EXHIBIT 10.2
20 SEPTEMBER, 2005
TREND MINING COMPANY
(AS CHARGOR)
AND
PACIFIC RIM MINING CORP.
(AS CHARGEE)
CHARGE OVER SHARES
IN
DMC CAYMAN INC.
▇▇▇▇▇▇ AND ▇▇▇▇▇▇
CHARGE OVER SHARES AND ASSIGNMENT
THIS CHARGE AND ASSIGNMENT is made on 20 September, 2005
BETWEEN:
(1) TREND MINING COMPANY, a corporation organized and existing under the
laws of Delaware (the "CHARGOR"); and
(2) PACIFIC RIM MINING CORP., a British Columbia company (the "CHARGEE").
WHEREAS:
(A) Pursuant to the Agreement (as defined below), the Chargor has acquired
the Purchased Assets (as defined in the Agreement) subject to the terms
and conditions set out in the Agreement.
(B) Pursuant to sub-section 2.4(b) of the Agreement, the Chargor hereby
enters into this charge over shares in the Company.
IT IS AGREED as follows:
1 DEFINITIONS AND INTERPRETATION
1.1 In this Charge (except where the context otherwise requires) the
following words and expressions shall have the following meanings:
"AGREEMENT" means the share purchase agreement made as of 20
September, 2005 between the Chargor and the Chargee;
"BUSINESS DAY" means any day which is not a Saturday or Sunday or a
public holiday in the place at or to which the notice
is left or sent;
"CHARGED SHARES" means the Initial Shares and all and any other
shares, warrants and other securities of any kind
(including loan capital) of the Company now or at any
time in the future beneficially owned by the Chargor
or in which the Chargor has any interest and all
rights, benefits and advantages now or at any time in
the future deriving from or incidental to any of the
Charged Shares, including:
(a) all dividends, interest and other income
paid or payable in relation to any Charged
Shares; and
(b) all shares, securities, rights, monies or
other property accruing, offered or issued
at any time by way of redemption,
conversion, exchange, substitution,
preference, option or otherwise in respect
of any Charged Shares (including but not
limited to proceeds of sale);
"COMPANY" means DMC Cayman Inc., an exempted company
incorporated in the Cayman Islands;
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"ENFORCEMENT NOTICE" means an enforcement notice served by the
Chargee on the Chargor;
"INITIAL SHARES" means the securities listed in Schedule 1
which are all registered in the name of the
Chargor;
"PACRIM LOAN" has the meaning given in the Agreement;
"PROMISSORY NOTE" means the promissory note made on 20
September, 2005 by the Chargor in favour of
the Chargee;
"PROJECT ENCUMBRANCE" has the meaning given in the Agreement;
"RECEIVER" has the meaning given to it in Clause 9;
"SECURED OBLIGATIONS" means all and any amounts of any kind now or
in the future, actual or contingent, due or
payable (or expressed to be due or payable)
by the Chargor or the Company to the Chargee
in any currency, actually or contingently,
solely and/or jointly and/or severally with
another or others, as principal or surety on
any account whatsoever under or in
connection with the Agreement, the
Promissory Note and this Charge or as a
consequence of any breach, non-performance,
disclaimer or repudiation by the Chargor of
any of its obligations under this Charge,
the Agreement, the Promissory Note or
otherwise and references to the Secured
Obligations include references to any part
of them;
"SECURITY INTEREST" means any mortgage, charge, pledge, lien,
encumbrance, right of set off or any
security interest, howsoever created or
arising; and
"TERMINATION EVENT" means any breach of, or a termination event,
or event of default under the Agreement, the
Promissory Note or this Charge.
1.2 In this Charge:
1.2.1 any reference to a Recital, Clause or Schedule is to the
relevant Recital, Clause or Schedule of or to this Charge and
any reference to a sub-clause or paragraph is to the relevant
sub-clause or paragraph of the Clause or Schedule in which it
appears;
1.2.2 the clause headings are included for convenience only and
shall not affect the interpretation of this Charge;
1.2.3 use of the singular includes the plural and vice versa;
1.2.4 use of any gender includes the other genders;
1.2.5 any phrase introduced by the terms "including", "include", "in
particular" or any similar expression shall be construed as
illustrative and shall not limit the sense of the words
preceding those terms; and
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1.2.6 references to any document or agreement are to be construed as
references to such document or agreement as is in force for
the time being and as amended, varied supplemented,
substituted or novated from time to time.
1.3 The Recitals and Schedules form part of this Charge and shall have
effect as if set out in full in the body of this Charge and any
reference to this Charge includes the Recitals and Schedules.
2 COVENANT TO PAY
The Chargor covenants with the Chargee that it will on demand pay and discharge
each of the Secured Obligations when due to the Chargee.
3 PRIORITY OF MORTGAGES AND CHARGES
Notwithstanding any other provision of this Charge, this Charge shall rank
behind any Project Encumbrance granted by the Chargor over the Shares. The
provisions of this Charge shall be subject to any contrary provisions in
documents creating any Project Encumbrance which shall prevail in the event of
any inconsistency, PROVIDED THAT the rights of the Chargee under this Charge
shall not be disturbed any more than is necessary to enable the Project
Encumbrance to rank ahead of this Charge.
4 CHARGE
4.1 The Chargor hereby charges by way of first fixed charge as a continuing
security for the payment and discharge of the Secured Obligations, all
its right, title, interest and benefit present and future in, to and
under the Charged Shares subject to the provisions for release of this
Charge set out below.
4.2 Subject to Clauses 4.3 and 4.4, on the irrevocable and unconditional
payment or discharge by or on behalf of the Chargor of the Secured
Obligations in full, the Chargee shall, at the request and cost of the
Chargor, release this Charge.
4.3 Any receipt, release or discharge of any security created by this
Charge or of any liability arising under this Charge may be given by
any one of ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇-▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ or ▇▇▇▇▇▇▇ ▇. Church
in accordance with the provisions of this Charge and shall not release
or discharge the Chargor from any liability to the Chargee for the same
or any other monies which may exist independently of this Charge. Where
such receipt, release or discharge relates to only part of the Secured
Obligations such receipt, release or discharge shall not prejudice or
affect any other part thereof nor any of the rights and remedies of the
Chargee hereunder or under the Agreement or the Promissory Note nor any
of the obligations of the Chargor under this Charge or under the
Agreement or the Promissory Note.
4.4 Any release, discharge or settlement between the Chargor and the
Chargee shall be conditional upon no security, disposition or payment
to the Chargee or any other person being void, set aside or ordered to
be refunded pursuant to any enactment or law relating to liquidation,
administration or insolvency or for any other reason whatsoever and if
such condition is not fulfilled the Chargee shall be entitled to
enforce this Charge as if such release, discharge or settlement had not
occurred and any such payment not been made.
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5 COVENANTS BY THE CHARGOR
The Chargor covenants that, for so long as any Secured Obligations remain
outstanding:
5.1 it shall deliver to the Chargee as security in accordance with the
terms of this Charge the following (on the date hereof) in form and
substance acceptable to the Chargee:
5.1.1 a memorandum signed by a director of the Company concerning
the endorsement of a note of this Charge on the Register of
Members of the Company;
5.1.2 a notice of charge addressed by the Chargor to the Company.
5.2 it shall promptly pay (and shall indemnify the Chargee on demand
against) all calls, instalments and other payments which may be made or
become due in respect of the Charged Shares and so that, in the event
of default by the Chargor, the Chargee may do so on behalf of the
Chargor;
5.3 it shall not, except with the written consent of the Chargee:
5.3.1 create or permit to exist over all or part of the Charged
Shares (or any interest therein) any Security Interest (other
than a Project Encumbrance) whether ranking prior to, pari
passu with or behind the security contained in this Charge;
5.3.2 sell, transfer or otherwise dispose of the Charged Shares or
any interest therein or attempt or agree to so dispose (other
than pursuant to enforcement of a Project Encumbrance);
5.3.3 permit any person other than the Chargor or the Chargee or the
Chargee's nominee or nominees to be registered as, or become
the holder of, the Charged Shares (other than pursuant to
enforcement of a Project Encumbrance); or
5.3.4 vote in favour of a resolution to amend, modify or change the
memorandum and articles of association of the Company in any
material way;
5.4 save as contemplated by the Agreement and to the extent that the same
is within the control of the Chargor, no further shares in the Company
will be issued without the prior consent of the Chargee;
5.5 it shall promptly forward to the Chargee all material notices, reports,
accounts and other documents relating to the Charged Shares which it
may receive from time to time (including all notices of meetings of the
shareholders of the Company);
5.6 at any time after the service of an Enforcement Notice it shall
exercise all voting and other rights and powers which may at any time
be exercisable by the holder of the Charged Shares as the Chargee may
in its absolute discretion direct;
5.7 it shall not take or accept any Security Interest from the Company or,
in relation to the Secured Obligations, from any third party, without
first obtaining the Chargee's written consent;
5.8 unless directed in writing to do so by the Chargee it shall not prove
in a liquidation or winding up of the Company until all the Secured
Obligations are paid in full and if directed to prove by the Chargee
(or if the Chargor otherwise receives any payment or other benefit in
breach of this sub-clause or sub-clause 5.7) the Chargor shall hold all
monies received by it on trust for the Chargee to satisfy the Secured
Obligations; and
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5.9 until all of the Secured Obligations have been paid in full, it shall
not claim payment whether directly or by set-off, lien, counterclaim or
otherwise of any amount which may be or has become due to the Chargor
by the Company other than as contemplated and/or expressly permitted by
the Agreement.
6 REPRESENTATIONS AND WARRANTIES
The Chargor represents and warrants to the Chargee and undertakes that:
6.1 the Chargor is the absolute sole, legal and beneficial owner of all of
the Initial Shares free of all Security Interests, encumbrances,
trusts, equities and claims whatsoever (save those under this Charge)
and that all of the Initial Shares are fully paid up;
6.2 it is duly incorporated and in good standing under the laws of the
jurisdiction in which it is incorporated and has and will at all times
have the necessary power to enter into and perform its obligations
under this Charge and has duly authorised the execution and delivery of
this Charge;
6.3 this Charge constitutes its legal, valid, binding and enforceable
obligation and is a first priority security interest over the Charged
Shares effective in accordance with its terms;
6.4 the execution, delivery, observance and performance by the Chargor of
this Charge will not require the Chargor to obtain any licences,
consents or approvals and will not result in any violation to the best
of the Chargor's knowledge, of any law, statute, ordinance, rule or
regulation applicable to it;
6.5 it has obtained all the necessary authorisations and consents to enable
it to enter into this Charge and the necessary authorisations and
consents will remain in full force and effect at all times during the
substance of the security constituted by this Charge; and
6.6 the execution, delivery, observance and performance by the Chargor of
the Charge will not constitute an event of default or trigger any
enforcement under any Security Interest in the Chargor's assets nor
will it result in the creation of any Security Interest over or in
respect of the present or future assets of the Company.
7 ENFORCEMENT NOTICE
7.1 The Chargee may at any time after the occurrence of a Termination Event
serve an Enforcement Notice on the Chargor. Unless and until the
occurrence of a Termination Event:
7.1.1 the Chargor shall be entitled to exercise all voting rights
attaching to the Charged Shares or any thereof for all
purposes not inconsistent with the purposes of this Charge,
any of the Secured Obligations, and of the Agreement; and
7.1.2 the Chargor shall be entitled to receive and retain any and
all dividends paid in respect of the Charged Shares or any
thereof.
7.2 The Chargor shall forthwith following the occurrence of a Termination
Event sign, seal, deliver and complete all transfers, renunciations,
proxies, mandates, assignments, deeds and documents and do all acts and
things which the Chargee may, in its absolute discretion, at any time
and from time to time specify for enabling or assisting the Chargee:
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7.2.1 to perfect or improve its title to and security over the
Charged Shares;
7.2.2 to vest the Charged Shares in the Chargee or its nominee or
nominees;
7.2.3 to procure that the Chargee or its nominee or nominees is
registered in the Register of Members of the Company in
respect of the Charged Shares;
7.2.4 to exercise (or enable its nominee or nominees to exercise)
any rights or powers attaching to the Charged Shares;
7.2.5 to sell or dispose of the Charged Shares; and/or
7.2.6 otherwise to enforce any of the rights of the Chargee under or
in connection with this Charge.
8 CHARGEE'S RIGHTS AS TO SHARES
At any time after the occurrence of a Termination Event, the Chargee shall,
without prejudice to any other right or remedy available hereunder or under
applicable law, forthwith become entitled:
8.1 solely and exclusively to exercise all voting rights attaching to the
Charged Shares or any thereof and shall exercise such rights in such
manner as the Chargee may in its absolute discretion determine; and/or
8.2 solely and exclusively to exercise all other rights and/or powers
and/or discretions of the Chargor in, to and under the Charged Shares
pursuant to the memorandum and articles of association of the Company;
and/or
8.3 to receive and retain all dividends and other distributions made on or
in respect of the Charged Shares or any thereof and any such dividends
and other distributions received by the Chargor after such time shall
be held in trust by the Chargor for the Chargee and be paid or
transferred to the Chargee on demand to be applied towards the
discharge of the Secured Obligations; and/or
8.4 without notice to, or further consent or concurrence by, the Chargor to
sell the Charged Shares or any part thereof by such method, at such
place and upon such terms as the Chargee may in its absolute discretion
determine, with power to postpone any such sale and in any such case
the Chargee may exercise any and all rights attaching to the Charged
Shares as the Chargee in its absolute discretion may determine and
without being answerable for any loss occasioned by such sale or
resulting from postponement thereof or the exercise of such rights;
and/or
8.5 to date and deliver the documents delivered to it pursuant to this
Charge hereof as it considers appropriate and to take all steps to
register the Charged Shares in the name of the Chargee or its nominee
or nominees and to assume control as registered owner of the Charged
Shares.
9 RECEIVER
At any time after the occurrence of a Termination Event the Chargee may by
writing without notice to the Chargor appoint one or more person or persons as
the Chargee thinks fit to be a receiver (the "RECEIVER") in relation to the
Charged Shares. Where the Chargee appoints two or more persons as Receiver, the
Receivers may act jointly or independently.
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9.1 The Receiver may take such action in relation to the enforcement of
this Charge including, without limitation, to sell, charge or otherwise
dispose of the Charged Shares, to exercise any powers, discretion,
voting or other rights or entitlements in relation to the Charged
Shares and generally to carry out any other action which he may in his
sole discretion deems necessary in relation to the enforcement of this
Charge.
9.2 The Receiver shall have, in addition to the other powers set-out in
this Clause, the following powers:
9.2.1 power to take possession of, collect and get in the Charged
Shares and, for that purpose, to take such proceedings as may
seem to him to be expedient;
9.2.2 power to raise or borrow money and grant security therefor
over the Charged Shares;
9.2.3 power to appoint an attorney or accountant or other
professionally qualified person to assist him in the
performance of his functions;
9.2.4 power to bring or defend any action or other legal proceedings
in the name of and on behalf of the Chargor in respect of the
Charged Shares;
9.2.5 power to do all acts and execute in the name and on behalf of
the Chargor any document or deed in respect of the Charged
Shares;
9.2.6 power to make any payment which is necessary or incidental to
the performance of his functions;
9.2.7 power to make any arrangement or compromise on behalf of the
Chargor in respect of the Charged Shares;
9.2.8 power to rank and claim in the insolvency or liquidation of
the Company and to receive dividends and to accede to
agreements for the creditors of the Company;
9.2.9 power to present or defend a petition for the winding up of
the Company; and
9.2.10 power to do all other things incidental to the exercise of the
foregoing powers.
9.3 The Receiver shall be the agent of the Chargor and the Chargor alone
shall be responsible for his acts and defaults and liable on any
contracts made, entered into or adopted by the Receiver. The Chargee
shall not be liable for the Receiver's acts, omissions, negligence or
default, nor be liable on contracts entered into or adopted by the
Receiver.
10 APPLICATION OF MONIES
10.1 The Chargee (and any Receiver) shall apply the monies received by it as
a result of the enforcement of the security:
10.1.1 first, in payment or satisfaction of the expenses related to
enforcement of this security (including without limitation the
fees and expenses of the Receiver);
10.1.2 second, in meeting claims of the Chargee in respect of the
Secured Obligations;
10.1.3 third, in payment of the balance (if any) to the Chargor.
10.2 The Chargee shall not be liable for any loss or damage occasioned by:
10.2.1 any sale or disposal of the Charged Shares or an interest in
the Charged Shares; or
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10.2.2 arising out of the exercise, or failure to exercise, any of
its powers under this Charge; or
10.2.3 any neglect or default to pay any instalment or accept any
offer or notify the Chargor of any such neglect or default; or
10.2.4 any other loss of whatever nature in connection with the
Charged Shares.
11 PROTECTION OF PURCHASERS
No purchaser or other person dealing with the Chargee or its delegate shall be
bound to see or inquire whether the right of the Chargee to exercise any of its
powers has arisen or become exercisable or be concerned with notice to the
contrary, or be concerned to see whether the delegation by the Chargee pursuant
to the terms of this Charge shall have lapsed for any reason or been revoked.
12 CONTINUING SECURITY AND NON-MERGER
12.1 The security constituted by this Charge shall be continuing and shall
not be considered as satisfied or discharged by any intermediate
payment or settlement of the whole or any part of the Secured
Obligations or any other matter or thing whatsoever and shall be
binding until all the Secured Obligations have been unconditionally and
irrevocably paid and discharged in full.
12.2 This Charge is in addition to and shall not merge with or otherwise
prejudice or affect any banker's lien, right to combine and consolidate
accounts, right of set-off or any other contractual or other right or
remedy or any guarantee, lien, pledge, ▇▇▇▇, note, charge or other
security now or hereafter held by or available to the Chargee.
13 CURRENCY
13.1 For the purpose of, or pending the discharge of, any of the Secured
Obligations the Chargee may, in its sole discretion, convert any moneys
received, recovered or realised in any currency under this Charge
(including the proceeds of any previous conversion under this Clause)
from their existing currency of denomination into any other currency at
such rate or rates of exchange and at such time as the Chargee thinks
fit.
13.2 No payment to the Chargee (whether under any judgment or court order or
otherwise) shall discharge the Secured Obligations in respect of which
it was made unless and until the Chargee shall have received payment in
full in the currency in which such Secured Obligations were incurred
and, to the extent that the amount of any such payment shall on actual
conversion into such currency fall short of such Secured Obligations
expressed in that currency, the Chargee shall have a further separate
cause of action against the Chargor and shall be entitled to enforce
this Charge to recover the amount of the shortfall.
14 COSTS
The Chargor shall on demand and on a full indemnity basis pay to the Chargee the
amount of all reasonable costs and expenses and other liabilities (including
stamp duty, and legal and out-of-pocket expenses) which the Chargee incurs in
connection with:
14.1 any actual or proposed amendment or waiver or consent under or in
connection with this Charge; and/or
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14.2 any discharge or release of this Charge; and/or
14.3 the preservation or exercise (or attempted preservation or exercise) of
any rights under or in connection with and the enforcement (or
attempted enforcement) of this Charge; and/or
14.4 dealing with or obtaining advice about any matter or question arising
out of or in connection with enforcing the Chargee's exercise of its
rights under this Charge.
15 VARIATION AND AMENDMENT
This Charge shall remain in full force and effect notwithstanding any amendments
or variations from time to time of the Agreement and the Promissory Note and no
variation of this Charge shall be valid unless it is in writing and signed by or
on behalf of each of the parties.
16 ASSIGNMENT
This Charge shall be binding upon and enure to the benefit of each party hereto
and its successors in title and permitted assigns.
17 SECURITY OVER RIGHT TO REPAYMENT OF PACRIM LOAN
17.1 The Chargor covenants that, upon the delivery of an Enforcement Notice
by the Chargee to the Chargor, where no Project Encumbrance is in
existence over the right to repayment of the Pacrim Loan, the Chargor
shall immediately execute and deliver as a deed an assignment by way of
security of the right to repayment of the Pacrim Loan in the form of
the deed of assignment by way of security set out in Schedule 2 and
that it shall immediately give notice to the Company of such assignment
and procure that the Company shall execute the acknowledgement of
notice of assignment by way of security in the form set out in Schedule
3 and deliver an executed original thereof to the Chargee.
17.2 The Chargor covenants that, upon the delivery of an Enforcement Notice
by the Chargee to the Chargor, where a Project Encumbrance is in
existence over the right to repayment of the Pacrim Loan, the Chargor
shall immediately assign to the Chargee all such rights as it has in
respect of the right to repayment of the Pacrim Loan (including the
equity of redemption in relation to the said Project Encumbrance) and
shall promptly give written notice to the beneficiary of the said
Project Encumbrance of such assignment.
18 ENTIRE AGREEMENT
This Charge, the Agreement, the Promissory Note and the assignment by way of
security set out in clause 17 (when the latter is executed and delivered)
constitute the entire agreement and understanding of the parties and supersede
any previous agreement between the parties relating to the subject matter of
this Charge.
19 FURTHER ASSURANCE
The Chargor shall promptly execute all documents and do all things that the
Chargee may reasonably specify for the purpose of (a) securing and perfecting
its security over or title to all or any of the Charged Shares, (b) enabling the
Chargee to vest all or part of the Charged Shares in its name or in the names of
its nominee(s), agent or any purchaser, or (c) securing or perfecting its
security over the right to repayment of the Pacrim Loan. The Chargee agrees to
use all reasonable endeavours to ensure that any Project Encumbrance has
priority over this Charge, and
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shall promptly execute all documents and do all things that the Chargor may
reasonably specify for that purpose.
20 NOTICES
20.1 Without prejudice to any other method of service of notices and
communications provided by law, a demand or notice under this Charge
shall be in writing signed by an officer or agent of the Chargee or the
Chargor, as the case may be, and may be served on the Chargor or the
Chargee, as the case may be, by hand, by post or by facsimile
transmission. Any such notice or communication shall be sent to the
address or number of the Chargor as set out below:
Chargor:
Trend Mining Company
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy (which will not constitute notice) to:
Holland & ▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy (which will not constitute notice) to:
▇▇▇▇▇ & Ashton
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇, ▇▇▇▇ ▇▇
▇▇▇ ▇▇▇▇▇▇-▇▇▇▇▇▇▇▇
▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Facsimile: (▇▇▇ ▇) ▇▇▇-▇▇▇▇
with a copy (which will not constitute notice) to:
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇
Zephyr House
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
PO Box 709 GT
George Town
Grand Cayman
Cayman Islands
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Attention: ▇▇▇▇ de Saram
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Chargee:
Pacific Rim Mining Corp.
Suite 410 - ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. Church
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy (which will not constitute notice) to:
Gowling ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ LLP
Suite 2300, ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
20.2 Any such notice or communication given by the Chargee shall be deemed
to have been received:
20.2.1 if sent by facsimile transmission, at the time of
transmission, or the following Business Day if transmitted
after normal business hours;
20.2.2 if delivered personally, at the time of delivery, or the
following Business Day if delivered after normal business
hours; and
20.2.3 if posted, on the second Business Day following the day on
which it was properly despatched by mail.
20.3 Any notice given to the Chargee shall be deemed to have been given only
upon on actual receipt.
20.4 In proving such service it shall be sufficient to prove that the
envelope containing such notice was addressed to the address of the
relevant party set out in sub-clause 20.1 (or as otherwise notified by
that party hereunder) and delivered either to that address or into the
custody of the postal authorities as a pre-paid recorded delivery,
registered post or airmail letter, or that the notice was transmitted
by fax to the fax number of the relevant party set out in sub-clause
20.1 (or as otherwise notified by that party hereunder).
21 MISCELLANEOUS
21.1 All sums payable by either party under this Charge shall be paid
without any set-off, counterclaim, withholding or deduction whatsoever
unless required by law in which event the paying party will
simultaneously with making the relevant payment under this
12
Charge pay to the receiving party such additional amount as will result
in the receipt by the receiving party of the full amount which would
otherwise have been receivable and will supply the receiving party
promptly with evidence satisfactory to the receiving party that the
paying party has accounted to the relevant authority for the sum
withheld or deducted.
21.2 No delay or omission on the part of either party in exercising any
right or remedy under this Charge shall impair that right or remedy or
operate as or be taken to be a waiver of it nor shall any single,
partial or defective exercise of any such right or remedy preclude any
other or further exercise under this Charge of that or any other right
or remedy.
21.3 The parties' rights powers and remedies under this Charge are
cumulative and are not, nor are they to be construed as, exclusive of
any rights, powers or remedies provided by law or otherwise and may be
exercised from time to time and as often as the relevant party deems
expedient.
21.4 Any waiver by either party of any terms of this Charge or any consent
or approval given by relevant party under it shall be effective only if
given in writing and then only for the purpose and upon the terms and
conditions (if any) on which it is given.
21.5 If at any time any one or more of the provisions of this Charge is or
becomes illegal, invalid or unenforceable in any respect under any law
of any jurisdiction neither the legality, validity or enforceability of
the remaining provisions of this Charge nor the legality, validity or
enforceability of such provision under the law of any other
jurisdiction shall be in any way affected or impaired as a result.
21.6 Any statement, certificate or determination of the Chargee as to the
Secured Obligations or (without limitation) any other matter provided
for in this Charge shall, in the absence of manifest error, be
conclusive and binding on the Chargor.
21.7 The Chargor shall at all times maintain an agent for service of process
in the Cayman Islands. Such agent shall be CARD Corporate Services Ltd.
of ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, PO Box 709 GT, ▇▇▇▇▇▇ Town, Grand
Cayman, Cayman Islands and any writ, judgment or other notice of legal
process shall be sufficiently served on the Chargor if delivered to
such agent at its address set out above. The Chargor undertakes not to
revoke the authority of the above agent and if, for any reason, such
agent no longer serves as agent of the Chargor to receive service of
process the Chargor shall promptly appoint another such agent and
advise the Chargor of the new agent's name and address for service.
22 LAW AND JURISDICTION
22.1 This Charge is governed by, and shall be construed in accordance with,
the law of the Cayman Islands.
22.2 The Chargor irrevocably agrees for the exclusive benefit of the Chargee
that the courts of the Cayman Islands shall have jurisdiction to hear
and determine any suit, action or proceeding and to settle any dispute
which may arise out of or in connection with this Charge and for such
purposes irrevocably submits to the jurisdiction of such courts.
13
23 COUNTERPARTS
This Charge may be executed in any number of counterparts and all such
counterparts taken together shall be deemed to constitute one and the same
instrument.
14
IN WITNESS WHEREOF this Charge has been executed and delivered as a Deed the day
and year first above written.
EXECUTED AS A DEED AND DELIVERED by )
)
TREND MINING COMPANY )
)
acting by ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ) .................................
)
)
)
In the presence of:
______________________Witness
EXECUTED AS A DEED AND DELIVERED by )
)
PACIFIC RIM MINING CORP. )
acting by ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇-▇▇▇▇▇▇▇ ) .................................
)
)
In the presence of:
______________________Witness
SCHEDULE 1
Amount or number of Initial Shares Description of registered Shares
---------------------------------- --------------------------------
12,975,919 Ordinary shares of US$1.00 par value in DMC
Cayman Inc., a Cayman Islands company of ▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ House, Church Street,
Grand Cayman, Cayman Islands. (the "COMPANY")
56,564,767 Preference shares of US$1.00 par value in
DMC Cayman Inc., a Cayman Islands company of
▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ House, Church Street,
Grand Cayman, Cayman Islands. (the "COMPANY")
SCHEDULE 2
FORM OF DEED OF ASSIGNMENT BY WAY OF SECURITY
DEED OF ASSIGNMENT BY WAY OF SECURITY
THIS DEED is made on [ ]
BETWEEN:
(1) TREND MINING COMPANY, a corporation organized and existing under the
laws of Delaware, (the "SECURITY ASSIGNOR"); and
(2) PACIFIC RIM MINING CORP., a British Columbia company, (the "SECURITY
ASSIGNEE").
WHEREAS:
(A) The Security Assignee assigned the right to repayment of the Pacrim
Loan (as defined in the Agreement) to the Security Assignor pursuant to
a deed of assignment in the form attached hereto (the "ASSIGNMENT").
(B) The Security Assignor has agreed to assign by way of security the
rights assigned pursuant to the Assignment to the Security Assignee.
IT IS AGREED as follows:
1 DEFINITIONS AND INTERPRETATION
In this Deed (except where the context otherwise requires) the following words
and expressions shall have the following meanings:
"AGREEMENT" means the share purchase agreement made as
of 20 September, 2005 between the ecurity
Assignor and the Security Assignee;
"ASSIGNMENT" has the meaning given in Recital (A);
"PACRIM LOAN" has the meaning given in the Agreement; and
"PROJECT ENCUMBRANCE" has the meaning given in the Agreement;
"PROMISSORY NOTE" means the promissory note made on 20
September, 2005 by the Security Assignor in
favour of the Security Assignee.
2 ASSIGNMENT
The Security Assignor hereby assigns by way of security for the obligations of
the Security Assignor under the Agreement and the Promissory Note, the right to
repayment of the Pacrim
-2-
Loan to the Security Assignee free and clear of any liens or other third party
rights. This assignment is to take effect as an absolute assignment (subject to
the equity of redemption).
3 ACKNOWLEDGEMENT OF ASSIGNMENT
The Security Assignee acknowledges the assignment pursuant to clause 2 above.
4 NOTICE TO COMPANY
The Security Assignee hereby undertakes to give express notice in writing of
this assignment by way of security to the Company.
5 COVENANTS OF THE SECURITY ASSIGNOR
The Security Assignor shall promptly take all necessary steps (i) to enter
details of the security interest created by this Deed in the relevant register
of the Security Assignor (as applicable) and (ii) to make all filings required
by applicable law in respect of such security interest.
6 GOVERNING LAW
This Deed is governed by, and shall be construed in accordance with, the law of
the Cayman Islands.
7 COUNTERPARTS
This Deed may be executed in any number of counterparts and all such
counterparts taken together shall be deemed to constitute one and the same
instrument.
-3-
IN WITNESS WHEREOF this Deed has been executed and delivered as a Deed the day
and year first above written.
EXECUTED AS A DEED AND DELIVERED by )
)
TREND MINING COMPANY )
)
acting by [ ] ) .................................
)
)
)
In the presence of:
______________________Witness
EXECUTED AS A DEED AND DELIVERED by )
)
PACIFIC RIM MINING CORP. )
acting by ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇-▇▇▇▇▇▇▇ ) .................................
)
)
In the presence of:
______________________Witness
FORM OF ASSIGNMENT
------------------
THIS ASSIGNMENT is made on 20 September, 2005
BETWEEN:
(1) PACIFIC RIM MINING CORP., a British Columbia company, (the "ASSIGNOR"); and
(2) TREND MINING COMPANY, a corporation organized and existing under the laws of
Delaware, (the "ASSIGNEE").
WHEREAS:
(C) Pursuant to the Agreement (as defined below), the Assignee has agreed
to acquire the Pacrim Loan (as defined in the Agreement) subject to the
terms and conditions set out in the Agreement.
(D) Pursuant to the Agreement, the Assignor hereby enters into this
assignment of the right to repayment of the Pacrim Loan.
IT IS AGREED as follows:
1 DEFINITIONS AND INTERPRETATION
In this Assignment (except where the context otherwise requires) the following
words and expressions shall have the following meanings:
"AGREEMENT" means the share purchase agreement made as
of 20 September, 2005 between the
Assignor and the Assignee;
"COMPANY" means DMC Cayman Inc., an exempted company
incorporated in the Cayman Islands; and
"PACRIM LOAN" has the meaning given in the Agreement.
2 ASSIGNMENT
The Assignor hereby assigns the right to repayment of the Pacrim Loan
to the Assignee free and clear of any liens or other third party
rights. This assignment is to take effect as an absolute assignment
(and not by way of charge only).
3 ACKNOWLEDGEMENT OF ASSIGNMENT
The Assignee acknowledges the assignment pursuant to clause 2 above.
4 NOTICE TO COMPANY
The Assignor hereby undertakes to deliver a copy of this Assignment to
the Company.
- 2 -
5 GOVERNING LAW
This Assignment is governed by, and shall be construed in accordance
with, the law of the Cayman Islands.
6 COUNTERPARTS
This Assignment may be executed in any number of counterparts and all
such counterparts taken together shall be deemed to constitute one and
the same instrument.
- 3 -
IN WITNESS WHEREOF this Assignment has been executed and delivered as a Deed the
day and year first above written.
EXECUTED AS A DEED AND DELIVERED by )
)
PACIFIC RIM MINING CORP. )
acting by ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇-▇▇▇▇▇▇▇ ) .................................
)
)
In the presence of:
______________________Witness
EXECUTED AS A DEED AND DELIVERED by )
)
TREND MINING COMPANY )
)
acting by ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ) .................................
)
)
)
In the presence of:
______________________Witness
SCHEDULE 3
ACKNOWLEDGEMENT OF NOTICE OF ASSIGNMENT BY WAY OF SECURITY
To: Pacific Rim Mining Corp.
▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
Standard Life Building
▇▇ ▇▇▇ ▇▇
▇▇▇▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇ ▇▇▇ ▇▇▇
DMC Cayman Inc. hereby acknowledges that it has received express notice in
writing of the assignment by way of security by Trend Mining Company to Pacific
Rim Mining Corp. of the right to repayment of the Pacrim Loan (as defined in the
Share Purchase Agreement between Trend Mining Company and Pacific Rim Mining
Corp.).
DMC CAYMAN INC.
By: ____________________
Title:___________________
Date:___________________