SUBSCRIPTION AGENCY AGREEMENT
THIS AGREEMENT is made the • day
of •, 2001.
B E T W E E N :
RADIANT
ENERGY CORPORATION, a corporation amalgamated under the
laws
of Canada,
(hereinafter called the "Company")
OF THE FIRST PART
- and -
EQUITY TRANSFER SERVICES INC., a corporation incorporated under the
laws of
the Province of Ontario,
(hereinafter
called "Equity")
OF THE SECOND PART
WHEREAS:
| A. |
Equity is the registrar and transfer agent for the issued and outstanding
common shares (the "Shares") in the capital of the Company;
|
| B. |
the Company has resolved to issue rights (the "Rights") to subscribe
for US$100 principal amount of Series B 8% redeemable convertible
subordinated debentures;
|
| C. |
the Rights are to be issued to the holders of the Shares of the Company as
described in this Agreement;
|
| D. |
the Company deems it expedient that Equity act as subscription agent for
the Rights and custodian of monies tendered for exercise of the Rights;
|
NOW
THEREFORE, in consideration of the mutual covenants herein set forth, the
parties hereto agree as follows:
Section 1. Definitions
| 1.01 |
In this Agreement and the recitals hereto, unless there is something in the
subject matter or context inconsistent therewith, the following terms or
expressions have the following meanings, respectively:
|
| |
“Additional Debentures” means such Debentures, if any, as subscribed for under the
Additional Subscription Privilege (as defined in the Prospectus); |
| |
“Basic Subscription Privilege” means the right of each shareholder
of the Company to subscribe for one Debenture for each 150 Rights pursuant to
the Prospectus;
|
| |
“Debentures” means the Series B 8% redeemable convertible
unsecured subordinated debentures to be created and issued pursuant to a trust
indenture to be dated o , 2001 between the Trustee and the Company;
|
| |
“Expiry Date” means 4:00 p.m. (Toronto time) on o , 2001;
|
| |
“Non-Participating Shareholder” means shareholders of the Company
who reside in any jurisdiction other than the United States and the Qualifying
Provinces;
|
| |
“Prospectus” means, collectively, the preliminary prospectus of
the Company dated September 25, 2001 and the (final) prospectus to be prepared
and filed with the securities commissions of the Qualifying Provinces
qualifying the distribution of the Rights in each of the Qualifying Provinces;
|
| |
“Qualifying Provinces” means the Provinces of Alberta, British
Columbia, Ontario and Nova Scotia;
|
| |
“Record Date” means o , 2001;
|
| |
“Subscription Funds” means any and all monies tendered by holders
of Rights on account of subscriptions for the Debentures;
|
| |
“Trustee” means Trust Company of Bank of Montreal, a trust company
existing under the laws of Canada; and
|
| |
“U.S. Resident Shareholder” means any registered holder of Shares
whose address, as reflected in the Share register of the Company maintained by
Equity, is in the United States of America.
|
Section 2. Appointment of Agent
| 2.01 |
Equity is hereby appointed as subscription agent for the Rights at its principal
office in Toronto and Equity hereby accepts such appointment upon the terms and
conditions hereinafter set forth.
|
| 2.02 |
Equity shall keep the Company’s register of Rights and register of
transfers of Rights and the Company’s supply of unissued Rights
certificates and, subject to such instructions as may be from time to time given
by any officer of the Company, Equity shall:
|
| |
(a) |
issue to the persons entitled thereto, in accordance with Section 3.01 hereof,
Rights certificates representing the Rights held by them, or transferred to them
after the initial issuance, respectively, and enter or register such Rights
certificates on the Company’s register of transfers of Rights;
|
| |
(b) |
permit transfers to be made upon the said register of transfers by holders of
Rights or by their duly authorized attorneys and cancel certificates for Rights
surrendered upon such transfers;
|
| |
(c) |
in accordance with the Prospectus, accept for division and consolidation
Rights certificates properly presented for division or consolidation prior to
the Expiry Date;
|
| |
(d) |
in accordance with the Prospectus, calculate the number of Additional Debentures
available after giving effect to the Basic Subscription Privilege and allocate
and issue such Additional Debentures to the persons entitled thereto;
|
| |
(e) |
in accordance with the Prospectus, accept for exercise Rights from holders of
Rights entitled to subscribe for Debentures, along with Subscription Funds, and
cancel such Rights certificates properly presented for exercise from the
register of Rights;
|
| |
(f) |
forthwith after the Expiry Date and after all duly tendered subscriptions for
the Debentures have been calculated, cancel all Rights from the register;
|
| |
(g) |
until the Expiry Date, make such entries from time to time in the said register
of Rights as may be necessary in order that the Rights account of each holder of
Rights of the Company may be properly and accurately kept;
|
| |
(h) |
supply the Company and the Trustee from time to time as required with lists of
holders of Rights of the Company as shown by the said register corrected to the
dates of such lists showing at a minimum the name and last known postal address
of each holder of Rights and the number of Rights held by each holder of Rights;
|
| |
(i) |
supply the Trustee and such other persons as the Company may designate from time
to time with such information in such form (oral or written) as they may
reasonably request as to the Rights exercised or transferred and the names of
the subscribers or transferees thereof; and
|
| |
(j) |
in accordance with any requisition given to Equity by the Trustee, issue and
deliver the specified number of Shares in the names of persons who have properly
converted their Debentures.
|
Section 3. The Rights
| 3.01 |
Subject to the provisions of Section 4.02 hereof, the Rights shall be issued to
all registered holders of Shares entitled thereto at the close of business on
the Record Date, shall be in fully registered form and shall be freely
transferable under applicable securities laws of the Qualifying Provinces.
Rights shall be exercisable in accordance with the Prospectus.
|
| 3.02 |
The Rights shall be evidenced by certificates substantially in the form annexed
hereto as Schedule A, subject to such changes as may be necessary or desirable
for the printing thereof.
|
Section 4. Appointment of Custodian and
Agent
| 4.01 |
Equity is hereby appointed as custodian for the receipt and holding of the
Subscription Funds and Equity hereby accepts such appointment.
|
| 4.02 |
Equity agrees and consents to its appointment as agent of:
|
| |
(a) |
Non-Participating Shareholders as provided in the Prospectus under the heading
“Details of the Offering – General – Non-Participating
Shareholders” and as custodian of proceeds of Rights sold on behalf of
Non-Participating Shareholders. Equity hereby covenants and agrees to sell or
transfer any such Rights as described under the headings “Details of the
Offering – General - Non-Participating Shareholders” and “Details
of the Offering – General - Mandatory Sale of Certain Rights” in the
Prospectus. Promptly following the Expiry Date, Equity shall remit the proceeds
in excess of Cdn.$5.00 per person of any such sales to the persons entitled
thereto, less brokerage fees, if any, applicable tax withholdings, if any, and
any other required deductions;
|
| |
(b) |
US Resident Shareholders as provided in the Prospectus under the heading
“Canadian Federal Income Tax Considerations – Shareholders Not
Resident in Canada – Rights” and as custodian of proceeds of Rights
sold on behalf of US Resident Shareholders. Equity hereby covenants and agrees
to withhold and sell 15% of the Rights issued to US Resident Shareholders and
remit the proceeds of sale of such Rights to the Canada Customs and Revenue
Agency on behalf of US Resident Shareholders on account of their liability for
non-resident withholding tax pursuant to the Income Tax Act (Canada).
|
| 4.03 |
As contemplated by the Prospectus and form of Rights certificate, Equity agrees
and consents to its appointment as agent for the purpose of selling excess
Rights by any holder of Rights who so appoints it pursuant to the Rights
certificate.
|
| 4.04 |
Immediately upon receipt of any Subscription Funds, Equity shall forthwith
deposit all Subscription Funds in a segregated account at a Canadian chartered
bank located in Toronto.
|
Section 5.
Delivery of Subscription Funds.
| 5.01 |
The Company shall promptly deliver or pay over to Equity any Subscription
Funds which it may happen to receive.
|
| 5.02 |
After the Expiry Date, and after the calculation and tabulation of all properly
tendered subscriptions, Equity shall pay the Subscription Funds in accordance
with a direction to be provided by the Company in the form attached hereto as
Schedule B.
|
Section 6.
Interest on Subscription Funds
| 6.01 |
All interest earned on Subscription Funds while in the custody of Equity shall
be paid to the Company at the same time as the Subscription Funds are paid out
by Equity pursuant to section 5.02 hereof.
|
Section 7.
Covenants by the Company
| 7.01 |
The Company hereby covenants and agrees with Equity that:
|
| |
(a) |
it will pay Equity reasonable remuneration for its services hereunder according
to the fees specified in Schedule C hereto and will repay to Equity on
demand the amount of all expenditures which Equity reasonably incurs as a result
of the execution of its duties hereunder; and
|
|
(b) |
it will promptly give notice to Equity of any and all changes to the terms and
conditions of the Rights which it may resolve to make from time to time and that
it will prepare and execute any and all documents to amend this Agreement
pursuant to any such changes made.
|
Section 8.
Replacement of Lost Rights Certificates
| 8.01 |
The authority of Equity shall also extend to the issuance of any Rights
certificate the issue of which may be authorized by any officer of the Company
in lieu of a Rights certificate or Rights certificates claimed to have been
lost, destroyed or stolen.
|
| 8.02 |
No new Rights certificate or Rights certificates shall be issued in lieu of a
Rights certificate or Rights certificates claimed to have been lost, destroyed
or stolen until an indemnity or security in an amount and form satisfactory to
the Company and Equity, in their sole discretion, shall have been furnished and
the applicant has paid the reasonable expenses of the Company and Equity in
connection therewith.
|
Section 9.
Indemnity of Equity, etc.
| 9.01 |
All Subscription Funds, while in the custody of Equity, shall be and shall
remain at the sole risk and responsibility of Equity, and Equity shall be liable
to the Company for any loss, except a loss of profit, of the Subscription Funds
while in the custody of Equity.
|
| 9.02 |
The Company hereby indemnifies Equity from all third party claims, demands and
judgments which may arise from the carrying out by Equity of its obligations
under this Agreement save and except for such claims, demands and judgments
attributable to the negligence or misconduct of Equity.
|
| 9.03 |
Without in any way limiting the generality of the foregoing indemnity, Equity
may use its own judgment in the performance of its duties but at any time it may
apply to the Company or to counsel for the Company, or to its own counsel at the
expense of the Company, for instructions or advice, and the Company shall fully
indemnify and hold Equity harmless from any liability for any action taken by
Equity in accordance with its own judgment (save for such claims, demands and
judgments attributable to the gross negligence or misconduct of Equity or its
employees, agents, officers or directors) or pursuant to any applicable
legislation, regulation or order in accordance with or pursuant to such
instructions or advice as may be given to it by any officer of the Company or
instructions or advice of counsel for the Company or of its own counsel.
|
Section 10.
Notices
| 10.01 |
All payments and notices required to be made or given pursuant to this Agreement
shall be telecopied or personally delivered and any notice so telecopied shall
be deemed to have been given upon receipt by the addressee, or, if delivered,
shall be deemed to have been given on the delivery date, at the offices and to
the parties at the addresses shown below:
|
| |
(a) |
If to Equity, to it at:
|
| |
Xxxxx 000
000 Xxxxxxxx Xxxxxx Xxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: President
Telecopier: (000) 000-0000
|
| |
(b) |
If to the Company, to it at:
|
| |
00 Xxxxxx Xxxxx
Xxxxxxx Xxxx, Xxx Xxxx
00000-0000
Attention: Chief Financial Officer
Telecopier: (000) 000-0000
|
| |
with a copy to Xxxxxxxxx Xxxx Xxxxxxx Apps & Dellelce, LLP, Barristers &
Solicitors, Xxxxx 000, X.X. Xxx 0, 0 Xxxxx Xxxxxxxx Xxxxx, Xxxxxxx, Xxxxxxx, X0X
0X0, Telecopier (000) 000-0000.
|
Section 11.
General
| 11.01 |
It is understood and agreed that any benefits accruing to the holders of Rights
at any time are held by each and every holder of Rights as against the Company
alone and that, subject to sections 4.01, 4.02 and 4.03 hereof, in no way does
Equity act as agent or trustee for the holders of Rights in respect of
obligations upon or covenants made by the Company. In all respects, subject to
sections 4.01, 4.02 and 4.03 hereof, Equity shall act as agent of the Company in
the execution of duties assumed hereunder, including, without limitation, any
duties imposed on or undertaken by Equity with respect to meetings of holders of
Rights as may be provided for from time to time.
|
| 11.02 |
The parties hereto hereby covenant and agree to execute and deliver any and all
such other instruments and to take any and all other actions as may be
reasonably necessary to carry out the intention of this Agreement.
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| 11.03 |
Time shall be of the essence of this
Agreement.
|
| 11.04 |
This Agreement shall enure to the benefit of and be binding upon the successors
and assigns of the parties hereto.
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| 11.05 |
This Agreement shall be governed by and construed in accordance with the laws of
the Province of Ontario and the federal laws of Canada applicable therein.
|
| 11.06 |
The headings as used in this Agreement are for convenience of reference only and
shall not affect the construction or interpretation of this Agreement.
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| 11.07 |
This Agreement may be executed in any number of counterparts, each of which
shall be deemed an original but all of which when taken together shall
constitute one and the same instrument.
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| 11.08 |
The signature of any of the parties hereto may be evidenced by a facsimile copy
of this Agreement bearing such signature, and such signature shall be as valid
and binding as if an original executed copy of this Agreement had been
delivered.
|
IN
WITNESS WHEREOF the parties hereto have executed this Agreement as of the
day and year first above written.
| |
EQUITY TRANSFER SERVICES INC.
Per: ________________________________
Authorized Signing Officer
Per: ________________________________
Authorized Signing Officer
RADIANT ENERGY CORPORATION
Per: ________________________________
Authorized Signing Officer
|
SCHEDULE A
Form of Rights Certificate
See attached.
SCHEDULE B
Confirmation and Direction
TO: EQUITY TRANSFER SERVICES INC. (“Equity”)
The
undersigned hereby makes reference to the subscription agency agreement (the
“Agreement”) made as of o , 2001 between the undersigned and Equity
and hereby:
| |
(a) |
confirms its acceptance of all subscriptions for Debentures pursuant to the
Basic Subscription Privilege and the Additional Subscription Privilege;
|
| |
(B) |
in accordance with Section 5 of the Agreement, authorizes and directs you to
Deliver and pay by certified cheque:
|
| |
(i) |
US$___________________ to Xxxxx Securities Limited (“Xxxxx”)
from the Subscription Funds received by Equity as payment of the management
fee and solicitation fee pursuant to the soliciting dealer agreement made
between Xxxxx and the undersigned;
|
| |
(ii) |
US$ ______________ to Xxxxxxxx Xxxxx Camera Securities
(“Xxxxxxxx”) from the Subscription Funds received by Equity as
payment of the management fee and solicitation fee pursuant to the soliciting
dealer agreement made between Xxxxxxxx and the undersigned; and
|
| |
(iii) |
to Xxxxxxxxx Xxxx Thomson Apps & Dellelce, LLP in trust, the remainder of
the Subscription Funds received by Equity pursuant to the Basic Subscription
Privilege and the Additional Subscription Privilege, together with all interest
accrued thereon,
|
| |
and this shall be your good and sufficient authority and direction for so
doing; and
|
|
(c) |
in accordance with Section 2.02(j) of the Agreement, authorizes and directs you
from time to time, upon requisition by the Trustee, to issue and deliver common
share certificates duly registered in the names of such subscribers or
transferees who have properly converted their Debentures, and this shall be your
good and sufficient authority and direction for so doing.
|
All
capitalized terms used and not otherwise defined herein shall have the meanings
ascribed thereto in the Agreement.
DATED the ______ day of
___________, 2001.
SCHEDULE C
Fee Schedule
| |
(A) |
Documentation Review and Set-Up Fee
- Review of Pertinent Documentation
- Production of Rights Record
- Co-ordination and Distribution including
CDS communications
- Maintenance of Issued and Returned
certificates including maintaining
registry and safekeeping
|
|
$1,500.00 |
| |
(B) |
Initial Issuance of Certificates |
|
$2.00/certificate
|
| |
(C) |
Mailing Charges
- Normal Mailing Charges per schedule |
|
|
| |
(D) |
Transfers of Ownership |
|
As noted in the Fee Schedule
|
| |
(E) |
Exercise, per certificate |
|
$17.50
|
| |
(F) |
Sale of Rights
- Ineligible (per account)
- Eligible (per account) |
|
$5.00
$5.00
|
| |
(G) |
Calculation of Additional Subscription Privileges
|
|
$250.00
|
| |
(H) |
Calculation of Broker Credit |
|
$250.00
|
| |
(i) |
Taxation
- Calculating and remitting non-resident withholding tax
- Investment Income Reporting |
|
$250.00
$1.50/shareholder
minimum $250.00
|
