EXHIBIT 4.13 FORM OF WARRANT FOR SHORT FORM OFFERING
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SHARE PURCHASE WARRANT CERTIFICATE
==================================
FROM:
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STOCKGROUP INFORMATION SYSTEMS INC.
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TO:
--
[WARRANT HOLDER]
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STOCKGROUP INFORMATION SYSTEMS INC.
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Xxxxx 000, 000 Xxxx Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx Xxxxxxxx, X0X 0X0
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150
SHARE PURCHASE WARRANT CERTIFICATE
==================================
No. [seq.].
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STOCKGROUP INFORMATION SYSTEMS INC.
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(Incorporated under the laws of the State of Colorado, U.S.A.)
SHARE PURCHASE WARRANT
----------------------
(the "Warrant")
THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE OFFERED,
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SOLD, TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE UNITED STATES OR TO U.S.
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PERSONS FOR A PERIOD OF UP TO ONE YEAR FROM THE DATE OF ISSUANCE UNLESS SUCH
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OFFER, SALE, TRANSFER, PLEDGE OR HYPOTHECATION IS MADE PURSUANT TO REGISTRATION
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OR AN APPLICABLE EXEMPTION UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS
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AMENDED (THE "1933 ACT"). IN ADDITION, THE SECURITIES REPRESENTED BY THIS
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CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE 1933 ACT OR THE LAWS OF ANY
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STATE, AND WILL BE ISSUED PURSUANT TO REGULATION S, WHICH IS AN EXEMPTION FROM
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REGISTRATION UNDER THE 1933 ACT. THE SECURITIES REPRESENTED BY THIS CERTIFICATE
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MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE UNITED
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STATES OR TO U.S. PERSONS PRIOR TO THE END OF A ONE-YEAR PERIOD COMMENCING ON
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THE LATER OF (I) THE DATE THE SECURITIES ARE FIRST OFFERED TO PERSONS OTHER THAN
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DISTRIBUTORS (AS DEFINED IN REGULATION S OF THE 1933 ACT) OR (II) THE DATE OF
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THE FINAL CLOSING OF THE OFFERING OF THE SECURITIES BY THE ISSUER, UNLESS SUCH
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OFFER, SALE, TRANSFER, PLEDGE OR HYPOTHECATION (A) IS MADE IN ACCORDANCE WITH
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THE PROVISIONS OF REGULATION S OR (B) IS MADE PURSUANT TO REGISTRATION OR AN
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APPLICABLE EXEMPTION UNDER THE 1933 ACT. IN ADDITION, HEDGING TRANSACTIONS
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INVOLVING THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE CONDUCTED
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UNLESS IN COMPLIANCE WITH THE 1933 ACT. THE SECURITIES REPRESENTED BY THIS
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CERTIFICATE ARE DEEMED "RESTRICTED SECURITIES" UNDER RULE 905 OF REGULATION S
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AND UNDER RULE 144 OF THE 1933 ACT. AFTER A ONE-YEAR PERIOD HAS ELAPSED AS SET
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OUT ABOVE, A PURCHASER OF SECURITIES REPRESENTED BY THIS CERTIFICATE MAY OFFER,
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SELL, TRANSFER, PLEDGE OR HYPOTHECATE SUCH SECURITIES IN THE UNITED STATES OR TO
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U.S. PERSONS PURSUANT TO THE PROVISIONS OF RULE 144(E) OF THE 1933 ACT (WHICH IS
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MORE COMMONLY KNOWN AS THE "DRIBBLE OUT" PERIOD STARTING FROM THE 13TH MONTH TO
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THE 24TH MONTH OF OWNERSHIP OF SUCH SECURITIES). THIS WARRANT MAY NOT BE
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EXERCISED BY OR ON BEHALF OF A U.S. PERSON UNLESS REGISTERED UNDER THE 1933 ACT
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OR AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE.
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THIS IS TO CERTIFY THAT, for value received, [FULL NAME OF WARRANT
--------------------------- ---------------------
HOLDER], of [FULL ADDRESS OF HOLDER] (the "Holder"), is the owner of [NUMBER]
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share purchase warrants (each a "Warrant"). Each two Warrants entitle the
Holder to purchase one fully paid and non-assessable share of no par value (each
a "Share") of STOCKGROUP INFORMATION SYSTEMS INC. (the "Issuer") at a purchase
-----------------------------------
price of $0.75 per Share if subscribed for on or before 4:00 p.m. (Vancouver
-----
151
time) on JUNE 4, 2004 (the "Time of Expiry"). This Warrant Certificate
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(sometimes herein called "this Warrant") is subject to the terms and conditions
contained hereinbelow together with the terms and conditions which are attached
to this Warrant as Schedule "A".
The aforesaid right to purchase Shares may be exercised by the Holder
at anytime and from time to time prior to the Time of Expiry (i) by duly
completing in the manner indicated and executing the subscription form attached
hereto, (ii) by surrendering this Warrant to either the Issuer or to Pacific
Corporate Trust Company, at their respective and principal offices located in
Vancouver, British Columbia, and (iii) by paying the appropriate purchase price
for the Shares subscribed for either in cash or by certified cheque or money
order payable at par to the order of the Issuer. Upon said surrender and
payment the Issuer will issue to the Holder the number of Shares subscribed for
and said Holder will become a shareholder or shareholders of the Issuer in
respect of the Shares as of the date of such surrender and payment. Subject to
the terms and conditions of this Warrant, the Issuer will, as soon as
practicable after said surrender and payment, mail to the person or persons at
the address or addresses specified in the subscription form a certificate or
certificates evidencing the Shares subscribed for. If the Holder subscribes for
a lesser number of Shares than the number of Shares referred to in this Warrant,
the Holder shall be entitled to receive a further Warrant in respect of Shares
not subscribed for.
The Holder may surrender this Warrant to either the Issuer or Pacific
Corporate Trust Company, at their respective and principal offices located in
Vancouver, British Columbia, in exchange for new certificates representing this
Warrant entitling the Holder to purchase in the aggregate the same number of
Shares referred to in this Warrant.
The Holder hereof and the Issuer, by acceptance and issuance of this
Warrant, agree that this Warrant and all rights hereunder may not be transferred
or assigned. Nothing contained herein shall confer any right upon the Holder
hereof or any other person to subscribe for or purchase any Shares at any time
subsequent to 4:00 p.m. (Vancouver time) on JUNE 4, 2004 and, from and after
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such time, this Warrant and all rights hereunder shall be void and of no value.
This Warrant shall not constitute the holder a member of the Issuer.
This Warrant is also subject to the terms and conditions which are
attached to this Warrant as Schedule "A". Time shall be of the essence hereof.
152
IN WITNESS WHEREOF STOCKGROUP INFORMATION SYSTEMS INC. has caused its
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common seal to be affixed and this Warrant to be signed by its authorized
representative effective on this 4th day of June, 2003.
Signed by:
STOCKGROUP INFORMATION SYSTEMS INC.
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(c/s)
Per: --------------------------------------
Authorized Signatory
153
FORM OF SUBSCRIPTION
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To: STOCKGROUP INFORMATION SYSTEMS INC.
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And to: PACIFIC CORPORATE TRUST COMPANY
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IN ORDER TO EXERCISE THIS WARRANT THE HOLDER MUST REPRESENT THAT HE IS NOT
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A U.S. PERSON AND IS NOT EXERCISING THIS WARRANT ON BEHALF OF A U.S. PERSON.
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THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE OFFERED,
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SOLD, TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE UNITED STATES OR TO U.S.
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PERSONS FOR A PERIOD OF UP TO ONE YEAR FROM THE DATE OF ISSUANCE UNLESS SUCH
-----------------------------------------------------------------------------
OFFER, SALE, TRANSFER, PLEDGE OR HYPOTHECATION IS MADE PURSUANT TO REGISTRATION
-----------------------------------------------------------------------------
OR AN APPLICABLE EXEMPTION UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS
--------------------------------------------------------------------------------
AMENDED (THE "1933 ACT"). IN ADDITION, THE SECURITIES REPRESENTED BY THIS
--------------------------------------------------------------------------------
CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE 1933 ACT OR THE LAWS OF ANY
--------------------------------------------------------------------------------
STATE, AND WILL BE ISSUED PURSUANT TO REGULATION S, WHICH IS AN EXEMPTION FROM
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REGISTRATION UNDER THE 1933 ACT. THE SECURITIES REPRESENTED BY THIS CERTIFICATE
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MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE UNITED
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STATES OR TO U.S. PERSONS PRIOR TO THE END OF A ONE-YEAR PERIOD COMMENCING ON
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THE LATER OF (I) THE DATE THE SECURITIES ARE FIRST OFFERED TO PERSONS OTHER THAN
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DISTRIBUTORS (AS DEFINED IN REGULATION S OF THE 1933 ACT) OR (II) THE DATE OF
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THE FINAL CLOSING OF THE OFFERING OF THE SECURITIES BY THE ISSUER, UNLESS SUCH
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OFFER, SALE, TRANSFER, PLEDGE OR HYPOTHECATION (A) IS MADE IN ACCORDANCE WITH
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THE PROVISIONS OF REGULATION S OR (B) IS MADE PURSUANT TO REGISTRATION OR AN
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APPLICABLE EXEMPTION UNDER THE 1933 ACT. IN ADDITION, HEDGING TRANSACTIONS
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INVOLVING THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE CONDUCTED
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UNLESS IN COMPLIANCE WITH THE 1933 ACT. THE SECURITIES REPRESENTED BY THIS
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CERTIFICATE ARE DEEMED "RESTRICTED SECURITIES" UNDER RULE 905 OF REGULATION S
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AND UNDER RULE 144 OF THE 1933 ACT. AFTER A ONE-YEAR PERIOD HAS ELAPSED AS SET
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OUT ABOVE, A PURCHASER OF SECURITIES REPRESENTED BY THIS CERTIFICATE MAY OFFER,
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SELL, TRANSFER, PLEDGE OR HYPOTHECATE SUCH SECURITIES IN THE UNITED STATES OR TO
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U.S. PERSONS PURSUANT TO THE PROVISIONS OF RULE 144(E) OF THE 1933 ACT (WHICH IS
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MORE COMMONLY KNOWN AS THE "DRIBBLE OUT" PERIOD STARTING FROM THE 13TH MONTH TO
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THE 24TH MONTH OF OWNERSHIP OF SUCH SECURITIES). THIS WARRANT MAY NOT BE
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154
EXERCISED BY OR ON BEHALF OF A U.S. PERSON UNLESS REGISTERED UNDER THE 1933 ACT
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OR AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE.
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The undersigned holder of the attached Warrant hereby subscribes for
_______________ Shares of STOCKGROUP INFORMATION SYSTEMS INC. (again the
--------------------------------------
"Issuer") pursuant to the attached Warrant at a purchase price of $0.75 per
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Share if subscribed for on or before 4:00 p.m. (Vancouver time) on JUNE 4, 2004
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(or such number of other shares or securities to which such subscription
entitles it in lieu thereof or in addition thereto under the terms and
conditions mentioned in the within Warrant) on the terms specified in the said
Warrant. This subscription is accompanied by a certified cheque or money order
payable to or to the order of the Issuer for the whole amount of the purchase
price of the said Shares.
The undersigned hereby directs that the said Shares be registered as
follows:
Name in Full Address Number of Shares
------------- ------- ----------------
---------------------------- ----------------------------- ------------------
---------------------------- ----------------------------- ------------------
---------------------------- ----------------------------- ------------------
Total: _________________
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DATED this day of , .
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In the presence of:
______________________________ ______________________________
Witness Signature of Warrant Holder
______________________________
If Warrant Holder is not an
individual, name and title of signatory
Please print below your name and address in full:
Name:
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Address:
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155
SCHEDULE A
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TERMS AND CONDITIONS
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OF
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WARRANTS
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These are the Terms and Conditions which are attached to the Share
Purchase Warrants issued by STOCKGROUP INFORMATION SYSTEMS INC.
IN ORDER TO EXERCISE THIS WARRANT THE HOLDER MUST REPRESENT THAT HE IS NOT
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A U.S. PERSON AND IS NOT EXERCISING THIS WARRANT ON BEHALF OF A U.S. PERSON.
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THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE OFFERED,
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SOLD, TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE UNITED STATES OR TO U.S.
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PERSONS FOR A PERIOD OF UP TO ONE YEAR FROM THE DATE OF ISSUANCE UNLESS SUCH
-----------------------------------------------------------------------------
OFFER, SALE, TRANSFER, PLEDGE OR HYPOTHECATION IS MADE PURSUANT TO REGISTRATION
-----------------------------------------------------------------------------
OR AN APPLICABLE EXEMPTION UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS
--------------------------------------------------------------------------------
AMENDED (THE "1933 ACT"). IN ADDITION, THE SECURITIES REPRESENTED BY THIS
--------------------------------------------------------------------------------
CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE 1933 ACT OR THE LAWS OF ANY
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STATE, AND WILL BE ISSUED PURSUANT TO REGULATION S, WHICH IS AN EXEMPTION FROM
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REGISTRATION UNDER THE 1933 ACT. THE SECURITIES REPRESENTED BY THIS CERTIFICATE
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MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE UNITED
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STATES OR TO U.S. PERSONS PRIOR TO THE END OF A ONE-YEAR PERIOD COMMENCING ON
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THE LATER OF (I) THE DATE THE SECURITIES ARE FIRST OFFERED TO PERSONS OTHER THAN
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DISTRIBUTORS (AS DEFINED IN REGULATION S OF THE 1933 ACT) OR (II) THE DATE OF
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THE FINAL CLOSING OF THE OFFERING OF THE SECURITIES BY THE ISSUER, UNLESS SUCH
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OFFER, SALE, TRANSFER, PLEDGE OR HYPOTHECATION (A) IS MADE IN ACCORDANCE WITH
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THE PROVISIONS OF REGULATION S OR (B) IS MADE PURSUANT TO REGISTRATION OR AN
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APPLICABLE EXEMPTION UNDER THE 1933 ACT. IN ADDITION, HEDGING TRANSACTIONS
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INVOLVING THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE CONDUCTED
--------------------------------------------------------------------------------
UNLESS IN COMPLIANCE WITH THE 1933 ACT. THE SECURITIES REPRESENTED BY THIS
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CERTIFICATE ARE DEEMED "RESTRICTED SECURITIES" UNDER RULE 905 OF REGULATION S
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AND UNDER RULE 144 OF THE 1933 ACT. AFTER A ONE-YEAR PERIOD HAS ELAPSED AS SET
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OUT ABOVE, A PURCHASER OF SECURITIES REPRESENTED BY THIS CERTIFICATE MAY OFFER,
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SELL, TRANSFER, PLEDGE OR HYPOTHECATE SUCH SECURITIES IN THE UNITED STATES OR TO
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U.S. PERSONS PURSUANT TO THE PROVISIONS OF RULE 144(E) OF THE 1933 ACT (WHICH IS
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MORE COMMONLY KNOWN AS THE "DRIBBLE OUT" PERIOD STARTING FROM THE 13TH MONTH TO
--------------------------------------------------------------------------------
THE 24TH MONTH OF OWNERSHIP OF SUCH SECURITIES). THIS WARRANT MAY NOT BE
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EXERCISED BY OR ON BEHALF OF A U.S. PERSON UNLESS REGISTERED UNDER THE 1933 ACT
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OR AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE.
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ARTICLE ONE - INTERPRETATION
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Section 1.01 - Definitions
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In these Terms and Conditions, unless there is something in the
subject matter or context inconsistent:
(a) "Issuer" means Stockgroup Information Systems Inc. or any successor
company referred to in Article 7;
156
(b) "Issuer's Auditors" means an independent firm of accountants duly
appointed as auditors of the Issuer;
(c) "Current Market Price" of the shares at any date means the closing
price for such shares for the trading day immediately prior to such
date on the TSX Venture Exchange (or if there is not a closing price
on such date, the average of the bid and ask prices) or, if on such
date the shares are not listed on the TSX Venture Exchange, on such
stock exchange or over-the-counter market upon which the shares are
listed or quoted;
(d) "Director" means a director of the Issuer for the time being, and
reference, without more, to action by the Directors of the Issuer
shall mean action taken by the directors of the Issuer as a board, or
whenever duly empowered, action by an executive committee of the
board;
(e) "Dividends Paid in the Ordinary Course" means dividends paid on the
shares in any fiscal year of the Issuer, whether in: (1) cash; (2)
shares of the Issuer; (3) warrants or similar rights to purchase any
shares of the Issuer; or (4) property or other assets of the Issuer;
provided that the amount or value of such dividends (any such shares,
warrants or similar rights, or property or other assets so distributed
to be valued at the fair market value of such shares, warrants or
similar rights, or property or other assets, as the case may be, as
determined by action by the Directors (such determination to be
conclusive)), does not in such fiscal year exceed the greatest of:
(i) 150% of the aggregate amount of dividends declared payable by the
Issuer on the shares in the period of twelve consecutive months
ended immediately prior to the first day of such fiscal year; and
(ii) 100% of the consolidated net income of the Issuer before
extraordinary items for the period of twelve consecutive months
ended immediately prior to the first day of such fiscal year less
the amount of all dividends payable on all shares ranking prior
to or on a parity with the shares in respect of the payment of
dividends (such consolidated net income, extraordinary items and
dividends to be shown in the audited consolidated financial
statements of the Issuer for such period of twelve consecutive
months or if there are no audited consolidated financial
statements for such period, computed in accordance with generally
accepted accounting principles, consistent with those applied in
the preparation of the most recent audited consolidated financial
statements of the Issuer);
(f) "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 expressions "Article" or "Section" followed by a number refer
to the specified Article or Section of these Terms and Conditions;
(g) "Issuance Date" means that date on which the Issuer issued the
Warrants;
(h) "person" means an individual, Issuer, partnership, trustee or any
unincorporated organization, and any words importing persons have a
similar meaning;
157
(i) "shares" means the no par value shares in the capital of the Issuer as
constituted at the Issuance Date and any shares resulting from any
subdivision or consolidation of the shares;
(j) "Time of Expiry" means 4:00 p.m. (Vancouver time) on June 4, 2004;
(k) "Transfer Agent" means Pacific Corporate Trust Company at its office
located at the 10th Floor, 000 Xxxx Xxxxxx, Xxxxxxxxx, Xxxxxxx
Xxxxxxxx, X0X 0X0;
(l) "Warrants" means the Warrants of the Issuer issued and presently
authorized, as set out in Section 2.01 and for the time being
outstanding, and any other warrants made subject to these Terms and
Conditions;
(m) "Warrant Holders" or "Holders" means the registered holders of the
Warrants for the time being;
(n) "Warrant Holders' Request" means an instrument signed in one or more
counterparts by Warrant Holders entitled to purchase in the aggregate
not less than 25% of the aggregate number of shares which could be
purchased pursuant to all the Warrants outstanding for the time being,
requesting the Issuer to take some action or proceeding; and
(o) words importing the singular number include the plural and vice versa,
and words importing the masculine gender include the feminine and
neuter genders.
Section 1.02 - 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 their construction of interpretation.
Section 1.03 - Applicable Law
---------------
The Warrants will be construed in accordance with the laws of British
Columbia and will be treated in all respects as British Columbia contracts.
ARTICLE TWO - ISSUE OF WARRANTS
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Section 2.01 - Issue of Warrants
-------------------
Warrants entitling the Holders thereof to purchase an aggregate of up
to 1,082,500 shares are authorized to be issued by the Issuer on the basis of an
issue of 2,165,000 Warrants where two Warrants are required to purchase one
share of the Issuer.
158
Section 2.02 - Additional Warrants
--------------------
Nothing contained herein shall preclude the Issuer from time to time
to make further equity or debt offerings and sell additional shares, warrants or
grant options or similar rights to purchase shares of its capital stock.
Section 2.03 - Issue in Substitution for Lost Warrants
--------------------------------------------
(a) Subject to Section 2.03(b), if a Warrant is mutilated, lost, destroyed
or stolen, the Issuer shall 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 of these Terms and Conditions and rank equally in accordance
with its terms with all other Warrants issued or to be issued by the
Issuer.
(b) The applicant for the issue of a new Warrant will bear the cost of its
issue and in case of loss, destruction or theft, furnish to the Issuer
such evidence of ownership and of loss, destruction or theft of the
Warrant so lost, destroyed or stolen, as will be satisfactory to the
Issuer in its discretion, and such applicant may also be required to
furnish indemnity in amount and form satisfactory to the Issuer in its
discretion, and will pay the reasonable charges of the Issuer in
connection with such issuance of a new Warrant.
Section 2.04 - Warrant Holder Not a Shareholder
------------------------------------
The holding of a Warrant will not constitute the Holder a member of
the Issuer, nor entitle him to any right or interest except as expressly
provided in the Warrant and herein.
ARTICLE THREE - OWNERSHIP AND TRANSFER
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Section 3.01 - Exchange of Warrants
----------------------
(a) Warrants in any authorized denomination may, upon compliance with the
reasonable requirements of the Issuer, be exchanged for Warrants in
any other authorized denomination, of the same class and date of
expiry, entitling the Holder to purchase an equal aggregate number of
shares at the same subscription price and on the same terms as the
Warrants so exchanged.
(b) Warrants may be exchanged only at the office of the Transfer Agent and
any Warrants tendered for exchange will be surrendered to the Transfer
Agent and cancelled.
(c) On exchange of Warrants, the Transfer Agent, except as otherwise
herein provided, may charge a sum not exceeding $10.00 for each new
Warrant issued, and payment of such charges and of any transfer taxes
or governmental or other charges required to be paid will be made by
the party requesting such exchange.
159
Section 3.02 - Ownership of Warrants
-----------------------
(a) The Issuer and Transfer Agent may deem and treat the registered holder
of any Warrant as the absolute owner of such Warrant, for all
purposes, and will not be affected by any notice or knowledge to the
contrary.
(b) The registered holder of any Warrant will be entitled to the rights
evidenced by such Warrant free from all equities or rights of set-off
or counterclaim between the Issuer and the original or any
intermediate Holder and all persons may act accordingly, and the
receipt of any such holder for the shares will be a good discharge to
the Issuer and the Transfer Agent for the same and neither the Issuer
nor the Transfer Agent will be bound to inquire into the title of any
such holder.
Section 3.03 - Transfer of Warrants
----------------------
The Warrants are non-transferable.
Section 3.04 - Notice to Warrant Holders
----------------------------
Any notice to be given to Warrant Holders will be deemed to be validly
given if delivered or sent by ordinary post addressed to such Warrant holders at
the addresses appearing on the register hereinbefore mentioned and shall be
deemed to have been effectively given on the date of delivery or, if mailed, on
the seventh business day following the date of mailing.
ARTICLE FOUR - EXERCISE OF WARRANTS
-----------------------------------
Section 4.01 - Method of Exercise of Warrants
----------------------------------
The right to purchase shares conferred by the Warrants may be
exercised, before the Time of Expiry, by the Holder of such Warrant surrendering
it, with a duly completed and executed subscription in the form attached thereto
and cash or a certified cheque or money order payable to or to the order of the
Issuer, at par in Vancouver, British Columbia, for the purchase price applicable
at the time of surrender in respect of the shares subscribed for in lawful money
of Canada, to the Transfer Agent at its principal office in the City of
Vancouver.
Section 4.02 - Effect of Exercise of Warrants
----------------------------------
As soon as practicable, but in any event within three business days,
after surrender and payment, and subject to the terms and conditions set forth
herein, the Issuer will cause to be delivered to the person or persons in whose
name or names the shares subscribed for are to be issued as specified in such
subscription or mailed to him or them at his or their respective addresses
160
specified in such subscription, a certificate or certificates for the
appropriate number of shares not exceeding those which the Warrant Holder is
entitled to purchase pursuant to the Warrant surrendered. Upon issuance, such
person or persons shall be deemed to have become the holder or holders of record
of such shares on the date of surrender and payment.
Section 4.03 - Subscription for Less than Entitlement
------------------------------------------
The Holder of any Warrant may subscribe for and purchase a number of
shares less than the number which he is entitled to purchase pursuant to the
surrendered Warrant. In the event of any purchase of a number of shares less
than the number which can be purchased pursuant to a Warrant, the Transfer Agent
will issue a new Warrant in respect of the balance of the shares which the
Holder was entitled to purchase pursuant to the surrendered Warrant and which
were not then purchased.
Section 4.04 - Warrants for Fractions of Shares
------------------------------------
No fractional shares shall be issued upon exercise of these Warrants.
If any fractional interest in a share would, except for the provisions of the
first sentence of this Section 4.04, be deliverable upon the exercise of a
Warrant, the number of shares to be issued to the Warrant Holder upon exercise
of the Warrant shall be rounded up to the next whole number.
Section 4.05 - Expiration of Warrants
------------------------
After the Time of Expiry all rights attaching to the Warrants will
wholly cease and terminate and the Warrants will be void and of no effect.
Section 4.06 - Exercise Price
---------------
The price per share which must be paid to exercise a Warrant (the
"Exercise Price") is as prescribed by resolution of the Board of Directors of
the Issuer and set forth on the face of the Warrant certificate subject to
adjustment as provided for herein.
Section 4.07 - Adjustment of Subscriptions Rights and Exercise Price
-----------------------------------------------------------
The Exercise Price and the number of shares deliverable upon the
exercise of the Warrants will be subject to adjustment in the events and in the
manner following:
(a) Share Reorganization. If prior to the Time of Expiry the Issuer shall:
---------------------
(i) issue shares without the receipt of any consideration therefor to
all or substantially all of the holders of the shares by way of
stock dividend or other distribution (other than as dividends
paid in the common course ("Dividends Paid in the Common
Course")), or
(ii) subdivide its outstanding shares into a greater number of shares;
or
161
(iii) consolidate its outstanding shares into a lesser number of
shares,
(any of such events in these clauses (i), (ii) and (iii) being called
a "Share Reorganization"), then the Exercise Price shall be adjusted
as of the effective date or record date, as the case may be, at which
the holders of shares are determined for the purpose of the Share
Reorganization by multiplying the Exercise Price in effect immediately
prior to such effective date or record date by a fraction, the
numerator of which shall be the number of shares outstanding on such
effective date or record date before giving effect to such Share
Reorganization and the denominator of which shall be the number of
shares outstanding as of the effective date or record date after
giving effect to such Share Reorganization.
(b) Rights Offering. If prior to the Time of Expiry the Issuer shall fix a
----------------
record date for the issue of rights, options or warrants to all or
substantially all of the holders of shares under which such holders
are entitled, during a period expiring not more than 45 days after the
record date for such issue ("Rights Period"), to subscribe for or
purchase shares at a price per share to the holder of less than 95% of
the Current Market Price for the shares on such record date (any of
such events being called a "Rights Offering"), then the Exercise Price
shall be adjusted effective immediately after the end of the Rights
Period to a price determined by multiplying the Exercise Price in
effect immediately prior to the end of the Rights Period by a
fraction:
(i) the numerator of which shall be the aggregate of:
A. the number of shares outstanding as of the record date for
the Rights Offering; and
B. a number determined by dividing (1) the product of the
number of shares issued or subscribed during the Rights
Period upon the exercise of the rights, warrants or options
under the Rights Offering and the price at which such shares
are offered by (2) the Current Market Price of the shares as
of the record date for the Rights Offering; and
(ii) the denominator of which shall be the number of shares
outstanding after giving effect to the Rights Offering and
including the number of shares actually issued or subscribed for
during the Rights Period upon exercise of the rights, warrants or
options under the Rights Offering.
Any Warrant Holder who shall have exercised his right to purchase
shares in accordance with Article 4 during the period beginning
immediately after the record date for a Rights Offering and ending on
the last day of the Rights Period therefor shall, in addition to the
shares to which he is otherwise entitled upon such exercise in
accordance with Article 4, be entitled to that number of additional
shares equal to the result obtained when the difference, if any,
resulting from the subtraction of the Exercise Price as adjusted for
such Rights Offering pursuant to this subsection (b) from the Exercise
Price in effect immediately prior to the end of such Rights Offering
is multiplied by the number of shares purchased upon exercise of the
162
Warrants held by such Warrant Holder during such period, and the
resulting product is divided by the Exercise Price as adjusted for
such Rights Offering pursuant to this subsection 4.7(b); provided that
the provisions of Article 4 shall be applicable to any fractional
interest in any share to which such Warrant Holder might otherwise be
entitled under the foregoing provisions of this subsection 4.7(b).
Such additional shares shall be deemed to have been issued to the
Warrant Holder immediately following the end of the Rights Period and
a certificate for such additional shares shall be delivered to such
Warrant Holder within ten business days following the end of the
Rights Period.
(c) Special Distribution. If prior to the Time of Expiry the Issuer shall
---------------------
issue or distribute to all or to substantially all the holders of the
shares:
(i) securities of the Issuer including rights, options or warrants to
acquire shares of any class or securities exchangeable for or
convertible into or exchangeable into any such shares or property
or assets and including evidences of its indebtedness; or
(ii) any property or other assets;
and if such issuance or distribution does not constitute Dividends
Paid in the Ordinary Course, a Share Reorganization or a Rights
Offering (any of such non-excluded events being herein called a
"Special Distribution"), the Exercise Price shall be adjusted
effective immediately after the record date at which the holders of
affected shares are determined for purposes of the Special
Distribution to a price determined by multiplying the Exercise Price
in effect on such record date by a fraction:
(iii) the numerator of which shall be:
A. the product of the number of shares outstanding on such
record date and the Current Market Price of the shares on
such record date; less
B. the excess, if any, of (1) the fair market value on such
record date, as determined by action by the Directors (whose
determination shall be conclusive), to the holders of the
shares of such securities or property or other assets so
issued or distributed in the Special Distribution over (2)
the fair market value of the consideration received therefor
by the Issuer from the holders of the shares, as determined
by action by the Directors (whose determination shall be
conclusive); and
(iv) the denominator of which shall be the number of shares
outstanding on such record date multiplied by the Current Market
Price of the shares on such record date.
(d) Capital Reorganization. If prior to the Time of Expiry there shall be
----------------------
a reclassification of shares at any time outstanding or a change of
163
the shares into other shares or into other securities (other than a
Share Reorganization), or a consolidation, amalgamation, arrangement
or merger of the Issuer with or into any other Issuer or other entity
(other than a consolidation, amalgamation, arrangement or merger which
does not result in any reclassification of the outstanding shares or a
change of the shares into other securities), or a transfer of the
undertaking or assets of the Issuer as an entirety or substantially as
an entirety to another Issuer or other entity (any of such events
being herein called a "Capital Reorganization"), any Warrant Holder
who exercises his right to purchase shares pursuant to Warrant(s) then
held after the effective date of such Capital Reorganization shall be
entitled to receive, and shall accept for the same aggregate
consideration in lieu of the number of shares to which such holder was
theretofore entitled upon such exercise the aggregate number of
shares, other securities or other property which such holder would
have been entitled to receive as a result of such Capital
Reorganization if, on the effective date thereof, the Warrant Holder
had been the registered holder of the number of shares to which such
holder was theretofore entitled upon exercise of the Warrant subject
to adjustment thereafter in accordance with provisions the same, as
nearly as may be possible, as those contained in Section 4.07 hereof,
provided, however, that no such Capital Reorganization shall be
carried into effect unless all necessary steps shall have been taken
to so entitle the Warrant Holders. If determined appropriate by the
Issuer, acting reasonably, appropriate adjustments shall be made as a
result of any such Capital Reorganization in the application of the
provisions set forth in this Article 4 with respect to the rights and
interests thereafter of Warrant Holders to the end that the provisions
set forth in this Article 4 shall thereafter correspondingly be made
applicable as nearly as may reasonably be in relation to any shares,
other securities or other property thereafter deliverable upon the
exercise of any Warrant. Any such adjustments shall be made by and set
forth in terms and conditions supplemental hereto approved by action
by the Directors and by the Issuer, acting reasonably and shall for
all purposes be conclusively deemed to be appropriate adjustments.
(e) If prior to the Time of Expiry a Share Reorganization shall occur
which results in an adjustment in the Exercise Price pursuant to the
provisions of this Section 4.07, the number of shares purchasable
pursuant to each whole Warrant shall be adjusted contemporaneously
with the adjustment of the Exercise Price by multiplying the number of
shares theretofore purchasable on the exercise thereof by a fraction
the numerator of which shall be the Exercise Price in effect
immediately prior to such adjustment and the denominator of which
shall be the Exercise Price resulting from such adjustment.
Section 4.08 - Rules Regarding Calculation of Adjustment of Exercise Price and
---------------------------------------------------------------
Number of shares Purchasable upon Exercise
----------------------------------------------
For the purposes of Section 4.07:
(a) The adjustments provided for in Section 4.07 are cumulative, and
shall, in the case of adjustments to the Exercise Price, be computed
to the nearest one-tenth of one cent and shall be made successively
whenever an event referred to therein shall occur, subject to the
following subsections of this Section 4.08.
(b) No adjustment in the Exercise Price shall be required unless such
164
adjustment would result in a change of at least 1.5% in the prevailing
Exercise Price and no adjustment shall be made in the number of shares
purchasable upon exercise of a Warrant unless it would result in a
change of at least one one-tenth of a share; provided, however, that
any adjustments which, except for the provisions of this subsection
4.08(b) would otherwise have been required to be made, shall be
carried forward and taken into account in any subsequent adjustment.
(c) Subject to the prior consent of the Canadian Venture Exchange, no
adjustment in the Exercise Price or in the number of shares
purchasable upon exercise of Warrants shall be made in respect of any
event described in Section 4.07, other than the events referred to in
clauses (ii) and (iii) of subsection (a) thereof, if Warrant Holders
are entitled to participate in such event on the same terms, mutatis
mutandis, as if Warrant Holders had exercised their Warrants prior to
or on the effective date or record date of such event.
(d) No adjustment in the Exercise Price shall be made pursuant to Section
4.07 in respect of the issue from time to time:
(i) of shares purchasable on exercise of the Warrants; or
(ii) in respect of the issue from time to time as Dividends Paid in
the Ordinary Course of shares to holders of shares who exercise
an option or election to receive substantially equivalent
dividends in shares in lieu of receiving a cash dividend;
and any such issue shall be deemed not to be a Share Reorganization.
(e) If a dispute shall at any time arise with respect to adjustments
provided for in Section 4.07, such dispute shall be conclusively
determined by the Issuer's Auditors, or if they are unable or
unwilling to act, by such other firm of independent chartered
accountants as may be selected by action by the Directors and any such
determination shall be binding upon the Issuer and the Warrant
Holders; such auditors or accountants shall be provided access to all
necessary records of the Issuer. In the event that any such
determination is made, the Issuer shall deliver a certificate to the
Warrant Holders describing such determination.
(f) In case the Issuer after the date of issue of the Warrants shall take
any action affecting the shares, other than action described in
Section 4.07, which in the opinion of the Directors of the Issuer
would materially affect the rights of Warrant Holders, the Exercise
Price or the number of shares purchasable upon exercise shall be
adjusted in such manner, if any, and at such time, by action by the
Directors, in their sole discretion as they may determine to be
equitable in the circumstances, but subject in all cases to the prior
approval of the TSX Venture Exchange and to all other necessary
regulatory approvals. Failure of the taking of action by the Directors
so as to provide for an adjustment on or prior to the effective date
of any action by the Issuer affecting the shares shall be conclusive
evidence that the Board of Directors of the Issuer has determined that
it is equitable to make no adjustment in the circumstances.
165
(g) If the Issuer shall set a record date to determine the holders of the
shares for the purpose of entitling them to receive any dividend or
distribution or any subscription or purchase rights and shall,
thereafter and before the distribution to such shareholders of any
such dividend, distribution or subscription or purchase rights,
legally abandon its plan to pay or deliver such dividend, distribution
or subscription or purchase rights, then no adjustment in the Exercise
Price or the number of shares purchasable upon exercise of any Warrant
shall be required by reason of the setting of such record date.
(h) In the absence of a resolution of the Directors fixing a record date
for a Special Distribution or Rights Offering, the Issuer shall be
deemed to have fixed as the record date therefor the date on which the
Special Distribution or Rights Offering is effected.
(i) As a condition precedent to the taking of any action which would
require any adjustment in any of the subscription rights pursuant to
any of the Warrants, including the Exercise Price and the number or
class of shares or other securities which are to be received upon the
exercise thereof, the Issuer shall take any corporate action which
may, in the opinion of counsel to the Issuer, be necessary in order
that the Issuer have unissued and reserved in its authorized capital
and may validly and legally issue as fully paid and non-assessable all
the shares or other securities which all the holders of such Warrants
are entitled to receive on the full exercise thereof in accordance
with the provisions thereof.
Section 4.09 - Postponement of Subscription
------------------------------
In any case in which this Article 4 shall require that an adjustment
shall be effective immediately after a record date for an event referred to
herein, the Issuer may defer, until the occurrence of such an event:
(a) issuing to the Holder of any Warrant exercised after such record date
and before the occurrence of such event, the additional shares
issuable upon such exercise by reason of the adjustment required by
such event; and
(b) delivering to such Holder any distributions declared with respect to
such additional shares after such Exercise Date and before such event;
provided, however, that the Issuer shall deliver to such Holder an appropriate
instrument evidencing such Holder's right, upon the occurrence of the event
requiring the adjustment, to an adjustment in the Exercise Price or the number
of shares purchasable on the exercise of any Warrant to such distributions
declared with respect to any additional shares issuable on the exercise of any
Warrant.
Section 4.10 - Notice of Adjustment of Exercise Price and Number of shares
--------------------------------------------------------------
Purchasable Upon Exercise
----------------------
(a) At least 14 days prior to the effective date or record date, as the
case may be, of any event which requires or might require adjustment
in any of the subscription rights pursuant to any of the Warrants,
including the Exercise Price and the number of shares which are
166
purchasable upon the exercise thereof, or such longer period of notice
as the Issuer shall be required to provide holders of shares in
respect of any such event, the Issuer shall give notice to the Warrant
Holders by way of a certificate of the Issuer specifying the
particulars of such event and, if determinable, the required
adjustment and the computation of such adjustment.
(b) In case any adjustment for which a notice in subsection 4.10(a) of
this Section 4.10 has been given is not then determinable the Issuer
shall promptly after such adjustment is determinable, give notice to
the Warrant Holders of the adjustment and the computation of such
adjustment.
Section 4.11 - Legending of Warrants and shares
------------------------------------
(a) The Holder of any Warrants hereby agrees and consents by acceptance
hereof that the certificate or certificates representing such Warrants
shall be impressed with a legend (the "Legend") reciting that the
transfer thereof is restricted for a prescribed period (the
"Restricted Period"), substantially in the following form:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE OFFERED, SOLD,
TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE UNITED STATES OR TO U.S. PERSONS FOR
A PERIOD OF UP TO ONE YEAR FROM THE DATE OF ISSUANCE UNLESS SUCH OFFER, SALE,
TRANSFER, PLEDGE OR HYPOTHECATION IS MADE PURSUANT TO REGISTRATION OR AN
APPLICABLE EXEMPTION UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED
(THE "1933 ACT"). IN ADDITION, THE SECURITIES REPRESENTED BY THIS CERTIFICATE
HAVE NOT BEEN REGISTERED UNDER THE 1933 ACT OR THE LAWS OF ANY STATE, AND WILL
BE ISSUED PURSUANT TO REGULATION S, WHICH IS AN EXEMPTION FROM REGISTRATION
UNDER THE 1933 ACT. THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE
OFFERED, SOLD, TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE UNITED STATES OR TO
U.S. PERSONS PRIOR TO THE END OF A ONE-YEAR PERIOD COMMENCING ON THE LATER OF
(I) THE DATE THE SECURITIES ARE FIRST OFFERED TO PERSONS OTHER THAN DISTRIBUTORS
(AS DEFINED IN REGULATION S OF THE 1933 ACT) OR (II) THE DATE OF THE FINAL
CLOSING OF THE OFFERING OF THE SECURITIES BY THE ISSUER, UNLESS SUCH OFFER,
SALE, TRANSFER, PLEDGE OR HYPOTHECATION (A) IS MADE IN ACCORDANCE WITH THE
PROVISIONS OF REGULATION S OR (B) IS MADE PURSUANT TO REGISTRATION OR AN
APPLICABLE EXEMPTION UNDER THE 1933 ACT. IN ADDITION, HEDGING TRANSACTIONS
INVOLVING THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE CONDUCTED
UNLESS IN COMPLIANCE WITH THE 1933 ACT. THE SECURITIES REPRESENTED BY THIS
CERTIFICATE ARE DEEMED "RESTRICTED SECURITIES" UNDER RULE 905 OF REGULATION S
AND UNDER RULE 144 OF THE 1933 ACT. AFTER A ONE-YEAR PERIOD HAS ELAPSED AS SET
OUT ABOVE, A PURCHASER OF SECURITIES REPRESENTED BY THIS CERTIFICATE MAY OFFER,
SELL, TRANSFER, PLEDGE OR HYPOTHECATE SUCH SECURITIES IN THE UNITED STATES OR TO
U.S. PERSONS PURSUANT TO THE PROVISIONS OF RULE 144(E) OF THE 1933 ACT (WHICH IS
MORE COMMONLY KNOWN AS THE "DRIBBLE OUT" PERIOD STARTING FROM THE 13TH MONTH TO
THE 24TH MONTH OF OWNERSHIP OF SUCH SECURITIES). THIS WARRANT MAY NOT BE
EXERCISED BY OR ON BEHALF OF A U.S. PERSON UNLESS REGISTERED UNDER THE 1933 ACT
OR AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE.".
(b) The Holder and any transferee thereof acknowledges by acceptance
hereof that if any Warrants are exercised during the Restricted
Period, the certificate or certificates representing the shares
issuable upon such exercise shall also be impressed with the Legend
set forth above unless counsel reasonably acceptable to the Issuer
delivers an unqualified opinion that such Legend need not be imposed.
167
ARTICLE FIVE - COVENANTS BY THE ISSUER
--------------------------------------
Section 5.01 - Reservation of Shares
-----------------------
The Issuer will reserve and there will remain unissued out of its
authorized capital a sufficient number of shares to satisfy the rights of
purchase in the Warrants should the Holders of all the Warrants from time to
time outstanding determine to exercise such rights in respect of all shares
which they are or may be entitled to purchase pursuant thereto.
ARTICLE SIX - MEETING OF WARRANT HOLDERS
----------------------------------------
Section 6.01 - Right to Convene Meeting
---------------------------
(a) The Issuer may at any time and from time to time, and will on receipt
of a Warrant Holder's Request and upon being indemnified to its
reasonable satisfaction by the Warrant Holders signing such Warrant
Holder's Request against the costs which may be incurred in connection
with the calling and holding of such meeting, convene a meeting of the
Warrant Holders.
(b) If the Issuer fails, within 15 days after receipt of such Warrant
Holder's Request and indemnity, to give notice convening a meeting,
such Warrant Holders may convene such meeting.
(c) Every such meeting will be held in the City of Vancouver, Province of
British Columbia, unless required by law to be held elsewhere in
Canada.
Section 6.02 - Notice
------
At least 30 days' notice of any meeting will be given by the Issuer to
the Warrant Holders. Such notice will state the time when and the place where
the meeting is to be held and will state briefly the general nature of the
business to be transacted, but it will not be necessary for any such notice to
set out the terms of any resolution to be proposed or any of the provisions of
this Article.
Section 6.03 - Chairman
--------
Some person nominated in writing by the Issuer will be Chairman of the
meeting and if no person is so nominated, or if the person so nominated is not
present within fifteen minutes from the time fixed for the holding of the
meeting, the Warrant Holders present in person or by proxy will choose some
person present to be Chairman.
Section 6.04 - Quorum
------
Subject to the provisions of Section 6.12, at any meeting of the
Warrant Holders a quorum will consist of Warrant Holders present in person or by
proxy and entitled to purchase at least 25% of the aggregate number of shares
which could be purchased pursuant to all the then outstanding Warrants of the
class, provided that at least two persons entitled to vote are personally
present. If a quorum of the Warrant Holders is not present within half-an-hour
168
from the time fixed for holding any meeting, the meeting, if summoned by the
Warrant Holders, or on a Warrant Holder's request, will be dissolved; but in any
other case the meeting will be adjourned to the same day in the next week
(unless such day is a non-business day, in which case it will be adjourned to
the next following business day) at the same time and place. At the adjourned
meeting the Warrant Holders present in person or by proxy will form a quorum and
may transact the business for which the meeting was originally convened
notwithstanding that they may not be entitled to purchase at least 25% of the
aggregate number of shares which can be purchased pursuant to all of the then
outstanding Warrants.
Section 6.05 - Power to Adjourn
------------------
The Chairman of any meeting at which a quorum of the Warrant Holders
is present may with the consent of the meeting adjourn any such meeting and no
notice of such adjournment need be given except such notice, if any, as the
meeting may prescribe.
169
Section 6.06 - Show of Hands
---------------
Every question submitted to a meeting will be decided in the first
place by a majority of the votes given on a show of hands. At any such meeting,
unless a poll is demanded, a declaration by the Chairman that a resolution has
been carried or carried unanimously or by a particular majority will be
conclusive evidence of the fact.
Section 6.07 - Poll
----
On any question submitted to a meeting and after a vote by show of
hands, when demanded by the Chairman or by one or more of the Warrant Holders
acting in person or by proxy and entitled to purchase in the aggregate at least
5% of the aggregate number of shares which could be purchased pursuant to all
the Warrants for the time being outstanding, a poll will be taken in such manner
as the Chairman will direct. Questions other than extraordinary resolutions
will be decided by a majority of the votes cast on the poll.
Section 6.08 - Voting
------
On a show of hands every person who is present and entitled to vote,
whether as a Warrant Holder or as proxy for one or more absent Warrant Holders
or both, will have one vote. On a poll each Warrant Holder present in person or
represented by proxy duly appointed by instrument in writing will be entitled to
one vote in respect of each share which he is entitled to purchase pursuant to
the Warrant or Warrants then held by him. A proxy need not be a Warrant Holder.
Section 6.09 - Regulations
-----------
The Issuer may from time to time make or vary such regulations as it
will think fit:
(a) for the issue of voting certificates by any bank, trust company or
other depository, certifying that specified Warrants have been
deposited with it by a named Holder and will remain on deposit until
after the meeting, which voting certificate will entitle the Holders
to be present and vote at any such meeting and at any adjournment
thereof in the same manner and with the same effect as though the
holders so named in such voting certificates were the actual bearers
of the Warrants specified therein;
(b) for the deposit of voting certificates or instruments appointing
proxies at such place and time as the Issuer or the Warrant Holders
convening the meeting, as the case may be, may in the notice convening
the meeting direct;
(c) for the deposit of voting certificates or instruments appointing
proxies at some approved place or places other than the place at which
the meeting is to be held, and enabling particulars of such voting
certificates or instruments appointing proxies to be mailed, cabled or
telegraphed before the meeting to the Issuer at the place where the
same is to be held, and for the voting of proxies so deposited as
though the instruments themselves were produced at the meeting; and
170
(d) for the form of the instrument of proxy.
Any regulations so made will be binding and effective and the votes
given in accordance therewith will be valid and will be counted. Save as such
regulations may provide, the only persons who will be recognized at any meeting
as the Holder of any Warrants, or as entitled to vote or be present at the
meeting in respect thereof, will be persons who produce Warrants at the meeting.
Section 6.10 - Issuer May Be Represented
----------------------------
The Issuer, by its officers and Directors and the legal advisors of
the Issuer, may attend any meeting of the Warrant Holders, but will have no vote
as such.
Section 6.11 - Powers Exercisable by Extraordinary Resolution
--------------------------------------------------
In addition to all other powers conferred upon them by any other
provisions hereof or by law, the Warrant Holders at a meeting will have the
following powers, exercisable from time to time by extraordinary resolution:
(a) to enforce any of the covenants on the part of the Issuer contained in
the Warrants, or to enforce any of the rights of the Warrant Holders
in any manner specified in such extraordinary resolution, or to
refrain from enforcing any such covenant or right;
(b) to waive any default on the part of the Issuer in complying with any
provision hereof either conditionally or upon any conditions specified
in such extraordinary resolution; and
(c) to consent to any amendment of the provisions of these Terms and
Conditions.
Section 6.12 - Meaning of "Extraordinary Resolution"
----------------------------------------
(a) The Expression "extraordinary resolution" when used herein means,
subject as hereinafter in this Section and in Section 6.15 provided, a
resolution proposed at a meeting of Warrant Holders duly convened for
that purpose, and held in accordance with the provisions in this
Article contained at which there are present, in person or by proxy,
Warrant Holders entitled to purchase at least 25% of the aggregate
number of shares which can be purchased pursuant to all the then
outstanding Warrants, and passed by the affirmative votes of Warrant
Holders entitled to purchase not less than 75% of the aggregate number
of shares which can be purchased pursuant to all the then outstanding
Warrants represented at the meeting and voted upon such resolution.
(b) If, at any such meeting called for the purpose of passing an
extraordinary resolution, Warrant Holders entitled to purchase 25% of
the aggregate number of shares which can be purchased pursuant to all
the then outstanding Warrants are not present in person or by proxy
171
within half-an-hour after the time appointed for the meeting, then the
meeting, if convened by Warrant Holders or on a Warrant Holder's
Request, will be dissolved; but in any other case it will stand
adjourned and the provisions of Section 6.04 will mutatis mutandis
apply.
Section 6.13 - Powers Cumulative
------------------
Any one or more of the powers or any combination of the powers to be
exercisable by the Warrant Holders by extraordinary resolution or otherwise may
be exercised from time to time and the exercise of any one or more of such
powers or any combination of powers from time to time will not be deemed to
exhaust the right of the Warrant Holders to exercise such power or powers or
combination of powers then or any power or powers or combination of powers
thereafter from time to time.
Section 6.14 - Minutes
-------
Minutes of all resolutions and proceedings at every such meeting will
be made and duly entered in books to be from time to time provided for that
purpose by the Issuer, and any such minutes, if signed by the Chairman of the
meeting at which such resolutions were passed or proceedings had, or by the
Chairman of the next succeeding meeting of the Warrant Holders, will be prima
facie evidence of the matters stated and until the contrary is proved, every
such meeting, in respect of the proceedings of which minutes will have been
made, will be deemed to have been duly convened and held, and all resolutions
passed or proceedings taken, to have been duly passed and taken.
Section 6.15 - Binding Effect of Resolutions
--------------------------------
Every resolution and every extraordinary resolution passed in
accordance with the provisions of this Article at a meeting of Warrant Holders
will be binding upon all Warrant Holders.
Section 6.16 - Status of Warrant Holders
----------------------------
The Holders of Warrants of a particular class will not be entitled as
such to attend or vote at a meeting of the Holders of Warrants of another class,
and any action taken at a meeting of the Holders of Warrants of a particular
class will in no way affect the rights of the Holders of the Warrants of another
class.
ARTICLE SEVEN - MODIFICATION OF TERMS, MERGER, SUCCESSORS
---------------------------------------------------------
Section 7.01 - Modification of Terms for Certain Purposes
-----------------------------------------------
From time to time the Issuer may, and it will, when so directed by
these presents, modify these Terms and Conditions, for any one or more or all of
the following purposes:
172
(a) giving effect to any extraordinary resolution passed as provided in
Article 6;
(b) adding to or altering these provisions in respect of the registration
and transfer of Warrants making provision for the exchange of Warrants
of different denominations; and making any modification in the form of
the Warrants which does not affect their substance;
(c) for any other purpose, including the correction or rectification of
any ambiguous, defective provisions, errors or omissions herein; and
(d) to evidence any succession of any corporation and the assumption by
any successor of the covenants of the Issuer and in the Warrants
contained as provided in this Article.
173
Section 7.02 - No Extension of Expiry Date
-------------------------------
Notwithstanding Section 7.01, no modification will be made to the Time
of Expiry without the prior consent of both the TSX Venture Exchange and the
British Columbia Securities Commission.
Section 7.03 - Issuer May Consolidate, etc. on Certain Terms
---------------------------------------------------
Nothing will prevent any consolidation, amalgamation or merger of the
Issuer with or into any other corporation or corporations, but the corporation
formed by such consolidation or into which such merger will have been made will
be a corporation organized and existing under the laws of Canada or of the
United States of America, or any Province, State, District or Territory thereof,
and will, simultaneously with such consolidation, amalgamation or merger assume
the due and punctual performance and observance of all the covenants and
conditions hereof to be performed or observed by the Issuer.
Section 7.04 - Successor Issuer Substituted
------------------------------
In case the Issuer is consolidated, amalgamated or merged with or into
any other corporation or corporations, the successor corporation formed by such
consolidation or amalgamation, or into which the Issuer will have been merged,
will succeed to and be substituted for the Issuer hereunder. Such changes in
phraseology and form (but not in substance) may be made in the Warrants as may
be appropriate in view of such consolidation, amalgamation or merger.
__________
174
