SHAREHOLDER RIGHTS PLAN AGREEMENT
BETWEEN
INFOWAVE SOFTWARE, INC.
and
MONTREAL TRUST COMPANY OF CANADA
as Rights Agent
Dated as of June 5, 2000
TABLE OF CONTENTS
Page
ARTICLE 1
CERTAIN DEFINITIONS
1.1 Certain Definitions..........................................................................2
1.2 Currency....................................................................................11
1.3 Acting Jointly or in Concert................................................................11
1.4 Control ...................................................................................11
ARTICLE 2
THE RIGHTS
2.1 Legend on Common Share Certificates.........................................................12
2.2 Initial Exercise Price; Exercise of Rights; Detachment of Rights............................12
2.3 Adjustments to Exercise Price; Number of Rights.............................................14
2.4 Date on Which Exercise is Effective.........................................................17
2.5 Execution, Authentication, Delivery and Dating of Rights Certificates.......................17
2.6 Registration, Registration of Transfer and Exchange.........................................18
2.7 Mutilated, Destroyed, Lost and Stolen Rights Certificates...................................18
2.8 Persons Deemed Owners.......................................................................19
2.9 Delivery and Cancellation of Certificates...................................................19
2.10 Agreement of Rights Holders.................................................................19
ARTICLE 3
ADJUSTMENTS TO THE RIGHTS IN THE EVENT OF CERTAIN TRANSACTIONS
3.1 Flip-in Event...............................................................................20
ARTICLE 4
THE RIGHTS AGENT
4.1 General ...................................................................................21
4.2 Merger, Amalgamation or Consolidation or Change of Name of Rights Agent.....................21
4.3 Duties of Rights Agent......................................................................22
4.4 Change of Rights Agent......................................................................23
ARTICLE 5
MISCELLANEOUS
5.1 Redemption and Termination..................................................................24
5.2 Expiration..................................................................................25
5.3 Issuance of New Rights Certificates.........................................................26
5.4 Supplements and Amendments..................................................................26
5.5 Fractional Rights and Fractional Shares.....................................................27
5.6 Rights of Action............................................................................27
5.7 Holder of Rights Not Deemed a Shareholder...................................................28
5.8 Notice of Proposed Actions..................................................................28
5.9 Notices ...................................................................................28
5.10 Costs of Enforcement........................................................................29
5.11 Successors..................................................................................29
5.12 Benefits of this Agreement..................................................................29
5.13 Descriptive Headings........................................................................29
5.14 Governing Law...............................................................................30
5.15 Language....................................................................................30
5.16 Counterparts................................................................................30
5.17 Severability................................................................................30
5.18 Record Time.................................................................................30
5.19 Shareholder Review..........................................................................30
5.20 Regulatory Approvals........................................................................30
5.21 Determinations and Actions by then Board of Directors.......................................31
SHAREHOLDER RIGHTS PLAN AGREEMENT
THIS SHAREHOLDER RIGHTS PLAN AGREEMENT made as of June 5, 2000.
BETWEEN:
INFOWAVE SOFTWARE, INC., a body corporate organized under
the laws of British Columbia (hereinafter referred to as
the "Corporation")
OF THE FIRST PART
- and -
MONTREAL TRUST COMPANY OF CANADA, a trust company
incorporated under the laws of Canada (hereinafter
referred to as the "Rights Agent")
OF THE SECOND PART
WHEREAS the Board of Directors of the Corporation has determined that it is
advisable to adopt a shareholder rights plan to take effect immediately (the
"Rights Plan") to ensure, to the extent possible, that all shareholders of the
Corporation are treated fairly in connection with any take-over offer for the
Corporation and, due to the uniqueness of the Corporation's business, to ensure
that the Board of Directors are provided with a sufficient time to evaluate
unsolicited take-over bids and to explore and develop alternatives to maximize
shareholder value;
AND WHEREAS, in order to implement the Rights Plan, the Board of Directors
of the Corporation has:
(a) authorized the distribution of one right (a "Right") in respect of
each Common Share as hereinafter defined) outstanding at the close of
business on June 5, 2000 (the "Record Time"), such distribution being
made to shareholders of record at the Record Time; and
(b) authorized the issuance of one Right in respect of each Common Share
issued after the Record Time and prior to the earlier of the
Separation Time (as hereinafter defined) and the Expiration Time (as
hereinafter defined);
AND WHEREAS each Right entitles the holder thereof after the Separation
Time to purchase securities of the Corporation pursuant to the terms and subject
to the conditions set forth herein;
AND WHEREAS the Corporation desires to appoint the Rights Agent to act on
behalf of the Corporation, and the Rights Agent is willing to so act, in
connection with the issuance, transfer, exchange and replacement of Rights
Certificates (as hereinafter defined), the exercise of Rights and other matters
referred to herein;
NOW THEREFORE in consideration of the premises and the respective
agreements set forth herein, the parties hereby agree as follows:
ARTICLE 1
CERTAIN DEFINITIONS
1.1 Certain Definitions
For purposes of this Agreement, the following terms have the meanings
indicated:
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(a) "Acquiring Person" shall mean any Person who is the Beneficial Owner
of 20% or more of the outstanding Voting Shares of the Corporation;
provided, however, that the term "Acquiring Person" shall not include:
(i) the Corporation or any Subsidiary of the Corporation;
(ii) any Person who becomes the Beneficial Owner of 20% or more of the
outstanding Voting Shares of the Corporation as a result of any
one or a combination of
(A) an acquisition or redemption by the Corporation of Voting
Shares of the Corporation which, by reducing the number of
Voting Shares outstanding, increases the proportionate
number of Voting Shares Beneficially Owned by such Person to
20% or more of the Voting Shares of the Corporation then
outstanding;
(B) share acquisitions made pursuant to a Permitted Bid
("Permitted Bid Acquisitions");
(C) share acquisitions (1) in respect of which the Board of
Directors of the Corporation has waived the application of
Section 3.1 pursuant to Sections 5.1(b), (c) or (d); or (2)
which were made on or prior to the date of the Rights Plan;
or (3) which were made pursuant to a dividend reinvestment
plan of the Corporation; or (4) pursuant to the receipt or
exercise of rights issued by the Corporation to all the
holders of the Voting Shares (other than holders resident in
a jurisdiction where such distribution is restricted or
impractical as a result of applicable law) to subscribe for
or purchase Voting Shares or Convertible Securities,
provided that such rights are acquired directly from the
Corporation and not from any other person; or (5) pursuant
to a distribution by the Corporation of Voting Shares or
Convertible Securities made pursuant to a prospectus
provided that such Person does not thereby Beneficially Own
a greater percentage of Voting Shares than the Voting Shares
Beneficially Owned by such Person immediately prior to such
acquisition; or (6) pursuant to a distribution by the
Corporation of Voting Shares or Convertible Securities by
way of a private placement by the Corporation or upon the
exercise by an individual employee of stock options granted
under a stock option plan of the Corporation or rights to
purchase securities granted under a share purchase plan of
the Corporation, provided that (i) all necessary stock
exchange approvals for such private placement, stock option
plan or share purchase plan have been obtained and such
private placement, stock option plan or share purchase plan
complies with the terms and conditions of such approvals and
(ii) such Person does not become the Beneficial Owner of
more than 25% of the Voting Shares outstanding immediately
prior to the distribution, and in making this determination
the Voting Shares to be issued to such Person in the
distribution shall be deemed to be held by such Person but
shall not be included in the aggregate number of outstanding
Voting Shares immediately prior to the distribution ("Exempt
Acquisitions");
(D) the acquisition of Voting Shares upon the exercise of
Convertible Securities received by such Person pursuant to a
Permitted Bid Acquisition, Exempt Acquisition or a Pro Rata
Acquisition (as defined below) ("Convertible Security
Acquisitions"); or
(E) acquisitions as a result of a stock dividend, a stock split
or other event pursuant to which such Person receives or
acquires Voting Shares or Convertible Securities on the same
pro rata basis as all other holders of Voting Shares of the
same class ("Pro Rata Acquisitions");
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provided, however, that if a Person shall become the
Beneficial Owner of 20% or more of the Voting Shares of the
Corporation then outstanding by reason of any one or a
combination of (i) share acquisitions or redemptions by the
Corporation or (ii) Permitted Bid Acquisitions or (iii)
Exempt Acquisitions or (iv) Convertible Security
Acquisitions or (v) Pro Rata Acquisitions and, after such
share acquisitions or redemptions by the Corporation or
Permitted Bid Acquisitions or Exempt Acquisitions,
Convertible Security Acquisitions or Pro Rata Acquisitions,
such Person subsequently becomes the Beneficial Owner of
more than an additional 1.00% of the number of Voting Shares
of the Corporation outstanding other than pursuant to any
one or combination of share acquisitions or redemptions of
shares by the Corporation, Permitted Bid Acquisitions,
Exempt Acquisitions, Convertible Security Acquisitions or
Pro Rata Acquisitions, then as of the date of any such
acquisition such Person shall become an "Acquiring Person";
(iii) a Grandfathered Person provided, however, that if such Person
shall thereafter become the Beneficial Owner of more than an
additional 1.00% of the number of Common Shares of the
Corporation outstanding other than pursuant to share acquisitions
or redemption of shares by the Corporation, Permitted Bid
Acquisitions, Exempt acquisitions, Convertible Security
Acquisitions, Acquisitions, then as of the date of any such
acquisition such person shall become an "Acquiring Person";
(iv) for a period of 10 days after the Disqualification Date, any
Person who becomes the Beneficial Owner of 20% or more of the
outstanding Voting Shares as a result of such Person becoming
disqualified from relying on clause 1.1(d)(B) solely because such
Person makes or announces an intention to make a Take-over Bid,
either alone or by acting jointly or in concert with any other
Person. For the purposes of this definition, "Disqualification
Date" means the first date of public announcement that any Person
is making or intends to make a Take-over Bid either alone or by
acting jointly or in concert with any other Person; or
(v) an underwriter or member of a banking or selling group that
becomes the Beneficial Owner of 20% or more of the Voting Shares
in connection with a distribution of securities by way of
prospectus or private placement.
(b) "Affiliate", used to indicate a relationship with a specified Person,
shall mean a Person that directly, or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common
control with, such specified Person.
(c) "Associate" of a specified individual shall mean any individual to
whom such specified individual is married or with whom such specified
individual is living in a conjugal relationship, outside marriage, or
any relative of such specified individual or said spouse who has the
same home as such specified individual.
(d) A Person shall be deemed the "Beneficial Owner", and to have
"Beneficial Ownership", of, and to "Beneficially Own":
(i) any securities as to which such Person or any of such Person's
Affiliates or Associates is the owner at law or in equity;
(ii) any securities as to which such Person or any of such Person's
Affiliates or Associates has the right to acquire (A) upon the
exercise of any Convertible Securities, or (B) pursuant to any
agreement, arrangement or understanding whether such right is
exercisable immediately or within a period of 60 days thereafter
and whether or not on condition or the happening of any
contingency (other than (1) customary agreements with and between
underwriters and banking group or selling group members with
respect to a distribution to the public or pursuant to a private
placement of securities or (2) pursuant to a pledge of securities
in the ordinary course of business); and
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(iii) any securities which are Beneficially Owned within the meaning
of clauses 1.1(d)(i) or (ii) above by any other Person with which
such Person is acting jointly or in concert;
provided, however, that a Person shall not be deemed the
"Beneficial Owner", or to have "Beneficial Ownership" of, or to
"Beneficially Own", any security:
(A) where (1) the holder of such security has agreed to deposit
or tender such security pursuant to a Permitted Lock-up
Agreement to a Take-over Bid made by such Person or any of
such Person's Affiliates or Associates or any other person
referred to in clause 1.1(d)(iii) or (2) such security has
been deposited or tendered pursuant to a Take-over Bid made
by such Person or any of such Person's Affiliates or
Associates or any other Person referred to in clause
1.1(d)(iii) until the earliest time at which any such
tendered security is accepted unconditionally for payment or
exchange or is taken up and paid for;
(B) where such Person, any of such Person's Affiliates or
Associates or any other Person referred to in clause
1.1(d)(iii), holds such security provided that (1) the
ordinary business of any such Person (the "Investment
Manager") includes the management of investment funds for
others (including without limitation the acquisition or
holding of securities for a non-discretionary account of a
Client (as defined below)) and such security is held by the
Investment Manager in the ordinary course of such business
in the performance of such Investment Manager's duties for
the account of any other Person (a "Client"), or (2) such
Person (the "Trust Company") is licensed to carry on the
business of a trust company under applicable laws and, as
such, acts as trustee or administrator or in a similar
capacity in relation to the estates of deceased or
incompetent Persons or in relation to other accounts and
holds such security in the ordinary course of such duties
for the estates of deceased or incompetent Persons or for
such other accounts, or (3) such Person (the "Plan Trustee")
is the administrator or trustee of one or more pension funds
or plans (each a "Plan") registered under applicable laws
and holds such security for the purposes of its activity as
such, or (4) such Person is a Plan or is a Person
established by statute (the "Statutory Body") for purposes
that include, and the ordinary business or activity of such
Person includes the management of investment funds for
employee benefit plans, pension plans, insurance plans
(other than plans administered by insurance companies) or
various public bodies or (5) such Person is a Crown agent or
agency; provided in any of the above cases, that the
Investment Manager, the Trust Company, the Plan Trustee, the
Plan, the Statutory Body or the Crown agent or agency, as
the case may be, is not then making a Take-over Bid or has
not announced a current intention to make a Take-over Bid,
other than an Offer to Acquire Voting Shares or other
securities pursuant to a distribution by the Corporation or
by means of ordinary market transactions (including
pre-arranged trades entered into in the ordinary course of
business of such Person) executed through the facilities of
a stock exchange, national securities quotations system, or
organized over-the-counter market, alone or by acting
jointly or in concert with any other Person; or
(C) because such Person is a client of or has an account with
the same Investment Manager as another Person on whose
account the Investment Manager holds such security, or where
such Person is a client of or has an account with the same
Trust Company as another Person on whose account the Trust
Company holds such security, or where such Person is a Plan
and has a Plan Trustee who is also a Plan Trustee for
another Plan on whose account the Plan Trustee holds such
security; or
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(D) where such Person is (i) a client of an Investment Manager
and such security is owned at law or in equity by the
Investment Manager, or (ii) an account of a Trust Company
and such security is owned at law or in equity by the Trust
Company, or (iii) a Plan and such security is owned at law
or in equity by the Plan Trustee; or
(E) where such Person is the registered holder of securities as
a result of carrying on the business of or acting as a
nominee of a securities depositary.
For purposes of this Agreement, the percentage of Voting Shares
Beneficially Owned by any Person, shall be and be deemed to be the
product determined by the formula:
100 x A/B
Where:
A = the number of votes for the election of all directors generally
attaching to the Voting Shares Beneficially Owned by such Person;
and
B = the number of votes for the election of all directors generally
attaching to all outstanding Voting Shares.
For the purposes of the foregoing formula, where any person is deemed
to Beneficially Own unissued Voting Shares which may be acquired
pursuant to Convertible Securities, such Voting Shares shall be deemed
to be outstanding for the purpose of calculating the percentage of
Voting Shares Beneficially Owned by such Person in both the numerator
and the denominator, but no other unissued Voting Shares which may be
acquired pursuant to any other outstanding Convertible Securities
shall, for the purposes of that calculation, be deemed to be
outstanding.
(e) "Business Day" shall mean any day other than a Saturday, Sunday or a
day that is treated as a holiday at the Corporation's principal
executive offices in Vancouver, British Columbia, Canada.
(f) "Canadian-U.S. Exchange Rate" shall mean on any date the inverse of
the U.S. Canadian Exchange Rate.
(g) "Canadian Dollar Equivalent" of any amount which is expressed in
United States dollars shall mean on any day the Canadian dollar
equivalent of such amount determined by reference to the Canadian-U.S.
Exchange Rate on such date.
(h) "close of business" on any given date shall mean the time on such date
(or, if such date is not a Business Day, the time on the next
succeeding Business Day) at which the office of the transfer agent for
the Voting Shares in the City of Vancouver, British Columbia (or,
after the Separation Time, the offices of the Rights Agent in the City
of Vancouver, British Columbia) becomes closed to the public.
(i) "Common Shares of the Corporation" and "Common Shares" shall mean the
Common Shares in the capital stock of the Corporation as constituted
as at the Record Time and any other share of the Corporation into
which such Common Shares may be subdivided, consolidated, reclassified
or changed from time to time and "common shares" when used with
reference to any Person other than the Corporation means the class or
classes of shares (or similar equity interest) with the greatest per
share voting power entitled to vote generally in the election of all
directors of such other Person or the equity securities or other
equity interest having power (whether or not exercised) to control or
direct the management of such other Person or, if such other Person is
a corporation controlled by another Person, the Person (other than an
individual) which ultimately controls such first mentioned other
Person.
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(j) "Company Act" shall mean the Company Act (British Columbia), R.S.B.C.
1996, c.62, as amended, and the regulations thereunder, and any
comparable or successor laws or regulations thereto.
(k) "Competing Permitted Bid" means a Take-over Bid that:
(i) is made after a Permitted Bid has been made and prior to the
expiry of the Permitted Bid;
(ii) satisfies all components of the definition of a Permitted Bid
other than the requirements set out in the clause (ii) of that
definition; and
(iii) contains, and the take-up and payment for securities tendered or
deposited is subject to, an irrevocable and unqualified provision
that no Voting Shares will be taken up or paid for pursuant to
the Take-over Bid prior to the close of business on the date that
is no earlier than the later of (1) the earliest date on which
Voting Shares may be taken up or paid for under any Permitted Bid
or Competing Permitted Bid that is then in existence and (2) 21
days (or such other minimum period of days as may be prescribed
by applicable law in British Columbia) after the date of the
Take-over Bid constituting the Competing Permitted Bid.
(l) "Convertible Securities" means at any time:
(i) any right (contractual or otherwise and regardless of whether
such right constitutes a security) to acquire Voting Shares from
the Corporation; and
(ii) any securities issued by the Corporation from time to time (other
than the Rights) carrying any exercise, conversion or exchange
right;
which is then exercisable or exercisable within a period of 60 days from
that time pursuant to which the holder thereof may acquire Voting Shares or
other securities which are convertible into or exercisable or exchangeable
for Voting Shares (in each case, whether such right is then exercisable or
exercisable within a period of 60 days from that time and whether or not on
condition or the happening of any contingency).
(m) "Convertible Security Acquisitions" has the meaning set forth in the
definition of "Acquiring Person" herein.
(n) "Co-Rights Agents" shall have the meaning set forth in subsection
4.1(a).
(o) "Exempt Acquisition" has the meaning set forth in the definition of
"Acquiring Person" herein.
(p) "Exercise Price" shall mean, as of any date after the Record Time, the
price at which a holder may purchase the securities issuable upon
exercise of one whole Right and until adjustment thereof in accordance
with the terms hereof, the Exercise Price shall equal Cdn. $1,000.
(q) "Expiration Time" shall mean the earlier of:
(i) the Termination Time; and
(ii) the termination of the annual meeting of shareholders of the
Corporation in the year 2003;
(iii) provided, however, that if the resolution referred to in Section
5.19 is approved by Independent Shareholders in accordance with
Section 5.19 at or prior to such meeting, "Expiration Time",
means the earlier of (i) the Termination Time and (ii) the
termination of the annual meeting of shareholders of the
Corporation in 2006.
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(r) A "Flip-in Event" shall mean a transaction occurring subsequent to the
date of this Agreement as a result of which any Person shall become an
Acquiring Person provided, however, that a Flip-in Event, shall be
deemed to occur at the close of business on the tenth day (or such
later day as the Board of Directors of the Corporation may determine)
after the Stock Acquisition Date.
(s) "Grandfathered Person" means any Person who is the Beneficial Owner of
20% or more of the Outstanding Common Shares of the Corporation at the
Record Time;
(t) "Independent Shareholders" shall mean holders of outstanding Voting
Shares of the Corporation excluding (i) any Acquiring Person; or (ii)
any Person (other than a Person referred to in Section 1.1(d)(B)) that
is making or has announced a current intention to make a Take-over Bid
for Voting Shares of the Corporation (including a Permitted Bid or a
Competing Permitted Bid) but excluding any such Person if the
Take-over Bid so announced or made by such Person has been withdrawn,
terminated or, expired; or (iii) any Affiliate or Associate of such
Acquiring Person or Persons referred to in clause (ii); or (iv) any
Person acting jointly or in concert with such Acquiring Person or a
Person referred to in clause (ii); or (v) a Person who is a trustee of
any employee benefit plan, share purchase plan, deferred profit
sharing plan or any similar plan or trust for the benefit of employees
of the Corporation or a Subsidiary of the Corporation, unless the
beneficiaries of the plan or trust direct the manner in which the
Voting Shares are to be voted or direct whether the Voting Shares are
to be tendered to a Take-over Bid.
(u) "Market Price" per security of any securities on any date of
determination shall mean the average of the daily Closing Prices Per
Security of such securities (determined as described below) on each of
the 20 consecutive Trading Days through and including the Trading Day
immediately preceding such date; provided, however, that if an event
of a type analogous to any of the events described in Section 2.3
hereof shall have caused the price used to determine the Closing Price
Per Security on any Trading Day not to be fully comparable with the
price used to determine the Closing Price Per Security on such date of
determination or, if the date of determination is not a Trading Day,
on the immediately preceding Trading Day, each such price so used
shall be appropriately adjusted in a manner analogous to the
applicable adjustment provided for in Section 2.3 hereof in order to
make it fully comparable with the price per security used to determine
the Closing Price Per Security on such date of determination or, if
the date of determination is not a Trading Day, on the immediately
preceding Trading Day. The "Closing Price Per Security" of any
securities on any date shall be:
(i) the closing board lot sale price or, if such price is not
available, the average of the closing bid and asked prices, for
such securities as reported by the stock exchange or national
securities quotation system on which such securities are listed
or admitted to trading, (provided that if at the date of
determination such securities are listed or admitted to trading
on more than one stock exchange or national securities quotation
system, such price or prices shall be determined based on the
stock exchange or national securities quotation system on which
such securities are then listed or admitted to trading on which
the largest number of such securities were traded during the most
recently completed calendar year);
(ii) if, for any reason, none of such prices is available on such date
or the securities are not listed or admitted to trading on a
stock exchange or national securities quotation system, the last
sale price, or in case no sale takes place on such date, the
average of the high bid and low asked prices for such securities
in the over-the-counter market, as quoted by any reporting system
then in use (as selected by the Board of Directors); or
(iii) if the securities are not listed or admitted to trading as
contemplated in clause 1.1(u)(i) or (ii), the average of the
closing bid and asked prices as furnished by a professional
market maker making a market in the securities provided, however,
that if on any such date the Closing Price Per Security cannot be
determined in accordance with the foregoing, the Closing Price
Per Security of such securities on such date shall mean the fair
value per
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share of such securities on such date as determined in good faith
by an internationally recognized investment dealer or investment
banker with respect to the fair value per share of such
securities. The Market Price, shall be expressed in Canadian
dollars and, if initially determined in respect of any day
forming part of the 20 consecutive trading day period in question
in United States dollars, such amount shall be translated into
Canadian dollars at the Canadian Dollar Equivalent thereof.
(v) "1933 Securities Act" shall mean the Securities Act of 1933 of the
United States, as amended, and the rules and regulations thereunder,
and any comparable or successor laws or regulations thereto.
(w) "1934 Exchange Act" shall mean the Securities Exchange Act of 1934 of
the United States, as amended, and the rules and regulations
thereunder, and any comparable or successor laws or regulations
thereto.
(x) "Offer to Acquire" shall include:
(i) an offer to purchase, or a solicitation of an offer to sell,
Voting Shares; and
(ii) an acceptance of an offer to sell Voting Shares, whether or not
such offer to sell has been solicited;
or any combination thereof, and the Person accepting an offer to sell
shall be deemed to be making an offer to acquire to the Person that
made the offer to sell.
(y) "Offeror's Securities" means Voting Shares Beneficially Owned on the
date of an Offer to Acquire by any Person who is making a Take-over
Bid and "Offeror" means a Person who has announced a current intention
to make or is making a Take-over Bid.
(z) "Permitted Bid" means a Take-over Bid made by a Person by means of a
Take-over Bid circular and which also complies with the following
additional provisions:
(i) the Take-over Bid is made to all holders of Voting Shares other
than the Offeror;
(ii) the Take-over Bid shall contain, and the provisions for the
take-up and payment for Voting Shares tendered or deposited
thereunder shall be subject to, an irrevocable and unqualified
condition that no Voting Shares shall be taken up or paid for
pursuant to the Take-over Bid prior to the close of business on a
date which is not less than 45 days following the date of the
Take-over Bid;
(iii) the Take-over Bid shall contain irrevocable and unqualified
provisions that, unless the Take-over Bid is withdrawn, Voting
Shares may be deposited pursuant to the Take-over Bid at any time
prior to the close of business on the date of first take-up or
payment for Voting Shares and that all Voting Shares deposited
pursuant to the Take-over Bid may be withdrawn at any time prior
to the close of business on such date;
(iv) the Take-over Bid shall contain an irrevocable and unqualified
condition that more than 50% of the outstanding Voting Shares
held by Independent Shareholders, determined as at the date of
first take-up or payment for Voting Shares under the Take-over
Bid, must be deposited to the Take-over Bid and not withdrawn at
the close of business on the date of first take-up or payment for
Voting Shares; and
(v) the Take-over Bid shall contain an irrevocable and unqualified
provision that in the event that more than 50% of the then
outstanding Voting Shares held by Independent Shareholders shall
have been deposited to the Take-over Bid and not withdrawn as at
the date of first take-up or payment for Voting Shares under the
Take-over Bid, the Offeror
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will make a public announcement of that fact and the Take-over
Bid will remain open for deposits and tenders of Voting Shares
for not less than 10 Business Days from the date of such public
announcement;
provided that if a Take-over Bid constitutes a Competing
Permitted Bid, the term "Permitted Bid" shall also mean the
Competing Permitted Bid.
(aa) "Permitted Bid Acquisition" has the meaning set forth in the
definition of "Acquiring Person" herein.
(bb) "Permitted Lock-up Agreement" means an agreement (the "Lock-up
Agreement") between a Person and one or more holders of Voting Shares
(each such holder herein referred to as a "Locked-up Person") (the
terms of which are publicly disclosed and reduced to writing and a
copy of which is made available to the public (including the
Corporation) not later than the date of the Lock-up Bid (as defined
below) or if the Lock-up Bid has been made prior to the date of the
Lock-up Agreement not later than the date of the Lock-up Agreement)
pursuant to which each Locked-up Person agrees to deposit or tender
the Voting Shares held by such holder to a Take-over Bid (the "Lock-up
Bid") made by the Person or any of such Person's Affiliates or
Associates or any other Person referred to in clause 1.1(d)(iii)
provided that:
(i) the Lock-up Agreement permits the Locked-up Person to withdraw
its Voting Shares from the Lock-up Agreement in order to deposit
or tender the Voting Shares to another Take-over Bid or to
support another transaction prior to the Voting Shares being
taken up and paid for under the Lock-up Bid:
(A) at a price or value per Voting Share that exceeds the price
or value per Voting Share offered under the Lock-up Bid; or
(B) for a number of Voting Shares at least 7% greater than the
number of Voting Shares that the Offeror has offered to
purchase under the Lock-up Bid at a price or value per
Voting Share that is not less than the price or value per
Voting Share offered under the Lock-up Bid; or
(C) (a) that contains an offering price for each Voting Share
that exceeds by as much as or more than a specified amount
(the "Specified Amount") the offering price for each Voting
Share contained in or proposed to be contained in the
Lock-up Bid and (b) does not by itself provide for a
Specified Amount that is greater than 7% of the offering
price contained in or proposed to be contained in the
Lock-up Bid; and;
for greater clarity, the agreement may contain a right of first
refusal or require a period of delay to give the Person who made
the Lock-up Bid an opportunity to match a higher price in another
Take-over Bid or other similar limitation on a Locked-up Person's
right to withdraw Voting Shares from the agreement, so long as
the limitation does not preclude the exercise by the Locked-up
Person of the right to withdraw Voting Shares during the period
of the other Take-over Bid or transaction; and
(ii) no "break-up" fees, "top-up" fees, penalties, expenses or other
amounts that exceed in aggregate the greater of:
(A) 2 1/2% of the price or value of the consideration payable
under the Lock-up Bid to a Locked-up Person; and
(B) 50% of the amount by which the price or value of the
consideration received by a Locked-up Person under another
Take-over Bid or transaction exceeds the
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price or value of the consideration that the Locked-up
Person would have received under the Lock-up Bid;
shall be payable by such Locked-up Person if the Locked-up Person
fails to deposit or tender Voting Shares to the Lock-up Bid, or
withdraws Voting Shares previously tendered thereto in order to
deposit or tender such Voting Shares to another Take-over Bid or
support another transaction.
(cc) "Person" shall mean any individual, firm, partnership, association,
trust, trustee, personal representative, body corporate, corporation,
unincorporated organization, syndicate or other entity.
(dd) "Pro Rata Acquisition" has the meaning set forth in the definition of
"Acquiring Person" herein.
(ee) "Record Time" shall mean the close of business on June 5, 2000.
(ff) "Redemption Price" has the meaning set forth in subsection 5.1(a)
herein.
(gg) "Securities Act" shall mean the Securities Act (British Columbia),
S.B.C. 1985, c. 83, as amended, and the rules and regulations
thereunder, and any comparable or successor laws, rules or regulations
thereto.
(hh) "Separation Time" shall mean the close of business on the tenth
Business Day after the earlier of:
(i) the Stock Acquisition Date;
(ii) the date of the commencement of, or first public announcement of
the intent of any Person (other than the Corporation or any
Subsidiary of the Corporation) to commence a Take-over Bid (other
than a Take-over Bid which is a Permitted Bid so long as such
Take-over Bid continues to satisfy the requirements of a
Permitted Bid), provided that, if any Take-over Bid referred to
in this clause (ii) expires, is cancelled, terminated or
otherwise withdrawn prior to the Separation Time, such Take-over
Bid shall be deemed, for purposes of this Section 1.1(ii), never
to have been made; and
(iii) the date upon which a Permitted Bid ceases to be a Permitted
Bid;
or such later date as may be determined by the Board of Directors of
the Corporation acting in good faith provided that, if the foregoing
results in the Separation Time being prior to the Record Time, the
Separation Time shall be the Record Time and if the Board of Directors
determines pursuant to Section 5.1 to waive the application of Section
3.1 to a Flip-In Event, the Separation Time in respect of such Flip-In
Event shall be deemed never to have occurred.
(ii) "Stock Acquisition Date" shall mean the first date of public
announcement (which, for purposes of this definition, shall include,
without limitation, a report filed pursuant to Section 111 of the
Securities Act or Section 13(d) under the 1934 Exchange Act) by the
Corporation or an Acquiring Person that a Person has become an
Acquiring Person.
(jj) "Subsidiary" of any specified Person shall mean any corporation or
other entity controlled by such specified Person.
(kk) "Take-over Bid" means an Offer to Acquire Voting Shares or securities
convertible into Voting Shares, where the Voting Shares subject to the
Offer to Acquire, together with the Voting Shares into which the
securities subject to the Offer to Acquire are convertible, and the
Offeror's Securities, constitute in the aggregate 20% or more of the
outstanding Voting Shares at the date of the Offer to Acquire.
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(ll) "Termination Time" shall mean the time at which the right to exercise
Rights shall terminate pursuant to Section 5.1, 5.18 or 5.19 hereof.
(mm) "Trading Day", when used with respect to any securities, shall mean a
day on which the principal securities exchange or securities quotation
system on which such securities are listed or admitted to trading is
open for the transaction of business or, if the securities are not
listed or admitted to trading on any securities exchange or securities
quotation system, a Business Day.
(nn) "U.S. Canadian Exchange Rate" shall mean on any date:
(i) if on such date the Bank of Canada sets an average noon spot rate
of exchange with a conversion of one United States dollar into
Canadian dollars, such rate;
(ii) in any other case, the rate for such date for the conversion of
one United States dollar into Canadian dollars which is
calculated in the manner which shall be determined by the Board
of Directors from time to time acting in good faith.
(oo) "U.S. Dollar Equivalent" of any amount which is expressed in Canadian
dollars shall mean on any day the United States dollar equivalent of
such amount determined by reference to the U.S.-Canadian Exchange Rate
on such date.
(pp) "Voting Shares" shall mean the Common Shares and any other securities
the holders of which are entitled to vote generally on the election of
directors of the Corporation and "voting shares" when used with
reference to any Person other than the Corporation means common shares
of such other Person and any other securities the holders of which are
entitled to vote generally in the election of the directors of such
other Person.
1.2 Currency
All sums of money which are referred to in this Agreement are expressed in
lawful money of Canada.
1.3 Acting Jointly or in Concert
For purposes of this Agreement, a Person is acting jointly or in concert
with another Person if such Person has any agreement, arrangement or
understanding (whether formal or informal and whether or not in writing) with
such other Person to acquire or Offer to Acquire any Voting Shares of the
Corporation (other than (A) customary agreements with and between underwriters
and banking group or selling group members with respect to a distribution of
securities by way of prospectus or private placement; or (B) pursuant to a
pledge of securities in the ordinary course of business).
1.4 Control
A Person is "controlled" by another Person or two or more other Persons
acting jointly or in concert if:
(a) in the case of a body corporate, securities entitled to vote in the
election of directors of such body corporate carrying more than 50% of
the votes for the election of directors are held, directly or
indirectly, by or for the benefit of the other Person or Persons
acting jointly or in concert and the votes carried by such securities
are entitled, if exercised, to elect a majority of the board of
directors of such body corporate; or
(b) in the case of a Person which is not a body corporate, more than 50%
of the voting or equity interests of such entity are held, directly or
indirectly, by or for the benefit of the other Person or Persons
acting jointly or in concert.
and "controls", "controlling" and "under common control with" shall be
interpreted accordingly.
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ARTICLE 2
THE RIGHTS
2.1 Legend on Common Share Certificates
Certificates for the Common Shares, including without limitation Common
Shares issued upon the conversion of Convertible Securities, issued after the
Record Time but prior to the earlier of the Separation Time and the Expiration
Time shall evidence one Right for each Common Share represented thereby and,
commencing as soon as reasonably practicable after the Record Time, shall have
impressed on, printed on, written on or otherwise affixed to them the following
legend:
Until the Separation Time (as defined in the Rights Agreement referred
to below), this certificate also evidences and entitles the holder
hereof to certain Rights as set forth in a Shareholder Rights Plan
Agreement, dated as of June 5, 2000, as such may from time to time be
amended, restated, varied or replaced, (the "Rights Agreement"),
between Infowave Software, Inc. (the "Corporation") and Montreal Trust
Company of Canada as Rights Agent, the terms of which are hereby
incorporated herein by reference and, a copy of which is on file at
the registered office of the Corporation. Under certain circumstances,
as set forth, in the Rights Agreement, such Rights may be amended or
redeemed, may expire, may become void (if, in certain cases, they are
"Beneficially Owned" by an "Acquiring Person", as such terms are
defined in the Rights Agreement, or a transferee thereof) or may be
evidenced by separate certificates and may no longer be evidenced by
this certificate. The Corporation will mail or arrange for the mailing
of a copy of the Rights Agreement to the holder of this certificate
without charge as soon as practicable, after the receipt of a written
request therefor.
Certificates representing Common Shares that are issued and outstanding at
the Record Time shall evidence one Right for each Common Share evidenced thereby
notwithstanding the absence of the foregoing legend.
2.2 Initial Exercise Price; Exercise of Rights; Detachment of Rights
(a) Subject to adjustment as herein set forth, each Right will entitle the
holder thereof, after the Separation Time, to purchase, for the
Exercise Price, or its U.S. Dollar Equivalent as at the Business Day
immediately preceding the day of exercise of the Right, one Common
Share. Notwithstanding any other provision of this Agreement, any
rights held by the Corporation or its subsidiaries shall be null and
void.
(b) Until the Separation Time,
(i) no Right may be exercised; and
(ii) each Right will be evidenced by the certificate for the
associated Common Share and will be transferable only together
with, and will be transferred by a transfer of, such associated
share.
(c) After the Separation Time and prior to the Expiration Time, the Rights
(i) may be exercised; and (ii) will be transferable independent of
Common Shares. Promptly following the Separation Time the Rights Agent
will mail to each holder of record of Common Shares as of the
Separation Time and, in respect of each Convertible Security converted
into Common Shares after the Separation Time and prior to the
Expiration Time promptly after such conversion to the holder so
converting (other than an Acquiring Person and, in respect of any
Rights Beneficially Owned by such Acquiring Person which are not held
of record by such Acquiring Person, the holder of record of such
Rights) at such holder's address as shown by the records of the
Corporation (the Corporation
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hereby agreeing to furnish copies of such records to the Rights Agent
for this purpose), (x) a certificate (a "Rights Certificate") in
substantially the form of Exhibit A hereto with registration
particulars appropriately completed, representing the number of Rights
held by such holder at the Separation Time and having such marks of
identification or designation and such legends, summaries or
endorsements printed thereon as the Corporation may deem appropriate
and as are not inconsistent with the provisions of this Agreement, or
as may be required to comply with any law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any
stock exchange or securities quotation system on which the Rights may
from time to time be listed or traded, or to conform to usage, and (y)
a disclosure statement describing the Rights.
(d) Rights may be exercised in whole or in part on any Business Day (or on
any other day which, in the city at which an Election to Exercise (as
hereinafter defined) is duly submitted to the Rights Agent in
accordance with this Agreement, is not a Saturday, Sunday or a day
that is treated as a holiday in such city) after the Separation Time
and prior to the Expiration Time by submitting to the Rights Agent (at
its office in the City of Vancouver, British Columbia, Canada or at
any other office of the Rights Agent in the cities designated from
time to time for that purpose by the Corporation), the Rights
Certificate evidencing such Rights together with an Election to
Exercise (an "Election to Exercise") substantially in the form
attached to the Rights Certificate duly completed, accompanied by
payment by certified cheque, banker's draft or money order payable to
the order of the Montreal Trust Company of Canada, of a sum equal to
the Exercise Price multiplied by the number of Rights being exercised
and a sum sufficient to cover any transfer tax or charge which may be
payable in respect of any transfer involved in the transfer or
delivery of Rights Certificates or the issuance or delivery of
certificates for Common Shares in a name other than that of the holder
of the Rights being exercised.
(e) Upon receipt of a Rights Certificate, with a duly completed Election
to Exercise (which does not indicate that the holder so exercising is
an Acquiring Person) accompanied by payment as set forth in Section
2.2(d) above, the Rights Agent will thereupon promptly:
(i) requisition from the transfer agent or any co-transfer agent of
the Common Shares certificates for the number of Common Shares to
be purchased (the Corporation hereby irrevocably authorizing its
transfer agent to comply with all such requisitions);
(ii) when appropriate, requisition from the Corporation the amount of
cash to be paid in lieu of issuing fractional Common Shares;
(iii) after receipt of the Common Share certificates, deliver the same
to or upon the order of the registered holder of such Rights
Certificate, registered in such name or names as may be
designated by such holder; and
(iv) when appropriate, after receipt, deliver such cash to or to the
order of the registered holder of the Rights Certificate.
(f) In case the holder of any Rights shall exercise less than all the
Rights evidenced by such holder's Rights Certificate, a new Rights
Certificate evidencing the Rights remaining unexercised will be issued
by the Rights Agent to such holder or to such holder's duly authorized
assigns.
(g) The Corporation covenants and agrees that it will:
(i) take all such action as may be necessary and within its power to
ensure that all shares delivered upon exercise of Rights shall,
at the time of delivery of the certificates for such shares
(subject to payment of the Exercise Price), be duly and validly
authorized, executed, issued and delivered and fully paid and
non-assessable;
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(ii) take all such action as may be necessary and within its power to
comply with any applicable requirements of the Company Act, the
Securities Act, the securities acts or comparable legislation of
each of the other provinces of Canada, the 1933 Securities Act
and the 1934 Exchange Act, and the rules and regulations
thereunder or any other applicable law, rule or regulation, in
connection with the issuance and delivery of the Rights
Certificates and the issuance of any shares upon exercise of
Rights;
(iii) use reasonable efforts to cause all shares issued upon exercise
of Rights to be listed on the principal exchanges, securities
quotation system or traded in the over-the-counter markets on
which the common shares were traded immediately prior to the
Stock Acquisition Date;
(iv) cause to be reserved and kept available out of its authorized and
unissued Common Shares the number of Common Shares that, as
provided in this Agreement, will from time to time be sufficient
to permit the exercise in full of all outstanding Rights; and
(v) pay when due and payable any and all Canadian and United States
federal, provincial, and state transfer taxes (for greater
certainty not including any income taxes or capital gains of the
holder or exercising holder or any liability of the Corporation
to withhold tax) and charges which may be payable in respect of
the original issuance or delivery of the Rights Certificates or
certificates for shares, provided that the Corporation shall not
be required to pay any transfer tax or charge which may be
payable in respect of any transfer involved in the transfer or
delivery of Rights Certificates or the issuance or delivery of
certificates for shares in a name other than that of the holder
of the Rights being transferred or exercised.
2.3 Adjustments to Exercise Price; Number of Rights
The Exercise Price, the number and kind of shares subject to purchase upon
exercise of each Right and the number of Rights outstanding are subject to
adjustment from time to time as provided in this Section 2.3.
(a) In the event the Corporation shall at any time after the Record Time
and prior to the Expiration Time:
(i) declare or pay a dividend on the Common Shares payable in Voting
Shares (or other capital stock or securities exchangeable for or
convertible into or giving a right to acquire Voting Shares or
other capital stock) other than pursuant to any optional stock
dividend program, dividend reinvestment plan or a dividend
payable in Voting Shares in lieu of a regular periodic cash
dividend;
(ii) subdivide or change the then outstanding Common Shares into a
greater number of Common Shares;
(iii) combine or change the then outstanding Common Shares into a
smaller number of Common Shares; or
(iv) issue any Voting Shares (or other capital stock or securities
exchangeable for or convertible into or giving a right to acquire
Voting Shares or other capital stock) in respect of, in lieu of
or in exchange for existing Common Shares in a reclassification,
amalgamation, merger, statutory arrangement or consolidation,
the Exercise Price and the number of Rights outstanding, or, if the
payment or Record Time therefor shall occur after the Separation Time,
the securities purchasable upon exercise of Rights shall be adjusted
in the manner set forth below. If the Exercise Price and number of
Rights outstanding are to be adjusted (x) the Exercise Price in effect
after such adjustment shall be equal
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to the Exercise Price in effect immediately prior to such adjustment
divided by the number of Common Shares (or other capital stock) (the
"Expansion Factor") that a holder of one Common Share immediately
prior to such dividend, subdivision, change, combination or issuance
would hold thereafter as a result thereof and (y) each Right held
prior to such adjustment shall become that number of Rights equal to
the Expansion Factor, and the adjusted number of Rights will be deemed
to be allocated among the Common Shares with respect to which the
original Rights were associated (if they remain outstanding) and the
shares issued in respect of such dividend, subdivision, change,
combination or issuance, so that each such Common Share (or other
capital stock) will have exactly one Right associated with it. If the
securities purchasable upon exercise of Rights are to be adjusted, the
securities purchasable upon exercise of each Right after such
adjustment will be the number of securities that a holder of the
securities purchasable upon exercise of one Right immediately prior to
such dividend, subdivision, change, combination or issuance would hold
thereafter as a result thereof. If after the Record Time and prior to
the Expiration Time the Corporation shall issue any shares of capital
stock other than Common Shares in a transaction of a type described in
subsection 2.3(a)(i) or (iv), shares of such capital stock shall be
treated herein as nearly equivalent to Common Shares as may be
practicable and appropriate under the circumstances and the
Corporation and the Rights Agent agree to amend this Agreement in
order to effect such treatment. If an event occurs which would require
an adjustment under both this Section 2.3 and Section 3.1 hereof, the
adjustment provided for in this Section 2.3 shall be in addition to
and shall be made prior to any adjustment required pursuant to Section
3.1 hereof. Adjustments pursuant to subsection 2.3(a) shall be made
successively, whenever an event referred to in subsection 2.3(a)
occurs.
In the event the Corporation shall at any time after the Record Time
and prior to the Separation Time issue any Common Shares otherwise
than in a transaction referred to in the preceding paragraph, each,
such Common Share so issued shall automatically have one new Right
associated with it, which Right shall be evidenced by the certificate
representing such Common Share.
(b) In the event the Corporation shall at any time after the Record Time
and prior to the Expiration Time fix a record date for the making of a
distribution to all holders of Common Shares of rights or warrants
entitling them (for a period expiring within 45 calendar days after
such record date) to subscribe for or purchase Common Shares (or
securities convertible into or exchangeable for or carrying a right to
purchase or subscribe for Voting Shares ) at a price per Common Share
(or, if a security convertible into or exchangeable for or carrying a
right to purchase or subscribe for Voting Shares, having a conversion,
exchange or exercise price (including the price required to be paid to
purchase such convertible or exchangeable security or right per
share)) less than 90% of the Market Price per Common Share on such
record date, the Exercise Price shall be adjusted in the manner set
forth below. The Exercise Price in effect after such record date shall
equal the Exercise Price in effect immediately prior to such record
date multiplied by a fraction, of which the numerator shall be the
number of Common Shares outstanding on such record date plus the
number of Common Shares which the aggregate offering price of the
total number of Common Shares so to be offered (and/or the aggregate
initial conversion, exchange or exercise price of the convertible or
exchangeable securities or rights so to be offered (including the
price required to be paid to purchase such convertible or exchangeable
securities or rights)) would purchase at such Market Price and of
which the denominator shall be the number of Common Shares outstanding
on such record date plus the number of additional Common Shares to be
offered for subscription or purchase (or into which the convertible or
exchangeable securities or rights so to be offered are initially
convertible, exchangeable or exercisable). In case such subscription
price is satisfied in whole or in part by consideration in a form
other than cash the value of such consideration shall be as determined
in good faith by the Board of Directors of the Corporation whose
determination shall be described in a statement filed with the Rights
Agent and shall be binding on the Rights Agent and the holders of
Rights.
Such adjustment shall be made successively whenever such a record date
is fixed. For purposes of this paragraph (b), the granting of the
right to purchase Common Shares pursuant to any dividend or interest
reinvestment plan and/or any Common Share purchase plan providing for
the
- 16-
reinvestment of dividends or interest payable on securities of the
Corporation and/or the investment of periodic optional payments and/or
employee benefit or similar plans (so long as such right to purchase
is in no case evidenced by the delivery of rights or warrants) shall
not be deemed to constitute an issue of rights or warrants by the
Corporation; provided, however, that in the case of any dividend or
interest reinvestment plan, the right to purchase Common Shares is at
a price per share of not less than 90% of the current market price per
share (determined as provided in such plans) of the Common Shares.
(c) In the event the Corporation shall at any time after the Record Time
and prior to the Expiration Time fix a record date for the making of a
distribution to all holders of Common Shares of evidences of
indebtedness or assets (other than a regular periodic cash dividend or
a dividend paid in Common Shares ) or rights or warrants entitling
them to subscribe for or purchase Voting Shares (or Convertible
Securities in respect of Voting Shares) at a price per Voting Share
(or, in the case of a Convertible Security in respect of Voting Shares
having a conversion or exercise price per share (including the price
required to be paid to purchase such Convertible Security) less than
90% of the Market Price per Common Share on such record date
(excluding those referred to in Section 2.3(b)), the Exercise Price
shall be adjusted in the manner set forth below. The Exercise Price in
effect after such record date shall equal the Exercise Price in effect
immediately prior to such record date less the fair market value (as
determined in good faith by the Board of Directors of the Corporation)
of the portion of the assets, evidences of indebtedness, rights or
warrants so to be distributed applicable to each of the securities
purchasable upon exercise of one Right (such determination to be
described in a statement filed with the Rights Agent and the holders
of the Rights). Such adjustment shall be made successively whenever
such a record date is fixed.
(d) Each adjustment made pursuant to this Section 2.3 shall be made as of:
(i) the payment or Record Time for the applicable dividend,
subdivision, change, combination or issuance, in the case of an
adjustment made pursuant to paragraph (a) above; and
(ii) the record date for the applicable dividend or distribution, in
the case of an adjustment made pursuant to paragraph (b) or (c)
above subject to readjustment to reverse the same if such
distribution shall not be made.
(e) In the event the Corporation shall at any time after the Record Time
and prior to the Expiration Time issue any shares of capital stock
(other than Common Shares ), or rights or warrants to subscribe for or
purchase any such capital stock, or securities convertible into or
exchangeable for any such capital stock, in a transaction referred to
in clause (a)(i) or (a)(iv) above, or if the Corporation shall take
any other action (other than the issue of Common Shares) which might
have a negative effect on the holders of Rights, if the Board of
Directors acting in good faith determines that the adjustments
contemplated by paragraphs (a), (b) and (c) above are not applicable
or will not appropriately protect the interests of the holders of
Rights, the Corporation may determine what other adjustments to the
Exercise Price, number of Rights and/or securities purchasable upon
exercise of Rights would be appropriate and, if the adjustments
contemplated by paragraphs (a), (b) and (c) above are applicable,
notwithstanding such paragraphs, the adjustments so determined by the
Corporation, rather than adjustments contemplated by paragraphs (a),
(b) and (c) above, shall be made. The Corporation and the Rights Agent
shall amend this Agreement in accordance with Section 5.4(b) and (c),
as the case may be, to provide for such adjustments.
(f) Each adjustment to the Exercise Price made pursuant to this Section
2.3 shall be calculated to the nearest cent. Whenever an adjustment to
the Exercise Price is made pursuant to this Section 2.3, the
Corporation shall:
(i) promptly prepare a certificate setting forth such adjustment and
a brief statement of the facts accounting for such adjustment;
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(ii) promptly file with the Rights Agent and with each transfer agent
for the Common Shares a copy of such certificate and mail a brief
summary thereof to each holder of Rights who requests a copy.
Failure to file such certificate or cause such summary to be mailed as
aforesaid, or any defect therein, shall not affect the validity of any
such adjustment or change.
(g) Irrespective of any adjustment or change in the securities purchasable
upon exercise of the Rights, the Rights Certificates theretofore and
thereafter issued may continue to express the securities so
purchasable which were expressed in the initial Rights Certificates
issued hereunder.
2.4 Date on Which Exercise is Effective
Each person in whose name any certificate for Common Shares is issued upon
the exercise of Rights shall for all purposes be deemed to have become the
holder of record of the Common Shares represented thereby on, and such
certificate shall be dated, the date upon which the Rights Certificate
evidencing such Rights was duly surrendered (together with a duly completed
Election to Exercise) and payment of the Exercise Price for such Rights (and any
applicable transfer taxes and other governmental charges payable by the
exercising holder hereunder) was made; provided, however, that if the date of
such surrender and payment is a date upon which the Common Share transfer books
of the Corporation are closed, such person shall be deemed to have become the
record holder of such shares on, and such certificate shall be dated, the next
succeeding Business Day on which the Common Share transfer books of the
Corporation are open.
2.5 Execution, Authentication, Delivery and Dating of Rights Certificates
(a) The Rights Certificates shall be executed on behalf of the Corporation
by its Chairman of the Board, President, Chief Executive Officer,
Chief Financial Officer, any Vice President or its Secretary. The
signature of any of these officers on the Rights Certificates may be
manual or facsimile. Rights Certificates bearing the manual or
facsimile signatures of individuals who were at any time the proper
officers of the Corporation shall bind the Corporation,
notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the countersignature and delivery of such
Rights Certificates. Promptly after the Corporation learns of the
Separation Time, the Corporation will notify the Rights Agent of such
Separation Time and will deliver Rights Certificates executed by the
Corporation to the Rights Agent for countersignature and a disclosure
statement describing the Rights, and the Rights Agent shall
countersign (manually or by facsimile signature) and mail such Rights
Certificates and disclosure statement to the holders of the Rights
pursuant to Section 2.2(c) hereof. No Rights Certificate shall be
valid for any purpose until countersigned by the Rights Agent as
aforesaid.
(b) Each Rights Certificate shall be dated the date of countersignature
thereof.
2.6 Registration, Registration of Transfer and Exchange
(a) The Corporation will cause to be kept a register (the "Rights
Register") in which, subject to such reasonable regulations as it may
prescribe, the Corporation will provide for the registration and
transfer of Rights. The Rights Agent is hereby appointed "Rights
Registrar" for the purpose of maintaining the Rights Register for the
Corporation and registering Rights and transfers of Rights as herein
provided. In the event that the Rights Agent shall cease to be the
Rights Registrar, the Rights Agent will have the right to examine the
Rights Register at all reasonable times.
(b) After the Separation Time and prior to the Expiration Time, upon
surrender for registration of transfer or exchange of any Rights
Certificate, and subject to the provisions of Section 2.6(d) below,
the Corporation shall execute, and the Rights Agent shall countersign
and deliver, in the name of the holder or the designated transferee or
transferees, as required pursuant to the holder's
- 18-
instructions, one or more new Rights Certificates evidencing the same
aggregate number of Rights as did the Rights Certificates so
surrendered.
(c) All Rights issued upon any registration of transfer or exchange of
Rights Certificates shall be the valid obligations of the Corporation,
and such Rights shall be entitled to the same benefits under this
Agreement as the Rights surrendered upon such registration of transfer
or exchange.
(d) Every Rights Certificate surrendered for registration of transfer or
exchange shall be duly endorsed, or be accompanied by a written
instrument of transfer in form satisfactory to the Corporation or the
Rights Agent, as the case may be, duly executed by the holder thereof
or such holder's attorney duly authorized in writing. As a condition
to the issuance of any new Rights Certificate under this Section 2.6,
the Corporation may require the payment of a sum sufficient to cover
any tax or other governmental charge that may be imposed in relation
thereto.
2.7 Mutilated, Destroyed, Lost and Stolen Rights Certificates
(a) If any mutilated Rights Certificate is surrendered to the Rights Agent
prior to the Expiration Time, the Corporation shall execute and the
Rights Agent shall countersign and deliver in exchange therefor a new
Rights Certificate evidencing the same number of Rights as did the
Rights Certificate so surrendered.
(b) If there shall be delivered to the Corporation and the Rights Agent
prior to the Expiration Time (i) evidence to their satisfaction of the
destruction, loss or theft of any Rights Certificate and (ii) such
security or indemnity as may be required by them in their sole
discretion to save each of them and any of their agents harmless,
then, in the absence of notice to the Corporation or the Rights Agent
that such Rights Certificate has been acquired by a bona fide
purchaser, the Corporation shall execute and upon its request the
Rights Agent shall countersign and deliver, in lieu of any such
destroyed, lost or stolen Rights Certificate, a new Rights Certificate
evidencing the same number of Rights as did the Rights Certificate so
destroyed, lost or stolen.
(c) As a condition to the issuance of any new Rights Certificate under
this Section 2.7, the Corporation may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be
imposed in relation thereto and any other expenses (including the fees
and expenses of the Rights Agent) connected therewith.
(d) Every new Rights Certificate issued pursuant to this Section 2.7 in
lieu of any destroyed, lost or stolen Rights Certificate shall
evidence an original additional contractual obligation of the
Corporation, whether or not the destroyed, lost or stolen Rights
Certificate shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Agreement equally and
proportionately with any and all other Rights, duly issued hereunder.
2.8 Persons Deemed Owners
The Corporation, the Rights Agent and any agent of the Corporation or the
Rights Agent may deem and treat the Person, in whose name a Rights Certificate
(or, prior to the Separation Time, the associated Common Share certificate) is
registered as the absolute owner thereof and of the Rights evidenced thereby for
all purposes whatsoever. As used in this Agreement, unless the context otherwise
requires, the term "holder" of any Rights shall mean the registered holder of
such Rights (or, prior to the Separation Time, the associated Common Shares ).
2.9 Delivery and Cancellation of Certificates
All Rights Certificates surrendered upon exercise or for redemption,
registration of transfer or exchange shall, if surrendered to any Person other
than the Rights Agent, be delivered to the Rights Agent and, in any case, shall
be promptly cancelled by the Rights Agent. The Corporation may at any time
deliver to the Rights Agent for cancellation any Rights Certificates previously
countersigned and delivered hereunder which the Corporation may
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have acquired in any manner whatsoever, and all Rights Certificates so delivered
shall be promptly cancelled by the Rights Agent. No Rights Certificate shall be
countersigned in lieu of or in exchange for any Rights Certificates cancelled as
provided in this Section 2.9, except as expressly permitted by this Agreement.
The Rights Agent shall, subject to applicable law, destroy all cancelled Rights
Certificates and deliver a certificate of destruction to the Corporation.
2.10 Agreement of Rights Holders
Every holder of Rights by accepting the same consents, agrees with the
Corporation and the Rights Agent and with every other holder of Rights that:
(a) he will be bound by and subject to the provisions of this Agreement,
as amended from time to time in accordance with the terms hereof, in
respect of all Rights held;
(b) prior to the Separation Time, each Right will be transferable only
together with, and will be transferred by a transfer of, the
associated Common Share;
(c) after the Separation Time, the Rights Certificates will be
transferable only on the Rights Register as provided herein.
(d) prior to due presentment of a Rights Certificate (or, prior to the
Separation Time, the associated Common Share certificate) for
registration of transfer, the Corporation, the Rights Agent and any
agent of the Corporation or the Rights Agent may deem and treat the
Person in whose name the Rights Certificate (or, prior to the
Separation Time, the associated Common Share certificate) is
registered as the absolute owner thereof and of the Rights evidenced
thereby (notwithstanding any notations of ownership or writing on such
Rights Certificate or the associated Common Share certificate made by
anyone other than the Corporation or the Rights Agent) for all
purposes whatsoever, and neither the Corporation nor the Rights Agent
shall be affected by any notice to the contrary;
(e) such holder of Rights has waived his right to receive any fractional
Rights or any fractional shares upon exercise of a Right (except as
provided herein);
(f) without the approval of any holder of Rights and upon the sole
authority of the Board of Directors of the Corporation acting in good
faith this Agreement may be supplemented or amended from time to time
as otherwise provided herein; and
(g) notwithstanding anything in this Agreement to the contrary, neither
the Corporation nor the Rights Agent shall have any liability to any
holder of a Right or any other Person as a result of its inability to
perform any of its obligations under this Agreement by reason of any
preliminary or permanent injunction or other order, decree or ruling
issued by a court of competent jurisdiction or by a governmental,
regulatory or administrative agency or commission, or any statute,
rule, regulation or executive order promulgated or enacted by any
governmental authority, prohibiting or otherwise restraining
performance of such obligation.
ARTICLE 3
ADJUSTMENTS TO THE RIGHTS IN THE EVENT OF CERTAIN TRANSACTIONS
3.1 Flip-in Event
(a) Subject to Sections 3.1(b), 5.1(b), 5.1(c) and 5.1(d) hereof, in the
event that prior to the Expiration Time a Flip-in Event shall occur,
the Corporation shall take such action as shall be necessary to ensure
and provide, within 10 Business Days thereafter or such longer period
as may be required to satisfy the requirements of the applicable
securities acts or comparable legislation so that, except as provided
below, each Right shall thereafter constitute the right to purchase
from the
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Corporation, upon exercise thereof in accordance with the terms
hereof, that number of Common Shares of the Corporation having an
aggregate Market Price on the date of consummation or occurrence of
such Flip-in Event equal to twice the Exercise Price for an amount in
cash equal to the Exercise Price, (such right be appropriately
adjusted in a manner analogous to the applicable adjustment provided
for in Section 2.3 in the event that after such date of consummation
or occurrence an event of a type analogous to any of the events
described in Section 2.3 shall have occurred with respect to such
Common Shares).
(b) Notwithstanding the foregoing or any other provisions of this
Agreement, upon the occurrence of any Flip-in Event, any Rights that
are or were Beneficially Owned on or after the earlier of the
Separation Time or the Stock Acquisition Date by:
(i) an Acquiring Person (or any Affiliate or Associate of an
Acquiring Person, or any Person acting jointly or in concert with
an Acquiring Person or any Affiliate or Associate of an Acquiring
Person); or
(ii) a transferee, direct or indirect, of an Acquiring Person (or any
Affiliate or Associate of an Acquiring Person or any Person,
acting jointly or in concert with, an Acquiring Person or any
Affiliate or Associate of an Acquiring Person) in a transfer made
after the date hereof, whether or not for consideration, that the
Board of Directors of the Corporation acting in good faith has
determined is part of a plan, arrangement or scheme of an
Acquiring Person, (or any Affiliate or Associate of an Acquiring
Person or any Person acting jointly or in concert with any
Acquiring Person or any Affiliate or Associate of an Acquiring
Person) that has the purpose or effect of avoiding clause (i) of
this Section 3.l(b),
shall become void and any holder of such Rights (including
transferees) shall thereafter have no right, to exercise such Rights
under any provision of this Agreement and shall not have any other
rights whatsoever in respect of such Rights, whether under any
provision of this Agreement or otherwise.
(c) Any Rights Certificate that represents Rights Beneficially Owned by a
Person described in either clauses (i) or (ii) of Section 3.1(b) or
transferred to any nominee of any such Person, and any Rights
Certificate issued upon transfer, exchange, replacement or adjustment
of any other Rights Certificate referred to in this sentence, shall
contain the following legend:
The Rights represented by this Rights Certificate were
Beneficially Owned by a Person who was an Acquiring Person or who
was an Affiliate or an Associate of an Acquiring Person (as such
terms are defined in the Rights Agreement) or was acting jointly
or in concert with any of them. This Rights Certificate and the
Rights represented hereby shall become void in the circumstances
specified in Section 3.1(b) of the Rights Agreement
provided that the Rights Agent shall not be under any responsibility
to ascertain the existence of facts that would require the imposition
of such legend but shall be required to impose such legend only if
instructed to do so by the Corporation or if a holder fails to certify
upon transfer or exchange in the space provided on the Rights
Certificate that such holder is not an Acquiring Person or an
Affiliate or Associate thereof.
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ARTICLE 4
THE RIGHTS AGENT
4.1 General
(a) The Corporation hereby appoints the Rights Agent to act as agent for
the Corporation and the holders of Rights in accordance with the terms
and conditions hereof, and the Rights Agent hereby accepts such
appointment. The Corporation may from time to time appoint such
Co-Rights Agents (the "Co-Rights Agents") as it may deem necessary or
desirable. In the event the Corporation appoints one or more Co-Rights
Agents, the respective duties of the Rights Agent and Co-Rights Agents
shall be as the Corporation may determine. The Corporation agrees to
pay to the Rights Agent reasonable compensation for all services
rendered by it hereunder and, from time to time, on demand of the
Rights Agent, its reasonable expenses and counsel fees and other
disbursements reasonably incurred in the execution and administration
of this Agreement and the exercise and performance of its duties
hereunder (including the reasonable fees and other disbursements of
any expert retained by the Rights Agent with the approval of the
Corporation, such approval not to be unreasonably withheld). The
Corporation also agrees to indemnify the Rights Agent, its directors,
officers, employees and agents for, and to hold them harmless against,
any loss, liability, cost, claim, action, damage or expense, incurred
without negligence, bad faith or wilful misconduct on the part of the
Rights Agent or its directors, officers, employees and agents, for
anything done, suffered or omitted by the Rights Agent in connection
with the acceptance, execution and administration of this Agreement
and the exercise and performance of its duties hereunder, including
the costs and expenses of defending against any claim of liability,
which right to indemnification will survive the termination of this
Agreement or the resignation or removal of the Rights Agent.
(b) The Rights Agent shall be protected and shall incur no liability for
or in respect of any action taken, suffered or omitted by it in
connection with its administration of this Agreement in reliance upon
any certificate for Common Shares, Rights Certificate, certificate for
other securities of the Corporation, instrument of assignment or
transfer, power of attorney, endorsement, affidavit, letter, notice,
direction, consent, certificate, statement, or other paper or document
believed by it to be genuine and to be signed, executed and, where
necessary, verified or acknowledged, by the proper person or persons.
4.2 Merger, Amalgamation or Consolidation or Change of Name of Rights Agent
(a) Any corporation into which the Rights Agent or any successor Rights
Agent may be merged or amalgamated or with which it may be
consolidated, or any corporation resulting from any merger,
amalgamation or consolidation to which the Rights Agent or any
successor Rights Agent is a party or any corporation succeeding to the
shareholder or stockholder services business of the Rights Agent or
any successor Rights Agent, will be the successor to the Rights Agent
under this Agreement without the execution or filing of any paper or
any further act on the part of any of the parties hereto, provided
that such corporation would be eligible for appointment as a successor
Rights Agent under the provisions of Section 4.4 hereof. In case, at
the time such successor Rights Agent succeeds to the agency created by
this Agreement, any of the Rights Certificates have been countersigned
but not delivered, any such successor Rights Agent may adopt the
countersignature of the predecessor Rights Agent and deliver such
Rights Certificates so countersigned; and in case at that time any of
the Rights Certificates have not been countersigned, any successor
Rights Agent may countersign such Rights Certificates either in the
name of the predecessor Rights Agent or in the name of the successor
Rights Agent; and in all such cases such Rights Certificates will have
the full force provided in the Rights Certificates and in this
Agreement.
(b) In case at any time the name of the Rights Agent is changed and at
such time any of the Rights Certificates shall have been countersigned
but not delivered, the Rights Agent may adopt the countersignature
under its prior name and deliver Rights Certificates so countersigned;
and in case
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at that time any of the Rights Certificates shall not have been
countersigned, the Rights Agent may countersign such Rights
Certificates either in its prior name or in its changed name; and in
all such cases such Rights Certificates shall have the full force
provided in the Rights Certificates and in this Agreement.
4.3 Duties of Rights Agent
The Rights Agent undertakes the duties and obligations imposed by this
Agreement upon the following terms and conditions, by all of which the
Corporation and the holders of Rights Certificates, by their acceptance thereof,
shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be legal
counsel for the Corporation), and the opinion of such counsel will be
full and complete authorization and protection to the Rights Agent as
to any action taken or omitted by it in good faith and in accordance
with such opinion; the Rights Agent may also, with the approval of the
Corporation (such approval not to be unreasonably withheld) and at the
expense of the Corporation, consult with such other experts as the
Rights Agent shall consider necessary or appropriate to properly carry
out the duties and obligations imposed under this Agreement and the
Rights Agent shall be entitled to rely in good faith on the advice of
any such expert.
(b) Whenever in the performance of its duties under this Agreement the
Rights Agent deems it necessary or desirable that any fact or matter
be proved or established by the Corporation prior to taking or
suffering any action hereunder, such fact or matter (unless other
evidence in respect thereof be herein specifically prescribed) may be
deemed to be conclusively proved and established by a certificate
signed by a person believed by the Rights Agent to be the Chairman of
the Board, the President, Chief Executive Officer, Chief Financial
Officer, any Vice President or the Secretary and delivered to the
Rights Agent; and such certificate will be full authorization to the
Rights Agent for any action taken or suffered in good faith by it
under the provisions of this Agreement in reliance upon such
certificate.
(c) The Rights Agent will be liable hereunder only for its own negligence,
bad faith or wilful misconduct.
(d) The Rights Agent will not be liable for or by reason of any of the
statements of fact or recitals contained in this Agreement or in the
certificates for Common Shares or the Rights Certificates (except its
countersignature thereof) or be required to verify the same, but all
such statements and recitals are and will be deemed to have been made
by the Corporation only.
(e) The Rights Agent will not be under any responsibility in respect of
the validity of this Agreement or the execution and delivery hereof
(except the due authorization, execution and delivery hereof by the
Rights Agent) or in respect of the validity or execution of any Common
Share certificate or Rights Certificate (except its countersignature
thereof); nor will it be responsible for any breach by the Corporation
of any covenant or condition contained in this Agreement or in any
Rights Certificate; nor will it be responsible for any change in the
exercisability of the Rights (including the Rights becoming void
pursuant to Section 3.l(b) hereof) or any adjustment required under
the provisions of Section 2.3 hereof or responsible for the manner,
method or amount of any such adjustment or the ascertaining of the
existence of facts that would require any such adjustment (except with
respect to the exercise of Rights after receipt of the certificate
contemplated by Section 2.3 describing any such adjustment); nor will
it by any act hereunder be deemed to make any representation or
warranty as to the authorization of any Common Shares to be issued
pursuant to this Agreement or any Rights or as to whether any Common
Shares will, when issued, be duly and validly authorized, executed,
issued and delivered and fully paid and non-assessable.
(f) The Corporation agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered
all such further and other acts, instruments and
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assurances as may reasonably be required by the Rights Agent for the
carrying out or performing by the Rights Agent of the provisions of
this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder
from any person believed by the Rights Agent to be the Chairman of the
Board, the President, the Chief Executive Officer, the Chief Financial
Officer, any Vice President or the Secretary, and to apply to such
persons for advice or instructions in connection with its duties, and
it shall not be liable for any action taken or suffered by it in good
faith in reliance upon instructions of any such person; it is
understood that instructions to the Rights Agent shall, except where
circumstances make it impracticable or the Rights Agent otherwise
agrees, be given in writing and, where not in writing, such
instructions shall be confirmed in writing as soon as reasonably
possible after the giving of such instructions.
(h) The Rights Agent and any shareholder or stockholder, director, officer
or employee of the Rights Agent may buy, sell or deal in Common
Shares, Rights or other securities of the Corporation or become
pecuniarily interested in any transaction in which the Corporation may
be interested, or contract with or lend money to the Corporation or
otherwise act as fully and freely as though it were not Rights Agent
under this Agreement. Nothing herein shall preclude the Rights Agent
from acting in any other capacity for the Corporation or for any other
legal entity.
(i) The Rights Agent may execute and exercise any of the rights or powers
hereby vested in it or perform any duty hereunder either itself or by
or through its attorneys or agents, and the Rights Agent will not be
answerable or accountable for any act, omission, default, neglect or
misconduct of any such attorneys or agents or for any loss to the
Corporation resulting from any such act, omission, default, neglect or
misconduct, provided reasonable care was exercised in the selection
and continued employment thereof.
4.4 Change of Rights Agent
The Rights Agent may resign and be discharged from its duties under this
Agreement upon 60 days' notice (or such lesser notice as is acceptable to the
Corporation) in writing mailed to the Corporation and to each transfer agent of
Common Shares by registered or certified mail, and to the holders of the Rights
in accordance with Section 5.9. The Corporation may remove the Rights Agent upon
30 days' notice in writing given to the Rights Agent and to each transfer agent
of the Common Shares (by personal delivery, or registered or certified mail). If
the Rights Agent should resign or be removed or otherwise become incapable of
acting, the Corporation will appoint a successor to the Rights Agent. If the
Corporation fails to make such appointment within a period of 30 days after such
removal or after it has been notified in writing of such resignation or
incapacity by the resigning or incapacitated Rights Agent, then the resigning
Rights Agent or any holder of any Rights may apply to any court of competent
jurisdiction for the appointment of a new Rights Agent. Any successor Rights
Agent, whether appointed by the Corporation or by such a court, shall be a
corporation incorporated under the laws of Canada or a province thereof
authorized to carry on the business of a trust company in the Province of
British Columbia. After appointment, the successor Rights Agent will be vested
with the same powers, rights, duties and responsibilities as if it had been
originally named as Rights Agent without further act or deed; but the
predecessor Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder upon payment of its
outstanding fees and expenses owing by the Corporation to the predecessor Rights
Agent under this Agreement, and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose. Not later than the Record
Time of any such appointment, the Corporation will file notice thereof in
writing with the predecessor Rights Agent and each transfer agent of the Common
Shares, and mail a notice thereof in writing to the holders of the Rights.
Failure to give any notice provided for in this Section 4.4, however, or any
defect therein, shall not affect the legality or validity of the resignation or
removal of the Rights Agent or the appointment of the successor Rights Agent, as
the case may be.
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ARTICLE 5
MISCELLANEOUS
5.1 Redemption and Termination
(a) The Board of Directors of the Corporation acting in good faith may,
with the prior consent of holders of Voting Shares or of the holders
of Rights given in accordance with Section 5.1(f) or (g), as the case
may be, at any time prior to the occurrence of a Flip-in Event as to
which the application of Section 3.1 has not been waived pursuant to
the provisions of this Section 5.1, elect to redeem all but not less
than all of the then outstanding Rights at a redemption price of
$0.00001 per Right appropriately adjusted in a manner analogous to the
applicable adjustment provided for in Section 2.3 in the event that an
event of the type analogous to any of the events described in Section
2.3 shall have occurred (such redemption price being herein referred
to as the "Redemption Price").
(b) The Board of Directors of the Corporation acting in good faith may,
with the prior consent of the holders of Voting Shares given in
accordance with Section 5.1(f), determine, at any time prior to the
occurrence of a Flip-in Event as to which the application of Section
3.1 has not been waived pursuant to this Section 5.1, if such Flip-in
Event would occur by reason of an acquisition of Voting Shares
otherwise than pursuant to a Take-over Bid made by means of a
Take-over Bid circular to all holders of Voting Shares and otherwise
than in the circumstances set forth in Section 5.1(d), to waive the
application of Section 3.1 to such Flip-in Event. In the event that
the Board of Directors proposes such a waiver, the Board of Directors
shall extend the Separation Time to a date subsequent to and not more
than ten Business Days following the meeting of shareholders called to
approve such waiver.
(c) The Board of Directors of the Corporation acting in good faith may,
prior to the occurrence of a Flip-in Event as to which the application
of Section 3.1 has not been waived under this clause, determine, upon
prior written notice to the Rights Agent, to waive the application of
Section 3.1 to that Flip-in Event provided that the Flip-in Event
would occur by reason of a Take-over Bid made by means of a Take-over
Bid circular sent to all holders of record of Voting Shares; further
provided that if the Board waives the application of Section 3.1 to
such a Flip-in Event, the Board of Directors shall be deemed to have
waived the application of Section 3.1 to any other Flip-in Event
occurring by reason of any Take-over Bid made by means of a Take-over
Bid circular to all holders of Voting Shares which is made prior to
the expiry of any Take-over Bid in respect of which a waiver is, or is
deemed to have been, granted under this Section 5.1(c).
(d) The Board of Directors of the Corporation acting in good faith may, in
respect of any Flip-in Event waive the application of Section 3.1 to
that Flip-in Event, provided that both of the following conditions are
satisfied:
(i) the Board of Directors has determined that the Acquiring Person
became an Acquiring Person by inadvertence and without any intent
or knowledge that it would become an Acquiring Person; and
(ii) such Acquiring Person has reduced its Beneficial Ownership of
Voting Shares such that at the time of waiver pursuant to this
Section 5.1(d) it is no longer an Acquiring Person.
(e) The Board of Directors of the Corporation shall, without further
formality, be deemed to have elected to redeem the Rights at the
Redemption Price on the date that a Person who has made a Permitted
Bid or a Take-over Bid in respect of which the Board of Directors of
the Corporation has waived, or is deemed to have waived, pursuant to
Section 5.1(c), the application of Section 3.1, takes up and pays for
the Voting Shares pursuant to the terms and conditions of the
Permitted Bid or Take-over Bid, as the case may be.
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(f) If a redemption of Rights pursuant to Section 5.1(a) or a waiver of a
Flip-in Event pursuant to Section 5.1(b) is proposed at any time prior
to the Separation Time, such redemption or waiver shall be submitted
for approval to the holders of Voting Shares . Such approval shall be
deemed to have been given if the redemption or waiver is approved by
the affirmative vote of a majority of the votes cast by Independent
Shareholders represented in person or by proxy at a meeting of such
holders duly held in accordance with applicable laws and the
Corporation's by-laws.
(g) If a redemption of Rights pursuant to Section 5.1(a) is proposed at
any time after the Separation Time, such redemption shall be submitted
for approval to the holders of Rights. Such approval shall be deemed
to have been given if the redemption is approved by holders of Rights
by a majority of the votes cast by the holders of Rights represented
in person or by proxy at and entitled to vote at a meeting of such
holders. For the purposes hereof, each outstanding Right (other than
Rights which are Beneficially Owned by any Person referred to in
clauses (i) to (v) inclusive of the definition of Independent
Shareholders) shall be entitled to one vote, and the procedures for
the calling, holding and conduct of the meeting shall be those, as
nearly as may be, which are provided in the Corporation's by-laws and
the Company Act with respect to meetings of shareholders of the
Corporation.
(h) Where a Take-over Bid that is not a Permitted Bid is withdrawn or
otherwise terminated after the Separation Time has occurred and prior
to the occurrence of a Flip-in Event, the Board may elect to redeem
all the outstanding Rights at the Redemption Price. Notwithstanding
such redemption, all of the provisions of this Agreement shall
continue to apply as if the Separation Time had not occurred and it
shall be deemed not to have occurred and Rights shall remain attached
to the outstanding Common Shares, subject to and in accordance with
the provisions of this Agreement.
(i) If the Board of Directors of the Corporation elects or is deemed to
have elected to redeem the Rights, and, in circumstances where Section
5.1(a) is applicable, such redemption is approved by the holders of
Voting Shares or the holders of Rights in accordance with Section
5.1(f) or (g), as the case may be, the right to exercise the Rights
will thereupon, without further action and without notice, terminate
and the only right thereafter of the holders of Rights will be to
receive the Redemption Price.
(j) Within 10 Business Days after the Board of Directors electing or
having been deemed to have elected to redeem the Rights or, if Section
5.1(a) is applicable within 10 Business Days after the holders of
Voting Shares or the holders of Rights have approved a redemption of
Rights in accordance with Section 5.1(f) or (g), as the case may be,
the Corporation shall give notice of redemption to the holders of the
then outstanding Rights by mailing such notice to each such holder at
its last address as it appears upon the register of the Rights Agent
or, prior to the Separation Time, on the register of the Transfer
Agent for the Common Shares. Any notice which is mailed in the manner
herein provided will be deemed given, whether or not the holder
receives the notice. Each such notice of redemption will state the
method by which the payment of the Redemption Price will be made. The
Corporation may not redeem, acquire or purchase for value any Rights
at any time in any manner other than that specifically set forth in
this Section 5.1 or in connection with the purchase of Common Shares
prior to the Separation Time.
(k) The Corporation shall give prompt written notice to the Rights Agent
of any waiver of the application of Section 3.1 made by the Board of
Directors under this Section 5.1.
5.2 Expiration
No Person shall have any rights pursuant to this Agreement or in respect of
any Right after the Expiration Time, except the Rights Agent as specified in
Section 4.1(a) of this Agreement.
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5.3 Issuance of New Rights Certificates
Notwithstanding any of the provisions of this Agreement or of the Rights to
the contrary, the Corporation may, at its option, issue new Rights Certificates
evidencing Rights in such form as may be approved by its Board of Directors to
reflect any adjustment or change in the number of or kind or class of shares
purchasable upon exercise of Rights made in accordance with the provisions of
this Agreement.
5.4 Supplements and Amendments
(a) The Corporation may make amendments to this Agreement to correct any
clerical or typographical error or which are required to maintain the
validity of this Agreement as a result of any change in any applicable
legislation, rules or regulations thereunder. The Corporation may,
prior to the date of the shareholders' meeting referred to in Section
5.19, supplement, amend, vary, rescind or delete any of the provisions
of this Agreement without the approval of any holders of Rights or
Voting Shares (whether or not such action would materially adversely
affect the interests of the holders of Rights generally) where the
Board of Directors acting in good xxxxx xxxxx such action necessary or
desirable. Notwithstanding anything in this Section 5.4 to the
contrary, no such supplement or amendment shall be made to the
provisions of Article 4 except with the written concurrence of the
Rights Agents to such supplement or amendment.
(b) Subject to Section 5.4(a), the Corporation may, with the prior consent
of the holders of Voting Shares, obtained as set forth below, at any
time prior to the Separation Time, supplement, amend, vary, rescind or
delete any of the provisions of this Agreement and the Rights (whether
or not such action would materially adversely affect the interests of
the holders of Rights generally). Such consent shall be deemed to have
been given if the action requiring such approval is authorized by the
affirmative vote of a majority of the votes cast by Independent
Shareholders present or represented at and entitled to be voted at a
meeting of the holders of Voting Shares duly called and held in
compliance with applicable laws and the articles and by-laws of the
Corporation.
(c) The Corporation may, with the prior consent of the holders of Rights,
at any time on or after the Separation Time, supplement, amend, vary,
rescind or delete any of the provisions of this Agreement and the
Rights (whether or not such action would materially adversely affect
the interests of the holders of Rights generally), provided that no
such amendment, variation or deletion shall be made to the provisions
of Article 4 except with the written concurrence of the Rights Agents
thereto. Such consent shall be deemed to have been given if such
amendment, variation or deletion is authorized by the affirmative
votes of the holders of Rights as provided in subsection 5.1(d)
present or represented at and entitled to be voted at a meeting of the
holders held in accordance with subsection 5.1(d) and representing 50%
plus one of the votes cast in respect thereof.
(d) Any approval of the holders of Rights shall be deemed to have been
given if the action requiring such approval is authorized by the
affirmative votes of the holders of Rights present or represented at
and entitled to be voted at a meeting of the holders of Rights and
representing a majority of the votes cast in respect thereof. For the
purposes hereof, each outstanding Right (other than Rights which are
void pursuant to the provisions hereof) shall be entitled to one vote,
and the procedures for the calling, holding and conduct of the meeting
shall be those, as nearly as may be, which are provided in the
Corporation's by-laws and the Company Act with respect to meetings of
shareholders of the Corporation.
(e) Any amendments made by the Corporation to this Agreement pursuant to
Subsection 5.4(a) which are required to maintain the validity of this
Agreement as a result of any change in any applicable legislation,
rules or regulation thereunder shall:
(i) if made before the Separation Time, be submitted to the
shareholders of the Corporation at the next meeting of
shareholders and the shareholders may, by the majority referred
to in Subsection 5.4(b), confirm or reject such amendment;
- 27-
(ii) if made after the Separation Time, be submitted to the holders of
Rights at a meeting to be called for on a date not later than
immediately following the next meeting of shareholders of the
Corporation and the holders of Rights may, by resolution passed
by the majority referred to in Subsection 5.4(d), confirm or
reject such amendment.
Any such amendment shall be effective from the date of the resolution
of the Board of Directors adopting such amendment, until it is
confirmed or rejected or until it ceases to be effective (as described
in the next sentence) and, where such amendment is confirmed, it
continues in effect in the form so confirmed. If such amendment is
rejected by the shareholders or the holder of Rights or is not
submitted to the shareholders or holders of Rights as required, then
such amendment shall cease to be effective from and after the
termination of the meeting at which it was rejected or to which it
should have been but was not submitted or from and after the date of
the meeting of holders of Rights that should have been but was not
held, and no subsequent resolution of the Board of Directors to amend
this Agreement to substantially the same effect shall be effective
until confirmed by the shareholders or holders of Rights as the case
may be.
(f) The Corporation shall be required to provide the Rights Agent with
notice in writing of any such amendment, recision or variation to this
Agreement as referred to in this Section 5.4 within five days of
effecting such amendment, recision or variation.
(g) Any supplement or amendment to this Agreement pursuant to Section
5.4(b) through (e) shall be subject to the receipt of any requisite
approval or consent from any governmental or regulatory authority
having jurisdiction over the Corporation, including without limitation
any requisite approval of stock exchanges or securities quotation
system on which the Common Shares are listed.
5.5 Fractional Rights and Fractional Shares
(a) The Corporation shall not be required to issue fractions of Rights or
to distribute Rights Certificates which evidence fractional Rights.
After the Separation Time there shall be paid to the registered
holders of the Rights Certificates with regard to which fractional
Rights would otherwise be issuable, an amount in cash equal to the
same fraction of the Market Price of a whole Right in lieu of such
fractional Rights as of the date such fractional Rights would
otherwise be issuable. The Rights Agent shall have no obligation to
make any payments in lieu of fractional Rights unless the Corporation
shall have provided the Rights Agent with the necessary funds to pay
in full all amounts payable in accordance with Section 2.2(e).
(b) The Corporation shall not be required to issue fractional Common
Shares upon exercise of the Rights or to distribute certificates which
evidence fractional Common Shares. In lieu of issuing fractional
Common Shares, the Corporation shall pay to the registered holder of
Rights Certificates at the time such Rights are exercised as herein
provided, an amount in cash equal to the same fraction of the Market
Price of one Common Share at the date of such exercise.
5.6 Rights of Action
Subject to the terms of this Agreement, rights of action in respect of this
Agreement, other than rights of action vested solely in the Rights Agent, are
vested in the respective holders of the Rights; and any holder of any Rights,
without the consent of the Rights Agent or of the holder of any other Rights,
may, on such holder's own behalf and for such holder's own, benefit and the
benefit of other holders of Rights, enforce, and may institute and maintain any
suit, action or proceeding against the Corporation to enforce, or otherwise act
in respect of, such holder's right to exercise such holder's Rights, or Rights
to which he is entitled, in the manner provided in this Agreement and in such
holder's Rights Certificate. Without limiting the foregoing or any remedies
available to the holders of Rights it is specifically acknowledged that the
holders of Rights would not have an adequate remedy at law for any breach of
this Agreement and will be entitled to specific performance of the obligations
under, and injunctive relief against actual or threatened violations of, the
obligations of any Person subject to this Agreement.
- 28-
5.7 Holder of Rights Not Deemed a Shareholder
No holder, as such, of any Rights shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of Common Shares or any other
securities which may at any time be issuable on the exercise of Rights, nor
shall anything contained herein or in any Rights Certificate be construed to
confer upon the holder of any Rights, as such, any of the rights of a
shareholder of the Corporation or any right to vote for the election of
directors or upon any matter submitted to shareholders at any meeting thereof,
or to give or withhold consent to any corporate action, or to receive notice of
meetings or other actions affecting Shareholders (except as provided in Section
5.8 hereof), or to receive dividends or subscription rights or otherwise, until
such Rights, or Rights to which such holder is entitled, shall have been
exercised in accordance with the provisions hereof.
5.8 Notice of Proposed Actions
In case the Corporation shall propose after the Separation Time and prior
to the Expiration Time:
(a) to effect or permit (in cases where the Corporation's permission is
required) any Flip-in Event; or
(b) to effect the liquidation, dissolution or winding up of the
Corporation or the sale of all or substantially all of the
Corporation's assets,
then, in each such case, the Corporation shall give to each holder of a Right,
in accordance with Section 5.9 hereof, a notice of such proposed action, which
shall specify the date on which such Flip-in Event, liquidation, dissolution, or
winding up is to take place, and such notice shall be so given at least 10
Business Days prior to the date of taking of such proposed action by the
Corporation.
5.9 Notices
(a) Notices or demands to be given or made in connection with this
Agreement by the Rights Agent or by the holder of any Rights to or on
the Corporation shall be sufficiently given or made if delivered or
sent by mail, postage prepaid or by fax (with, in the case of fax, an
original copy of the notice or demand sent by first class mail,
postage prepaid, to the Corporation following the giving of the notice
or demand by fax), addressed (until another address is filed in
writing with the Rights Agent) as follows:
Infowave Software, Inc.
000 - 0000 Xxxxxxxx Xxxxxxx
Xxxxxxx, X.X.
X0X 0X0
Attention: Xxxx Xxxxxx, Chief Financial Officer
Fax: (000) 000-0000
Notices or demands to be given or made in connection with this Agreement by
the Corporation or by the holder of any Rights to or on the Rights Agent shall
be sufficiently given or made if delivered or sent by mail, postage prepaid, or
by fax (with, in the case of fax, an original copy of the notice or demand sent
by first class mail, postage prepaid, to the Rights Agent following the giving
of the notice or demand by fax), addressed (until another address is filed in
writing with the Corporation) as follows:
Montreal Trust Company of Canada
Montreal Trust Centre
000 Xxxxxxx Xxxxxx
Xxxxxxxxx, X.X.
X0X 0X0
Attention: Manager, Client Services, Stock Transfer Services
Fax: (000) 000-0000
- 29-
Notices or demands to be given or made in connection with this Agreement by
the Corporation or the Rights Agent to or on the holder of any Rights shall be
sufficiently given or made if delivered or sent by first class mail, postage
prepaid, or by fax (with, in the case of fax, an original copy of the notice or
demand sent by first class mail, postage prepaid, to such holder following the
giving of the notice or demand by fax), addressed to such holder at the address
of such holder as it appears upon the register of the Rights Agent or, prior to
the Separation Time, on the register of the Corporation for the Common Shares.
Any notice given or made in accordance with this Section 5.9 shall be
deemed to have been given and to have been received on the day of delivery, if
so delivered, on the third Business Day (excluding each day during which there
exists any general interruption of postal service due to strike, lockout or
other cause) following the mailing thereof, if so mailed, and on the day of
faxing (provided such sending is during the normal business hours of the
addressee on a Business Day and if not, on the first Business Day thereafter).
Each of the Corporation and the Rights Agent may from time to time change its
address for notice by notice to the other given in the manner aforesaid.
If mail service is or is threatened to be interrupted at a time when the
Corporation or the Rights Agent wishes to give a notice or demand hereunder to
or on the holders of the Rights, the Corporation or the Rights Agent may,
notwithstanding the foregoing provisions of this Section 5.9, give such notice
by means, of publication once in each of two successive weeks in the business
section of the Financial Post and, so long as the Corporation has a transfer
agent in the United States, in a daily publication in the United States
designated by the Corporation, or in such other publication or publications as
may be designated by the Corporation and notice so published shall be deemed to
have been given on the date on which the first publication of such notice in any
such publication has taken place.
(b) The Rights Agent shall have no obligation to make any payments in lieu
of fractional Rights unless the Corporation shall have provided the
Rights Agent with the necessary funds to pay in full all amounts
payable in accordance with Section 2.2(e).
5.10 Costs of Enforcement
The Corporation agrees that if the Corporation fails to fulfil any of its
obligations pursuant to this Agreement, then the Corporation will reimburse the
holder of any Rights for the costs and expenses (including legal fees) incurred
by such holder in actions to enforce his rights pursuant to any Rights or this
Agreement.
5.11 Successors
All the covenants and provisions of this Agreement by or for the benefit of
the Corporation or the Rights Agent shall bind and enure to the benefit of their
respective successors and assigns hereunder.
5.12 Benefits of this Agreement
Nothing in this Agreement shall be construed to give to any Person other
than the Corporation, the Rights Agent and the holders of the Rights any legal
or equitable right, remedy or claim under this Agreement; but this Agreement
shall be for the sole and exclusive benefit of the Corporation, the Rights Agent
and the holders of the Rights.
5.13 Descriptive Headings
Descriptive headings appear herein for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
- 30-
5.14 Governing Law
This Agreement and each Right issued hereunder shall be deemed to be a
contract made under the laws of the Province of British Columbia and for all
purposes shall be governed by and construed in accordance with the laws of such
Province applicable to contracts to be made and performed entirely within such
Province.
5.15 Language
Les parties aux presentes ont exige que la presente convention ainsi que
tous les documents et avis qui s'y rattachent et/ou qui en decouleront soient
rediges en langue anglaise. The parties hereto have required that this Agreement
and all documents and notices related thereto and/or resulting therefrom be
drawn up in the English language.
5.16 Counterparts
This Agreement may be executed in any number of counterparts and each of
such counterparts shall for all purposes be deemed to be an original, and all
such counterparts shall together constitute but one and the same instrument.
5.17 Severability
If any term or provision hereof or the application thereof to any
circumstance is, in any jurisdiction and to any extent, invalid or
unenforceable, such term or provision shall be ineffective as to such
jurisdiction to the extent of such invalidity or unenforceability without
invalidating or rendering unenforceable the remaining terms and provisions
hereof or the application of such term or provision to circumstances other than
those as to which it is held invalid or unenforceable.
5.18 Effective Date
This Agreement is effective from the date hereof.
5.19 Shareholder Review
At or prior to the annual meeting of the Shareholders of the Corporation in
2003, provided that a Flip-in Event has not occurred prior to such time, the
Board of Directors shall submit a resolution ratifying the continued existence
of this Agreement to the Independent Shareholders for their consideration and,
if thought advisable, approval. Unless the majority of the votes cast by
Independent Shareholders who vote in respect of such resolution are voted in
favour of the continued existence of this Agreement, the Board of Directors
shall, immediately upon the confirmation by the Chairman of such shareholders'
meeting of the results of the votes on such resolution and without further
formality, be deemed to elect to redeem the Rights at the Redemption Price.
5.20 Regulatory Approvals
Any obligation of the Corporation or action or event contemplated by this
Agreement shall be subject to the receipt of any requisite approval or consent
from any governmental or regulatory authority. Without limiting the generality
of the foregoing, any issuance or delivery of debt or equity securities (other
than non-convertible debt securities) of the Corporation upon the exercise of
Rights and any amendment or supplement to this Agreement shall be subject to the
prior consent of The Toronto Stock Exchange and any other exchange or national
securities quotation system upon which the Common Shares of the Corporation may
be listed.
- 31-
5.21 Declaration as to Non-Canadian and Non-U.S. Holders
If in the opinion of the Board of Directors (who may rely upon the advice
of counsel), any action or event contemplated by This Agreement would require
compliance with the securities laws or comparable legislation of a jurisdiction
outside Canada and the United States of America, its territories and
possessions, the Board of Directors acting in good faith may take such actions
as it may deem appropriate to ensure that such compliance is not required,
including without limitation establishing procedures for the issuance to a
Canadian resident Fiduciary of Rights or securities issuable on exercise of
Rights, the holding thereof in trust for the Persons entitled thereto (but
reserving to the Fiduciary or to the Fiduciary and the Corporation, as the
Corporation many determine, absolute discretion with respect thereto) and the
sale thereof and remittance of the proceeds of such sale, if any, to the Persons
entitled thereto. In no event shall the Corporation or the Rights Agent be
required to issue or deliver Rights or securities issuable on exercise of Rights
to Persons who are citizens, residents or nationals of any jurisdiction other
than Canada and a provide or territory thereof and the United States of America
and any state thereof in which such issue or delivery would be unlawful without
registration of the relevant Persons or securities for such purpose. For
purposes of this Section, "Fiduciary" shall mean a trust company registered
under the trust company legislation of Canada or any province thereof, a trust
company organized under the laws of any state of the United States, a portfolio
manager registered under the securities legislation of one or more provinces of
Canada or an investment advisor registered under the United States Investment
Advisors Act of 1940 or any other securities legislation of the United States or
any state of the United States.
5.22 Determinations and Actions by the Board of Directors
All actions and determinations (including all omissions with respect to the
foregoing) which are done or made by the Board of Directors of the Corporation,
in good faith, shall not subject any member of the Board of Directors to any
liability whatsoever to the holders of the Rights.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
INFOWAVE SOFTWARE, INC.
PER: ----------------------------------
Name: Xxx XxXxxxxx
Title: President and
Chief Executive Officer
PER: ----------------------------------
Name: Xxxx Xxxxxx
Title: Chief Financial Officer
MONTREAL TRUST COMPANY OF CANADA
PER: ----------------------------------
Name:
Title:
PER: ----------------------------------
Name:
Title:
EXHIBIT A
FORM OF RIGHTS CERTIFICATE
Certificate No. _________ __________ Rights
THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE CORPORATION, ON
THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. IN CERTAIN CIRCUMSTANCES (SPECIFIED
IN SECTION 3.1(b) OF THE RIGHTS AGREEMENT), RIGHTS BENEFICIALLY OWNED BY AN
ACQUIRING PERSON OR TRANSFEREE OF AN ACQUIRING PERSON OR ITS AFFILIATES OR
ASSOCIATES (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) OR ANY PERSON
ACTING JOINTLY OR IN CONCERT WITH ANY OF THEM MAY BECOME VOID .
Rights Certificate
This certifies that _________________________________________________ is
the registered holder of the number of Rights set forth above, each of which
entitles the registered holder thereof, subject to the terms, provisions and
conditions of the Shareholder Rights Plan Agreement dated as of June 5, 2000, as
such may from time to time be amended, restated, varied or replaced, (the
"Rights Agreement") between Infowave Software, Inc., a corporation organized
under the laws of British Columbia (the "Corporation"), and Montreal Trust
Company of Canada, a trust company incorporated under the laws of British
Columbia, as Rights Agent (the "Rights Agent"), which term shall include any
successor Rights Agent under the Rights Agreement, to purchase from the
Corporation at any time after the Separation Time (as such term is defined in
the Rights Agreement) and prior to the earlier of (i) the Termination Time (as
such term is defined in the Rights Agreement) and (ii) the termination of the
first annual meeting of the Corporation in 2003 unless extended in accordance
with the terms of the Rights Agreement, one fully paid common share of the
Corporation (a "Common Share") at the Exercise Price referred to below, upon
presentation and surrender of this Rights Certificate together with the Form of
Election to Exercise duly executed to the Rights Agent at its principal office
in the City of Vancouver or in such other cities as may be designated by the
Corporation from time to time. The Exercise Price shall initially be Cdn. $1,000
per Right and shall be subject to adjustment in certain events as provided in
the Rights Agreement.
In certain circumstances described in the Rights Agreement, the number of
Common Shares which each Right entitles the registered holder thereof to
purchase shall be adjusted as provided in the Rights Agreement.
This Rights Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities thereunder of the
Rights Agent, the Corporation and the holders of the Rights Certificates. Copies
of the Rights Agreement are on file at the registered office of the Corporation
and are available upon written request.
This Rights Certificate, with or without other Rights Certificates, upon
surrender at any of the offices of the Rights Agent designated for such purpose,
may be exchanged for another Rights Certificate or Rights Certificates of like
tenor and date evidencing an aggregate number of Rights equal to the aggregate
number of Rights evidenced by the Rights Certificate or Rights Certificates
surrendered. If this Rights Certificate shall be exercised in part, the
registered holder shall be entitled to receive, upon surrender hereof, another
Rights Certificate or Rights Certificates for the number of whole Rights not
exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced by
this Certificate may be redeemed by the Corporation at a redemption price of
$0.00001 per Right, subject to adjustment in certain events, under certain
circumstances at its option.
No fractional Common Shares will be issued upon the exercise of any Rights
evidenced hereby, but in lieu thereof a cash payment will be made, as provided
in the Rights Agreement.
-2-
No holder of this Rights Certificate, as such, shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of Common Shares or of
any other securities which may at any time be issuable upon the exercise hereof,
nor shall anything contained in the Rights Agreement or herein be construed to
confer upon the holder hereof, as such, any of the Rights of a shareholder of
the Corporation or any right to vote for the election of directors or upon any
matter submitted to shareholders at any meeting thereof, or to give or withhold
consent to any corporate action, or to receive notice of meetings or other
actions affecting shareholders (except as provided in the Rights Agreement), or
to receive dividends or subscription rights, or otherwise, until the Rights
evidenced by this Rights Certificate shall have been exercised as provided in
the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Corporation
and its corporate seal.
Date: -------------------------
INFOWAVE SOFTWARE, INC.
By: -------------------------
Authorized Officer
Countersigned:
MONTREAL TRUST COMPANY OF CANADA
By: -------------------------
Authorized Signature
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder desires to transfer the
Rights represented by this Rights Certificate.)
FOR VALUE RECEIVED -------------------- hereby sells, assigns and transfers
to -----------------------------------------------------------------------------
(Please print name and address of transferee)
the Rights represented by this Rights Certificate, together with all right,
title and interest therein, and hereby irrevocably constitutes and appoints
---------------------------- as attorney, to transfer the within Rights on the
books of the Corporation, with full power of substitution.
Dated:
Signature Guaranteed: --------------------------------------------
Signature
(Signature must correspond to name as written
upon the face of this Rights Certificate in
every particular, without alteration or
enlargement or any change whatsoever.)
Signature must be guaranteed by a Canadian chartered bank, a Canadian trust
company, a member of a recognized stock exchange or a member of the Securities
Transfer Association Medallion (STAMP) Program.
--------------------------------------------------------------------------------
(To be completed if true)
The undersigned hereby represents, for the benefit of all holders of Rights and
Common Shares, that the Rights evidenced by this Rights Certificate are not,
and, to the knowledge of the undersigned, have never been, Beneficially Owned by
an Acquiring Person or an Affiliate or Associate thereof or by any Person acting
jointly or in concert with any of the foregoing (all capitalized terms are used
as defined in the Rights Agreement).
Dated: --------------------------- Signature: ----------------------------
NOTICE
In the event the certification set forth above in the Form of Election to
Exercise is not completed upon exercise of the Right(s) evidenced hereby or in
the event that the certification set forth above in the Form of Assignment is
not completed upon the assignment of the Right(s) evidenced hereby, the
Corporation will deem the Beneficial Owner of the Right(s) evidenced by this
Rights Certificate to be an Acquiring Person or an Affiliate or Associate
thereof (as defined in the Rights Agreement) and, in the case of an assignment,
will affix a legend to that effect on any Rights Certificates issued in exchange
for this Rights Certificate.
(To be attached to each Rights Certificate)
FORM OF ELECTION TO EXERCISE
TO: INFOWAVE SOFTWARE, INC.
The undersigned hereby irrevocably elects to exercise ___________________
whole Rights represented by the attached Rights Certificate to purchase the
Common Shares (or other securities or property) issuable upon the exercise of
such Rights and requests that certificates for such shares (or other, securities
or title to such property) be issued in the name of:
--------------------------------------------
(Name)
--------------------------------------------
(Street)
--------------------------------------------
(City and State or Province)
--------------------------------------------
(Country, Postal Code or Zip Code)
--------------------------------------------
SOCIAL INSURANCE, SOCIAL SECURITY OR
OTHER TAXPAYER IDENTIFICATION NUMBER
-2-
If such number of Rights shall not be all the Rights evidenced by this Rights
Certificate, a new Rights Certificate for the balance of such Rights shall be
registered in the name of and delivered to:
--------------------------------------------
(Name)
--------------------------------------------
(Street)
--------------------------------------------
(City and State or Province)
--------------------------------------------
(Country, Postal Code or Zip Code)
--------------------------------------------
SOCIAL INSURANCE, SOCIAL SECURITY OR
OTHER TAXPAYER IDENTIFICATION NUMBER
Dated: ----------------------
Signature Guaranteed: --------------------------------------------
Signature
(Signature must correspond to name as written
upon the face of this Rights Certificate in
every particular, without alteration or
enlargement or any change whatsoever.)
Signature must be guaranteed by a Canadian chartered bank, a Canadian trust
company, a member of a recognized stock exchange or a member of the Securities
Transfer Association Medallion (STAMP) Program.
--------------------------------------------------------------------------------
(To be completed if true)
The undersigned hereby represents, for the benefit of all holders of Rights and
Common Shares, that the Rights evidenced by this Rights Certificate are not,
and, to the knowledge of the undersigned, have never been, Beneficially Owned by
an Acquiring Person or an Affiliate or Associate thereof or by any Person acting
jointly or in concert with any of the foregoing (all capitalized terms are used
as defined in the Rights Agreement).
Dated: --------------------------- Signature: ----------------------------
NOTICE
In the event the certification set forth above in the Form of Election to
Exercise is not completed upon exercise of the Right(s) evidenced hereby or in
the event that the certification set forth above in the Form of Assignment is
not completed upon the assignment of the Right(s) evidenced hereby, the
Corporation will deem the Beneficial Owner of the Right(s) evidenced by this
Rights Certificate to be an Acquiring Person or an Affiliate or Associate
thereof (as defined in the Rights Agreement) and, in the case of an assignment,
will affix a legend to that effect on any Rights Certificates issued in exchange
for this Rights Certificate.
