SUBSCRIPTION RECEIPT AGREEMENT
between
AUSTRALIAN-CANADIAN OIL ROYALTIES LTD.
- and -
OLYMPIA TRUST COMPANY
- and -
TORYS LLP
Providing for the Issue of
Subscription Receipts
January 20, 2012
ARTICLE 1 INTERPRETATION.......................................................2
1.1 Definitions...................................................2
1.2 Headings......................................................6
1.3 References....................................................6
1.4 Certain Rules of Interpretation...............................6
1.5 Day Not a Business Day........................................7
1.6 Applicable Law................................................7
1.7 Conflict......................................................7
1.8 Currency......................................................7
1.9 Severability..................................................7
ARTICLE 2 ISSUE OF SUBSCRIPTION RECEIPTS.......................................7
2.1 Creation and Issue of Subscription Receipts...................7
2.2 Form and Terms of Subscription Receipts.......................8
2.3 Receiptholder not a Shareholder..............................10
2.4 Subscription Receipts to Rank Pari Passu.....................10
2.5 Signing of Subscription Receipt Certificates.................10
2.6 Certification by the Subscription Receipt Trustee............10
2.7 Issue in Substitution for Subscription
Receipt Certificates Lost, etc........................11
2.8 Exchange of Subscription Receipt Certificates................11
2.9 Charges for Exchange.........................................11
2.10 Transfer and Ownership of Subscription Receipts..............12
2.11 Escrowed Funds to be Placed in Escrow / Role of Torys........13
2.12 Issuance Right and Refund Right..............................14
2.13 Liquidation or Bankruptcy of the Corporation.................14
2.14 Reliance by the Subscription Receipt Trustee.................14
2.15 Cancellation of Surrendered Subscription
Receipt Certificates..................................15
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ARTICLE 3 SATISFACTION OF ISSUANCE RIGHT OR REFUND RIGHT......................15
3.1 Notice of Satisfaction of Escrow Release Conditions..........15
3.2 Issue of ACOR Shares.........................................15
3.3 Delivery of Irrevocable Direction and Release of Funds.......16
3.4 Reimbursement Pursuant to Refund Right.......................16
ARTICLE 4 ESCROWED FUNDS......................................................17
4.1 Segregation of Escrowed Funds................................17
ARTICLE 5 INVESTMENT OF ESCROW FUNDS..........................................18
5.1 Subscription Receipt Trustee.................................18
5.2 Interest on Escrowed Funds...................................18
ARTICLE 6 RIGHTS OF THE CORPORATION AND COVENANTS.............................19
6.1 Optional Purchases by the Corporation........................19
6.2 General Covenants of the Corporation.........................19
6.3 Subscription Receipt Trustee's Remuneration and Expenses.....20
6.4 Performance of Covenants by Subscription Receipt Trustee.....20
6.5 Accounting...................................................20
6.6 Payments by Subscription Receipt Trustee.....................21
6.7 Indemnity of Receiptholders..................................21
ARTICLE 7 ENFORCEMENT.........................................................21
7.1 Suits by Receiptholders......................................21
7.2 Immunity of Shareholders.....................................21
7.3 Limitation of Liability......................................21
ARTICLE 8 MEETINGS OF RECEIPTHOLDERS..........................................22
8.1 Right to Convene Meeting.....................................22
8.2 Notice of Meetings...........................................22
8.3 Chair........................................................22
8.4 Quorum.......................................................22
8.5 Power to Adjourn.............................................23
8.6 Show of Hands................................................23
8.7 Voting by Poll...............................................23
8.8 Voting.......................................................23
8.9 Regulations..................................................24
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8.10 Persons Entitled to Attend Meetings..........................24
8.11 Powers Exercisable by Extraordinary Resolution...............24
8.12 Meaning of Extraordinary Resolution..........................26
8.13 Powers Cumulative............................................26
8.14 Minutes......................................................27
8.15 Instruments in Writing.......................................27
8.16 Binding Effect of Resolutions................................27
8.17 Evidence of Rights of Receiptholders.........................27
8.18 Holdings by Corporation Disregarded..........................28
ARTICLE 9 SUPPLEMENTAL AGREEMENTS.............................................28
9.1 Provision for Supplemental Agreements for Certain Purposes...28
ARTICLE 10 CONCERNING THE SUBSCRIPTION RECEIPT TRUSTEE........................29
10.1 Applicable Legislation.......................................29
10.2 Rights and Duties of Subscription Receipt Trustee............29
10.3 Evidence, Experts and Advisors...............................30
10.4 Documents, Monies, etc. Held by Subscription
Receipt Trustee.......................................31
10.5 Actions by Subscription Receipt Trustee to
Protect Interest......................................31
10.6 Subscription Receipt Trustee not Required to
Give Security.........................................31
10.7 Protection of Subscription Receipt Trustee...................31
10.8 Replacement of Subscription Receipt Trustee;
Successor by Merger...................................32
10.9 Conflict of Interest.........................................33
10.10 Acceptance of Appointments...................................34
10.11 Subscription Receipt Trustee Not to be Appointed Receiver....34
10.12 Not Bound to Act.............................................34
10.13 Third Party Interest.........................................34
10.14 Privacy......................................................34
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ARTICLE 11 GENERAL............................................................35
11.1 Notice to the Corporation and the Subscription
Receipt Trustee.......................................35
11.2 Waiver.......................................................36
11.3 Evidence of Ownership........................................36
11.4 Satisfaction and Discharge of Agreement......................37
11.5 Provisions of Agreement and Subscription Receipts
for the Sole Benefit of Parties and Receiptholders....37
11.6 Subscription Receipts Owned by the Corporation or its
Subsidiaries - Certificate to be Provided.............37
11.7 Language.....................................................38
11.8 Effect of Execution..........................................38
11.9 Time of Essence..............................................38
11.10 Counterparts.................................................38
Schedule A - Form of Subscription Receipt Certificate
Schedule B - Irrevocable Direction of the Corporation
Schedule C - Closing Notice
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SUBSCRIPTION RECEIPT AGREEMENT
THIS AGREEMENT made as of January 20, 2012
BETWEEN:
AUSTRALIAN-CANADIAN OIL ROYALTIES LTD., a corporation formed and existing
under the laws of the Province of British Columbia ("ACOR" or the
"CORPORATION")
- and -
OLYMPIA TRUST COMPANY, a trust company existing under the laws of the
Province of Alberta and having an office in Calgary, Alberta (the
"SUBSCRIPTION RECEIPT TRUSTEE")
- and -
TORYS LLP, a law firm having an office in Calgary, Alberta ("TORYS")
RECITALS:
A. The Corporation is proposing to issue and sell Subscription Receipts
representing, in certain circumstances, the right to receive ACOR Shares
(as defined herein) on the basis set forth in this Agreement.
B. The Corporation is a party to the Share Exchange Agreement, whereby the
Exchange (as defined herein) is to be completed and the Escrowed Funds (as
defined herein)shall be released by the Corporation and the Receiptholder
(as defined herein) shall be entitled to receive in respect of each
Subscription Receipt (as defined herein) held one common share in the
capital of the Corporation.
C. The Corporation agrees that:
(i) pending the release in accordance with the terms and conditions
hereof, the Escrowed Funds are to be delivered to Torys to be held on
behalf of the Subscription Receipt Trustee (as defined herein) and
held by Torys and the Subscription Receipt Trustee as agent for and on
behalf of the Corporation and the Receiptholders and invested in the
manner set forth herein;
(ii) if the Escrow Release Conditions are satisfied and the Closing Notice
(as defined herein)is delivered to the Subscription Receipt Trustee at
or before the Termination Time,(A) the holders of Subscription
Receipts will be issued, without additional consideration or further
action being required by the holders, one ACOR Share for each
Subscription Receipt held, and (B) the Escrowed Funds, together with
any interest earned thereon but less any deductions provided for in
this Agreement, will be released to the Corporation, all in accordance
with the provisions of the Subscription Receipt Certificate(s), this
Agreement and the Share Exchange Agreement; and
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(iii) if the Escrow Release Conditions are not satisfied at or before the
Termination Time or, for any reason, a Termination Event occurs, the
ACOR Shares will not be issued and the holders of Subscription
Receipts will be entitled to receive an amount equal to the Issue
Price for each Subscription Receipt held, together with such
Receiptholder's pro rata share of the interest earned on the Escrowed
Funds less applicable withholding taxes, if any.
NOW THEREFORE THIS AGREEMENT WITNESSES that for good and valuable
consideration mutually given and received, the receipt and sufficiency of which
is hereby acknowledged, IT IS HEREBY AGREED AND DECLARED AS FOLLOWS:
ARTICLE 1
INTERPRETATION
1.1 DEFINITIONS
In this Agreement and the recitals the following terms have the meanings
ascribed thereto:
(a) "ACOR SHARE" or "COMMON SHARE" means a common share in the capital of
the Corporation, as constituted from time to time;
(b) "ACQUISITION AGREEMENT" means the Asset Purchase Agreement dated
November 17, 2011 among the Corporation, Chelsea Oil Australia Pty
Ltd., Brisbane Petroleum Limited and Delbaere Associates Pty Ltd.
(c) "AGREEMENT" means this Subscription Receipt Agreement dated January
20, 2012 and any agreement or instrument supplemental thereto;
(d) "APPLICABLE LEGISLATION" means any statute of Canada or of a province
or territory thereof, and all regulations under any such named or
other statute, relating to agreements similar in nature to this
Agreement or to the rights, duties and obligations of the Subscription
Receipt Trustee, trusts and corporations under agreements similar in
nature to this Agreement, to the extent that such provisions are at
the time in force and applicable to this Agreement;
(e) "AUTHORIZED INVESTMENT" has the meaning set forth in Section 5.1 of
this Agreement;
(f) "BCBCA" means the Business Corporations Act (British Columbia), S.B.C.
2002, c.57, c.B9, as amended, including the regulations promulgated
thereunder;
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(g) "BUSINESS DAY" means any day which is not a Saturday, Sunday or a
statutory holiday in Calgary, Alberta;
(h) "CLOSING" means the closing of the Subscription Receipt Offering;
(i) "CLOSING DATE" means the date of the Closing;
(j) "CLOSING NOTICE" means a notice substantially in the form set forth in
Schedule C hereto, executed by the Corporation, confirming that the
Escrow Release Conditions have been satisfied;
(k) "COUNSEL" means a barrister or solicitor or a firm of barristers and
solicitors, who may be counsel for the Corporation, reasonably
acceptable to the Subscription Receipt Trustee;
(l) "DESIGNATED OFFICE" means the principal stock transfer office of the
Subscription Receipt Trustee from time to time in the City of Calgary,
Alberta;
(m) "ESCROW RELEASE CONDITIONS" means:
(i) the Corporation has received all necessary regulatory (including
applicable stock exchange approval) and other approvals to (A)
the Subscription Receipt Offering and the issue of the ACOR
Shares pursuant to the Issuance Rights, and (B) complete the
Exchange;
(ii) all conditions, undertakings and other matters to be satisfied,
completed and otherwise met prior to the completion of the
Exchange (substantially in accordance with the Share Exchange
Agreement) have been satisfied, completed or otherwise met; and
(iii) there is no material impediment, restriction or prohibition to
the completion of the Exchange (on the terms and subject to the
conditions contained in the Share Exchange Agreement) forthwith
upon release from escrow hereunder of the Escrowed Funds to the
Corporation;
(n) "ESCROWED FUNDS" means up to $2,975,000, which amount is equal to the
Issue Price multiplied by the number of Subscription Receipts sold at
Closing;
(o) "EXCHANGE" means the exchange between ACOR and the Newco
Securityholders on a one-for-one basis pursuant to the Share Exchange
Agreement;
(p) "EXCHANGE DATE" means the date upon which the Escrow Release
Conditions are satisfied and the Issuance Rights arise in favor of the
Receiptholders;
(q) "FINRA" means the Financial Industry Regulatory Authority Inc.;
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(r) "IRREVOCABLE DIRECTION" means the written irrevocable direction of the
Corporation, to be delivered to the Subscription Receipt Trustee
pursuant to Section 3.3 herein, substantially in the form set forth in
Schedule B hereto;
(s) "ISSUANCE RIGHT" means, with respect to each Subscription Receipt, the
right of the holder, or a transferee thereof, to be issued at the
Issue Time, without payment of additional consideration or further
action, an ACOR Share for each Subscription Receipt held on the
Exchange Date, as provided in such right arising immediately if the
Escrow Release Conditions are satisfied and the Closing Notice and the
Irrevocable Direction have been delivered at or before the Termination
Time or otherwise in accordance with this Agreement;
(t) "ISSUE PRICE" means the amount of US$0.35 per Subscription Receipt;
(u) "ISSUE TIME" means the time on the Exchange Date when the Closing
Notice and Irrevocable Direction are delivered to the Subscription
Receipt Trustee;
(v) "NEWCO SECURITYHOLDERS" means the securityholders of 1629518 Alberta
Ltd., which are parties to the Share Exchange Agreement;
(w) "OTC BULLETIN BOARD" means the OTC Bulletin Board maintained by FINRA;
(x) "RECEIPTHOLDERS" or "holders" means the persons who are registered
owners of Subscription Receipts;
(y) "RECEIPTHOLDERS' REQUEST" means an instrument, signed in one or more
counterparts by Receipt holders holding, in the aggregate, not less
than 25% of the Subscription Receipts then outstanding, requesting the
Subscription Receipt Trustee to take some action or proceeding
specified therein;
(z) "REFUND DATE" means the third Business Day following the Termination
Date;
(aa) "REFUND RIGHT" means, with respect to each Subscription Receipt, the
right of a Receiptholder to be reimbursed the Issue Price together
with any interest earned thereon at the Refund Time, as provided in
Section 3.4, such right arising immediately upon the occurrence of a
Termination Event or otherwise in accordance with this Agreement;
(bb) "REFUND TIME" means on or before 5:00 p.m. (Calgary time) on the
Refund Date;
(cc) "REGISTER" has the meaning set forth in Section 2.10(a) herein;
(dd) "SEC" means the United States Securities and Exchange Commission;
(ee) "SHARE EXCHANGE AGREEMENT" means the definitive share exchange
agreement dated November 17, 2011 relating to the Exchange of shares
between ACOR, Newco and the Newco Securityholders;
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(ff) "SHAREHOLDER" means a holder of record of one or more ACOR Shares;
(gg) "SUBSCRIPTION RECEIPT CERTIFICATE" means a certificate evidencing
Subscription Receipts substantially in the form attached hereto as
Schedule A;
(hh) "SUBSCRIPTION RECEIPT OFFERING" means the offering and sale by the
Corporation of up to 8,500,000 Subscription Receipts at a price of
US$0.35 per Subscription Receipt for aggregate offering proceeds of up
to approximately US$2,975,000;
(ii) "SUBSCRIPTION RECEIPT TRUSTEE" means Olympia Trust Company or its
successors from time to time under this Agreement;
(jj) "SUBSCRIPTION RECEIPTS" means the Subscription Receipts issued
hereunder and from time to time outstanding hereunder, each
Subscription Receipt evidencing the rights of Receipt holders under
this Agreement, including the Issuance Right or the Refund Right, as
the case may be;
(kk) "SUBSIDIARY" has the meaning set forth in the BCBCA;
(ll) "TERMINATION DATE" means February 29, 2012 or any earlier date on
which a Termination Event occurs;
(mm) "TERMINATION EVENT" has the meaning ascribed thereto in Section 3.4;
(nn) "TERMINATION TIME" means 5:00 p.m. (Calgary time) on the Termination
Date;
(oo) "THIS AGREEMENT", "HEREIN", "HEREBY" and similar expressions mean and
refer to this Subscription Receipt Agreement and any agreement or
instrument supplemental hereto;
(pp) "TRANSFER AGENT" means the Corporation;
(qq) "U.S. PURCHASER" means a purchaser of Subscription Receipts that is:
(i) a person located in the United States, or (ii) a person that was
offered Subscription Receipts in the United States;
(rr) "U.S. SECURITIES ACT" means the United States Securities Act of 1933,
as amended;
(ss) "U.S. SUBSCRIPTION RECEIPT CERTIFICATES" means the Subscription
Receipt Certificates issued to U.S. Purchasers; and
(tt) "WRITTEN REQUEST OF THE CORPORATION" and "CERTIFICATE OF THE
CORPORATION" mean, respectively, a written request and certificate
signed in the name of the Corporation by any two of its officers or
directors and may consist of one or more instruments so executed.
A derivative of any defined word or phrase has the meaning appropriate to the
derivation of the word or phrase.
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1.2 HEADINGS
The headings, the table of contents and the division of this Agreement into
Articles and Sections are for convenience of reference only and do not affect
the interpretation of this Agreement.
1.3 REFERENCES
Unless otherwise specified in this Agreement:
(a) references to Articles, Sections and Schedules are to Articles,
Sections and Schedules in this Agreement;
(b) references to Subsections are references to Subsections of the Section
in which the reference appears; and
(c) "HERETO", "HEREIN", "HEREBY", "HEREUNDER", "HEREOF" and similar
expressions, without reference to a particular provision, refer to
this Agreement.
1.4 CERTAIN RULES OF INTERPRETATION
Unless other wise specified in this Agreement:
(a) the singular includes the plural and vice versa;
(b) gender references are to be read with such changes as may be required
by the context;
(c) "PERSON" includes any individual, firm, partnership, company,
corporation, trust, trustee, government, governmental body, agency,
instrumentality, unincorporated body of persons or association;
(d) "IN WRITING" or "WRITTEN" includes printing, typewriting or any
electronic means of communication capable of being visibly reproduced
at the point of reception, including telecopy;
(e) "INCLUDING", "INCLUDES" and "IN PARTICULAR" are used for illustration
or emphasis only "and not to limit the generality of any preceding
words, whether or not non-limiting language (such as "WITHOUT
LIMITATION", "BUT NOT LIMITED TO" and similar expressions) is used
with reference thereto;
(f) reference to any statute, regulation or bylaw includes amendments,
consolidations, re-enactments and replacements thereof and instruments
and legislation thereunder; and
(g) a derivative of any defined word or phrase has the meaning appropriate
to the derivative of the word or phrase.
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1.5 DAY NOT A BUSINESS DAY
In the event that any day at or before which any action is required to be
taken hereunder is not a Business Day, then such action is to be required to be
taken at or before the requisite time on the next succeeding day that is a
Business Day.
1.6 APPLICABLE LAW
This Agreement and the Subscription Receipt Certificates are to be
construed in accordance with the laws of the Province of Alberta and the laws of
Canada applicable therein and are to be treated in all respects as Alberta
contracts or instruments.
1.7 CONFLICT
In the event of a conflict or inconsistency between a provision in the body
of this Agreement and in the Subscription Receipt Certificates issued hereunder,
the provision in the body of this Agreement prevails to the extent of the
inconsistency.
1.8 CURRENCY
All dollars amounts expressed in this Agreement and in the Subscription
Receipts are in lawful money of Canada and all payments required to be made
hereunder and thereunder are to be made in Canadian dollars.
1.9 SEVERABILITY
Each of the provisions in this Agreement is distinct and severable and a
declaration of invalidity or unenforceability of any such provision or part
thereof by a court of competent jurisdiction does not affect the validity or
enforceability of any of the other provisions hereof.
ARTICLE 2
ISSUE OF SUBSCRIPTION RECEIPTS
2.1 CREATION AND ISSUE OF SUBSCRIPTION RECEIPTS
Upon Torys' receipt of the Escrowed Funds (on behalf of the Subscription
Receipt Trustee):
(a) Torys shall confirm receipt of the Escrowed Funds to the Subscription
Receipt Trustee;
(b) 8,500,000 Subscription Receipts evidencing the rights of
Receiptholders under this Agreement, including Issuance Rights and
Refund Rights are hereby created and authorized to be issued by the
Corporation. The Subscription Receipt Trustee is hereby appointed
registrar and transfer agent for the Subscription Receipts; and
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(c) At the written direction of the Corporation, the Subscription Receipt
Trustee will execute, issue and deliver Subscription Receipt
Certificates to the Receiptholders, registered in accordance with the
instructions for such registration received from the Corporation and
evidencing the number of Subscription Receipts each Receiptholder has
purchased.
2.2 FORM AND TERMS OF SUBSCRIPTION RECEIPTS
(a) The Subscription Receipt Certificates (including all replacements
issued in accordance with this Agreement) are to be substantially in
the form set out in Schedule A hereto, bear such legends and such
distinguishing letters and numbers as the Corporation may, with the
approval of the Subscription Receipt Trustee, prescribe, and are to be
issuable in any denomination, excluding fractions. Without limiting
the generality of the foregoing, all Subscription Receipt Certificates
are to be endorsed with the following legend (unless any such
certificate is issued after the applicable expiry date contemplated in
such legend):
"UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS
SECURITY MUST NOT TRADE THE SECURITY BEFORE THE DATE THAT IS 4 MONTHS
AND A DAY AFTER THE LATER OF (i)JANUARY 20, 2012, AND (ii) THE DATE
THE ISSUER BECAME A REPORTING ISSUER IN ANY PROVINCE OR TERRITORY."
(b) The Subscription Receipt Trustee acknowledges that the Subscription
Receipts and Common Shares issuable pursuant thereto have not been
registered under the U.S. Securities Act or any state securities laws.
Upon the original issuance thereof and until such time as the same is
no longer required under applicable requirements of the U.S.
Securities Act or applicable state securities laws, the certificates
representing any Subscription Receipt originally sold in the United
States, and all certificates representing Common Shares issued upon
the exercise of such Subscription Receipt in accordance with Article 3
hereof (and each Subscription Receipt Certificate and Common Share
certificate issued in exchange therefore or in substitution or
transfer thereof) shall bear the following legend (in addition to the
legend set forth in Section 2.2(a), as applicable):
"THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT") OR UNDER ANY STATE SECURITIES LAWS. THE HOLDER HEREOF, BY
PURCHASING SUCH SECURITIES, AGREES FOR THE BENEFIT OF
AUSTRALIAN-CANADIAN OIL ROYALTIES LTD. THAT SUCH SECURITIES MAY BE
OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (A) TO
AUSTRALIAN-CANADIAN OIL ROYALTIES LTD., (B) OUTSIDE THE UNITED STATES
IN ACCORDANCE WITH REGULATION S UNDER THE SECURITIES ACT, (C) IN
ACCORDANCE WITH RULE 144A UNDER THE SECURITIES ACT, OR (D) PURSUANT TO
AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT AND, IN EACH
CASE, IN COMPLIANCE WITH ANY APPLICABLE STATE SECURITIES LAWS AFTER,
8
IN THE CASE OF TRANSFERS UNDER CLAUSE (D), THE HOLDER HAS FURNISHED TO
AUSTRALIAN-CANADIAN OIL ROYALTIES LTD. AN OPINION OF COUNSEL OF
RECOGNIZED STANDING OR OTHER EVIDENCE REASONABLY SATISFACTORY TO
AUSTRALIAN-CANADIAN OIL ROYALTIES LTD. TO SUCH EFFECT."
provided, that if any such securities are being transferred or sold in
compliance with the requirements of Rule 904 of Regulation S, the
above legend may be removed by providing a declaration to the transfer
agent for the Corporation to the following effect (or as the
Corporation may prescribe from time to time), together with any other
evidence, which may include, without limitation, an opinion of counsel
of recognized standing, reasonably satisfactory to the Corporation to
the effect that such legend is not required under the requirements of
the U.S. Securities Act:
The undersigned (A) acknowledges that the sale of the
securities to which this declaration relates is being
made in reliance on Rule 904 of Regulation S under the
U.S. Securities Act of 1933, as amended (the
"SECURITIES ACT"), and (B) certifies that (1) it is not
an "affiliate" (as defined in Rule 405 under the
Securities Act) of Australian-Canadian Oil Royalties
Ltd., (2) the offer of such securities was not made to
a person in the United States and either (a) at the
time the buy order was originated, the buyer was
outside the United States, or the seller and any person
acting on its behalf reasonably believe that the buyer
was outside the United States or (b) the transaction
was executed on or through the facilities of the
Toronto Stock Exchange or any other "designated
offshore securities market" and neither the seller nor
any person acting on its behalf knows that the
transaction has been prearranged with a buyer in the
United States, (3) neither the seller nor any person
acting on its behalf has engaged or will engage in any
directed selling efforts in the United States in
connection with the offer and sale of such securities,
(4) the sale is bona fide and not for the purpose of
"washing off" the resale restrictions imposed because
the securities are "restricted securities" (as that
term is defined in Rule 144(a)(3) under the Securities
Act), (5) the seller does not intend to replace such
securities with fungible unrestricted securities, and
(6) the contemplated sale is not a transaction, or part
of a series of transactions that, although in technical
compliance with Regulation S, is part of a plan or
scheme to evade the registration requirements of the
Securities Act. Terms used herein have the meanings
given to them by Regulation S.";
and the Corporation shall use its reasonable best efforts to cause the
registrar and transfer agent of the Corporation to remove the
foregoing U.S. legend within three business days (excluding weekends
and holidays) of receipt of the foregoing, as applicable.
(c) Each Subscription Receipt authorized to be issued hereunder
confers upon the holder thereof the rights of Receiptholders
under this Agreement, including an Issuance Right and a Refund
Right.
(d) No fractional Subscription Receipts are to be issued or otherwise
provided for hereunder.
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2.3 RECEIPTHOLDER NOT A SHAREHOLDER
Until the Issue Time, nothing in this Agreement or in the holding of a
Subscription Receipt, evidenced by a Subscription Receipt Certificate or
otherwise, confers or is to be construed as conferring upon a Receiptholder any
right or interest whatsoever as a Shareholder, including, the right to vote at,
to receive notice of, or to attend, meetings of Shareholders or any other
proceedings of the Corporation, or the right to receive dividends or other
distributions.
2.4 SUBSCRIPTION RECEIPTS TO RANK PARI PASSU
All Subscription Receipts rank pari passu, whatever may be the actual date
of issue of same.
2.5 SIGNING OF SUBSCRIPTION RECEIPT CERTIFICATES
The Subscription Receipt Certificates are to be signed by any director or
officer of the Corporation. The signatures of such respective directors or
officers may be mechanically reproduced in facsimile and Subscription Receipt
Certificates bearing such facsimile signatures are as binding upon the
Corporation as if they had been manually signed by such directors or officers.
Notwithstanding that any of the persons whose manual or facsimile signature
appears on any Subscription Receipt Certificate as director or officer may no
longer hold office at the date of such Subscription Receipt Certificate or at
the date of certification or delivery thereof, any Subscription Receipt
Certificate signed as aforesaid is, subject to Section 2.6, valid and binding
upon the Corporation and the holder thereof is entitled to the benefits of this
Agreement.
2.6 CERTIFICATION BY THE SUBSCRIPTION RECEIPT TRUSTEE
(a) No Subscription Receipt Certificate is to be issued or, if issued, is
valid for any purpose or entitles the holder to the benefit hereof
until it has been countersigned by manual signature by or on behalf of
the Subscription Receipt Trustee, and such counterpart signature by
the Subscription Receipt Trustee upon any Subscription Receipt
Certificate is conclusive evidence as against the Corporation that the
Subscription Receipt Certificate so countersigned has been duly issued
hereunder and that the holder is entitled to the benefits hereof.
(b) The Subscription Receipt Trustee's counterpart signature on any
Subscription Receipt Certificate issued hereunder is not to be
construed as a representation or warranty by the Subscription Receipt
Trustee as to the validity of this Agreement or the Subscription
Receipt Certificate (except the due certification thereof) and the
Subscription Receipt Trustee is in no respect liable or answerable for
the use made of the Subscription Receipt Certificate or of the
consideration therefor except as otherwise specified herein. The
counterpart signature by or on behalf of the Subscription Receipt
Trustee on the Subscription Receipt Certificate(s) constitutes a
representation and warranty by the Subscription Receipt Trustee that
the Subscription Receipt Certificate has been duly certified by or on
behalf of the Subscription Receipt Trustee pursuant to the provisions
of this Agreement.
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2.7 ISSUE IN SUBSTITUTION FOR SUBSCRIPTION RECEIPT CERTIFICATES LOST, ETC.
(a) If any Subscription Receipt Certificate is mutilated or lost,
destroyed or stolen, the Corporation, subject to applicable law and
compliance with paragraph (b) below, will issue and thereupon the
Corporation and the Subscription Receipt Trustee will certify (by its
counterpart signature) and deliver, a new Subscription Receipt
Certificate of like tenor as the one mutilated, lost, destroyed or
stolen in exchange for and in place of and upon cancellation of such
mutilated Subscription Receipt Certificate, or in lieu of and in
substitution for such lost, destroyed or stolen Subscription Receipt
Certificate. Every substituted Subscription Receipt Certificate is to
be in a form approved by the Subscription Receipt Trustee, entitles
the holder to the benefits hereof, and ranks equally in accordance
with its terms with all other Subscription Receipt Certificates issued
or to be issued hereunder. When a new Subscription Receipt Certificate
has been issued in substitution for a Subscription Receipt Certificate
which has been mutilated, lost, stolen or destroyed, only one of such
certificates is counted for the purpose of determining the number of
Subscription Receipts outstanding.
(b) The applicant for the issue of a new Subscription Receipt Certificate
pursuant to this Section 2.7 will bear the cost of the issue thereof
and, in case of loss, destruction or theft will, as a condition
precedent to the issue thereof, furnish to the Corporation and to the
Subscription Receipt Trustee such evidence of ownership and of the
loss, destruction or theft of the Subscription Receipt Certificate so
lost, destroyed or stolen as is satisfactory to the Corporation and
the Subscription Receipt Trustee, each in their sole discretion, and
such applicant shall also be required to furnish an indemnity or
security in amount and form satisfactory to the Corporation and the
Subscription Receipt Trustee each in their sole discretion, and will
pay the reasonable charges of the Corporation and the Subscription
Receipt Trustee in connection therewith.
2.8 EXCHANGE OF SUBSCRIPTION RECEIPT CERTIFICATES
(a) Subscription Receipt Certificates may, upon compliance with the
reasonable requirements of the Subscription Receipt Trustee, be
exchanged for another Subscription Receipt Certificate or Subscription
Receipt Certificates entitling the holder thereto, in the aggregate,
the same number of Subscription Receipts as represented by the
Subscription Receipt Certificates so exchanged.
(b) Subscription Receipt Certificates may be surrendered for exchange only
at the Designated Office of the Subscription Receipt Trustee or at any
other place that is designated by the Corporation with the approval of
the Subscription Receipt Trustee.
2.9 CHARGES FOR EXCHANGE
Except as otherwise herein provided, the Subscription Receipt Trustee may
charge to the holder requesting an exchange, a reasonable sum for each new
Subscription Receipt Certificate issued in exchange for Subscription Receipt
Certificate(s), except that no such amount is to be charged against or payable
by a Receiptholder during the 30 days after the Closing Date. Payment of such
charges and reimbursement of the Subscription Receipt Trustee or the Corporation
for any and all stamp taxes or governmental or other charges required to be paid
will be made by such holder as a condition precedent to such exchange.
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2.10 TRANSFER AND OWNERSHIP OF SUBSCRIPTION RECEIPTS
(a) The Subscription Receipt Trustee will keep at its Designated Office a
register in which it will enter and record: (i) the names and
addresses of Receiptholders and particulars of the Subscription
Receipts held by them; and (ii) all transfers of Subscription Receipts
and the date and other particulars of each transfer (the "REGISTER").
This Register is to be at all reasonable times during the regular
business hours of the Subscription Receipt Trustee open for inspection
by the Receiptholders. The Subscription Receipts may only be
transferred on the Register by the holder or his legal representatives
or his attorney duly appointed by an instrument in writing. Upon
surrender for registration of transfer of Subscription Receipts at the
Designated Office of the Subscription Receipt Trustee, the Corporation
will issue and thereupon the Subscription Receipt Trustee will certify
and deliver a new Subscription Receipt Certificate of like tenor in
the name of the designated transferee. If less than all the
Subscription Receipts evidenced by a Subscription Receipt Certificate
so surrendered are transferred, the transferor is entitled to receive,
in the same manner, one or more new Subscription Receipt Certificates
registered in his name evidencing the Subscription Receipts not
transferred. However, notwithstanding the foregoing, the Subscription
Receipt Trustee and the Corporation will cause a transfer of
Subscription Receipts to be entered and recorded on the Register only
upon:
(i) payment to the Subscription Receipt Trustee of a reasonable sum
for each new Subscription Receipt Certificate issued upon such
transfer, and reimbursement of the Subscription Receipt Trustee
or the Corporation for any and all stamp taxes or governmental or
other charges required to be paid in respect of such transfer;
(ii) if the Subscription Receipt Certificate tendered for transfer
bears the legend set forth in Section 2.2(a) or 2.2(b), the
transfer restrictions set forth in such legend shall be complied
with; and
(iii) such reasonable requirements as the Subscription Receipt Trustee
may prescribe,
in which case, the Subscription Receipt Trustee will duly note all
such transfers in such Register and, within three Business Days
thereafter, the Corporation and the Subscription Receipt Trustee will
sign a Subscription Receipt Certificate representing the transferred
Subscription Receipts registered in the name of the transferee, as
holder, and cause such certificate to be sent to the such holder at
the address shown in the Register.
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(b) The Corporation and the Subscription Receipt Trustee may deem and
treat the registered holder of any Subscription Receipt Certificate
or, in the case of a transferee who has surrendered a Subscription
Receipt Certificate in accordance with and as contemplated in this
Section 2.10, such transferee, as the absolute owner of the
Subscription Receipt represented thereby for all purposes, and the
Corporation and the Subscription Receipt Trustee are not affected by
any notice or knowledge to the contrary except where the Corporation
or the Subscription Receipt Trustee is required to take notice by
statute or by order of a court of competent jurisdiction.
(c) Neither the Corporation nor the Subscription Receipt Trustee is bound
to inquire into the title of a Receiptholder who surrenders a
Subscription Receipt Certificate hereunder, or otherwise, except where
the Corporation or the Subscription Receipt Trustee is required to
take notice by statute or by order of a court of competent
jurisdiction;
(d) The Register in respect of Subscription Receipts will be closed at
5:00 p.m. (Calgary time) at the Designated Office, on the earlier to
occur of the Exchange Date and the Termination Date (subject to
settlement).
(e) Subject to the provisions of this Agreement and applicable law, a
Receiptholder is entitled to the rights and privileges attaching to
the Subscription Receipts free from all equities or rights of set off
or counterclaim between the Corporation and the original or any
intermediate holder thereof. The delivery of ACOR Shares by the
Subscription Receipt Trustee in satisfaction of the Issuance Right or,
in satisfaction of the Refund Right, the payment of the Issue Price
per Subscription Receipt together with interest earned thereon to but
not including the Refund Date as soon as practicable, all in
accordance with the terms and conditions herein, will discharge all
responsibilities of the Corporation and the Subscription Receipt
Trustee with respect to such Subscription Receipts and neither the
Corporation nor the Subscription Receipt Trustee will be bound to
inquire into the title of a Receiptholder who surrenders a
Subscription Receipt Certificate.
2.11 ESCROWED FUNDS TO BE PLACED IN ESCROW / ROLE OF TORYS
Upon the issuance of Subscription Receipts, the Escrowed Funds will be held
by Torys, on behalf of the Subscription Receipt Trustee to be held, invested and
reinvested pursuant to the terms hereof.
Notwithstanding any other provision set out herein, the parties hereto
agree that Torys shall hold all of the Escrowed Funds on behalf of the
Subscription Receipt Trustee in accordance with the terms of this Agreement.
Torys hereby undertakes and agrees that it shall not pay out any of the Escrowed
Funds unless directed by the Subscription Receipt Trustee in writing. The
Subscription Receipt Trustee hereby agrees to cause Torys to hold the Escrowed
Funds in accordance with this Agreement and to only disburse and deal with such
funds as herein provided.
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For greater certainty, any references herein to the Subscription Receipt
Trustee holding the Escrowed Funds shall be deemed to mean Torys holding such
Escrowed Funds on behalf of the Subscription Receipt Trustee. Any reference to
the Subscription Receipt Trustee taking any action with respect to the Escrowed
Funds shall be deemed to mean that the Subscription Receipt Trustee will direct
Torys to take such actions on behalf of the Subscription Receipt Trustee. As
Torys is holding the Escrowed Funds and only investing or disbursing such funds
upon the written direction of the Subscription Receipt Trustee, the parties
hereto agree that Torys shall not incur any liability with respect to this
Agreement provided it holds the Escrowed Funds on behalf of the Subscription
Receipt Trustee and only releases or invests such funds upon receiving written
direction from the Subscription Receipt Trustee. Further, in addition to the
above, Torys shall be entitled to all indemnities and limitations of liability
afforded to the Subscription Receipt Trustee set out herein.
2.12 ISSUANCE RIGHT AND REFUND RIGHT
Each Receiptholder has in respect of the Issuance Right or the Refund
Right, as the case may be, a claim against the Corporation to be: (i) issued one
ACOR Share for each Subscription Receipt held, if the Issuance Right arises in
favor of the Receiptholder, or (ii) reimbursed an amount equal to the Issue
Price for each Subscription Receipt held by such holder, plus any interest
accrued or earned and payable thereon if the Refund Right arises in favor of the
Receiptholder.
2.13 LIQUIDATION OR BANKRUPTCY OF THE CORPORATION
Until the Issuance Right or the Refund Right arises, a Receiptholder is not
entitled to assert a claim against the Corporation pursuant to Section 2.12
unless, prior to the Exchange Date or the Refund Date, as the case may be: (i)
the Corporation makes a general assignment for the benefit of creditors; (ii)
any proceeding is instituted by the Corporation, seeking relief on its behalf as
a debtor or to adjudicate it a bankrupt or insolvent or seeking liquidation,
winding-up, reorganization, arrangement, adjustment or composition of it or its
debts under any law relating to bankruptcy, insolvency or reorganization or
relief of debtors; (iii) any proceeding is instituted by the Corporation,
seeking appointment of a receiver, receiver and manager, trustee, custodian or
similar official for it or any substantial part of its property and assets; or
(iv) the Corporation takes any action to authorize any of the actions set forth
above, in which event the right of each holder of Subscription Receipts to
exercise the Issuance Right or the Refund Right terminates and such holder is
entitled to assert his claim against the Corporation, referred to in Section
2.12 in respect of each Subscription Receipt, at such holder's election, as if
the Issuance Right or the Refund had arisen in favor of the holder and the
holder is deemed to have exercised his Issuance Rights or Refund Rights in
accordance with his election.
2.14 RELIANCE BY THE SUBSCRIPTION RECEIPT TRUSTEE
The Subscription Receipt Trustee has no obligation to ensure or verify
compliance with any applicable laws or regulatory requirements on the issue,
exercise or transfer of any Subscription Receipts (or the Issuance Right
comprising part thereof) or ACOR Share issuable upon the exercise thereof
provided such issue, exercise or transfer, as the case may be, is effected in
accordance with the terms of this Agreement. The Subscription Receipt Trustee is
entitled to process all proffered transfers and exercises of Subscription
Receipts upon the presumption that such transfers or exercises are permissible
pursuant to all applicable laws and regulatory requirements. The Subscription
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Receipt Trustee may assume for the purposes of this Agreement that any address
on the Register is the holder's actual address and is also determinative as to
residency and that the address of any transferee to whom any ACOR Share are to
be registered, as shown on the transfer document, is the transferee's residency.
The Subscription Receipt Trustee has no obligation to ensure that the legends
appearing on the Subscription Receipts Certificates or ACOR Shares comply with
regulatory requirements or securities laws of any applicable jurisdiction.
2.15 CANCELLATION OF SURRENDERED SUBSCRIPTION RECEIPT CERTIFICATES
All Subscription Receipt Certificates surrendered to or received by the
Subscription Receipt Trustee pursuant to Sections 2.8 or 2.10 are to be returned
to or received by the Subscription Receipt Trustee for cancellation and, if
required by the Corporation, the Subscription Receipt Trustee will furnish the
Corporation with a cancellation certificate identifying the Subscription Receipt
Certificates so cancelled and the number of Subscription Receipts evidenced
thereby.
ARTICLE 3
SATISFACTION OF ISSUANCE RIGHT OR REFUND RIGHT
3.1 NOTICE OF SATISFACTION OF ESCROW RELEASE CONDITIONS
(a) If the Escrow Release Conditions are satisfied at or before the
Termination Time, the Corporation will concurrently deliver the
Closing Notice and the Irrevocable Direction to the Subscription
Receipt Trustee and the Transfer Agent. In addition, the Corporation
will, as soon as practicable, issue a press release disclosing the
Exchange Date, the date on which the transfer register for the
Subscription Receipts closes, and that the ACOR Shares are to be
issued to Receiptholders following the Exchange Date within the time
set forth in this Agreement.
(b) Upon receipt of the Closing Notice and the Irrevocable Direction, the
Subscription Receipt Trustee shall direct Torys in writing to release
the Escrowed Funds to the Corporation.
3.2 ISSUE OF ACOR SHARES
(a) If the Escrow Release Conditions are satisfied and the Closing Notice
and the Irrevocable Direction are delivered to the Subscription
Receipt Trustee and the Transfer Agent at or before the Termination
Time:
(i) the Issuance Right is deemed to have been exercised and the ACOR
Shares are deemed to be automatically issued at the Issue Time;
and
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(ii) the holder of a Subscription Receipt (or a transferee thereof if
all applicable transfer requirements, other than registration,
have been satisfied) is automatically entitled from and after the
Issue Time to a certificate with respect to the ACOR Shares
issued in registered form without payment of additional
consideration or any further action on the part of the
Receiptholder.
(b) All certificates representing the ACOR Shares so issued are to be
endorsed with the legends in accordance with the Agreement and the
applicable Subscription Receipt Certificate(s).
(c) Effective immediately after the deemed exercise of the Issuance Right
as contemplated in Subsection 3.2(a), and after the Transfer Agent has
mailed or caused to be mailed or delivered the certificates
representing the ACOR Shares the Issuance Right is satisfied and the
Subscription Receipts relating thereto are void and of no value or
further effect.
3.3 DELIVERY OF IRREVOCABLE DIRECTION AND RELEASE OF FUNDS
If the Escrow Release Conditions are satisfied and the delivery of the
Closing Notice and the Irrevocable Direction by the Corporation to the
Subscription Receipt Trustee occur at or before the Termination Time, the
Subscription Receipt Trustee will as soon as practicable direct Torys in writing
to release to the Corporation, or as directed by the Corporation, the full
amount of the Escrowed Funds, together with any interest earned thereon.
3.4 REIMBURSEMENT PURSUANT TO REFUND RIGHT
(a) If prior to the Termination Time:
(i) the Escrow Release Conditions are not satisfied;
(ii) the Exchange does not become effective;
(iii) the Exchange or the Share Exchange Agreement is terminated; or
(iv) the Corporation has announced to the public that it does not
intend to proceed with the Exchange or the transactions
contemplated by the Acquisition Agreement,
(the earliest of such events being referred to herein as a
"TERMINATION EVENT"), the Corporation will, as soon as practicable
thereafter, notify the Subscription Receipt Trustee thereof and the
Corporation will issue a press release. At the Refund Time, the
Receiptholders, as shown on the Register on the Refund Date, cease to
be entitled to all rights attaching thereto with the exception of the
Refund Right.
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(b) Upon the occurrence of the Termination Event, each Receiptholder, as
shown on the Register on the Refund Date, is deemed to have elected
(without further action) to exercise the Refund Right whereupon the
Corporation and the Subscription Receipt Trustee will forthwith cause
the payment obligation under the Refund Right to be satisfied and
discharged. The amount to be paid to each Receiptholder pursuant to
the Refund Right is to be satisfied and discharged out of the Escrowed
Funds and include any accrued or earned interest thereon, calculated
for each such Receiptholder as the product of (i) the amount of any of
the interest earned on the Escrowed Funds from and including the
Closing Date to, but excluding the Refund Date, multiplied by (ii) a
fraction, of which the numerator is the number of Subscription
Receipts held by such Receiptholder and the denominator is the
aggregate number of Subscription Receipts outstanding as at the Refund
Time. Interest paid in such amount is deemed for all purposes to be
interest earned by and on behalf of the Receiptholder.
(c) The obligation to make the payment of the amounts specified in
Subsection 3.4(a) and (b) is to be satisfied and discharged by Torys
effecting a wire transfer payable to the registered holder of the
Subscription Receipt.
(d) Upon the wire transfer as provided in Subsection 3.4(c) all rights
evidenced by the Subscription Receipts relating are satisfied and such
Subscription Receipts are void and of no value or further effect.
(e) Subject to applicable law, if any holders of Subscription Receipts (or
transferees thereof) have not, for any reason, notified the
Corporation or the Subscription Receipt Trustee in order to obtain
payment under a Refund Right which has not been previously received
within six years of the Refund Date or Termination Date all remaining
funds held by the Subscription Receipt Trustee (or by Torys on behalf
of the Subscription Receipt Trustee) hereunder may be paid by the
Subscription Receipt Trustee (or Torys) to the Corporation.
(f) Immediately after the Issue Time or the Refund Time, as the case may
be, all Subscription Receipt Certificates which prior to such time
represented Subscription Receipts are deemed to be cancelled and of no
further force or effect, without any further action by or on behalf of
the Corporation or the Subscription Receipt Trustee and whether or not
the Subscription Receipt Trustee has received any of such certificates
for cancellation.
ARTICLE 4
ESCROWED FUNDS
4.1 SEGREGATION OF ESCROWED FUNDS
The Escrowed Funds received by the Subscription Receipt Trustee (or by
Torys on behalf of the Subscription Receipt Trustee), together with interest
earned thereon, and any securities or other instruments received by the
Subscription Receipt Trustee (or by Torys on behalf of the Subscription Receipt
Trustee) upon the investment or reinvestment of such Escrowed Funds, are
received as agent and trustee for the Corporation and the Receiptholders, and
the Subscription Receipt Trustee (or by Torys on behalf of the Subscription
Receipt Trustee) will keep the Escrowed Funds and any interest earned thereon
segregated and kept apart, subject to the conditions herein.
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ARTICLE 5
INVESTMENT OF ESCROW FUNDS
5.1 SUBSCRIPTION RECEIPT TRUSTEE
Upon receipt of a direction from the Corporation, the Subscription Receipt
Trustee shall cause Torys to invest the Subscription Receipt Trustee funds in
Authorized Investments in its name in accordance with such direction. Any
direction from the Corporation to the Subscription Receipt Trustee shall be in
writing and shall be provided to the Subscription Receipt Trustee no later than
9:00 a.m. on the day on which the investment is to be made. Any such direction
received by the Subscription Receipt Trustee after 9:00 a.m. (Calgary time) or
received on a non-Business Day, shall be deemed to have been given prior to 9:00
a.m. (Calgary time) the next Business Day. Any direction from the Corporation
for the release of the Escrow Funds must be received prior to 10:00 a.m.
(Calgary time) on the day on which the release of funds is to be made. Any such
direction for the release of funds received after 11:00 a.m. (Calgary time) or
on a non-Business Day, will be handled on a commercially reasonable efforts
basis and may result in escrow funds being released on the next Business Day.
For the purpose hereof, "AUTHORIZED INVESTMENTS" means short term interest
bearing or discount debt obligations of, or issued or guaranteed by, the
Government of Canada or a province of Canada or a Canadian chartered bank
provided that such obligation is rated at least R1 (high) by DBRS Inc. or an
equivalent rating service.
If at any time the Escrowed Funds include cash that is not invested and the
Corporation has not provided directions to the Subscription Receipt Trustee to
invest such cash, the Subscription Receipt Trustee shall direct Torys to deposit
all such uninvested cash in an account, a term deposit or guaranteed investment
certificates of a Canadian chartered bank, having either no fixed term or no
irrevocable term and which pays interest on the daily balance. Neither the
Subscription Receipt Trustee nor Torys shall have any liability with respect to
any loss in value of investments as permitted to be made hereunder. In making
any payment, neither the Subscription Receipt Trustee nor Torys shall be liable
for any loss sustained from early termination of an investment if such
termination is required to make a payment hereunder.
5.2 INTEREST ON ESCROWED FUNDS
Interest, if any, accruing on any Escrowed Funds accrues to the benefit of,
and will be disbursed by the Subscription Receipt Trustee (or by Torys on behalf
of the Subscription Receipt Trustee) in accordance with the provisions of this
Agreement to the Corporation, if the Issuance Rights are deemed to have been
exercised, or the Receiptholders, if the Refund Rights are deemed to have been
exercised.
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ARTICLE 6
RIGHTS OF THE CORPORATION AND COVENANTS
6.1 OPTIONAL PURCHASES BY THE CORPORATION
Subject to compliance with applicable laws, the Corporation may from time
to time purchase by private contract or otherwise any of the Subscription
Receipts. Any such purchase may be made in such manner, from such persons and on
such other terms as the Corporation, in its sole discretion, may determine.
6.2 GENERAL COVENANTS OF THE CORPORATION
(a) The Corporation covenants with the Subscription Receipt Trustee that
so long as any Subscription Receipts remain outstanding:
(i) it will reserve and keep available a sufficient number of ACOR
Shares for the purpose of enabling it to satisfy its obligations
to issue ACOR Shares upon the deemed exercise of the Subscription
Receipts;
(ii) it will cause the ACOR Shares and the certificates representing
the ACOR Shares from time to time acquired pursuant to the deemed
exercise of the Subscription Receipts to be duly issued and
delivered in accordance with this Agreement and the Subscription
Receipt Certificate(s);
(iii) all ACOR Shares issued pursuant to the Subscription Receipts
will be fully paid and non-assessable;
(iv) it will use reasonable commercial efforts to maintain its
corporate existence and carry on its business in the ordinary
course;
(v) it will make all requisite filings under applicable Canadian
securities legislation;
(vi) it will use its reasonable commercial efforts to ensure that the
outstanding ACOR Shares are listed and posted for trading on the
OTCBB; and
(vii) generally, it will well and truly perform and carry out all of
the acts or things to be done by it as provided in this
Agreement.
(b) In addition, the Corporation covenants with the Subscription Receipt
Trustee, that, from the date hereof to the earlier of the date that
the Issuance Right or the Refund Right occurs it will not do any of
the following:
(i) subdivide or redivide the outstanding ACOR Shares into a greater
number of shares;
(ii) reduce, combine or consolidate the outstanding ACOR Shares into a
smaller number of shares;
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(iii) issue ACOR Shares to holders of all or substantially all of the
outstanding ACOR Shares by way of a dividend or distribution;
(iv) fix a record date for the making of a distribution to all or
substantially all the holders of its outstanding ACOR Shares of:
(i) shares of any class other than ACOR Shares and other than
shares distributed to holders of ACOR Shares who have elected to
receive dividends in the form of such shares in lieu of dividends
paid in the ordinary course; or (ii) rights, options or warrants
entitling holders to subscribe for or purchase ACOR Shares or
securities convertible into ACOR Shares;
(v) it will not sell all or substantially all of the properties or
assets of the Corporation to any other person; or
(vi) declare or pay any dividend.
6.3 SUBSCRIPTION RECEIPT TRUSTEE'S REMUNERATION AND EXPENSES
The Corporation covenants that it will pay to the Subscription Receipt
Trustee from time to time reasonable remuneration for its services hereunder and
will pay or reimburse the Subscription Receipt Trustee upon its request for all
reasonable expenses, disbursements and advances incurred or made by the
Subscription Receipt Trustee in the administration or execution of this
Agreement (including the reasonable compensation and the disbursements of its
counsel and all other advisors and assistants not regularly in its employ) both
before any default hereunder and thereafter until all duties of the Subscription
Receipt Trustee hereunder are finally and fully performed, except any such
expense, disbursement or advance as may arise out of or result from the
Subscription Receipt Trustee's gross negligence, willful misconduct or fraud.
6.4 PERFORMANCE OF COVENANTS BY SUBSCRIPTION RECEIPT TRUSTEE
If the Corporation fails to perform any of its covenants contained in this
Agreement and the Subscription Receipt Trustee has notified the Corporation of
such failure to perform and such failure remains unremediated, the Subscription
Receipt Trustee may notify the Receiptholders of such failure on the part of the
Corporation or may itself perform any of the covenants capable of being
performed by it, but is under no obligation to perform covenants or to notify
the Receiptholders of such performance by it. All sums expended or advanced by
the Subscription Receipt Trustee in so doing are repayable as provided in
Section 6.3. No such performance, expenditure or advance by the Subscription
Receipt Trustee relieves the Corporation of any default hereunder or of its
continuing obligations under the covenants herein contained.
6.5 ACCOUNTING
The Subscription Receipt Trustee will maintain accurate books, records and
accounts of the transactions effected or controlled by the Subscription Receipt
Trustee hereunder and the receipt, investment, reinvestment and disbursement of
the Escrowed Funds, together with interest earned thereon, if any, and will
provide to the Corporation records and statements thereof periodically upon
request.
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6.6 PAYMENTS BY SUBSCRIPTION RECEIPT TRUSTEE
If any funds to be disbursed by the Subscription Receipt Trustee in
accordance herewith are received by the Subscription Receipt Trustee (or by
Torys on behalf of the Subscription Receipt Trustee) in the form of an
uncertified cheque or cheques, the Subscription Receipt Trustee or Torys, as
applicable, are entitled to delay the time for disbursement of such funds
hereunder until such uncertified cheque or cheques have cleared in the ordinary
course by the financial institution upon which the same are drawn. The
Subscription Receipt Trustee and Torys will disburse monies according to this
Agreement only to the extent that monies have been deposited with it.
6.7 INDEMNITY OF RECEIPTHOLDERS
The Corporation agrees to indemnify the Receiptholders for, and hold each
of them harmless against, any loss, liability, claim, damage or expense imposed
on, or incurred by, any of them as a result of a breach by the Subscription
Receipt Trustee or Torys of its obligations under this Agreement, including the
failure of the Subscription Receipt Trustee or Torys to refund the Issue Price,
together with interest earned thereon, to the Receiptholders pursuant to the
provisions of Sections 3.2 and 3.4 as the case may be. The indemnity provided
for in this Section 6.7 survives any termination of this Agreement, or the
resignation or replacement of the Subscription Receipt Trustee.
ARTICLE 7
ENFORCEMENT
7.1 SUITS BY RECEIPTHOLDERS
Subject to Section 8.11, a Receiptholder may enforce all or any of the
rights conferred upon the Receiptholder by any of the terms of the Subscription
Receipt Certificates or of this Agreement, or of both, by appropriate
proceedings but without prejudice to the right which is hereby conferred upon
the Subscription Receipt Trustee to proceed in its own name to enforce each and
all of the provisions herein contained for the benefit of the Receiptholders.
7.2 IMMUNITY OF SHAREHOLDERS
The Subscription Receipt Trustee and, by the acceptance of the Subscription
Receipts and as part of the consideration for the issue of the Subscription
Receipts, the Receiptholders hereby waive and release any right, cause of action
or remedy now or hereafter existing in any jurisdiction against any past,
present or future, Shareholder, director, officer, employee or agent of the
Corporation or any successor person for the issue of any ACOR Shares pursuant to
the corresponding Subscription Receipts or on any covenant, agreement,
representation or warranty by the Corporation herein or in the Subscription
Receipt Certificate(s).
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7.3 LIMITATION OF LIABILITY
The obligations hereunder are not personally binding upon, nor is resort
hereunder to be had to the private property of, any of the past, present or
future securityholders of the Corporation, or any successor person or any of the
past, present or future directors, officers, employees or agents, of the
Corporation, or any successor person, but only the property of the Corporation
or any successor person is bound in respect hereof.
ARTICLE 8
MEETINGS OF RECEIPTHOLDERS
8.1 RIGHT TO CONVENE MEETING
The Subscription Receipt Trustee or the Corporation may at any time and
from time to time, and the Subscription Receipt Trustee will, on receipt of a
written request of the Corporation or a Receiptholders' Request and upon being
funded and indemnified to its reasonable satisfaction by the Corporation or by
the Receiptholders signing such request against the costs which may be incurred
in connection with the calling and holding of such meeting, convene a meeting of
the Receiptholders. If the Subscription Receipt Trustee fails within 10 days
after receipt of any such request and such funding and indemnity to give notice
convening a meeting, the Corporation or such Receiptholders, as the case may be,
may convene such meeting. Every such meeting is to be held in the City of
Calgary or at such other place as may be approved or determined by the
Subscription Receipt Trustee.
8.2 NOTICE OF MEETINGS
To validly convene a meeting of Receiptholders, at least 10 days' notice of
any meeting is to be given to the Receiptholders in the manner provided in
Section 11.1 and a copy of such notice is to be sent by post to the Subscription
Receipt Trustee, unless the meeting has been called by it. To be valid for the
purposes hereof, such notice must: (a) state the time when and the place in
Calgary, Alberta where the meeting is to be held; (b) state briefly the general
nature of the business to be transacted thereat; and (c) contain such
information as is reasonably necessary to enable the Receiptholders to make an
informed decision on the matter, but it is not necessary for any such notice to
set out the terms of any resolution to be proposed or any of the provisions of
this Article. The accidental omission to give valid notice of a meeting to any
holder of Subscription Receipts does not invalidate any resolution passed at any
such meeting. A Receiptholder may waive notice of a meeting either before or
after the meeting.
8.3 CHAIR
A person, who need not be a Receiptholder, nominated in writing by the
Subscription Receipt Trustee is to be chair of the meeting and if no person is
so nominated, or if the person so nominated is not present within 15 minutes
from the time fixed for the holding of the meeting, the Receiptholders present
in person or by proxy will choose another person present to be chair.
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8.4 QUORUM
Subject to the provisions of Section 8.12, at any meeting of the
Receiptholders a quorum consists of Receiptholders present in person or by proxy
and representing at least 10% of the outstanding Subscription Receipts. If a
quorum of the Receiptholders is not present within 30 minutes after the time
fixed for holding any meeting, the meeting, if summoned by the Receiptholders or
pursuant to a request of the Receiptholders, is be dissolved; but in any other
case the meeting is adjourned to the same day in the next week (unless such day
is not a Business Day in which case it is adjourned to the next following
Business Day thereafter) at the same time and place and no notice need be given
in respect of such adjourned meeting. At the adjourned meeting, the
Receiptholders present in person or by proxy constitute and form a quorum and
may transact the business for which the meeting was originally convened
notwithstanding that they may not represent 10% of the outstanding Subscription
Receipts. Any business may be brought before or dealt with at an adjourned
meeting which might have been brought before or dealt with at the original
meeting in accordance with the notice calling the same. No business is to be
transacted at any meeting unless the required quorum be present at the
commencement of business.
8.5 POWER TO ADJOURN
The chair of any meeting at which a quorum of the Receiptholders is present
may, with the consent of the holders of a majority of the Subscription Receipts
represented thereat, adjourn any such meeting and no notice of such adjournment
need be given except such notice, if any, as the meeting may prescribe.
8.6 SHOW OF HANDS
Every question submitted to a meeting is to be decided, subject to Section
8.7, in the first place by a majority of the votes given on a show of hands. At
any such meeting, unless a poll is duly demanded as herein provided, a
declaration by the chair that a resolution has been carried or carried
unanimously or by a particular majority or lost or not carried by a particular
majority is conclusive evidence of the fact. The chair of any meeting is
entitled, both on a show of hands and on a poll, to vote in respect of the
Subscription Receipts, if any, held by him or her.
8.7 VOTING BY POLL
On every Extraordinary Resolution (as defined in Section 8.12), and on any
other question submitted to a meeting, when demanded by the chair or by one or
more Receiptholders or proxies for Receiptholders, a poll is to be taken in such
manner and either at once or after an adjournment as the chair directs.
Questions other than Extraordinary Resolutions are to be decided, if a poll be
taken, by the votes of the holders of a majority of the Subscription Receipts
represented at the meeting and voted on the poll.
8.8 VOTING
On a show of hands, every person who is present and entitled to vote,
whether as a Receiptholder or as proxy for one or more Receiptholders (duly
appointed by a written instrument) or both, has one vote. On a poll, each
Receiptholder present in person or represented by a proxy duly appointed by an
instrument in writing is entitled to one vote in respect of each Subscription
Receipt of which he is then the holder. A proxy need not be a Receiptholder. In
the case of joint holders of a Subscription Receipt, any one of them present in
person or represented by proxy at the meeting may vote in the absence of the
other or others but if more than one of them be present in person or by proxy,
they will vote together in respect of the Subscription Receipts of which they
are joint holders.
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8.9 REGULATIONS
The Subscription Receipt Trustee, or the Corporation with the approval of
the Subscription Receipt Trustee, may from time to time make and from time to
time vary or revoke such regulations as it thinks fit providing for and
governing:
(a) the form of the instrument appointing a proxy, which is to be in
writing, and the manner in which the same is to executed and the
production of the authority of any person signing on behalf of a
Receiptholder;
(b) the deposit of instruments appointing proxies at such place as the
Subscription Receipt Trustee, the Corporation or the Receiptholder
convening the meeting, as the case may be, may, in the notice
convening the meeting, direct and the time, if any, before the holding
of the meeting or any adjournment thereof by which the same must be
deposited;
(c) the deposit of instruments appointing proxies at some approved place
or places other than the place at which the meeting is to be held and
enabling particulars of such instruments appointing proxies to be
mailed, faxed, emailed or otherwise sent electronically before the
meeting to the Corporation or to the Subscription Receipt Trustee at
the place where the same is to be held and for the voting of proxies
so deposited as though the instruments themselves were produced at the
meeting; and
(d) the convening of meetings of Receiptholders, generally, and the
conduct of business thereat.
Any regulations so made are binding and effective and the votes given in
accordance therewith are valid and are to be counted. Save as such regulations
may provide, the only persons who will be recognized at any meeting as the
holders of any Subscription Receipts, or as entitled to vote or be present at
the meeting in respect thereof, are Receiptholders and any person whom a
Receiptholder has by instruments in writing duly appointed as the
Receiptholder's proxies.
8.10 PERSONS ENTITLED TO ATTEND MEETINGS
The Corporation and the Subscription Receipt Trustee, by their respective
officers, employees, and directors, and the legal advisors of the Corporation,
the Subscription Receipt Trustee or any Receiptholder may attend any meeting of
the Receiptholders, but have no vote as such.
8.11 POWERS EXERCISABLE BY EXTRAORDINARY RESOLUTION
In addition to the powers conferred upon them by any other provisions of
this Agreement or by law, the Receiptholders, at a meeting, have the following
powers exercisable from time to time by Extraordinary Resolution (as defined
below), subject, if applicable, to the approval of the OTCBB:
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(a) to agree to any modification, abrogation, alteration, compromise or
arrangement of the rights of Receiptholders or rights or obligations
of the Subscription Receipt Trustee in its capacity as Subscription
Receipt Trustee hereunder on behalf of the Receiptholders against the
Corporation or against its property and assets or any part thereof,
whether such rights arise under this Agreement or the Subscription
Receipt Certificate(s) or otherwise;
(b) to amend, alter or repeal any Extraordinary Resolution previously
passed or sanctioned by the Receiptholders;
(c) to direct or to authorize the Subscription Receipt Trustee to enforce
any of the covenants on the part of the Corporation contained in this
Agreement or the Subscription Receipt Certificate(s) or to enforce any
of the rights of the Receiptholders in any manner specified in such
Extraordinary Resolution or to refrain from enforcing any such
covenant or right;
(d) to waive, and to direct the Subscription Receipt Trustee to waive, any
default on the part of the Corporation in complying with any
provisions of this Agreement or the Subscription Receipt
Certificate(s) either unconditionally or upon any conditions specified
in such Extraordinary Resolution;
(e) to restrain any Receiptholder from taking or instituting any suit,
action or proceeding against the Corporation for the enforcement of
any of the covenants on the part of the Corporation in this Agreement
or the Subscription Receipt Certificate(s) or to enforce any of the
rights of the Receiptholders;
(f) to direct any Receiptholder who, as such, has brought any suit, action
or proceeding to stay or to discontinue or otherwise to deal with the
same upon payment of the costs, charges and expenses reasonably and
properly incurred by such Receiptholder in connection therewith;
(g) to assent to any change in or omission from the provisions contained
in the Subscription Receipt Certificate(s) and this Agreement or any
ancillary or supplemental instrument which may be agreed to by the
Corporation, and to authorize the Subscription Receipt Trustee to
concur in and execute any ancillary or supplemental agreement
embodying the change or omission;
(h) to assent to any modification of the articles of the Corporation in
circumstances where, had the ACOR Shares issuable pursuant to the
Subscription Receipts then been outstanding, an extraordinary
resolution of the holders of ACOR Shares would have been required;
(i) with the consent of the Corporation (such consent not to be
unreasonably withheld), to remove the Subscription Receipt Trustee or
its successors in office and to appoint a replacement; and
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(j) to assent to any compromise or arrangement with any creditor or
creditors or any class or classes of creditors, whether secured or
otherwise and with holders of any shares or other securities of the
Corporation.
8.12 MEANING OF EXTRAORDINARY RESOLUTION
(a) The expression "EXTRAORDINARY RESOLUTION" when used in this Agreement
means, subject as hereinafter in this Article provided, a resolution
proposed to be passed as an Extraordinary Resolution at a meeting of
Receiptholders (including an adjourned meeting) duly convened for the
purpose and held in accordance with the provisions of this Article at
which the holders of not less than 25% of the Subscription Receipts
then outstanding are present in person or by proxy and passed by the
favorable votes of the holders of not less than 66 2/3% of the
Subscription Receipts represented at the meeting and voted on a poll
upon such resolution.
(b) If, at any such meeting, the holders of not less than 25% of the
Subscription Receipts outstanding are not present in person or by
proxy within 30 minutes after the time appointed for the meeting, then
the meeting, if convened by or on the requisition of Receiptholders,
is dissolved; but in any other case, the meeting stands adjourned to
such date, being not less than 14 nor more than 30 days later, and to
such place and time as may be appointed by the chair. Not less than
seven days' notice is to be given of the time and place of such
adjourned meeting in the manner provided in Section 11.1. To be valid
for the purposes hereof, such notice must state that at the adjourned
meeting the Receiptholders present in person or by proxy will
constitute a quorum. At the adjourned meeting, the Receiptholders
present in person or by proxy will form a quorum and may transact the
business for which the meeting was originally convened and a
resolution proposed at such adjourned meeting and passed by the
requisite vote as provided in Subsection (a) of this Section is an
Extraordinary Resolution within the meaning and for the purposes of
this Agreement, notwithstanding that the holders of less than 25% of
the Subscription Receipts then outstanding is not present in person or
by proxy at such adjourned meeting.
(c) To be valid for the purposes hereof, such votes on an Extraordinary
Resolution must always be given on a poll and no demand for a poll on
an Extraordinary Resolution is necessary.
8.13 POWERS CUMULATIVE
It is hereby declared and agreed that any one or more of the powers in this
Agreement stated to be exercisable by the Receiptholders by Extraordinary
Resolution or otherwise may be exercised from time to time and the exercise of
any one or more of such powers from time to time does not and is not to be
deemed to exhaust the rights of the Receiptholders to exercise the same or any
other such power or powers thereafter from time to time.
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8.14 MINUTES
Minutes of all resolutions and proceedings at every meeting as aforesaid
are to be made and duly entered in books to be from time to time provided for
that purpose by the Subscription Receipt Trustee at the expense of the
Corporation, and any such minutes as aforesaid, if signed by the chair of the
meeting at which such resolutions were passed or proceedings had, or by the
chair of the next succeeding meeting of the Receiptholders, are prima facie
evidence of the matters therein stated and, until the contrary is proved, every
such meeting, in respect of the proceedings of which minutes have been made, is
deemed to have been duly held and convened, and all resolutions passed thereat
or proceedings taken thereat to have been duly passed and taken.
8.15 INSTRUMENTS IN WRITING
All actions which may be taken and all powers that may be exercised by the
Receiptholders at a meeting held as hereinbefore in this Article provided may
also be taken and exercised by the holders of 66 2/3% of the outstanding
Subscription Receipts, by an instrument in writing signed in one or more
counterparts and the expression "Extraordinary Resolution" when used in this
Agreement include an instrument so signed.
8.16 BINDING EFFECT OF RESOLUTIONS
Every resolution and every Extraordinary Resolution passed in accordance
with the provisions of this Article at a meeting of Receiptholders is binding
upon all the Receiptholders, whether present at or absent from such meeting, and
every instrument in writing signed by Receiptholders in accordance with Section
8.15 is binding upon all the Receiptholders, whether signatories thereto or not,
and each and every Receiptholder and the Subscription Receipt Trustee is bound
to give effect accordingly to every such resolution, Extraordinary Resolution
and instrument in writing.
8.17 EVIDENCE OF RIGHTS OF RECEIPTHOLDERS
Any request, direction, notice, consent or other instrument which this
Agreement may require or permit to be signed or executed by the Receiptholders,
including a Receiptholders' Request, may be in any number of concurrent
instruments of similar tenor and may be signed or executed by such
Receiptholders in person or by attorney duly appointed in writing. Proof of the
execution of any such request or other instrument or of a writing appointing any
such attorney or (subject to the provisions of this Article with regard to
voting at meetings of Receiptholders) of the holding by any person of
Subscription Receipts is sufficient for any purpose of this Agreement if made in
the following manner, namely, the fact and date of execution by any person of
such request or other instrument or writing may be proved by the certificate of
any notary public, or other officer authorized to take acknowledgements of deeds
to be recorded at the place where such certificate is made, that the person
signing such request or other instrument in writing acknowledged to him the
execution thereof, or by an affidavit of a witness of such execution or in any
other manner which the Subscription Receipt Trustee may consider adequate.
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8.18 HOLDINGS BY CORPORATION DISREGARDED
In determining whether Receiptholders holding the required number of
Subscription Receipts are present at a meeting of Receiptholders for the purpose
of determining a quorum or have concurred in any consent, waiver, extraordinary
resolution, Receiptholders' Request or other action under this Agreement,
Subscription Receipts owned legally or beneficially by the Corporation or any
affiliate of the Corporation are to be disregarded in accordance with the
provisions of Section 11.6.
ARTICLE 9
SUPPLEMENTAL AGREEMENTS
9.1 PROVISION FOR SUPPLEMENTAL AGREEMENTS FOR CERTAIN PURPOSES
From time to time the Corporation and the Subscription Receipt Trustee may,
subject to the provisions hereof and receipt of the approval of the OTCBB, if
applicable, and they will, when so directed in accordance with the provisions
hereof, execute and deliver by their proper officers or proper authorized
persons, agreements supplemental hereto, which thereafter form part hereof, for
any one or more or all of the following purposes:
(a) adding to the provisions hereof such additional covenants and
enforcement provisions as, in the opinion of Counsel, are necessary or
advisable in the premises, provided that the same are not in the
opinion of the Subscription Receipt Trustee (based on the opinion of
Counsel) prejudicial to the interests of the Receiptholders;
(b) giving effect to any Extraordinary Resolution passed as provided in
Article 8;
(c) making such provisions not inconsistent with this Agreement as may be
necessary or desirable with respect to matters or questions arising
hereunder, provided that such provisions are not, in the opinion of
the Subscription Receipt Trustee (based on the opinion of Counsel),
prejudicial to the interests of the Receiptholders;
(d) adding to or altering the provisions hereof in respect of the transfer
of Subscription Receipts, making provision for the exchange of
Subscription Receipt Certificates, and making any modification in the
form of the Subscription Receipt Certificates which does not affect
the substance thereof;
(e) modifying any of the provisions of this Agreement, including relieving
the Corporation from any of the obligations, conditions or
restrictions herein contained, provided that such modification or
relief is or becomes operative or effective only if, in the opinion of
the Subscription Receipt Trustee (based on the opinion of Counsel),
such modification or relief in no way prejudices any of the rights of
the Receiptholders or the Subscription Receipt Trustee, and provided
further that the Subscription Receipt Trustee may in its sole
discretion decline to enter into any such supplemental agreement which
in its opinion may not afford adequate protection to the Subscription
Receipt Trustee when the same becomes operative or effective; and
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(f) for any other purpose not inconsistent with the terms of this
Agreement, including the correction or rectification of any
ambiguities, defective or inconsistent provisions, errors, mistakes or
omissions herein, provided that in the opinion of the Subscription
Receipt Trustee (based on the opinion of Counsel), the rights of the
Subscription Receipt Trustee and of the Receiptholders are in no way
prejudiced thereby.
ARTICLE 10
CONCERNING THE SUBSCRIPTION RECEIPT TRUSTEE
10.1 APPLICABLE LEGISLATION
(a) In regard to the Subscription Receipt Trustee, if and to the extent
that any provision of this Agreement limits, qualifies or conflicts
with a mandatory requirement of Applicable Legislation, such mandatory
requirement prevails.
(b) The Corporation and the Subscription Receipt Trustee agree that each
will, at all times in relation to this Agreement and any action to be
taken hereunder, observe and comply with and is entitled to the
benefits of Applicable Legislation.
10.2 RIGHTS AND DUTIES OF SUBSCRIPTION RECEIPT TRUSTEE
(a) In the exercise of the rights and duties prescribed or conferred by
the terms of this Agreement, the Subscription Receipt Trustee will
exercise that degree of care, diligence and skill that a reasonably
prudent Subscription Receipt Trustee or trustee, as applicable, would
exercise in comparable circumstances. No provision of this Agreement
is to be construed to relieve the Subscription Receipt Trustee from
liability for its own grossly negligent action, its own grossly
negligent failure to act, or its own willful misconduct or fraud.
(b) The obligation of the Subscription Receipt Trustee to commence or
continue any act, action or proceeding for the purpose of enforcing
any rights of the Subscription Receipt Trustee or the Receiptholders
hereunder is conditional upon the Receiptholders furnishing, when
required by notice from the Subscription Receipt Trustee, sufficient
funds to commence or to continue such act, action or proceeding and an
indemnity reasonably satisfactory to the Subscription Receipt Trustee
to protect and to hold harmless the Subscription Receipt Trustee
against the costs, charges and expenses and liabilities to be incurred
thereby and any loss and damage it may suffer by reason thereof. None
of the provisions contained in this Agreement require the Subscription
Receipt Trustee to expend or to risk its own funds or otherwise to
incur financial liability in the performance of any of its duties or
in the exercise of any of its rights or powers unless funded and
indemnified as aforesaid.
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(c) The Subscription Receipt Trustee may, before commencing any action or
proceeding, or at any time during the continuance of any such action
or proceeding, require the Receiptholders at whose instance it is
acting to deposit with the Subscription Receipt Trustee the
Subscription Receipts held by them, for which Subscription Receipts
the Subscription Receipt Trustee will issue receipts.
(d) Every provision of this Agreement that by its terms relieves the
Subscription Receipt Trustee of liability or entitles it to act and
rely upon any evidence submitted to it is subject to the provisions of
Applicable Legislation, of this Section 10.2 and of Section 10.3.
10.3 EVIDENCE, EXPERTS AND ADVISORS
(a) In addition to the reports, certificates, opinions and other evidence
required by this Agreement, the Corporation will furnish to the
Subscription Receipt Trustee such additional evidence of compliance
with any provision hereof, and in such form, as may be prescribed by
Applicable Legislation or as the Subscription Receipt Trustee may
reasonably require by written notice to the Corporation.
(b) In the exercise of its rights and duties hereunder, the Subscription
Receipt Trustee may, if it is acting in good faith, act and rely as to
the truth of the statements and the accuracy of the opinions expressed
in statutory declarations, opinions, reports, written requests,
consents, or orders of the Corporation, certificates of the
Corporation, or other evidence furnished to the Subscription Receipt
Trustee pursuant to any provision hereof or of Applicable Legislation
or pursuant to a request of the Subscription Receipt Trustee, provided
that such evidence complies with Applicable Legislation and that the
Subscription Receipt Trustee complies with Applicable Legislation and
that the Subscription Receipt Trustee examines the same and determines
that such evidence complies with the applicable requirements of this
Agreement.
(c) Whenever it is provided in this Agreement or under Applicable
Legislation that the Corporation will deposit with the Subscription
Receipt Trustee resolutions, certificates, reports, opinions,
requests, orders or other documents, it is intended that the truth,
accuracy and good faith on the effective date thereof and the facts
and opinions stated in all such documents so deposited will, in each
and every such case, be conditions precedent to the right of the
Corporation to have the Subscription Receipt Trustee take the action
to be based thereon.
(d) The Subscription Receipt Trustee may employ or retain such Counsel,
accountants, appraisers or other experts or advisors as it may
reasonably require for the purpose of determining and discharging its
duties hereunder and may pay reasonable remuneration for all services
so performed by any of them, without taxation of costs of any Counsel,
and the Subscription Receipt Trustee is not responsible for any
misconduct or negligence on the part of any such experts or advisors
who have been appointed with due care by the Subscription Receipt
Trustee.
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10.4 DOCUMENTS, MONIES, ETC. HELD BY SUBSCRIPTION RECEIPT TRUSTEE
Subject to Section 5.1, any securities, documents of title or other
instruments that may at any time be held by the Subscription Receipt Trustee or
Torys pursuant to this Agreement may be placed in the deposit vaults of any
Canadian chartered bank or deposited for safekeeping with any such bank. Unless
herein otherwise expressly provided, any monies so held pending the application
or withdrawal thereof under any provisions of this Agreement may be deposited in
the name of the Subscription Receipt Trustee or Torys in any Canadian chartered
bank at the rate of interest (if any) then current on similar deposits or, with
the consent of the Corporation, may be:
(a) deposited in the deposit department of the Subscription Receipt
Trustee or any other loan or trust company authorized to accept
deposits under the laws of Canada or a province thereof; or
(b) invested in securities issued or guaranteed by the Government of
Canada or a province thereof or in obligations maturing not more than
30 days from the date of investment, of any Canadian chartered bank or
loan or trust company. The maturity period of any such investment is
to be selected to facilitate any payments expected to be made under
this Agreement. All interest received by the Subscription Receipt
Trustee or Torys in respect of such deposits and investments belong to
the Receiptholders.
10.5 ACTIONS BY SUBSCRIPTION RECEIPT TRUSTEE TO PROTECT INTEREST
The Subscription Receipt Trustee has power to institute and to maintain
such actions and proceedings as it may consider necessary or expedient to
preserve, protect or enforce its interests and the interests of the
Receiptholders.
10.6 SUBSCRIPTION RECEIPT TRUSTEE NOT REQUIRED TO GIVE SECURITY
The Subscription Receipt Trustee is not required to give any bond or
security in respect of the execution of this Agreement or otherwise in respect
of the premises.
10.7 PROTECTION OF SUBSCRIPTION RECEIPT TRUSTEE
By way of supplement to the provisions of any law for the time being
relating to the Subscription Receipt Trustee or trustees, it is expressly
declared and agreed as follows:
(a) the Subscription Receipt Trustee is not liable for or by reason of any
statements of fact or recitals in this Agreement or in the
Subscription Receipt Certificates (except the representation contained
in Section 10.9 or in the certificate of the Subscription Receipt
Trustee on the Subscription Receipt Certificates) or required to
verify the same, but all such statements or recitals are and are
deemed to be made by the Corporation;
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(b) nothing herein contained imposes any obligation on the Subscription
Receipt Trustee to see to or to require evidence of the registration
or filing (or renewal thereof) of this Agreement or any instrument
ancillary or supplemental hereto;
(c) the Subscription Receipt Trustee is not bound to give notice to any
person or persons of the execution hereof;
(d) the Subscription Receipt Trustee will not incur any liability or
responsibility whatever or be in any way responsible for the
consequence of any breach on the part of the Corporation of any of the
covenants herein contained or of any acts of any directors, officers,
employees, agents or servants of the Corporation; and
(e) the Corporation agrees to indemnify and save harmless the Subscription
Receipt Trustee and its directors, officers, employees, shareholders
and agents from and against any and all liabilities, losses, costs,
claims, actions, or demands whatsoever which may be brought against
the Subscription Receipt Trustee or which it may suffer or incur as a
result of or arising out of the performance of its duties and
obligations under this Agreement, save only in the event of the
grossly negligent failure to act, or the willful misconduct or fraud
of the Subscription Receipt Trustee. It is understood and agreed that
this indemnification survives the termination or discharge of this
Agreement or the resignation of the Subscription Receipt Trustee.
10.8 REPLACEMENT OF SUBSCRIPTION RECEIPT TRUSTEE; SUCCESSOR BY MERGER
(a) The Subscription Receipt Trustee may resign its appointment and be
discharged from all other duties and liabilities hereunder, subject to
this Section 10.8, by giving to the Corporation not less than 60 days'
prior notice in writing or such shorter prior notice as the
Corporation may accept as sufficient. The Receiptholders by
Extraordinary Resolution have power at any time to remove the existing
Subscription Receipt Trustee, acceptable to the Corporation, acting
reasonably, and to appoint a new Subscription Receipt Trustee. If the
Subscription Receipt Trustee resigns or is removed as aforesaid or is
dissolved, becomes bankrupt, goes into liquidation or otherwise
becomes incapable of acting hereunder, the Corporation will forthwith
appoint a new Subscription Receipt Trustee, unless a new Subscription
Receipt Trustee has already been appointed by the Receiptholders;
failing such appointment by the Corporation, the retiring Subscription
Receipt Trustee or any Receiptholder may apply to a justice of the
Alberta Court of Queen's Bench on such notice as such justice may
direct, for the appointment of a new Subscription Receipt Trustee at
the Corporation's expense; but any new Subscription Receipt Trustee so
appointed by the Corporation or by the Court is subject to removal as
aforesaid by the Receiptholders. Any new Subscription Receipt Trustee
appointed under any provision of this Section 10.8 is to be a
corporation authorized to carry on the business of a trust company in
the Province of Alberta and, if required by Applicable Legislation for
any other provinces, in such other provinces. On any such appointment
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the new Subscription Receipt Trustee is vested with the same powers,
rights, duties and responsibilities as if it had been originally named
herein as Subscription Receipt Trustee. At the request of the
Corporation or the new Subscription Receipt Trustee, the retiring
Subscription Receipt Trustee, upon payment of the amounts, if any, due
to it pursuant to Section 6.3, shall duly assign, transfer and deliver
to the Subscription Receipt Trustee all property and money held and
all records kept by the retiring Subscription Receipt Trustee
hereunder or in connection herewith.
(b) Upon the appointment of a successor Subscription Receipt Trustee, the
Corporation will promptly notify the Receiptholders thereof in the
manner provided for in Article 11.
(c) Any corporation into or with which the Subscription Receipt Trustee
may be merged or consolidated or amalgamated, or any corporation
resulting therefrom to which the Subscription Receipt Trustee is a
party, or any corporation succeeding to the corporate trust business
of the Subscription Receipt Trustee will be the successor to the
Subscription Receipt Trustee hereunder without any further act on its
part or any of the parties hereto, provided that such corporation
would be eligible for appointment as a successor Subscription Receipt
Trustee under Subsection 10.8(a).
(d) Any Subscription Receipt Certificates certified but not delivered by a
predecessor Subscription Receipt Trustee may be certified by the
successor Subscription Receipt Trustee in the name of the predecessor
or successor Subscription Receipt Trustee.
10.9 CONFLICT OF INTEREST
(a) The Subscription Receipt Trustee represents to the Corporation that at
the time of execution and delivery hereof no material conflict of
interest exists between its respective role as the Subscription
Receipt Trustee hereunder and its role in any other capacity and
agrees that in the event of a material conflict of interest arising
hereafter it will, within 30 days after ascertaining that it has such
material conflict of interest, either eliminate the same or assign its
appointment as Subscription Receipt Trustee hereunder to a successor
Subscription Receipt Trustee approved by the Corporation and meeting
the requirements set forth in Subsection 10.8(a). Notwithstanding the
foregoing provisions of this Subsection 10.9(a), if any such material
conflict of interest exists the validity and enforceability of this
Agreement and the Subscription Receipt Certificates are not affected
in any manner whatsoever by reason thereof.
(b) Subject to Subsection 10.9(a), the Subscription Receipt Trustee in its
personal or any other capacity, may buy, lend upon and deal in
securities of the Corporation and generally may contract and enter
into financial transactions with the Corporation or any Subsidiary of
the Corporation without being liable to account for any profit made
thereby.
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10.10 ACCEPTANCE OF APPOINTMENTS
The Subscription Receipt Trustee hereby accepts the appointment as
Subscription Receipt Trustee in this Agreement and agrees to perform its duties
hereunder upon the terms and conditions herein set forth. The Subscription
Receipt Trustee hereby accepts the appointment as registrar and transfer agent
of the Subscription Receipts and agrees to perform its duties hereunder upon the
terms and conditions herein set forth.
10.11 SUBSCRIPTION RECEIPT TRUSTEE NOT TO BE APPOINTED RECEIVER
The Subscription Receipt Trustee and any person related to the Subscription
Receipt Trustee is not to be appointed a receiver, a receiver and manager or
liquidator of all or any part of the assets or undertaking of the Corporation or
any affiliate of the Corporation.
10.12 NOT BOUND TO ACT
The Subscription Receipt Trustee shall retain the right not to act and
shall not be liable for refusing to act if, due to a lack of information or for
any other reason whatsoever, the Subscription Receipt Trustee, in its sole
judgment, determines that such act might cause it to be in non-compliance with
any applicable anti-money laundering or anti-terrorist legislation, regulation
or guideline. Should the Subscription Receipt Trustee, in its sole discretion,
determine at any time that its acting under this Agreement has resulted in its
being in non-compliance with any applicable anti-money laundering or
anti-terrorist legislation, regulation or guideline, then it shall have the
right to resign on 10 days written notice to the other parties to this
Agreement, provided that (i) the Subscription Receipt Trustee's written notice
shall describe the circumstances of such non-compliance; and (ii) if such
circumstances are rectified to the Subscription Receipt Trustee's satisfaction
within such 10 day period, then such resignation shall not be effective.
10.13 THIRD PARTY INTEREST
Each party to this Agreement hereby represents to the Subscription Receipt
Trustee that any account to be opened by, or interest to be held by, the
Subscription Receipt Trustee in connection with this Agreement, for or to the
credit of such party, either (i) is not intended to be used by or on behalf of
any third party; or (ii) is intended to be used by or on behalf of a third
party, in which case the Corporation hereto agrees to complete and execute
forthwith a declaration in the Subscription Receipt Trustee's prescribed form as
to the particulars of the third party.
10.14 PRIVACY
The parties acknowledge that federal and/or provincial legislation that
addresses the protection of individuals' personal information (collectively,
"PRIVACY LAWS") applies to obligations and activities under this Agreement.
Despite any other provision of this Agreement, neither party shall take or
direct any action that would contravene, or cause the other to contravene,
applicable Privacy Laws. The Corporation shall, prior to transferring or causing
to be transferred personal information to the Subscription Receipt Trustee,
obtain and retain required consents of the relevant individuals to the
collection, use and disclosure of their personal information, or shall have
determined that such consents either have previously been given upon which the
parties can rely or are not required under the Privacy Laws. The Subscription
34
Receipt Trustee shall use commercially reasonable efforts to ensure that its
services hereunder comply with Privacy Laws. Specifically, the Subscription
Receipt Trustee agrees: (a) to have a designated chief privacy officer; (b) to
maintain policies and procedures to protect personal information and to receive
and respond to any privacy complaint or inquiry; (c) to use personal information
solely for the purposes of providing its services under or ancillary to this
Agreement and not to use it for any other purpose except with the consent of or
direction from the Corporation or the individual involved; (d) not to sell or
otherwise improperly disclose personal information to any third party; and (e)
to employ administrative, physical and technological safeguards to reasonably
secure and protect personal information against loss, theft, or unauthorized
access, use or modification.
ARTICLE 11
GENERAL
11.1 NOTICE TO THE CORPORATION AND THE SUBSCRIPTION RECEIPT TRUSTEE
(a) Any notice required or permitted to be given hereunder shall be in
writing and shall be effectively given if (i) delivered personally,
(ii) sent prepaid courier service or mail, or (iii) sent prepaid by
facsimile transmission or other similar means of electronic
communication (confirmed on the same or following day by prepaid mail)
addressed as follows:
(i) in the case of notice to ACOR:
Australian-Canadian Oil Royalties Ltd.
0000 Xxxxxx X
Xxxxx, Xxxxx 00000
Attention: Xxxxxx Xxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Email: xxxx@xxxxxxxxxx.xxx
(ii) in the case of notice to Olympia:
Olympia Trust Company
2300, 000- 0xx Xxxxxx X.X.
Xxxxxxx, Xxxxxxx X0X 0X0
Attention: Manager, Client Services
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Email: xxxxxxxxxxxx@xxxxxxxxxxxx.xxx
35
(iii) in the case of notice to Torys:
Torys LLP
Xxxxx 000, 000-0xx Xxxxxx X.X.
Xxxxxxx, Xxxxxxx X0X 0X0
Attention: Xxxxx Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Email: xxxxxxxxx@xxxxx.xxx
(b) Any notice, designation, communication, request, demand or other
document given or sent or delivered as aforesaid shall:
(i) if delivered as aforesaid, be deemed to have been given, sent,
delivered and received on the date of delivery;
(ii) if sent by mail as aforesaid, be deemed to have been given, sent,
delivered and received (but not actually received) on the fourth
Business Day following the date of mailing, unless at any time
between the date of mailing and the fourth Business Day
thereafter there is a discontinuance or interruption of regular
postal service, whether due to strike or lockout or work
slowdown, affecting postal service at the point of dispatch or
delivery or any intermediate point, in which case the same shall
be deemed to have been given, sent, delivered and received in the
ordinary course of the mail, allowing for such discontinuance or
interruption of regular postal service; and
(iii) if sent by facsimile machine, be deemed to have been given,
sent, delivered and received on the date the sender receives the
facsimile machine answer back confirming receipt by the
recipient.
11.2 WAIVER
Any Party hereto which is entitled to the benefits of this Agreement may,
and has the right to, unless otherwise provided, waive any term or condition
hereof at any time on or prior to the Closing Date, provided however that such
waiver shall be evidenced by written instrument duly executed on behalf of such
Party.
11.3 EVIDENCE OF OWNERSHIP
(a) Upon receipt of a certificate of any bank, trust company or other
depositary satisfactory to the Subscription Receipt Trustee stating
that the Subscription Receipts have been deposited by a named person
with such bank, trust company or other depositary and are to remain so
deposited until the expiry of the period specified therein, the
Corporation and the Subscription Receipts Trustee may treat the person
so named as the holder, and such certificate as sufficient evidence of
the ownership by such person of such Subscription Receipt during such
period, for the purpose of any requisition, direction, consent,
instrument or other document to be made, signed or given by the holder
of the Subscription Receipt so deposited; and
36
(b) The Corporation and the Subscription Receipt Trustee may accept as
sufficient evidence of the fact and date of the signing of any
requisition, direction, consent, instrument or other document by any
person: (i) the signature of any officer of any bank, trust company,
or other depositary satisfactory to the Subscription Receipt Trustee
as witness of such execution; (ii) the certificate of any notary
public or other officer authorized to take acknowledgements of deeds
to be recorded at the place where such certificate is made that the
person signing acknowledged to him the execution thereof; or (iii) a
statutory declaration of a witness of such execution.
11.4 SATISFACTION AND DISCHARGE OF AGREEMENT
Upon the earlier of:
(a) the payment and delivery of all certificates, book-entry only customer
confirmations, documents and moneys required to satisfy the Issuance
Right; or
(b) the payent of all monies required to satisfy the Refund Right,
this Agreement terminates and ceases to be of further effect and the
Subscription Receipt Trustee, on demand of and at the cost and expense of the
Corporation and upon delivery to the Subscription Receipt Trustee of a
certificate of the Corporation stating that all conditions precedent to the
satisfaction and discharge of this Agreement have been complied with, will
execute proper instruments acknowledging satisfaction of and discharging this
Agreement. Notwithstanding the foregoing, the indemnities provided to the
Subscription Receipt Trustee by the Corporation hereunder, and the Corporation
to the Receiptholders hereunder, respectively, remain in full force and effect
and survive the termination of this Agreement.
11.5 PROVISIONS OF AGREEMENT AND SUBSCRIPTION RECEIPTS FOR THE SOLE
BENEFIT OF PARTIES AND RECEIPTHOLDERS
Nothing in this Agreement or in the Subscription Receipt Certificates,
expressed or implied, gives or is to be construed as giving to any person other
than the parties hereto, the Receiptholders and the transferees of Subscription
Receipts as contemplated in Article 2, as the case may be, any legal or
equitable right, remedy or claim under this Agreement, or under any covenant or
provision herein or therein contained, all such covenants and provisions being
for the sole benefit of the parties hereto, the Receiptholders and such
transferees.
11.6 SUBSCRIPTION RECEIPTS OWNED BY THE CORPORATION OR ITS SUBSIDIARIES -
CERTIFICATE TO BE PROVIDED
For the purpose of disregarding any Subscription Receipts owned legally or
beneficially by the Corporation or any Subsidiary of the Corporation in Section
8.18, the Corporation will provide to the Subscription Receipt Trustee, from
time to time, a certificate of the Corporation setting forth as at the date of
such certificate the number of Subscription Receipts owned legally or
beneficially by the Corporation or any Subsidiary of the Corporation, and the
Subscription Receipt Trustee, in making the computations in Section 8.18, is
entitled to rely on such certificate without requiring further evidence thereof.
37
11.7 LANGUAGE
The parties hereto have requested that this document be drafted in the
English language. Les parties ont demande que le present document soit redige en
langue anglaise. 11.8 EFFECT OF EXECUTION
Notwithstanding any provision of this Agreement, should any Subscription
Receipt Certificates be issued and certified in accordance with the terms hereof
prior to the actual time of execution of this Agreement by the Corporation,
Acumen and the Subscription Receipt Trustee, any such Subscription Receipt
Certificates are void and of no value and effect until such actual execution of
this Agreement.
11.9 TIME OF ESSENCE
Time is and will remain of the essence of this Agreement and for the
Subscription Receipts.
11.10 COUNTERPARTS
This Agreement may be executed and delivered in counterparts, each of
which when so executed and delivered is deemed to be an original and such
counterparts together constitute one and the same instrument and,
notwithstanding their date of execution, such counterparts are deemed to be
dated as of the date hereof.
[SIGNATURE PAGE FOLLOWS]
38
IN WITNESS WHEREOF the parties hereto have executed this Agreement under
the hands of their proper officers in that behalf.
AUSTRALIAN-CANADIAN OIL ROYALTIES LTD.
By:
--------------------------------------------
Name:
Title:
OLYMPIA TRUST COMPANY
By:
--------------------------------------------
Name:
Title:
By:
--------------------------------------------
Name:
Title:
TORYS LLP
By:
--------------------------------------------
Name:
Title:
39
This is Schedule A to a Subscription Receipt Agreement made as of January 20,
2012 between Australian-Canadian Oil Royalties Ltd., Olympia Trust Company, as
Subscription Receipt Trustee, and Torys LLP.
FORM OF SUBSCRIPTION RECEIPT CERTIFICATE
UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST
NOT TRADE THE SECURITY BEFORE THE DATE THAT IS 4 MONTHS AND A DAY AFTER THE
LATER OF (I)JANUARY 20, 2012; AND (II) THE DATE THE ISSUER BECAME A REPORTING
ISSUER IN ANY PROVINCE OR TERRITORY.
[IF A U.S. LEGEND IS REQUIRED BY SECTION 2.2(B) OF THE AGREEMENT:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR UNDER ANY
STATE SECURITIES LAWS. THE HOLDER HEREOF, BY PURCHASING SUCH SECURITIES, AGREES
FOR THE BENEFIT OF AUSTRALIAN-CANADIAN OIL ROYALTIES LTD. THAT SUCH SECURITIES
MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (A) TO
AUSTRALIAN-CANADIAN OIL ROYALTIES LTD., (B) OUTSIDE THE UNITED STATES IN
ACCORDANCE WITH REGULATION S UNDER THE SECURITIES ACT, (C) IN ACCORDANCE WITH
RULE 144A UNDER THE SECURITIES ACT, OR (D) PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT AND, IN EACH CASE, IN COMPLIANCE WITH ANY
APPLICABLE STATE SECURITIES LAWS AFTER, IN THE CASE OF TRANSFERS UNDER CLAUSE
(D), THE HOLDER HAS FURNISHED TO AUSTRALIAN-CANADIAN OIL ROYALTIES LTD. AN
OPINION OF COUNSEL OF RECOGNIZED STANDING OR OTHER EVIDENCE REASONABLY
SATISFACTORY TO AUSTRALIAN-CANADIAN OIL ROYALTIES LTD. TO SUCH EFFECT.]
SUBSCRIPTION RECEIPTS
AUSTRALIAN-CANADIAN OIL ROYALTIES LTD.
(A CORPORATION EXISTING UNDER THE LAWS OF THE PROVINCE OF BRITISH COLUMBIA)
Number: [ ] [ ] Subscription Receipts
THIS CERTIFIES THAT
[ ]
(the "HOLDER") is the registered holder of _____________________________________
Subscription Receipts issued by Australian-Canadian Oil Royalties Ltd.
(the "CORPORATION").
The Subscription Receipts represented by this Subscription Receipt certificate
("CERTIFICATE") are issued pursuant to a Subscription Receipt Agreement
("AGREEMENT") dated January 20, 2012 between the Corporation, Olympia Trust
Company (the "SUBSCRIPTION RECEIPT TRUSTEE") and Torys LLP. Capitalized terms
not defined herein have the meaning ascribed to them in the Agreement.
40
Each Subscription Receipt entitles the holder:
(a) to receive, for no additional consideration and without further action
by the holder, one common share of the Corporation (an "ACOR SHARE"),
provided the Escrow Release Conditions are satisfied and the Closing
Notice and Irrevocable Direction are delivered to the Subscription
Receipt Trustee and the transfer agent of the Corporation at or before
the Termination Time; or
(b) to be reimbursed the Issue Price together with any interest accrued or
earned thereon, if a Termination Event occurs.
THE SUBSCRIPTION RECEIPTS REPRESENTED HEREBY ARE ISSUED UNDER AND PURSUANT
TO THE AGREEMENT. Reference is hereby made to the Agreement and any and all
other instruments supplemental or ancillary thereto for a full description of
the rights of the holders of the Subscription Receipts and the terms and
conditions upon which such Subscription Receipts are, or are to be, issued and
held, all to the same effect as if the provisions of the Agreement and all
instruments supplemental or ancillary thereto were herein set forth, and to all
of which provisions the holder of these Subscription Receipts by acceptance
hereof assents. In the event of a conflict or inconsistency between the terms of
the Agreement and this Certificate, the terms of the Agreement prevail.
The holder is entitled to obtain a copy of the Agreement from the
Subscription Receipt Trustee upon making a written request for such Agreement.
The holding of the Subscription Receipts evidenced by this Certificate does
not constitute the holder hereof a holder of ACOR Shares or entitle such holder
to any right or interest in respect thereof except as herein and in the
Agreement expressly provided.
The Agreement contains provisions making binding upon all holders of
Subscription Receipts outstanding thereunder resolutions passed at meetings of
such holders held in accordance with such provisions and by instruments in
writing signed by the holders of a specified majority of the outstanding
Subscription Receipts.
The Subscription Receipts evidenced by this Certificate may be transferred
on the Register kept at the offices of the Subscription Receipt Trustee by the
registered holder hereof or his legal representatives or his attorney duly
appointed by an instrument in writing in form and execution satisfactory to the
Subscription Receipt Trustee, only upon payment of the charges provided for in
the Agreement and upon compliance with such reasonable requirements as the
Subscription Receipt Trustee may prescribe. The transfer Register will be closed
at 5:00 p.m. (Calgary time) at the Designated Office, on the earlier to occur of
the Exchange Date and the Termination Date (subject to settlement).
This Certificate is not valid for any purpose whatever unless and until it
has been countersigned by or on behalf of the Subscription Receipt Trustee.
Time is of the essence hereof. This Certificate is governed by the laws of
Alberta and the laws of Canada applicable therein.
41
IN WITNESS WHEREOF each of the Corporation and the Subscription Receipt
Trustee has caused this Certificate to be signed by a duly authorized
representative as of January 20, 2012.
AUSTRALIAN-CANADIAN OIL ROYALTIES LTD.
By:
--------------------------------------------
Name:
Title:
Countersigned by
OLYMPIA TRUST COMPANY, in its capacity as
Subscription Receipt Trustee
By:
--------------------------------------------
Name:
Title:
42
TRANSFER FORM
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto
______________________________________________________________________________
NAME and ADDRESS in full (please print)
________________________________________Subscription Receipts of
AUSTRALIAN-CANADIAN OIL ROYALTIES LTD. represented by this Certificate and
irrevocably constitutes and appoints as the attorney of the undersigned to
_______________________________________________________________________________
transfer such securities on the register of transfers with full power of
substitution.
In the event the Issuance Rights relating to the Subscription Receipts are
deemed to have been exercised to receive ACOR Shares or the holder is entitled
to the Refund Right as described in this Certificate, this transfer form is
effective to transfer the holder's right, title and entitlement in and to the
ACOR Shares issued upon the deemed exercise of the Issuance Rights or the monies
payable as a Refund Right, as the case may be.
Dated , 201[ ]
--------------------------------------
_______________________________________________________________________________
Signature of Transferor
_______________________________________________________________________________
Signature of Guarantee
NOTE: Subject to applicable law, the securities may be required to contain a
legend which restricts trading in such securities. The signature to
any endorsement hereof must correspond with the name as written upon
the face of this Certificate in every particular without alteration or
any change whatsoever. All endorsements or assignments of this
Certificate must be endorsed by the registered holder thereof or be
accompanied by a share transfer power of attorney duly and properly
completed by the registered holder, with the signature guaranteed in
either case by a Canadian Schedule 1 chartered bank, a major trust
company in Canada, a member of the Securities Transfer Agents
Medallion Program (STAMP), a member of the Stock Exchange Medallion
Program (SEMP) or a member of the New York Stock Exchange Inc.
Medallion Signature Program (MSP). The signature of the registered
holder must correspond in every respect with the name of the
registered holder appearing on the face of the share certificate(s).
CONDITION
Where this Transfer Form is being executed by an agent, executor,
administrator, trustee, guardian, curator, attorney, officer of a
corporation or other person, or any person acting in a fiduciary or
representative capacity, this Transfer Form must be accompanied by
satisfactory evidence of the representative's authority to act
satisfactory to the Subscription Receipt Trustee and the Corporation.
43
This is Schedule B to a Subscription Receipt Agreement made as of January 20,
2012 between Australian-Canadian Oil Royalties Ltd., Olympia Trust Company, as
Subscription Receipt Trustee, and Torys LLP.
IRREVOCABLE DIRECTION
TO: Olympia Trust Company (the "SUBSCRIPTION RECEIPT TRUSTEE"), as Subscription
Receipt Trustee under the Agreement (defined below);
AND TO: Australian-Canadian Oil Royalties Ltd. (the "CORPORATION") as registrar
and transfer agent for the Common Shares in the capital of the
Corporation
This Irrevocable Direction is being provided pursuant to the Subscription
Receipt Agreement ("AGREEMENT") dated January 20, 2012 between the
Corporation, the Subscription Receipt Trustee and Torys LLP.
Capitalized terms not defined herein have the meaning ascribed to them in
the Agreement.
The Corporation is hereby irrevocably directed and authorized to issue on
behalf of the Corporation a total of [ ]ACOR Shares to the person or persons to
whom such ACOR Shares are to be issued pursuant to the deemed exercise of the
Issuance Rights under the terms of the Agreement and the Subscription Receipt
Certificate(s) following the satisfaction of the Escrow Release Conditions
(which occurred ________________________ on , 201[ ]), in accordance with the
provisions of the Subscription Receipt Certificate(s) and the Agreement. All
certificates representing the ACOR Shares so issued are to be endorsed with the
legends in accordance with the Agreement.
(i) In the case of the ACOR Shares:
UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS
SECURITY MUST NOT TRADE THE SECURITY BEFORE THE DATE THAT IS 4
MONTHS AND A DAY AFTER THE LATER OF (I) [n, 201n]; AND (II) THE
DATE THE ISSUER BECAME A REPORTING ISSUER IN ANY PROVINCE OR
TERRITORY.
[IF A U.S. LEGEND IS REQUIRED BY SECTION 2.2(B) OF THE AGREEMENT:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER
THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT") OR UNDER ANY STATE SECURITIES LAWS. THE HOLDER
HEREOF, BY PURCHASING SUCH SECURITIES, AGREES FOR THE BENEFIT OF
AUSTRALIAN-CANADIAN OIL ROYALTIES LTD. THAT SUCH SECURITIES MAY
BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (A) TO
AUSTRALIAN-CANADIAN OIL ROYALTIES LTD., (B) OUTSIDE THE UNITED
STATES IN ACCORDANCE WITH REGULATION S UNDER THE SECURITIES ACT,
44
(C) IN ACCORDANCE WITH RULE 144A UNDER THE SECURITIES ACT, OR (D)
PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES
ACT AND, IN EACH CASE, IN COMPLIANCE WITH ANY APPLICABLE STATE
SECURITIES LAWS AFTER, IN THE CASE OF TRANSFERS UNDER CLAUSE (D),
THE HOLDER HAS FURNISHED TO HYPERION EXPLORATION CORP. AN OPINION
OF COUNSEL OF RECOGNIZED STANDING OR OTHER EVIDENCE REASONABLY
SATISFACTORY TO AUSTRALIAN-CANADIAN OIL ROYALTIES LTD. TO SUCH
EFFECT.]
The Subscription Receipt Trustee is hereby irrevocably directed and
authorized to cause release to the Corporation, or as directed by the
Corporation, the full amount of the Escrowed Funds,
together with any interest earned thereon.
DATED at , this day of , 201[ ].
-------------------------------------------------------
AUSTRALIAN-CANADIAN OIL ROYALTIES LTD.
By:
--------------------------------------------
Name:
Title:
45
This is Schedule C to a Subscription Receipt Agreement made as of January
20, 2012 between Australian-Canadian Oil Royalties Ltd., Olympia Trust Company,
as Subscription Receipt Trustee, and Torys LLP.
CLOSING NOTICE
TO: Olympia Trust Company (the "SUBSCRIPTION RECEIPT TRUSTEE"), as Subscription
Receipt Trustee under the Agreement (defined below);
AND TO: Australian-Canadian Oil Royalties Ltd.(the "CORPORATION") as registrar
and transfer agent for the Common Shares in the capital of the
Corporation
This Closing Notice is being provided pursuant to the Subscription Receipt
Agreement ("AGREEMENT") dated January 20, 2012 between the Corporation, the
Subscription Receipt Trustee and Torys LLP.
Capitalized terms not defined herein have the meaning ascribed to them in
the Agreement.
The Subscription Receipt Trustee and the Corporation are hereby notified by
the Corporation that the Escrow Release Conditions have been satisfied all in
accordance with the provisions of the Agreement and the Subscription Receipt
Certificates.
DATED at , this ___ day of _________________, 201n.
AUSTRALIAN-CANADIAN OIL ROYALTIES LTD.
By:
--------------------------------------------
Name:
Title:
46
