EXHIBIT 10.1
NONE OF THE SECURITIES TO WHICH THIS PRIVATE PLACEMENT SUBSCRIPTION AGREEMENT
(THE "AGREEMENT") RELATES HAVE BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"), AND, UNLESS SO REGISTERED,
NONE MAY BE OFFERED OR SOLD IN THE UNITED STATES OR TO U.S. PERSONS (AS DEFINED
HEREIN) EXCEPT PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT
TO, THE REGISTRATION REQUIREMENTS OF THE 1933 ACT.
PRIVATE PLACEMENT SUBSCRIPTION AGREEMENT
(outside North America)
Personal & Confidential
TO: SMARTIRE SYSTEMS INC. (the "Company")
Richmond Corporate Centre
#150 - 00000 Xxxxxx Xxxxx
Xxxxxxxx, Xxxxxxx Xxxxxxxx
Xxxxxx X0X 0X0
AND TO: ____________________________ (the "Agent")
____________________________
____________________________
Purchase of Securities
1. Subscription
1.1 The undersigned (the "Subscriber") hereby irrevocably subscribes for and
agrees to purchase (such subscription and agreement to purchase being the
"Subscription") on the basis of the representations and warranties and subject
to the terms and conditions set forth herein, that number of units (each, a
"Unit") consisting of one common share (a "Share") and one share purchase
warrant in the form of Exhibit A to this Private Placement Subscription
Agreement (a "Warrant"), (the Shares, the Warrants and the common shares issued
on exercise of the Warrants being referred to herein as "Securities") in the
capital of the Company set out on page 10 at the price per Unit of U.S.$1.70
(the "Subscription Price").
1.2 The Company hereby irrevocably agrees to sell, on the basis of the
representations and warranties and subject to the terms and conditions set forth
herein, to the Subscriber that number of Units set out on page 10, at the
Subscription Price.
1.3 Subject to the terms hereof, the Subscription will be effective upon its
acceptance by the Company or the Agent on behalf of the Company.
2. Payment
2.1 The Subscription Price shall be paid by certified cheque or bank draft made
payable to the Company in immediately available funds. Such certified cheque or
bank draft must accompany this Subscription for delivery at Closing (as defined
below), or the Subscription Price may be immediately wired to the Company
according to the wire instructions provided by the Company. If the Subscription
Price is wired to the Company's agents or lawyers, those
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agents or lawyers are authorized to immediately deliver the Subscription Price
to the Company upon Closing.
3. Undertaking and Direction
3.1 The Subscriber must complete, sign and return along with an executed
original of this Agreement to the Agent a direction to the Company and the Agent
with respect to registration and delivery instructions as set out on page 10.
3.2 The Subscriber shall complete, sign and return to the Company and the Agent
as soon as possible on request by the Company or the Agent any documents,
questionnaires, acknowledgements, notices and undertakings as may be required by
regulatory authorities, stock exchanges and applicable law.
4. Closing
4.1 Closing of the offering (the "Closing") shall occur no later than November
15, 2001 or on such other date as may be mutually agreed to by the Agent and the
Company (the "Closing Date").
5. Acknowledgements of Subscriber
5.1 The Subscriber acknowledges and agrees that:
(a) the Securities have not been registered under the 1933 Act, or
under any state securities or "blue sky" laws of any state of
the United States, and, unless so registered, may not be
offered or sold in the United States or to U.S. Persons, as
that term is defined in Regulation S promulgated under the
1933 Act ("Regulation S"), except pursuant to an exemption
from, or in a transaction not subject to, the registration
requirements of the 1933 Act;
(b) the decision to execute this Agreement and purchase the
Securities agreed to be purchased hereunder has not been based
upon any oral or written representation as to fact or
otherwise made by or on behalf of the Company or the Agent,
and such decision is based entirely upon a review of
information (the receipt of which is hereby acknowledged)
which has been filed by the Company with the British Columbia
Securities Commission and the United States Securities and
Exchange Commission and in compliance, or intended compliance,
with applicable securities legislation (collectively, the
"Public Record") including the Company's audited financial
statements, together with the related schedules and notes, for
the year ending July 31, 2001;
(c) although the Agent may have introduced the Subscriber to the
Company, the Subscriber and the Company acknowledge and agree
with, and for the benefit of, the Agent and the Company, as
applicable (such acknowledgement and agreements to survive the
Closing) that:
(i) the Agent and its directors, officers, employees,
agents and representatives have no responsibility or
liability of any nature whatsoever for the accuracy
or adequacy of the information contained in this
Agreement, the Public Record or any other publicly
available information concerning the
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Company or as to whether all information concerning
the Company required to be disclosed by it or them
has generally been disclosed;
(ii) the Agent makes no representations or warranties
herein with respect to the Securities, and neither
the Agent nor its directors, officers, employees,
agents or representatives shall have any liability
with respect to the sale of the Securities;
(iii) the Agent has not engaged in any independent
investigation or verification with respect to this
Subscription or any such information; and
(iv) the Agent and the Company are entitled to rely on the
representations and warranties and the statements and
answers of the Subscriber contained in this Agreement
and in the questionnaires and undertakings attached
as schedules to this Agreement, and the Subscriber
will hold harmless each of the Agent and the Company
from any loss or damage it or they may suffer as a
result of the Subscriber's failure to correctly
complete this Agreement or such questionnaires and
undertakings;
(d) by execution hereof the Subscriber has waived the need for the
Company or the Agent to communicate the Company's acceptance
of the purchase of the Securities pursuant to this Agreement;
(e) it will indemnify and hold harmless the Company and the Agent
and, where applicable, their respective directors, officers,
employees, agents, advisors and shareholders from and against
any and all loss, liability, claim, damage and expense
whatsoever (including, but not limited to, any and all fees,
costs and expenses whatsoever reasonably incurred in
investigating, preparing or defending against any claim,
lawsuit, administrative proceeding or investigation whether
commenced or threatened) arising out of or based upon any
representation or warranty of the Subscriber contained herein
or in any document furnished by the Subscriber to the Company
or the Agent in connection herewith being untrue in any
material respect or any breach or failure by the Subscriber to
comply with any covenant or agreement made by the Subscriber
to the Company or the Agent in connection therewith;
(f) the issuance and sale of the Securities to the Subscriber will
not be completed if the Subscription is otherwise fully
subscribed, if acceptance would be unlawful or if, in the
discretion of the Company, acting reasonably, acceptance is
not in the best interests of the Company;
(g) it has been advised to consult its own legal, tax and other
advisors with respect to the merits and risks of an investment
in the Securities and with respect to applicable resale
restrictions and it is solely responsible (and neither the
Agent nor the Company is in any way responsible except with
regard to the Company's obligations arising from section 7 of
this Agreement) for compliance with applicable resale
restrictions;
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(h) the Securities are not listed on any stock exchange or subject
to quotation except that the Shares currently are listed on
the National Association of Securities Dealers, Inc. Automated
Quotation System SmallCap Market, and no representation has
been made to the Subscriber that the Securities will become
listed on any other stock exchange or subject to quotation on
any other quotation system;
(i) the Subscriber is not resident in Canada nor the United States
and is not purchasing the Securities for such residents;
(j) no securities commission or similar regulatory authority has
reviewed or passed on the merits of the Securities; (k) there
is no government or other insurance covering the Securities;
(l) there are risks associated with the purchase of the
Securities;
(m) there are restrictions on the Subscriber's ability to resell
the Securities and it is the responsibility of the Subscriber
to find out what those restrictions are and to comply with
them before selling the Securities;
(n) the Subscriber must file with the British Columbia Securities
Commission an "Initial Trade Report" in the form as attached
to B.C. BOR#95/17 within 10 days of the initial sale of the
Securities;
(o) the Company has advised the Subscriber that the Company is
relying on an exemption from the requirements to provide the
Subscriber with a prospectus and to sell the Securities
through a person registered to sell securities under the
Securities Act (British Columbia) (the "B.C. Act") and, as a
consequence of acquiring the Securities pursuant to this
exemption, certain protections, rights and remedies provided
by the B.C. Act, including statutory rights of rescission or
damages, will not be available to the Subscriber; and
(p) this Agreement is not enforceable by the Subscriber unless it
has been accepted by the Company.
6. Representations, Warranties and Covenants of the Subscriber
6.1 The Subscriber hereby represents and warrants to and covenants with the
Company and the Agent (which representations, warranties and covenants shall
survive the Closing) that:
(a) the Subscriber and any beneficial purchaser for whom it is
acting are resident in the jurisdiction set out under the
heading "Name and Address of Subscriber" on page 11 of this
Subscription;
(b) the Subscriber has the legal capacity and competence to enter
into and execute this Subscription and to take all actions
required pursuant hereto and, if the Subscriber is a
corporation, it is duly incorporated and validly subsisting
under the laws of its jurisdiction of incorporation and all
necessary approvals by its directors,
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shareholders and others have been obtained to authorize
execution and performance of this Subscription on behalf of
the Subscriber;
(c) the entering into of this Subscription and the transactions
contemplated hereby do not result in the violation of any of
the terms and provisions of any law applicable to, or the
constating documents of, the Subscriber or of any agreement,
written or oral, to which the Subscriber may be a party or by
which the Subscriber is or may be bound;
(d) the Subscriber has duly executed and delivered this
Subscription and it constitutes a valid and binding agreement
of the Subscriber enforceable against the Subscriber;
(e) it understands and agrees that none of the Securities has been
registered under the 1933 Act, and they may not be sold under
U.S. law except as permitted in paragraph 6.1(g) below;
(f) it is purchasing the Securities for its own account or for an
account with respect to which it exercises sole investment
discretion, and that it or such account is an accredited
investor as that term is defined in Rule 501 under the 1933
Act (an "Institutional Accredited Investor") acquiring the
Securities for investment purposes and not for distribution;
(g) the Subscriber acknowledges that any resale of the Securities
will be subject to resale restrictions contained in the
securities legislation applicable to the Subscriber or any
proposed transferee. The Subscriber acknowledges that the
Securities have not been registered under the 1933 Act or the
securities laws of any state of the United States and that the
Company does not intend to register same under the 1933 Act,
or the securities laws of any such state and has no obligation
to do so. The Securities may not be offered or sold in the
United States unless registered in accordance with federal
securities laws and all applicable state securities laws or
exemptions from such registration requirements are available;
(h) it understands and agrees that the notification requirement
referred to in paragraph 6.1(g) above will be satisfied by
virtue of the fact that the legend set out below will be
placed on the Shares unless otherwise agreed by the Company:
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE
UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE
"1933 ACT"). THE HOLDER HEREOF, BY PURCHASING THIS
SECURITY, AGREES FOR THE BENEFIT OF THE COMPANY THAT
THIS SECURITY MAY NOT BE RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED TO A U.S. PERSON EXCEPT AFTER THE EXPIRY
OF A 40 DAY DISTRIBUTION COMPLIANCE PERIOD AS
PRESCRIBED IN REGULATION S."
(i) it (i) is able to fend for itself in the Subscription; (ii)
has such knowledge and experience in business matters as to be
capable of evaluating the merits and risks of its prospective
investment in the Securities; and (iii) has the ability to
bear the
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economic risks of its prospective investment and can afford
the complete loss of such investment;
(j) it understands and agrees that the legend referred to in
paragraph 6.1(h) above shall not be removed from any Shares
purchased by it pursuant to this Subscription unless there is
delivered to the Company such satisfactory evidence, which may
include an opinion of counsel licensed to practice law in one
of the states of the United States of America, as may be
reasonably required by the Company, that such Shares are not
"restricted" within the meaning of Rule 144;
(k) if it is acquiring the Securities as a fiduciary or agent for
one or more investor accounts, it has sole investment
discretion with respect to each such account and it has full
power to make the foregoing acknowledgments, representations
and agreements on behalf of such account;
(l) it understands and agrees that the Company and others will
rely upon the truth and accuracy of the acknowledgments,
representations and agreements contained in sections 5 and 6
hereof and agrees that if any of such acknowledgments,
representations and agreements are no longer accurate or have
been breached, it shall promptly notify the Company;
(m) the Subscriber is not aware of any advertisement of any of the
Securities;
(n) in purchasing the Securities the Subscriber has complied with
all securities laws of its jurisdiction of residence and
warrants that the sale of the Securities by the Company is in
full compliance with such laws, and the Subscriber will make
all filings necessary in such jurisdiction to ensure the
Company complies with securities laws of such jurisdiction;
and
(o) no person has made to the Subscriber any written or oral
representations:
(i) that any person will resell or repurchase any of the
Securities;
(ii) that any person will refund the purchase price of any
of the Securities; or
(iii) as to the future price or value of any of the
Securities.
6.2 In this Subscription, the term "U.S. Person" shall have the meaning ascribed
thereto in Regulation S and for the purpose of the Subscription includes any
person in the United States.
7. Representations and Warranties of the Company
7.1 The Company acknowledges and agrees that the Subscriber is entitled to rely
upon the representations and warranties of the Company contained in this
Agreement and further acknowledges that the Subscriber will be relying upon such
representations and warranties in purchasing the Securities.
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7.2 The Company warrants that the Public Record fairly represents the status of
the Company as at the dates indicated in the Public Record.
8. Commission to the Agent
8.1 The Subscriber understands that upon Closing, the Agent will receive from
the Company a commission of up to seven percent (7%) of the gross proceeds
raised from the sale of the Securities, payable to the Agent in cash. The Agent
will also receive share purchase warrants which permit the acquisition of the
Company's common shares at the Subscription Price in such number as equals the
commission payable to the Agent hereunder divided by the Subscription Price.
9. Acknowledgement and Waiver
9.1 The Subscriber has acknowledged that the decision to purchase the Securities
was solely made on the basis of publicly available information. The Subscriber
hereby waives, to the fullest extent permitted by law, any rights of withdrawal,
rescission or compensation for damages (other than as expressly described
herein).
10. B.C. Resale Restrictions
10.1 Subscriber acknowledges that the Shares are subject to a hold period in
British Columbia and may not be traded in British Columbia until 4 months from
the Closing Date except as permitted by the Securities Act (British Columbia)
and the Rules made thereunder.
10.2 The Subscriber acknowledges that within 10 days of the initial trade of the
Shares by the Subscriber it must file with the British Columbia Securities
Commission an "Initial Trade Report" in the form as attached to B.C. Blanket
Order and Ruling 95/17.
11. Costs
11.1 The Subscriber acknowledges and agrees that all costs and expenses incurred
by the Subscriber (including any fees and disbursements of any special counsel
retained by the Subscriber) relating to the purchase of the Shares shall be
borne by the Subscriber.
12. Appointment of Agent
12.1 The Subscriber (and others for whom the Subscriber is contracting
hereunder) hereby:
(a) irrevocably authorizes the Agent to swear, execute, file and
record any documents necessary to accept delivery of the
Securities on the Closing Date; and
(b) appoints the Agent to act as its agent to represent it with
respect to all matters relating to this Subscription
Agreement, including representing the Subscriber at the
Closing for the purpose of all closing matters and deliveries
of documents and payment of funds, and the Subscriber hereby
authorizes the Agent to extend such time periods and to modify
or waive such conditions as the Agent may deem appropriate,
acting reasonably, provided however that the Agent shall not
modify
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or waive any such condition where to do so would result in a
material change to any of the material attributes or terms of
sale of the Securities, and to correct or rectify any
ambiguities, errors or omissions herein that the Agent, acting
reasonably, may deem appropriate.
13. Governing Law
13.1 This Subscription Agreement is governed by the laws of the province of
British Columbia and the federal laws of Canada applicable herein. The
Subscriber, in its personal or corporate capacity and, if applicable, on behalf
of each beneficial purchaser for whom it is acting, irrevocably attorns to the
jurisdiction of the courts of the Province of British Columbia.
14. Survival
14.1 This Subscription, including without limitation the representations,
warranties and covenants contained herein, shall survive and continue in full
force and effect and be binding upon the parties hereto notwithstanding the
completion of the purchase of the Securities by the Subscriber pursuant hereto,
the completion of the issue of Securities of the Company and any subsequent
disposition by the Subscriber of the Shares.
15. Assignment
15.1 This Subscription is not transferable or assignable.
16. Execution
16.1 The Company shall be entitled to rely on delivery by facsimile machine of
an executed copy of this Subscription and acceptance by the Company of such
facsimile copy shall be equally effective to create a valid and binding
agreement between the Subscriber and the Company in accordance with the terms
hereof.
17. Severability
17.1 The invalidity or unenforceability of any particular provision of this
Subscription shall not affect or limit the validity or enforceability of the
remaining provisions of this Subscription.
18. Termination
18.1 If, prior to Closing, the Agent determines for valid cause to terminate
this Subscription Agreement, this Agreement and the obligations of the parties
hereto are deemed to have terminated as at the effective date of such
termination.
19. Entire Agreement
19.1 Except as expressly provided in this Agreement and in the agreements,
instruments and other documents contemplated or provided for herein, this
Agreement contains the entire agreement between the parties with respect to the
sale of the Securities and there are no
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other terms, conditions, representations or warranties, whether expressed,
implied, oral or written, by statute or common law, by the Company, the Agent,
the Subscriber or by anyone else.
20. Notices and Counterparts
20.1 All notices and other communications hereunder shall be in writing and
shall be deemed to have been duly given if mailed or transmitted by any standard
form of telecommunication. Notices to the Subscriber shall be directed to the
address on page 11; notices to the Company shall be directed to it at Richmond
Corporate Centre, #150 - 00000 Xxxxxx Xxxxx, Xxxxxxxx, Xxxxxxx Xxxxxxxx, X0X
0X0, attention of The President; notices to the Agent shall be directed to it at
the address first above written.
20.2 This Agreement may be executed in any number of counterparts, each of
which, when so executed and delivered, shall constitute an original and all of
which together shall constitute one instrument.
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IN WITNESS WHEREOF the Subscriber has duly executed this Subscription as of the
date first above mentioned.
Number of Units
to be purchased at U.S.$1.70 each:______________________________________________
Total purchase price: __________________________________________________________
DELIVERY INSTRUCTIONS
1. Delivery - please deliver the Share certificate(s) to:
_______________________________________________________________________
_______________________________________________________________________
2. Registration - registration of the Share certificates which are to be
delivered at Closing should be made as follows:
_______________________________________________________________________
(name)
_______________________________________________________________________
(address)
3. Delivery - please deliver the Warrant certificate(s) to:
_______________________________________________________________________
_______________________________________________________________________
4. Registration - registration of the Warrant certificates which are to be
delivered at Closing should be made as follows:
_______________________________________________________________________
(name)
_______________________________________________________________________
(address)
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5. The undersigned hereby acknowledges that it will deliver to the Company
all such additional completed forms in respect of the Subscriber's
purchase of Securities as may be required for filing with the
appropriate securities commissions and regulatory authorities and stock
exchanges.
____________________________________________________
(Name of Subscriber - Please type or print)
____________________________________________________
(Signature and, if applicable, Office)
____________________________________________________
(Address of Subscriber)
____________________________________________________
(City, State or Province, Postal Code of Subscriber)
____________________________________________________
(Country of Subscriber)
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A C C E P T A N C E
The above-mentioned Subscription in respect of the Securities is hereby accepted
by SMARTIRE SYSTEMS INC.
DATED at ___________________________________________ , the _________ day of
___________________ , 2001.
SMARTIRE SYSTEMS INC.
Per: __________________________________
Authorized Signatory
Exhibit A
THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO
AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH
APPLICABLE STATE SECURITIES LAWS.
================================================================================
WARRANT CERTIFICATE
================================================================================
WARRANT FOR PURCHASE OF COMMON SHARES
================================================================================
THIS WARRANT WILL BE VOID AND OF NO VALUE UNLESS EXERCISED
WITHIN THE LIMITS HEREIN PROVIDED
THIS WARRANT IS NOT TRANSFERABLE
SMARTIRE SYSTEMS INC.
(INCORPORATED UNDER THE LAWS OF THE PROVINCE OF BRITISH COLUMBIA)
WARRANT CERTIFICATE NO. _____ _____________ WARRANTS
Each such warrant entitling the holder to
purchase one (1) Common Share at the
Exercise Price of (i) $2.30 US per Common
Share if exercised at or before 5:00 p.m.
(Vancouver time) on June 30, 2002, (ii)
$2.80 US per Common Share if exercised after
June 30, 2002 but at or before 5:00 p.m.
(Vancouver time) on February 28, 2003 or
(iii) $3.30 US per Common Share if exercised
after February 28, 2003 but at or before
5:00 p.m. (Vancouver time) on October 31,
2003.
DATE OF ISSUANCE: _______________________________ , 2001
THIS IS TO CERTIFY THAT ________________________________________________ (herein
called the "Holder") is entitled to acquire in the manner herein provided,
subject to the restrictions herein contained, during the period commencing on
the date hereof and ending at 5:00 p.m. (Vancouver time) on October 31, 2003
(the "Expiry Date"), the number of fully paid
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and non-assessable common shares ("Common Shares") without nominal or par value
of SmarTire Systems Inc. ("the Company") as set forth above.
The Warrants are governed by the Terms and Conditions attached.
Any Common Shares issuable on exercise of the Warrants represented by this
Certificate will contain the following legends:
THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO
AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH
APPLICABLE STATE SECURITIES LAWS.
SMARTIRE SYSTEMS INC.
Per: _______________________________________
Authorized Signatory
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THE FOLLOWING ARE THE TERMS AND CONDITIONS REFERRED TO IN THIS WARRANT:
ARTICLE 1
INTERPRETATION
1.1 Definitions
In these Terms and Conditions, unless there is something in the subject
matter or context inconsistent therewith:
(a) "Common Shares" means the common shares in the capital of the
Company as constituted at the date hereof and any shares
resulting from any subdivision or consolidation of the Common
Shares;
(b) "Company" means SmarTire Systems Inc. or its successor
corporation as a result of consolidation, amalgamation or
merger with or into any other corporation or corporations, or
as a result of the conveyance or transfer of all or
substantially all of the properties and estates of the Company
as an entirety to any other corporation and thereafter
"Company" will mean such successor corporation;
(c) "Company's Auditors" means an independent firm of accountants
duly appointed as Auditors of the Company;
(d) "herein", "hereby" and similar expressions refer to these
Terms and Conditions as the same may be amended or modified
from time to time; and the expression "Article" and "Section"
followed by a number refer to the specified Article or Section
of these Terms and Conditions;
(e) "person" means an individual, corporation, partnership,
trustee or any unincorporated organization and words importing
persons have a similar meaning;
(f) "Warrant Holders" or "Holders" means the holders of the
Warrants; and
(g) "Warrants" mean share purchase warrants issued by the Company.
1.2 Gender
Words importing the singular number include the plural and
vice versa and words importing the masculine gender include the feminine and
neuter genders.
1.3 Interpretation Not Affected by Headings
The division of these Terms and Conditions into Articles and
Sections, and the insertion of headings are for convenience of reference only
and will not affect the construction or interpretation thereof.
1.4 Applicable Law
The Warrants will be construed in accordance with the laws of
the Province of British Columbia and the laws of Canada applicable thereto and
will be treated in all respects as British Columbia contracts.
ARTICLE 2
ISSUE OF ADDITIONAL WARRANTS
2.1 Additional Warrants
The Company may at any time and from time to time issue
additional warrants or grant options or similar rights to acquire or purchase
Common Shares.
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2.2 Issue in Substitution for Lost Warrants
(a) In case a Warrant becomes mutilated, lost, destroyed or
stolen, the Company, at its discretion, may issue and deliver
a new Warrant 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 Warrant, or in lieu of,
and in substitution for such lost, destroyed or stolen Warrant
and the substituted Warrant will be entitled to the benefit
hereof and rank equally in accordance with its terms with all
other Warrants issued or to be issued by the Company.
(b) The applicant for the issue of a new Warrant pursuant hereto
will bear the cost of the issue thereof and in case of loss,
destruction or theft furnish to the Company such evidence of
ownership and of loss, destruction, or theft of the Warrant so
lost, destroyed or stolen as will be satisfactory to the
Company in its discretion and such applicant may also be
required to furnish indemnity in amount and form satisfactory
to the Company in its discretion, and will pay the reasonable
charges of the Company in connection therewith.
2.3 Warrant Holder Not a Shareholder
A Warrant Holder is not a shareholder of the Company, is not
entitled to any rights or interests as a shareholder of the Company and has only
the rights and interests expressly provided herein.
ARTICLE 3
NOTICE
3.1 Notice to Warrant Holders
Any notice to be given to the Holders will be sent by prepaid
registered post and will be deemed to have been received by the Holder on the
fourth day following the mailing thereof or on the date of successful facsimile
transmission or email. Any such notice will be addressed to the Holder at the
address of the Holder appearing on the Holder's Warrant or to such other address
as the Holder may advise the Company by notice in writing.
3.2 Notice to the Company
Any notice to be given to the Company may be delivered
personally, or sent by facsimile or other means of electronic communication
providing a printed copy ("Electronic Communication") or may be forwarded by
first class prepaid registered mail to the addresses set forth below. Any notice
delivered or sent by Electronic Communication shall be deemed to have been given
and received at the time of delivery. Any notice mailed as aforesaid shall be
deemed to have been given and received on expiration of 72 hours after it is
posted, addressed as follows:
SmarTire Systems Inc.
00000 Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxxx, X.X.
X0X 0X0
Attention: The President
Facsimile No.: (000) 000-0000
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ARTICLE 4
EXERCISE OF WARRANTS
4.1 Method of Exercise of Warrants
The right to acquire Common Shares conferred by the Warrants
may be exercised by the Holder of such Warrant by surrendering the Warrant
Certificate representing same, together with a duly completed and executed
Exercise Form in the form attached hereto and a bank draft or certified cheque
payable to the Company at its principal office in the City of Richmond, British
Columbia, for the purchase price applicable at the time of exercise in respect
of the number of Warrants exercised.
4.2 Effect of Exercise of Warrants
(c) Upon surrender and payment as aforesaid the Common Shares so
subscribed for will be deemed to have been issued and such
person or persons will be deemed to have become the holder or
holders of record of such Common Shares on the date of such
surrender.
(d) Within ten (10) business days after surrender as aforesaid,
the Company will forthwith cause to be delivered to the person
or persons in whose name or names the Common Shares so
subscribed for are to be issued as specified in such
subscription or mailed to him or them at his or their
respective addresses specified in such subscription, a
certificate or certificates for the appropriate number of
Common Shares not exceeding those which the Warrant Holder is
entitled to acquire pursuant to the Warrant surrendered.
4.3 Subscription for Less Than Entitlement
The holder of any Warrant may subscribe for and acquire a
number of Common Shares, less than the number which he is entitled to acquire
pursuant to the surrendered Warrant. In the event of any acquisition of a number
of Common Shares less than the number which can be acquired pursuant to a
Warrant, the holder thereof upon exercise thereof will in addition be entitled
to receive a new Warrant in respect of the balance of the Common Shares which he
was entitled to acquire pursuant to the surrendered Warrant and which were not
then acquired.
4.4 Warrants for Fractions of Shares
To the extent that the holder of any Warrant is entitled to
receive on the exercise or partial exercise thereof a fraction of a Common
Share, such right may be exercised in respect of such fraction only in
combination with another Warrant or other Warrants which in the aggregate
entitle the holder to receive a whole number of such Common Shares.
4.5 Expiration of Warrants
After the expiration of the period within which a Warrant is
exercisable, all rights thereunder will wholly cease and terminate and such
Warrant will no longer be valid and of no effect.
4.6 Time of Essence
Time will be of the essence hereof.
4.7 Adjustments
The number of Common Shares deliverable upon the exercise of
the Warrants will be subject to adjustment in the event and in the manner
following:
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(e) if and whenever the Common Shares at any time outstanding are
subdivided into a greater or consolidated into a lesser number
of Common Shares the number of Common Shares deliverable upon
the exercise of the Warrants will be increased or decreased
proportionately as the case may be;
(f) (i) in case of any capital reorganization or of any
reclassification of the capital of the Company or in
the case of the consolidation, merger or amalgamation
of the Company with or into any other Company
(hereinafter collectively referred to as a
"Reorganization"), each Warrant will after such
Reorganization confer the right to acquire the number
of shares or other securities of the Company (or of
the Company resulting from such Reorganization) which
the Warrant Holder would have been entitled to upon
Reorganization if the Warrant Holder had been a
shareholder at the time of such Reorganization;
(ii) in any such case, if necessary, appropriate
adjustments will be made in the application of the
provisions of this Article 4 relating to the rights
and interest thereafter of the holders of the
Warrants so that the provisions of this Article 4
will be made applicable as nearly as reasonably
possible to any shares or other securities
deliverable after the Reorganization or the exercise
of the Warrants;
(iii) the subdivision or consolidation of Common Shares at
any time outstanding into a greater or lesser number
of Common Shares (whether with or without par value)
will not be deemed to be a Reorganization for the
purposes of this Section 4.7(b);
the adjustments provided for in this Section 4.7 are cumulative and
will become effective immediately after the record date for or, if a
record date is fixed, the effective date of the event which results in
such adjustments.
4.8 Determination of Adjustments
If any questions will at any time arise with respect to any
adjustment provided for in Section 4.7, such question will be conclusively
determined by the Company's Auditors, or, if they decline to so act any other
firm of chartered accountants, in Vancouver, British Columbia, that the Company
may designate and who will have access to all appropriate records and such
determination will be binding upon the Company and the holders of the Warrants.
ARTICLE 5
COVENANTS BY THE COMPANY
5.1 Reservation of Shares
The Company will reserve and there will remain unissued out of
its authorized capital a sufficient number of Common Shares to satisfy the
rights provided for herein and in the Warrants should the holders of all the
Warrants from time to time outstanding determine to exercise such rights in
respect of all Common Shares which they are or may be entitled to acquire
pursuant thereto and hereto.
5.2 Company may Purchase
The Company may from time to time offer to purchase and
purchase, for cancellation only, any Warrants in such manner, from such persons
and on such terms and conditions as it determines.
ARTICLE 6
WAIVER OF CERTAIN RIGHTS
6.1 Immunity of Shareholders, Etc.
The Warrant Holder, as part of the consideration for the issue
of the Warrants, waives and releases and will not have any right, cause of
action or remedy now or hereafter existing in any jurisdiction against any past,
present or future incorporator, shareholder, director or officer (as such) of
the Company for the issue of Common
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Shares pursuant to any Warrant or on any covenant, agreement, representation or
warranty by the Company herein contained or in the Warrant.
ARTICLE 7
MODIFICATION OF TERMS, MERGER, SUCCESSORS
7.1 Modification of Terms and Conditions for Certain Purposes
From time to time the Company may, subject to the provisions
of these Terms and Conditions, modify the Terms and Conditions hereof, for the
purpose of correction or rectification of any ambiguities, defective provisions,
errors or omissions herein.
7.2 Transferability
The Warrant and all rights attached to it are not transferable
or assignable.
IN WITNESS WHEREOF SMARTIRE SYSTEMS INC. has caused this Warrant to be signed by
its duly authorized officers under its corporate seal, and this Warrant to be
dated as of the date of issuance first above written.
SIGNED BY:
SMARTIRE SYSTEMS INC.
Per: "SmarTire Systems Inc."
---------------------------
Authorized Signatory
EXERCISE FORM
TO: SMARTIRE SYSTEMS INC.
The undersigned holder of Warrants hereby exercises the right to acquire
_____________ Common Shares without nominal or par value of SmarTire Systems
Inc. (the "Company") (or such number of other securities or property to which
such Warrants entitle the undersigned in lieu thereof or in addition thereto
under the provisions set forth in the Warrant Certificate) according to the
terms set forth in the Warrant Certificate.
Such securities or property are to be issued as follows:
Name: __________________________________________________________
Address in Full: __________________________________________________________
__________________________________________________________
The undersigned acknowledges that the certificates representing the Common
Shares issuable hereunder shall bear such legends as may be required under
applicable securities law.
DATED this ______ day of ______________________ , _____.
_______________________________________
Signature
_______________________________________
(Print full name)
_______________________________________
(Print full address)
_______________________________________
INSTRUCTIONS:
THE REGISTERED HOLDER MAY EXERCISE HIS RIGHT TO ACQUIRE COMMON SHARES BY
COMPLETING THE ABOVE FORM, SURRENDERING THIS WARRANT CERTIFICATE AND PROVIDING
PAYMENT BY BANK DRAFT, MONEY ORDER OR CERTIFIED CHECK TO THE COMPANY AT ITS
PRINCIPAL OFFICE IN RICHMOND, BRITISH COLUMBIA. FOR THE PROTECTION OF THE
HOLDER, IT WOULD BE PRUDENT TO REGISTER IF FORWARDING BY MAIL. CERTIFICATES FOR
COMMON SHARES WILL BE DELIVERED OR MAILED AS SOON AS PRACTICABLE AFTER THE
EXERCISE OF THE WARRANTS. THE RIGHTS OF THE REGISTERED HOLDER CEASE IF THE
WARRANTS ARE NOT EXERCISED PRIOR TO 5:00 P.M. (VANCOUVER TIME) ON THE EXPIRY
DATE.
