the Corporation, on the demand of the Holder thereof, shall make available within a reasonable time after such demand, without expense to such Holder, an engraved, lithographed or printed Debenture Certificate in exchange therefor.
The Corporation in issuing the Debentures may use “CUSIP” and “ISIN” numbers (if then generally in use) and place such numbers on the Debenture Certificates, and, if so, the Trustee shall use “CUSIP” and “ISIN” numbers in notices of repayment as a convenience to Holders; provided that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Debenture Certificates or as contained in any notice of repayment and that reliance may be placed only on the other identification numbers printed on the Debenture Certificates, and any such repayment shall not be affected by any defect in or omission of such numbers. The Corporation shall promptly notify the Trustee of any change in the “CUSIP” or “ISIN” numbers.
2.4 Ranking
The Debentures shall be direct unsecured obligations of the Corporation and shall rank pari passu (equally and rateably) in right of payment with each other and with all other unsecured Permitted Indebtedness of the Corporation other than Indebtedness described in paragraph (m) of the definition of Permitted Indebtedness. The designation herein of the Debentures as senior unsecured debentures applies to the priority in right of payment of the Debentures to the Indebtedness described in paragraph (m) of the definition of Permitted Indebtedness and not to other Permitted Indebtedness of the Corporation.
2.5 Book Entry Only Debentures
The Debentures (other than Debentures issued to or for the account or benefit of Persons who are ineligible to be beneficial owners under a Global Debenture Certificate) shall be issued as Book Entry Only Debentures represented by one or more Global Debenture Certificates. Each Global Debenture Certificate authenticated in accordance with this Indenture shall be registered in the name of the Depository designated for such Global Debenture Certificate or a nominee thereof and delivered to such Depository or a nominee thereof as custodian therefor, and each such Global Debenture Certificate shall constitute a single Debenture Certificate for all purposes of this Indenture. Beneficial interests under the Global Debenture Certificate will not be shown on the Register or the records maintained by the Depository but will be represented through book-entry accounts of BEO Participants on behalf of the beneficial owners under such Global Debenture Certificate. None of the Corporation, the Trustee and any other Paying Agent shall have any responsibility or liability for any aspects of the records relating to or payments made by any Depository or any BEO Participant on account of the beneficial interest under any Global Debenture Certificate. Except as provided in this Section 2.5, owners of beneficial interests under any Global Debenture Certificate shall not be entitled to have Debentures registered in their names and shall not receive or be entitled to receive Debenture Certificates in definitive form.
Notwithstanding any other provision in this Indenture, a Global Debenture Certificate may not be exchanged in whole or in part for a registered Debenture Certificate which is not a Global Debenture Certificate, and no transfer of Debentures represented by a Global Debenture Certificate may be
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registered in the name of any Person other than the Depository for such Global Debenture Certificate or a nominee thereof unless:
(a) the Depository notifies the Corporation that it is unwilling or unable to continue to act as depository in connection with the Global Debenture Certificate and the Corporation is unable to locate a qualified successor;
(b) the Corporation determines that the Depository is no longer willing, able or qualified to discharge properly its responsibilities as Holder of the Global Debenture Certificate and the Corporation is unable to locate a qualified successor;
(c) the Depository ceases to be a clearing agency or otherwise ceases to be eligible to be a depository and the Corporation is unable to locate a qualified successor;
(d) the Corporation determines that the Debentures shall no longer be held as Book Entry Only Debentures through the Depository;
(e) the Depository determines to transfer the Global Debenture Certificate in accordance with Section 3.3(d);
(f) such exchange or transfer is required by Applicable Law, as determined by the Corporation and the Corporation Counsel; or
(g) a request for such exchange or transfer is made in accordance with Sections 8.5 or 12.2; following which Debenture Certificates in fully registered form shall be issued to the beneficial owners of such Debentures or their nominees.
Subject to the provisions of this Section 2.5, any exchange of a Global Debenture Certificate for Debenture Certificates which are not Global Debenture Certificates may be made in whole or in part in accordance with the provisions of Section 2.9, mutatis mutandis. All such Debenture Certificates issued in exchange for a Global Debenture Certificate or any Debentures represented by a Global Debenture Certificate shall be registered in such names as the Depository for such Global Debenture Certificate shall direct and shall be entitled to the same benefits and subject to the same terms and conditions (except insofar as they relate specifically to Global Debenture Certificates) as the Global Debenture Certificate or the Debentures represented by a Global Debenture Certificate surrendered upon such exchange.
Every Debenture Certificate authenticated and delivered upon registration of transfer of a Global Debenture Certificate, or in exchange for or in lieu of a Global Debenture Certificate or any Debentures represented by a Global Debenture Certificate, whether pursuant to this Section 2.5 or otherwise, shall be authenticated and delivered in the form of, and shall be, a Global Debenture Certificate, unless such Debenture is registered in the name of a Person other than the Depository for such Global Debenture Certificate or a nominee thereof.
2.6 Signatures on Debenture Certificates
All Debenture Certificates shall be signed (either manually or by facsimile signature) by one of the following officers of the Corporation: the Executive Co-Chairman of the Board, the chief executive officer, a vice-president, the chief financial officer or the corporate secretary, or by any one director or officer of the Corporation authorized by resolution of the Board. A facsimile signature on any Debenture Certificate shall for all purposes of this Indenture be deemed to be the signature of the individual whose signature it purports to be and to have been signed at the time such facsimile signature was reproduced, and each Debenture Certificate so signed shall be valid and binding upon the Corporation.
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2.7 Certification
No Debenture Certificate issued shall be obligatory or entitle the Holder thereof to the benefit thereof until such certificate, substantially in the form set out in Exhibit A or in some other form acceptable to the Trustee, has been countersigned by or on behalf of the Trustee, as Transfer Agent and Registrar. Such countersignature of the Trustee on any Debenture Certificate shall be conclusive evidence that such Debenture Certificate has been duly issued hereunder and certified by the Trustee.
The countersignature of the Trustee on a Debenture Certificate shall not be construed as a representation or warranty by the Trustee as to the validity of this Indenture or of such Debenture Certificate or issuance of the Debentures, and the Trustee shall not be liable for the use made of such Debenture Certificate or the proceeds of issuance. The countersignature of the Trustee on any Debenture Certificate shall, however, be a representation and warranty by the Trustee that the Debentures represented by such Debenture Certificate has been duly certified by or on behalf of the Trustee pursuant to the provisions of this Indenture and has been validly issued by the Corporation. Debenture Certificates are only certified by the Trustee upon written order of the Corporation.
2.8 Interest
The Corporation shall pay interest monthly in arrears on the last day of each month commencing February 29, 2016 (each, an “Interest Payment Date”). Interest on the Debentures shall accrue from the most recent date to which interest has been paid or, if no interest has been paid, from and including the Issue Date for Debentures issued on the Issue Date. The Corporation shall pay interest (including post- petition interest in any proceeding under any Bankruptcy Law) on overdue principal and Premium, if any, at the rate equal to the Interest Rate on the Debentures to the extent lawful; it shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue instalments of interest (without regard to any applicable grace periods) at the same rate to the extent lawful.
Interest shall be computed on the basis of a year of 365 days or 366 days in a leap year, as the case may be. Interest is payable on each Interest Payment Date to holders of record at the close of business on the fifth business day immediately preceding each Interest Payment Date.
For the purposes of this Indenture, whenever interest is computed on the basis of a year (the “deemed year”) which contains fewer days than the actual number of days in the calendar year of calculation, such rate of interest shall be expressed as a yearly rate for purposes of the Interest Act (Canada) by multiplying such rate of interest by the actual number of days in the calendar year of calculation and dividing such product by the number of days of the deemed year.
Interest on each Debenture shall cease to accrue from the Maturity Date of such Debenture and, if such Debenture is called for redemption, the Redemption Date fixed for such Debenture and, if such Debenture is called for repayment, the Change of Control Purchase Date fixed for such Debenture, unless, in each case, on or after such Maturity Date, Redemption Date or Change of Control Purchase Date, as the case may be, such payment is improperly withheld or refused. If such payment is improperly withheld or refused, such payment shall be subject to interest (including interest on unpaid interest) calculated in the manner and at the rate provided for in the Debenture Certificates.
Wherever in this Indenture or a Debenture Certificate there is mention, in any context, of the payment of interest, such mention is deemed to include the payment of interest on amounts in default to the extent that, in such context, such interest is, was or would be payable pursuant to this Indenture or such Debenture Certificate, and express mention of interest on amounts in default in any of the provisions of this Indenture shall not be construed as excluding such interest in those provisions of this Indenture in which such express mention is not made.
If the date for payment of any amount of principal, interest or Premium, if any, in respect of a Debenture is not a Business Day at the place of payment, then payment shall be made on the next Business Day at
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such place and the Holder of such Debenture shall not be entitled to any further interest or other payment in respect of the delay.
As the interest on the Debentures represented by Debenture Certificates comes due (except interest payable at Stated Maturity or on any repayment which shall be paid upon presentation and surrender of such Debenture for payment), the Corporation, no later than 9:00 a.m. (Toronto time) two (2) Business Days prior to the date on which payment of interest on such Debentures becomes due, shall cause to be wire-transferred to the Trustee’s account in Toronto, Ontario (or as may be agreed by the Corporation and the Trustee) an amount equal to such payment of interest (including any tax required to be deducted or withheld by the trustee). For greater certainty, the Trustee will only withhold and remit tax required to be withheld within the Income Tax Act (Canada).
If at any time the Corporation is not making payments in respect of Debentures represented by Debenture Certificates as provided in the immediately preceding paragraph, the Corporation shall pay the interest due upon the outstanding principal amount of a Debenture (except interest payable on Stated Maturity or any redemption of Debenture Certificate which, at the option of the Corporation, may be paid only upon presentation of the applicable Debenture Certificate for payment) by forwarding or causing to be forwarded, by same day delivery at least three Business Days prior to the applicable Interest Payment Date, a cheque for such interest (less any tax required by law to be deducted or withheld) payable on the applicable Interest Payment Date to the Paying Agent to be sent to the Holder of such Debenture on the Record Date for such payment at the Holder’s address appearing on the Register unless otherwise directed in writing by such Holder or, in the case of joint Holders, payable to all such joint Holders and addressed to one of them at the last address appearing in the Register and negotiable at par at each of the places at which interest upon such Debenture is payable. The forwarding of such cheque shall satisfy and discharge the liability for the interest on such Debenture to the extent of the sum represented thereby (plus the amount of any tax deducted or withheld) unless such cheque is not paid on presentation at any of the places at which such interest is payable. In the event of the non-receipt of such cheque by the applicable Debentureholder or the loss, theft or destruction thereof, the Corporation or the Paying Agent, upon being furnished with evidence of such non-receipt, loss, theft or destruction and indemnity reasonably satisfactory to it, shall issue or cause to be issued to such Debentureholder a replacement cheque for the amount of such cheque. Notwithstanding the foregoing, the Corporation, at its option, may cause the amount payable in respect of interest to be paid to a Debentureholder by wire transfer to an account maintained by such Debentureholder or in any other manner reasonably acceptable to the Trustee.
If payment of interest is made by cheque, such cheque shall be forwarded at least two Business Days prior to the applicable Interest Payment Date, and if payment is made in any other manner, such payment shall be made in a manner whereby the recipient receives credit for such payment on the applicable Interest Payment Date, provided the Trustee and the Paying Agent shall only forward such cheques upon receipt of the full amount of interest being paid in immediately available funds pursuant to Section 10.4.
2.9 Issue of Substitutional Debenture Certificates
If any Debenture Certificate issued and certified hereunder becomes mutilated or is lost, destroyed or stolen, the Corporation, in its discretion, may issue, and thereupon the Trustee shall certify and deliver, a replacement Debenture Certificate of like date and tenor as the one mutilated, lost, destroyed or stolen in exchange for and in place of and upon cancellation of such mutilated Debenture Certificate or in lieu of and in substitution for such lost, destroyed or stolen Debenture Certificate. The substituted Debenture Certificate shall be in substantially the form of Debenture Certificate attached as Exhibit A, shall be reasonably approved by the Trustee and the Debentures represented by such Debenture Certificate shall be entitled to the benefit hereof and rank equally in accordance with its terms with all other Debentures. The applicant for a replacement Debenture shall bear the cost of the issue thereof and in case of loss, destruction or theft shall, as a condition precedent to the issue thereof, furnish to the Corporation and to the Trustee such evidence of ownership and of the loss, destruction or theft of the Debenture Certificate so lost, destroyed or stolen as shall be satisfactory to each of the Corporation and the Trustee in their discretion, and such applicant shall also furnish an indemnity and surety bond, in amount and form
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satisfactory to each of the Corporation and the Trustee in their discretion, and shall pay the reasonable charges and expenses of the Corporation and the Trustee in connection therewith.
2.10 Option of Holder as to Place of Payment
Except as herein otherwise provided, all amounts which at any time become payable on account of any Debenture or any interest or Premium, if any, thereon shall be payable at the option of the Holder at any of the places at which the principal and interest in respect of such Debenture are payable subject to written notice to the Registrar and Trustee.
2.11 Record of Payments
The Trustee shall maintain accounts and records evidencing each payment of principal, Premium, if any, and interest on Debentures, which accounts and records shall constitute, in the absence of manifest error, prima facie evidence thereof.
None of the Corporation, the Trustee, any other Registrar and any Paying Agent shall be liable or responsible to any Person for any aspect of the records related to or payments made on account of beneficial interests under any Global Debenture Certificate or for maintaining, reviewing, or supervising any records relating to such beneficial interests.
2.12 Surrender for Cancellation
If the outstanding principal amount due upon any Debenture shall become payable before the Stated Maturity thereof, the Person presenting the applicable Debenture Certificate for payment shall surrender the same for cancellation to the Corporate Trust Office and the Corporation shall pay or cause to be paid the interest accrued and unpaid thereon (computed on a per diem basis if the date fixed for payment is not an Interest Payment Date).
2.13 Right to Receive Indenture
Each Debentureholder is entitled to receive from the Corporation a copy of this Indenture on written request and upon payment of a reasonable copying charge.
Article 3 REGISTRATION, TRANSFER, EXCHANGE AND OWNERSHIP OF DEBENTURES AND DEBENTURE CERTIFICATES
3.1 Registers
The Corporation shall cause to be kept at the Corporate Trust Office, or at such other place and by such other Person as shall be agreed by the Corporation and the Trustee, a central register (the “Register”) (the Trustee or other Person maintaining the Register being hereinafter referred to as the “Registrar”) in which shall be entered the names and last known addresses of Debentureholders and the other particulars, as prescribed by law, of the Debentures held by each of them and of all transfers and cancellations of such Debentures. Such registration shall be noted on such Debenture Certificates by the Registrar. The Registrar from time to time shall, when requested in writing to do so by the Corporation or by the Trustee, furnish the Corporation or the Trustee, as the case may be, with a list of the names and last known addresses of the Debentureholders entered on the Register, showing the number of Debentures, and the principal amount and serial numbers of the Debenture Certificates held by each of them.
The Corporation shall, or shall cause the Registrar to, furnish to the Trustee, in writing at least seven Business Days before each Interest Payment Date and at such other times as the Trustee may request in
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writing, a list in such form and as of such date as the Trustee may reasonably require of the names and last known addresses of Debentureholders.
The Register shall at all reasonable times and upon prior written request be open for inspection by the Corporation, the Trustee and any Debentureholder.
3.2 Transfer of Debentures
A Holder of a Debenture may at any time and from time to time, subject to Section 3.5, have such Debenture transferred at the place at which the Register is kept pursuant to the provisions of Section 3.1.
No transfer of a Debenture shall be effective as against the Corporation unless:
(a) such transfer is made by the Holder of the Debenture or the executor, administrator or other legal representative of, or any attorney for, the Holder, duly appointed by an instrument in form and execution satisfactory to the Registrar, upon surrender to the Registrar of the applicable Debenture Certificate and a duly executed form of transfer;
(b) such transfer is made in compliance with Applicable Law;
(c) such transfer is made in compliance with requirements as the Registrar may prescribe;
(d) such transfer has been noted on the Register by the Registrar; and
(e) such transfer is made in compliance with Section 3.3.
3.3 Restrictions on Transfer of Debentures Represented by Global Debenture Certificates
Notwithstanding any other provision of this Indenture, Debentures represented by a Global Debenture Certificate registered in the name of the Depository or a nominee of the Depository may not be transferred by the Depository or such nominee except in the following circumstances:
(a) such Debentures may be transferred by the Depository to a nominee of the Depository or by a nominee of the Depository to the Depository or to another nominee of the Depository or by the Depository or its nominee to a successor Depository or its nominee;
(b) such Debentures may be transferred at any time after the Depository for such Debentures has notified the Corporation or the Corporation determines that the Depository is unwilling or unable or no longer eligible to continue as Depository for such Debentures;
(c) such Debentures may be transferred at any time after the Corporation has determined, in its sole discretion, that the Debentures represented by such Global Debenture Certificate shall no longer be held as Book Entry Only Debentures;
(d) such Debentures may be transferred at any time after the Trustee has determined that an Event of Default has occurred and is continuing with respect to the Debentures represented by a Global Debenture Certificate, provided that at the time of such transfer such Event of Default has not been waived in accordance with the provisions of this Indenture; and
(e) such Debentures may be transferred in accordance with the exceptions set out in Section 2.5.
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3.4 Transferee Entitled to Registration
The registered transferee of a Debenture shall be entitled, after the appropriate form of transfer is lodged with the Registrar and upon compliance with all other conditions in that regard required by this Indenture or by law, to be entered on the Register as the Holder of such Debenture free from all equities or rights of setoff or counterclaim between the Corporation and the transferor or any previous Holder of such Debenture, except in respect of equities of which the Corporation is required to take notice by statute or by order of a court of competent jurisdiction.
3.5 Closing of Register; Recording of Certain Transfers
The Corporation shall not have the power to close the Register.
Neither the Corporation nor the Registrar shall be required to:
(a) effect transfers of Debentures on any Interest Payment Date or during the 10 preceding Business Days, provided that such transfer restriction shall not affect the ability of the Debentureholders to trade the Debentures on the Exchange, or
(b) effect transfers of Debentures that have been designated for repayment unless, upon due presentation thereof for repayment, such Debentures are not repaid.
3.6 Exchange of Debentures Certificates
Subject to Sections 3.3 and 3.5, Debenture Certificates in any authorized form or denomination may be exchanged, upon reasonable notice, for Debenture Certificates in any other authorized form or denomination, any such exchange to be for an equivalent aggregate principal amount of Debentures, carrying the same rate of interest and having the same Maturity Date.
Debenture Certificates may be exchanged at the Corporate Trust Office or at such other place or places as may be specified in the Debenture Certificates and at such other place or places as may from time to time be designated by the Corporation pursuant to Section 10.3. Any Debenture Certificates tendered for exchange shall be surrendered to the Trustee. The Corporation shall execute and the Trustee shall certify all Debenture Certificates necessary to carry out such exchanges. All Debenture Certificates surrendered for exchange shall be cancelled.
3.7 Ownership and Entitlement to Payment
The Person in whose name a Debenture is registered shall be deemed to be the beneficial owner thereof for all purposes of this Indenture and payment of or on account of the principal, Premium, if any, and interest on such Debenture shall be made only to or upon the order in writing of such Person, and each such payment shall be a good and sufficient discharge to the Corporation, the Trustee, any other Registrar and any Paying Agent for the amount so paid.
If a Debenture is registered in the name of more than one Person, the principal, Premium, if any, and interest from time to time payable on such Debenture may be paid to the order of all such Persons and each such payment shall be a good and sufficient discharge to the Corporation, the Trustee, any other Registrar and any Paying Agent for the amount so paid.
Notwithstanding any other provision of this Indenture, all payments in respect of Debentures represented by a Global Debenture Certificate shall be made to the Depository or its nominee for subsequent payment by the Depository or its nominee to BEO Participants.
The Holder for the time being of a Debenture shall be entitled to the principal, Premium, if any, and interest evidenced by such Debenture, free from all equities or rights of setoff or counterclaim between
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the Corporation and the original or any intermediate Holder thereof except in respect of equities of which the Corporation is required to take notice by statute or by order of a court of competent jurisdiction. The receipt by any such Holder of any such principal, Premium, if any, or interest shall be a good and sufficient discharge to the Corporation, the Trustee, any other Registrar and any Paying Agent for the amount so paid, and none of the Corporation, the Trustee, any other Registrar and any Paying Agent shall be bound to inquire into the title of any such Holder.
3.8 Evidence of Ownership
The Corporation and the Trustee may treat the Holder of a Debenture as the beneficial owner thereof without actual production of such Debenture for the purpose of any Debentureholders’ Request, requisition, direction, consent, instrument or other document to be made, signed or given by the Holder of such Debenture.
3.9 No Notice of Trusts
Neither the Corporation nor the Trustee nor any other Registrar nor any Paying Agent shall be bound to take notice of or see to the performance or observance of any duty owed to a third Person (whether under a trust, express, implied, resulting or constructive, in respect of any Debenture or otherwise) by the beneficial owner or the Holder of a Debenture or any Person whom the Corporation or the Trustee treats, as permitted or required by law, as the beneficial owner or the Holder of such Debenture, and the Corporation, the Trustee or any other Registrar may transfer any Debenture on the direction of the Person so treated or registered as the Holder thereof, whether named as trustee or otherwise, as though that Person was the beneficial owner of such Debenture.
3.10 Charges for Transfer and Exchange
For each Debenture transferred or Debenture Certificate exchanged, the Trustee or other Registrar, except as otherwise herein provided, may charge a reasonable amount for its services and in addition may charge a reasonable amount for each new Debenture Certificate issued (such amounts to be agreed upon by the Trustee or other Registrar and the Corporation from time to time), and payment of such charges and reimbursement of the Trustee or other Registrar for any stamp taxes or governmental or other charges required to be paid shall be made by the Person requesting such exchange or transfer as a condition precedent thereto.
Notwithstanding the foregoing, no charge (except a charge to reimburse the Trustee or other Registrar for any stamp taxes or governmental or other charges) shall be made to a Debentureholder:
(a) for any exchange of a Debenture Certificate or any transfer of Debentures applied for within a period of 45 days from the date of the first delivery of Debenture Certificate; or
(b) for any exchange of any Debenture Certificate resulting from a partial repayment pursuant to Section 5.3 or Section 6.9.
Article 4 ISSUE AND DELIVERY OF DEBENTURES
4.1 Issuance of Debentures
The Corporation may issue, and the Trustee shall certify and deliver to or to the order of the Corporation, Debenture Certificates representing Debentures issuable under this Indenture, but only upon receipt by the Trustee of the following on the Issue Date:
(a) a Certified Resolution authorizing the issuance and delivery of Debentures in a specified aggregate principal amount;
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(b) an Officer’s Certificate stating that no default exists in respect of any of the covenants, agreements or provisions of this Indenture or, if any such default exists, specifying the nature thereof and the action, if any, being taken by the Corporation to remedy such default;
(c) an order of the Corporation for the certification and delivery of such Debentures specifying the number of Debentures requested to be certified and delivered; and
(d) an opinion of Corporation Counsel to the effect that the Debentures have been validly created, allotted and issued and upon receipt of consideration for their issuance in accordance with this Indenture will be duly and validly issued securities of the Corporation.
4.2 No Debentures to be Issued During Default
No Debentures shall be issued and no Debenture Certificates representing such Debentures shall be certified and delivered hereunder if, at the time of such certification and delivery, the Corporation, to the knowledge of the Trustee, is in default hereunder, or would immediately after such issuance be in default hereunder, provided that in each case the Trustee may certify and deliver Debenture Certificates notwithstanding such knowledge if the Trustee shall be satisfied, relying on the advice or opinion of Trustee Counsel or other appropriately qualified experts that such default is not material and that the Corporation is taking appropriate action to remedy such default.
Article 5 PURCHASE OF DEBENTURES IN OPEN MARKET
5.1 Purchase of Debentures
The Corporation, at any time when it is not in default hereunder, may purchase all or any of the Debentures in the open market (which shall include purchase from or through an investment dealer or a firm holding membership on a recognized stock exchange), by tender or by private contract, at any price, in compliance with any applicable securities regulations and stock exchange rules. All Debentures so purchased shall forthwith be delivered to the Trustee and shall be cancelled by it and, subject to the following paragraph of this Section 5.1, no Debentures shall be issued in substitution therefor.
If, upon an invitation for tenders, more Debentures are tendered at the same lowest price than the Corporation is prepared to accept, the Debentures to be purchased by the Corporation shall be selected by the Trustee, in such manner (which may include selection on a pro rata basis, random selection by computer or any other method) as the Trustee deems equitable and expedient, from the Debentures tendered by each tendering Debentureholder who tendered at such lowest price. For this purpose the Trustee may make, and from time to time amend, regulations with respect to the manner in which Debentures may be so selected, and regulations so made shall be valid and binding upon all Debentureholders.
5.2 Cancellation of Debentures
Subject to the provisions of Sections 5.3 as to Debentures repaid or purchased in part:
(a) any Debentures that are to be repaid shall be surrendered to the Trustee at the Corporate Trust Office (with, if the Corporation or the Trustee so requires, due endorsement by, or a written instrument of transfer in form satisfactory to the Corporation and the Trustee duly executed by, the Holder thereof or such Holder’s attorney duly authorized in writing); and
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(b) all Debentures repaid or purchased by the Corporation shall not be reissued or resold and shall be forthwith delivered to and cancelled by the Trustee, and no Debentures shall be issued in substitution therefor.
5.3 Debenture Certificates Repaid in Part
The Holder of a Debenture Certificate of which less than all of the Debentures represented thereby are purchased, upon surrender of such Debenture Certificate for payment, shall be entitled to receive, without expense to such Holder, one or more new Debenture Certificates representing the Debentures which have not been purchased, and the Trustee shall certify and deliver such new Debenture Certificate(s) upon receipt of the Debenture Certificate(s) so surrendered.
Article 6 CHANGE OF CONTROL PURCHASES
6.1 Change of Control Purchase
If a Change of Control occurs at any time during which any Debentures remain outstanding, a Holder of such Debentures shall be entitled to require the Corporation to purchase and repay all or less than all of such Holder’s Debentures, and the Corporation shall be required to purchase and repay the Debentures designated for purchase by the Holder, for a purchase price, payable in cash in U.S. dollars, equal to 101% of the outstanding principal amount of each such Debenture to be purchased and repaid (the “Change of Control Purchase Price”) (the amount in excess of 100% being the Premium), together with any accrued and unpaid interest up to but excluding the date of purchase (the “Change of Control Purchase Date”, which shall not be later than 35 Business Days after the Change of Control).
6.2 Change of Control Notice
Within 15 Business Days after the occurrence of a Change of Control:
(a) the Corporation shall provide a written notice of a Change of Control (the “Change of Control Notice”) by registered mail to the Trustee; and
(b) the Corporation shall cause a copy of the Change of Control Notice to be published in the national edition of The Globe and Mail or other daily newspaper of national circulation in Canada.
The Trustee shall forthwith upon receipt of the Change of Control Notice mail a copy thereof to each Holder in the manner set forth in Section 14.2.
The Trustee shall be under no obligation to ascertain the occurrence of a Change of Control or to give notice with respect thereto other than as provided above upon receipt of the Change of Control Notice. The Trustee may conclusively assume, in the absence of written notice to the contrary from the Corporation, that no Change of Control has occurred.
The Change of Control Notice shall state, among other things the date of the Change of Control and, briefly, the events causing the Change of Control.
6.3 Change of Control Purchase Notice
The Change of Control Notice shall be accompanied by a written notice (the “Change of Control Purchase Notice”) of the Corporation notifying each Holder of Debentures that such Holder may require the Corporation to purchase and repay all or less than all of such Holder’s Debentures on the Change of Control Purchase Date, which Change of Control Purchase Notice shall state, among other things:
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(a) that if the Holder wishes to require the Corporation to purchase all or less than all of such Holder’s Debentures, the Change of Control Purchase Notice must be completed and returned by the Holder by 5:00 p.m. (Toronto time) on the Business Day immediately prior to the Change of Control Purchase Date;
(b) the Change of Control Purchase Date;
(c) the Change of Control Purchase Price;
(d) the name and address of the Trustee;
(e) that the applicable Debenture Certificates representing the Debentures to be purchased and repaid must be surrendered to the Trustee at its Corporate Trust Office to collect payment;
(f) that the Change of Control Purchase Price for the Debentures as to which a Change of Control Purchase Notice has been duly given and not withdrawn, together with accrued and unpaid interest thereon, will be paid promptly following the later of the Change of Control Purchase Date and the time of surrender of the Debenture Certificates as described in paragraph (e);
(g) the procedures that the Holder must follow to exercise its rights under Section 6.1 and a brief description of those rights;
(h) that any Holder delivering to the Trustee a signed Change of Control Purchase Notice shall have the right to withdraw that Change of Control Purchase Notice at any time prior to the close of business on the Change of Control Purchase Date by delivery of a written notice of withdrawal to the Trustee in accordance with Section 6.6;
(i) that interest on those Debentures in respect of which a Change of Control Purchase Notice has been given by the Debentureholder and not withdrawn shall cease to accrue from and after the Change of Control Purchase Date; and
(j) that the Debentures shall be purchased and repaid on the Change of Control Purchase Date pursuant to the applicable provisions of this Indenture and immediately cancelled by the Trustee thereafter.
6.4 Procedures for Exercising Change of Control Purchase
A Holder may exercise its rights specified in Section 6.1 upon delivery to the Trustee, at any time prior to 5:00 p.m. (Toronto time) on the Business Day immediately prior to a Change of Control Purchase Date, of a signed Change of Control Purchase Notice, that includes the following information:
(a) the number of Debentures that the Holder designates for purchase and repayment; and
(b) that the Debentures are to be purchased and repaid by the Corporation on the Change of Control Purchase Date pursuant to this Indenture.
The delivery of the applicable Debenture Certificate, if any, (together with a written instrument of transfer in form satisfactory to the Corporation and the Trustee, duly endorsed) to the Trustee prior to, on or after the Change of Control Purchase Date shall be a condition to the receipt by the Holder of the Change of Control Purchase Price therefor; provided that such Change of Control Purchase Price shall be paid only if the Debenture Certificates so delivered to the Trustee conform in all respects to the description thereof set forth in the related Change of Control Purchase Notice.
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6.5 Consummation of Change of Control Purchase
Upon receipt by the Trustee of a Change of Control Purchase Notice, the Holder of the Debentures in respect of which such Change of Control Purchase Notice was given shall (unless such Change of Control Purchase Notice is withdrawn in accordance with Section 6.6) thereafter be entitled to receive solely the Change of Control Purchase Price, together with accrued and unpaid interest with respect to such Debentures to but excluding the Change of Control Purchase Date. The Change of Control Purchase Price and accrued and unpaid interest shall be paid to such Holder promptly following the later of:
(a) the Change of Control Purchase Date (provided the conditions in Section 6.4 have been satisfied); and
(b) the time of delivery of the Debenture Certificates, if applicable, to the Trustee by the Holder thereof in the manner required by Section 6.4.
6.6 Withdrawal of Purchase Notice
A signed Change of Control Purchase Notice may be withdrawn by a Holder at any time prior to 5:00 p.m. (Toronto time) on the Business Day immediately prior to the Change of Control Purchase Date, by means of a written notice of withdrawal delivered by the Holder to the Trustee and received by the Trustee on or before such time specifying:
(a) the number of Debentures in respect of which such notice of withdrawal is being submitted; and
(b) the number of Debentures, if any, to remain subject to the original Change of Control Purchase Notice.
The Trustee shall promptly return to the respective Holders thereof any Debenture Certificates with respect to which a signed Change of Control Purchase Notice has been withdrawn in compliance with this Indenture.
6.7 Notification by Trustee
The Trustee shall promptly notify the Corporation of the receipt of any signed Change of Control Purchase Notice and of any written notice of withdrawal thereof.
6.8 Deposit of Change of Control Purchase Price
No later than 9:00 a.m. (Toronto time) two (2) Business Days immediately prior to the Change of Control Purchase Date, the Corporation shall deposit with the Trustee an amount of cash sufficient to pay the aggregate Change of Control Purchase Price of all the Debentures that are to be purchased and repaid as of the Change of Control Purchase Date, together with accrued and unpaid interest on such Debentures.
6.9 Debenture Certificates Purchased in Part
If less than all of the Debentures of a Holder are purchased and repaid, the Debenture Certificate, if any, representing such Debentures being purchased and repaid shall be surrendered to the Trustee at the Corporate Trust Office (with, if the Corporation or the Trustee so requires, due endorsement by, or a written instrument of transfer in form satisfactory to the Corporation and the Trustee duly executed by, the Holder thereof or such Holder’s attorney duly authorized in writing) and the Corporation shall execute and the Trustee shall certify and deliver to the Holder of such Debentures, without service charge, a replacement certificate representing the remaining Debenture(s).
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Article 7 REDEMPTION OF DEBENTURES
7.1 Applicability of Article
Subject to regulatory approval, the Corporation shall have the right at its option to redeem, either in whole at any time or in part from time to time before maturity, any Debentures issued hereunder at the Redemption Price, and on such date or dates and in accordance with such other provisions as shall have been expressed in this Indenture and in the Debentures.
7.2 Partial Redemption
If less than all the Debentures are at any time to be redeemed, the Debentures to be so redeemed shall be selected by the Trustee on a pro rata basis to the nearest multiple of $1.00 in accordance with the principal amount of the Debentures registered in the name of each Holder or in such other manner as the Trustee deems equitable, subject to the approval of the Exchange, as may be required from time to time.
7.3 Notice of Redemption
Notice of redemption (the “Redemption Notice”) of the Debentures shall be given to the Holders of the Debentures so to be redeemed not more than 60 days nor less than 30 days prior to the date fixed for redemption (the “Redemption Date”) in the manner provided in Section 14.2. Every such notice shall specify the aggregate principal amount of Debentures called for redemption, the Redemption Date, the Redemption Price and the manner of payment and shall state that interest upon the principal amount of Debentures called for redemption shall cease to be payable from and after the Redemption Date. In addition, unless all the outstanding Debentures are to be redeemed, the Redemption Notice shall specify:
(a) the distinguishing letters and numbers of the registered Debentures which are to be redeemed (or of such thereof as are registered in the name of such Debentureholder);
(b) in the case of a Global Debenture, that the redemption will take place in such manner as may be agreed upon by the Depository, the Trustee and the Corporation; and
(c) in all cases, the principal amounts of such Debentures or, if any such Debenture is to be redeemed in part only, the principal amount of such part.
7.4 Debentures Due on Redemption Dates
Notice having been given as aforesaid, all the Debentures called for redemption shall thereupon be and become due and payable at the Redemption Price on the Redemption Date specified in such Redemption Notice, in the same manner and with the same effect as if it were the date of maturity specified in such Debentures, anything therein or herein to the contrary notwithstanding, and from and after such Redemption Date, if the monies necessary to redeem such Debentures shall have been deposited as provided in Section 7.5 and affidavits or other proof satisfactory to the Trustee as to the publication and/or mailing of such notices shall have been lodged with it, interest upon the Debentures shall cease. If any question shall arise as to whether any notice has been given as above provided and such deposit made, such question shall be decided by the Trustee whose decision shall be final and binding upon all parties in interest.
7.5 Deposit of Redemption Monies
Subject to the application of funds pursuant to Section 10.12(b), Redemption of Debentures shall be provided for by the Corporation depositing with the Trustee or any paying agent to the order of the Trustee, on or before 11:00 a. m. (Toronto time) on the Business Day immediately prior to the Redemption Date specified in the Redemption Notice, such sums of money as may be sufficient to pay
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the Redemption Price of the Debentures called for redemption. The Corporation shall also deposit with the Trustee a sum of money sufficient to pay any charges or expenses which may be incurred by the Trustee in connection with such redemption. Every such deposit shall be irrevocable. From the sums deposited, the Trustee shall pay or cause to be paid to the Holders of such Debentures so called for redemption, upon surrender of such Debentures, the principal, Premium (if any) and interest (if any) to which they are respectively entitled on redemption.
7.6 Failure to Surrender Debentures Called for Redemption
In case the Holder of any Debenture called for redemption shall fail on or before the Redemption Date to surrender such Holder’s Debenture, or shall not within such time accept payment of the redemption monies payable, or give such receipt therefor, if any, as the Trustee may require, such redemption monies may be set aside in trust, either in the deposit department of the Trustee or in a chartered bank, and such setting aside shall for all purposes be deemed a payment to the Debentureholder of the sum so set aside and, to that extent, the Debenture shall thereafter not be considered as outstanding hereunder and the Debentureholder shall have no other right except to receive payment out of the monies so paid and deposited upon surrender and delivery of such Holder’s Debenture of the Redemption Price of such Debenture. In the event that any money required to be deposited hereunder with the Trustee or Paying Agent on account of principal, Premium, if any, or interest, if any, on Debentures issued hereunder shall remain so deposited for a period of five years less one day from the Redemption Date, then such monies together with any interest thereon or any distribution paid thereon, shall, subject to any applicable law regarding unclaimed property, at the end of such period be paid over or delivered over by the Trustee or the Paying Agent to the Corporation at its request, and thereupon the Trustee shall not be responsible to Debentureholders for any amounts owing to them and subject to applicable law, thereafter the Holder of a Debenture in respect of which such money was so repaid to the Corporation shall have no rights in respect thereof except to obtain payment of the money due from the Corporation, subject to any limitation period provided by the laws of Ontario.
7.7 Cancellation of Debentures Redeemed.
Subject to the provisions of Section 7.2 as to Debentures redeemed or purchased in part, all Debentures redeemed and repaid under this Article 7 shall forthwith be delivered to the Trustee and cancelled and no Debentures shall be issued in substitution for those so redeemed and repaid.
7.8 Effect of Redemption Notice
Any Redemption Notice, if given in a manner herein provided, shall be conclusively presumed to have been given, whether or not the Holder receives such notice. In any case, failure to give such notice or any defect in the notice to the Holder of any Debenture shall not affect the validity of the proceedings for the purchase of any other Debenture. On and after the applicable redemption or purchase date, interest shall cease to accrue on Debentures or portions of Debentures purchased.
Article 8 CONVERSION OF DEBENTURES
8.1 Applicability of Article
(a) Any Debentures issued hereunder will be convertible into Common Shares or other securities of the Corporation, at such conversion rate or rates, on such date or dates and in accordance with such other provisions as shall have been expressed in this Indenture and in the Debentures.
(b) Such right of conversion shall extend only to the maximum number of whole Common Shares into which the aggregate principal amount of the Debenture or Debentures surrendered for conversion at any one time by the Holder thereof may be converted.
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Fractional interests in Common Shares shall be adjusted for in the manner provided in Section 8.7.
8.2 Conversion Price
The Conversion Price in effect on the Issue Date for each Common Share to be issued upon the conversion of Debentures shall be equal to $0.13, being a conversion ratio of approximately 7,692 Common Shares for each $1,000 principal amount of Debentures. Except as provided in Section 8.5, no adjustment in the number of Common Shares to be issued upon conversion will be made for dividends or distributions on Common Shares issuable upon conversion, the record date for the payment of which precedes the date upon which the Holder becomes a holder of Common Shares in accordance with Article 8. No fractional Common Shares will be issued, and Holders will receive a cash payment in satisfaction of any fractional interest in an amount equal to the fractional interest which would have been issuable multiplied by the Conversion Price.
8.3 Notice of Expiry of Conversion Rights
Notice of the expiry of the conversion rights of the Debentures (other than the expiry occurring on the Business Day immediately preceding the Stated Maturity of the Debentures) shall be given by or on behalf of the Corporation, not more than 60 days and not less than 30 days prior to the date fixed for the Time of Expiry, in the manner provided in Section 14.2.
8.4 Revival of Right to Convert
If the redemption of any Debenture called for redemption by the Corporation is not made or the payment of the purchase price of any Debenture which has been tendered in acceptance of an offer by the Corporation to purchase Debentures for cancellation is not made, in the case of a redemption upon due surrender of such Debenture or in the case of a purchase on the date on which such purchase is required to be made, as the case may be, then, provided the Time of Expiry has not passed, the right to convert such Debentures shall revive and continue as if such Debenture had not been called for redemption or tendered in acceptance of the Corporation’s offer, respectively.
8.5 Manner of Exercise of Right to Convert
(a) The Holder of a Debenture desiring to convert such Debenture in whole or in part into Common Shares shall surrender such Debenture to the Trustee at its principal offices in the City of Toronto, Ontario together with the conversion notice in the form attached to the Debenture as Schedule B (the “Conversion Notice”) or any other written notice in a form satisfactory to the Trustee, in either case duly executed by the Holder or his executors or administrators or other legal representatives or his or their attorney duly appointed by an instrument in writing in form and executed in a manner satisfactory to the Trustee, exercising his right to convert such Debenture in accordance with the provisions of this Article; provided that with respect to a Global Debenture Certificate, any owner of a beneficial interest thereunder desiring to convert shall request and receive a Debenture Certificate in definitive form and shall deliver such Debenture Certificate and Conversion Notice to the Trustee. Thereupon such Debentureholder or, subject to payment of all applicable stamp or security transfer taxes or other governmental charges and compliance with all reasonable requirements of the Trustee, his nominee(s) or assignee(s) shall be entitled to be entered in the books of the Corporation as at the Date of Conversion (or such later date as is specified in the Debenture and Section 8.5(b)) as the holder of the number of Common Shares into which such Debenture is convertible, net of applicable withholding taxes if any, in accordance with the provisions of this Article and, as soon as practicable thereafter, the Corporation shall deliver to such Debentureholder or, subject as aforesaid, his nominee(s) or assignee(s), a certificate or certificates for such Common Shares. If a conversion of Debentures would result in the Holder being issued Common Shares that, together with any other Common Shares held
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by such Holder, would constitute 10% or more of the then outstanding Common Shares, then such Holder must, as a condition to such conversion, provide to the Corporation and the Exchange an undertaking, in the form attached hereto as Schedule C to the Debenture or such other form as may be acceptable to the Exchange. Such undertaking will require such Holder to: (i) file with the Exchange such documentation as may be required by the Exchange in connection with such Holder acquiring Common Shares constituting 10% or more of the then outstanding Common Shares, which may include, among other things, a Personal Information Form, if, on the 10th Business Day following such conversion, such Holder continues to hold Common Shares constituting 10% or more of the then outstanding Common Shares; and (ii) if such Personal Information Form is not cleared by the Exchange, within 20 Business Days following notice from the Exchange thereof to the Holder, such Holder will sell that number of Common Shares in order to decrease his, her or its holdings of Common Shares below 10% of the then outstanding Common Shares.
(b) For the purposes of this Article, a Debenture shall be deemed to be surrendered for conversion on the date (herein called the “Date of Conversion”) (i) on which it is so surrendered when the register of the Trustee is open and in accordance with the provisions of this Article, or (ii) in the case of a Debenture so surrendered by post or other means of transmission, on which it is received by the Trustee at its office specified in Section 8.5(a); provided that if a Debenture is surrendered for conversion on a day on which the register of Common Shares is closed, the person or persons entitled to receive Common Shares shall become the holder or holders of record of such Common Shares as at the date on which such registers are next reopened.
(c) No Debenture may be exchanged on an Interest Payment Date or during the seven Business Days preceding an Interest Payment Date. If a Debenture is surrendered for exchange on an Interest Payment Date or during the seven Business Days preceding an Interest Payment Date, the Person entitled to receive Common Shares in respect of the Debenture so surrendered for exchange shall not become the holder of record of such Common Shares until the Business Day following such Interest Payment Date.
(d) Any part, being $1.00 or an integral multiple thereof, of a Debenture in a denomination in excess of $1.00 may be converted as provided in this Article and all references in this Indenture to conversion of Debentures shall be deemed to include conversion of such parts.
(e) The Holder of any Debenture of which only a part is converted shall, upon the exercise of his right of conversion, surrender such Debenture to the Trustee in accordance with Section 8.5(a), and the Trustee shall cancel the same and shall without charge forthwith certify and deliver to the Holder a new Debenture or Debentures in an aggregate principal amount equal to the unconverted part of the principal amount of the Debenture so surrendered.
(f) The Holder of a Debenture surrendered for conversion in accordance with this Section 8.5 shall be entitled to receive accrued and unpaid interest in respect thereof from the date of the last Interest Payment Date up to but excluding the Date of Conversion (less applicable withholding taxes, if any), and the Common Shares issued upon such conversion shall rank only in respect of distributions or dividends declared in favour of shareholders of record on and after the Date of Conversion or such later date as such Holder shall become the holder of record of such Common Shares pursuant to Section 8.5(b), from which applicable date they will for all purposes be and be deemed to be issued and outstanding as fully paid and non-assessable Common Shares.
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8.6 Adjustment of Conversion Price
Subject to the requirements of the Exchange, the Conversion Price in effect at any date shall be subject to adjustment from time to time as set forth below.
(a) If and whenever at any time prior to the Time of Expiry the Corporation shall (i) subdivide, redivide or change the outstanding Common Shares into a greater number of shares, (ii) reduce, combine or consolidate the outstanding Common Shares into a smaller number of shares, or (iii) issue Common Shares or securities convertible into Common Shares to the holders of all or substantially all of the outstanding Common Shares by way of a dividend or distribution (other than cash dividends or distributions for which an adjustment would be made under Section 8.6(b)) (a “Common Share Reorganization”), the Conversion Price in effect on the effective date of such subdivision, redivision, reduction, combination or consolidation or on the record date for such issue of Common Shares or securities convertible into Common Shares by way of a dividend or distribution, as the case may be, shall be adjusted effective immediately after the record date at which the holders of Common Shares are determined for the purpose of the Common Share Reorganization by multiplying the Conversion Price in effect immediately prior to such record date by a fraction: (1) the denominator of which shall be the number of Common Shares outstanding immediately after giving effect to such Common Share Reorganization (including, in the case where securities exchangeable for or convertible into Common Shares are distributed, the number of Common Shares that would have been outstanding had such securities been exchanged for or converted into Common Shares on such record date, assuming in any case where such securities are not then convertible or exchangeable but subsequently become so, that they were convertible or exchangeable on the record date on the basis upon which they first become convertible or exchangeable); and (2) the numerator of which shall be the number of Common Shares outstanding on such record date before giving effect to such Common Share Reorganization. Such adjustment shall be made successively whenever any event referred to in this Section 8.6 shall occur. Any such issue of Common Shares or securities convertible into Common Shares by way of a dividend or distribution shall be deemed to have been made on the record date for the dividend or distribution for the purpose of calculating the number of outstanding Common Shares under subsections (c) and (d) of this Section 8.6.
(b) If and whenever at any time prior to the Time of Expiry the Corporation shall fix a record date for the payment of a cash dividend or distribution to the holders of all or substantially all of the outstanding Common Shares in respect of any Applicable Period, the Conversion Price shall be adjusted immediately after such record date so that it shall be equal to the price determined by multiplying the Conversion Price in effect on such record date by a fraction, of which the denominator shall be the Current Market Price per Common Share on such record date and of which the numerator shall be the Current Market Price per Common Share on such record date minus the amount in cash per Common Share distributed to holders of Common Shares. Such adjustment shall be made successively whenever such a record date is fixed. To the extent that any such cash dividend or distribution is not paid, the Conversion Price shall be re-adjusted to the Conversion Price which would then be in effect if such record date had not been fixed.
(c) If and whenever at any time prior to the Time of Expiry the Corporation shall fix a record date for the issuance of options, rights or warrants to all or substantially all the holders of its outstanding Common Shares entitling them, for a period expiring not more than 45 days after such record date, to subscribe for or purchase Common Shares (or securities convertible into Common Shares) at a price per share (or having a conversion or exchange price per share) less than 95% of the Current Market Price of a Common Share on such record date, the Conversion Price shall be adjusted immediately after such record date so that it shall equal the price determined by multiplying the Conversion
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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 offered for subscription or purchase (or the aggregate conversion or exchange price of the convertible securities so offered) by such Current Market Price per Common Share, 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 offered for subscription or purchase (or into which the convertible securities so offered are convertible). Such adjustment shall be made successively whenever such a record date is fixed. To the extent that any such options, rights or warrants are not so issued or any such options, rights or warrants are not exercised prior to the expiration thereof, the Conversion Price shall be re-adjusted to the Conversion Price which would then be in effect if such record date had not been fixed or to the Conversion Price which would then be in effect based upon the number of Common Shares (or securities convertible into Common Shares) actually issued upon the exercise of such options, rights or warrants were included in such fraction, as the case may be.
(d) If and whenever at any time prior to the Time of Expiry, there is a reclassification of the Common Shares or a capital reorganization of the Corporation other than as described in Section 8.6(a) or a consolidation, amalgamation, arrangement, share exchange, merger of the Corporation with or into any other Person or other entity or acquisition of the Corporation or other combination pursuant to which the Common Shares are converted into or acquired for cash, securities or other property; or a sale or conveyance of the property and assets of the Corporation as an entirety or substantially as an entirety to any other Person (other than a direct or indirect wholly-owned subsidiary of the Corporation) or other entity or a liquidation, dissolution or winding-up of the Corporation, any Holder of a Debenture who has not exercised its right of conversion prior to the effective date of such reclassification, capital reorganization, consolidation, amalgamation, arrangement, share exchange, merger, acquisition, combination, sale or conveyance or liquidation, dissolution or winding-up, upon the exercise of such right thereafter, shall be entitled to receive and shall accept, in lieu of the number of Common Shares then sought to be acquired by it, such amount of cash or the number of shares or other securities or property of the Corporation or of the Person or other entity resulting from such reclassification, capital reorganization, consolidation, amalgamation, arrangement, share exchange, merger, acquisition, combination, or to which such sale or conveyance may be made or which holders of Common Shares receive pursuant to such liquidation, dissolution or winding-up, as the case may be, that such Holder of a Debenture would have been entitled to receive on such reclassification, capital reorganization, consolidation, amalgamation, arrangement, share exchange, merger, acquisition, combination, sale or conveyance or liquidation, dissolution or winding-up, if, on the record date or the effective date thereof, as the case may be, the holder had been the registered holder of the number of Common Shares sought to be acquired by it and to which it was entitled to acquire upon the exercise of the conversion right. If determined appropriate by the Board, to give effect to or to evidence the provisions of this Section 8.6(d), the Corporation, its successor, or such purchasing Person or other entity, as the case may be, shall, prior to or contemporaneously with any such reclassification, capital reorganization, consolidation, amalgamation, arrangement, merger, share exchange, acquisition, combination, sale or conveyance or liquidation, dissolution or winding-up, enter into an indenture which shall provide, to the extent possible, for the application of the provisions set forth in this Indenture with respect to the rights and interests thereafter of the Holder of Debentures to the end that the provisions set forth in this Indenture shall thereafter correspondingly be made applicable, as nearly as may reasonably be, with respect to any cash, shares or other securities or property to which a Holder of Debentures is entitled on the exercise of its rights thereafter. Any indenture entered into between the Corporation and the Trustee pursuant to the provisions of this Section 8.6(d) shall be a supplemental indenture entered into pursuant to the provisions of Article 17.
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Any indenture entered into between the Corporation, any successor to the Corporation or such purchasing Person or other entity and the Trustee shall provide for adjustments which shall be as nearly equivalent as may be practicable to the adjustments provided in this Section 8.6(d) and which shall apply to successive reclassifications, capital reorganizations, consolidations, amalgamations, arrangements, share exchanges, mergers, acquisitions, combinations, sales or conveyances. For greater certainty, notice of any transaction to which this Section 8.6(d) applies shall be given in accordance with Section 8.11.
(e) If the Corporation shall make a distribution to all holders of Common Shares of shares in the capital of the Corporation, other than Common Shares, or evidences of indebtedness or other assets of the Corporation, including securities (but excluding (x) any issuance of rights or warrants for which an adjustment was made pursuant to Section 8.6(c), and (y) any dividend or distribution paid exclusively in cash for which an adjustment was made pursuant to Section 8.6(b)) (the “Distributed Securities”), then in each such case (unless the Corporation distributes such Distributed Securities to the Holders of Debentures on such dividend or distribution date (as if each Holder had converted such Debenture into Common Shares immediately preceding the record date with respect to such distribution)) the Conversion Price in effect immediately preceding the ex- distribution date fixed for the dividend or distribution shall be adjusted so that the same shall equal the price determined by multiplying the Conversion Price in effect immediately preceding such ex-distribution date by a fraction of which the denominator shall be the VWAP for the Common Shares for the five consecutive trading days immediately prior to the ex-distribution date and of which the numerator shall be the VWAP for the Common Shares for the first five consecutive trading days that occur immediately following ex distribution date. Such adjustment shall be made successively whenever any such distribution is made and shall become effective 5 Business Days immediately after the ex-distribution date. In the event that such dividend or distribution is not so paid or made, the Conversion Price shall again be adjusted to be the Conversion Price that would then be in effect if such dividend or distribution had not been declared.
Notwithstanding the foregoing, if the securities distributed by the Corporation to all holders of its Common Shares consist of capital stock of, or similar equity interests in, a Subsidiary or other business of the Corporation (the “Spinoff Securities”), the Conversion Price shall be adjusted, unless the Corporation makes an equivalent distribution to the Holders of Debentures, so that the same shall be equal to the rate determined by multiplying the Conversion Price in effect on the record date fixed for the determination of shareholders entitled to receive such distribution by a fraction, the denominator of which shall be the sum of (A) the VWAP for the Common Shares for the 20 consecutive trading day period (the “Spinoff Valuation Period”) commencing on and including the fifth trading day after the date on which ex-dividend trading commences for such distribution on the Exchange and (B) the product of (i) the weighted average trading price (calculated in substantially the same way as the Current Market Price is calculated for the Common Shares) over the Spinoff Valuation Period of the Spinoff Securities or, if no such prices are available, the fair market value of the Spinoff Securities as reasonably determined by the Board (which determination shall be conclusive and shall be evidenced by an Officer’s Certificate delivered to the Trustee) multiplied by (ii) the number of Spinoff Securities distributed in respect of one Common Share and the numerator of which shall be the VWAP for the Common Shares for the Spinoff Valuation Period, such adjustment to become effective immediately preceding the opening of business on the 25th trading day after the date on which ex dividend trading commences; provided, however, that the Corporation may in lieu of the foregoing adjustment elect to make adequate provision so that each Holder of Debentures shall have the right to receive upon conversion thereof the amount of such Spinoff Securities that such holder of Debentures would have received if such Debentures had been converted on the record date with respect to such distribution.
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(f) If any issuer bid made by the Corporation or any of its Subsidiaries for all or any portion of Common Shares shall expire, then, if the issuer bid shall require the payment to shareholders of consideration per Common Share having a fair market value (determined as provided below) that exceeds the Current Market Price per Common Share on the last date (the "Bid Expiry Date") tenders could have been made pursuant to such issuer bid (as it may be amended) (the last time at which such tenders could have been made on the Bid Expiry Date is hereinafter sometimes called the “Bid Expiry Time”), the Conversion Price shall be decreased so that the same shall equal the rate determined by multiplying the Conversion Price in effect immediately preceding the close of business on the Bid Expiry Date by a fraction of which (i) the denominator shall be the sum of (A) the fair market value of the aggregate consideration (the fair market value as determined by the Board, whose determination shall be conclusive evidence of such fair market value and which shall be evidenced by an Officer’s Certificate delivered to the Trustee) payable to shareholders based on the acceptance (up to any maximum specified in the terms of the issuer bid) of all Common Shares validly tendered and not withdrawn as of the Bid Expiry Time (the Common Shares deemed so accepted, up to any such maximum, being referred to as the “Purchased Common Shares”) and (B) the product of the number of Common Shares outstanding (less any Purchased Common Shares and excluding any Common Shares held in the treasury of the Corporation) at the Bid Expiry Time and the Current Market Price per Common Share on the Bid Expiry Date and (ii) the numerator of which shall be the product of the number of Common Shares outstanding (including Purchased Common Shares but excluding any Common Shares held in the treasury of the Corporation) at the Bid Expiry Time multiplied by the Current Market Price per Common Share on the Bid Expiry Date, such increase to become effective immediately preceding the opening of business on the day following the Bid Expiry Date. In the event that the Corporation is obligated to purchase Common Shares pursuant to any such issuer bid, but the Corporation is permanently prevented by applicable law from effecting any or all such purchases or any or all such purchases are rescinded, the Conversion Price shall again be adjusted to be the Conversion Price which would have been in effect based upon the number of Common Shares actually purchased, if any. If the application of this Section 8.6(f) to any issuer bid would result in an increase in the Conversion Price, no adjustment shall be made for such issuer bid under this Section 8.6(f).
For purposes of this Section 8.6(f), the term “issuer bid” shall mean a issuer bid under Canadian Securities Legislation or a take-over bid under Canadian Securities Legislation by a Subsidiary of the Corporation for the Common Shares and all references to “purchases” of Common Shares in issuer bids (and all similar references) shall mean and include the purchase of Common Shares in issuer bids and all references to “Common Shares validly tendered” (and all similar references) shall mean and include Common Shares tendered in issuer bids.
(g) In any case in which this Section 8.6 shall require that an adjustment shall become effective immediately after a record date for an event referred to herein, the Corporation may defer, until the occurrence of such event, issuing to the Holder of any Debenture converted after such record date and before the occurrence of such event the additional Common Shares issuable upon such conversion by reason of the adjustment required by such event before giving effect to such adjustment; provided, however, that the Corporation shall deliver to such Holder an appropriate instrument evidencing such Holder’s right to receive such additional Common Shares upon the occurrence of the event requiring such adjustment and the right to receive any distributions made on such additional Common Shares declared in favour of holders of record of Common Shares on and after the Date of Conversion or such later date as such Holder would, but for the provisions of this Section 8.6(g), have become the holder of record of such additional Common Shares pursuant to Section 8.5(b).
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(h) The adjustments provided for in this Section 8.6 are cumulative and shall apply to successive subdivisions, redivisions, reductions, combinations, consolidations, distributions, issues 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 Conversion Price shall be required unless such adjustment would require an increase or decrease of at least 1% in the Conversion Price then in effect; provided however, that any adjustments which by reason of this Section 8.6(h) are not required to be made shall be carried forward and taken into account in any subsequent adjustment.
(i) For the purpose of calculating the number of Common Shares outstanding, Common Shares owned by or for the benefit of the Corporation shall not be counted.
(j) In the event of any question arising with respect to the adjustments provided in this Section 8.6, such question shall be conclusively determined by a firm of nationally recognized chartered accountants appointed by the Corporation and acceptable to the Trustee (who may be the Auditors of the Corporation); such accountants shall have access to all necessary records of the Corporation and such determination shall be binding upon the Corporation, the Trustee, and the Debentureholders.
(k) In case the Corporation shall take any action affecting the Common Shares other than action described in this Section 8.6, which in the opinion of the Board, would materially affect the rights of Debentureholders, the Conversion Price shall be adjusted in such manner and at such time, by action of the Board, subject to the prior written consent of the Exchange, as the Board, in their sole discretion may determine to be equitable in the circumstances. Failure of the directors to make such an adjustment shall be conclusive evidence that they have determined that it is equitable to make no adjustment in the circumstances.
(l) Subject to the prior written consent of the Exchange, no adjustment in the Conversion Price shall be made in respect of any event described in Sections 8.6(a), 8.6(b), 8.6(c), 8.6(e) or 8.6(f) other than the events described in Section 8.6(a)(i) or Section (a)(ii) if the Holders of the Debentures are entitled to participate in such event on the same terms mutatis mutandis as if they had converted their Debentures prior to the effective date or record date, as the case may be, of such event.
(m) Except as stated above in this Section 8.6, no adjustment will be made in the Conversion Price for any Debentures as a result of the issuance of Common Shares at less than the Current Market Price for such Common Shares on the date of issuance or the then applicable Conversion Price.
8.7 No Requirement to Issue Fractional Common Shares
The Corporation shall not be required to issue fractional Common Shares upon the conversion of Debentures pursuant to this Article. If more than one Debenture shall be surrendered for conversion at one time by the same Holder, the number of whole Common Shares issuable upon conversion thereof shall be computed on the basis of the aggregate principal amount of such Debentures to be converted. If any fractional interest in a Common Share would, except for the provisions of this Section, be deliverable upon the conversion of any principal amount of Debentures, the Corporation shall, in lieu of delivering any certificate representing such fractional interest, make a cash payment to the Holder of such Debenture of an amount equal to the fractional interest which would have been issuable multiplied by the Conversion Price.
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8.8 Corporation to Reserve Common Shares
The Corporation covenants with the Trustee that it will at all times reserve and keep available out of its authorized Common Shares (if the number thereof is or becomes limited), solely for the purpose of issue upon conversion of Debentures as in this Article provided, and conditionally allot to Debentureholders who may exercise their conversion rights hereunder, such number of Common Shares as shall then be issuable upon the conversion of all outstanding Debentures. The Corporation covenants with the Trustee that all Common Shares which shall be so issuable shall be duly and validly issued as fully-paid and non-assessable.
8.9 Cancellation of Converted Debentures
Subject to the provisions of Section 8.5 as to Debentures converted in part, all Debentures converted in whole or in part under the provisions of this Article shall be forthwith delivered to and cancelled by the Trustee and no Debenture shall be issued in substitution for those converted.
8.10 Certificate as to Adjustment
The Corporation shall from time to time immediately after the occurrence of any event which requires an adjustment or readjustment as provided in Section 8.6, deliver an Officer’s Certificate to the Trustee specifying the nature of the event requiring the same and the amount of the adjustment necessitated thereby and setting forth in reasonable detail the method of calculation and the facts upon which such calculation is based, which certificate and the amount of the adjustment specified therein shall be verified by an opinion of a firm of nationally recognized chartered accountants appointed by the Corporation and acceptable to the Trustee (who may be the Auditors of the Corporation) and shall be conclusive and binding on all parties in interest. When so approved, the Corporation shall forthwith give notice to the Debentureholders in the manner provided in Section 14.2 specifying the event requiring such adjustment or readjustment and the results thereof, including the resulting Conversion Price.
8.11 Notice of Special Matters
(a) The Corporation covenants with the Trustee that so long as any Debenture remains outstanding, it will give notice to the Trustee, and to the Debentureholders in the manner provided in Section 14.2, of its intention to fix a record date for any event referred to in Sections 8.6(a), 8.6(b), 8.6(c) or 8.6(e) which may give rise to an adjustment in the Conversion Price, and, in each case, such notice shall specify the particulars of such event and the record date and the effective date for such event; provided that the Corporation shall only be required to specify in such notice such particulars of such event as shall have been fixed and determined on the date on which such notice is given. Such notice shall be given not less than 14 days in each case prior to such applicable record date.
(b) In addition, the Corporation covenants with the Trustee that so long as any Debenture remains outstanding, it will give notice to the Trustee, and to the Debentureholders in the manner provided in Section 14.2, at least 30 days prior to the (i) effective date of any transaction referred to in Section 8.6(d) stating the consideration into which the Debentures will be convertible after the effective date of such transaction, and (ii) Bid Expiry Date of any transaction referred to in Section 8.6(f) stating the consideration paid per Common Share in such transaction.
8.12 Protection of Trustee
Subject to Article 15, the Trustee:
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(a) shall not at any time be under any duty or responsibility to any Debentureholder to determine whether any facts exist which may require any adjustment in the Conversion Price, or with respect to the nature or extent of any such adjustment when made, or with respect to the method employed in making the same;
(b) shall not be accountable with respect to the validity or value (or the kind or amount) of any Common Shares or of any shares or other securities or property which may at any time be issued or delivered upon the conversion of any Debenture; and
(c) shall not be responsible for any failure of the Corporation to make any cash payment or to issue, transfer or deliver Common Shares or share certificates upon the surrender of any Debenture for the purpose of conversion, or to comply with any of the covenants contained in this Article.
Article 9 WITHHOLDING TAXES/PREPAYMENT OBLIGATIONS
9.1 Withholding Taxes
All payments made by the Corporation with respect to the Debentures shall be made free and clear of and without deduction for or on account of any present or future tax, duty, levy, impost, assessment, or other governmental charge imposed or levied by or on behalf of the Government of Canada or the United States, as well as any other government or authority, province, state or territory thereof or by any authority or agency therein or thereof as well as any other government or authority having power to tax a Debentureholder, unless the Corporation or the Trustee is required to withhold or deduct taxes by law or by the interpretation or administration thereof. If the Corporation or the Trustee is required by such laws or by the interpretation or administration thereof to withhold or deduct any amount from any payment with respect to the Debentures (including without limitation, any payments for principal, Premium, if any, interest and capitalized interest) for or on account of any taxes, the Corporation or the Trustee, as applicable, shall make such withholding or deduction and remit the full amount deducted or withheld to the relevant authority in accordance with Applicable Law.
The Corporation or Trustee, as applicable, will, if requested, furnish to the Holders of the Debentures, within 30 days after the date that the payment of any taxes is due pursuant to Applicable Law, copies of receipts evidencing such payment.
Article 10 COVENANTS OF THE CORPORATION
10.1 Positive Covenants
The Corporation hereby covenants and agrees with the Trustee for the benefit of the Trustee and the Debentureholders, for and on behalf of itself and each of the Corporation Subsidiaries, as follows, for so long as the Debentures are outstanding:
(a) Payment and Performance of Debenture Indebtedness: the Corporation shall duly and punctually pay or cause to be paid to each Holder of Debentures the principal thereof, interest accrued thereon and Premium, if any, payable thereon, on the dates, at the places, in the currency, and in the manner specified herein or as otherwise provided in such Debentures;
(b) Compliance with Indenture: the Corporation shall, and shall cause each of the Corporation Subsidiaries to, duly and practically carry out all of the acts or things to be done by or provided by this Indenture;
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(c) Corporate Existence: subject to the express provisions hereof, the Corporation shall, and shall cause each of the Corporation Subsidiaries to, at all times maintain its respective corporate existence, carry on and conduct its respective business in a reasonably proper, efficient and businesslike manner and in accordance with good business practice and diligently maintain, use and operate its respective properties so as to preserve and protect the earnings, incomes, rents, issues and profits thereof;
(d) Books and Records: subject to the express provisions hereof, the Corporation shall, and shall cause the Corporation Subsidiaries to, at all times keep or cause to be kept proper books of account and make or cause to be made therein true and faithful entries of all its dealings and transactions in relation to its business and the business of the Corporation Subsidiaries all in accordance with IFRS for itself and the Corporation Subsidiaries;
(e) Corporation Subsidiaries Direct or Indirect Wholly-Owned Subsidiaries: except for (A) any corporate reorganization of the Corporation’s Subsidiaries intended to simplify the ownership structure of the Marmato Project and (B) Mazamorras Gold Corp., Medoro Resources International Ltd. (BVI), Mineria MH, CA (Venezuela), Medoro de Venezuela, CA (Venezuela), Lo Increible Mining Company de Venezuela CA (Venezuela), Los Mineros de El Callao, SA (Venezuela), Medoro srl (Italy), African Gold Resources Corp. (Panama), Gold Resources du Mali SARL (Mali), Medoro Andina Internacional S.A. (Panama), Medoro Resources Colombia Inc. Sucursal (Colombia), Minera de Caldas, S.A. (Colombia), Gavilan Minerales, S.A. (Colombia), Provedencia Gold Corp. (Panama), Providencia Gold Sucursal (Colombia), Remedios Gold, S.A. (Panama) and Commerclializadora Internacional de Metales Preciosos y Metales Comunes Inversiones Generales S.A. CIIGSA (Colombia), the Corporation shall cause the Corporation Subsidiaries to continue to be direct or indirect wholly-owned Subsidiaries of the Corporation;
(f) Annual and Interim Financial Statements: the Corporation shall furnish to the Trustee a copy of the consolidated financial statements, whether annual or interim, of the Corporation, any report of the Corporation’s Auditors thereon and an Officer’s Certificate setting out the amounts required to be in, and the amounts actually in, the 2018 Debenture Sinking Fund as at the end of the annual or interim period to which such consolidated financial statements relate, at substantially the same time as such financial statements are or would be filed with securities regulatory authorities;
(g) Notice of Default: promptly upon becoming aware thereof, the Corporation shall provide written notice to the Trustee of the occurrence of any Event of Default, or any other event, circumstance or matter which, with the giving of notice or passage of time, or both, would have a material adverse effect on the ability of the Corporation to pay the Indebtedness under the Debentures, as well as the action which the Corporation proposes to take or has taken to remedy same;
(h) Notice of Proceedings: promptly upon becoming aware thereof, the Corporation shall provide written notice to the Trustee of any actions, suits, arbitrations, proceedings, inquiries or investigations or other proceedings existing, pending or, to the knowledge of the Corporation, threatened by or against the Corporation or any of the Corporation Subsidiaries, or before or by any Governmental Authority or before any arbitrator of any kind, which, if determined adversely to the Corporation or any of the Corporation Subsidiaries, would have a material adverse effect on the ability of the Corporation to pay the Debenture Indebtedness, as well as the action which the Corporation proposes to take or has taken to remedy same;
(i) Payment of Taxes: the Corporation shall, and shall cause the Corporation Subsidiaries to, from time to time pay or cause to be paid all taxes, rates, levies, assessments
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(ordinary or extraordinary), government fees or dues lawfully levied, assessed or imposed upon or in respect of its respective property or any part thereof or upon its income and profits as and when the same become due and payable and to withhold and remit any amounts required to be withheld by it from payments due to others and remit the same to any government or agency thereof, and it shall exhibit or cause to be exhibited to the Trustee, when requested, the receipts and vouchers establishing such payment and shall duly observe and conform to all applicable requirements of any Governmental Authority relative to any of the property or rights of the Corporation and of the Corporation Subsidiaries and all covenants, terms and conditions upon or under which any such property or rights are held; provided, however, that the Corporation or the Corporation Subsidiaries shall have the right to contest in good faith and diligently by legal proceedings any such taxes, rates, levies, assessments, government fees or dues, and during such contest, may deliver or defer payment or discharge thereof, provided adequate reserves in respect thereof are maintained by such Corporation or Corporation Subsidiaries, as applicable;
(j) Exchange Listing: the Corporation shall use its commercially reasonable efforts to obtain and continue, the listing of the Debentures on the Exchange;
(k) Maintenance of Authorizations, Permits, Etc.: the Corporation shall, and shall cause the Corporation Subsidiaries to, maintain in good standing and in full force and effect all material authorizations, permits, consents, registrations and approvals necessary to properly conduct their respective businesses in accordance with this Indenture or to perform and comply with their respective obligations under this Indenture;
(l) Defend Title: except as otherwise expressly provided for hereunder, the Corporation shall, and shall cause each Corporation Subsidiary to, maintain, protect and defend title to all of its assets subject to Permitted Encumbrances and take all such commercially reasonable acts and steps as are necessary or advisable at any time and from time to time to retain its ownership in all such assets subject to Permitted Encumbrances in good standing and to cure any material title defects in respect of all such assets subject to Permitted Encumbrances;
(m) Compliance with Laws and Regulations: the Corporation shall, and shall cause the Corporation Subsidiaries to, observe and comply in all material respects with the requirements of all applicable laws, judgments, orders, decisions and awards of any Governmental Authority (including laws, rules, regulations and orders relating to taxes, employer and employee contributions, securities, employee retirement and welfare benefits, and Environmental Matters and employee health and safety) as now in effect and which may be imposed in the future in all jurisdictions where the assets of the Corporation or any of the Corporation Subsidiaries are located or may hereafter be located; and
(n) Insurance: the Corporation shall, and shall cause each Corporation Subsidiary to, maintain such policies of insurance in respect of its assets, issued by responsible insurers, as are appropriate to its business and in such amounts and against such risks as are customarily carried and insured against by owners of comparable businesses, properties or assets in the jurisdiction where such assets are located.
10.2 Negative Covenants
The Corporation hereby covenants and agrees with the Trustee for the benefit of the Trustee and the Debentureholders, for and on behalf of itself and each of the Corporation Subsidiaries, that it shall not, and shall ensure that each Corporation Subsidiary shall not, for so long as the Debentures are outstanding:
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(a) Negative Pledge: create, incur, assume or suffer to exist any Lien upon or with respect to any of its property, assets and undertaking comprising the Marmato Project, whether now owned or hereafter acquired, other than Permitted Encumbrances;
(b) Limitations on Indebtedness: directly or indirectly create, issue, incur, assume or otherwise become liable for or in respect of any Indebtedness, other than Permitted Indebtedness;
(c) Limitation on Payments: directly or indirectly: (a) declare or pay any dividend or make any distribution or payment of any kind (other than dividends or distributions payable in Common Shares or in options, warrants or other rights to purchase Common Shares) on or in respect of any shares in the capital of the Corporation; (b) purchase, repay or otherwise acquire for cash or retire for value any shares in the capital of the Corporation or any warrants, rights or options to purchase or acquire shares in the capital of the Corporation; (c) make any principal payment on, purchase, defease, repay, prepay, decrease or otherwise acquire or retire for value, prior to any scheduled final maturity, scheduled repayment or scheduled sinking fund payment, any Indebtedness of the Corporation that is subordinate or junior in right of payment to the Debentures other than in each case as expressly permitted herein;
(d) Pledge of Securities: create, incur, assume or permit or suffer to exist any Lien against or upon any Securities of a Corporation Subsidiary held by the Corporation or another Corporation Subsidiary, other than Permitted Encumbrances; and
(e) Business Activities: engage in the conduct of any business other than the business of the Corporation and the Corporation Subsidiaries as existing on the Issue Date or in businesses reasonably related thereto on a basis consistent with the conduct of such business as conducted on the Issue Date.
10.3 Maintenance of Offices or Agencies
The Corporation shall maintain in Toronto an office or agency where Debenture Certificates may be presented or surrendered for payment, where Debenture Certificates may be surrendered for registration of transfer or exchange and where notices and demands to or upon the Corporation in respect of the Debentures and this Indenture may be served. The Corporate Trust Office shall be such office or agency of the Corporation, unless the Corporation shall designate and maintain some other office or agency for one or more of such purposes. The Corporation shall give prompt notice to the Trustee of any change in the location of any such office or agency. If at any time the Corporation shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office, and the Corporation hereby appoints the Trustee as its Trustee to receive all such presentations, surrenders, notices and demands.
The Corporation may from time to time designate one or more other offices or agencies (in or outside of Toronto) where the Debenture Certificates may be presented or surrendered for any or all such purposes, and may from time to time rescind such designation provided, however, that no such designation or rescission shall in any manner relieve the Corporation of its obligation to maintain an office or agency in Toronto for such purposes. The Corporation will give prompt written notice to the Trustee of any such designation or rescission and any change in the location of any such office or agency.
10.4 Money for Payments to Be Held in Trust
If the Corporation shall at any time act as its own Paying Agent, it shall, on or before each due date of the principal and Premium, if any, and interest on any of the Debentures, segregate and hold in trust for the benefit of the Persons entitled thereto a sum sufficient to pay the principal and Premium, if any, and
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interest so becoming due until such sums shall be paid to such Persons or otherwise disposed of as herein provided, and shall promptly notify the Trustee of its action or failure to so act and the Trustee shall promptly provide the Debentureholders with written notice of any such action or failure to so act.
Whenever the Corporation shall have one or more Paying Agents for the Debentures, it shall, except as provided with respect to Global Debenture Certificates, no later than three Business Days on or before each due date of the principal of, and Premium, if any, and interest on, any Debentures, forward or cause to be forwarded to the Paying Agent by same day delivery a cheque sufficient to pay the principal and Premium, if any, and interest so becoming due, such sum to be held in trust for the benefit of the Persons entitled to such principal, Premium, if any, or interest and (unless such Paying Agent is the Trustee) the Corporation shall promptly notify the Trustee of such action or failure to so act.
The Corporation shall cause each Paying Agent other than the Trustee to execute and deliver to the Trustee an instrument in which such Paying Agent shall agree with the Trustee, subject to the provisions of this Section that such Paying Agent will:
(a) hold all sums held by it for the payment of the principal, Premium, if any, and interest on Debentures in trust for the benefit of the Persons entitled thereto until such sums shall be paid to such Persons or otherwise disposed of as herein provided;
(b) give the Trustee notice of any default by the Corporation (or any other obligor upon the Debentures) in the making of any payment of principal, Premium, if any, and interest; and
(c) at any time during the continuance of any such default, upon the written request of the Trustee, forthwith pay to the Trustee all sums so held in trust by such Paying Agent.
The Corporation may at any time, for the purpose of obtaining the satisfaction and discharge of this Indenture or for any other purpose, pay, or by an order of the Corporation direct any Paying Agent to pay, to the Trustee all sums held in trust by the Corporation or such Paying Agent, such sums to be held by the Trustee upon the same trusts as those upon which such sums were held by the Corporation or such Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such Paying Agent shall be released from all further liability with respect to such money.
Any money deposited with the Trustee or any Paying Agent, or then held by the Corporation, in trust for the payment of the principal, Premium, if any, and interest on any Debenture and remaining unclaimed for two years after such principal, Premium, if any, and interest has become due and payable shall be paid, on written request of the Corporation, to the Corporation, or (if then held by the Corporation) shall be discharged from such trust; and the Holder of such Debenture shall thereafter, as an unsecured general creditor, look only to the Corporation for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money, and all liability of the Corporation as trustee thereof, shall thereupon cease.
10.5 Trustee’s Remuneration and Expenses
The Corporation shall pay the Trustee reasonable remuneration for its services as trustee hereunder and shall pay or reimburse the Trustee upon its request for all reasonable expenses, disbursements and advances incurred or made by the Trustee in the administration or execution of the trusts hereby created (including the reasonable compensation and the disbursements of Trustee Counsel and all other advisers and assistants not regularly in its employ who have been retained by the Trustee) both before any default hereunder and thereafter until all the duties of the Trustee shall be firmly and fully performed, except any such expense, disbursement or advance as may arise from failure to perform its obligations hereunder in accordance with Section 15.2. Any amount due under this Section 10.5 and unpaid 30 days after request for such payment shall bear interest from the expiration of such 30 days at a rate per annum equal to the then current rate charged by the Trustee from time to time, payable on demand. After default, all amounts so payable and the interest thereon shall be payable out of any funds coming into the
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possession of the Trustee or its successors in the trusts hereunder in priority to any payment of the principal of, or interest or Premium, if any, on, the Debentures. Such remuneration shall continue to be payable until the trusts hereof shall be finally wound up, whether or not the trusts of this Indenture shall be in course of administration by or under the direction of a court.
10.6 Not to Extend Time for Payment of Interest
Subject to the provisions of Section 13.11, in order to prevent any accumulation after maturity of unpaid interest, the Corporation shall not directly or indirectly extend or assent to the extension of time for payment of interest upon any Debentures or directly or indirectly be or become a party to or approve any such arrangement by purchasing or funding interest on the Debentures or in any other manner.
If the time for the payment of any interest shall be so extended, whether or not such extension is by or with the consent of the Corporation, notwithstanding anything herein or in the Debenture Certificates contained, such interest shall not be entitled in case of default hereunder to the benefit of this Indenture until such time as payment in full has been made of the principal of all the Debentures and of all interest on such Debentures the payment of which has not been so extended.
10.7 Examination and Audit
The Corporation shall annually, within 90 days (or such other period prescribed by Applicable Laws) after the end of its fiscal year, have an audit of the Corporation’s consolidated financial statements made by the Corporation’s Auditors.
10.8 No Amalgamation, Merger, Consolidation
Except for any reorganization of the Corporation’s Subsidiaries described in Section 10.1(e), the Corporation shall not, directly or indirectly through a Corporation Subsidiary, enter into a transaction or series of transactions, other than a transaction or series of transactions involving a Change of Control, in which all or substantially all of the undertaking, property and assets of the Corporation and its Subsidiaries would become the property of any other Person, whether by way of reorganization, consolidation, amalgamation, arrangement, merger, transfer, sale, lease or otherwise, unless the Corporation will be the continuing corporation or:
(a) the Person is a corporation organized and existing under the laws of Canada or a province or territory thereof or of the United States of America or a state thereof or of the District of Columbia and the Person expressly assumes, by a Supplemental Indenture satisfactory in form to the Trustee and Trustee Counsel and executed and delivered to the Trustee, all the covenants and obligations of the Corporation under this Indenture and all Debenture Certificates (and the Corporation Counsel shall have provided to the Trustee a legal opinion to that effect);
(b) at the time of and after giving effect to the reorganization, consolidation, amalgamation, arrangement, merger, transfer, sale, lease or other transaction, no Event of Default or event that, with the passing of time or the giving of notice or both, would constitute an Event of Default has occurred and is continuing;
(c) the Corporation shall have delivered to the Trustee an Officer’s Certificate stating that the conditions precedent in this Section 10.8 have been satisfied; and
(d) neither the Corporation nor the Person, either at the time of or immediately after the consummation of any such transaction and after giving full effect thereto, or immediately after compliance by the Person with the provisions of Section 10.8(a), will be insolvent or generally fail to meet, or admit in writing its inability or unwillingness to meet, its obligations as they generally become due.
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Whenever the conditions of this Section 10.8 have been duly observed and performed, the Person shall possess and from time to time may exercise each and every right and power of the Corporation under this Indenture, in the name of the Corporation or otherwise, and any act or proceeding required by any provision of this Indenture to be done or performed by any Directors or officers of the Corporation may be done and performed with like force and effect by the directors or officers of the Person.
10.9 Trustee May Perform Covenants
If the Corporation fails to perform any covenant on its part herein contained, the Trustee may perform any such covenant capable of being performed by it and, if any such covenant requires the payment or expenditure of money, the Trustee may make such payment or expenditure with its own funds or with money borrowed by or advanced to it for such purpose, but shall be under no obligation to do so. All sums so expended or advanced shall be repayable by the Corporation in the manner provided in Section 10.5, but no such performance or payment shall be deemed to relieve the Corporation from any default or continuing obligation hereunder.
10.10 Certificates Relating to Compliance and Default
So long as any Debentures are outstanding, the Corporation shall deliver to the Trustee within 60 days after the end of each of the first three fiscal quarters in each of its fiscal years and 120 days after the end of each of its fiscal years, and at any other time if so requested by the Trustee, an Officer’s Certificate stating that the Corporation has complied with all covenants, conditions or other requirements contained herein, non-compliance with which would, with the giving of notice or the lapse of time or otherwise, constitute an Event of Default or, if such is not the case, specifying all relevant particulars thereof, the period of existence thereof and the action the Corporation is taking or proposes to take with respect thereto. For purposes of this Section 10.10, compliance by the Corporation with the covenants, conditions or other requirements of this Indenture shall be determined without regard to any period of grace or notice requirement under this Indenture.
10.11 Financial Statements
Following receipt of consolidated financial statements of the Corporation by the Trustee pursuant to this Indenture, the Trustee shall, while such statements are current, maintain custody of them and make them available for inspection by Debentureholders upon reasonable written request. No obligation shall rest with the Trustee to analyze such statements, or evaluate the performance of the Corporation as indicated by such financial statements, in any manner whatsoever.
10.12 2018 Debenture Sinking Fund
(a) The Trustee shall establish a segregated and separate account at a branch of a Canadian chartered bank in Ontario in the name, and under the control, of the Trustee, in trust, designated as the “2018 Debenture Sinking Fund” for the benefit of all Debentureholders to be governed by the terms of this Indenture. The Corporation shall, within five Business Days following the later of (i) the date on which the Corporation is required to file financial information for such fiscal quarter under applicable Canadian Securities Legislation and (ii) the date on which the Corporation files such financial information, calculate, disburse and apply 25% of the Excess Cash Flow relating to such quarter to the 2018 Debenture Sinking Fund.
(b) Assets in the 2018 Debenture Sinking Fund shall be applied by the Trustee exclusively for the repurchase by the Corporation (in the market, by tender, or by private contract, at any price, which, for greater certainty, may be below par) or redemption of the Debentures in accordance with Article 7, as directed by an Officer in writing to the Trustee from time to time. Any assets remaining in the 2018 Debenture Sinking Fund at
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the Stated Maturity of the Debentures shall be applied by the Trustee to the repayment of the Debentures.
(c) All funds in the 2018 Debenture Sinking Fund shall be held by the Trustee in cash or invested in Permitted Excess Cash Flow Investments as directed by an Officer to the Trustee. Any written direction by the Corporation to the Trustee as to the investment of funds forming part of the 2018 Debenture Sinking Fund shall be in writing and shall be provided to the Trustee no later than 9:00 a.m. (Toronto time) on the day on which the investment is to be made. Any such direction received by the Trustee after 9:00 a.m. (Toronto time) shall be deemed to have been given prior to 9:00 a.m. (Toronto time) on the next Business Day.
(d) Permitted Excess Cash Flow Investments purchased using money in the 2018 Debenture Sinking Fund shall be deemed at all times to be a part of the 2018 Debenture Sinking Fund. Permitted Excess Cash Flow Investments so purchased shall be sold on commercially reasonable terms upon the written direction of an Officer whenever it shall be necessary so to do in order to provide monies to make any withdrawal or payment from the 2018 Debenture Sinking Fund. Permitted Excess Cash Flow Investments in which money held in the 2018 Debenture Sinking Fund have been invested shall mature not later than the dates when monies from the 2018 Debenture Sinking Fund shall be needed (as estimated and directed by the Corporation). The Trustee shall have no responsibility or liability to anyone in respect of any such estimate by the Corporation.
Article 11 DEFAULTS AND REMEDIES
11.1 Events of Default
Each of the following events shall be an “Event of Default” in respect of the Debentures:
(a) failure to pay principal or Premium, if any, on any Debentures when due except as provided in subsection 11.1(c) below;
(b) failure to pay interest on any Debentures when due if such failure continues for a period of 10 days;
(c) failure to pay the Change of Control Purchase Price when due in accordance with Article 6 if such failure continues for a period of 10 Business Days;
(d) failure to comply with Article 8 if such failure continues for a period of 10 Business Days;
(e) any material breach by the Corporation or any Corporation Subsidiary of any representation or warranty contained in this Indenture, a Supplemental Indenture or a Guarantee, provided that if such representation or warranty is capable of rectification, then such breach will be an Event of Default only if such breach continues for a period of 30 days after written notice thereof has been given to the Corporation by the Trustee or the Holders of at least 25% aggregate outstanding principal amount of the Debentures then outstanding;
(f) failure by the Corporation or any Corporation Subsidiary to observe or perform any other material covenant or condition contained in this Indenture, a Supplemental Indenture or Guarantee, provided that if such covenant or condition is capable of rectification, then such failure will be an Event of Default only if such failure continues for a period of 30 days after written notice thereof has been given to the Corporation by the Trustee or the
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Holders of at least 25% aggregate outstanding principal amount of the Debentures then outstanding;
(g) failure by the Corporation or any Corporation Subsidiary to observe or perform any provision of any agreement under which Indebtedness is created, if such failure has the effect of causing more than U.S.$4,000,000 of such Indebtedness in the aggregate at such time to become due and payable or to be required to be repaid or repurchased before its stated maturity;
(h) the rendering by a court of competent jurisdiction of one or more judgments against the Corporation and the Corporation Subsidiaries in an aggregate amount of more than U.S.$4,000,000 if the judgments remain undischarged or unstayed for more than 30 days, unless the Corporation or such Corporation Subsidiary are actively and diligently contesting such judgment;
(i) proceedings are commenced for the winding-up, liquidation or dissolution of the Corporation or any Corporation Subsidiary (except as otherwise permitted under this Indenture), unless the Corporation or such Corporation Subsidiary in good faith actively and diligently contests such proceedings, decree, order or approval, resulting in a dismissal or stay thereof within 30 days of commencement;
(j) a decree or order of a court of competent jurisdiction is entered adjudging the Corporation or any Corporation Subsidiary to be bankrupt or insolvent, or a petition seeking reorganization, arrangement or adjustment of or in respect of the Corporation or any Corporation Subsidiary is approved under Applicable Law relating to bankruptcy, insolvency or relief of debtors and remains in force for a period of at least 30 days during which a stay of enforcement is not in effect;
(k) the Corporation or any Corporation Subsidiary makes an assignment for the benefit of its creditors, or petitions or applies to any court or tribunal for the appointment of a receiver or trustee for itself or any substantial part of its property, or commences for itself or acquiesces in any proceeding under any bankruptcy, insolvency, reorganization, arrangement or readjustment of debt law or statute or any proceeding for the appointment of a receiver or trustee for itself or any substantial part of its property, or suffers any such receivership or trusteeship;
(l) a resolution is passed for the winding-up or liquidation of the Corporation except in the course of carrying out or pursuant to a transaction in respect of which the conditions of Section 10.8 are duly observed and performed; or
(m) this Indenture shall for any reason cease in whole or in any material part to be a legal, valid, binding and enforceable obligation of the Corporation.
11.2 Notice of Event of Default
If an Event of Default shall occur and be continuing, then the Trustee shall, within 10 Business Days after it becomes aware of the occurrence of such Event of Default, give notice of such Event of Default to the Debentureholders in the manner specified in Section 14.2; provided, however, that, except in the case of a default in the payment of the principal of, (or Premium, if any,) or interest on, any Debenture, the Trustee shall be protected in withholding such notice if and so long as the Trustee in good faith determines that the withholding of such notice is in the best interests of the Debentureholders and the Trustee so advises the Corporation in writing.
If notice of an Event of Default has been given to Debentureholders and such Event of Default is thereafter remedied or cured prior to the acceleration of the Indebtedness of the Corporation hereunder
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pursuant to Section 11.3, notice that such Event of Default is no longer continuing shall be given by the Trustee to the Persons to whom notice of such Event of Default was given pursuant to this Section 11.2, such notice to be given within a reasonable time, not to exceed 10 days, after the Trustee becomes aware that such Event of Default has been remedied or cured during such period of time.
11.3 Acceleration
If an Event of Default occurs and is continuing, the Trustee may in its discretion and shall upon receipt of a Debentureholders Request, by notice in writing to the Corporation declare the principal amount of, the Premium, if any, and accrued and unpaid interest on, all Debentures and all other moneys then outstanding hereunder immediately due and payable.
If the principal amount and the Premium, if any, and any accrued and unpaid interest on the Debentures are due and payable pursuant to this Section 11.3, the Corporation shall pay to the Trustee forthwith, for the benefit of the Debentureholders, the principal amount and the Premium, if any, and any accrued and unpaid interest on the Debentures and all other fees and expenses payable in regard thereto under this Indenture, together with interest thereon at the rate borne by such Debentures from the date that such amounts are due and payable until payment is received by the Trustee. Such payments, when made, shall be deemed to have been made in discharge of the Corporation’s obligations under this Indenture.
11.4 Waiver of Event of Default
Upon the happening of an Event of Default:
(a) the Holders of Debentures then outstanding with respect to which an Event of Default shall have occurred and be continuing, pursuant to an Extraordinary Resolution shall have the power, exercisable by requisition in writing, to instruct the Trustee to waive such Event of Default, and the Trustee shall thereupon waive such Event of Default upon such terms and conditions as shall be prescribed in such requisition; and
(b) the Trustee, so long as it has not become bound to declare the principal of, Premium, if any, and interest on, the Debentures to be due and payable, or to obtain or enforce payment thereof, shall have the power to waive any Event of Default which has been remedied or cured or in respect of which, in the opinion of the Trustee, relying, if necessary on the opinion of Trustee Counsel or other expert, adequate satisfaction has been made.
No delay or omission of the Trustee or of the Debentureholders in exercising any right or power accruing upon the occurrence of an Event of Default shall impair any such right or power or shall be construed to be a waiver of such Event of Default or acquiescence therein, and no act or omission, either of the Trustee or of the Debentureholders, shall extend to or be taken in any manner whatsoever to affect any subsequent Event of Default or the rights resulting therefrom.
11.5 Enforcement by the Trustee
Subject to Section 11.4, upon the occurrence of an Event of Default, the Trustee shall exercise the rights and powers vested in it under this Indenture.
Subject to the provisions of Section 11.4 and to the provisions of any Extraordinary Resolution, if the Corporation fails to pay to the Trustee, forthwith after the same shall have been declared to be or has automatically become due and payable under Section 11.3, the principal of, and Premium, if any, and accrued and unpaid interest on, the Debentures together with any other amounts due hereunder, the Trustee shall, upon being sufficiently indemnified and funded to its reasonable satisfaction against all costs, expenses and liabilities to be incurred, proceed in its name as Trustee hereunder to obtain or enforce payment of such principal of, and Premium, if any, and accrued and unpaid interest on, the
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Debentures together with any other amounts due hereunder by such proceedings authorized by this Indenture or by suit at law or in equity as the Trustee in the Debentureholders’ Request shall have been directed to take, or if the Debentureholders’ Request contains no such direction, then by such proceedings authorized by this Indenture or by suit at law or in equity as the Trustee shall deem expedient.
The Trustee shall be entitled and is hereby empowered, either in its own name or as trustee of an express trust, or as attorney-in-fact for each of the Debentureholders, or in any one or more of such capacities, to file such proof of debt, amendment of proof of debt, claim, petition or other document as may be necessary or advisable in order to have the claims of the Trustee and some or all of the Debentureholders allowed in any insolvency, bankruptcy, liquidation or other judicial proceedings relative to the Corporation or its creditors or relative to or affecting its property. The Trustee is hereby irrevocably appointed (and the successive respective Debentureholders by taking and holding Debentures shall be conclusively deemed to have so appointed the Trustee) the true and lawful attorney-in-fact of the respective Debentureholders with authority to make and file in the respective names of the Debentureholders or on behalf of the Debentureholders as a class, subject to deduction from any such claims of the amounts of any claims filed by any of the Debentureholders themselves, any proof of debt, amendment of proof of debt, claim, petition or other document in any such proceedings and to receive payment of any sums becoming distributable on account thereof, and to execute any such other documents and to do and perform any and all such acts and things, for and on behalf of such Debentureholders, as may be necessary or advisable, in the opinion of the Trustee acting on the advice of Trustee Counsel, in order to have the respective claims of the Trustee and of the Debentureholders against the Corporation or its property allowed in any such proceeding, and to receive payment of or on account of such claims, provided that nothing contained in this Indenture shall be deemed to give to the Trustee, unless so authorized by Extraordinary Resolution, any right to accept or consent to any plan of reorganization or otherwise by action of any Person in such proceeding to waive or change in any way any right of any Debentureholder.
The Trustee shall also have 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 some or all of the Debentureholders.
All rights of action hereunder may be enforced by the Trustee without the possession of any of the Debenture Certificates or the production thereof at the trial or other proceedings relative thereto. Any such suit or proceeding instituted by the Trustee shall be brought in the name of the Trustee as trustee of an express trust, and any recovery of judgment shall be for the rateable benefit of the applicable Debentureholders whose rights are enforced subject to the provisions of this Indenture. In any proceeding brought by the Trustee (and also in 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 Trustee shall be a party), the Trustee shall be held to represent all the Debentureholders whose rights are enforced, and it shall not be necessary to make any Debentureholders parties to any such proceeding.
11.6 Suits by Debentureholders
No Holder of any Debenture shall have any right to institute any action, suit or proceeding at law or in equity for the purpose of enforcing payment of the principal of, or Premium, if any, or interest on, the Debentures or for the execution of any trust or power hereunder or for the appointment of a liquidator or receiver or for a receiving order under the Bankruptcy and Insolvency Act (Canada) or to have the Corporation wound up or to file or prove a claim in any liquidation or bankruptcy proceeding or for any other remedy unless:
(a) the Debentureholders, by Debentureholders’ Request, shall have made a written request to the Trustee and the Trustee shall have been afforded reasonable opportunity either itself to proceed to exercise the powers conferred upon it or to institute an action, suit or proceeding in its name for such purpose;
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(b) the Debentureholders or any of them shall have furnished to the Trustee, when so requested by the Trustee, funding and indemnity satisfactory to the Trustee with respect to the costs, expenses and liabilities to be incurred therein or thereby;
(c) the Trustee shall have failed to act within a reasonable time after such notification, request and provision of indemnity; and
(d) no direction inconsistent with such written request has been received by the Trustee from Holders of a majority of the aggregate outstanding principal amount of the outstanding Debentures.
If a Debentureholder has the right to institute proceedings under this Section 11.6, such Debentureholder, acting on behalf of itself and all other Debentureholders, shall be entitled to commence proceedings in any court of competent jurisdiction in which the Trustee might have commenced proceedings under Section 11.5, but in no event shall any Debentureholder or combination of Debentureholders have any right to seek any other remedy or institute proceedings out of court. No Debentureholder or Debentureholders shall have any right in any manner whatsoever to enforce any right under this Indenture or under any Debenture Certificate, except in accordance with the conditions and in the manner provided in this Indenture.
11.7 Application of Money
Except as herein otherwise expressly provided, any money received by the Trustee or a Debentureholder as a result of legal or other proceedings against the Corporation pursuant hereto, or from any trustee in bankruptcy or liquidator of the Corporation, shall be applied, together with other money available to the Trustee for such purpose, as follows:
(a) first, in payment or in reimbursement to the Trustee of its fees, costs, charges, expenses, borrowings, advances or other amounts furnished or provided by or at the request of the Trustee in or about the administration and execution of its trusts under, or otherwise in relation to, this Indenture, with interest thereon as herein provided;
(b) second, subject to the provisions of Section 10.6 and this Section 11.7, in payment of the principal of, and Premium, if any, and accrued and unpaid interest and interest on amounts in default on, the Debentures which shall then be outstanding in the priority of principal first and then Premium, if any, and then accrued and unpaid interest and interest on amounts in default unless otherwise directed by an Extraordinary Resolution in respect of the Debentures, and in that case in such order or priority as between principal, Premium, if any, and interest as may be directed by such Extraordinary Resolution; and
(c) third, in payment of the surplus, if any, of such money to the Corporation or its assigns; provided, however, that no payment shall be made pursuant to Section 11.7(b) in respect of the principal of, or Premium, if any, or interest on, any Debenture which the Trustee knows is held, directly or indirectly, by or for the benefit of the Corporation or any Affiliate of the Corporation (other than any Debenture pledged for value and in good faith to a Person other than the Corporation or any Affiliate of the Corporation, but only to the extent of such Person’s interest therein) until the prior payment in full of the principal of, and Premium, if any, and interest on, all Debentures which are not so held.
11.8 Distribution of Proceeds
Payments to Debentureholders pursuant to Section 11.7(b) shall be made as follows:
(a) at least 15 days’ notice of every such payment shall be given in the manner specified in Section 14.2, specifying the time and the place or places at which the Debenture
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Certificates, if applicable, are to be presented and the amount of the payment and the application thereof as between principal, Premium, if any, and interest;
(b) payment in respect of any Debenture shall be made upon presentation of the Debenture Certificate representing such Debenture, if applicable, at any one of the places specified in such notice and any the Debenture Certificate representing such Debenture thereby paid in full shall be surrendered, but the Trustee may in its discretion dispense with presentation and surrender or endorsement in any case upon such indemnity being given as the Trustee shall consider sufficient;
(c) from and after the date of payment specified in such notice, interest shall accrue only on the amount owing on each Debenture after giving credit for the amount of the payment specified in such notice unless the Debenture in respect of which such amount is owing is duly presented on or after the date so specified, if applicable, and payment of such amount is not made; and
(d) the Trustee shall not be required to make any payment to Debentureholders unless the amount available to it for such purpose, after reserving therefrom such amount as the Trustee may think necessary to provide for the payments referred to in Section 11.7(a), exceeds one per cent of the aggregate outstanding principal amount of the Debentures in default then outstanding.
11.9 Remedies Cumulative
No remedy herein conferred upon or reserved to the Trustee or upon or to the Debentureholders is intended to be exclusive of any other remedy, but each and every such remedy shall be cumulative and shall be in addition to every other remedy given hereunder or now existing or hereafter to exist by law.
11.10 Judgment Against the Corporation
In case of any judicial or other proceedings to enforce the rights of the Debentureholders, judgment may be rendered against the Corporation in favour of the Debentureholders or in favour of the Trustee, as trustee for the Debentureholders, for any amount which may remain due in respect of the Debenture Indebtedness.
11.11 Immunity of Shareholders, Directors and Officers
The Debentureholders and the Trustee hereby waive and release any right, cause of action or remedy now or hereafter existing in any jurisdiction against any past, present or future incorporator, shareholder, director, officer, employee or agent of the Corporation for the payment of the principal of, or Premium, if any, or interest on, any of the Debentures or on any covenant, agreement, representation or warranty by the Corporation herein or contained in the Debenture Certificates.
Article 12 CANCELLATION AND DISCHARGE
12.1 Cancellation and Destruction
All Debenture Certificates surrendered to the Corporation, a Registrar or a Paying Agent for any purpose shall be delivered to the Trustee as soon as reasonably practicable. Each such Debenture Certificate surrendered to the Trustee shall be cancelled by the Trustee forthwith after all payments required in respect thereof to the date of surrender have been made. Subject to Applicable Law, all Debenture Certificates cancelled or required to be cancelled under this or any other provision of this Indenture shall be destroyed by the Trustee in accordance with the Trustee’s ordinary practice, and the Trustee shall, at
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the request of the Corporation, furnish to it a cancellation or destruction certificate in respect of the Debenture Certificates so cancelled or destroyed.
12.2 Payment of Amounts Due on Maturity
On the Stated Maturity of the Debentures the Corporation may, at its option, satisfy its obligation to repay the outstanding principal amount of the Debentures and all accrued and unpaid interest thereon (the “Outstanding Balance”) by issuing and delivering that number of Common Shares obtained by dividing the Outstanding Balance by $0.13. Notwithstanding the foregoing, if the volume weighted average trading price for the 20 consecutive trading days ending five trading days before the Stated Maturity of the Debentures (the “Trading Period”) is below $0.13 per share, 19% of the Outstanding Balance (the “Cash Portion”) shall be settled in cash and 81% of the Outstanding Balance (the ‘Balance”) shall, at the Corporation’s option, be settled in cash or by issuing and delivering that number of Common Shares obtained by dividing the Balance by $0.13.
The following shall be the conditions to the exercise of the Corporation’s option to satisfy its obligation to repay the Outstanding Balance in Common Shares or Common Shares and cash, as the case may be:
(a) on or before the last day of the Trading Period, the Corporation shall have delivered a notice to the Trustee exercising such option;
(b) no material Event of Default shall have occurred and be continuing; and
(c) the Corporation shall have received all required regulatory approvals.
Notwithstanding the foregoing, if the Corporation elects to settle the Balance by issuing and delivering Common Shares, each Debentureholder may, in lieu of the Cash Portion, elect to receive that number of Common Shares obtained by dividing the Cash Portion by $0.13. Not less than 35 days prior to the first day of the Trading Period, the Corporation shall deliver a notice to the Trustee advising of the Stated Maturity of the Debentures and the right of the Debentureholder to make such election. Not less than 30 days prior to the first day of the Trading Period, the Trustee shall deliver a notice to the Debentureholders in the manner provided in Section 14.2 advising of the Stated Maturity of the Debentures and the right of the Debentureholder to make such election. To exercise such election, a Debentureholder must deliver a notice thereof to the Trustee not less than 20 days prior to the last day of the Trading Period. The balance of the Cash Portion, if any, remaining after accounting for such Debentureholder elections shall be allocated pro rata among the Debentureholders not making such election.
With respect to a Global Debenture Certificate, each owner of beneficial interest thereunder shall request and receive a Debenture Certificate in definitive form and shall deliver such Debenture Certificate to the Trustee together with a representation in a form satisfactory to the Trustee as to the number of Common Shares held by it. If the issuance of the Common Shares would result in the Holder being issued Common Shares that, together with any other Common Shares held by such Holder, would constitute 10% or more of the then outstanding Common Shares, then such Holder must, as a condition to such issuance, provide to the Corporation and the Exchange an undertaking, in the form attached hereto as Schedule C to the Debenture or such other form as may be acceptable to the Exchange. Such undertaking will require such Holder to: (i) file with the Exchange such documentation as may be required by the Exchange in connection with such Holder acquiring Common Shares constituting 10% or more of the then outstanding Common Shares, which may include, among other things, a Personal Information Form, if, on the 10th Business Day following such issuance, such Holder continues to hold Common Shares constituting 10% or more of the then outstanding Common Shares; and (ii) if such Personal Information Form is not cleared by the Exchange, within 20 Business Days following notice from the Exchange thereof to the Holder, such Holder will sell that number of Common Shares in order to decrease his, her or its holdings of Common Shares below 10% of the then outstanding Common Shares.
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If the Corporation is not entitled, or elects not, to exercise the option provided for in this Section 12.2, then prior to 9:00 a.m. (Toronto time) on the Maturity Date, the Corporation shall transfer to the Trustee by wire transfer an amount sufficient to pay the amount payable in respect of the Debentures on the Maturity Date (including the amount of any taxes required by Applicable Law to be deducted or withheld by the Trustee and remitted to the applicable Governmental Authority, which the Trustee shall deduct and remit as required by Applicable Law). The Trustee shall use such funds to pay to the Debentureholder entitled to receive payment on the Maturity Date the principal amount of, accrued and unpaid interest, if any, and Premium, if any, on such Debenture upon surrender of the Debenture Certificate representing such Debenture, if applicable, at the Corporate Trust Office or at such other place as shall be designated for such purpose from time to time by the Corporation and the Trustee. The transfer of such amount shall satisfy and discharge the liability of the Corporation for the Debentures to which the deposit relates to the extent of the amount transferred (including the amount of any taxes required by Applicable Law to be deducted or withheld by the Trustee and remitted to the applicable Governmental Authority, which the Trustee shall deduct and remit as required by Applicable Law) and thereafter such amounts in respect of the Debentures shall not be considered to be outstanding or to have any interest accrue thereon for the benefit of the Debentureholders and the Debentureholders shall have no right with respect thereto other than to receive out of the amount so transferred the respective amounts to which the Holders are entitled. Failure to make a transfer as required pursuant to this Section 12.2 shall constitute default in payment on the Debentures in respect of which the transfer was required to have been made. For greater certainty, the Trustee will only withhold and remit taxes required to be withheld under the Income Tax Act (Canada).
12.3 Repayment of Unclaimed Money
Subject to Applicable Law, any amount deposited pursuant to Section 12.2 and not claimed by and paid to the Debentureholders as provided in Section 12.2 within two years after the later of the date of such deposit and the applicable Maturity Date shall be repaid to the Corporation by the Trustee on written demand provided that the Debentureholders are first provided with written notice in accordance with Section 14.2 of any such demand by the Corporation and provided that the Debentureholders are given 20 days from the date of such written notice to claim any such amount yet claimed by the Debentureholder, and thereupon the Trustee shall be released from all further liability with respect to such amount and thereafter the Holders of the Debentures in respect of which such amount was so repaid to the Corporation shall have no rights in respect thereof and the Corporation shall be discharged from its obligations in respect thereof.
12.4 Discharge
Upon proof being given to the Trustee that the principal of all the Debentures and the Premium, if any, thereon and interest (including interest on amounts in default) thereon and other amounts payable hereunder have been paid or satisfied, or that all the outstanding Debentures have matured or have been duly called for repayment and such payment or repayment has been duly and effectually provided for by payment to the Trustee or otherwise (including by way of delivery of Common Shares pursuant to Section 12.2), and upon payment of all costs, charges and expenses properly incurred by the Trustee in relation to this Indenture and all interest thereon and the remuneration of the Trustee, or upon provision satisfactory to the Trustee being made therefor, the Trustee shall, at the written request and at the expense of the Corporation, execute and deliver to the Corporation such deeds or other instruments as shall be required to evidence the satisfaction and discharge of this Indenture and to release the Corporation from its covenants herein contained other than those relating to the indemnification of the Trustee.
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Article 13 MEETINGS OF DEBENTUREHOLDERS
13.1 Right to Convene Meetings
The Trustee may at any time and from time to time convene a meeting of Debentureholders, and the Trustee shall convene a meeting of Debentureholders upon receipt of a request of the Corporation or a Debentureholders’ Request and upon being funded and indemnified to its reasonable satisfaction by the Corporation or by the Debentureholders signing such request against the costs which may be incurred in connection with the calling and holding of such meeting. If the Trustee fails within 30 days after receipt of any such request and such indemnity and funding to give notice convening a meeting, the Corporation or such Debentureholders, as the case may be, may convene such meeting. Every such meeting shall be held in Toronto, Ontario, or at such other place as may be approved or determined by such of the Trustee, the Corporation or the Debentureholders as convened the meeting in accordance with this Section 13.1.
13.2 Notices of Meetings
Notice of a meeting of Debentureholders shall be given to the Debentureholders in the manner specified in Section 14.2 at least 21 days prior to the date of the meeting, and a copy of any notice sent by mail to Debentureholders shall be sent by mail to the Trustee (unless the meeting has been called by it) and to the Corporation (unless the meeting has been called by it). A notice of a meeting of Debentureholders shall state the time and place at which the meeting is to be held and shall state briefly the general nature of the business to be transacted thereat, and it shall not be necessary for any such notice to set out the terms of any resolution to be proposed or any of the provisions of this Article 13.
13.3 Chairman
The Debentureholders present in person or represented by proxy shall choose an individual present to be the chairman of the meeting.
13.4 Quorum
Subject to the provisions of Section 13.13, the quorum for a meeting of Debentureholders shall be the Holder or Holders, present in person or represented by proxy, of at least 25% of the aggregate outstanding principal amount of the Debentures then outstanding. If a quorum is not present within 30 minutes from the time fixed for the holding of a meeting, the meeting, if convened by the Debentureholders, shall be dissolved, but in any other case the meeting shall be adjourned to the same day in the next week (unless such day is not a Business Day, in which case it shall be adjourned to the next following Business Day thereafter) at the same time and place, and no notice shall be required to be given in respect of such adjourned meeting. At the adjourned meeting, the Debentureholders present in person or represented by proxy shall constitute a quorum and may transact the business for which the meeting was originally convened notwithstanding that they may not represent at least 25% of the aggregate outstanding principal amount of the Debentures then outstanding.
13.5 Power to Adjourn
The chairman of a meeting at which a quorum of Debentureholders is present may, with the consent of the Debentureholders representing a majority of the aggregate outstanding principal amount of the Debentures present or represented thereat, adjourn such meeting, and no notice of such adjournment need be given except such notice, if any, as the meeting may prescribe.
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13.6 Show of Hands
Except as otherwise provided in this Indenture, every resolution submitted to a meeting shall be decided by a majority of the votes cast 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 shall be conclusive evidence of the fact.
13.7 Poll
On every resolution proposed to be passed as an Extraordinary Resolution and on any other resolution submitted to a meeting in respect of which the chairman of the meeting or one or more Debentureholders or proxyholders for Debentureholders holding at least U.S.$10,000 aggregate outstanding principal amount of Debentures demands a poll, a poll shall be taken in such manner and either at once or after an adjournment as the chairman of the meeting shall direct.
13.8 Voting
On a show of hands, every Person who is present and entitled to vote, whether as a Debentureholder or as proxyholder for one or more Debentureholders or both, shall have one vote. On a poll each Debentureholder present in person or represented by a proxy duly appointed by an instrument in writing shall be entitled to one vote in respect of each Debenture held by such Debentureholder on the record date fixed for the meeting. A proxyholder need not be a Debentureholder. In the case of joint Holders of a Debenture, any one of them present in person or represented by proxy at the meeting may vote in the absence of the other or others, but if more than one of them are present in person or represented by proxy, they shall vote together in respect of the Debentures of which they are joint Holders. Subject to the provisions of Section 13.9, in the case of Debentures held by a Person other than an individual, an officer or representative of such Person may vote the Debentures held by it unless there shall be more than one officer or representative of such Person present at the meeting, and those officers or individuals present do not agree on how the Debentures may be voted, in which case a written proxy shall be required to determine who may vote the Debentures and how such Debentures are to be voted.
In the case of a Global Debenture Certificate, the Depository may appoint or cause to be appointed a Person or Persons as proxies and shall designate the number of votes entitled to each such Person, and each such Person shall be entitled to be present at any meeting of Debentureholders and shall be the Persons entitled to vote at such meeting in accordance with the number of votes set out in the Depository’s designation.
13.9 Regulations
The Trustee, or the Corporation with the approval of the Trustee, may from time to time make and from time to time vary such regulations as it shall from time to time think fit providing for or governing the following:
(a) voting by proxy by Debentureholders, the form of the instrument appointing a proxyholder (which shall be in writing) and the manner in which it may be executed, and the authority to be provided by any Person signing a proxy on behalf of a Debentureholder;
(b) the deposit of instruments appointing proxyholders at such place as the Trustee, the Corporation or the Debentureholders convening the meeting, as the case may be, may, in the notice convening the meeting, direct and the time, if any, before the holding of the meeting or any adjournment thereof by which the same shall be deposited; and
(c) the deposit of instruments appointing proxyholders at an approved place or places other than the place at which the meeting is to be held and enabling particulars of such instruments appointing proxyholders to be provided before the meeting to the Corporation
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or to the Trustee at the place at which the meeting is to be held and for the voting of proxies so deposited as though the instruments themselves were produced at the meeting.
Any regulations so made shall be binding and effective and the votes given in accordance therewith shall be valid and shall be counted. Except as such regulations may provide, the only Persons who shall be recognized at a meeting as the Holders of any Debentures, or as entitled to vote or be present at the meeting in respect thereof, shall be registered Debentureholders and Persons whom registered Debentureholders have by instrument in writing duly appointed as their proxyholders.
13.10 Corporation and Trustee May Be Represented
The Corporation and the Trustee, by their respective officers, directors and employees, and the legal and business advisers of the Corporation and the Trustee may attend any meeting of the Debentureholders, but shall have no voting rights unless they are Debentureholders.
13.11 Powers Exercisable by Debentureholders by Extraordinary Resolution
Subject to the provisions of Sections 11.4 of this Indenture and the prior approval of the Exchange, the following powers of the Debentureholders shall be exercisable from time to time only by Extraordinary Resolution:
(a) power to sanction any modification, abrogation, alteration, compromise or arrangement of the rights of the Debentureholders or any of them, (including, for greater certainty, power to extend the time for completion of a purchase on a Change of Control contemplated by Article 6) or, subject to the Trustee’s prior consent, the Trustee against the Corporation or against its property, assets or undertaking, whether such rights arise under this Indenture or a Debenture Certificate or otherwise, provided that such sanctioned actions are not prejudicial to the Trustee;
(b) power to assent to any modification of or change in or addition to or omission from the provisions contained in this Indenture which shall be agreed to by the Corporation and to authorize the Trustee to concur in and execute any Supplemental Indenture embodying any modification, change, addition or omission;
(c) power to sanction any scheme for the reconstruction or reorganization of the Corporation or for the consolidation, amalgamation or merger of the Corporation with or into any other Person or for the sale, leasing, transfer or other disposition of the undertaking, property and assets of the Corporation or any part thereof, provided that no such sanction shall be necessary in respect of any transaction which is not subject to any restriction in Article 10;
(d) power to direct or authorize the Trustee to exercise any power, right, remedy or authority given to it by this Indenture in any manner specified in any such Extraordinary Resolution (subject to the Trustee being sufficiently funded and indemnified to its reasonable satisfaction) or to refrain from exercising any such power, right, remedy or authority;
(e) power to waive and direct the Trustee to waive any Event of Default and to cancel any declaration made by the Trustee pursuant to Section 11.3 either unconditionally or upon any condition specified in such Extraordinary Resolution;
(f) power to restrain any Debentureholder from taking or instituting any suit, action or proceeding for the purpose of enforcing payment of the principal of, or interest on, or Premium, if any, on any Debentures or for the purpose of executing any trust or power hereunder;
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(g) power to direct any Debentureholder who, as such, has brought any action, suit or proceeding to stay or discontinue or otherwise deal with the same upon payment, if the taking of such suit, action or proceeding shall have been permitted by Section 11.6, of the costs, charges and expenses reasonably and properly incurred by such Debentureholder in connection therewith;
(h) power to remove the Trustee at any time;
(i) power to assent to or sanction 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 the Corporation; and
(j) power to appoint a committee with power and authority (subject to such limitations, if any, as may be prescribed in the resolution) to exercise, and to direct the Trustee to exercise, on behalf of the Debentureholders, such of the powers of the Debentureholders as are exercisable by Extraordinary Resolution or otherwise as shall be included in the resolution appointing the committee. The resolution making such appointment may provide for payment of the expenses and disbursements of and compensation to such committee and the Trustee. Such committee shall consist of such number of individuals as shall be prescribed in the resolution appointing it and the members need not be Debentureholders. Every such committee may elect its chairman and may make regulations respecting its quorum, the calling of its meetings, the filling of vacancies occurring in its number and its procedure generally. Such regulations may provide that the committee may act at a meeting at which a quorum is present or may act by minutes signed by the number of members thereof necessary to constitute a quorum. All acts of any such committee within the authority delegated to it shall be binding upon all Debentureholders. Neither the committee nor any member thereof nor the Trustee shall be liable for any loss arising from or in connection with any action taken or omitted to be taken by them in good faith;
(k) extend the fixed maturity of, or alter the repayment provisions of, the Debentures;
(l) change the currency in which the Debentures or any Premium, if any, or interest on the Debentures is payable;
(m) reduce the percentage in principal amount at maturity outstanding of the Debentures that must consent to an amendment, supplement or waiver or consent to take any action under this Indenture or the Debenture Certificates;
(n) impair the right to institute suit for the enforcement of any payment on or with respect to the Debentures;
(o) waive a default in payment with respect to the Debentures;
(p) reduce the rate or extend the time for payment of interest on the Debentures;
(q) affect the ranking of the Debentures in a manner adverse to the Holder of the Debentures; or
(r) make any changes to this Indenture or the Debenture Certificates that could result in the Corporation being required to make any withholding or deduction from payments made under or with respect to the Debentures.
Except as otherwise provided in this Indenture, all other powers of and matters to be determined by the Debentureholders may be exercised or determined from time to time by Ordinary Resolution.
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13.12 Meaning of Ordinary Resolution
The expression “Ordinary Resolution” when used in this Indenture means, except as otherwise provided in this Indenture, a resolution proposed to be passed as an ordinary resolution at a meeting of Debentureholders, as the case may be, duly convened for the purpose and held in accordance with the provisions of this Article 13 at which a quorum of Debentureholders is present and passed by the affirmative votes of Debentureholders present in person or represented by proxy at the meeting who hold more than 50% of the aggregate outstanding principal amount of the Debentures voted in respect of such resolution.
13.13 Meaning of Extraordinary Resolution
The expression “Extraordinary Resolution” when used in this Indenture means, except as otherwise provided in this Indenture, a resolution proposed to be passed as an extraordinary resolution at a meeting of Debentureholders, duly convened for the purpose and held in accordance with the provisions of this Section at which the Holders of at least 51% of the aggregate outstanding principal amount of the Debentures then outstanding are present in person or represented by proxy and passed by the affirmative votes of Debentureholders present in person or represented by proxy at the meeting who hold not less than 66 2/3% of the aggregate outstanding principal amount of the Debentures voted in respect of such resolution.
If, at any such meeting, the Holders of at least 51% of the aggregate outstanding principal amount of the Debentures then outstanding are not present in person or represented by proxy within 30 minutes after the time appointed for the meeting, then the meeting, if convened by or on the requisition of Debentureholders, shall be dissolved, but in any other case the meeting shall stand adjourned to such date, being not less than 21 nor more than 60 days later, and to such place and time as may be appointed by the chairman of the meeting. Notice of the time and place that such adjourned meeting is to be reconvened shall be given to the Debentureholders in the manner specified in Section 13.2 at least 10 days prior to the date the adjourned meeting is to be reconvened. Such notice shall state that at the adjourned meeting the Debentureholders present in person or represented by proxy shall constitute a quorum, but it shall not be necessary to set forth the purposes for which the meeting was originally called or any other particulars. At the adjourned meeting, the Debentureholders present in person or represented by proxy shall constitute a quorum and may transact the business for which the meeting was originally convened, and a resolution proposed to be passed as an extraordinary resolution at such adjourned meeting and passed by the requisite vote as provided in this Section 13.13 shall be an Extraordinary Resolution within the meaning of this Indenture, notwithstanding that the Holders of at least 51% of the aggregate outstanding principal amount of the Debentures then outstanding are not present in person or represented by proxy at such adjourned meeting.
13.14 Powers Cumulative
Any one or more of the powers or any combination of the powers in this Indenture stated to be exercisable by the Debentureholders may be exercised from time to time, and the exercise of any one or more of such powers or any combination of powers from time to time shall not be deemed to exhaust the rights of the Debentureholders to exercise the same or any other such power or powers or combination of powers thereafter from time to time.
13.15 Minutes
Minutes of all resolutions and proceedings at every meeting of Debentureholders shall be made and duly entered in books to be from time to time provided for that purpose by the Trustee at the expense of the Corporation, and any such minutes, if signed by the chairman of the meeting at which such resolutions were passed or proceedings had, or by the chairman of the next succeeding meeting of the Debentureholders, shall be prima facie evidence of the matters therein stated and, unless the contrary is proved, every such meeting, in respect of the proceedings of which minutes shall have been made, shall
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be deemed to have been duly held and convened, and all resolutions passed thereat or proceedings had shall be deemed to have been duly passed and had.
13.16 Instruments in Writing
All actions which may be taken and all powers which may be exercised by the Debentureholders at a meeting held as provided in this Article 13 may also be taken and exercised by an instrument in writing signed in one or more counterparts by the Holders of more than 50%, in the case of an Ordinary Resolution, or not less than 66 2/3%, in the case of an Extraordinary Resolution, of the aggregate outstanding principal amount of the Debentures, and the expressions “Ordinary Resolution” and “Extraordinary Resolution” when used in this Indenture shall include any instrument so signed.
13.17 Binding Effect of Resolutions
Every resolution passed in accordance with the provisions of this Article 13 at a meeting of Debentureholders shall be binding upon all the Debentureholders, whether present at or absent from such meeting, and every instrument in writing signed by Debentureholders in accordance with Section 13.16 shall be binding upon all the Debentureholders, whether signatories thereto or not, and each and every Debentureholder and the Trustee (subject to the provisions for its remuneration, indemnification and protection herein contained) shall be bound to give effect accordingly to every such resolution and instrument in writing.
13.18 Record Dates
If the Corporation shall solicit from the Holders any request, demand, authorization, direction, notice, consent, waiver or other action, the Corporation may, at its option, by or pursuant to a Certified Resolution, fix in advance a record date for the determination of such Holders entitled to provide such request, demand, authorization, direction, notice, consent, waiver or other action, but the Corporation shall have no obligation to do so. Any such record date shall be the record date specified in or pursuant to such Certified Resolution.
If such a record date is fixed, such request, demand, authorization, direction, notice, consent, waiver or other action may be given before or after such record date, but only the Holders of record at the close of business on such record date shall be deemed to be Holders for the purposes of determining whether Holders of the requisite proportion of Debentures then outstanding have authorized or agreed or consented to such request, demand, authorization, direction, notice, consent, waiver or other Act, and for this purpose the Debentures then outstanding shall be computed as of such record date.
Article 14 NOTICES
14.1 Notice to the Corporation
Any notice to the Corporation under the provisions hereof shall be valid and effective if delivered to the Chief Financial Officer of the Corporation or if sent by facsimile transmission (with receipt confirmed) to the attention of the Chief Financial Officer of the Corporation at Gran Colombia Gold Corp., 333 Bay Street, Suite 1100, Toronto, Ontario M5H 2R2, fax: (416) 360-7783, and shall be deemed to have been validly given at the time of delivery or transmission if it is received prior to 5:00 p.m. (Toronto time) on a Business Day, failing which it shall be deemed to have been given on the next Business Day. The Corporation may from time to time notify the Trustee of a change in address or facsimile number which thereafter, until changed by like notice, shall be the address or facsimile number of the Corporation for all purposes of this Indenture.
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14.2 Notice to Debentureholders
Unless otherwise expressly provided in this Indenture, any notice to Debentureholders under the provisions hereof shall be valid and effective if it is delivered, sent by electronic communication or mailed postage prepaid, addressed to such Debentureholders, at their addresses or electronic communication numbers, if any, appearing in the Register and, subject as provided in this Section 14.2, shall be deemed to have been received at the time of delivery or sending by electronic communication or on the fifth Business Day after the day on which it was mailed. Any notice made by delivery or sent by electronic communication on a day other than a Business Day, or after 5:00 p.m. (Toronto time) on a Business Day, shall be deemed to be received on the next following Business Day. All notices to joint Holders of any Debentures may be given to whichever one of the Holders thereof is named first in the Register, and any notice so given shall be sufficient notice to all holders of such Debenture. In the event of a postal disruption, notice to Debentureholders shall be given or sent by other appropriate means.
14.3 Notice to the Trustee
Any notice to the Trustee under the provisions hereof shall be valid and effective if delivered to the Trustee at Equity Financial Trust Company 200 University Ave., Suite 300, Toronto, Ontario M5H 4H1, Attention: Corporate Trust Department, fax no: (416) 361-0470, or if sent by facsimile transmission (with receipt confirmed) to and shall be deemed to have been validly given at the time of delivery or transmission if it is received prior to 5:00 p.m. (Toronto time) on a Business Day, failing which it shall be deemed to have been given on the next Business Day. The Trustee may from time to time notify the Corporation of a change in address or facsimile number which thereafter, until changed by like notice, shall be the address or facsimile number of the Trustee for all purposes of this Indenture.
14.4 When Publication Not Required
If at any time a notice is required by this Indenture to be published in a particular city and no newspaper of general circulation is then being published and circulated on a daily basis in that city, the Corporation shall not be required to publish such notice in that city.
14.5 Waiver of Notice
Any notice provided for in this Indenture may be waived in writing by the Person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice. Waivers of notice by Debentureholders shall be filed with the Trustee, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waivers.
Article 15 CONCERNING THE TRUSTEE
15.1 Corporate Trustee Required Eligibility
The Trustee shall at all times be a corporation organized under the laws of Canada or any province thereof and represents to the Corporation that at the date of execution and delivery by it of this Indenture, it is duly authorized and qualified to carry on the business of a trust company in all provinces of Canada (except Quebec). If at any time the Trustee shall cease to be eligible in accordance with this Article 15, it shall resign immediately in the manner and with the effect hereinafter specified in this Article 15.
15.2 Certain Duties and Responsibilities of Trustee
In the exercise of the rights, powers and duties prescribed or conferred by the terms of this Indenture, the Trustee shall act honestly and in good faith and exercise that degree of care, diligence and skill that a reasonably prudent trustee would exercise in comparable circumstances and with a view to the best interests of the Debentureholders hereunder, and shall duly observe and comply with the provisions of
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any legislation and regulations which relate to the functions or role of the Trustee as a fiduciary hereunder. The duties and obligations of the Trustee shall be determined solely by the provisions hereof and, accordingly, the Trustee shall not be responsible except for the performance of such duties and obligations as they have undertaken herein. None of the provisions of this Indenture shall require the Trustee 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 nor shall the Trustee be so compelled pursuant to any provisions contained in this Indenture.
For greater certainty, it is hereby confirmed that the performance or discharge by the Trustee of any of its rights, powers, duties or responsibilities hereunder shall be construed in accordance with the laws of Ontario and the federal laws of Canada applicable therein and wherever it applies to the Trustee, the term “Applicable Law” shall be construed accordingly. For greater certainty, no provisions of this Indenture shall be construed to relieve the Trustee against liability for its own gross negligence, wilful misconduct or fraud.
The Trustee, upon the occurrence or at any time during the continuance of any act, action or proceeding, may require the Debentureholders at whose instance it is acting to deposit with it any Debenture Certificates held by them, for which Debenture Certificates the Trustee shall issue receipts.
Notwithstanding any other provision of this Indenture to the contrary, every provision of this Indenture that by its terms relieves the Trustee of liability or entitles the Trustee to rely or act upon any evidence submitted to it is subject to the provisions of applicable legislation, this Section 15.2 and Section 15.3.
No provision of this Indenture shall operate to confer any obligation, duty or power on the Trustee in any jurisdiction in which it does not have the legal capacity required to assume, hold or carry out such obligation, duty or power. For the purposes of this Section 15.2, legal capacity includes, without limitation, the capacity to act as a fiduciary in such jurisdiction.
15.3 No Conflict of Interest
(a) The Trustee represents to the Corporation that at the date of the execution and delivery of this Indenture there exists no material conflict of interest in the Trustee’s role as a fiduciary hereunder and the Trustee’s role in any other capacity. If at any time a material conflict of interest exists in respect of the Trustee’s role as a fiduciary under this Indenture that is not eliminated within three months after the Trustee becomes aware that such a material conflict of interest exists, the Trustee shall resign from the trusts under this Indenture by giving notice in writing of such resignation and the nature of such conflict to the Corporation at least 21 days prior to the date upon which such resignation is to take effect, and shall on such date be discharged from all further duties and liabilities hereunder. The validity and enforceability of this Indenture and any Debenture Certificate shall not be affected in any manner whatsoever by reason only of the existence of a material conflict of interest of the Trustee.
(b) If at any time the Trustee fails to comply with the provisions of Section 15.3(a), the Trustee shall within 10 days after the expiration of the 21-day period referred to therein, transmit notice of such failure to the Holders in the manner provided for notices to the Holders in Section 14.2.
15.4 Conditions Precedent to Trustee’s Obligation to Act
The Trustee shall not be bound to give any notice or take any action or proceeding unless it is required to do so under the terms of this Indenture. The Trustee shall not be required to take notice of an Event of Default under this Indenture, other than in respect of payment of any money required by any provision of this Indenture to be paid to it, unless and until the Trustee is notified in writing of such Event of Default by
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any Debentureholder or the Corporation. In the absence of such written notice the Trustee may for all purposes of this Indenture assume that no Event of Default has occurred.
The obligation of the Trustee to commence or continue any act, action or proceeding under this Indenture shall be conditional upon its receipt of the following:
(a) an Extraordinary Resolution, Ordinary Resolution, Debentureholders’ Request, requisition in writing, or such other notice or direction as is required pursuant to this Indenture, specifying the action or proceeding which the Trustee is requested, directed or authorized to take;
(b) sufficient funds to commence or continue such act, action or proceeding; and
(c) an indemnity satisfactory to the Trustee to protect and hold harmless the Trustee against the costs, charges, expenses and liabilities to be incurred thereby and any loss and damages it may suffer by reason thereof.
15.5 Resignation and Removal; Appointment of Successor
(a) No resignation or removal of the Trustee and no appointment of a successor Trustee pursuant to this Section 15.5 shall become effective until the acceptance of appointment by the successor Trustee under Section 15.6.
(b) The Trustee may resign at any time by giving 60 days’ written notice thereof to the Corporation. If an instrument of acceptance by a successor Trustee shall not have been delivered to the resigning Trustee within 30 days after the giving of such notice of resignation, the resigning Trustee may petition any court of competent jurisdiction for the appointment of a successor Trustee.
(c) The Trustee may be removed at any time by an Extraordinary Resolution of the Debentureholders.
(d) If at any time:
(i) the Trustee shall fail to comply with the provisions of Section 15.3, or
(ii) the Trustee shall cease to be eligible under Section 15.1 and shall fail to resign after written request therefor by the Corporation or by any Holder who has been a bona fide Debentureholder for at least six months, or
(iii) the Trustee shall become incapable of acting or shall be adjudged as bankrupt or insolvent, or a receiver of the Trustee or of its property shall be appointed or any public officer shall take charge or control of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation,
then, in any case,
(A) the Corporation by a Certified Resolution may remove the Trustee, or
(B) the Debentureholders may, subject to an Ordinary Resolution, petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee.
(e) If the Trustee shall resign, be removed or become incapable of acting, or if a vacancy shall occur in the office of the Trustee for any cause, the Corporation, by a Certified
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Resolution, shall promptly appoint a successor Trustee. If, within one year after such resignation, removal or incapability, or the occurrence of such vacancy, a successor Trustee shall be appointed by Ordinary Resolution of the Debentureholders, the successor Trustee so appointed shall, forthwith upon its acceptance of such appointment in accordance with Section 15.6, become the successor Trustee and supersede the successor Trustee appointed by the Corporation. If no successor Trustee shall have been so appointed by the Corporation or the Debentureholders and so accepted such appointment, a Debentureholder may on behalf of itself and all others similarly situated, petition any court of competent jurisdiction for the appointment of a successor Trustee. Any successor Trustee appointed under any provision of this Section 15.5 shall be a corporation authorized to carry on the business of a trust company in all of the provinces of Canada (except Quebec).
(f) The Corporation shall give notice of each resignation and each removal of the Trustee and each appointment of a successor Trustee by mailing written notice of such event by registered mail, postage prepaid, to the Debentureholders as their names and addresses appear in the Register. Alternatively, the Corporation may give such notice pursuant to a bulletin issued by CDS. Each notice shall include the name of the successor Trustee and the address of its Corporate Trust Office.
15.6 Acceptance of Appointment by Successor
Every successor Trustee appointed hereunder shall execute, acknowledge and deliver to the Corporation and to the retiring Trustee an instrument accepting such appointment, and thereupon the resignation or removal of the retiring Trustee shall become effective and such successor Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Trustee; but, upon written request of the Corporation or the successor Trustee, such retiring Trustee shall, upon payment of all amounts due it under Section 10.5, execute and deliver an instrument transferring to such successor Trustee all the rights, powers and trusts of the retiring Trustee, and shall duly assign, transfer and deliver to such successor Trustee all property and money held by such retiring Trustee hereunder subject to the claim provided for in Section 10.5. Upon request of any such successor Trustee, acting reasonably, the Corporation shall execute any and all deeds, conveyances or instruments for more fully and certainly vesting in and confirming to it such rights, powers and trusts.
No successor Trustee shall accept its appointment unless at the time of such acceptance such successor Trustee shall be qualified and eligible under this Article 15.
15.7 Trustee May Deal in Debentures
The Trustee may buy, sell, lend upon and deal in the Debentures and generally contract and enter into financial transactions with the Corporation or otherwise, without being liable to account for any profits made thereby.
15.8 No Person Dealing with Trustee Need Inquire
No Person dealing with the Trustee shall be required to inquire as to whether the powers that the Trustee is purporting to exercise have become exercisable, or whether any amount remains due upon the Debentures or to see to the application of any amount paid to the Trustee.
15.9 Investment of Money Held by Trustee
Unless otherwise provided in this Indenture (including the provisions of Section 15.5), any funds held by the Trustee under the trusts of this Indenture shall be deposited in a trust account in the name of the Trustee, (i) in any Canadian chartered bank at the rate of interest (if any) then current on similar deposits, or (ii) in the deposit department of the Trustee at the Trustee’s prevailing rate for all moneys held by it as
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may change from time to time, which account shall be interest-bearing unless otherwise agreed by the Corporation. Upon the written direction of the Corporation, the Trustee shall invest such funds in Authorized Investments in its name and in accordance with such direction. Any direction by the Corporation to the Trustee as to the investment of funds shall be in writing and shall be provided to the Trustee not later than 9:00 a.m. (Toronto time) on the Business Day on which the investment is to be made. Any such direction received by the Trustee after 9:00 a.m. (Toronto time) or received on a day which is not a Business Day shall be deemed to have been given prior to 9:00 a.m. (Toronto time) on the next Business Day. The Trustee shall not be held liable for any losses incurred in the investment of any funds in Authorized Investments.
All interest or other income received by the Trustee in respect of any investment or deposit made pursuant to the provisions of this Section 15.9 shall belong to the Corporation, and unless and until the Trustee shall have declared the principal of, and Premium, if any, and interest on, the Debentures to be due and payable, the Trustee shall pay over to the Corporation all such interest and other income forthwith upon receipt thereof by the Trustee
15.10 Trustee Not Required to Give Security
The Trustee shall not be required to give any bond or security in respect of the execution of the trusts and powers of this Indenture or otherwise in respect of this Indenture.
15.11 Trustee Not Required to Possess Debenture Certificates
All rights of action under this Indenture may be enforced by the Trustee without the possession of any of the Debenture Certificates or the production thereof on any trial or other proceedings relative thereto.
15.12 Evidence of Compliance
The Corporation shall furnish to the Trustee forthwith evidence of compliance with the conditions specified in this Indenture relating to the issue, certification, authentication and delivery of Debentures and Debenture Certificates hereunder, the satisfaction and discharge of this Indenture or the taking of any other action to be taken by the Trustee at the request of or on the application of the Corporation. Such evidence shall consist of:
(a) an Officer’s Certificate addressed to the Trustee stating that such conditions have been complied with in accordance with the terms of this Indenture and Applicable Law; and
(b) in the case of conditions, compliance with which are by this Indenture subject to review or examination by Corporation Counsel, an opinion of Corporation Counsel addressed to the Trustee that such conditions have been complied with in accordance with the terms of this Indenture, including any statements required by Applicable Law.
15.13 Form of Evidence
Evidence furnished to the Trustee, which relates to a matter other than the issue, certification and delivery of Debentures or the satisfaction and discharge of this Indenture or the compliance with a particular term of the Indenture which specifies more particularly the nature of evidence required for compliance, may consist of or otherwise be in accordance with a report or opinion of any solicitor, auditor, accountant, engineer or appraiser or any other Person whose qualifications give authority to a statement made by such Person, but if such report or opinion is furnished by a Director, officer or employee of the Corporation it shall be in the form of a statutory declaration or a certificate.
Evidence furnished to the Trustee pursuant to Section 15.12 or this Section 15.13 shall include:
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(a) a statement by the Person giving the evidence declaring that such Person has read and understands the provisions hereof relating to the conditions precedent with respect to compliance with which such evidence is being given;
(b) a statement describing the nature and scope of the examination or investigation upon which the statements or opinions contained in the evidence are based;
(c) a statement declaring that, in the belief of the Person giving the evidence, such Person has made such examination or investigation as is necessary to enable such Person to make the statements or give the opinions contained or expressed therein; and
(d) a statement permitting and acknowledging reliance thereon by Holders.
15.14 Certain Rights of Trustee
Subject to the provisions of Section 15.2,
(a) the Trustee may, acting in good faith, conclusively act and rely as to the truth of the statements and correctness of the opinions expressed in, shall not be bound to make any investigation into the facts or matters of, and shall be fully protected in acting or relying or refraining from acting upon, any resolution, certificate, statement, statutory declaration, instrument, opinion, report, notice, request, direction, consent, order, bond, Debenture Certificate, Debenture, other evidence of indebtedness or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties;
(b) any request or order of the Corporation shall be sufficiently evidenced by a request or order in writing and signed by any officer of the Corporation, any resolution of the Directors shall be sufficiently evidenced by a Certified Resolution, and the Trustee may conclusively act and rely on any such request, order or Certified Resolution;
(c) whenever in the administration of this Indenture the Trustee shall deem it desirable that a matter be proved or established prior to taking, suffering or omitting any action hereunder, the Trustee (unless other evidence is herein specifically prescribed) may, in the absence of bad faith on its part, rely and act upon an Officer’s Certificate;
(d) the Trustee at the expense of the Corporation may consult with Trustee Counsel and such other experts and advisers as the Trustee believes are necessary to enable it to determine and discharge its duties hereunder, and the advice or opinion of the Trustee Counsel, experts or advisers shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon;
(e) the Trustee shall not be under any obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Debentureholders pursuant to this Indenture unless such Debentureholders shall have offered to the Trustee sufficient funding and indemnity against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction, and provisions of this Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Section 15.14(e);
(f) no duty shall rest with the Trustee to determine compliance by the transferor or transferee with applicable securities laws;
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(g) in addition to the reports, certificates, opinions and other evidence required by this Indenture, the Corporation shall furnish to the Trustee such additional evidence of compliance with any provision hereof, and in such form as may be prescribed by Applicable Law or the Trustee may reasonably require by written notice to the Corporation;
(h) proof of the execution of an instrument in writing, including a Debentureholders’ Request, by any Debentureholder may be made by the certificate of a notary, solicitor or commissioner for oaths, 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 which the Trustee may consider adequate; and
(i) the Trustee shall not be bound to do or give notice or take any act, action, proceeding for the enforcement of any of the obligations of the Corporation under this Indenture unless and until it shall have received a Debentureholders’ Request specifying the act, action or proceedings which the Trustee is requested to take, nor shall the Trustee be required to take notice of any default hereunder, unless and until notified in writing of such default, which notice shall distinctly specify the default desired to be brought to the attention of the Trustee and, in the absence of any such notice, the Trustee may for all purposes of this Indenture conclusively assume that no default has been made in the observance or performance of any of the representations, debentures, covenants, agreements, or conditions contained herein.
15.15 Merger, Conversion, Consolidation or Succession to Business
Any corporation into which the Trustee may be merged or with which it may be amalgamated or consolidated, or any corporation resulting from any merger, amalgamation or consolidation to which the Trustee shall be a party, or any corporation succeeding to all or substantially all the corporate trust business of the Trustee, shall be the successor of the Trustee hereunder, provided such corporation shall be otherwise qualified and eligible under this Article 15, without the need for execution or filing of any specific instrument or any further act on the part of any of the parties hereto to evidence same.
15.16 Action by Trustee to Protect Interests
The Trustee shall have power to institute and maintain such actions and proceedings as it may consider necessary or expedient to preserve, protect or enforce its interests and the interests of the Debentureholders.
15.17 Protection of Trustee
The Corporation hereby indemnifies and saves harmless the Trustee and its directors, officers and employees (each in this paragraph, an “Indemnified Persons”) from and against all claims, demands, losses, actions, causes of action, costs, charges, expenses, damages, taxes (other than income or capital taxes), penalties and liabilities whatsoever brought against or incurred by the Trustee (collectively in this paragraph, “Claims”), which it may suffer or incur as a result of or arising in connection with the performance of its duties and obligations under this Indenture, including any and all legal fees and disbursements of whatever kind or nature, except that no Indemnified Person shall be entitled to indemnification in respect of a Claim resulting from the negligence, fraud, wilful misconduct, or the failure of the Trustee to perform its obligations in accordance with Section 15.2. This indemnity shall survive the removal or resignation of the Trustee under this Indenture and the termination of this Indenture.
The Trustee shall not be liable for or by reason of any statements of fact in this Indenture or in the Debenture Certificates (except for the representations contained in Sections 15.3 and in the certificate of the Trustee on the Debenture Certificates) or required to verify such statements, and all such statements are and shall be deemed to be made by the Corporation.
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The Trustee shall not be bound to give notice to any Person of the execution of this Indenture.
The Trustee shall not incur any liability or responsibility whatever or in any way be responsible for the consequence of any breach on the part of the Corporation of any of the covenants contained in this Indenture or in any Debenture Certificate or of any acts of the agents or employees of the Corporation.
Neither the Trustee nor any Affiliate of the Trustee shall be appointed a receiver or receiver and manager or liquidator of all or any part of the assets or undertaking of the Corporation.
Nothing in this Indenture shall impose on the Trustee any obligation to see to, or to require evidence of, the registration or filing (or renewal thereof) of this Indenture or any instrument ancillary or supplemental to this Indenture in any jurisdiction.
The Trustee shall not incur any liability with respect to the delivery or non-delivery of any certificate or certificates whether delivered by hand, mail or any other means.
The Trustee shall not be responsible for ensuring that the proceeds from the sale of Debentures are used in a manner contemplated by any prospectus pursuant to which such Debentures were offered or sold. The Trustee will not be required to expend or risk its own funds or otherwise incur financial liability.
The Corporation hereby indemnifies and saves harmless the Trustee, its directors, officers, employees, and agents, and all of their respective representatives, heirs, successors and assigns (collectively in this and the next paragraph the “Indemnified Parties”) against any loss, expenses, claim, proceedings, judgment, liability or asserted liability (including strict liability and including costs and expenses of abatement and remediation of spills or releases of contaminants and including liabilities of the Indemnified Parties to third parties (including Governmental Authorities) in respect of bodily injuries, property damage, damage to or impairment of the environment or any other injury or damage and including liabilities of the Indemnified Parties to third parties for the third parties’ foreseeable and unforeseeable consequential damages) incurred as a result of:
(a) the administration of the trust created hereby;
(b) the exercise by the Trustee of any rights hereunder; which result from or relate, directly or indirectly, to the breach or alleged breach of any Environmental Laws by the Corporation.
For purposes of the previous paragraph, “liability” shall include (i) liability of an Indemnified Party for costs and expenses of abatement and remediation of spills and releases of contaminants, (ii) liability of an Indemnified Party to a third party to reimburse the third party for bodily injuries, property damages and other injuries or damages which the third party suffers, including (to the extent, if any, that the Indemnified Party is liable therefor) foreseeable and unforeseeable consequential damages suffered by the third party and (iii) liability of the Indemnified Party for damage suffered by the third party, (iv) liability of an Indemnified Party for damage to or impairment of the environment and (v) liability of an Indemnified Party for court costs, expenses of alternative dispute resolution proceedings, and fees and disbursements of expert consultants and legal counsel on a solicitor and client basis.
15.18 Trustee Not Liable in Respect of Depository
The Trustee shall not have any liability whatsoever for:
(a) any aspect of the records relating to or payments made on account of beneficial ownership interests in the Debentures held by and registered in the name of a Depository or any BEO Participant;
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(b) maintaining, supervising or reviewing any records relating to such beneficial ownership interests; or
(c) any advice or representation made or given by or with respect to a Depository and made or given herein with respect to rules of such Depository or any action to be taken by a Depository or at the direction of a BEO Participant.
15.19 Global Debenture Certificates
Debentures issued to a Depository and represented by a Global Debenture Certificate shall be subject to the following:
(a) the Trustee may deal with the Depository as the authorized representative of the beneficial owners of such Debentures;
(b) the rights of the beneficial owners of such Debentures shall be exercised only through such Depository;
(c) such Depository will make book-entry transfers among the BEO Participants and will receive and transmit distributions of principal, Premium, if any, and interest on the Debentures to the BEO Participants; and
(d) the BEO Participants shall have no rights under this Indenture or under or with respect to any of the Debentures held on their behalf by such Depository, and the Depository may be treated by the Trustee and its agents, employees, officers and directors as the absolute owner of the Debentures represented by such Global Debenture Certificate for all purposes whatsoever.
15.20 Trustee Appointed Attorney
The Corporation hereby irrevocably appoints the Trustee to be the attorney of the Corporation in the name and on behalf of the Corporation to execute any documents and to do any acts and things which the Corporation is required to execute and do, and has not executed or done, under the covenants and provisions contained in this Indenture and generally to use the name of the Corporation in the exercise of all or any of the powers hereby conferred on the Trustee, with full powers of substitution and revocation.
15.21 Acceptance of Trusts
The Trustee hereby accepts the trusts in this Indenture declared and provided for and agrees to perform the same upon the terms and conditions set forth in this Indenture and in trust for the Debentureholders from time to time, subject to the terms and conditions of this Indenture.
15.22 No Liability for Certain Deposited Monies
The Trustee will bear no liability for monies deposited other than with the Trustee. The Trustee will disburse monies according to this Indenture only to the extent that monies have been deposited with it.
15.23 Third Party Interests
Each party to this Indenture hereby represents to the Trustee that any account to be opened by, or interest to held by, the Trustee in connection with this Indenture, for or to the credit of such party, either (i) is not intended to be used by or on behalf of any third party; or (ii) is intended to be used by or on behalf of a third party, in which case such party hereto agrees to complete and execute forthwith a declaration in the Trustee’s prescribed form as to the particulars of such third party.
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15.24 Trustee Not Bound to Act
The Trustee shall retain the right not to act and shall not be liable for refusing to act if, due to a lack of information or for any other reason whatsoever, the Trustee, in its sole judgment, determines that such act might cause it to be in non-compliance with any applicable anti-money laundering or anti-terrorist legislation, regulation or guideline. Further, should the Trustee, in its sole judgment, determine at any time that its acting under this Indenture has resulted in its being in non-compliance with any applicable anti- money laundering or anti-terrorist legislation, regulation or guideline, then it shall have the right to resign on 10 days written notice to the other parties to this Indenture, provided (i) that the Trustee’s written notice shall describe the circumstances of such non-compliance; and (ii) that if such circumstances are rectified to the Trustee’s satisfaction within such 10 day period, then such resignation shall not be effective.
15.25 Privacy Laws
The parties acknowledge that federal and/or provincial legislation that addresses the protection of individuals’ personal information (collectively, “Privacy Laws”) applies to obligations and activities under this Indenture. Despite any other provision of this Indenture, neither party shall take or direct any action that would contravene, or cause the other to contravene, applicable Privacy Laws. The Corporation shall, prior to transferring or causing to be transferred personal information to the Trustee, obtain and retain required consents of the relevant individuals to the collection, use and disclosure of their personal information, or shall have determined that such consents either have previously been given upon which the parties can rely or are not required under the Privacy Laws. The Trustee shall use commercially reasonable efforts to ensure that its services hereunder comply with Privacy Laws.
Article 16 GUARANTEES
16.1 Material Subsidiary Guarantees
To secure the due payment of all obligations and the performance by the Corporation of its obligations contained in this Indenture, any Supplemental Indenture or the Debenture Certificates, including without limitation the Debenture Indebtedness, the Corporation shall cause each Material Subsidiary to execute and deliver a Guarantee to the Trustee, for the benefit of the Debentureholders.
16.2 Additional Guarantees
In the event that any Material Subsidiary is created or acquired after the Issue Date, the Corporation covenants to cause such Material Subsidiary to execute and deliver a Guarantee to the Trustee, such Guarantee. Such Guarantee, in each case, shall be accompanied by supporting resolutions, certificates and opinions in form and substance satisfactory to the Trustee, and shall be provided within 30 days of such Material Subsidiary being created.
16.3 Release of Guarantees
If (A) a Corporation Subsidiary ceases to (i) directly hold interests in mining properties in Colombia, and (ii) constitute any part of the chain of ownership from the Corporation to any Corporation Subsidiary directly holding interests in mining properties in Colombia as a result of a reorganization described in Section 10.1(e), or (B) Mazamorras Gold Corp. ceases to be a wholly-owned Corporation Subsidiary of the Corporation, the Trustee shall, at the request of the Corporation, release such Corporation Subsidiary from its Guarantee.
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Article 17 SUPPLEMENTAL INDENTURES
17.1 Supplemental Indentures
From time to time, subject to the prior approval of Exchange, the Trustee and, when authorized by a resolution of the Board, the Corporation may, without the consent of any Debentureholder, and they shall when required by this Indenture, execute, acknowledge and deliver by their proper officers Supplemental Indentures, which thereafter shall form part of this Indenture, for any one or more of the following purposes:
(a) to evidence the succession, or successive successions, of successors to the Corporation and the covenants of and obligations assumed by any such successor in accordance with the provisions of this Indenture or any Supplemental Indenture;
(b) to add to the covenants of the Corporation or those of any other obligor of the Debentures in the Indenture, any Supplemental Indenture or in the Debenture Certificates for the benefit of the Debentureholders, including all consequential amendments to the Indenture, or to surrender any right or power conferred upon the Corporation or any other obligor of the Debentures in the Indenture, any Supplemental Indenture or in the Debenture Certificates for the benefit of the Debentureholders;
(c) to cure or correct any ambiguity or defective or inconsistent provision or omission or mistake or manifest error contained in the Indenture any Supplemental Indenture or in the Debenture Certificates, provided that the rights of the Debentureholders are not adversely affected in any material respect and for purposes hereof the Trustee may rely on the advice of Corporation Counsel or Trustee Counsel, in the discretion of the Trustee;
(d) to evidence and provide the acceptance of the appointment of a successor trustee under the Indenture or Supplemental Indenture and pursuant to the terms hereof;
(e) to comply with the rules of the Depository or with any requirement of any Canadian securities regulator or the Securities and Exchange Commission with respect to the Indenture, any Supplemental Indenture, the Guarantees or the Debenture Certificates;
(f) to give effect to any Extraordinary Resolution or Ordinary Resolution; and
(g) to make any other changes with respect to matters or questions arising under the Indenture, the Supplemental Indenture or the Debenture Certificates, provided that the rights of the Debentureholders are not adversely affected in any material respect and for purposes hereof the Trustee may rely on the advice of Corporation Counsel or Trustee Counsel, in the discretion of the Trustee.
The Trustee may also, in reliance on the advice of Corporation Counsel or Trustee Counsel, in the discretion of the Trustee, without the consent or concurrence of the Debentureholders, by Supplemental Indenture or otherwise, concur with the Corporation in making any changes or corrections in this Indenture, any Supplemental Indenture, the Guarantees or the Debenture Certificates.
17.2 Effect of Supplemental Indentures
Upon the execution of any Supplemental Indenture relating to some or all Debentures, this Indenture shall be modified in accordance therewith, such Supplemental Indenture shall form a part of this Indenture for all purposes in relation to such Debentures, and every Holder of such Debentures shall be bound thereby. Any Supplemental Indenture providing for the issue of Debentures may contain terms which add to, modify or negate any of the terms contained in this Indenture in relation to the Debentures to be so
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issued, and to the extent that there is any inconsistency between the terms of this Indenture and the terms contained in a Supplemental Indenture, the terms contained in the Supplemental Indenture shall be applicable to the Debentures unless otherwise indicated in such Supplemental Indenture.
17.3 Execution of Supplemental Indentures
In executing, or accepting the additional trusts created by, any Supplemental Indenture permitted by this Indenture or the modifications thereby of the trusts created by this Indenture, the Trustee shall be entitled to receive, and shall be fully protected in acting and relying upon, an opinion of Corporation Counsel stating that the execution of such Supplemental Indenture is authorized or permitted by this Indenture and that the rights of the Debentureholders are not adversely affected in any material respect. The Trustee may, but shall not be obligated to, enter into any such Supplemental Indenture which affects the Trustee’s own rights, duties or immunities under this Indenture or otherwise.
Article 18 EVIDENCE OF RIGHTS OF DEBENTUREHOLDERS
18.1 Evidence of Rights of Debentureholders
Any instrument which this Indenture may require or permit to be signed or executed by the Debentureholders may be in any number of concurrent instruments of similar tenor and may be signed or executed by such Debentureholders in person or by attorney duly appointed in writing. Proof of the execution of any such instrument, or of a writing appointing any such attorney or of the holding by any Person of Debentures shall be sufficient for any purpose of this Indenture if the fact and date of the execution by any Person of such instrument or writing are proved by the certificate of any notary public or other officer authorized to take acknowledgements of deeds to be recorded at the place at which such certificate is made that the Person signing such request or other instrument or writing acknowledged to him the execution thereof, or by an affidavit of a witness of such execution, or in any other manner which the Trustee may consider adequate.
The Trustee may, nevertheless, in its discretion, require further proof when it deems further proof desirable or may accept such other proof as it shall consider proper.
The ownership of Debentures shall be proved by the Register as herein provided.
Article 19 EXECUTION AND FORMAL DATE
19.1 Counterpart Execution
This Indenture may be executed in several counterparts, each of which when so executed shall be deemed to be an original, and such counterparts together shall constitute one and the same instrument.
19.2 Formal Date
For the purpose of convenience, this Indenture may be referred to as bearing the formal date of August 11, 2011, as amended and restated as of January 20, 2016, irrespective of the actual date of execution hereof.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF the parties hereto have executed this Indenture under the hands of their proper signatories in that behalf.
GRAN COLOMBIA GOLD CORP.
By: “Peter Volk”
Name: Peter Volk
Title: General Counsel and Secretary
EQUITY FINANCIAL TRUST COMPANY
By: “Kathy Thorpe”
Name: KathyThorpe
Title: SeniorTrust Officer
By: “Donald Crawford”
Name: Donald Crawford
Title: Corporate Trust Officer
(Note Indenture (2018 Debentures))
EXHIBIT A
FORM OF FACE OF DEBENTURE
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CUSIP [ ]
ISIN [ ]
[GLOBAL] DEBENTURE
SENIOR UNSECURED CONVERTIBLE DEBENTURES DUE 2018
No. [______] [Up to] [$______]
GRAN COLOMBIA GOLD CORP.
promises to pay to [CDS & CO.] [NAME OF REGISTERED HOLDER] or registered assigns the principal sum [$______(______Dollars), as revised by the Schedule of Exchanges of Interests in the Global Debenture Certificate attached hereto] [of $______(______Dollars)] on August 11, 2018.
Interest Payment Dates: last day of every month commencing February 29, 2016
Record Dates: 5th Business Day preceding each Interest Payment Date.
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IN WITNESS HEREOF, the Corporation has caused this instrument to be duly executed.
GRAN COLOMBIA GOLD CORP.
By:
Name:
Title:
CERTIFICATE OF AUTHENTICATION
This is one of the Debentures referred to in the within-mentioned Indenture:
EQUITY FINANCIAL TRUST COMPANY, as Trustee
By:
Authorized Signatory
Dated: [______] [__], [__]
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[Reverse Side of Debenture]
SENIOR UNSECURED CONVERTIBLE DEBENTURES DUE 2018
Capitalized terms used herein shall have the meanings assigned to them in the Indenture referred to below unless otherwise indicated.
(1) INTEREST. Gran Colombia Gold Corp., a Canadian corporation (the “Corporation”), promises to pay interest on the principal amount of this Debenture at the Interest Rate from and including January 20, 2016 until but excluding maturity in accordance with the terms and conditions set forth in Section 2.8 of the Indenture.
(2) METHOD OF PAYMENT. The Corporation, either directly or through the Trustee or any agent of the Trustee, shall pay interest on the Debentures (less any tax required to be withheld therefrom) to the Persons who are registered Holders of Debentures at the close of business on the fifth Business Day immediately preceding the related Interest Payment Date even if such Debentures are cancelled after such record date and on or before such Interest Payment Date. Principal, Premium, if any, and interest on the Debentures shall be payable by prepaid ordinary mail, electronic transfer of funds or such other means as may be agreed to by the Trustee. If payment is made by cheque, such cheque shall be forwarded at least three days prior to each date on which interest becomes due and if payment is made by other means (such as electronic transfer of funds, provided the Trustee must receive confirmation of receipt of funds prior to being able to wire funds to Holders), such payment shall be made in a manner whereby the Holder receives credit for such payment on the date such interest on such Debenture becomes due. The mailing of such cheque or the making of such payment by other means shall, to the extent of the sum represented thereby, plus the amount of any tax withheld as aforesaid, satisfy and discharge all liability for interest on such Debenture, unless in the case of payment by cheque, such cheque is not paid at par on presentation. In the event of non-receipt of any cheque for or other payment of interest by the person to whom it is so sent as aforesaid, the Corporation will issue to such person a replacement cheque or other payment for a like amount upon being furnished with such evidence of non-receipt as it shall reasonably require and upon being indemnified to its satisfaction. Notwithstanding the foregoing, if the Corporation is prevented by circumstances beyond its control (including, without limitation, any interruption in mail service) from making payment of any interest due on each Debenture in the manner provided above, the Corporation may make payment of such interest or make such interest available for payment in any other manner acceptable to the Trustee, acting reasonably, with the same effect as though payment had been made in the manner provided above. On or prior to 11:00 a.m. Eastern time on the Business Day prior to the earlier of: (i) any Interest Payment Date, or the day cheques are required to be mailed in accordance with this Section, the Corporation shall deposit with the Trustee money sufficient to pay the full amount due on the relevant Interest Payment Date. Notwithstanding the foregoing, payment by wire transfer of immediately available funds shall be required with respect to principal, Premium, if any, and interest on all Global Debenture Certificates and all other Debentures the Holders of which shall have provided wire transfer instructions to the Corporation or the Paying Agent at least five Business Days prior to the applicable payment date. Such payment shall be in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts.
(3) PAYMENT AT MATURITY. Subject to the conditions set out in Section 12.2, the Corporation may satisfy the Outstanding Balance at maturity by the issuance and delivery of Common Shares.
(4) REDEMPTION. The Debentures will be redeemable at the option of the Corporation in accordance with the terms of Article 7 of the Indenture at any time prior to the Stated Maturity of the Debentures in whole or in part from time to time on notice as provided for in Section 7.3 of the Indenture at a Redemption Price. The Redemption Notice for the Debentures shall be substantially in the form of Schedule “A” hereto.
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(5) REPURCHASE. The Debentures may be the subject of a Change of Control Offer, as further described in the Indenture.
(6) CONVERSION. Upon and subject to the provisions and conditions of Article 8 of the Indenture and this Section 6, the Holder of each Debenture shall have the right at such Holder’s option, at any time prior to the Time of Expiry, to convert any part, being $1.00 or an integral multiple thereof, of the principal amount of a Debenture into Common Shares at the Conversion Price in effect on the Date of Conversion. To the extent a redemption is a redemption in part only of the Debentures, such right to convert, if not exercised prior to the applicable Time of Expiry, shall survive as to any Debentures not redeemed or converted and be applicable to the next succeeding Time of Expiry. The Conversion Notice shall be substantially in the form of Schedule “B” hereto.
Holders converting Debentures will receive, in addition to the applicable number of Common Shares, accrued and unpaid interest in respect of the Debentures surrendered for conversion up to but excluding the Date of Conversion from, and including, the most recent Interest Payment Date in accordance with Section 8.5(f) of the Indenture.
Notwithstanding any other provisions of this Indenture, if a Debenture is surrendered for conversion on an Interest Payment Date or during the five preceding Business Days, the person or persons entitled to receive Common Shares in respect of the Debenture so surrendered for conversion shall not become the holder or holders of record of such Common Shares until the Business Day following such Interest Payment Date.
(7) PAYING AGENT AND REGISTRAR. Initially, Equity Financial Trust Company, the Trustee under the Indenture, shall act as Paying Agent and Registrar. The Corporation may change any Paying Agent or Registrar without notice to the Holders. The Corporation or any of its Subsidiaries may act as Paying Agent or Registrar.
(8) INDENTURE. This Debenture is one of a duly authorized issue of debentures by the Corporation pursuant to the Indenture and designated as Senior Unsecured Convertible Debentures due 2018. The Debentures shall be treated as a single class of securities under the Indenture. The terms of the Debentures include those stated in the Indenture. The Debentures are subject to all such terms, and Holders are referred to the Indenture for a statement of such terms. To the extent any provision of this Debenture conflicts with the express provisions of the Indenture, the provisions of the Indenture shall govern and be controlling. All Debentures issued pursuant to the Indenture are treated as a single class of securities under the Indenture.
(9) REPURCHASE. The Debentures may be the subject of open market purchases, as further described in the Indenture.
(10) DENOMINATIONS, TRANSFER, EXCHANGE. The Debentures are in registered form without coupons in denominations of $1.00 and integral multiples thereof. The transfer of Debentures may be registered and Debentures may be exchanged as provided in the Indenture. The Registrar and the Trustee may require a Holder, among other things, to furnish appropriate endorsements and transfer documents, and Holders shall be required to pay any taxes and fees required by law or permitted by the Indenture.
(11) PERSONS DEEMED OWNERS. The registered Holder of a Debenture may be treated as its owner for all purposes.
(12) AMENDMENT, SUPPLEMENT AND WAIVER. The Indenture, the Debenture Guarantees or the Debentures may be amended or supplemented as provided in the Indenture.
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(13) DEFAULTS AND REMEDIES. The Events of Default relating to the Debentures are defined in Section 11.1 of the Indenture. Upon the occurrence of an Event of Default, the rights and obligations of the Corporation, the Guarantors, the Trustee and the Holders shall be as set forth in the applicable provisions of the Indenture.
(14) AUTHENTICATION. This Debenture shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose until authenticated by the manual signature of the Trustee.
(15) GOVERNING LAW. THIS DEBENTURE WILL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE PROVINCE OF ONTARIO AND THE FEDERAL LAWS OF CANADA APPLICABLE THEREIN.
(16) SECURITY. The Debentures and the Debenture Guarantees are unsecured.
(17) CUSIP AND ISIN NUMBERS. Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures, the Corporation has caused CUSIP and ISIN numbers to be printed on the Debentures, and the Trustee may use CUSIP and ISIN numbers in notices of redemption as a convenience to Holders. No representation is made as to the accuracy of such numbers either as printed on the Debentures or as contained in any notice of redemption and reliance may be placed only on the other identification numbers placed thereon.
The Corporation shall furnish to any Holder upon written request and without charge a copy of the Indenture. Requests may be made to the Corporation at the following address:
Gran Colombia Gold Corp. 333 Bay Street Suite 1100 Toronto, Ontario M5H 2R2 Attention: Chief Financial Officer
This Debenture, if a Global Debenture Certificate (as defined in the Indenture) may only be transferred upon compliance with the conditions prescribed in the Indenture relating to a Global Debenture Certificate. Further this Debenture certificate may be transferred only upon compliance with such reasonable requirements as the Trustee or other Registrar may prescribe, and such transfer shall be duly noted herein by the Trustee or other Registrar.
This Debenture shall not become obligatory for any purpose until it shall have been certified by the manual signature of the Trustee in accordance with the Indenture.
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ASSIGNMENT FORM
To assign this Debenture, fill in the form below:
For value received the undersigned hereby, sells, assigns and transfers this Debenture to:
(Insert assignee’s legal name)
(Insert assignee’s soc. sec. or tax I. D. no. )
(Print or type assignee’s name, address and zip code) and irrevocably appoint to record the transfer of this Debenture on the books of the Corporation. The agent may substitute another to act for him.
Date: ______
Your Signature: ______(Sign exactly as your name appears on the face of this Debenture)
Name of Registered holder:______
Signature Guarantee*: ______
* Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustee).
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SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL DEBENTURE CERTIFICATE*
The initial outstanding principal amount of this Global Debenture Certificate is $71,141,883.00. The following exchanges of a part of this Global Debenture Certificate for an interest in another Global Debenture Certificate or for a Definitive Debenture, or exchanges of a part of another Global or Definitive Debenture for an interest in this Global Debenture Certificate, have been made:
Amount of increase Principal Amount of in Principal this Global Signature of Amount of Amount of this Debenture Certificate authorized signatory decrease Global Debenture following such of Trustee or Effective Date in Principal Amount Certificate decrease or increase Custodian
______
*This schedule should be included only if the Debenture is issued in global form.
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Schedule A
Form of Redemption Notice
REDEMPTION NOTICE
To: Holders of Senior Unsecured Convertible Debentures due 2018 (the "Debentures") of Gran Colombia Gold Corp. (the "Corporation")
DEBENTURE: All capitalized terms used herein have the meaning ascribed thereto in the Indenture mentioned below, unless otherwise indicated.
Notice is hereby given pursuant to Section 7.3 of the debenture indenture (the "Indenture") dated as of January 20, 2016 among the Corporation and Equity Financial Trust Company (the "Trustee"), that an aggregate principal amount of $ of the $ of Debentures outstanding will be redeemed as of (the "Redemption Date"), upon payment of a redemption amount of $ for each $1.00 principal amount of Debentures, being equal to the aggregate of (i) $ (the "Redemption Price"), and (ii) all accrued and unpaid interest thereon to but excluding the Redemption Date (collectively, the "Total Redemption Price").
The Total Redemption Price will be payable upon presentation and surrender of the Debentures called for redemption at the following corporate trust office:
Equity Financial Trust Company 200 University Avenue, Suite 300 Toronto, Ontario M5H 4H1
Attention: Corporate Actions
The interest upon the principal amount of Debentures called for redemption shall cease to be payable from and after the Redemption Date, unless payment of the Total Redemption Price shall not be made on presentation for surrender of such Debentures at the above-mentioned corporate trust office on or after the Redemption Date or prior to the setting aside of the Total Redemption Price pursuant to the Indenture.
No fractional Common Shares shall be delivered upon the exercise by the Corporation of the above-mentioned redemption right but, in lieu thereof, the Corporation shall pay the cash equivalent thereof determined on the basis of the Current Market Price of Common Shares on the Redemption Date (less any tax required to be deducted, if any).
DATED:
GRAN COLOMBIA GOLD CORP.
(Authorized Director or Officer of Gran Colombia Gold Corp.)
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Schedule B
Form of Notice of Conversion
CONVERSION NOTICE
TO: Equity Financial Trust Company. DEBENTURE: All capitalized terms used herein have the meaning ascribed thereto in the Indenture mentioned below, unless otherwise indicated. The undersigned holder of Senior Unsecured Convertible Debentures due 2018 irrevocably elects to convert such Debentures (or $ principal amount thereof*) in accordance with the terms of the Indenture referred to in such Debentures and tenders herewith the Debentures, and, if applicable, directs that the Common Shares of Gran Colombia Gold Corp. issuable upon a conversion be issued and delivered to the person indicated below. (If Common Shares are to be issued in the name of a person other than the holder, all requisite transfer taxes must be tendered by the undersigned).
The undersigned holder certifies that, as of the date hereof, it beneficially owns, controls or directs, directly or indirectly, Common Shares of Gran Colombia Gold Corp.
Dated:
(Signature of Registered Holder)
* If less than the full principal amount of the Debentures, indicate in the space provided the principal amount (which must be $1.00 or integral multiples thereof). Note: If Common Shares are to be issued in the name of a person other than the holder, the signature must be guaranteed by a chartered bank, a trust company or by a member of an acceptable Medallion Guarantee Program. The Guarantor must affix a stamp bearing the actual words: “SIGNATURE GUARANTEED”. (Print name in which Common Shares are to be issued, delivered and registered) Name:
(Address)
(City, Province and Postal Code)
Name of guarantor: Authorized signature:
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Schedule C
Form of Undertaking
UNDERTAKING
TO: Toronto Stock Exchange AND TO: Equity Financial Trust Company AND TO: Gran Colombia Gold Corp. DEBENTURE: All capitalized terms used herein have the meaning ascribed thereto in the Indenture mentioned below, unless otherwise indicated. The undersigned beneficial owner of Senior Unsecured Convertible Debentures due 2018, in accordance with the terms of the Indenture referred to in such Debentures, irrevocably undertakes to:
(i) file with the Exchange such documentation as may be required by the Exchange in connection with such holder acquiring Common Shares constituting 10% or more of the then outstanding Common Shares, which may include, among other things, a Personal Information Form, if, on the 10th Business Day following such conversion, such holder continues to hold Common Shares constituting 10% or more of the then outstanding Common Shares; and
(ii) if such Personal Information Form is not cleared by the Exchange, within 20 Business Days following notice from the Exchange thereof to the holder, such holder will sell that number of Common Shares in order to decrease his, her or its holdings of Common Shares below 10% of the then outstanding Common Shares.
Dated:
(Signature of beneficial holder)
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EXHIBIT B – FORM OF GUARANTEE
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EXHIBIT C – PERMITTED LIENS
Gran Colombia Gold Corp. Schedule of Liens As of January 20, 2016
Grantor Lien Secured Obligation Release of Lien
Gran Colombia Gold There is a pledge over Performance of Expected in 2016 S.A. the shares representing exploration the 80% of the issued commitments during a and outstanding share twenty-four (24) month capital of Providencia period ending on May Gold Corp. 14, 2012, as established under the Share Pledge Agreement entered between Gran Colombia Gold S.A. and Compañía de Minas Providencia S.A. on May 14, 2010.
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EXHIBIT D – AMOUNT OF INDEBTEDNESS
Gran Colombia Gold Corp. Schedule of Indebtedness As of January 20, 2016
Acquisition Amount
Marmato acquisition Approximately USD$1,771,000 (as of September 30, 2015)
Banco de Occidente Approximately US$2,050,000
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