YM BIOSCIENCES INC. And CIBC MELLON TRUST COMPANY As Rights Agent SHAREHOLDER RIGHTS PLAN AGREEMENT
And
CIBC
MELLON TRUST COMPANY
As
Rights
Agent
Dated
as
of October 22, 2007
THIS
AGREEMENT dated as of the 22nd
day of
October, 2007 between YM BioSciences Inc. (the “Corporation”), a corporation
continued under the Companies
Act
(Nova
Scotia), and CIBC Mellon Trust Company, a trust company incorporated under
the
laws of Canada, as Rights Agent (the “Rights Agent”), which term shall include
any successor Rights Agent hereunder.
AND
WHEREAS the Board of Directors has determined that it is advisable and in the
best interests of the Corporation to maintain a shareholder rights plan and,
therefore, to adopt a new shareholder rights plan (the “Rights Plan”) to take
effect immediately upon expiry of the Previous Rights Plan;
AND
WHEREAS in order to implement the adoption of the Rights Plan the Board of
Directors has (a) authorized the issuance of one Rights effective the Record
Time in respect of each Common Share outstanding 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 and the
Expiration Time;
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, the
exercise of Rights, and other matters referred to herein;
1.1
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For
purposes of this Agreement, the following terms have the meanings
indicated:
(a)
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“1933
Securities Act” means 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.
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2
(b)
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“1934
Exchange Act” means 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.
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(c)
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“Acquiring
Person” means, any Person who is the Beneficial Owner of twenty percent
(20%) or more of the outstanding Voting Shares of the Corporation;
provided, however, that the term “Acquiring Person” shall not
include:
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(i)
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the
Corporation or any Subsidiary of the
Corporation;
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(ii)
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any
Person who becomes the Beneficial Owner of twenty percent (20%) or
more of
the outstanding Voting Shares of the Corporation as a result
of
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(A)
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Corporate
Acquisitions;
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(B)
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Permitted
Bid Acquisitions;
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(C)
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Corporate
Distributions; or
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(D)
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Exempt
Acquisitions
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provided,
however, that if a Person shall become the Beneficial Owner of twenty percent
(20%) or more of the Voting Shares of the Corporation then outstanding by reason
of one or more or any combination of the operation of a Corporate Acquisition,
Permitted Bid Acquisition, Corporate Distribution or Exempt Acquisition, becomes
the Beneficial Owner of an additional one percent (1%) or more of the
outstanding Voting Shares of the Corporation other than pursuant to Corporate
Acquisitions, Permitted Bid Acquisitions, Corporate Distributions or Exempt
Acquisitions, then as of the date of such acquisition, such Person shall become
an “Acquiring Person”;
(iii)
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for
a period of ten (10) days after the Disqualification Date (as hereinafter
defined), any Person who becomes the Beneficial Owner of twenty percent
(20%) or more of the outstanding Voting Shares of the Corporation
as a
result of such Person becoming disqualified from relying on Clause
1.1
(g)(vii) hereof solely because such Person makes or announces an
intention
to make a Take-over Bid in respect of securities of the Corporation
alone
or by acting jointly or in concert with any other Person (the first
date
of public announcement (which, for the purposes of this definition,
shall
include, without limitation, a report filed pursuant to Section 101
of the
Securities Act (Ontario)) by such Person or the Corporation of the
intent
to commence such a Take-over Bid being herein referred to as the
“Disqualification Date”);
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(iv)
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an
underwriter or member of a banking or selling group which acquires
Voting
Shares of the Corporation from the Corporation in connection with
a bona
fide distribution to the public of securities of the Corporation;
and
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3
(v)
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a
Person (a “Grandfathered Person”) who is the Beneficial Owner of more than
20% of the outstanding Voting Shares determined as at the Record
Time,
provided, however, that this exception shall not be, and shall cease
to
be, applicable to a Grandfathered Person in the event that such
Grandfathered Person shall, after the Record Time: cease to Beneficially
Own more than 20% of the outstanding Voting Shares; or through the
acquisition of additional Voting Shares, become the Beneficial Owner
of
any additional Voting Shares that increases its Beneficial Ownership
of
Voting Shares by more than 1% of the number of Voting Shares outstanding
as at the Record Time, other than through an acquisition pursuant
to which
a Person becomes a Beneficial Owner of additional Voting Shares by
reason
of one or any combination of the operation of Paragraphs
1.1(c)(ii)(A),(B), (C) or (D).
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(d)
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“Affiliate”
when used to indicate a relationship with a specified Person, means
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.
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(e)
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“Agreement”
means this agreement as amended, modified or supplemented from time
to
time.
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(f)
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“Associate”
when used to indicate a relationship with a specified Person, means
any
relative of such specified Person who has the same residence as such
specified Person, a spouse of that Person, any person of the same
or
opposite sex with whom such specified Person is living in a conjugal
relationship outside marriage, or any relative of such spouse or
other
Person who has the same residence as such specified
Person.
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(g)
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A
Person shall be deemed the “Beneficial Owner”, of, and to “Beneficially
Own”:
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(i)
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any
securities as to which such Person or any Affiliate or Associate
of such
Person is or may be deemed to be the owner at law or in
equity;
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(ii)
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any
securities as to which such Person or any Affiliate or Associate
of such
Person has the right to acquire (whether such right is exercisable
immediately or within a period of 75 days thereafter or upon the
occurrence of a contingency or otherwise) pursuant to any agreement,
arrangement, pledge or understanding, whether or not in writing (other
than customary agreements with and between underwriters or banking
group
or selling group members with respect to a public offering of securities
and other than bona fide pledges of securities) or upon the exercise
of
any conversion right, exchange right, share purchase right (other
than a
Right), warrant or option or otherwise;
and
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(iii)
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any
securities which are Beneficially Owned within the meaning of the
foregoing provisions of this Subsection 1.1(g) by any other Person
with
whom such Person is acting jointly or in
concert;
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provided,
however, that a Person shall not be deemed the “Beneficial Owner”, or to have
“Beneficial Ownership” of, or to “Beneficially Own”, any security solely
because:
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(iv)
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such
security has been deposited or tendered pursuant to any Take-over
Bid made
by such Person or made by any Affiliate or Associate of such Person
or
made by any other Person acting jointly or in concert with such Person,
unless such deposited or tendered security has been taken up or paid
for,
whichever shall first occur; or
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(v)
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such
Person or any Affiliate or Associate of such Person or any other
Person
acting jointly or in concert with such Person has or shares the power
to
vote or direct the voting of such security pursuant to a revocable
proxy
given in response to a public proxy solicitation or any such Person
has an
agreement, arrangement or understanding with respect to a particular
shareholder proposal or proposals or a particular matter or matters
to
come before a meeting of shareholders, including the election of
directors; or
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(vi)
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such
Person or any Affiliate or Associate of such Person or any other
Person
acting jointly or in concert with such Person has or shares the power
to
vote or direct the voting of such security in connection with or
in order
to participate in a public proxy solicitation;
or
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(vii)
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(A)
such Person or any Affiliate or Associate of such Person or any other
Person acting jointly or in concert with such Person, holds or exercises
dispositive power over such security; provided that the ordinary
business
of any such Person (the “Fund Manager”) includes the management of
investment funds for others and such dispositive power over such
security
is held by the Fund Manager in the ordinary course of such business
in the
performance of such Fund Manager’s duties for the account of any other
Person (a “Client”), (B) such Person (the “Trust Company”) is licensed to
carry on the business of a trust company under applicable law and,
as
such, acts as trustee or administrator or in a similar capacity in
relation to other accounts and holds or exercises dispositive power
over
such security in the ordinary course of such duties for the estate
of any
such accounts (each an “Other Account”), (C) such Person is established by
statute 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 or various public bodies;
(D) the ordinary business of any such Person includes acting as an
agent
of the Crown in the management of public assets (the “Crown Agent”), or
(E) the Person, any of such Person’s Affiliates or Associates or any other
Person acting jointly or in concert with such Person holds or exercises
dispositive power over such security, provided that the Person exercising
such dispositive power is the administrator or the trustee of one
or more
pension funds or plans (each a “Pension Fund”) registered under the laws
of Canada or any province thereof or the United States or any state
thereof (the “Independent Person”) and holds such securities solely for
the purposes of its activities as an Independent Person, and further
provided that such Person:
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5
a)
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does
not hold or exercise dispositive power over more than thirty percent
(30%)
of the Voting Shares of the
Corporation;
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b)
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holds
such Voting Shares of the Corporation for investment purposes;
and
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c)
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is
not acting jointly or in concert with any other
Person;
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provided,
however, that in any of the foregoing cases no one of the Fund Manager, the
Trust Company, the Crown Agent or the Independent Person makes or proposes
to
make a Take-over Bid in respect of securities of the Corporation alone or by
acting jointly or in concert with any other Person (other than by means of
ordinary market transactions (including prearranged trades) executed through
the
facilities of a stock exchange or organized over-the-counter market);
or
(viii)
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such
security has been agreed to be deposited or tendered pursuant to
a Lock-up
Agreement;
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(ix)
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such
Person is a Client of the same Fund Manager as another Person on
whose
account the Fund Manager holds or exercises dispositive power over
such
security, or such Person is an Estate Account or an Other Account
of the
same Trust Company as another Person on whose account the Trust Company
holds or exercises dispositive power over such security, or such
Person is
a Pension Fund with the same Independent Person as another Pension
Fund;
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(x)
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such
Person is a Client of a Fund Manager and such security is owned at
law or
in equity by the Fund Manager, or such Person is an Estate Account
or
Other Account of a Trust Company and such security is owned at law
or in
equity by the Trust Company, or such Person is a Pension Fund and
such
security is owned at law or in equity by the Independent Person of
the
Pension Fund; or
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(xi)
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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
depository.
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For
purposes of this Agreement, the percentage of Voting Shares Beneficially Owned
by any Person, shall be and be deemed to be the product of one hundred (100)
and
the number of which the numerator is the number of votes for the election of
all
directors generally attaching to the Voting Shares Beneficially Owned by such
Person and the denominator of which is the number of votes for the election
of
all directors generally attaching to all outstanding Voting Shares. Where any
Person is deemed to Beneficially Own unissued Voting Shares, such Voting Shares
shall be deemed to be issued and outstanding for the purpose of calculating
the
percentage of Voting Shares Beneficially Owned by such Person.
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(h)
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“Board
of Directors” means, at any time, the duly constituted board of directors
of the Corporation.
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(i)
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“Business
Day” means any day other than a Saturday, a Sunday or a day on which
banking institutions in Toronto or New York are authorized or obligated
by
law to close.
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(j)
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“Canadian
Dollar Equivalent” means any amount which is ex pressed in United States
dollars shall mean on any day the Canadian dollar equivalent of such
amount determined by reference to the U.S. Canadian Exchange Rate
on such
date.
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(k)
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“close
of business” on any given date means 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 offices of the transfer agent for the Common Shares
(or,
after the Separation Time, the offices of the Rights Agent) is closed
to
the public in the city in which such transfer agent or Rights Agent
has an
office for the purposes of this
Agreement.
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(l)
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“Common
Shares”, when used with reference to the Corporation, means the common
shares in the capital of the Corporation and, 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 Subsidiary of another
Person, the Person or Persons which ultimately control such
first-mentioned Person.
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(m)
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“Companies
Act” means the Companies
Act (Nova
Scotia), as amended, and the regulations thereunder, and any comparable
or
successor laws or regulations
thereto.
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(n)
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“Competing
Permitted Bid” means a Take-over Bid which: (i) is made after a Permitted
Bid has been made and prior to the expiry of the Permitted Bid; (ii)
satisfies all the components of the definition of a Permitted Bid,
except
that the requirements set out in Clause (iii) of the definition of
a
Permitted Bid shall be satisfied if the Take-over Bid shall contain,
and
take up and payment for securities 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 Competing Permitted
Bid prior to the close of business on the date that is no earlier
than the
later of: (A) the sixtieth (60th)
day after the date on which the Permitted Bid which preceded the
Competing
Permitted Bid was made; and (B) thirty-five (35) days after the date
of
the Take-over Bid constituting the Competing Permitted Bid; and only
if at
that date, more than fifty percent (50%) of the then outstanding
Voting
Shares held by Independent Shareholders have been deposited to the
Competing Permitted Bid and not
withdrawn.
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7
(o)
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“controlled”:
a corporation is “controlled” by another Person or two or more Persons
if:
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(i)
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securities
entitled to vote in the election of directors carrying more than
fifty
percent (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; and
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(ii)
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the
votes carried by such securities are entitled, if exercised, to elect
a
majority of the board of directors of such
corporation;
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and
“controls”, “controlling” and “under common control with” shall be interpreted
accordingly.
(p)
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“Corporate
Acquisition” means an acquisition by the Corporation or a Subsidiary of
the Corporation or the redemption by the Corporation of Voting Shares
of
the Corporation, which by reducing the number of Voting Shares of
the
Corporation outstanding increases the proportionate number of Voting
Shares Beneficially Owned by any
Person.
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(q)
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“Corporate
Distribution” means an acquisition of Voting Shares of the Corporation as
a result of:
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(i)
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a
stock dividend or a stock split or other event pursuant to which
a person
receives or acquires Voting Shares on the same pro rata basis as
all other
holders of the same class of Voting
Shares;
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(ii)
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any
dividend reinvestment plan or other plan made available by the Corporation
to holders of all of its Voting Shares (other than holders resident
in any
jurisdiction where participation in such plan is restricted or impractical
to the Corporation as a result of applicable
law);
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(iii)
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the
receipt and/or exercise of rights issued by the Corporation to purchase
Voting Shares distributed to all the holders of a series or class
of
Voting Shares of the Corporation to subscribe for or purchase Voting
Shares of the Corporation, (other than holders resident in any
jurisdiction where the distribution or exercise of such rights is
restricted or impractical as a result of applicable law), provided
that
such rights are acquired directly from the Corporation and not from
any
other Person; or
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(iv)
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a
distribution or Voting Shares, or securities convertible into,
exchangeable for or carrying the right to acquire Voting Shares (and
the
conversion or exchange of such convertible or exchangeable securities
or
the exercise of the right to acquire Voting Shares carried by such
securities), made pursuant to a
prospectus.
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8
(r)
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“Disqualification
Date” has the meaning ascribed thereto in Clause
1.1(c)(iii).
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(s)
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“Effective
Date” has the meaning ascribed thereto in Section
5.16.
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(t)
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“Election
to Exercise” has the meaning ascribed thereto in Subsection
2.2(d).
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(u)
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“Exempt
Acquisition” means an acquisition of Voting Shares of the Corporation, in
respect of which the Board of Directors has waived the application
of
Section 3.1 hereof pursuant to the provisions of Subsections 5.1(b),
(c)
or (f) hereof or which was made on or prior to the Record
Time.
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(v)
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“Exercise
Price” means, as of any date from and after the Separation Time, the price
at which a holder may purchase the securities issuable upon exercise
of
one whole Right. Until adjustment thereof in accordance with the
terms
hereof, the Exercise Price shall be
$200.00.
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(w)
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“Expansion
Factor” has the meaning ascribed thereto in Subsection
2.3(a)(v).
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(x)
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“Expiration
Time” means the close of business on that date which is the earliest of
the date of termination of this Agreement pursuant to Section 5.16
or, if
this Agreement is confirmed pursuant to Section 5.16, the date of
termination of this Agreement pursuant to Section 5.17 or, if this
Agreement is reconfirmed pursuant to Section 5.17, the close of business
on the date of the Corporation’s annual meeting of shareholders to be held
in 2017.
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(y)
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“Flip-In
Event” means a transaction in or pursuant to which any Person becomes an
Acquiring Person.
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(z)
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“holder”
has the meaning ascribed thereto in Section
2.8.
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(aa)
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“Independent
Shareholders” means holders of Voting Shares of the Corporation, but shall
not include: (i) any Acquiring Person; (ii) any Offeror (including
an
Offeror who has announced an intention to make or who makes a Permitted
Bid or Competing Permitted Bid); (iii) any Affiliate or Associate
of such
Acquiring Person or Offeror; (iv) any Person acting jointly or in
concert
with such Acquiring Person or Offeror; or (v) any employee benefit
plan,
stock 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 any such plan or trust
direct
the manner in which the Voting Shares are to be voted or director
whether
the Voting Shares are to be tendered to a Take-over
Bid.
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(bb)
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“Lock-up
Agreement” means an agreement between an Offeror, any of its Affiliates or
Associates or any other Person acting jointly or in concert with
the
Offeror and a Person (the “Locked-up Person”) who is not an Affiliate or
Associate of the Offeror or a Person acting jointly or in concert
with the
Offeror whereby the Locked-up Person agrees to deposit or tender
the
Voting Shares held by the Locked-up Person to the Offeror’s Take-over Bid
or to any Take-over Bid made by any of the Offeror’s Affiliates or
Associates or made by any other Person acting jointly or in concert
with
the Offeror (the “Lock-up Bid”), provided
that:
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(i)
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the
agreement:
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(A)
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permits
the Locked-up Person to withdraw the Voting Shares from the agreement
in
order to tender or deposit the Voting Shares to another Take-over
Bid or
to support another transaction that contains an offering price for
each
Voting Share that is higher than the offering price contained in
or
proposed to be contained in the Lock-up Bid;
or
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(B)
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(a)
permits the Locked-up Person to withdraw the Voting Shares from the
agreement in order to tender or deposit the Voting Shares to another
Take-over Bid or to support another transaction 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
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(b)
does
not by its terms 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, an agreement may contain a right of first refusal or require
a
period of delay to give an offeror an opportunity to match a higher price in
another take-over bid or other similar limitation on a Locked-up Person as
long
as the Locked-up Person is not precluded indefinitely from accepting another
bid
or tendering to another transaction; and
(ii)
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no
“break-up” fees, “top-up” fees, penalties or other amounts that exceed in
the aggregate one-half of the cash equivalent of any amount in excess
of
the amount offered under the Lock-up Bid and the Locked-up Person
receives
pursuant to another Take-over Bid or transaction shall be payable
pursuant
to the agreement in the event that the Locked-up Person fails to
tender
Voting Shares pursuant thereto in order to accept the other Take-over
Bid
or support another transaction.
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10
(cc)
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“Market
Price” per share of any securities on any date of determination means the
average of the daily closing prices per share of such securities
(determined as described below) on each of the twenty (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
closing prices used to determine the Market Price on any Trading
Days not
be fully comparable with the closing price on such date of determination
or, if the date of determination is not a Trading Day, on the immediately
preceding Trading Day, each such closing 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 if fully comparable
with the closing price 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 share 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 each share as
reported by The Toronto Stock Exchange; or (ii) if for any reason
none of
such prices is available on such day or the securities are not listed
or
admitted to trading on The Toronto Stock Exchange, the closing board
lot
sale price or, if such price is not available, the average of the
closing
bid and asked prices, for each share as reported in the principal
consolidated transaction reporting system with respect to securities
listed or admitted to trading on the principal national securities
exchange in the United States on which the securities are listed
or
admitted to trading; or (iii) if for any reason none of such prices
is
available on such day or the securities are not listed or admitted
to
trading on The Toronto Stock Exchange or a national securities exchange
in
the United States, the last quoted price, or if not so quoted, the
average
of the high bid and low asked prices for each share of such securities
in
the over-the-counter market, as reported by The Canadian Dealing
Network
Inc. or such other comparable system then in use; or (iv) if on any
such
date the securities are not quoted by any such organization, the
average
of the closing bid and asked prices as furnished by a professional
market
maker making a market in the securities selected in good faith by
the
Board of Directors; provided, however, that if on any such date the
securities are not traded on any stock exchange or in the over-the-counter
market, the closing price per share of such securities on such date
shall
mean the fair value per share of such securities on such date as
determined in good faith by the Board of Directors, after consultation
with a nationally or internationally recognized investment dealer
or
investment banker.
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The
Market Price shall be expressed in Canadian dollars and if initially determined
in respect of any day forming part of the twenty (20) consecutive trading day
period in United States dollars, such amount shall be translated into Canadian
dollars at the Canadian Dollar Equivalent thereof. Notwithstanding the
foregoing, where the Board of Directors is satisfied that the Market Price
of
securities as determined herein was affected by an anticipated or actual
Take-over Bid or by improper manipulation, the Board of Directors may, acting
in
good faith, determine the Market P rice of securities, such determination to
be
based on a finding as to the price of which a holder of securities of that
class
could reasonably have expected to dispose of his securities immediately prior
to
the relevant date excluding any change in price reasonably attributable to
the
anticipated or actual Take-over Bid or to the improper
manipulation.
(dd)
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“Offer
to Acquire” shall include:
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(i)
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an
offer to purchase, a public announcement of an intention to make
an offer
to purchase, or a solicitation of an offer to sell, Voting Shares
of the
Corporation; and
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(ii)
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an
acceptance of an offer to sell Voting Shares of the Corporation,
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 Acquire to the Person that made the offer to
sell.
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(ee)
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“Offeror”
means a Person who has announced an intention to make, or who is
making, a
Take-over Bid.
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(ff)
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“Offeror’s
Securities” means Voting Shares of the Corporation Beneficially Owned by
an Offeror, any Affiliate or Associate of such Offeror, any Person
acting
jointly or in concert with the Offeror or with any Affiliate of the
Offeror and any Affiliates or Associates of such Person so acting
jointly
or in concert.
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(gg)
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“Permitted
Bid” means a Take-over Bid made by an Offeror which is made by means of
a
Take-over Bid circular and which also complies with the following
additional provisions:
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(i)
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the
Take-over Bid shall be made to all holders or record of Voting Shares
wherever resident as registered on the books of the Corporation,
other
than the Offeror;
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(ii)
|
the
Take-over Bid shall contain, and the take up and payment for securities
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 the
date
which is not less than sixty (60) days following the date of the
Take-over
Bid, and only if at such date, more than fifty percent (50%) of the
then
outstanding Voting Shares held by Independent Shareholders shall
have been
deposited to the Take-over Bid and not
withdrawn;
|
(iii)
|
the
Take-over Bid shall contain an irrevocable and unqualified provision
that,
unless the Take-over Bid is withdrawn in accordance with applicable
law,
Voting Shares of the Corporation may be deposited pursuant to such
Take-over Bid at any time during the period of time described in
Clause
(ii) of this Subsection 1.1(gg) and that any Voting Shares deposited
pursuant to the Take-over Bid may be withdrawn at any time until
taken up
and paid for; and
|
(iv)
|
the
Take-over Bid shall contain an irrevocable and unqualified provision
that
if, on the date on which Voting Shares may be taken up and paid for,
more
than fifty percent (50%) of the then outstanding Voting Shares held
by
Independent Shareholders have been deposited to the Take-over Bid
and not
withdrawn, (A) the Offeror will make a public announcement of that
fact on
the date the Take-over Bid would otherwise expire; and (B) the Take-over
Bid will be extended for a period of not less than ten (10) Business
Days
from the date it would otherwise
expire.
|
12
(hh)
|
“Permitted
Bid Acquisitions” means share acquisitions made pursuant to a Permitted
Bid or a Competing Permitted Bid.
|
(ii)
|
“Person”
means any individual, firm, partnership, association, trust, trustee,
executor, administrator, legal or personal representative, government,
governmental body, entity or authority, group, body corporate,
corporation, unincorporated organization or association, syndicate,
joint
venture or any other entity, whether or not having legal personality,
and
any of the foregoing in any derivative, representative or fiduciary
capacity, and pronouns have a similar extended
meaning.
|
(jj)
|
“Pro
Rata Acquisition” means an acquisition of Voting Shares pursuant to: (i)
the receipt and/or exercise of rights issued by the Corporation to
all
holders of a class of Voting Shares to subscribe for or purchase
Voting
Shares, provided that such rights are acquired directly from the
Corporation as part of a rights offering and not from any other Person;
or
(ii) a distribution by the Corporation of Voting Shares, or securities
convertible into or exchangeable for Voting Shares (and the conversion
or
exchange of such convertible or exchangeable securities) made pursuant
to
a prospectus or a distribution by way of private placement by the
Corporation, provided that the Person does not thereby acquire a
greater
percentage of such Voting Shares, or securities convertible or
exchangeable for Voting Shares of that class, than the Person’s percentage
of Voting Shares Beneficially owned immediately prior to such
acquisition.
|
(kk)
|
“Record
Time” means the time as of the termination of business at the
Corporation’s annual and special meeting of shareholders to be held on
November 28, 2007 (including any adjournment
thereof).
|
(ll)
|
“Redemption
Price” has the meaning ascribed thereto in Subsection
5.1(a).
|
(mm)
|
“regular
periodic cash dividends” means cash dividends paid at regular intervals in
any fiscal year of the Corporation to the extent that such cash dividends
do not exceed, in the aggregate, the greatest
of
|
(i)
|
two
hundred percent (200%) of the aggregate amount of cash dividends
declared
payable by the Corporation on its Common Shares in its immediately
preceding fiscal year;
|
(ii)
|
three
hundred percent (300%) of the arithmetic average of the aggregate
amounts
of cash dividends declared payable by the Corporation on its Common
Shares
in its three immediately preceding financial years;
and
|
(iii)
|
one
hundred percent (100%) of the aggregate consolidated net income of
the
Corporation, before extraordinary items, for its immediately preceding
fiscal year.
|
(nn)
|
“Right”
means a right issued pursuant to this
Agreement.
|
13
(oo)
|
“Rights
Agent” means CIBC Mellon Trust Company, a trust company incorporated under
the laws of Canada or any successor Rights Agent appointed pursuant
to
Subsection 4.1(a).
|
(pp)
|
“Rights
Certificate” has the meaning ascribed thereto in Subsection
2.2(c).
|
(qq)
|
“Rights
Holders’ Special Meeting” means a meeting of the holders of Rights called
by the Board of Directors for the purpose of approving a supplement
or
amendment to this Agreement pursuant to Subsection
5.4(c).
|
(rr)
|
“Rights
Register” has the meaning ascribed thereto in Subsection
2.6(a).
|
(ss)
|
“Securities
Act (Ontario)” means the Securities Act, R.S.O. 1990, c. S.5. as amended,
and the regulations, rules, policies, and notices thereunder, and
any
comparable or successor laws, regulations, rules, policies or notices
thereto.
|
(tt)
|
“Separation
Time” means the close of business on the eighth (8th)
Trading Day after the earlier of (i) the Stock Acquisition Date,
and (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 Permitted
Bid or
Competing Permitted Bid) or such later date as may be determined
by the
Board of Directors provided that, if any Take-over Bid referred to
in
Clause (ii) of this Subsection 1.1(tt) expires, is cancelled, terminated
or otherwise withdrawn prior to the Separation Time, such Take-over
Bid
shall be deemed, for the purposes of this Subsection 1.1(tt), never
to
have been made and provided further that if the Board of Directors
determines pursuant to Subsections 5.1(b), (c) or (f) hereof to waive
the
application of Section 3.1 hereof to a Flip-in Event, the Separation
Time
in respect of such Flip-in Event shall be deemed never to have
occurred.
|
(uu)
|
“Stock
Acquisition Date” means the first date of public announcement (which, for
purposes of this definition, shall include, without limitation, a
report
filed pursuant to Section 101 of the Securities Act (Ontario) or
Section
13(d) of the 1934 Exchange Act) by the Corporation or an Offeror
or
Acquiring Person of facts indicating that a Person has become an
Acquiring
Person.
|
(vv)
|
“Subsidiary”:
a corporation shall be deemed to be a Subsidiary of another corporation
if:
|
(i)
|
it
is controlled by:
|
(A)
|
that
other; or
|
(B)
|
that
other and one or more corporations each of which is controlled by
that
other; or
|
(C)
|
two
or more corporations each of which is controlled by that other;
or
|
14
(ii)
|
it
is a Subsidiary of a corporation that is that other’s
Subsidiary.
|
(ww)
|
“Take-over
Bid” means an Offer to Acquire Voting Shares of the Corporation or
securities convertible into or exchangeable for or carrying a right
to
purchase Voting Shares of the Corporation where the Voting Shares
of the
Corporation subject to the Offer to Acquire, together with the Voting
Shares of the Corporation into which the securities subject to the
Offer
to Acquire are convertible, exchangeable or exercisable, and the
Offeror’s
Securities, constitute in the aggregate twenty percent (20%) or more
of
the outstanding Voting Shares of the Corporation at the date of the
Offer
to Acquire.
|
(xx)
|
“Termination
Time” means the time at which the right to exercise Rights shall terminate
pursuant to Subsection 5.1(h)
hereof.
|
(yy)
|
“Trading
Day”, when used with respect to any securities, means a day on which
the
principal Canadian stock exchange or American stock exchange or market
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 Canadian stock exchange or American stock exchange
or
market, a Business Day.
|
(zz)
|
“U.S.
–
Canadian Exchange Rate” means on any date: (i) if on such date the Bank of
Canada sets an average noon spot rate of exchange for the conversion
of
one United States dollar into Canadian dollars, such rate; and (ii)
if 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.
|
(aaa)
|
“Voting
Shares” means, with respect to any Person, the Common Shares of such
Person and any other shares of capital stock or voting interests
of such
Person entitled to vote generally in the election of all
directors.
|
1.2
|
Currency.
All sums of money which are referred to in this Agreement are expressed
in
lawful money of Canada, unless otherwise
specified.
|
1.3
|
Headings.
The division of this Agreement into Articles, Sections, Subsections,
Clauses and Subclauses and the insertion of headings, subheadings
and a
table of contents are for convenience of reference only and shall
not
affect the construction or interpretation of this
Agreement.
|
1.4
|
Number
and Gender.
Wherever the context so requires, terms used herein importing the
singular
number only shall include the plural and vice-versa and words importing
only one gender shall include all
others.
|
1.5
|
Acting
Jointly or in Concert.
For the purposes of this Agreement, a Person shall be deemed to be
acting
jointly or in concert with every Person who is a party to an agreement,
commitment or understanding, whether formal or informal, with the
first
Person or any Associate or Affiliate of such Person for the purpose
of
acquiring or making an Offer to Acquire Voting Shares of the
Corporation.
|
15
1.6
|
Generally
Accepted Accounting Principles.
Wherever in this Agreement reference is made to generally accepted
accounting principles, such reference shall be deemed to be the
recommendations at the relevant time of the Canadian Institute of
Chartered Accountants, or any successor institute, applicable on
a
consolidated basis (unless otherwise specifically provided herein
to be
applicable on an unconsolidated basis) as at the date on which a
calculation is made or required to be made in accordance with generally
accepted accounting principles. Where the character or amount of
any asset
or liability or item of revenue or expense is required to be determined,
or any consolidation or other accounting computation is required
to be
made for the purpose of this Agreement or any document, such determination
or calculation shall, to the extent applicable and except as otherwise
specified herein or as otherwise agreed in writing by the parties,
be made
in accordance with generally accepted accounting principles applied
on a
consistent basis.
|
1.7
|
Statutory
References.
Unless the context otherwise requires or except as expressly provided
herein, any reference herein to a specific part, section, subsection,
clause or Rule of any statute or regulation shall be deemed to refer
to
the same as it may be amended, re-enacted or replaced or, if repealed
and
there shall be no replacement therefore, to the same as it is in
effect on
the date of this Agreement.
|
2. THE
RIGHTS
(a)
|
Certificates
issued for Common Shares after the Record Time but prior to the close
of
business on the earlier of the Separation Time and the Expiration
Time
shall evidence one Right for each Common Share represented thereby
and
shall have impressed on, printed on, written on or otherwise affixed
to
them, a legend in substantially the following
form:
|
UNTIL
THE
SEPARATION TIME (AS DEFINED IN THE RIGHTS PLAN 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 OCTOBER 22, 2007
(THE “RIGHTS PLAN”), BETWEEN YM BIOSCIENCES INC. (THE “CORPORATION”) AND CIBC
MELLON TRUST COMPANY, AS RIGHTS AGENT (THE “RIGHTS AGENT”), THE TERMS OF WHICH
ARE HEREBY INCORPORATED HEREIN BY REFERENCE AND A COPY OF WHICH MAY BE INSPECTED
DURING NORMAL BUSINESS HOURS AT THE PRINCIPAL EXECUTIVE OFFICE OF THE
CORPORATION. UNDER CERTAIN CIRCUMSTANCES, AS SET FORTH IN THE RIGHTS PLAN,
SUCH
RIGHTS MAY BE AMENDED OR REDEEMED, MAY EXPIRE, MAY BECOME NULL AND VOID (IF,
IN
CERTAIN CASES, THEY ARE ISSUED TO OR “BENEFICIALLY OWNED” BY ANY PERSON WHO IS,
WAS OR BECOMES AN “ACQUIRING PERSON”, AS SUCH TERMS ARE DEFINED IN THE RIGHTS
PLAN, WHETHER CURRENTLY HELD BY OR ON BEHALF OF SUCH PERSON OR ANY SUBSEQUENT
HOLDER) OR MAY BE EVIDENCED BY SEPARATE CERTIFICATES AND NOT LONGER BY THIS
CERTIFICATE. THE CORPORATION WILL MAIL OR ARRANGE FOR THE MAILING OF A COPY
OF
THE RIGHTS PLAN TO THE HOLDER OF THIS CERTIFICATE WITHOUT CHARGE UPON RECEIPT
OF
A WRITTEN REQUEST THEREFOR.
16
(b)
|
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 until the earlier
of
the Separation Time and the Expiration
Time.
|
(a)
|
Right
to entitle holder to purchase one Common Shares prior to
adjustment.
Subject to adjustment as herein set forth, each Right will entitle
the
holder thereof, from and after the Separation Time and prior to the
Expiration Time, to purchase, for the Exercise Price as at the Business
Day immediately preceding the date of exercise of the Right, one
Common
Share of the Corporation (which price and number of Common Shares
are
subject to adjustment as set forth below). Notwithstanding any other
provision of this Agreement, any Rights held by the Corporation and
any of
its Subsidiaries shall be void.
|
(b)
|
Rights
not exercisable until Separation Time.
Until the Separation Time, (i) the Rights shall not be exercisable
and no
Right may be exercised, and (ii) for administrative purposes, each
Right
will be evidenced by the certificate for the associated Common Share
registered in the name of the holder thereof (which certificate shall
also
be deemed to be a Rights Certificate) and will be transferable only
together with, and will be transferred by a transfer of, such associated
Common Share.
|
(c)
|
Delivery
of Rights Certificate and disclosure statement.
From and after the Separation Time and prior to the Expiration Time:
(i)
the Rights shall be exercisable, and (ii) the registration and transfer
of
the Rights shall be separate from, and independent of, Common
Shares.
|
Promptly
following the Separation Time, the Corporation will prepare and the Rights
Agent
will mail to each holder a record of Rights as of the Separation Time (other
than an Acquiring Person and other than in respect of any Rights Beneficially
Owned by such Acquiring Person which are not held 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 hereby agreeing to furnish copies
of
such records to the Rights Agent for this purpose), (A) a certificate (a “Rights
Certificate”) in substantially the form of Exhibit A-1 hereto 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, rule, regulation or judicial
or
administrative order or with any rule or regulation made pursuant thereto or
with any rule or regulation of any self-regulatory organization, stock exchange
or quotation system on which the Rights may from time to time be listed or
traded or to confirm to usage, and (B) a disclosure statement describing the
Rights, provided that a nominee shall be sent the materials provided for in
(A)
and (B) in respect of all Common Shares held of record by it which are not
Beneficially Owned by an Acquiring Person. In order for the Corporation to
determine whether any Person is holding Common Shares which are Beneficially
Owned by another Person, the Corporation may require such first mentioned Person
to furnish it with such information and documentation as the Corporation
considers advisable.
17
(d)
|
Exercise
of Rights.
Rights may be exercised in whole or in part on any Business Day after
the
Separation Time and prior to the Expiration Time by submitting to
the
Rights Agent the Rights Certificate evidencing such Rights together
with
an election to exercise such Rights (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 Rights Agent (on behalf of
the
Corporation), of a sum equal to the Exercisable 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 deli very of certificates for Common Shares in a name
other
than that of the holder of the Rights being exercised, all of the
above to
be received before the Expiration Time by the Rights Agent at its
principal office in any of the cities listed on the Rights
Certificate.
|
(e)
|
Duties
of Rights Agent upon receipt of Election to Exercise.
Upon receipt of a Rights Certificate, which is accompanied by a completed
Election to Exercise that does not indicate such Right is null and
void as
provided by Subsection 3.1(b) hereof, and payment as set forth in
Subsection 2.2(d) above, the Rights Agent (unless otherwise instructed
by
the Corporation) will thereupon
promptly:
|
(i)
|
requisition
from the transfer agent for the Common Shares certificates representing
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 ash to
be paid
in lieu of issuing fractional Common
Shares;
|
(iii)
|
after
receipt of such 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 registered
holder;
|
(iv)
|
when
appropriate, after receipt, deliver such payment (less any amounts
required to be withheld) to or to the order of the registered holder
of
the Rights Certificate; and
|
(v)
|
tender
to the Corporation all payments received on exercise of the
Rights.
|
18
(f)
|
Partial
Exercise of Rights.
In case the holder of any Rights shall exercise less than all of
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)
|
Duties
of the Corporation.
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 Common Shares or other securities 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;
|
(ii)
|
take
all such action as may be necessary and within its power to ensure
compliance with the provisions of Section 3.1 hereof including, without
limitation, all such action to comply with any applicable requirements
of
the Companies Act, the Securities Act (Ontario), the 1933 Securities
Act,
the 1934 Exchange Act and any applicable comparable securities legislation
of any other applicable jurisdiction, in connection with the issuance
and
delivery of the Rights Certificates and the issuance of any Common
Shares
upon exercise of Rights;
|
(iii)
|
use
reasonable efforts to cause all Common Shares issued upon exercise
of
Rights to be listed upon issuance on the principal stock exchanges
on
which the Common Shares were traded 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;
|
(v)
|
pay
when due and payable any and all Canadian and, if applicable, United
States, federal, provincial and state transfer taxes and charges
(but for
greater certainty, not including any income or capital taxes of the
holder
or exercising holder of any liability of the Corporation to withhold
tax)
which may be payable in respect of the original issuance or delivery
of
the Rights Certificates, 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
or
other securities in a name other than that of the registered holder
of the
Rights being transferred or exercised;
and
|
(vi)
|
after
the Separation Time, except as permitted by Sections 5.1 or 5.4 hereof,
not take (or permit any Subsidiary to take) any action if at the
time such
action is taken it is reasonably foreseeable that such action will
diminish substantially or otherwise eliminate the benefits intended
to be
afforded by the Rights.
|
19
2.3
|
Adjustments
to Exercise Price; Number of Rights.
The Exercise Price, the number and kind of Common Shares or other
securities 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)
|
Adjustment
to Exercise Price upon changes to share capital.
In the event the Corporation shall at any time after the Record Time:
|
(i)
|
declare
or pay a dividend on the Common Shares payable in Common Shares (or
other
securities exchangeable for or convertible into or giving a right
to
acquire Common Shares or other securities) other than the issue of
Common
Shares or such exchangeable or convertible securities to holders
of Common
Shares in lieu of but not in an amount which exceeds the value of
regular
periodic cash dividends;
|
(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 Common Shares (or other securities exchangeable for or convertible
into or giving a right to acquire Common Shares or other securities)
in
respect of, in lieu of or in exchange for existing Common Shares,
except
as otherwise provided in this Section
2.3;
|
the
Exercise Price in effect at the time of the record date for such dividend or
of
the effective date of such subdivision, combination or reclassification, and
the
number and kind of Common Shares or other securities, as the case may be,
issuable on such date, shall be proportionately adjusted so that the holder
of
any Right exercised after such time shall be entitled to receive, upon payment
of the Exercise Price then in effect, the aggregate number and kind of Common
Shares or other securities, as the case may be, which, if such Right had been
exercised immediately prior to such date and at a time when the share transfer
books of the Corporation were open, such holder would have owned upon such
exercise and been entitled to receive by virtue of such dividend, subdivision,
combination or reclassification. 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 3.1 shall be in addition to, and shall be made
prior to, any adjustment required pursuant to Section 3.1 hereof.
If
the
Exercise Price and number of Rights outstanding are to be adjusted:
(v)
|
the
Exercise Price in effect after such adjustment will be equal 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, consolidation or issuance would hold
thereafter as a result thereof; and
|
20
(vi)
|
each
Right held prior to such adjustment will become that number of Rights
equal to the Expansion Factor, and the adjusted number of Rights
will be
deemed to be distributed 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,
consolidation or issuance, so that each such Common Share (or other
capital stock) will have exactly one Right associated with
it.
|
For
greater certainty, 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 securities that a holder of the securities purchasable
upon exercise of one Right immediately prior to such dividend, subdivision,
change, consolidation or issuance would hold thereafter as a result of such
dividend, subdivision, change, consolidation or issuance.
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 Clause 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.
In
the
event the Corporation shall at any time after the Record Time prior to the
Separation Time issue any Common Shares otherwise than in a transaction referred
to in this Subsection 2.3(a), 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 associated Common
Share.
(b)
|
Adjustment
to Exercise Price upon issue of rights, options and
warrants.
In case the Corporation shall at any time after the Record Time fix
a
record date for the issuance of rights, options or warrants to all
holders
of Common Shares entitling them (for a period expiring within forty-five
(45) calendar days after such record date) to subscribe for or purchase
Common Shares (or shares having the same rights, privileges and
preferences as Common Shares (“equivalent common shares”)) or securities
convertible into or exchangeable for or carrying a right to purchase
Common Shares or equivalent common shares at a price per Common Share
or
per equivalent common share (or having a conversion price or exchange
price or exercise price per share, if a security convertible into
or
exchangeable for or carrying a right to purchase Common Shares or
equivalent common shares) less than ninety percent (90%) of the Market
Price per Common Share on such record date, the Exercise Price to
be in
effect after such record date shall be determined by multiplying
the
Exercise Price in effect immediately prior to such record date by
a
fraction, the numerator of which shall be the number of Common Shares
outstanding on such record date, plus the number of Common Shares
that the
aggregate offering price of the total number of Common Shares and/or
equivalent 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
so
to be offered) would purchase at such Market Price per Common Share,
and
the denominator of which shall be the number of Common Shares outstanding
on such record date, plus the number of additional Common Shares
and/or
equivalent common shares to be offered for subscription or purchase
(or
into which the convertible or exchangeable securities are initially
convertible, exchangeable or exercisable). In case such subscription
price
may be paid by delivery of consideration, part or all of which may
be in a
form other than cash, the value of such consideration shall be as
determined in good faith by the Board of Directors, whose determination
shall be described in a certificate filed with the Rights Agent and
shall
be binding on the Rights Agent and the holders of the Rights. Such
adjustment shall be made successively whenever such a record date
is
fixed, and in the event that such rights or warrants are not so issued,
the Exercise Price shall be adjusted to be the Exercise Price which
would
then be in effect if such record date had not been
fixed.
|
21
For
purposed of this Agreement, the granting of the right to purchase Common Shares
(or equivalent common shares) (whether from treasury shares or otherwise)
pursuant to any dividend or interest reinvestment plan and/or any Common Share
purchase plan providing for the reinvestment of dividends or interest payable
on
securities of the Corporation and/or the investment of periodic optional
payments or any employee benefit, stock option 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, options or warrants by
the
Corporation; provided, however, that, in all such cases, the right to purchase
Common Shares (or equivalent common shares) is at a price per share of not
less
than ninety percent (90%) of the current market price per share (determined
as
provided in such plans) of the Common Shares.
(c)
|
Adjustment
to Exercise Price upon corporate distributions.
In case the Corporation shall at anytime after the Record Time fix
a
record date for a distribution to all holders of Common Shares (including
any such distribution made in connection with a merger, amalgamation,
arrangement, plan, compromise or reorganization in which the Corporation
is the continuing or successor corporation) of evidences of indebtedness,
cash (other than a regular periodic cash dividend or a regular periodic
cash dividend paid in Common Shares, but including any dividend payable
in
securities other than Common Shares), assets or subscription rights,
options or warrants (excluding those referred to in Subsection 2.3(b)
above), at a price per Common Share that is less than ninety percent
(90%)
of the Market Price per Common Share on the second Trading Day immediately
preceding such record date shall be determined by multiplying the
Exercise
Price in effect immediately prior to such record date by a fraction,
the
numerator of which shall be the Market Price per Common Share on
such
record date, less the fair market value (as determined in good faith
by
the Board of Directors, 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 the Rights) of the portion of the cash,
assets or
evidences of indebtedness so to be distributed or of such subscription
rights, options or warrants applicable to a Common Share and the
denominator of which shall be such Market Price per Common Share.
Such
adjustments shall be made successively whenever such a record date
is
fixed, and in the event that such distribution is not so made, the
Exercise Price shall be adjusted to be the Exercise Price which would
have
been in effect if such record date had not been
fixed.
|
22
(d)
|
De
minimis threshold for adjustment to Exercise Price.
Notwithstanding anything herein to the contrary, no adjustment in
the
Exercise Price shall be required unless such adjustment would require
an
increase or decrease of at least one percent (1%) in the Exercise
Price;
provided, however, that any adjustments which by reason of this Subsection
2.3(d) are not required to be made shall be carried forward and taken
into
account in any subsequent adjustment. All calculations under this
Section
2.3 shall be made to the nearest cent or to the nearest one-hundredth
of a
Common Share or other share, as the case may be. Notwithstanding
the first
sentence of this Subsection 2.3(d), any adjustment required by this
Section 2.3 shall be made no later than the earlier of: (i) three
(3)
years from the date of the transaction which mandates such adjustment;
and
(ii) the Expiration Time.
|
(e)
|
Corporation
may provide for alternate means of adjustment.
Subject to the prior consent of the holders of Voting Shares or Rights
obtained as set forth in Subsections 5.4(b) or 5.4(c) hereof, as
applicable, in the event the Corporation shall at any time after
the
Record 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 Clauses 2.3(a)(i) or 2.3(a)(iv) or
Subsections 2.3(b) or 2.3(c) above, if the Board of Directors acting
in
good faith determines that the adjustments contemplated by Subsections
2.3(a), (b) and (c) above in connection with such transaction will
no
appropriately protect the interests of the holders of Rights, the
Corporation shall be entitled to determine what other adjustments
to the
Exercise Price, number of Rights and/or securities purchasable upon
exercise of Rights would be appropriate and, notwithstanding Subsections
2.3(a), (b) and (c) above, such adjustments, rather than the adjustments
contemplated by Subsections 2.3(a), (b) and (c) above, shall be made.
The
Corporation and the Rights Agent shall amend this Agreement as appropriate
to provide for such adjustments.
|
(f)
|
Adjustment
to Rights exercisable into shares other than Common
Shares.
If as a result of an adjustment made pursuant to Section 3.1 hereof,
the
holder of any Right thereafter exercised shall become entitled to
receive
any shares other than Common Shares, thereafter the number of such
other
shares so receivable upon exercise of any Right and the Exercise
Price
thereof shall be subject to adjustment from time to time in a manner
and
on terms as nearly equivalent as practicable to the provisions with
respect to the Common Shares contained in this Section 2.3, and the
provisions of this Agreement with respect to the Common Shares shall
apply
on like terms to any such other
shares.
|
23
(g)
|
Rights
to evidence right to purchase Common Shares at adjusted Exercise
Price.
Each Right originally issued by the Corporation subsequent to any
adjustment made to the Exercise Price hereunder shall evidence the
right
to purchase, at the adjusted Exercise Price, the number of Common
Shares
purchasable from time to time hereunder upon exercise of such Right,
all
subject to further adjustment as provided
herein.
|
(h)
|
Adjustment
to number of Common Shares purchasable upon adjustment to Exercise
Price.
Unless the Corporation shall have exercised its election as provided
in
Subsection 2.3(i) below, upon each adjustment of the Exercise Price
as a
result of the calculations made in Subsections 2.3(b) and (c) above,
each
Right outstanding immediately prior to the making of such adjustment
shall
thereafter evidence the right to purchase, at the adjusted Exercise
Price,
that number of Common Shares (calculated to the nearest one
ten-thousandth) obtained by: (i) multiplying (A) the number of shares
purchasable upon exercise of a Right immediately prior to this adjustment
by (B) the Exercise Price in effect immediately prior to such adjustment
of the Exercise Price; and (ii) dividing the product so obtained
by the
Exercise Price in effect immediately after such adjustment of the
Exercise
Price.
|
(i)
|
Election
to adjust number of Rights upon adjustment to Exercise
Price.
The Corporation shall be entitled to elect on or after the date of
any
adjustment of the Exercise Price to adjust the number of Rights,
in lieu
of any adjustment in the number of Common Shares purchasable upon
the
exercise of a Right. Each of the Right outstanding after the adjustment
in
the number of Rights shall be exercisable for the number of Common
Shares
for which a Right was exercisable for the number of Common Shares
for
which a Right was exercisable immediately prior to such adjustment.
Each
Right held of record prior to such adjustment of the number of Rights
shall become that number of Rights (calculated to the nearest one
ten
thousandth) obtained by dividing the Exercise Price in effect immediately
after adjustment of the Exercise Price. The Corporation shall make
a
public announcement of its election to adjust the number of Rights,
indicating the record date for the adjustment, and, if known at the
time,
the amount of the adjustment to be made. This record date may be
the date
on which the Exercise Price is adjusted or any day thereafter, but,
if
Rights Certificates have been issued, shall be at least ten (10)
days
later than the date of the public announcement. If Rights Certificates
have been issued, upon each adjustment of the number of Rights pursuant
to
this Subsection 2.3(i), the Corporation shall, as promptly as practicable,
cause to be distributed to holders of record of Rights Certificates
on
such record date Rights Certificates evidencing, subject to Section
5.5
hereof, the additional Rights to which such holders shall be entitled
as a
result of such adjustment, or, at the option of the Corporation,
shall
cause to be distributed to such holders of record in substitution
and
replacement for the Rights Certificates held by such holders prior
to the
date of adjustment, and upon surrender thereof, new Rights Certificates
evidencing all the Rights to which such holders shall be entitled
after
such adjustment.
|
24
Rights
Certificates so to be distributed shall be issued, executed and countersigned
in
the manner provided for herein and may bear, at the option of the Corporation,
the adjusted Exercise Price and shall be registered in the names of the holders
of record of Rights Certificates on the record date for the adjustment specified
in the public announcement.
(j)
|
Rights
Certificates may contain Exercise Price before
adjustment.
Irrespective of any adjustment or change in the Exercise Price or
the
number of Common Shares issuable upon the exercise of the Rights,
the
Rights Certificates theretofore and thereafter issued may continue
to
express the Exercise Price per share and the number of Common Shares
which
were expressed in the initial Rights Certificates issued
hereunder.
|
(k)
|
Corporation
may in certain cases defer issues of securities.
In any case in which this Section 2.3 shall require that an adjustment
in
the Exercise Price be made effective as of a record date for a specified
event, the Corporation may elect to defer until the occurrence of
such
event the issuance to the holder of any Right exercised after such
record
date of the number of Common Shares and other securities of the
Corporation, if any, issuable upon such exercise over and above the
number
of Common Shares and other securities of the Corporation, if any,
issuable
upon such exercise on the basis of the Exercise Price in effect prior
to
such adjustment; provided, however, that the Corporation shall deliver
to
such holder an appropriate instrument evidencing such holder's right
to
receive such additional Common Shares (fractional or otherwise) or
other
securities upon the occurrence of the event requiring such
adjustment.
|
(l)
|
Corporation
has discretion to reduce Exercise Price for tax
reasons.
Notwithstanding anything in this Section 2.3 to the contrary, the
Corporation shall be entitled to make such reductions in the Exercise
Price, in addition to those adjustments expressly required by this
Section
2.3 as and to the extent that in their good faith judgment, the Board
of
Directors shall determine to be advisable in order that any: (i)
consolidation or subdivision of the Common Shares; (ii) issuance
of any
Common Shares at less than the Market Price; (iii) issuance of securities
convertible into or exchangeable for Common Shares; (iv) stock dividends;
or (v) issuance of rights, options or warrants, referred to in this
Section 2.3 hereafter made by the Corporation to holders of its Common
Shares, shall not be taxable to such
shareholders.
|
(m)
|
Adjustment
of Exercise Price.
If, as a result of an adjustment made pursuant to Section 3.1, the
holder
of any Right thereafter exercised shall become entitled to receive
any
securities other than Common Shares, thereafter the number of such
other
securities so receivable upon exercise of any Right and the applicable
Exercise Price thereof shall be subject to adjustment from time to
time in
a manner and on terms as nearly equivalent as may be practicable
to the
provisions with respect to the Common Shares contained in the foregoing
Subsections of this Section 2.3 and the provisions of this Agreement
with
respect to the Common Shares shall apply on like terms to any such
other
securities.
|
25
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.
|
(a)
|
The
Rights Certificates shall be executed on behalf of the Corporation
by any
of the Chairman, the President, the Chief Financial Officer, or any
Vice
President, together with any other of such Persons or together with
any
one of its Secretary or Treasurer. 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.
|
(b)
|
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 together with disclosure statements, and the Rights
Agent
shall manually countersign or by facsimile signature in a manner
satisfactory to the Corporation and send such Rights Certificates
and
statements to the holders of the Rights pursuant to Subsection 2.2(c)
hereof. No Rights Certificates shall be valid for any purpose until
countersigned by the Rights Agent as
aforesaid.
|
(c)
|
Each
Rights Certificate shall be dated the date of countersignature
thereof.
|
26
(a)
|
After
the Separation Time, 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 the "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. 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
Subsection 2.6(c) below and the other provisions of this Agreement,
the
Corporation will execute and the Rights Agent will countersign and
deliver, in the name of the holder or the designated transferee or
transferees as required pursuant to the holder's instructions, one
or more
new Rights Certificates evidencing the same aggregate number of Rights
as
did the Rights Certificates so surrendered.
|
(b)
|
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.
|
(c)
|
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 or
the
Rights Agent may require the payment of a sum sufficient to cover
any tax
or other governmental charge that may be imposed in relation thereto
and
the Corporation may require payment of a sum sufficient to cover
any other
expenses (including the fees and expenses of the Rights Agent) in
connection therewith.
|
(d)
|
The
Corporation shall not be required to register the transfer or exchange
of
any Rights after the Rights have been terminated pursuant to the
provisions of this Agreement.
|
(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 therefore 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 reasonable satisfaction
of the
destruction, loss or theft of any Rights Certificate; and (ii) such
indemnity or other security as may be required by them 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.
|
27
(c)
|
As
a condition to the issuance of any new Rights Certificate under this
Section 2.7, the Corporation or the Rights Agent may require the
payment
of a sum sufficient to cover any tax or other governmental charge
that may
be imposed in relation thereto and the Corporation may require payment
of
a sum sufficient to cover any other expenses (including the fees
and
expenses of the Rights Agent) in connection
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 the holder thereof shall be entitled to
all the
benefits of this Agreement equally and proportionately with any and
all
other holders of Rights duly issued by the
Corporation.
|
2.8
|
Persons
Deemed Owners.
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 shall be entitled to 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 Rights 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 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
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 and agrees
with
the Corporation and the Rights Agent and with every other holder
of
Rights:
|
(i)
|
to
be bound by and subject to the provisions of this Agreement, as amended
or
supplemented from time to time in accordance with the terms hereof,
in
respect of all Rights held;
|
(ii)
|
that
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 certificate representing such
Right;
|
28
(iii)
|
that
after the Separation Time, the Rights Certificates will be transferable
only on the Rights Register as provided
herein;
|
(iv)
|
that
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 shall be entitled to 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;
|
(v)
|
that
such holder of Rights has waived his or her right to receive any
fractional Rights or any fractional Common Shares upon exercise of
Rights
except as provided herein;
|
(vi)
|
that,
subject to the provisions of Section 5.4, without the approval of
any
holder of Rights and upon the sole authority of the Board of Directors
acting in good faith this Agreement may be supplemented or amended
from
time to time pursuant to and as provided herein;
and
|
(vii)
|
that
notwithstanding anything in this Agreement to the contrary, neither the
Corporation nor the Board of Directors nor the Rights Agent shall
have any
liability to any holder of a Right or to any other Person as a result
of
the inability of the Corporation, the Board of Directors or the Rights
Agent 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 government, 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.
|
2.11 |
Rights
Certificate Holder not Deemed a Shareholder.
No holder, as such, of any Rights or Rights Certificate shall be
entitled
to vote, receive dividends or be deemed for any purpose whatsoever
the
holder of any Common Share or any other share or security of the
Corporation which may at any time be issuable on the exercise of
the
Rights represented thereby, nor shall anything contained herein or
in any
Rights Certificate be construed or deemed to confer upon the holder
of any
Right or Rights Certificate, as such, any of the rights, titles,
benefits
or privileges of a holder of Common Shares or any other shares or
securities of the Corporation or any right to vote at any meeting
of
shareholders of the Corporation whether for the election of directors
or
otherwise or upon any matter submitted to holders of shares of the
Corporation at any meeting thereof, or to give or withhold consent
to any
action of the Corporation, or to receive notice of any meeting or
other
action affecting any holder of Common Shares or any other shares
or
securities of the Corporation except as expressly provided herein,
or to
receive dividends, distributions or subscription rights, or otherwise,
until the Right or Rights evidenced by Rights Certificates shall
have been
duly exercised in accordance with the terms and provisions
hereof.
|
29
3.1
|
(a)
|
Subject
to Subsection 3.1(b), and Subsections 5.1(b), 5.1(c) and 5.1(f)
hereof, in
the event that prior to the Expiration Time a Flip-in Event shall
occur,
the Corporation shall take such action as may be necessary to ensure
and
provide within eight (8) Trading Days of such occurrence, or such
longer
period as may be required to satisfy all applicable requirements
of the
Securities
Act (Ontario),
and the securities legislation of each other province of Canada
and, if
applicable, of the United States of America that, except as provided
below, each Right shall thereafter constitute the right to purchase
from
the 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 the consummation or occurrence of such Flip-in
Event
equal to twice the Exercise Price for an amount equal to the Exercise
Price (such Right to be appropriately adjusted in a manner analogous
to
the applicable adjustment provided for in Section 2.3 hereof 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 hereof
shall have
occurred with respect to such Common
Shares).
|
(b)
|
Notwithstanding
anything in this Agreement to the contrary, 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, and 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 such Acquiring Person); or (ii) a transferee
or
other successor in title directly or indirectly of Rights held
by an
Acquiring Person (or of any Affiliate or Associate of an Acquiring
Person
or of any Person acting jointly or in concert with an Acquiring
Person or
any Associate or Affiliate of an Acquiring Person) who becomes
a
transferee or successor in title concurrently with or subsequent
to the
Acquiring Person becoming an Acquiring Person; shall become null
and void
without any further action, and any holder of such Rights (including
transferees or successors in title) shall not have any rights whatsoever
to exercise such Rights under any provision of this Agreement and
shall
not have thereafter any other rights whatsoever with respect to
such
Rights, whether under any provision of this Agreement or otherwise.
|
(c)
|
From
and after the Separation Time, the Corporation shall do all such
acts and
things as shall be necessary and within its power to ensure compliance
with the provisions of Section 3.1, including without limitation,
all such
acts and things as may be required to satisfy the requirements
of the
Companies Act,
the Securities Act (Ontario),
the 1933 Securities Act, the 1934 Exchange Act and the securities
laws or
comparable legislation in each of the provinces of Canada and each
of the
States of the United States in respect of the issue of Common Shares
upon
the exercise of Rights in accordance with this
Agreement.
|
30
(d)
|
Any
Rights Certificate that would represent Rights Beneficially owned
by a
Person described in either Clause 3.1(b)(i) or (ii) or transferred
to any
nominee of any such Person, and any Rights Certificate that would
be
issued upon transfer, exchange, replacement or adjustment of any
other
Rights Certificate referred to in this sentence, shall either not
be
issued upon the instruction of the Corporation in writing to the
Rights
Agent or contain the following
legend:
|
“THE
RIGHTS REPRESENTED BY THIS RIGHTS CERTIFICATE WERE ISSUED TO A PERSON WHO
WAS AN
ACQUIRING PERSON OR AN AFFILIATE OR AN ASSOCIATE OF AN ACQUIRING PERSON (AS
SUCH
TERMS ARE DEFINED IN THE SHAREHOLDER RIGHTS PLAN AGREEMENT) OR A PERSON WHO
WAS
ACTING JOINTLY OR IN CONCERT WITH AN ACQUIRING PERSON OR AN AFFILIATE OR
ASSOCIATE OF AN ACQUIRING PERSON. THIS RIGHTS CERTIFICATE AND THE RIGHTS
REPRESENTED HEREBY ARE VOID OR SHALL BECOME VOID IN THE CIRCUMSTANCES SPECIFIED
IN SUBSECTION 3.1(b) OF THE SHAREHOLDER RIGHTS PLAN AGREEMENT.”
Provided,
however, 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 impose such legend only if instructed to do so by the
Corporation in writing or if a holder fails to certify upon transfer or exchange
in the space provided on the Rights Certificate that such holder is not a
Person
described in such legend. The issuance of a Rights Certificate without the
legend referred to in this Subsection 3.1(d) shall be of no effect on the
provisions of Subsection 3.1(b).
(e)
|
If,
upon the occurrence of a Flip-In Event, the aggregate number of
Common
Shares issuable upon the exercise of all Rights then outstanding
would
exceed the aggregate number of Common Shares that the Corporation
is then
authorized to issue pursuant to its constating documents, the number
of
Common Shares acquirable pursuant to each Right shall, notwithstanding
Subsection 3.1(a), be reduced pro
rata to
the extent necessary such that the aggregate number of Common Shares
issuable upon the exercise of all outstanding Rights does not then
exceed
the aggregate number of Common Shares that the Corporation is then
authorized to issue pursuant to its constating documents, provided
that
any such pro
rata reduction
will not affect the Exercise Price or any other term of this Agreement
relating to the Rights.
|
31
4.1
|
(a)
|
The
Corporation hereby appoints the Rights Agent to act as agent for
the
Corporation 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 as it may deem necessary
or
desirable, subject to the approval of the Rights Agent. In the
event the
Corporation appoints one or more co-Rights Agents, the respective
duties
of the Rights Agents and co-Rights Agents shall be as the Corporation
may
determine with the prior consent of the Rights Agent and the co-Rights
Agents. 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
other
disbursements incurred in the administration and execution of this
Agreement and the exercise and performance of its duties hereunder.
The
Corporation also agrees to indemnify the Rights Agent, its officers,
directors and employees for, and to hold them harmless against,
any loss,
liability, or expense incurred that is not the result of negligence,
bad
faith or wilful misconduct on the part of the Rights Agent, its
officers
or employees, for anything done or omitted by the Rights Agent
in
connection with the acceptance and administration of this Agreement,
including the costs and expenses of defending against any claim
of
liability, which right to indemnification will survive the termination
of
this Agreement and the resignation or removal of the Rights
Agent.
|
(b)
|
The
Rights Agent shall be protected from 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 or any Rights Certificate or 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.
|
(c)
|
The
Corporation shall inform the Rights Agent in a reasonably timely
manner of
events which may materially affect the administration of this Agreement
by
the Rights Agent and, at any time upon request, shall provide to
the
Rights Agent an incumbency certificate certifying the then current
officers of the Corporation.
|
(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, statutory
arrangement
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.
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32
(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
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.
|
The
Rights Agent undertakes the duties and obligations imposed by this Agreement
upon the following terms and conditions, to all of which the Corporation
and the
holders of Rights Certificates, by their acceptance thereof, shall be
bound.
(a)
|
The
Rights Agent may retain and 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 to be taken by it in good faith and in
accordance
with such opinion. The Rights Agent may also consult with such
other
experts as the Rights Agent shall consider necessary to properly
carry out
the duties and obligations imposed under this Agreement (at the
expense of
the Corporation) and the Rights Agent shall be entitled to act
and 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
proven
and established by a certificate signed by a person believed by
the Rights
Agent to be the Chairman, the President, the Chief Financial Officer,
or
any Vice-President, the Treasurer or the Secretary of the Corporation
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.
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33
(c)
|
The
Rights Agent will be liable hereunder only for events which are
the result
of its own negligence, bad faith or willful misconduct and that
of its
officers, employees and other
representatives.
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(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 Subsection 3.1(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 hereof 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 or 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 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 written
instructions with respect to the performance of its duties hereunder
from
any person believed by the Rights Agent to be the Chairman, the
President,
the Chief Financial Officer, any Vice-President, the Treasurer
or the
Secretary of the Corporation 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 accordance
with
instructions of any such person.
|
(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.
|
34
(i)
|
The
Corporation agrees that it shall pay the Rights Agent for the services
provided hereunder in accordance with the tariff of fees as agreed
to in
writing by the Corporation and the Rights Agent and shall reimburse
the
Rights Agent for all costs and expenses, including legal fees incurred
in
the carrying out of duties
hereunder.
|
(j)
|
The
Rights Agent may execute and exercise any of the rights or powers
hereby
vested in it or perform any duty hereunder either by itself or
by through
its attorneys or agents, and the Rights Agent will not be answerable
or
accountable for any act, default, neglect or misconduct of any
such
attorneys as agents or for any loss to the Corporation resulting
from any
such act, default, neglect or misconduct, provided reasonable care
was
exercised in the selection and continued employment
thereof.
|
The
Rights Agent may resign and be discharged from its duties under this Agreement
upon sixty (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
Voting Shares of the Corporation by registered or certified mail, and to
the
holders of the Rights in accordance with Section 5.8 hereof, all of which
shall
be at the expense of the Corporation. The Corporation may remove the Rights
Agent upon sixty (60) days' notice in writing, mailed to the Rights Agent
and to
each transfer agent of the Voting Shares of the Corporation by registered
or
certified mail and to the holders of the Rights in accordance with Section
5.8
hereof. 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
sixty (60) days after such removal or after it has been notified in writing
of
such resignation or incapacity by the resigning or incapacitated Rights Agent
or
by the holder of any Rights (which holder shall, with such notice, submit
such
holder's Rights Certificate for inspection by the Corporation), then the
holder
of any Rights may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent at the Corporation’s expense. 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
Ontario. 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, and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose upon receipt of all fees
and
expenses properly owing pursuant to this Agreement. Not later than the effective
date of any such appointment. the Corporation will file notice thereof in
writing with the predecessor Rights Agent and each transfer agent of the
Voting
Shares of the Corporation, and mail a notice thereof in writing to the holders
of the Rights. The cost of giving any notice required under this Section
4.4
shall be borne solely by the Corporation. 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.
35
(a)
|
Subject
to the prior consent of the holders of Voting Shares or the holders
of
Rights obtained as set forth in Subsections 5.4(b) or 5.4(c) hereof,
as
applicable, the Board of Directors acting in good faith may, 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, elect
to
redeem all but not less than all of the then outstanding Rights
at a
redemption price of $0.0001 per Right appropriately adjusted in
a manner
analogous to the applicable adjustment provided for in Section
2.3 hereof
in the event that an event of the type described in Section 2.3
hereof
shall have occurred (such redemption price being herein referred
to as the
“Redemption Price”).
|
(b)
|
Subject
to the prior consent of the holders of Voting Shares obtained as
set forth
in Subsection 5.4(b) hereof, the Board of Directors 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 pursuant to this
Section
5.1, and upon prior written notice to the Rights Agent, determine
to waive
the application of Section 3.1 hereof to a Flip-in Event which
may occur
by reason of an acquisition of Voting Shares made otherwise than
pursuant
to a Take-over Bid made by means of a take-over bid circular to
all
holders of record of Voting Shares (which for greater certainty
shall not
include the circumstances described in Subsection 5.1(g) below).
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 (10) Business Days following the meeting of shareholders
called to approve such waiver.
|
(c)
|
The
Board of Directors 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 pursuant to this Section 5.1, and upon prior written notice
delivered to the Rights Agent, determine to waive the application
of
Section 3.1 hereof to a Flip-in Event which may occur by reason
of a
Take-over Bid made by means of a take-over bid circular to all
holders of
Voting Shares (which for greater certainty shall not include the
circumstances described in Subsection 5.1(g) below); provided that
if the
Board of Directors waives the application of Section 3.1 hereof
to a
particular Flip-in Event pursuant to this Subsection 5.1(c), the
Board of
Directors shall be deemed to have waived the application of Section
3.1
hereof 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 record
of
Voting Shares prior to the expiry of any Take-over Bid (as the
same may be
extended from time to time) in respect of which a waiver is, or
is deemed
to have been, granted pursuant to this Subsection
5.1(c).
|
36
(d)
|
The
Board of Directors may, prior to the close of business on the tenth
(10th)
Trading Day following a Stock Acquisition Date or such later Business
Day
as they may from time to time determine, upon prior written notice
delivered to the Rights Agent, waive the application of Section
3.1 to the
related Flip-In Event, provided that the Acquiring Person has reduced
its
Beneficial Ownership of Voting Shares (or has entered into a contractual
arrangement with the Corporation, acceptable to the Board of Directors,
to
do so within ten (10) calendar days of the date on which such contractual
arrangement is entered into or such other date as the Board of
Directors
may have determined) such that at the time the waiver becomes effective
pursuant to this Subsection 5.1(d) such Person is no longer an
Acquiring
Person. In the event of such a waiver becoming effective prior
to the
Separation Time, for the purposes of this Agreement, such Flip-In
Event
shall be deemed not to have
occurred.
|
(e)
|
Where
a Take-over Bid that is not a Permitted Bid Acquisition is withdrawn
or
otherwise terminated after the Separation Time has occurred and
prior to
the occurrence of a Flip-In Event, the Board of Directors may elect
to
redeem all the outstanding Rights at the Redemption Price. Upon
the Rights
being redeemed pursuant to this Subsection 5.1(e), all the provisions
of
this Agreement shall continue to apply as if the Separation Time
had not
occurred and Rights Certificates representing the number of Rights
held by
each holder of record of Common Shares as of the Separation Time
had not
been mailed to each such holder and for all purposes of this Agreement
the
Separation Time shall be deemed not to have occurred and the Corporation
shall be deemed to have issued replacement Rights to the holders
of its
then outstanding Common Shares.
|
(f)
|
Notwithstanding
the provisions of Subsections 5.1(b) and (c) hereof, the Board
of
Directors may, prior to the close of business on the eighth (8th)
day following the Stock Acquisition Date, determine, upon prior
written
notice delivered to the Rights Agent, to waive or to agree to waive
the
application of Section 3.1 hereof to a Flip-in Event, provided
that both
of the following conditions are
satisfied:
|
(i)
|
the
Board of Directors has determined that a Person became an Acquiring
Person
by inadvertence and without any intention to become, or knowledge
that
Person would become, an Acquiring Person;
and
|
(ii)
|
such
Acquiring Person has reduced its Beneficial Ownership of Voting
Shares (or
has entered into a contractual arrangement with the Corporation,
acceptable to the Board of Directors, to do so within thirty (30)
days of
the date on which such contractual arrangement is entered into)
such that
at the time the waiver becomes effective pursuant to this Subsection
5.1(f), such Person is no longer an Acquiring Person; and in the
event of
such a waiver, for the purposes of this Agreement, the Flip-in
Event shall
be deemed never to have occurred, and the Separation Time shall
be deemed
not to have occurred as a result of such Person having inadvertently
become an Acquiring Person.
|
(g)
|
The
Board of Directors 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, a Competing Permitted Bid
or an
Exempt Acquisition under Subsection 5.1(c) above, takes up and
pays for
Voting Shares pursuant to the terms and conditions of such Permitted
Bid,
Competing Permitted Bid or Exempt Acquisition, as the case may
be.
|
37
(h)
|
If
the Board of Directors elects or is deemed to have elected to redeem
the
Rights and, in circumstances in which Subsection 5.1(a) is applicable,
such redemption is approved by the holders of Voting Shares or
the holders
of Rights in accordance with Subsection 5.4(b) or (c), as the case
may be,
the right to exercise the Rights will thereupon, without further
action
and without notice, terminate and each Right will after redemption
be null
and void and the only right thereafter of the holders of Rights
shall be
to receive the Redemption Price.
|
(i)
|
Within
ten (10) days after the Board of Directors electing or having been
deemed
to have elected to redeem the Rights or, if Subsection 5.1(a) applies,
within ten (10) Business Days after the holders of Voting Shares
or the
holders of Rights have approved the redemption of Rights in accordance
with Subsection 5.4(b) or (c) hereof, 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 all such holders at their last
address as
they appear upon the Rights Register or, prior to the Separation
Time, on
the registry books of the Transfer Agent for the Common Shares.
Any
notice, which is mailed in the manner herein provided, shall 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 and other than in connection
with the purchase of Common Shares prior to the Separation
Time.
|
(j)
|
Where
a Take-over Bid that is not a Permitted Bid Acquisition is withdrawn
or
otherwise terminated after the Separation Time has occurred and
prior to
the occurrence of a Flip-in Event, the Board of Directors may elect
to
redeem all the outstanding Rights at the Redemption Price. Upon
the Rights
being redeemed pursuant to this Subsection 5.1(j), all the provisions
of
this Agreement shall continue to apply as if the Separation Time
had not
occurred and Rights Certificates representing the number of Rights
held by
each holder of record of Common Shares as of the Separation Time
had not
been mailed to each such holder and for all purposes of this Agreement
the
Separation Time shall be deemed not to have
occurred.
|
(k)
|
The
Corporation shall give prompt written notice to the Rights Agent
of any
waiver of the application of Section 3.1 pursuant to this Section
5.1.
|
5.2
|
Expiration.
No person shall have any rights whatsoever pursuant to or arising
out of
this Agreement or in respect of any Right after the Expiration
Time,
except the Rights Agent as specified in Subsection 4.1(a)
hereof.
|
38
5.3
|
Issuance
of New Right 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 adjustments or change in the
number of
kind or class of shares purchasable upon exercise of Rights made
in
accordance with the provisions of this
Agreement.
|
(a)
|
The
Corporation may from time to time supplement or amend this Agreement
without the approval of any holders of Rights or Voting Shares
to correct
any clerical or typographical error or to maintain the validity
of the
Agreement as a result of a change in any applicable legislation
or
regulations thereunder. The Corporation, at or prior to the meeting
of the
shareholders, or any adjournment or postponement thereof, to be
held for
shareholders of the Corporation to consider and if deemed advisable,
to
adopt a resolution approving, ratifying and confirming this Agreement
and
the Rights issued pursuant thereto, may supplement or amend this
Agreement
without the approval of any holders of Rights or Voting Shares
in order to
make changes which the Board of Directors acting in good faith
may deem
necessary or desirable.
|
Notwithstanding
anything in this Section 5.4 to the contrary, no supplement or amendment
shall
be made to the provisions of Article 4 hereof except with the written
concurrence of the Rights Agent to such supplement or amendment.
(b)
|
Subject
to Subsection 5.4(a), the Corporation may, with the prior consent
of the
holders of the Voting Shares obtained as set forth below, at any
time
prior to the Separation Time, amend, vary or rescind 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
provided by
the holders of Voting Shares at a meeting of the holders of Voting
Shares,
which meeting shall be called and held in compliance with applicable
laws
and regulatory requirements and the requirements in the articles
and
by-laws of the Corporation. Subject to compliance with any requirements
imposed by the foregoing, consent shall be given if the proposed
amendment, variation or revision is approved by the affirmative
vote of a
majority of the votes cast by Independent Shareholders present
in person
or represented by proxy and entitled to be voted at a meeting of
the
holders of Voting Shares.
|
(c)
|
Subject
to Subsection 5.4(a), the Corporation may, with the prior consent
of the
holders of Rights obtained as set forth below, at any time after
the
Separation Time and before the Expiration Time, amend, vary or
rescind 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 Agent thereto. Such consent shall be
deemed to
have been given if provided by the holders of Rights at a Rights
Holders’
Special Meeting, which Rights Holders’ Special Meeting shall be called and
held in compliance with applicable laws and regulatory requirements
and,
to the extent possible, with the requirements in the articles and
by-laws
of the Corporation applicable to meetings of holders of Common
Shares,
applied mutatis mutandis. Subject to compliance with any requirements
imposed by the foregoing, consent shall be given if the proposed
amendment, variation or rescission is approved by the affirmative
vote of
a majority of the votes cast by holders of Rights (other than holders
of
Rights whose Rights have become null and void pursuant to Subsection
3.1(b)), represented in person or by proxy at the Rights Holders’ Special
Meeting.
|
39
(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 in person or represented by proxy
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 Companies Act with respect to a meeting of shareholders
of
the Corporation.
|
(e)
|
Any
supplements or amendments made by the Corporation to this Agreement
pursuant to Subsection 5.4(a) above which are required to maintain
the
validity of this Agreement as a result of any change in any applicable
legislation or regulations 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; and
|
(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(c), confirm or reject such
amendment.
|
(f) |
The
Corporation shall be required to provide the Rights Agent with
notice in
writing of any such amendment, recission or variation to this Agreement
as
referred to in this Section 5.4 within five business days of effecting
such amendment, recission or variation. A supplement or amendment
shall be
effective from the date of the resolution of the Board of Directors
adopting such supplement or amendment until it is confirmed or
rejected or
until it ceases to be effective (as described in the next sentence)
and,
where such supplement or amendment is confirmed, it continues in
effect in
the form so confirmed. If such supplement or amendment is rejected
by the
shareholders or the holders of Rights or is not submitted to the
shareholders or holders of Rights as required, then such supplement
or
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, vary or delete any
provision of this Agreement to substantially the same effect shall
be
effective until confirmed by the shareholders or holders of Rights,
as the
case may be.
|
40
(a)
|
The
Corporation shall not be required to issue fractions of Rights or
to
distribute Rights Certificates which evidence fractional Rights.
Any such
fractional Right shall be null and void and the Corporation will
not have
any obligation or liability in respect
thereof.
|
(b)
|
The
Corporation shall not be required to issue fractions of Common Shares
or
other securities upon exercise of the Rights or to distribute certificates
which evidence fractional Common Shares or other securities, the
Corporation shall pay to the registered holders 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.
|
5.6
|
Rights
of Action.
Subject to the terms of this Agreement, all rights of action in respect
of
this Agreement, other than rights of action vested solely in the
Rights
Agent, are vested in the respective registered holders of the Rights;
and
any registered holder of any Rights, without the consent of the Rights
Agent or of the registered 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 such holder's
right to exercise such holder's Rights in the manner provided in
such
holder's Rights Certificate and in this Agreement. 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.
|
5.7
|
Regulatory
Approvals.
Any obligation of the Corporation or action or event contemplated
by this
Agreement (including, without limitation, any amendments to this
Agreement) shall be subject to the receipt of any requisite approval
or
consent from any governmental or regulatory authority, and without
limiting the generality of the foregoing, necessary approvals of
any stock
exchange shall be obtained, such as approvals relating to the issuance
of
Common Shares upon the exercise of Rights under Subsection 2.2(d).
|
5.8
|
Declaration
as to Non-Canadian
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 by the Corporation with the securities laws or
comparable legislation of a jurisdiction outside Canada or the United
States, the Board of Directors acting in good faith shall 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 or United States resident trustee of Rights
or
securities issuable on exercise of Rights, the holding thereof in
trust
for the Persons entitled thereto (but reserving to the trustee or
to the
trustee and the Corporation, as the Corporation may determine, absolution
investment discretion with respect thereto) and the sale thereof
and
remittance of 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 or the United States, in which such issue or delivery
would be
unlawful without registration of the relevant Persons or securities
for
such purposes.
|
41
5.9
|
Notice
of Proposed Actions.
In case the Corporation shall propose after the Separation Time and
prior
to the Expiration Time to effect or permit (in cases where the
Corporation's permission is required) any Flip-in Event or to effect
the
liquidation, dissolution or winding-up of the Corporation or the
sale of
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 5.8 hereof, a notice of such proposed action, which shall
specify
the date on which such Flip-in Event, liquidation, dissolution, winding-up
or sale is to take place, and such notice shall be so given at least
twenty (20) Business Days prior to the date of taking of such proposed
action.
|
5.10
|
Notices.
Notices or demands authorized or required by this Agreement to be
given or
made 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
first-class mail, postage prepaid, addressed (until another address
is
filed in writing with the Rights Agent) or sent by facsimile (in
the case
of facsimile, 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 facsimile), charges prepaid and confirmed in
writing,
as follows:
|
0000
Xxxxxxx Xxxxx,
Xxxxxxxx
00, Xxxxx 000
Xxxxxxxxxxx,
Xxxxxxx
X0X
0X0
Attention:
Chairman and Chief Executive Officer
Facsimile:
905.629.9761
e-mail:
xxxxxx@xxxxxxxxxxxxx.xxx
Any
notice or demand authorized or required by this Agreement to be given or made
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 first-class mail, postage
prepaid, addressed (until another address is filed in writing with the
Corporation) or sent by facsimile (in the case of facsimile, 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 facsimile), or other
form
of recorded electronic communication, charges prepaid and confirmed in writing,
as follows:
42
CIBC
Mellon Trust Company
6th
Floor
000
Xxx
Xxxxxx
X.X.
Xxx
0
Xxxxxxx,
Xxxxxxx
X0X
0X0
Attention:
Manager, Client Services
Facsimile:
(000) 000-0000
Notices
or demands authorized or required by this Agreement to be given or made 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, addressed to such holder at the address of such holder as it appears
upon the Rights Register or, prior to the Separation Time, on the registry
books
of the transfer agent for the Common Shares. Any notice, which is mailed in
the
manner herein provided, shall be deemed given, whether or not the holder
receives the notice. Any notice given or made in accordance with this Section
5.10 shall be deemed to have been given and to have been received on the day
of
delivery, if 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 mailed, and on the
day
of telegraphing, telecopying or sending of the same by other means of recorded
electronic communication (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.
5.11
|
Cost
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 to enforce his, her or its rights
pursuant to any Rights or this
Agreement.
|
5.12
|
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.
|
5.13
|
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.
|
5.14
|
Governing
Law.
This Agreement and each Right issued hereunder shall be deemed to
be a
contract made under the laws of the Province of Ontario 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.
|
43
5.15
|
Severability.
If any Section, Subsection, Clause, Subclause, term or provision
hereof or
the application thereof to any circumstances or any right hereunder
shall,
in any jurisdiction and to any extent, be invalid or unenforceable,
such
Section, Subsection, Clause, Subclause, term or provision or such
right
shall be ineffective only in such jurisdiction and to the extent
of such
invalidity or unenforceability in such jurisdiction without invalidating
or rendering unenforceable or ineffective the remaining Sections,
Subsections, Clauses, Subclauses, terms and provisions hereof or
rights
hereunder in such jurisdiction or the application of such Section,
Subsection, Clause, Subclause, term or provision or rights hereunder
in
any other jurisdiction or to circumstances other than those as to
which it
is specifically held invalid or
unenforceable.
|
5.16
|
Effective
Date.
This Agreement is effective and in full force and effect in accordance
with its terms as of the date hereof (the "Effective Date"). If the
Rights
Plan is not confirmed by resolution passed by a majority of the votes
cast
by Independent Shareholders present or represented by proxy at a
meeting
of shareholders of the Corporation to be held within six months of
the
Effective Date, then, without further formality, this Agreement and
all
outstanding Rights shall terminate and be void and be of no further
force
and effect on and from the earlier of: (i) the close of such meeting
of
shareholders; and (ii) 5:00 p.m. (Toronto time) on the date which
is six
(6) months after the Effective Date.
|
5.17
|
Reconfirmation.
Notwithstanding
the confirmation of this Agreement pursuant to Section 5.16, this
Agreement must be reconfirmed by a resolution passed by a majority
of the
votes cast by all holders of Voting Shares who vote in respect of
such
resolution at every third annual meeting of shareholders following
the
meeting at which this Agreement is confirmed pursuant to Section
5.16. If
this Agreement is not so reconfirmed (or is not presented for
reconfirmation) at such annual meeting, this Agreement and all outstanding
Rights shall terminate and be void and of no further force or effect
on
and from the date of termination of the annual meeting; provided,
however,
that termination shall not occur if a Flip-in Event has occurred
(other
than a Flip-in Event which has been waived pursuant to Section 5.1),
prior
to the date upon which this Agreement would otherwise terminate pursuant
to this Section 5.17.
|
5.18
|
Determinations
and Actions by the Board of Directors.
The Board of Directors shall have the exclusive power and authority
to
administer this Agreement and to exercise all rights and powers
specifically granted to the Board of Directors or to the Corporation
as
may be necessary or advisable in the administration of this Agreement.
All
such actions, calculations and determinations (including all omissions
with respect to the foregoing) which are done or made by the Board
of
Directors, in good faith, shall not subject the Board of Directors
or any
director of the Corporation to any liability to the holders of the
Rights.
|
5.19
|
Rights
of Board, Corporation and Offeror.
Without limiting the generality of the foregoing, nothing contained
herein
shall be construed to suggest or imply that the Board of Directors
shall
not be entitled to recommend that holders of Voting Shares reject
or
accept an Takeover Bid or take any other action (including, without
limitation, the commencement, prosecution, defence or settlement
of any
litigation and the submission of additional or alternative Take-over
Bids
or other proposals to the Shareholders of the Corporation) with respect
to
any Take-over Bid or otherwise that the Board of Directors believes
is
necessary or appropriate in the exercise of its fiduciary duties.
|
44
5.20
|
Regulatory
Approvals.
Any obligation of the Corporation or action or event contemplated
by this
Agreement shall be subject to the prior receipt of any requisite
approval
or consent from any governmental or regulatory authority including,
without limiting the generality of the foregoing, any necessary approval
of any securities regulatory authority, The Toronto Stock Exchange
or any
other stock exchange.
|
5.21
|
Declaration
as to Non-Canadian 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, the Board of Directors acting in good
faith
may take such actions as it may deem appropriate to ensure such
compliance. 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 or the United States in which such
issue or
delivery would be unlawful without registration of the relevant Persons
or
securities for such purposes. United States Persons, as such term
is
defined in Regulation S of the 1933 Securities Act, may not exercise
the
Rights granted pursuant to this Agreement unless the Common Shares
to be
issued pursuant to the exercise of such Rights are either registered
under
the 1933 Securities Act, or there is an appropriate exemption from
registration.
|
5.22
|
Time
of the Essence.
Time shall be of the essence in this
Agreement.
|
5.23
|
Execution
in 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 one and the same
instrument.
|
5.24
|
Expiration
Time.
If the Separation Time shall have occurred, then (notwithstanding
anything
to the contrary in this Agreement) this Agreement and the Rights
shall
continue in full force and effect until such time as there shall
be no
further Rights.
|
[SIGNATURE
PAGE FOLLOWS]
45
“Xxx
Xxxxxx”
Name:
Xxx
Xxxxxx
Title:
VP, Finance and Administration
CIBC
MELLON TRUST COMPANY
“Xxx
Xxx”
Name:
Xxx
Xxx
Title:
Authorized Signatory
“Xxxxx
Xxxxxxx”
Name: Xxxxx Xxxxxxx
Title:
Authorized Signatory
46
EXHIBIT
“A-1”
[FORMS
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. UNDER CERTAIN CIRCUMSTANCES, RIGHTS
BENEFICIALLY OWNED BY AN ACQUIRING PERSON, ANY PERSON ACTING JOINTLY OR IN
CONCERT WITH AN ACQUIRING PERSON OR THEIR RESPECTIVE ASSOCIATES AND AFFILIATES
(AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) AND THEIR RESPECTIVE
TRANSFEREES SHALL BECOME VOID WITHOUT ANY FURTHER ACTION.
This
certifies that _______________________________ or registered assigns, 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 the ____ day
of
October, 2007 (the "Rights Agreement") between YM BioSciences Inc., a
corporation continued under the Companies
Act (Nova
Scotia) (the "Corporation"), and CIBC Mellon Trust Company, a trust company
incorporated under the laws of Canada, 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 and
prior
to the Expiration Time (as such terms are defined in the Rights Agreement)
one
fully paid and non-assessable 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
and submitted to the Rights Agent at its principal office in the City of
Toronto. The Exercise Price shall initially be $200.00 (Canadian) 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, each
Right evidenced hereby may entitle the registered holder thereof to purchase
or
receive assets, debt securities or other equity securities of the Corporation
(or a combination thereof) all 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. Copies of the Rights Agreement are
on
file at the registered head 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 entitling the holder to
purchase a like aggregate number of Common Shares as the 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.
47
Subject
to the provisions of the Rights Agreement, the Rights evidenced by this Rights
Certificate (i) may be, and under certain circumstances are required to be,
redeemed by the Corporation at a redemption price of $0.0001 per Right; and
(ii)
may be exchanged at the option of the Corporation for cash, debt or equity
securities or other assets of the Corporation.
No
fractional Common Shares will be issued upon the exercise of any Right or Rights
evidenced hereby.
No
holder
of this Rights Certificate, as such, shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of Common Shares or of any
other securities of the Corporation 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, 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 of the Corporation 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 of the
Corporation (except as expressly provided in the Rights Agreement), or to
receive dividends, distributions 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 manually countersigned by the Rights Agent.
WITNESS
the
facsimile signature of the proper officers of the Corporation.
Date:
|
||||||
By:
|
By:
|
|||||
Chairman
and Chief Executive Officer
|
Vice
President, Finance and
|
|||||
Administration
|
||||||
Countersigned
|
||||||
CIBC
MELLON TRUST COMPANY
|
||||||
Transfer
Agent and Registrar
|
||||||
By:
|
||||||
Authorized
Signature
|
48
(To
be
attached to each Rights Certificate)
TO:
YM
BIOSCIENCES INC.
The
undersigned hereby irrevocably elects to exercise ____________________ whole
Rights represented by the attached Rights Certificate to purchase the Common
Shares issuable upon the exercise of such Rights and requests that certificates
for such Shares be issued to:
(Name)
(Address)
(City and State or Province)
Social Insurance, Social Security or Other Taxpayer Number
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)
(Address )
(City and State or Province)
Social
Insurance, Social Security or Other Taxpayer Number
Date
Guaranteed
by an
|
||
Eligible
Institution:
|
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)
|
49
An
"Eligible Institution" means a Canadian Schedule 1 chartered bank, a major
trust
company in Canada, a member of the Securities Transfer Association Medallion
Program (STAMP), a member of the Stock Medallion Program (SEMP) or a member
of
the New York Stock Exchange Inc. Medallion Signature Program (MSP). Members
of
these programs are usually members of a recognized stock exchange in Canada
and
the United States, members of the Investment Dealers Association of Canada,
members of the National Association of Securities Dealers or banks and trust
companies in the United States.
[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 any Person acting
jointly or in concert with any of the foregoing (as defined in the Rights
Agreement).
Signature
|
In
the
event the certification set forth in the Form of Election to Exercise is not
completed, the Corporation will deem the Beneficial Owner of the Rights
evidenced by this Rights Certificate to be an Acquiring Person or an Affiliate
or Associate thereof (as defined in the Rights Agreement) and accordingly such
Rights shall be null and void.
50
(To
be
executed by the registered holder if such
holder
desires to transfer the Rights Certificate)
FOR
VALUE
RECEIVED ________________________________________ hereby sells,
assigns
and transfers unto ______________________________________ (Please
print name and address of transferee) the
Rights represented by this Rights Certificate, together with all right, title
and interest therein and does hereby irrevocably constitute and appoint
_____________________________ as attorney to transfer the within Rights on
the
books of the Corporation, with full power of substitution.
Dated
|
||||
Guaranteed
by an
|
||||
Eligible
Institution:
|
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)
|
An
"Eligible Institution" means a Canadian Schedule 1 chartered bank, a major
trust
company in Canada, a member of the Securities Transfer Association Medallion
Program (STAMP), a member of the Stock Medallion Program (SEMP) or a member
of
the New York Stock Exchange Inc. Medallion Signature Program (MSP). Members
of
these programs are usually members of a recognized stock exchange in Canada
and
the United States, members of the Investment Dealers Association of Canada,
members of the National Association of Securities Dealers or banks and trust
companies in the United States.
[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 any Person acting
jointly or in concert with any of the foregoing (as defined in the Rights
Agreement).
Signature
|
In
the
event the certification set forth in the Form of Assignment is not completed,
the Corporation will deem the Beneficial Owner of the Rights evidenced by this
Rights Certificate to be an Acquiring Person or an Affiliate or Associate
thereof (as defined in the Rights Agreement) and accordingly such Rights shall
be null and void.
51