Common use of Adjustment of Conversion Basis Clause in Contracts

Adjustment of Conversion Basis. (1) If and whenever the Company shall (i) subdivide or redivide 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 any Common Shares (or securities convertible into or exchangeable for Common Shares) to the holders of all or substantially all of the outstanding Common Shares or any other class of shares of the Company by way of a stock dividend (other than the issuance of Common Shares as interest payments on the Debentures), the number of Common Shares which may be obtained pursuant to Section 5.1 for each one thousand ($1,000) dollars principal amount of this Debenture as of 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 or exchangeable for Common Shares) by way of a stock dividend, as the case may be, shall be increased, in the case of the events referred to in (i) and (iii) above, in the proportion which the number of Common Shares outstanding after such subdivision, redivision or dividend bears to the number of Common Shares outstanding before such subdivision, redivision or dividend, or shall be decreased, in the case of the events referred to in (ii) above, in the proportion which the number of Common Shares outstanding after such reduction, combination or consolidation bears to the number of Common Shares outstanding before such reduction, combination or consolidation. Any such issue of Common Shares by way of a stock dividend shall be deemed to have been made on the record date fixed for such stock dividend for the purpose of calculating the number of outstanding Common Shares under this subsection 5.4(1) or subsection 5.4(2), (3) or (4) and, in the case where securities convertible into or exchangeable for Common Shares are distributed, shall include the number of Common Shares that would have been outstanding had such securities been converted into Common Shares on such record date. (2) If at any time prior to the first anniversary date of the Commencement Date the Company shall fix a record date for the issuance of rights, options or warrants to all or substantially all of the holders of its outstanding Common Shares or any other class of shares of the Company, entitling them to subscribe for or purchase Common Shares (or securities exchangeable for or convertible into Common Shares or a combination of Common Shares and such exchangeable or convertible securities) at a price per share (or having a conversion or exchange price per share) less than one (US$1.50) United States dollar and fifty cents, the number of Common Shares which may be obtained pursuant to Section 5.1 for each one thousand ($1,000) dollars principal amount of this Debenture shall be adjusted immediately after such record date by multiplying the Conversion Basis in effect on such record date by a fraction, (i) the numerator of which shall be the total number of Common Shares outstanding on such record date plus the total number of Common Shares offered for subscription or purchase (or into which the convertible or exchangeable securities so offered are convertible or exchangeable), and (ii) the denominator of which 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 one (US$1.50) United States dollar and fifty cents; to the extent that any such rights, options or warrants are not so issued or any such rights, options or warrants are not exercised prior to the expiration thereof, the number of Common Shares which may be obtained pursuant to Section 5.1 for each one thousand ($1,000) dollars principal amount of this Debenture shall be re-adjusted to that which would then be in effect based upon the number of Common Shares (or securities convertible into or exchangeable for Common Shares) actually issued upon the exercise of such rights, options or warrants, as the case may be. (3) If and whenever the Company shall fix a record date for the making of a distribution (other than any distributions constituting dividends paid in the ordinary course) to all or substantially all the holders of its outstanding Common Shares or any other class of shares of the Company of (i) shares of the Company of any class other than Common Shares, or (ii) rights, options or warrants or other securities of the Company which are convertible into or exchangeable for Common Shares (excluding those referred to in subsection 5.4(2); or (iii) evidences of its indebtedness (excluding those referred to in subsection 5.4(2); or (iv) property or other assets of the Company or any Subsidiary of the Company, then, in each such case, the number of Common Shares which may be obtained pursuant to Section 5.1 for each one thousand ($1,000) dollars principal amount of the Debenture shall be adjusted immediately after such record date by multiplying the Conversion Basis in effect on such record date by a fraction (v) the numerator of which shall be the total number of Common Shares outstanding on such record date multiplied by one (US$1.50) United States dollar and fifty cents per Common Share, and (vi) the denominator of which shall be the total number of Common Shares outstanding on such record date multiplied by one (US$1.50) United States dollar and fifty cents, less the fair market value (as determined by the Directors, subject to the approval of any regulatory body having jurisdiction over the Company, which determination, absent manifest error, shall be conclusive) of such shares or rights, options or warrants or evidences or indebtedness or assets so distributed; any Common Shares owned by or held for the account of the Company or any Subsidiary of the Company shall be deemed not to be outstanding for the purpose of any such computation to the extent that such distribution is not so made, the number of Common Shares which may be obtained pursuant to Section 5.1 for each one thousand ($1,000) dollars principal amount of this Debenture shall be re-adjusted to that which would then be in effect if such record date had not been fixed or to that which would then be in effect if such record date had not been fixed or to that which would then be in effect based upon such share or rights, options or warrants or other securities or evidences of indebtedness or property or other assets actually distributed, as the case may be. (4) In case of the reclassification of the Common Shares at any time outstanding (other than any subdivision, redivision, reduction, combination of consolidation of Common Shares into a greater or lesser number of Common Shares) or change of the Common Shares into other shares, or in case of a Corporate Reorganization of the Company, (other than a Corporate Reorganization which does not result in a reclassification of the outstanding shares), the Holder of the 1. If necessary, appropriate adjustments shall be made in the application of the provisions set forth in this Article 5 with respect to the rights and interests thereafter of the Holder to the end that the provisions set forth in this Article 5 shall thereafter correspondingly be made applicable as nearly as may be possible in relation to any shares or other securities or property thereafter deliverable upon the exercise its rights to obtain Common Shares under Section 5. 1. Any such adjustments shall be approved by the Directors, subject to the approval of any regulatory body having jurisdiction over the Company, and shall be set forth in a notice given to the Holder in accordance with Article 9 hereof and, absent manifest error, shall for all purposes be conclusively deemed to be an appropriate adjustment. (5) In any case in which this Section 5.4 shall require that an adjustment shall become effective immediately after a record date for an event referred to herein, the Company may defer, until the occurrence of such event, issuing to the Holder the additional Common Shares issuable by reason of the adjustment upon a conversion pursuant to Section 5.1 made after such record date and before the occurrence of such event. The Company shall deliver or cause to be delivered to the Holder in any such case an appropriate instrument evidencing the Holder's right to receive 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 subsection 5.4(5), have become the holder of record of such additional Common Shares pursuant to subsection 5.2(2). (6) The adjustments provided for in this Section 5.4 are cumulative, shall in the case of the resulting adjustments to the Conversion Price be computed to the nearest one-tenth (1/10th) of one (1) cent 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 5.4. Notwithstanding any other provision of this Section 5.4, no adjustment of the Conversion Basis and Conversion Price shall be required in respect of any such event unless such adjustment would require an increase or decrease of at least one (1%) per cent in the Conversion Basis then in effect. Any adjustments which by reason of the preceding sentence of this subsection 5.4(6) are not required to be made shall be carried forward and taken into account on any subsequent adjustment. (7) If any questions arise with respect to the adjustments provided in this Section 5.4 and except with respect to matters where a decision of the Directors is expressly stated herein to be conclusive, such questions shall be determined by the Company's Auditors, subject to the consent of any regulatory body having jurisdiction over the Company and such determination, absent manifest error, shall be binding upon the Company and the Holder. 27

Adjustment of Conversion Basis. (1) If and whenever the Company shall (i) subdivide or redivide 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 any Common Shares (or securities convertible into or exchangeable for Common Shares) to the holders of all or substantially all of the outstanding Common Shares or any other class of shares of the Company by way of a stock dividend (other than the issuance of Common Shares as interest payments on the Debentures), the number of Common Shares which may be obtained pursuant to Section 5.1 for each one thousand ($1,000) dollars principal amount of this Debenture as of 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 or exchangeable for Common Shares) by way of a stock dividend, as the case may be, shall be increased, in the case of the events referred to in (i) and (iii) above, in the proportion which the number of Common Shares outstanding after such subdivision, redivision or dividend bears to the number of Common Shares outstanding before such subdivision, redivision or dividend, or shall be decreased, in the case of the events referred to in (ii) above, in the proportion which the number of Common Shares outstanding after such reduction, combination or consolidation bears to the number of Common Shares outstanding before such reduction, combination or consolidation. Any such issue of Common Shares by way of a stock dividend shall be deemed to have been made on the record date fixed for such stock dividend for the purpose of calculating the number of outstanding Common Shares under this subsection 5.4(1) or subsection 5.4(2), (3) or (4) and, in the case where securities convertible into or exchangeable for Common Shares are distributed, shall include the number of Common Shares that would have been outstanding had such securities been converted into Common Shares on such record date. (2) If at any time prior to while the first anniversary date of the Commencement Date debentures are outstanding the Company shall fix a record date for the issuance of rights, options or warrants to all or substantially all of the holders of its outstanding Common Shares or any other class of shares of the Company, entitling them to subscribe for or purchase Common Shares (or securities exchangeable for or convertible into Common Shares or a combination of Common Shares and such exchangeable or convertible securities) at a price per share (or having a conversion or exchange price per share) less than one (US$1.50) United States dollar and fifty centsthe Conversion Price, the number of Common Shares which may be obtained pursuant to Section 5.1 for each one thousand ($1,000) dollars principal amount of this Debenture shall be adjusted immediately after such record date by multiplying the Conversion Basis in effect on such record date by a fraction, (i) the numerator of which shall be the total number of Common Shares outstanding on such record date plus the total number of Common Shares offered for subscription or purchase (or into which the convertible or exchangeable securities so offered are convertible or exchangeable), and (ii) the denominator of which 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 one (US$1.50) United States dollar and fifty centsthe Conversion Price; to the extent that any such rights, options or warrants are not so issued or any such rights, options or warrants are not exercised prior to the expiration thereof, the number of Common Shares which may be obtained pursuant to Section 5.1 for each one thousand ($1,000) dollars principal amount of this Debenture shall be re-adjusted to that which would then be in effect based upon the number of Common Shares (or securities convertible into or exchangeable for Common Shares) actually issued upon the exercise of such rights, options or warrants, as the case may be. (3) If and whenever the Company shall fix a record date for the making of a distribution (other than any distributions constituting dividends paid in the ordinary course) to all or substantially all the holders of its outstanding Common Shares or any other class of shares of the Company of (i) shares of the Company of any class other than Common Shares, or (ii) rights, options or warrants or other securities of the Company which are convertible into or exchangeable for Common Shares (excluding those referred to in subsection 5.4(2); or (iii) evidences of its indebtedness (excluding those referred to in subsection 5.4(2); or (iv) property or other assets of the Company or any Subsidiary of the Company, then, in each such case, the number of Common Shares which may be obtained pursuant to Section 5.1 for each one thousand ($1,000) dollars principal amount of the Debenture shall be adjusted immediately after such record date by multiplying the Conversion Basis in effect on such record date by a fraction (v) the numerator of which shall be the total number of Common Shares outstanding on such record date multiplied by one (US$1.50) United States dollar and fifty cents per Common Sharethe Conversion Price, and (vi) the denominator of which shall be the total number of Common Shares outstanding on such record date multiplied by one (US$1.50) United States dollar and fifty cents, the Conversion Price less the fair market value (as determined by the Directors, subject to the approval of any regulatory body having jurisdiction over the Company, which determination, absent manifest error, shall be conclusive) of such shares or rights, options or warrants or evidences or indebtedness or assets so distributed; any Common Shares owned by or held for the account of the Company or any Subsidiary of the Company shall be deemed not to be outstanding for the purpose of any such computation to the extent that such distribution is not so made, the number of Common Shares which may be obtained pursuant to Section 5.1 for each one thousand ($1,000) dollars principal amount of this Debenture shall be re-adjusted to that which would then be in effect if such record date had not been fixed or to that which would then be in effect if such record date had not been fixed or to that which would then be in effect based upon such share or rights, options or warrants or other securities or evidences of indebtedness or property or other assets actually distributed, as the case may be. (4) In case of the reclassification of the Common Shares at any time outstanding (other than any subdivision, redivision, reduction, combination of consolidation of Common Shares into a greater or lesser number of Common Shares) or change of the Common Shares into other shares, or in case of a Corporate Reorganization of the Company, (other than a Corporate Reorganization which does not result in a reclassification of the outstanding shares), the Holder of the 1the Debenture if he, she or it shall thereafter exercise his, her or its rights to obtain Common Shares under Section 5.1, in whole or in part, shall be entitled to receive, and shall accept, in lieu of the number of Common Shares to which he, she or it was therefore entitled upon exercise of such conversion rights, the kind and amount of shares and other securities or property which such Holder would have been entitled to receive as a result of such reclassification, change or Corporate Reorganization, as the case may be, if on the effective date thereof, he, she or it had been the registered holder of the number of Common Shares to which he, she or it was theretofore entitled upon exercise of such Holder’s rights to obtain Common Shares under Section 5.1. If necessary, appropriate adjustments shall be made in the application of the provisions set forth in this Article 5 with respect to the rights and interests thereafter of the Holder to the end that the provisions set forth in this Article 5 shall thereafter correspondingly be made applicable as nearly as may be possible in relation to any shares or other securities or property thereafter deliverable upon the exercise its rights to obtain Common Shares under Section 5. 15.1. Any such adjustments shall be approved by the Directors, subject to the approval of any regulatory body having jurisdiction over the Company, and shall be set forth in a notice given to the Holder in accordance with Article 9 hereof and, absent manifest error, shall for all purposes be conclusively deemed to be an appropriate adjustment. (5) In any case in which this Section 5.4 shall require that an adjustment shall become effective immediately after a record date for an event referred to herein, the Company may defer, until the occurrence of such event, issuing to the Holder the additional Common Shares issuable by reason of the adjustment upon a conversion pursuant to Section 5.1 made after such record date and before the occurrence of such event. The Company shall deliver or cause to be delivered to the Holder in any such case an appropriate instrument evidencing the Holder's ’s right to receive 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 subsection 5.4(5), have become the holder of record of such additional Common Shares pursuant to subsection 5.2(2). (6) The adjustments provided for in this Section 5.4 are cumulative, shall in the case of the resulting adjustments to the Conversion Price be computed to the nearest one-tenth (1/10th) of one (1) cent 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 5.4. Notwithstanding any other provision of this Section 5.4, no adjustment of the Conversion Basis and Conversion Price shall be required in respect of any such event unless such adjustment would require an increase or decrease of at least one (1%) per cent in the Conversion Basis then in effect. Any adjustments which by reason of the preceding sentence of this subsection 5.4(6) are not required to be made shall be carried forward and taken into account on any subsequent adjustment. (7) If any questions arise with respect to the adjustments provided in this Section 5.4 and except with respect to matters where a decision of the Directors is expressly stated herein to be conclusive, such questions shall be determined by the Company's ’s Auditors, subject to the consent of any regulatory body having jurisdiction over the Company and such determination, absent manifest error, shall be binding upon the Company and the Holder. 27.

Adjustment of Conversion Basis. (1) If and whenever the Company shall (i) subdivide or redivide 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 any Common Shares (or securities convertible into or exchangeable for Common Shares) to the holders of all or substantially all of the outstanding Common Shares or any other class of shares of the Company by way of a stock dividend (other than the issuance of Common Shares as interest payments on the Debentures), the number of Common Shares which may be obtained pursuant to Section 5.1 for each one thousand ($1,000) dollars principal amount of this Debenture as of 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 or exchangeable for Common Shares) by way of a stock dividend, as the case may be, shall be increased, in the case of the events referred to in (i) and (iii) above, in the proportion which the number of Common Shares outstanding after such subdivision, redivision or dividend bears to the number of Common Shares outstanding before such subdivision, redivision or dividend, or shall be decreased, in the case of the events referred to in (ii) above, in the proportion which the number of Common Shares outstanding after such reduction, combination or consolidation bears to the number of Common Shares outstanding before such reduction, combination or consolidation. Any such issue of Common Shares by way of a stock dividend shall be deemed to have been made on the record date fixed for such stock dividend for the purpose of calculating the number of outstanding Common Shares under this subsection 5.4(1) or subsection 5.4(2), (3) or (4) and, in the case where securities convertible into or exchangeable for Common Shares are distributed, shall include the number of Common Shares that would have been outstanding had such securities been converted into Common Shares on such record date. (2) If at any time prior to the first anniversary date of the Commencement Date the Company shall fix a record date for the issuance of rights, options or warrants to all or substantially all of the holders of its outstanding Common Shares or any other class of shares of the Company, entitling them to subscribe for or purchase Common Shares (or securities exchangeable for or convertible into Common Shares or a combination of Common Shares and such exchangeable or convertible securities) at a price per share (or having a conversion or exchange price per share) less than one (US$1.50) United States dollar and fifty centsthe IPO Price, the number of Common Shares which may be obtained pursuant to Section 5.1 for each one thousand ($1,000) dollars principal amount of this Debenture shall be adjusted immediately after such record date by multiplying the Conversion Basis in effect on such record date by a fraction, (i) the numerator of which shall be the total number of Common Shares outstanding on such record date plus the total number of Common Shares offered for subscription or purchase (or into which the convertible or exchangeable securities so offered are convertible or exchangeable), and (ii) the denominator of which 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 one (US$1.50) United States dollar and fifty centsthe IPO Price; to the extent that any such rights, options or warrants are not so issued or any such rights, options or warrants are not exercised prior to the expiration thereof, the number of Common Shares which may be obtained pursuant to Section 5.1 for each one thousand ($1,000) dollars principal amount of this Debenture shall be re-adjusted to that which would then be in effect based upon the number of Common Shares (or securities convertible into or exchangeable for Common Shares) actually issued upon the exercise of such rights, options or warrants, as the case may be. (3) If and whenever the Company shall fix a record date for the making of a distribution (other than any distributions constituting dividends paid in the ordinary course) to all or substantially all the holders of its outstanding Common Shares or any other class of shares of the Company of (i) shares of the Company of any class other than Common Shares, or (ii) rights, options or warrants or other securities of the Company which are convertible into or exchangeable for Common Shares (excluding those referred to in subsection 5.4(2); or (iii) evidences of its indebtedness (excluding those referred to in subsection 5.4(2); or (iv) property or other assets of the Company or any Subsidiary of the Company, then, in each such case, the number of Common Shares which may be obtained pursuant to Section 5.1 for each one thousand ($1,000) dollars principal amount of the Debenture shall be adjusted immediately after such record date by multiplying the Conversion Basis in effect on such record date by a fraction (v) the numerator of which shall be the total number of Common Shares outstanding on such record date multiplied by one (US$1.50) United States dollar and fifty cents per Common Sharethe IPO Price, and (vi) the denominator of which shall be the total number of Common Shares outstanding on such record date multiplied by one the lessor of $0.50 (US$1.50US Fifty Cents) United States dollar and fifty centsor the IPO Price, less the fair market value (as determined by the Directors, subject to the approval of any regulatory body having jurisdiction over the Company, which determination, absent manifest error, shall be conclusive) of such shares or rights, options or warrants or evidences or indebtedness or assets so distributed; any Common Shares owned by or held for the account of the Company or any Subsidiary of the Company shall be deemed not to be outstanding for the purpose of any such computation to the extent that such distribution is not so made, the number of Common Shares which may be obtained pursuant to Section 5.1 for each one thousand ($1,000) dollars principal amount of this Debenture shall be re-adjusted to that which would then be in effect if such record date had not been fixed or to that which would then be in effect if such record date had not been fixed or to that which would then be in effect based upon such share or rights, options or warrants or other securities or evidences of indebtedness or property or other assets actually distributed, as the case may be. (4) In case of the reclassification of the Common Shares at any time outstanding (other than any subdivision, redivision, reduction, combination of consolidation of Common Shares into a greater or lesser number of Common Shares) or change of the Common Shares into other shares, or in case of a Corporate Reorganization of the Company, (other than a Corporate Reorganization which does not result in a reclassification of the outstanding shares), the Holder of thethe Debenture if he, she or it shall thereafter exercise his, her or its rights to obtain Common Shares under Section 5.1, in whole or in part, shall be entitled to receive, and shall accept, in lieu of the number of Common Shares to which he, she or it was therefore entitled upon exercise of such conversion rights, the kind and amount of shares and other securities or property which such Holder would have been entitled to receive as a result of such reclassification, change or Corporate Reorganization, as the case may be, if on the effective date thereof, he, she or it had been the registered holder of the number of Common Shares to which he, she or it was theretofore entitled upon exercise of such Holder's rights to obtain Common Shares under Section 5. 1. If necessary, appropriate adjustments shall be made in the application of the provisions set forth in this Article 5 with respect to the rights and interests thereafter of the Holder to the end that the provisions set forth in this Article 5 shall thereafter correspondingly be made applicable as nearly as may be possible in relation to any shares or other securities or property thereafter deliverable upon the exercise its rights to obtain Common Shares under Section 5. 1. Any such adjustments shall be approved by the Directors, subject to the approval of any regulatory body having jurisdiction over the Company, and shall be set forth in a notice given to the Holder in accordance with Article 9 hereof and, absent manifest error, shall for all purposes be conclusively deemed to be an appropriate adjustment. (5) In any case in which this Section 5.4 shall require that an adjustment shall become effective immediately after a record date for an event referred to herein, the Company may defer, until the occurrence of such event, issuing to the Holder the additional Common Shares issuable by reason of the adjustment upon a conversion pursuant to Section 5.1 made after such record date and before the occurrence of such event. The Company shall deliver or cause to be delivered to the Holder in any such case an appropriate instrument evidencing the Holder's right to receive 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 subsection 5.4(5), have become the holder of record of such additional Common Shares pursuant to subsection 5.2(2). (6) The adjustments provided for in this Section 5.4 are cumulative, shall in the case of the resulting adjustments to the Conversion Price be computed to the nearest one-tenth (1/10th) of one (1) cent 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 5.4. Notwithstanding any other provision of this Section 5.4, no adjustment of the Conversion Basis and Conversion Price shall be required in respect of any such event unless such adjustment would require an increase or decrease of at least one (1%) per cent in the Conversion Basis then in effect. Any adjustments which by reason of the preceding sentence of this subsection 5.4(6) are not required to be made shall be carried forward and taken into account on any subsequent adjustment. (7) If any questions arise with respect to the adjustments provided in this Section 5.4 and except with respect to matters where a decision of the Directors is expressly stated herein to be conclusive, such questions shall be determined by the Company's Auditors, subject to the consent of any regulatory body having jurisdiction over the Company and such determination, absent manifest error, shall be binding upon the Company and the Holder. 27.