THIS WARRANT INDENTURE is made as of the 12th day of September, 2000.
BETWEEN:
SPECTRUM SIGNAL PROCESSING INC., 200 - 0000
Xxxxxxxxxx Xxx, Xxxxxxx, Xxxxxxx Xxxxxxxx, X0X 0X0
(herein called the "Company")
OF THE FIRST PART
AND:
MONTREAL TRUST COMPANY OF CANADA, of 3rd Floor,
000 Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxx Xxxxxxxx, X0X 0X0
(herein called the "Trustee")
OF THE SECOND PART
WHEREAS the Company is proposing to issue warrants (each, a "Warrant")
in the manner herein set forth;
AND WHEREAS one Warrants shall entitle the holder thereof to acquire
one Common Share of the Company at the Exercise Price upon the terms and
conditions herein set forth;
AND WHEREAS all acts and deeds necessary have been done and performed
to make the Warrants when issued, as in this Indenture provided, legal, valid
and binding upon the Company with the benefits and subject to the terms of this
Indenture;
NOW THEREFORE THIS INDENTURE WITNESSETH that in consideration of the
mutual covenants and agreements of the parties contained herein, the parties
hereto agree as follows:
ARTICLE 1
INTERPRETATION
1.1 Definitions
In this Indenture, including the recitals and schedules hereto and in
all indentures supplemental hereto:
(a) "Applicable Legislation" means the provisions of the Company Act
(British Columbia) as from time to time amended, and any other
statute of Canada or a province thereof, and the regulations
under any such named or other statute, relating to trust
indentures or to the rights, duties and obligations of trustees
and of corporations under trust indentures, to the extent that
such provisions are at the time in force and applicable to this
Indenture;
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(b) "Business Day" means a day which is not Saturday or Sunday or a
legal holiday in the Cities of Vancouver, British Columbia or
Toronto, Ontario;
(c) "Common Shares" means fully paid and non-assessable common shares
of the Company as presently constituted;
(d) "Company's Auditors" means a firm of chartered accountants duly
appointed as auditors of the Company;
(e) "Counsel" means a barrister or solicitor acceptable to the
Trustee;
(f) "Effective Date" means, with respect to any Warrant, the date on
which such Warrant is issued;
(g) "Equity Shares" means the Common Shares and any shares of any
other class or series of the Company which may from time to time
be authorized for issue if by their terms such shares confer on
the holders thereof the right to participate in the distribution
of assets upon the voluntary or involuntary liquidation,
dissolution or winding-up of the Company beyond a fixed sum or a
fixed sum plus accrued dividends;
(h) "Exercise Date" means, with respect to any Warrant, the date on
which the Warrant Certificate representing such Warrant is
surrendered for exercise in accordance with the provisions of
Article 3 hereof;
(i) "Exercise Price" means in respect of the Warrants, $4.75 per
Common Share when the Warrant is exercised on or before the
Expiry Date, unless such price shall have been adjusted in
accordance with the provisions of Article 4, in which case it
shall mean the adjusted price then in effect;
(j) "Expiry Date" means the first Business Day following the date
which is eighteen (18) months after the date of issue of all
Warrants;
(k) "person" means an individual, body corporate, partnership, trust,
trustee, executor, administrator, legal representative or any
unincorporated organization;
(l) "Warrants" means warrants issued by the Company in registered
form in accordance with the terms and conditions of this
Indenture;
(m) "Shareholder" means a holder of record of one or more Common
Shares;
(n) "this Warrant Indenture", "this Indenture", "herein", "hereby"
and similar expressions mean and refer to this Indenture and any
indenture, deed or instrument supplemental hereto; and the
expressions "Article", "Section", "subsection" and "paragraph"
followed by a number mean and refer to the specified article,
section, subsection or paragraph of this Indenture;
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(o) "Time of Expiry" means 4:30 o'clock in the afternoon, Vancouver
time, on the Expiry Date;
(p) "Trading Day" means, with respect to a stock exchange, a day on
which such exchange is open for the transaction of business;
(q) "Transfer Agent" means the Transfer Agent for the time being of
the Common Shares;
(r) "Warrant Agency" means the principal office of the Trustee in the
Cities of Xxxxxxxxx, Xxxxxxx Xxxxxxxx xxx Xxxxxxx, Xxxxxxx;
(s) "Warrant Certificate" means, with respect to any Warrant, a
certificate issued on or after the Effective Date to evidence
such Warrant;
(t) "Warrantholders" or "holders" means the persons who, after the
Effective Date, are registered owners of Warrants;
(u) "Warrantholders' Request" means an instrument signed in one or
more counterparts by Warrantholders entitled to acquire in the
aggregate not less than 10% of the aggregate number of Common
Shares which could be acquired pursuant to all Warrants then
unexercised and outstanding, requesting the Trustee to take some
action or proceeding specified therein; and
(v) "written order of the Company", "written request of the Company",
"written consent of the Company" and "certificate of the Company"
mean, respectively, a written order, request, consent and
certificate signed in the name of the Company by its Chairman,
President, a Vice-President, or a director and, in addition, by
its Secretary, Treasurer, or a director, and may consist of one
or more instruments so executed.
1.2 Gender and Number
Unless herein otherwise expressly provided or unless the context
otherwise requires, words importing the singular include the plural and vice
versa and words importing gender include all genders.
1.3 Interpretation not Affected by Headings, Etc.
The division of this Indenture into Articles and Sections, and the
insertion of headings are for convenience of reference only and shall not affect
the construction or interpretation of this Indenture.
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1.4 Day not a Business Day
In the event that any day on or before which any action is required to
be taken hereunder is not a Business Day, then such action shall be required to
be taken at or before the requisite time on the next succeeding day that is a
Business Day.
1.5 Time of the Essence
Time shall be of the essence of this Indenture.
1.6 Applicable Law
This Indenture and the Warrant Certificates shall be construed in
accordance with the laws of the Province of British Columbia and shall be
treated in all respects as British Columbia contracts.
1.7 Currency
All currency amounts set out herein refer to Canadian currency unless
otherwise indicated.
ARTICLE 2
ISSUE OF WARRANTS
2.1 Issue of Warrants
(a) 1,764,705 Warrants, entitling the holders to acquire up to an
aggregate of 1,764,705 Common Shares, subject to adjustment in
accordance with Article 4 hereof, are hereby created and
authorized to be issued.
(b) The Warrant Certificates shall be substantially in the form set
out in Schedule "A" hereto, shall be dated in respect of any
Warrant Certificate as of the Effective Date in respect of those
Warrants represented by the Warrant Certificate (including all
replacements issued in accordance with this Indenture), shall
bear such distinguishing letters and numbers as the Company may,
with the approval of the Trustee, prescribe, and shall be
issuable in any denomination excluding fractions.
2.2 Form and Terms of Warrants
(a) One (1) Warrant authorized to be issued hereunder shall entitle
the holder thereof to acquire one (1) Common Share, subject to
adjustment in accordance with Article 4 hereof, at any time after
the Effective Date until the Time of Expiry upon payment of the
Exercise Price.
(b) No fractional Warrants or Common Shares shall be issued or
otherwise provided for hereunder. In the event that any person
would have been entitled, but for this section, to receive a
whole number of Warrants or Common Shares and a fraction of a
Warrants or a Common Share, as the case may be, such person will
not be entitled to receive any cash or securities of the Company
in lieu of such fraction of a Warrant or Common Share.
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(c) The number of Common Shares which may be acquired pursuant to the
Warrants shall be adjusted in the events and in the manner
specified in Article 4.
2.3 Warrantholder not a Shareholder
Nothing in this Indenture or in the holding of a Warrant itself
evidenced by a Warrant Certificate or otherwise, shall confer or be construed as
conferring upon a Warrantholder any right or interest whatsoever as a
Shareholder or as any other shareholder of the Company, including, but not
limited to, the right to vote at, to receive notice of, or to attend, meetings
of shareholders or any other proceedings of the Company, or the right to receive
dividends and other distributions.
2.4 Warrants to Rank Pari Passu
All Warrants shall rank pari passu, whatever may be the actual date of
issue of the same.
2.5 Signing of Warrant Certificates
The Warrant Certificates shall be signed by any one director or
officer of the Company, under seal or otherwise. The signature of such director
or officer may be mechanically reproduced in facsimile and Warrant Certificates
bearing such facsimile signature shall be binding upon the Company as if they
had been manually signed by such director or officer. Notwithstanding that any
person whose manual or facsimile signature appears on any Warrant Certificate as
such director or officer may no longer hold office at the date of such Warrant
Certificate or at the date of certification or delivery thereof, any Warrant
Certificate signed as aforesaid shall, subject to Section 2.6, be valid and
binding upon the Company and the holder thereof shall be entitled to the
benefits of this Indenture.
2.6 Countersignature by the Trustee
(a) No Warrant Certificate shall be issued or, if issued, shall be
valid for any purpose or entitle the holder to the benefit hereof
until it has been countersigned by manual signature by or on
behalf of the Trustee in the form set out in Schedule "A" hereto,
and such countersignature by the Trustee upon any Warrant
Certificate shall be conclusive evidence as against the Company
that the Warrant Certificate so certified has been duly issued
hereunder and that the holder is entitled to the benefits hereof.
(b) The countersignature of the Trustee on Warrant Certificates
issued hereunder shall not be construed as a representation or
warranty by the Trustee as to the validity of this Indenture or
the Warrant Certificates (except the due countersigning thereof)
and the Trustee shall in no respect be liable or answerable for
the use made of the Warrant Certificates or any of them or of the
consideration therefor except as otherwise specified herein.
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2.7 Issue in Substitution for Warrant Certificates Lost, Etc.
(a) In case any of the Warrant Certificates shall become mutilated or
be lost, destroyed or stolen, the Company, subject to Applicable
Legislation, shall issue and thereupon the Trustee shall certify
and deliver, a new Warrant Certificate of like tenor as the one
mutilated, lost, destroyed or stolen, in exchange for and in
place of such mutilated Warrant Certificate upon surrender and
cancellation thereof, or in lieu of and in substitution for such
lost, destroyed or stolen Warrant Certificate, and the
substituted Warrant Certificate shall be in a form approved by
the Trustee and shall be entitled to the benefits hereof and
shall rank equally in accordance with its terms and all other
Warrant Certificates issued or to be issued hereunder.
(b) The applicant for the issue of a new Warrant Certificate pursuant
to this Section 2.7 shall bear the cost of the issue thereof and
in case of loss, destruction or theft shall, as a condition
precedent to the issue thereof, furnish to the Company and to the
Trustee such evidence of ownership and of the loss, destruction
or theft of the Warrant Certificate so lost, destroyed or stolen
as shall be satisfactory to the Company and to the Trustee in
their sole discretion, and such applicant may also be required to
furnish an indemnity and surety bond in amount and form
satisfactory to the Company and the Trustee in their discretion
and shall pay the reasonable charges of the Company and the
Trustee in connection therewith.
2.8 Exchange of Warrant Certificates
(a) Warrant Certificates representing Warrants to acquire any
specified number of Common Shares may, upon compliance with the
reasonable requirements of the Trustee, be exchanged for another
Warrant Certificate or Warrant Certificates entitling the holder
thereto to acquire in the aggregate the same number of Common
Shares as may be acquired under the Warrant Certificate or
Warrant Certificates so exchanged.
(b) Warrant Certificates may be exchanged only at the Warrant Agency
or at any other place that is designated by the Company with the
approval of the Trustee. Any Warrant Certificate tendered for
exchange shall be cancelled and surrendered to the Trustee at the
Warrant Agency.
2.9 Charges for Exchange
Except as otherwise herein provided, the Trustee shall charge to the
holder reasonable fees for each new Warrant Certificate issued in exchange for
or upon the transfer of Warrant Certificate(s); and payment of such charge and
reimbursement of the Trustee or the Company for any and all stamp taxes or
governmental or other charges required to be paid shall be made by such holder
as a condition precedent to such exchange or transfer.
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2.10 Transferability and Ownership of Warrants
(a) The Warrants may only be transferred on the register kept by the
Trustee at the Warrant Agency by the holder or its legal
representatives or its attorney duly appointed by an instrument
in writing in form and execution satisfactory to the Trustee only
upon surrendering to the Trustee at the Warrant Agency the
Warrant Certificates representing the Warrants to be transferred
and upon compliance with:
(i) the conditions herein;
(ii) such reasonable requirements as the Trustee may prescribe;
and
(iii)all applicable securities legislation and requirements of
regulatory authorities;
and such transfer shall be duly noted in such register by the
Trustee. Upon compliance with such requirements, the Trustee
shall issue to the transferee a Warrant Certificate representing
the Warrants transferred;
(b) the Trustee acknowledges that the Warrants and the Common Shares
issuable upon exercise thereof have not been registered under the
U.S. Securities Act, or the securities laws of any state of the
United States, and may not be transferred in the United States or
to a U.S. Person unless the Warrants and the Common Shares
issuable upon exercise thereof have been registered under the
U.S. Securities Act and the securities laws of all applicable
states of the United States or an exemption from such
registration requirements is available and the Warrantholder has
presented to the Corporation evidence of the availability of the
exemption satisfactory to the Corporation.
(c) Subject to the provisions of this Indenture and Applicable
Legislation, the Warrantholder shall be entitled to the rights
and privileges attaching to the Warrants.
(d) Subject to the provisions of this Indenture and Applicable
Legislation, the issue of Common Shares by the Company upon the
exercise of Warrants by any Warrantholder in accordance with the
terms and conditions herein contained shall discharge all
responsibilities of the Company and the Trustee with respect to
such Warrants and neither the Company nor the Trustee shall be
bound to inquire into the title of any such holder.
ARTICLE 3
EXERCISE OF WARRANTS
3.1 Holders Eligible to Exercise Warrants
The Warrants may not be exercised within the United States by or on
behalf of any U.S. Person or person in the United States nor will certificates
representing Warrants be delivered in the United States unless the Common Shares
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issuable upon exercise of the Warrants are registered under the U.S. Securities
Act and the securities laws of all applicable states of the United States or any
exemption from such registration requirement is available. Any person who
exercises a Warrant shall provide to the Trustee either:
(a) (i) written certification that it is not a U.S. Person and that
such Warrant is not being exercised within the United States
or on behalf of, or for the account or benefit of, a U.S.
Person or a person in the United States; or
(ii) a written opinion of counsel or other evidence satisfactory
to the Corporation to the effect that the Common Shares have
been registered under the U.S. Securities Act and applicable
state securities laws or are exempt from registration
thereunder; or
(b) written certification that it was a transferee pursuant to
section 2.10(b) who was a U.S. Person at the time of the
acquisition of such Warrants and the representations and
warranties made by such person in connection with the acquisition
of such Warrants remain true and correct on the date of exercise.
3.2 Method of Exercise of Warrants
(a) The holder of any Warrant may exercise the right thereby
conferred on such holder to acquire Common Shares by
surrendering, prior to the Time of Expiry, to the Trustee at the
Warrant Agency the Warrant Certificate with a duly completed and
executed exercise form as attached to the Warrant Certificate and
cash or a certified cheque, bank draft or money order in lawful
money of Canada payable to or to the order of the Company or the
Trustee in an amount equal to the Exercise Price multiplied by
the number of Common Shares to be acquired.
A Warrant Certificate with the duly completed and executed
exercise form referred to in this subsection 3.2(a) shall be
deemed to be surrendered only upon personal delivery thereof or,
if sent by mail or other means of transmission, upon actual
receipt thereof at, in each case, the Warrant Agency.
(b) Any exercise form referred to in subsection 3.2(a) shall be
signed by the Warrantholder and shall specify the number of
Common Shares which the holder desires to acquire (being not more
than those which the holder is entitled to acquire pursuant to
the Warrant Certificate(s) surrendered), the person or persons in
whose name or names such Common Shares are to be issued, the
address or addresses of such persons and the number of Common
Shares to be issued to each such person if more than one is so
specified. If any of the Common Shares subscribed for are to be
issued to a person or persons other than the Warrantholder:
(i) the Warrantholder shall pay to the Company or the Trustee on
behalf of the Company, all applicable transfer or similar
taxes and the Company shall not be required to issue or
deliver certificates evidencing Common Shares unless or
until such Warrantholder shall have paid to the Company, or
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the Trustee on behalf of the Company, the amount of such tax
or shall have established to the satisfaction of the Company
that such tax has been paid or that no tax is due; and
(ii) the signature of the Warrantholder on the exercise form will
be guaranteed by a Canadian Schedule "A" chartered bank or
trust company or by a member of an acceptable Medallion
Guarantee Program.
(c) Notwithstanding any provision to the contrary herein or contained
in the Warrant Certificates, on the exercise of Warrants, Common
Shares will not be issued to a person whose address is in, or
whom the Company or the Trustee has reason to believe is a
citizen or national or resident of, the United States of America,
its territories and possessions except pursuant to a registration
statement under the United States Securities Act of 1933 and in
compliance with applicable securities laws of various States or
pursuant to an exemption available from registration and such
Common Shares may not be offered or sold directly or indirectly
in the United States of America or its territories or possession
or to a national or resident thereof, or any partnership,
corporation or other entity organized or incorporated under the
laws of the United States during the 90 day period commencing on
the exercise of such Warrants except pursuant to a registration
statement under the United States Securities Act of 1933 and in
compliance with applicable securities laws of various States or
pursuant to an exemption available from such registration.
3.3 Effect of Exercise of Warrants
(a) Upon compliance by the holder of any Warrant Certificate with the
provisions of Section 3.2, and subject to Section 3.4, the Common
Shares subscribed for shall be deemed to have been issued and the
person or persons to whom such Common Shares are to be issued
shall be deemed to have become the holder or holders of record of
such Common Shares on the Exercise Date unless the transfer
registers of the Company shall be closed on such date, in which
case the Common Shares subscribed for shall be deemed to have
been issued, and such person or persons deemed to have become the
holder or holders of record of such Common Shares, on the date on
which such transfer registers are reopened.
(b) Within five (5) Business Days after the Exercise Date of a
Warrant as aforesaid, the Company shall cause to be mailed to the
person or persons in whose name or names the Common Shares so
subscribed for have been issued, as specified in the
subscription, at the address specified in such subscription or,
if so specified in such subscription, cause to be delivered to
such person or persons at the address for such person or persons
set forth in the register maintained for the Warrants, a
certificate or certificates for the appropriate number of Common
Shares so subscribed for.
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3.4 Partial Exercise of Warrants; Fractions
(a) The holder of any Warrant Certificate(s) may acquire a number of
Common Shares less than the number which the holder is entitled
to acquire pursuant to the surrendered Warrant Certificate(s)
provided that, in no event shall fractional Common Shares be
issued with regard to Warrants exercised. In the event of any
acquisition of a number of Common Shares less than the number
which the holder is entitled to acquire, the holder of the
Warrant Certificate(s) upon exercise thereof shall, in addition,
be entitled to receive, without charge therefor, a new Warrant
Certificate(s) in respect of the balance of the Common Shares
which such holder was entitled to acquire pursuant to the
surrendered Warrant Certificate(s) and which were not then
acquired.
(b) Notwithstanding anything herein contained including any
adjustment provided for in Article 4, the Company shall not be
required, upon the exercise of any Warrants, to issue fractions
of Common Shares or to distribute certificates which evidence
fractional Common Shares. In lieu of fractional Common Shares,
there shall be paid to the holder upon surrender of Warrant
Certificate(s) for exercise of Warrants pursuant to Section 3.1,
within ten (10) Business Days after surrender, an amount in
lawful money of Canada equal to the then current market value of
such fractional interest calculated on the basis of the closing
price of the Common Shares on The Toronto Stock Exchange on the
Trading Day immediately prior to the Exercise Date, provided that
no such cheque shall be issued for less than $5.00.
3.5 Common Share Certificates
At the instruction of the Company, Common Shares issued to a person
who does not provide the certificate referred to in 3.1(a)(i) hereof in
connection with the exercise of the Warrants may bear a legend in substantially
the following form:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT") OR THE SECURITIES LAWS OF ANY STATE. THE HOLDER HEREOF, BY
PURCHASING SUCH SECURITIES, AGREES FOR THE BENEFIT OF THE CORPORATION
THAT SUCH SECURITIES MAY BE OFFERED, SOLD OR OTHERWISE TRANSFERRED
ONLY (A) TO THE CORPORATION (B) OUTSIDE THE UNITED STATES IN
COMPLIANCE WITH RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (C)
IN COMPLIANCE WITH THE EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER, OR (D) IN COMPLIANCE
WITH ANOTHER EXEMPTION FROM REGISTRATION AFTER PROVIDING AN OPINION OF
COUNSEL SATISFACTORY TO THE CORPORATION TO EFFECT THAT REGISTRATION IS
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NOT REQUIRED. DELIVERY OF THIS CERTIFICATE MAY NOT CONSTITUTE "GOOD
DELIVERY' IN SETTLEMENT OF TRANSACTIONS ON STOCK EXCHANGES IN CANADA.
AT ANY TIME THE CORPORATION IS A "FOREIGN ISSUER" AS DEFINED IN
REGULATION S UNDER THE SECURITIES ACT, A NEW CERTIFICATE, BEARING NO
LEGEND, DELIVERY OF WHICH WILL CONSTITUTE "GOOD DELIVERY", MAY BE
OBTAINED FROM MONTREAL TRUST COMPANY OF CANADA UPON DELIVERY OF THIS
CERTIFICATE AND A DULY EXECUTED DECLARATION, IN A FORM SATISFACTORY TO
MONTREAL TRUST COMPANY OF CANADA AND THE CORPORATION, TO THE EFFECT
THAT THE SALE OF THE SECURITIES REPRESENTED HEREBY IS BEING MADE IN
COMPLIANCE WITH RULE 904 OF REGULATIONS UNDER THE SECURITIES ACT;
provided, that if the Common Shares or Warrants are being sold outside of the
United States in compliance with Rule 904 of Regulation S under the U.S.
Securities Act at the time that the Company is a "foreign issuer" as defined in
Rule 902 of Regulation S under the U.S. Securities Act, the legend may be
removed by providing a declaration to the Transfer Agent for the Common Shares
of the Company and the Warrant Agency for the Warrants, in such form as the
Company may prescribe from time to time, it being understood that the Company
has instructed Montreal Trust Company of Canada to accept the form of
declaration set forth below, but reserves the right to change the form of
declaration to reflect applicable law or practice or to suspend removal of
legends if it should determine that such removal is not consistent with
applicable law:
"The undersigned (a) acknowledges that the sale of the securities of
Spectrum Signal Processing Inc. to which this declaration relates is being made
in reliance on Rule 904 of Regulation S under the United States Securities Act
of 1933, as amended (the "U.S. Securities Act") and (b) certifies that (1) the
undersigned is not an affiliate of the Corporation as that term is defined under
the U.S. Securities Act, (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 believed that the buyer was outside the
United States or (B) the transaction was executed on or through the facilities
of The Toronto Stock Exchange 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 affiliate of the seller nor any
person acting on any of their 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 U.S. 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, which, although in technical compliance with
Regulation S, is part of a plan or scheme to evade the registration provisions
of the U.S. Securities Act. Terms used herein have the meanings given to them by
Regulation S."
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3.6 Expiration of Warrants
After the Time of Expiry, all rights under any Warrant in respect of
which the right of subscription and acquisition herein and therein provided for
shall not theretofore have been exercised in accordance herewith and therewith
shall wholly cease and terminate and such Warrant shall be void and of no
effect.
3.7 Cancellation of Surrendered Warrants
All Warrant Certificates surrendered to the Trustee at the Warrant
Agency pursuant to s 2.7, 2.8, 3.1, 3.4 and 5.1 shall be cancelled and, after
the expiry of any period of retention prescribed by law, destroyed by the
Trustee and the Trustee shall furnish the Company with a destruction certificate
identifying the Warrant Certificates so destroyed and the number of Warrants
evidenced thereby and the number of Common Shares which could have been acquired
pursuant to each destroyed Warrant Certificate.
3.8 Accounting and Recording
(a) The Trustee shall promptly account to the Company with respect to
Warrants exercised. Any securities or other instruments, from
time to time received by the Trustee shall be received in trust
for, and shall be segregated and kept apart by the Trustee in
trust for, the Company.
(b) The Trustee shall record the particulars of Warrants exercised
which shall include the names and addresses of the persons who
become holders of Common Shares on exercise and the Exercise
Date. Within five (5) Business Days of each Exercise Date, the
Trustee shall provide such particulars in writing to the Company.
ARTICLE 4
ADJUSTMENT OF NUMBER OF COMMON SHARES
4.1 Adjustment of Number of Common Shares
The acquisition rights in effect at any date attaching to the Warrants
shall be subject to adjustment from time to time as follows:
(a) if and whenever at any time from the date hereof and prior to the
Time of Expiry, the Company shall:
(i) subdivide, redivide or change its outstanding Common Shares
into a greater number of shares; or
(ii) reduce, combine or consolidate its outstanding Common Shares
into a smaller number of shares, the number of Common Shares
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obtainable under each Warrant shall each be adjusted
immediately after the effective date of the events referred
to in (i) and (ii) above by multiplying the number of Common
Shares theretofore obtainable on the exercise of the
Warrants by a fraction of which the numerator shall be the
total number of Common Shares outstanding immediately after
such date and the denominator shall be the total number of
Common Shares outstanding immediately prior to such date.
Such adjustment shall be made successively whenever any
event referred to in this subsection shall occur;
(b) if and whenever at any time from the date hereof and prior to the
Time of Expiry, there is a reclassification or redesignation of
the Common Shares or a capital reorganization of the Company
other than as described in subsection 4.1(a) or a consolidation,
arrangement, amalgamation or merger of the Company with or into
any other body corporate, trust, partnership or other entity, or
a sale or conveyance of the property and assets of the Company as
an entirety or substantially as an entirety to any other body
corporate, trust, partnership or other entity, any Warrantholder
who has not exercised his right of acquisition prior to the
effective date of such reclassification, redesignation, capital
reorganization, consolidation, arrangement, amalgamation, merger,
sale or conveyance, upon the exercise of such right thereafter,
shall be entitled to receive and shall accept for the same
aggregate consideration, in lieu of the number of Common Shares
then sought to be acquired by him, the number of shares or other
securities or property of the Company or of the body corporate,
trust, partnership or other entity resulting from such merger,
amalgamation, arrangement, or consolidation, or to which such
sale or conveyance may be made, as the case may be, that such
Warrantholder would have been entitled to receive on such
reclassification, redesignation, capital reorganization,
consolidation, arrangement, amalgamation, merger, sale or
conveyance, if, on the record date or the effective date thereof,
as the case may be, the Warrantholder had been the registered
holder of the number of Common Shares receivable upon the
exercise of Warrants then held. If determined appropriate by the
Trustee to give effect to or to evidence the provisions of this
subsection 4.1(b), the Company, its successor, or such purchasing
body corporate, partnership, trust or other entity, as the case
may be, shall, prior to or contemporaneously with any such
reclassification, redesignation, capital reorganization,
consolidation, amalgamation, arrangement, merger, sale or
conveyance, enter into an indenture which shall provide, to the
extent possible, for the application of the provisions set forth
in this Indenture with respect to the rights and interests
thereafter of the Warrantholders to the end that the provisions
set forth in this Indenture shall thereafter correspondingly be
made applicable, as nearly as may reasonably be, with respect to
any shares, other securities or property to which a Warrantholder
is entitled on the exercise of his acquisition rights thereafter.
Any indenture entered into between the Company and the Trustee
pursuant to the provision of this subsection 4.1(b) shall be a
supplemental indenture entered into pursuant to the provisions of
Article 8 hereof. Any indenture entered into between the Company,
any successor to the Company or such purchasing body corporate,
partnership, trust or other entity and the Trustee shall provide
for adjustments which shall be as nearly equivalent as may be
practicable to the adjustments provided in this Section 4.1 and
which shall apply to successive reclassifications,
redesignations, capital reorganizations, consolidations,
arrangements, amalgamations, mergers, sales or conveyances;
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(c) if and whenever at any time prior to the Time of Expiry, the
Company shall:
(i) subdivide the outstanding Common Shares into a greater
number of Common Shares,
(ii) consolidate the outstanding Common Shares into a lesser
number of Common Shares, or
(iii)issue Common Shares by way of a stock dividend (other than
the issue of Common Shares to holders of Common Shares as a
stock dividend in lieu of a cash dividend paid in the
ordinary course),
the Exercise Price shall, on the effective date of such
subdivision or consolidation or on the record date of such
subdivision or stock dividend, as the case may be, be adjusted to
that amount which is in the same proportion to the Exercise Price
in effect immediately prior to such subdivision, consolidation or
stock dividend, as the number of outstanding Common Shares after
giving effect to such subdivision, consolidation or stock
dividend bears to the number of outstanding Common Shares after
giving effect such subdivision, consolidation or stock dividend.
Such adjustment shall be made successively whenever any event
referred to in this subsection (1) shall occur; and any such
issue of Common Shares by way of a stock dividend shall be deemed
to have been made on the record date for the stock dividend for
the purpose of calculating the number of outstanding Common
Shares under subsections (d) and (e) of this Section 4.1;
(d) if and whenever at any time prior to the Time of Expiry, the
Company shall fix a record date for the issuance of rights,
options or warrants to all or substantially all the holders of
the outstanding Common Shares entitling them to subscribe for or
purchase Common Shares, or securities convertible into Common
Shares at a price per share or having a conversion or exchange
price per share less than 95% of the Current Market Price (as
defined in subsection (f) of this Section 4.1), on such record
date, the Exercise Price shall be adjusted immediately after such
record date so that it shall equal the price determined by
multiplying the Exercise Price in effect on such record date by a
fraction of which the numerator shall be the total number of
Common Shares outstanding at such record date plus a number of
Common Shares equal to the number arrived at by dividing the
aggregate price of the total number of additional Common Shares
offered for subscription or purchase, or into which the
convertible securities so offered are convertible, or the
aggregate conversion or exchange price of the convertible
securities so offered, by such Current Market Price, and of which
the denominator shall be the total number of Common Shares
outstanding on such record date plus the total number of
additional Common Shares offered for subscription or purchase, or
into which the convertible securities so offered are convertible;
Common Shares owned by or held for the account of the Company or
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any subsidiary of the Company shall be deemed not to be
outstanding for the purpose of any such computation; such
adjustment shall be made successively whenever such a record date
is fixed; to the extent that any rights, options or warrants are
not so issued or any such rights, options or warrants are not
exercised prior to the expiration thereof, the Exercise Price
shall then be readjusted to the Exercise Price which would then
be in effect if such record date had not been fixed or to the
Exercise Price which would then be in effect based upon the
number of Common Shares, or securities convertible into Common
Shares, actually issued upon the exercise of such rights, options
or warrants, as the case may be;
(e) if and whenever at any time prior to the Time of Expiry, the
Company shall fix a record date for the making of a distribution
to all or substantially all the holders of its outstanding Common
Shares of:
(i) shares of any class other than Common Shares whether of the
Company or any other corporation (other than shares
distributed to holders of Common Shares as a stock dividend
in lieu of a cash dividend paid in the ordinary course), or
(ii) rights, options or warrants (other than those referred to in
subsection (d) of this Section 4.1), or
(iii) evidences of its indebtedness, or
(iv) assets (other than cash dividends paid in the ordinary
course)
then, in each such case, the Exercise Price shall be adjusted
immediately after such record date so that it shall equal the
price determined by multiplying the Exercise Price in effect on
such record date by a fraction, of which the numerator shall be
the total number of Common Shares outstanding on such record date
multiplied by the Current Market Price on such record date, less
the aggregate fair market value (as determined by the directors
and approved by the Trustee) of such shares or rights, options or
warrants or evidences of indebtedness or assets so distributed,
and of which the denominator shall be the total number of Common
Shares outstanding on such record date multiplied by such Current
Market Price; Common Shares owned by or held for the account of
the Company or any subsidiary of the Company shall be deemed not
to be outstanding for the purpose of any such computation; such
adjustment shall be made successively whenever such a record date
is fixed; and to the extent that such distribution is not so
made, the Exercise Price shall then be readjusted to the Exercise
Price which would then be in effect if such record date had not
been fixed or to the Exercise Price which would then be in effect
based upon such shares or rights, options or warrants or
evidences of indebtedness or assets actually distributed, as the
case may be;
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(f) for the purpose of any computation under subsections (d) or (e)
of this Section 4.1, the "Current Market Price" at any date shall
be the weighted average of the closing prices per share for
Common Shares for any 30 consecutive trading days selected by the
Company commencing not more than 45 trading days before such date
on The Toronto Stock Exchange. The weighted average price shall
be determined by dividing the aggregate sale price or the average
closing bid and ask prices of all such shares sold on the said
exchange during the said 30 consecutive trading days by the total
number of such shares so sold;
(g) in any case in which this Article 4 shall require that an
adjustment shall become effective immediately after a record date
for an event referred to herein, the Company may defer, until the
occurrence of such event, issuing to the holder of any Warrant
exercised after such record date and before the occurrence of
such event the additional Common Shares issuable upon such
exercise by reason of the adjustment required by such event
before giving effect to such adjustment; provided, however, that
the Company shall deliver to such holder an appropriate
instrument evidencing such holder's right to receive such
additional Common Shares upon the occurrence of the event
requiring such adjustment and the right to receive any
distributions made on such additional Common Shares which may be
acquired upon the exercise of Warrants declared in favour of
holders of record of Common Shares on and after the Exercise Date
or such later date as such holder would, but for the provisions
of this subsection (g), have become the holder of record of such
additional Common Shares pursuant to Section 4.1; and
(h) the adjustments provided for in this Article 4 in the number of
Common Shares, Exercise Price and classes of securities which are
to be received on the exercise of Warrants, are cumulative. After
any adjustment pursuant to this Section 4.1, the term "Common
Shares" where used in this Indenture shall be interpreted to mean
securities of any class or classes which, as a result of such
adjustment and all prior adjustments pursuant to this Section
4.1, the Warrantholder is entitled to receive upon the exercise
of his Warrant, and the number of Common Shares indicated by any
exercise made pursuant to a Warrant shall be interpreted to mean
the number of Common Shares or other property or securities a
Warrantholder is entitled to receive, as a result of such
adjustment and all prior adjustments pursuant to this Section
4.1, upon the full exercise of a Warrant.
4.2 Entitlement to Common Shares on Exercise of Warrant
All shares of any class, or other securities which a Warrantholder is
at the time in question entitled to receive on the exercise of his Warrant,
whether or not as a result of adjustments made pursuant to this Section shall,
for the purposes of the interpretation of this Indenture, be deemed to be shares
and other securities which such Warrantholder is entitled to acquire pursuant to
such Warrant.
4.3 Determination by Company's Auditors
In the event of any question arising with respect to the adjustments
provided for in this Article 4 such question shall be conclusively determined by
the Company's Auditors who shall have access to all necessary records of the
Company, and such determination shall be binding upon the Company, the Trustee,
all Warrantholders and all other persons interested therein.
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4.4 Proceedings Prior to any Action Requiring Adjustment
As a condition precedent to the taking of any action which would
require an adjustment in any of the acquisition rights pursuant to any of the
Warrants, including the number of Common Shares which are to be received upon
the exercise thereof, the Company shall take any corporate action which may, in
the opinion of counsel, be necessary in order that the Company has unissued and
reserved in its authorized capital and may validly and legally issue as fully
paid and non-assessable all the shares which the holders of such Warrants are
entitled to receive on the full exercise thereof in accordance with the
provisions hereof.
4.5 Certificate of Adjustment
The Company shall from time to time immediately after the occurrence
of any event which requires an adjustment or readjustment as provided in Article
4, deliver a certificate of the Company to the Trustee specifying the nature of
the event requiring the same and the amount of the adjustment necessitated
thereby and setting forth in reasonable detail the method of calculation and the
facts upon which such calculation is based, which certificate and the amount of
the adjustment specified therein shall be verified by the Trustee.
4.6 Protection of Trustee
The Trustee:
(a) shall not at any time be under any duty or responsibility to any
Warrantholder to determine whether any facts exist which may
require any adjustment contemplated by Section 4.1 or with
respect to the nature or extent of any such adjustment when made,
or with respect to the method employed in making the same;
(b) shall not be accountable with respect to the validity or value
(or the kind or amount) of any Common Shares or of any shares or
other securities or property which may at any time be issued or
delivered upon the exercise of the rights attaching to any
Warrant;
(c) shall not be responsible for any failure of the Company to issue,
transfer or deliver Common Shares or certificates for the same
upon the surrender of any Warrants for the purpose of the
exercise of such rights or to comply with any of the covenants
contained in this Article 4; and
(d) shall not incur any liability or responsibility whatever or be in
any way responsible for the consequences of any breach on the
part of the Company of any of the representations, warranties or
covenants herein contained or of any acts of the agents or
servants of the Company.
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ARTICLE 5
RIGHTS OF THE COMPANY AND COVENANTS
5.1 Optional Purchases by the Company
The Company may from time to time purchase for cancellation, in the
market, by private contract or otherwise any or all of the Warrants. Any such
purchase shall be made at the lowest price or prices at which, in the opinion of
the directors, such Warrants are then obtainable, plus reasonable costs of
purchase, and may be made in such manner, from such persons and on such other
terms as the Company, in its sole discretion, may determine. The Warrant
Certificates representing the Warrants purchased pursuant to this Section 5.1
shall forthwith be delivered to and cancelled by the Trustee.
5.2 General Covenants
The Company covenants with the Trustee that so long as any Warrants
remain outstanding:
(a) it will reserve and keep available a sufficient number of Common
Shares for the purpose of enabling it to satisfy its obligations
to issue Common Shares upon the exercise of the Warrants in the
event that the Company does not have an unlimited number of
Common Shares authorized;
(b) it will cause the Common Shares and the certificates representing
the Common Shares from time to time acquired pursuant to the
exercise of the Warrants to be duly issued and delivered in
accordance with the Warrant Certificates and the terms hereof;
(c) all Common Shares which shall be issued upon exercise of the
right to acquire provided for herein and in the Warrant
Certificates shall be fully paid and non-assessable;
(d) it will use its best efforts to maintain its corporate existence,
carry on and conduct its business in a prudent manner in
accordance with industry standards and good business practice,
keep or cause to be kept proper books of account in accordance
with applicable law, and, if and whenever required in writing by
the Trustee, file with the Trustee copies of all annual financial
statements of the Corporation furnished to Shareholders during
the term of this Indenture;
(e) it will use its best efforts to ensure that all Common Shares of
the Company outstanding or issuable from time to time continue to
be traded on the Toronto Stock Exchange, NASDAQ National Market
and such other exchange satisfactory or electronic trading
facility to the directors of the Company;
(f) it will make all requisite filings under applicable Canadian
securities legislation, including those necessary to remain a
reporting issuer not in default in the Province of British
Columbia, Alberta and Ontario;
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(g) 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
Indenture.
5.3 Trustee's Remuneration and Expenses
The Company covenants that it will pay to the Trustee from time to
time reasonable remuneration for its services hereunder and will pay or
reimburse the Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Trustee in the administration
or execution of the trusts hereby created (including the reasonable compensation
and the disbursements of its counsel and all other advisers and assistants not
regularly in its employ) both before any default hereunder and thereafter until
all duties of the Trustee hereunder shall be finally and fully performed, except
any such expense, disbursement or advance as may arise out of or result from the
Trustee's negligence or wilful misconduct.
5.4 Performance of Covenants by Trustee
If the Company shall fail to perform any of its covenants contained in
this Warrant Indenture, the Trustee may notify the Warrantholders of such
failure on the part of the Company or may itself perform any of the said
covenants capable of being performed by it, but, subject to Section 9.2, shall
be under no obligation to perform said covenants or to notify the Warrantholders
of such performance by it. All sums expended or advanced by the Trustee in so
doing shall be repayable as provided in Section 5.3. No such performance,
expenditure or advance by the Trustee shall relieve the Company of any default
hereunder or of its continuing obligations under the covenants herein contained.
ARTICLE 6
ENFORCEMENT
6.1 Suits by Warrantholders
All or any of the rights conferred upon any Warrantholder by any of
the terms of the Warrant Certificates or of the Indenture, or of both, may be
enforced by the Warrantholder by appropriate proceedings but without prejudice
to the right which is hereby conferred upon the Trustee to proceed in its own
name to enforce each and all of the provisions herein contained for the benefit
of the Warrantholders.
6.2 Immunity of Shareholders, Etc.
The Trustee and, by the acceptance of the Warrant Certificates and as
part of the consideration for the issue of the Warrants, the Warrantholders
hereby waive and release any right, cause of action or remedy now or hereafter
existing in any jurisdiction against any incorporator or any past, present or
future shareholder, director, officer, employee or agent of the Company or any
successor corporation for the issue of the Common Shares pursuant to any
Warrants or on any covenant, agreement, representation or warranty by the
Company herein or contained in the Warrant Certificates.
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6.3 Limitation of Liability
The obligations hereunder are not personally binding upon, nor shall
resort hereunder be had to, the private property of any of the past, present or
future directors or shareholders of the Company or any successor corporation or
any of the past, present or future officers, employees or agents of the Company
or any successor corporation, but only the property of the Company or any
successor corporation shall be bound in respect hereof.
6.4 Waiver of Default
Upon the happening of any default hereunder:
(a) the holders of not less than 75% of the Warrants then outstanding
shall have power (in addition to the powers exercisable by
extraordinary resolution as provided in Section 7.10) by
requisition in writing to instruct the Trustee to waive any
default hereunder and the Trustee shall thereupon waive the
default upon such terms and conditions as shall be prescribed in
such requisition; or
(b) the Trustee shall have power to waive any default hereunder upon
such terms and conditions as the Trustee may deem advisable, if,
in the Trustee's opinion based on the advice of Counsel, the same
shall have been cured or adequate provision made therefor;
provided that no delay or omission of the Trustee or of the Warrantholders to
exercise any right or power accruing upon any default shall impair any such
right or power or shall be construed to be a waiver of any such default or
acquiescence therein and provided further that no act or omission either of the
Trustee or of the Warrantholders shall extend to or be taken in any manner
whatsoever to affect any subsequent default hereunder or the rights resulting
therefrom.
ARTICLE 7
MEETINGS OF WARRANTHOLDERS
7.1 Right to Convene Meetings
The Trustee may at any time and from time to time, and shall on
receipt of a written request of the Company or of a Warrantholders' Request and
upon being indemnified and funded to its reasonable satisfaction by the Company
or by the Warrantholders signing such Warrantholders' Request against the costs
which may be incurred in connection with the calling, and holding of such
meeting, convene a meeting of the Warrantholders. In the event of the Trustee
failing to convene a meeting within seven days after receipt of such written
request of the Company or such Warrantholders' Request and indemnity and funding
given as aforesaid, the Company or such Warrantholders, as the case may be, may
convene such meeting. Every such meeting shall be held in the City of Vancouver
or at such other place as may be approved or determined by the Trustee.
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7.2 Notice
At least fourteen (14) days' prior notice of any meeting of
Warrantholders shall be given to the Warrantholders in the manner provided for
in Section 10.2 and a copy of such notice shall be sent by mail to the Trustee
(unless the meeting has been called by the Trustee) and to the Company (unless
the meeting has been called by the Company). Such notice shall state the time
when and the place where the meeting is to be held, shall state briefly the
general nature of the business to be transacted thereat and shall contain such
information as is reasonably necessary to enable the Warrantholders to make a
reasoned decision on the matter, but it shall not be necessary for any such
notice to set out the terms of any resolution to be proposed or any of the
provisions of this Article 7.
7.3 Chairman
An individual (who need not be a Warrantholder) designated in writing
by the Trustee shall be chairman of the meeting and if no individual is so
designated, or if the individual so designated is not present within 15 minutes
from the time fixed for the holding of the meeting, the Warrantholders present
in person or by proxy shall choose some individual present to be chairman.
7.4 Quorum
Subject to the provisions of Section 7.11, at any meeting of the
Warrantholders a quorum shall consist of Warrantholders present in person or by
proxy and entitled to acquire at least 25% of the aggregate number of Common
Shares which could be acquired pursuant to all the then outstanding Warrants,
provided that at least two persons entitled to vote thereat are personally
present. If a quorum of the Warrantholders shall not be present within 30
minutes from the time fixed for holding any meeting, the meeting, if summoned by
the Warrantholders or on a Warrantholders' Request, shall be dissolved; but in
any other case the meeting shall be adjourned to the same day in the next week
(unless such day is not a Business Day, in which case it shall be adjourned to
the next following Business Day) at the same time and place and no notice of the
adjournment need be given. Any business may be brought before or dealt with at
an adjourned meeting which might have been dealt with at the original meeting in
accordance with the notice calling the same. No business shall be transacted at
any meeting unless a quorum be present at the commencement of business. At the
adjourned meeting the Warrantholders present in person or by proxy shall form a
quorum and may transact the business for which the meeting was originally
convened, notwithstanding that they may not be entitled to acquire at least 25%
of the aggregate number of Common Shares which may be acquired pursuant to all
then outstanding Warrants.
7.5 Power to Adjourn
The chairman of any meeting at which a quorum of the Warrantholders is
present may, with the consent of the meeting, adjourn any such meeting, and no
notice of such adjournment need be given except such notice, if any, as the
meeting may prescribe.
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7.6 Show of Hands
Every question submitted to a meeting shall be decided in the first
place by a majority of the votes given on a show of hands except that votes on
an extraordinary resolution shall be given in the manner hereinafter provided.
At any such meeting, unless a poll is duly demanded as herein provided, a
declaration by the chairman that a resolution has been carried or carried
unanimously or by a particular majority or lost or not carried by a particular
majority shall be conclusive evidence of the fact.
7.7 Poll and Voting
On every extraordinary resolution, and on any other question submitted
to a meeting and after a vote by show of hands when demanded by the chairman or
by one or more of the Warrantholders acting in person or by proxy and entitled
to acquire in the aggregate at least 5% of the aggregate number of Common Shares
which could be acquired pursuant to all the Warrants then outstanding, a poll
shall be taken in such manner as the chairman shall direct. Questions other than
those required to be determined by extraordinary resolution shall be decided by
a majority of the votes cast on the poll.
On a show of hands, every person who is present and entitled to vote,
whether as a Warrantholder or as proxy for one or more absent Warrantholders, or
both, shall have one vote. On a poll, each Warrantholder present in person or
represented by a proxy duly appointed by instrument in writing shall be entitled
to one vote in respect of each Common Share which he is entitled to acquire
pursuant to the Warrant or Warrants then held by him or represented by such
proxy. A proxy need not be a Warrantholder. The chairman of any meeting shall be
entitled, both on a show of hands and on a poll, to vote in respect of the
Warrants, if any, held or represented by him.
7.8 Regulations
The Trustee, or the Company with the approval of the Trustee, may from
time to time make and from time to time vary such regulations as it shall think
fit for:
(a) the setting of the record date for a meeting for the purpose of
determining Warrantholders entitled to receive notice of and to
vote at a meeting;
(b) the issue of voting certificates by any bank, trust company or
other depository satisfactory to the Trustee stating that the
Warrant Certificates specified therein have been deposited with
it by a named person and will remain on deposit until after the
meeting, which voting certificates shall entitle the persons
named therein to be present and vote at any such meeting and at
any adjournment thereof or to appoint a proxy or proxies to
represent them and vote for them at any such meeting and at any
adjournment thereof in the same manner and with the same effect
as though the persons so named in such voting certificates were
the actual bearers of the Warrant Certificates specified therein;
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(c) the deposit of voting certificates and instruments appointing
proxies at such place and time as the Trustee, the Company or the
Warrantholders convening the meeting, as the case may be, may in
the notice convening the meeting direct;
(d) the deposit of voting certificates and 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 or telecopied or sent
by other means of electronic transmission before the meeting to
the Company or to the 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;
(e) the form of the instrument of proxy; and
(f) generally for the calling of meetings of Warrantholders and the
conduct of business thereat.
Any regulations so made shall be binding and effective and the votes
given in accordance therewith shall be valid and shall be counted. Save as such
regulations may provide, the only persons who shall be recognized at any meeting
as a Warrantholder, or be entitled to vote or be present at the meeting in
respect thereof (subject to Section 7.9), shall be Warrantholders or their
counsel, or proxies of Warrantholders.
7.9 Company and Trustee may be Represented
The Company and the Trustee, by their respective directors, employees
and officers, and the counsel for the Company and for the Trustee may attend any
meeting of the Warrantholders, but shall have no vote as such unless in their
capacity as a Warrantholder.
7.10 Powers Exercisable by Extraordinary Resolution
In addition to all other powers conferred upon them by any other
provisions of this Indenture or by law, the Warrantholders at a meeting shall,
subject to the provisions of Section 7.11, have the power, exercisable from time
to time by extraordinary resolution:
(a) to agree to any modification, abrogation, alteration, compromise
or arrangement of the rights of Warrantholders or the Trustee in
its capacity as trustee hereunder or on behalf of the
Warrantholders against the Company whether such rights arise
under this Indenture or the Warrant Certificates or otherwise;
(b) to amend, alter or repeal any extraordinary resolution previously
passed or sanctioned by the Warrantholders;
(c) to direct or to authorize the Trustee to enforce any of the
covenants on the part of the Company contained in this Indenture
or the Warrant Certificates or to enforce any of the rights of
the Warrantholders in any manner specified in such extraordinary
resolution or to refrain from enforcing any such covenant or
right;
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(d) to waive, and to direct the Trustee to waive, any default on the
part of the Company in complying with any provisions of this
Indenture or the Warrant Certificates either unconditionally or
upon any conditions specified in such extraordinary resolution;
(e) to restrain any Warrantholder from taking or instituting any
suit, action or proceeding against the Company for the
enforcement of any of the covenants on the part of the Company in
this Indenture or the Warrant Certificates or to enforce any of
the rights of the Warrantholders;
(f) to direct any Warrantholder 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 Warrantholder
in connection therewith;
(g) to assent to any change in or omission from the provisions
contained in the Warrant Certificates and this Indenture or any
ancillary or supplemental instrument which may be agreed to by
the Company, and to authorize the Trustee to concur in and
execute any ancillary or supplemental indenture embodying the
change or omission;
(h) with the consent of the Company, to remove the Trustee or its
successor in office and to appoint a new trustee or trustees to
take the place of the Trustee so removed; and
(i) 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 Company.
7.11 Meaning of Extraordinary Resolution
(a) The expression "extraordinary resolution" when used in this
Indenture means, subject as hereinafter provided in this Section
7.11 and in Section 7.14, a resolution proposed at a meeting of
Warrantholders duly convened for that purpose and held in
accordance with the provisions of this Article 7 at which there
are present in person or by proxy Warrantholders entitled to
acquire at least 25% of the aggregate number of Common Shares
which may be acquired pursuant to all the then outstanding
Warrants and passed by the affirmative votes of Warrantholders
entitled to acquire not less than 75% of the aggregate number of
Common Shares which may be acquired pursuant to all the then
outstanding Warrants represented at the meeting and voted on the
poll upon such resolution.
(b) If, at any meeting called for the purpose of passing an
extraordinary resolution, Warrantholders entitled to acquire at
least 25% of the aggregate number of Common Shares which may be
acquired pursuant to all the then outstanding Warrants are not
present in person or by proxy within 30 minutes after the time
appointed for the meeting, then the meeting, if convened by
Warrantholders or on a Warrantholders' Request, shall be
dissolved; but in any other case it shall stand adjourned to such
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day, being not less than 15 or more than 60 days later, and to
such place and time as may be appointed by the chairman. Not less
than ten (10) days' prior notice shall be given of the time and
place of such adjourned meeting in the manner provided for in
Section 10.2. Such notice shall state that at the adjourned
meeting the Warrantholders present in person or by proxy did not
form a quorum but it shall not be necessary to set forth the
purposes for which the meeting was originally called or any other
particulars. At the adjourned meeting the Warrantholders present
in person or by proxy shall 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 7.11(a) shall be an
extraordinary resolution within the meaning of this Indenture
notwithstanding that Warrantholders entitled to acquire at least
25% of the aggregate number of Common Shares which may be
acquired pursuant to all the then outstanding Warrants are not
present in person or by proxy at such adjourned meeting.
(c) Votes on an extraordinary resolution shall always be given on a
poll and no demand for a poll on an extraordinary resolution
shall be necessary.
7.12 Powers Cumulative
Any one or more of the powers or any combination of the powers in this
Indenture stated to be exercisable by the Warrantholders by extraordinary
resolution or otherwise may be exercised from time to time and the exercise of
any one or more of such powers or any combination of powers from time to time
shall not be deemed to exhaust the right of the Warrantholders to exercise such
power or powers or combination of powers then or thereafter from time to time.
7.13 Minutes
Minutes of all resolutions and proceedings at every meeting of
Warrantholders shall be made and duly entered in books to be provided from time
to time for that purpose by the Trustee at the expense of the Company, and any
such minutes as aforesaid, if signed by the chairman or the secretary of the
meeting at which such resolutions were passed or proceedings had shall be 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 shall have
been made shall be deemed to have been duly convened and held, and all
resolutions passed thereat or proceedings taken shall be deemed to have been
duly passed and taken.
7.14 Instruments in Writing
All actions which may be taken and all powers that may be exercised by
the Warrantholders at a meeting held as provided in this Article 7 may also be
taken and exercised by Warrantholders entitled to acquire at least 75% of the
aggregate number of Common Shares which may be acquired pursuant to all the then
outstanding Warrants by an instrument in writing signed in one or more
counterparts by such Warrantholders in person or by attorney duly appointed in
writing, provided that such instrument was submitted to all the Warrantholders
for their prior consideration, and the expression "extraordinary resolution"
when used in this Indenture shall include an instrument so signed.
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7.15 Binding Effect of Resolutions
Every resolution and every extraordinary resolution passed in
accordance with the provisions of this Article 7 at a meeting of Warrantholders
shall be binding upon all the Warrantholders, whether present at or absent from
such meeting, and every instrument in writing signed by Warrantholders in
accordance with Section 7.14 shall be binding upon all the Warrantholders,
whether signatories thereto or not, and each and every Warrantholder and the
Trustee (subject to the provisions for indemnity herein contained) shall be
bound to give effect accordingly to every such resolution and instrument in
writing.
7.16 Holdings by Company Disregarded
In determining whether Warrantholders holding Warrant Certificates
evidencing the entitlement to acquire the required number of Common Shares are
present at a meeting of Warrantholders for the purpose of determining a quorum
or have concurred in any consent, waiver, extraordinary resolution,
Warrantholders' Request or other action under this Indenture, Warrants owned
legally or beneficially by the Company or any subsidiary of the Company shall be
disregarded in accordance with the provisions of Section 10.7.
ARTICLE 8
SUPPLEMENTAL INDENTURES
8.1 Provision for Supplemental Indentures for Certain Purposes
From time to time the Company (when authorized by action by the
directors) and the Trustee may, subject to the provisions hereof, and they
shall, when so directed in accordance with the provisions hereof, execute and
deliver by their proper officers, indentures or instruments supplemental hereto,
which thereafter shall form part hereof, for any one or more or all of the
following purposes:
(a) setting forth any adjustments resulting from the application of
the provisions of Article 4;
(b) 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 Trustee, based upon the advice of
counsel, prejudicial to the interests of the Warrantholders;
(c) giving effect to any extraordinary resolution passed as provided
in Article 7;
(d) making such provisions not inconsistent with this Indenture as
may be necessary or desirable with respect to matters or
questions arising hereunder or for the purpose of obtaining a
listing or quotation of the Warrants on any stock exchange,
provided that such provisions are not, in the opinion of the
Trustee, based upon the advice of counsel, prejudicial to the
interests of the Warrantholders;
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(e) adding to or altering the provisions hereof in respect of the
transfer of Warrants, making provision for the exchange of
Warrant Certificates, and making any modification in the form of
the Warrant Certificates which does not affect the substance
thereof;
(f) modifying any of the provisions of this Indenture, including
relieving the Company from any of the obligations, conditions or
restrictions herein contained, provided that such modification or
relief shall be or become operative or effective only if, in the
opinion of the Trustee based upon the advice of counsel, such
modification or relief in no way prejudices any of the rights of
the Warrantholders or of the Trustee, and provided further that
the Trustee may in its sole discretion decline to enter into any
such supplemental indenture which in its opinion, based upon the
advice of counsel, may not afford adequate protection to the
Trustee when the same shall become operative; and
(g) for any other purpose not inconsistent with the terms of this
Indenture, including the correction or rectification of any
ambiguities, defective or inconsistent provisions, errors,
mistakes or omissions herein, provided that in the opinion of the
Trustee, based upon the advice of counsel, the rights of the
Trustee and of the Warrantholders are in no way prejudiced
thereby.
8.2 Successor Companies
In the case of the consolidation, amalgamation, merger or transfer of
the undertaking or assets of the Company as an entirety or substantially as an
entirety to another corporation ("successor corporation"), the successor
corporation resulting from such consolidation, amalgamation, merger or transfer
(if not the Company) shall expressly assume, by supplemental indenture
satisfactory in form to the Trustee and executed and delivered to the Trustee,
the due and punctual performance and observance of each and every covenant and
condition of this Indenture to be performed and observed by the Company.
8.3 Amending Adjustment Provisions
From time to time the Corporation (when authorized by action by the
directors) and the Trustee may modify the adjustments resulting from the
application of the provisions of Article 4, if such modification is required as
a result of any approval of the Toronto Stock Exchange and the Corporation and
the Trustee may execute and deliver such documents as may be necessary to effect
the modifications.
ARTICLE 9
CONCERNING THE TRUSTEE
9.1 Trust Indenture Legislation
(a) If and to the extent that any provision of this Indenture limits,
qualifies or conflicts with a mandatory requirement of Applicable
Legislation, such mandatory requirement shall prevail.
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(b) The Company and the Trustee agree that each will, at all times in
relation to this Indenture and any action to be taken hereunder,
observe and comply with and be entitled to the benefits of
Applicable Legislation.
9.2 Rights and Duties of Trustee
(a) In the exercise of the rights and duties prescribed or conferred
by the terms of this Indenture, the Trustee shall exercise that
degree of care, diligence and skill that a reasonably prudent
trustee would exercise in comparable circumstances. No provision
of this Indenture shall be construed to relieve the Trustee from
liability for its own negligent action, its own negligent failure
to act, or its own wilful misconduct or bad faith.
(b) The obligation of the Trustee to commence or continue any act,
action or proceeding for the purpose of enforcing any rights of
the Trustee or the Warrantholders hereunder shall be conditional
upon the Warrantholders furnishing, when required by notice by
the Trustee, sufficient funds to commence or to continue such
act, action or proceeding and an indemnity reasonably
satisfactory to the Trustee to protect and to hold harmless the
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
Indenture shall require the 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 indemnified as aforesaid.
(c) The Trustee may, before commencing or at any time during the
continuance of any such act, action or proceeding, require the
Warrantholders, at whose instance it is acting to deposit with
the Trustee the Warrants held by them, for which Warrants the
Trustee shall issue receipts.
(d) Every provision of this Indenture that by its terms relieves the
Trustee of liability or entitles it to rely upon any evidence
submitted to it is subject to the provisions of Applicable
Legislation, of this Section 9.2 and of Section 9.3.
9.3 Evidence, Experts and Advisers
(a) In addition to the reports, certificates, opinions and other
evidence required by this Indenture, the Company shall furnish to
the Trustee such additional evidence of compliance with any
provision hereof, and in such form, as may be prescribed by
Applicable Legislation or as the Trustee may reasonably require
by written notice to the Company.
(b) In the exercise of its rights and duties hereunder, the Trustee
may, if it is acting in good faith, 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 Company, certificates of the Company
or other evidence furnished to the Trustee pursuant to any
provision hereof or of Applicable Legislation or pursuant to a
request of the Trustee, provided that such evidence complies with
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Applicable Legislation and that the Trustee complies with
Applicable Legislation and that the Trustee examines the same and
determines that such evidence complies with the applicable
requirements of this Indenture.
(c) Whenever it is provided in this Indenture or under Applicable
Legislation that the Company shall deposit with the Trustee
resolutions, certificates, reports, opinions, requests, orders or
other documents, it is intended that the trust, accuracy and good
faith on the effective date thereof and the facts and opinions
stated in all such documents so deposited shall, in each and
every such case, be conditions precedent to the right of the
Company to have the Trustee take the action to be based thereon.
(d) The Trustee may employ or retain such counsel, accountants,
appraisers or other experts or advisers as it may reasonably
require for the purpose of 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 shall
not be responsible for any misconduct or negligence on the part
of any such experts or advisers who have been appointed with due
care by the Trustee.
9.4 Documents, Monies, etc. held by Trustee
Any securities, documents of title or other instruments that may at
any time be held by the Trustee subject to the trusts hereof may be placed in
the deposit vaults of the Trustee or 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 Indenture may be deposited in the name of the Trustee in any
Canadian chartered bank at the rate of interest (if any) then current on similar
deposits or, with the consent of the Company, may be:
(a) deposited in the deposit department of the 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 one year from the date of investment, of any Canadian
chartered bank or loan or trust company. Unless the Company shall
be in default hereunder, all interest or other income received by
the Trustee in respect of such deposits and investments shall
belong to the Company.
9.5 Actions by Trustee to Protect Interest
The Trustee shall have 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 Warrantholders.
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9.6 Trustee not Required to Give Security
The Trustee shall not be required to give any bond or security in
respect of the execution of the trusts and powers of this Indenture or otherwise
in respect of the premises.
9.7 Protection of Trustee
By way of supplement to the provisions of any law for the time being
relating to Trustees it is expressly declared and agreed as follows:
(a) the Trustee shall not be liable for or by reason of any
statements of fact or recitals in this Indenture or in the
Warrant Certificates (except the representation contained in
Section 9.9 or in the signature of the Trustee on the Warrant
Certificates) or be required to verify the same, but all such
statements or recitals are and shall be deemed to be made by the
Company;
(b) nothing herein contained shall impose any obligation on the
Trustee to see to or to require evidence of the registration or
filing (or renewal thereof) of this Indenture or any instrument
ancillary or supplemental hereto;
(c) the Trustee shall not be bound to give notice to any person or
persons of the execution hereof;
(d) the Trustee shall not incur any liability or responsibility
whatever or be in any way responsible for the consequence of any
breach on the part of the Company of any of the covenants herein
contained or of any acts of any directors, officers, employees,
agents or servants of the Company; and
(e) the Trustee shall not be bound to give any notice or to do or
take any act, action or proceeding by virtue of the powers
conferred on it hereby unless and until it shall have been
required so to do under the terms hereof nor shall the Trustee be
required to take notice of any default of the Company hereunder
unless and until notified in writing of the default (which notice
must specify the nature of the default) and, in the absence of
that notice, the Trustee may for all purposes hereunder
conclusively assume that no default by the Company hereunder has
occurred. The giving of any notice shall in no way limit the
discretion of the Trustee hereunder as to whether any action is
required to be taken in respect of any default hereunder.
9.8 Replacement of Trustee; Successor by Merger
(a) The Trustee may resign its trust and be discharged from all
further duties and liabilities hereunder, subject to this Section
9.8, by giving to the Company not less than 90 days' prior notice
in writing or such shorter prior notice as the Company may accept
as sufficient. The Warrantholders by extraordinary resolution
shall have power at any time to remove the existing Trustee and
to appoint a new trustee. In the event of the Trustee resigning
or being removed as aforesaid or being dissolved, becoming
bankrupt, going into liquidation or otherwise becoming incapable
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of acting hereunder, the Company shall forthwith appoint a new
trustee unless a new trustee has already been appointed by the
Warrantholders; failing such appointment by the Company, the
retiring Trustee or any Warrantholder may apply to a justice of
the British Columbia Supreme Court, on such notice as such
justice may direct, for the appointment of a new trustee; but any
new trustee so appointed by the Company or by the Court shall be
subject to removal as aforesaid by the Warrantholders. Any new
trustee appointed under any provision of this Section 9.8 shall
be a corporation authorized to carry on the business of a trust
company in the Province of British Columbia and, if required by
the Applicable Legislation for any other provinces, in such other
provinces. On any such appointment the new trustee shall be
vested with the same powers, rights, duties and responsibilities
as if it had been originally named herein as Trustee hereunder.
(b) Upon the appointment of a successor trustee, the Company shall
promptly notify the Warrantholders thereof in the manner provided
for in Article 10 hereof.
(c) Any corporation into or with which the Trustee may be merged or
consolidated or amalgamated, or any corporation resulting
therefrom to which the Trustee shall be a party, or any
corporation succeeding to the trust business of the Trustee shall
be the successor to the 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
trustee under subsection 9.8(a).
(d) Any Warrant Certificates countersigned but not delivered by a
predecessor trustee may be countersigned by the successor trustee
in the name of the predecessor or successor trustee.
9.9 Conflict of Interest
(a) The Trustee represents to the Company that at the time of
execution and delivery hereof no material conflict of interest
exists between its role as a 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 90 days
after ascertaining that it has such material conflict of
interest, either eliminate the same or assign its trust hereunder
to a successor trustee approved by the Company and meeting the
requirements set forth in subsection 9.8(a). Notwithstanding the
foregoing provisions of this subsection 9.9(a), if any such
material conflict of interest exists or hereafter shall exist,
the validity and enforceability of this Indenture and the Warrant
Certificates shall not be affected in any manner whatsoever by
reason thereof.
(b) Subject to subsection 9.9(a), the Trustee, in its personal or any
other capacity, may buy, lend upon and deal in securities of the
Company and generally may contract and enter into financial
transactions with the Company or any subsidiary of the Company
without being liable to account for any profit made thereby.
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9.10 Acceptance of Trust
The Trustee hereby accepts the trusts in this Indenture declared and
provided for and agrees to perform the same upon the terms and conditions herein
set forth.
9.11 Trustee not to be Appointed Receiver
The Trustee and any person related to the Trustee shall not be
appointed a receiver, a receiver and manager or liquidator of all or any part of
the assets or undertaking of the Company.
9.12 Indemnification
Without limiting any protection or indemnity of the Trustee under any
other provision hereof, or otherwise at law, the Company hereby agrees to
indemnify and hold harmless the Trustee from and against any and all
liabilities, losses, damages, penalties, claims, actions, suits, costs, expenses
and disbursements, including reasonable legal or advisor fees and disbursements,
of whatever kind and nature which may at any time be imposed on, incurred by or
asserted against the Trustee in connection with the performance of its duties
and obligations hereunder, other than such liabilities, losses, damages,
penalties, claims, actions, suits, costs, expenses and disbursements arising by
reason of the negligence or fraud of the Trustee. This provision shall survive
the resignation or removal of the Trustee, or the termination of the Indenture.
The Trustee shall not be under any obligation to prosecute or to defend any
action or suit in respect of the relationship which, in the opinion of its
counsel, may involve it in expense or liability, unless the Company shall, so
often as required, furnish the Trustee with satisfactory indemnity and funding
against such expense or liability.
ARTICLE 10
GENERAL
10.1 Notice to the Company and the Trustee
(a) Unless herein otherwise expressly provided, any notice to be
given hereunder to the Company or the Trustee shall be deemed to
be validly given if delivered, or if sent by registered letter,
postage prepaid, or by telecopier:
if to the Company:
Spectrum Signal Processing Inc.
000 - 0000 Xxxxxxxxxx Xxx
Xxxxxxx, X.X.
X0X 0X0
Attention: Xxxxxx Xxxxxxxxxx
Facsimile No.: (000) 000-0000
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if to the Trustee:
Montreal Trust Company of Canada
3rd Floor, 000 Xxxxxxx Xxxxxx
Xxxxxxxxx, X.X.
X0X 0X0
Attention: Corporate Trust Department
Facsimile No.: (000) 000-0000
and any such notice delivered on a business day in accordance with the foregoing
shall be deemed to have been received on the date of delivery, or if sent by
telecopier on a business day, on the date of such transmission, or if mailed, on
the fifth Business Day following the date of the postmark on such notice.
(b) The Company or the Trustee, as the case may be, may from time to
time notify the other in the manner provided in subsection
10.1(a) of a change of address which, from the effective date of
such notice and until changed by like notice, shall be the
address of the Company or the Trustee, as the case may be, for
all purposes of this Indenture. A copy of any notice of change of
address given pursuant to subsection 10.1(b) shall be sent to the
Warrant Agency, where it shall be available for inspection by
Warrantholders during normal business hours.
(c) If, by reason of a strike, lockout or other work stoppage, actual
or threatened, involving postal employees, any notice to be given
to the Trustee or to the Company hereunder could reasonably be
considered unlikely to reach its destination, such notice shall
be valid and effective only if it is delivered to the named
officer of the party to which it is addressed or, if it is
delivered to such party at the appropriate address provided in
subsection 10.1(a), by telecopier or other means of prepaid,
transmitted and recorded communication.
10.2 Notice to Warrantholders
(a) Any notice to the Warrantholders under the provisions of this
Indenture shall be valid and effective if sent by telecopier
other means of prepaid, transmitted and recorded communication,
or if sent by letter or circular through the ordinary post
addressed to such holders at their post office addresses
appearing on the register hereinbefore mentioned, and shall be
deemed to have been effectively given on the date of delivery or,
if mailed, five (5) Business Days following actual posting of the
notice.
(b) If, by reason of a strike, lockout or other work stoppage, actual
or threatened, involving postal employees, any notice to be given
to the Warrantholders hereunder could reasonably be considered
unlikely to reach its destination, such notice shall be valid and
effective only if it is delivered personally to such
Warrantholders or if delivered to the address for such
Warrantholders contained in the register of Warrants maintained
by the Trustee, by telecopier or other means of prepaid,
transmitted and recorded communication.
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10.3 Ownership of Warrants
The Company and the Trustee may deem and treat the registered owner of
any Warrant Certificate as the absolute owner of the Warrant represented thereby
for all purposes, and the Company and the Trustee shall not be affected by any
notice or knowledge to the contrary except where the Company or the Trustee is
required to take notice by statute or by order of a court of competent
jurisdiction. A Warrantholder shall be entitled to the rights evidenced by such
Warrant Certificate free from all equities or rights of set off or counterclaim
between the Company and the original or any intermediate holder thereof and all
persons may act accordingly and the receipt of any such Warrantholder for the
Common Shares which may be acquired pursuant thereto shall be a good discharge
to the Company and the Trustee for the same and neither the Company nor the
Trustee shall be bound to inquire into the title of any such holder except where
the Company or the Trustee is required to take notice by statute or by order of
a court of competent jurisdiction.
10.4 Counterparts
This Indenture may be executed in several counterparts, each of which
when so executed shall be deemed to be an original and such counterparts
together shall constitute one and the same instrument and notwithstanding their
date of execution they shall be deemed to be dated as of the date hereof.
10.5 Satisfaction and Discharge of Indenture
Upon the earlier of:
(a) the date by which there shall have been delivered to the Trustee
for exercise or destruction all Warrant Certificates theretofore
countersigned hereunder; or
(b) the Time of Expiry;
this Indenture shall cease to be of further effect and the Trustee, on demand of
and at the cost and expense of the Company and upon delivery to the Trustee of a
certificate of the Company stating that all conditions precedent to the
satisfaction and discharge of this Indenture have been complied with, shall
execute proper instruments acknowledging satisfaction of and discharging this
Indenture.
10.6 Provisions of Indentures and Warrants for the Sole Benefit of Parties
and Warrantholders
Nothing in this Indenture or in the Warrant Certificates, expressed or
implied, shall give or be construed to give to any person other than the parties
hereto and the Warrantholders, as the case may be, any legal or equitable right,
remedy or claim under this Indenture, or under any covenant or provision herein
or therein contained, all such covenants and provisions being for the sole
benefit of the parties hereto and the Warrantholders.
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10.7 Common Shares or Warrants Owned by the Company or its Subsidiaries -
Certificate to be Provided
For the purpose of disregarding any Warrants owned legally or
beneficially by the Company or any subsidiary of the Company in Section 7.16,
the Company shall provide to the Trustee, from time to time, a certificate of
the Company setting forth as at the date of such certificate:
(a) the names (other than the name of the Company) of the registered
holders of Common Shares which, to the knowledge of the Company,
are owned by or held for the account of the Company or any
subsidiary of the Company; and
(b) the number of Warrants owned legally or beneficially by the
Company or any subsidiary of the Company;
and the Trustee, in making the computations in Section 7.16, shall be entitled
to rely conclusively on such certificate.
IN WITNESS WHEREOF the parties hereto have executed this Indenture under their
respective corporate seals and the hands of their proper officers in that behalf
as of the date first above written.
SPECTRUM SIGNAL PROCESSING INC.
Per: "Xxxxxx Xxxxxxxxxx"
Authorized Signatory
MONTREAL TRUST COMPANY OF CANADA
Per: "Xxxxxx Xxxxxxx"
Authorized Signatory
Per: "Xxxxxxx Xxxxxxxxx"
Authorized Signatory
THIS IS SCHEDULE "A" TO THE WARRANT INDENTURE
MADE AS OF September 12, 2000, BETWEEN SPECTRUM SIGNAL PROCESSING INC.
AND MONTREAL TRUST COMPANY OF CANADA, AS TRUSTEE.
WARRANTS
Spectrum Signal Processing Inc.
__________________________
(Incorporated under the laws of British Columbia)
WARRANT CERTIFICATE NO. __________________ WARRANTS
________________________
One (1) such warrant entitling
the holder to purchase one (1)
Common Share at a price of $4.75
per Common Share on or before
________________, 2002 (subject
to adjustment in accordance with
the terms of the Warrant
Indenture).
DATE OF ISSUANCE: _____________________________.
THIS IS TO CERTIFY THAT ______________________________________________ (herein
called the "holder") is entitled to acquire in the manner herein provided,
subject to the restrictions herein contained, during the period commencing on
the date hereof and ending at 4:30 p.m. (Vancouver time) on ___________________,
2002 (the "Expiry Date"), the number of fully paid and non-assessable common
shares ("Common Shares") without nominal or par value of Spectrum Signal
Processing Inc. ("the Company") as set forth above.
Such right to purchase Common Shares may only be exercised by the holder hereof
within the time hereinbefore set out by:
(a) duly completing in the manner indicated and executing the
Exercise Form attached hereto; and
(b) surrendering this Warrant Certificate to Montreal Trust Company
of Canada (the "Trustee") at the principal office of the Trustee
in any of the Cities of Vancouver, British Columbia or Toronto,
Ontario; and
(c) payment by cash or certified cheque or money order in lawful
monies of Canada, payable to or to the order of the Company in
the amount of $4.75 for each Common Share to be purchased on or
before 5:00 p.m. (Vancouver time) on the Expiry Date (the
"Exercise Price") at the principal office of the Trustee in any
of the Cities of Vancouver, British Columbia or Xxxxxxx, Xxxxxxx.
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The Warrants represented by this Warrant Certificate are issued under and
pursuant to a Warrant indenture (herein called the "Indenture") made as of
September 12th, 2000, between the Company and the Trustee (which expression
shall include any successor trustee appointed under the Indenture), to which
Indenture and any instruments supplemental thereto reference is hereby made for
a full description of the rights of the holders of the Warrants and the terms
and conditions upon which such Warrants are, or are to be, issued and held, all
to the same effect as if the provisions of the Indenture and all instruments
supplemental thereto were herein set forth, and to all of which provisions the
holder of these Warrants by acceptance hereof assents.
These Warrants shall be deemed to be so surrendered only upon personal delivery
thereof or, if sent by post or other means of transmission, upon actual receipt
thereof by the Trustee at any of the offices referred to above.
Upon such surrender, the person or persons in whose name or names the Common
Shares issuable upon exercise of the Warrants are to be issued shall be deemed
for all purposes (except as provided in the Indenture hereinafter referred to)
the holder or holders of record of such Common Shares and the Company covenants
that it will (subject to the provisions of the Indenture) cause a certificate or
certificates representing such Common Shares to be delivered or mailed to such
person or persons at the address or addresses specified in such Exercise Form.
The registered holder of these Warrants may acquire any lesser number of Common
Shares than the number of Common Shares which may be acquired for the Warrants
represented by this Warrant Certificate and in such event shall be entitled to
receive a new Warrant Certificate in respect of the balance of the Common Shares
which may be acquired.
To the extent that the Warrants represented by this Warrant Certificate confer
the right to acquire a fraction of a Common Share, such right may be exercised
in respect of such fraction only in combination with an additional Warrant or
Warrants which in the aggregate entitle the holder to acquire a whole number of
Common Shares. No fractional Common Shares will be issued.
In the event of any alteration of the Common Shares, including any subdivision,
consolidation or reclassification, and in the event of any form of
reorganization of the Company, including any amalgamation, merger or
arrangement, an adjustment shall be made to the terms of the Warrants such that
the holders thereof, upon exercise of any Warrants following the completion of
any of the above noted events, will be entitled to receive the same number and
kind of securities that they would have been entitled to receive had they
exercised their Warrants immediately prior to such event.
The registered holder of this Warrant Certificate may at any time prior to the
Expiry Date of the Warrants, upon surrender hereof to the Trustee at its
principal office in the Cities of Vancouver, British Columbia or Toronto,
Ontario and payment of the charges provided for in the Indenture, exchange this
Warrant Certificate for other Warrant Certificates evidencing Warrants entitling
the holder to acquire in the aggregate the same number of Common Shares as may
be acquired under this Warrant Certificate.
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The holding of the Warrants evidenced by this Warrant Certificate shall not
constitute the holder hereof a shareholder of the Company or entitle such holder
to any right or interest in respect thereof except as herein and in the
Indenture expressly provided.
The Indenture contains provisions making binding upon all holders of Warrant
Certificates outstanding thereunder resolutions passed at meetings of such
holders held in accordance with such provisions and instruments in writing
signed by the holders of Warrants entitled to acquire a specified majority of
the Common Shares which may be acquired pursuant to all then outstanding Warrant
Certificates.
The Warrants evidenced by this Warrant Certificate may be transferred or
assigned.
This Warrant Certificate shall not be valid for any purpose whatever unless and
until it has been countersigned by or on behalf of the Trustee.
Time shall be of the essence hereof.
Words and phrases defined in the Indenture where used in this Warrant
Certificate shall be given the meanings ascribed thereto in the Indenture unless
otherwise defined herein.
IN WITNESS WHEREOF the Company has caused this Warrant Certificate to be signed
by its duly authorized officer effective as of _____________________, 2000.
SPECTRUM SIGNAL PROCESSING INC.
Per:___________________________
Authorized Signatory
Countersigned by:
MONTREAL TRUST COMPANY OF CANADA
Trustee
Per: _____________________________
Authorized Signatory
EXERCISE FORM
TO: Montreal Trust Company of Canada
The undersigned holder of Warrants hereby exercises the right to acquire
____________Common Shares without nominal or par value of Spectrum Signal
Processing Inc. (or such number of other securities or property to which such
Warrants entitle the undersigned in lieu thereof or in addition thereto under
the provisions of the Indenture mentioned in the Warrant Certificate) according
to the terms of the Indenture mentioned in the Warrant Certificate.
Such securities or property are to be issued as follows:
Name: _______________________________________________________
Address in Full: _______________________________________________________
The undersigned acknowledges that Warrants and the Common Shares have not been
registered with the United States Securities and Exchange Commission under the
United States Securities Act of 1933 (the "U.S. Act"), as amended, or under the
securities laws of any state of the United States, and may not be sold or
otherwise transferred in the United States or its territories or possessions or
to a citizen, resident or national of the United States during the 90 day period
commencing on the date of issuance of the Warrants in accordance with Regulation
S or unless such securities are registered under the U.S. Act or pursuant to an
exemption from the U.S. Act.
The undersigned further acknowledges that the certificates representing the
Common Shares issuable hereunder may bear the following legend:
The security represented by this certificate is subject to a hold period
expiring _____________________, 2001 and may not be traded in British Columbia
until the expiry of the hold period, except as permitted by the Securities Act
(British Columbia) and Regulations made under the Act.
DATED this _______ day of __________________, 2000.
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)
)
_______________________________ ) ______________________________
Signature Guaranteed ) Signature
)
) ______________________________
) (Print full name)
(by a Canadian Schedule "A" chartered )
bank, trust company or a member of an ) ______________________________
acceptable Medallion Guarantee Program) ) (Print full address)
Instructions:
The registered holder may exercise his right to acquire Common Shares by
completing the above form, surrendering this Warrant Certificate and paying the
Exercise Price to Computershare Investor Services Inc. at its principal office
in Vancouver, British Columbia. For the protection of the holder, it would be
prudent to register if forwarding by mail. Certificates for Common Shares will
be delivered or mailed as soon as practicable after the exercise of the
Warrants. The rights of the registered holder cease if the Warrants are not
exercised prior to 5:00 p.m. (Vancouver time) on the Expiry Date. If any of the
Common Shares subscribed for are to be issued to a person or persons other than
the registered holder, the signature of the registered holder must be guaranteed
by a Canadian Schedule "A" major chartered bank, trust company or by a member of
an acceptable Medallion Guarantee Program.
* Please Note - Signature guarantees are not accepted from treasury branches or
credit unions unless they are members of the Stamp Medallion Program.
** Please Note - In the United States of America, signature guarantees must be
done by members of the Medallion Signature Guarantee Program only.
