THIS SPECIAL WARRANT INDENTURE is made the 12th day of September, 2000.
BETWEEN:
SPECTRUM SIGNAL PROCESSING INC., 200 - 0000
Xxxxxxxxxx Xxx, Xxxxxxx, Xxxxxxx Xxxxxxxx, X0X 0X0
(herein called the "Corporation")
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 Corporation is proposing to create and issue Special
Warrants in the manner herein set forth; AND WHEREAS one Special Warrant shall
entitle the holder thereof to acquire one Common Share and one Warrant of the
Corporation, subject to adjustment in certain circumstances, at no additional
cost upon the terms and conditions herein set forth;
AND WHEREAS all acts and deeds necessary have been done and performed
to make the Special Warrants when issued, as in this Indenture provided, legal,
valid and binding upon the Corporation 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) "Adjustment Period" means the period from and including the date
of issuance of the Special Warrants up to and including the Time
of Expiry;
(b) "Applicable Legislation" means the provisions of the Company Act
(British Columbia) as from time to time amended, and any statute
of Canada or a province thereof, and the regulations under any
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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;
(c) "Business Day" means a day which is not Saturday or Sunday or a
statutory holiday in British Columbia or Ontario;
(d) "Common Shares" means fully paid and non-assessable common shares
of the Corporation as presently constituted;
(e) "Corporation's Auditors" means a firm of chartered accountants
duly appointed as auditors of the Corporation;
(f) "Counsel" means a barrister or solicitor acceptable to the
Trustee;
(g) "Current Market Price" of the Common Shares at any date means the
simple average of the closing trading price per share for such
shares for the 20 consecutive Trading Days immediately preceding
such date on The Toronto Stock Exchange or, if on such date the
Common Shares are not listed on The Toronto Stock Exchange, on
such stock exchange upon which such shares are listed and as
selected by the directors (provided that if on any day in such 20
Trading Day period no closing price per share is reported by such
exchange, the average of the reported closing bid and ask prices
on such exchange shall be deemed to be the closing price per
share for such day), or, if such shares are not listed on any
stock exchange, then on such over-the-counter market as may be
selected for such purpose by the directors;
(h) "Effective Date" means the date of this Indenture;
(i) "Equity Shares" means the Common Shares and any shares of any
other class or series of the Corporation 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 Corporation beyond
a fixed sum or a fixed sum plus accrued dividends;
(j) "Exercise Date" means, with respect to any Special Warrant, the
date on which the Warrant Certificate representing a Special
Warrant is surrendered for exercise or otherwise deemed to have
been exercised in accordance with the provisions of Article 3;
(k) "Exercise Period" means the period commencing on the Shareholder
Approval Date and ending at the Time of Expiry;
(l) "Filing Jurisdictions" means each of the provinces in the Selling
Jurisdictions where Special Warrants are sold;
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(m) "Notice of Compliance" means notice in writing from the
Corporation to the Trustee to the effect that the Qualification
Date and the Shareholder Approval Date have occurred, specifying
whether there has been any distribution of the Common Shares in
which the Warrantholders are entitled to participate or any
adjustment to the number of Common Shares and Warrants issuable
on exercise or deemed exercise of the Special Warrants as
contemplated in Section 2.2 hereof;
(n) "Notice of Non-Compliance" means notice in writing from the
Corporation to the Trustee to the effect that, either of the
Shareholder Approval Date or the Qualification Date has not
occurred prior to the Retraction Time.
(o) "Notice of Shareholder Approval" means notice in writing from the
Corporation to the Trustee to the effect that the Shareholder
Approval Date has occurred.
(p) "Permitted Investments" means:
(i) obligations of or guaranteed by the government of Canada or
any province of Canada;
(ii) certificates of deposits, term deposit, receipts, bearer
deposit notes or bankers' acceptances issued or accepted by,
deposited placed with, or other obligations of or guaranteed
by any Canadian chartered bank, or any trust company or
other financial institution incorporated under the laws of
Canada or of a province of Canada, the short-term debt
obligations of which are rated, at the date of acquisition,
at least A 1 by Canadian Bond Rating Service Inc. or R 1
(middle) by Dominion Bond Rating Service Limited; and
(iii)any other obligations which are rated, at the date of
acquisition, or which are guaranteed by a person the
obligations of which are rated, at the date of acquisition,
at least as highly as the levels specified in clause (i) of
this definition;
(q) "person" means an individual, body corporate, partnership, trust,
trustee, executor, administrator, legal representative or any
unincorporated organization;
(r) "Prospectus" means a (final) prospectus and any amendments
thereto, to be filed with the Securities Commissions qualifying
the distribution of the Common Shares and Warrants issuable upon
the exercise or deemed exercise of the Special Warrants;
(s) "Qualification Date" means the day on which a Receipt is issued
for the Prospectus by the last of the Securities Commission to do
so;
(t) "Receipt" means a MMRS decision document issued by or on behalf
of a Securities Commission for a Prospectus pursuant to National
Policy 43 201 and a receipt issued for a Prospectus by any
Securities Commission that opts out of the MMRS system;
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(u) "Regulation D" means Regulation D of the U.S. Securities Act;
(v) "Regulation S" means Regulation S of the U.S. Securities Act;
(w) "Restricted Proceeds" means an amount equal to the aggregate
purchase price for the Special Warrants issued by the Corporation
hereunder;
(x) "Retraction Date" means January 10, 2001;
(y) "Retraction Expiry Time" means 4:30 p.m. Vancouver time on
January 17, 2001;
(z) "Retraction Right" means the right of a holder of Special
Warrants to compel the Corporation to repurchase the Special
Warrants represented by each Special Warrant Certificate for the
Warrant Purchase Price for each Special Warrant repurchased
together with accrued interest less any withholding tax in
circumstances where the Qualification Date does not occur prior
to the Retraction Time;
(aa) "Retraction Time" means 4:30 p.m. Vancouver time on the
Retraction Date;
(bb) "Securities Commission" means the securities commissions or
similar regulatory authorities in the Filing Jurisdictions;
(cc) "Securities Laws" means the applicable securities laws of the
Provinces of British Columbia, Ontario and Alberta, and the
respective regulations made and forms prescribed thereunder
together with all applicable published policy statements and
blanket orders and rulings of the Securities Commission;
(dd) "Selling Jurisdictions" means the Provinces of British Columbia,
Ontario and Alberta;
(ee) "Shareholder" means a holder of record of one or more Common
Shares;
(ff) "Shareholder Approval Date" means the date the Corporation has
received shareholder approval for the issuance of the Common
Shares issuable upon exercise of the Special Warrants and the
Warrants in accordance with the policies of the Toronto Stock
Exchange;
(gg) "Special Warrant Purchase Price" means $4.25 in lawful money of
Canada per Special Warrant;
(hh) "Special Warrants" means warrants issued by the Corporation in
registered form in accordance with the terms and conditions of
this Indenture;
(ii) "this Special 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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(jj) "Time of Expiry" means 4:30 p.m., Vancouver time, on the earlier
of:
(i) the first business day after the Qualification Date; or
(ii) the first Business Day following the date which is twelve
(12) months after the Effective Date, provided that if the
Shareholder Approval Date has not occurred as of the
Qualification Date, the Time of Expiry shall be 4:30 p.m.
Vancouver time on the first Business Day following the date
which is twelve (12) months after the Effective Date;
(kk) "Trading Day" means, with respect to a stock exchange, a day on
which such exchange is open for the transaction of business;
(ll) "Transfer Agent" means the Transfer Agent for the time being of
the Common Shares;
(mm) "U.S. Securities Act" means the United States Securities Act of
1933, as amended;
(nn) "Warrant" means the one common share purchase warrant to be
issued by the Corporation on the conversion of one Special
Warrant, in registered form, in accordance with the terms and
conditions of an indenture to be entered into between the
Corporation and the Trustee. Each whole warrant will entitle the
holder to acquire one Common Share at any time on or before the
first Business Day following the date which is eighteen (18)
months after the date of issue of all Warrants at the Warrant
Exercise Price, subject to appropriate adjustments to such number
and such exercise price in the event of, among other things,
certain issuances of securities by the Corporation and changes in
capital structure of the Corporation and will contain such other
terms and conditions as are customarily included in such an
indenture;
(oo) "Warrant Agency" means the principal office of the Trustee in the
City of Vancouver, British Columbia and Toronto, Ontario;
(pp) "Warrant Certificate" means a certificate issued on or after the
Effective Date to evidence Special Warrants;
(qq) "Warrant Exercise Price" means each Warrant's respective exercise
price, being $4.75 per Common Share if exercised on or before
4:30 p.m., Vancouver time, on the first Business Day following
the date which is eighteen (18) months after the date of issue of
the Warrants, in lawful money of Canada unless such price shall
have been adjusted in accordance with the provisions of the
Indenture governing the Warrants, in which case it shall mean the
adjusted price then in effect;
(rr) "Warrantholder" means a holder of record of one or more Special
Warrants;
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(ss) "Warrantholders" or "holders" means the persons who, after the
Effective Date, are registered owners of Special Warrants;
(tt) "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 Special Warrants
then unexercised and outstanding, requesting the Trustee to take
some action or proceeding specified therein; and
(uu) "written order of the Corporation", "written request of the
Corporation", "written consent of the Corporation" and
"certificate of the Corporation" mean, respectively, a written
order, request, consent and certificate signed in the name of the
Corporation 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, Sections, subsections
and paragraphs, the provision of a table of contents and the insertion of
headings are for convenience of reference only and shall not affect the
construction or interpretation of this Indenture.
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 Currency
Except as otherwise expressly provided, all dollar amounts herein are
expressed in Canadian dollars.
1.7 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.
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ARTICLE 2
ISSUE OF SPECIAL WARRANTS
2.1 Issue of Special Warrants
(a) 1,764,705 Special Warrants, entitling the holders thereof to
acquire an aggregate of 1,764,705 Common Shares and 1,764,705
Warrants, 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
Special Warrants represented by the Warrant Certificate
(including all replacements issued in accordance with this
Indenture), shall bear such distinguishing letters and numbers as
the Corporation may, with the approval of the Trustee, prescribe,
and shall be issuable in any denomination excluding fractions.
2.2 Form and Terms of Special Warrants
(a) One Special Warrant authorized to be issued hereunder shall
entitle the holder thereof to acquire, in accordance with and
subject to the terms of Article 3 hereof and at no additional
cost to the holder one Common Share and one Warrant subject to
adjustment in accordance with Article 4 hereof;
(b) No fractional Special Warrants, Common Shares or Warrants shall
be issued or otherwise provided for hereunder.
(c) The number of Common Shares and Warrants which may be acquired
pursuant to the Special Warrants shall be adjusted in the events
and in the manner specified in Article 4.
2.3 Warrantholder not a Shareholder
Except as provided for in subsection 5.1(g), nothing in this Indenture
or in the holding of a Special Warrant itself evidenced by a Warrant Certificate
or otherwise, shall, in itself, confer or be construed as conferring upon a
Warrantholder any right or interest whatsoever as a Shareholder or as any other
shareholder of the Corporation, 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 Corporation, or the right to receive dividends and other
distributions.
2.4 Special Warrants to Rank Pari Passu
All Special Warrants shall rank pari passu, whatever may be the actual
date of issue of the same.
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2.5 Signing of Warrant Certificates
The Warrant Certificates shall be signed under seal by any one
director or officer of the Corporation. 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 Corporation as if
they had been manually signed by such director or officer. Notwithstanding that
any of the persons 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 Corporation 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 substantially in the form of the
certificate set out in Schedule "A" hereto, and such
countersignature by the Trustee upon any Warrant Certificate
shall be conclusive evidence as against the Corporation 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 Certificate or any of them or of the
consideration therefor except as otherwise specified herein.
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 Corporation, subject to
applicable law, 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 and upon cancellation of such mutilated Warrant
Certificate, 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 Corporation 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 Corporation
and to the Trustee in their sole discretion, and such applicant
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may also be required to furnish an indemnity and surety bond in
amount and form satisfactory to the Corporation and the Trustee
in their discretion and shall pay the reasonable charges of the
Corporation and the Trustee in connection therewith.
2.8 Exchange of Warrant Certificates
(a) Warrant Certificates representing Special Warrants to acquire any
specified number of Common Shares and Warrants, 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 and Warrants 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 Corporation 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 Warrant Agency shall charge
to the holder reasonable fees for each new Warrant Certificate issued in
exchange for Warrant Certificate(s); and payment of such charge and
reimbursement of the Trustee or the Corporation 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.
2.10 Ownership of Special Warrants
(a) The Corporation and the Trustee will deem and treat the
registered owner of any Special Warrant as the beneficial owner
thereof for all purposes and neither the Corporation nor the
Trustee shall be affected by any notice to the contrary.
(b) Subject to the provisions of this Indenture and applicable law,
the Warrantholder shall be entitled to the rights and privileges
attaching to the Special Warrants and the issue of Common Shares
and Warrants by the Corporation upon the exercise of Special
Warrants by any Warrantholder in accordance with the terms and
conditions herein contained shall discharge all responsibilities
of the Corporation and the Trustee with respect to such Special
Warrants and neither the Corporation nor the Trustee shall be
bound to inquire into the title of any such holder.
2.11 Registration and Transfer
(a) The Corporation will at all times cause to be kept by and at the
office of the Trustee in the cities of Vancouver, British
Columbia and Toronto, Ontario, and at such other place or places,
if any, as may be designated by the Corporation with the approval
of the Trustee, registers in which names and addresses of
Warrantholders and particulars of the Special Warrants held by
them will be entered, such registration to be noted on the
Special Warrants by the Trustee or other registrar.
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(b) No transfer of a Special Warrant will be valid unless made on one
of the registers to be kept by and at the office of the Trustee
in the cities of Vancouver, British Columbia and Toronto,
Ontario, or at such other place or places, if any, as may be
designated by the Corporation with the approval of the Trustee,
on surrender to the Trustee of the Warrant Certificate duly
endorsed by, or accompanied by, a written instrument of transfer
in form satisfactory to the Trustee executed by the registered
holder or his executors, administrators, or other legal
representative or his or their attorney duly appointed by
instrument in writing in form and execution satisfactory to the
Trustee or other registrar upon compliance with such reasonable
requirements as the Trustee may prescribe, nor unless such
transfer will have been noted on the Special Warrant register by
the Trustee or other registrar.
(c) The Special Warrants may not be offered, sold or transferred in
the United States or to or from the account or benefit of a
person in the United States unless an exemption from registration
under the U.S. Securities Act and applicable state securities
laws is available and the Warrantholder has presented to the
Corporation evidence of the availability of the exemption
satisfactory to the Corporation.
(d) The registers referred to in subsection 2.11(a) hereof will,
during business hours, be open to the inspection of the
Corporation and any person designated by it in writing and any
Warrantholder free of charge. In addition, every registrar will
from time to time when requested to do so by the Corporation or
by the Trustee furnish the Corporation or the Trustee with a list
of the names and addresses of the Warrantholders whose Special
Warrants are listed on the register kept by such registrar and
showing the number of Special Warrants registered in the name of
each such holder.
2.12 Legend Requirements
The Trustee acknowledges that the Special Warrants, Common Shares and
Warrants have not been registered under the U.S. Securities Act. Each Special
Warrant originally issued to a person in the United States or transferred to a
person in the United States and all certificates representing Common Shares and
Warrants issued upon the exercise of such Special Warrants in accordance with
Article 3 hereof (and each Special Warrant certificate, Common Share certificate
or Warrant certificate issued in exchange therefor or in substitution on
transfer thereof) shall be overprinted with the following legend:
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
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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
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 Corporation 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 Corporation and the Warrant Agency for the Warrants, in such form as the
Corporation may prescribe from time to time, it being understood that the
Corporation 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
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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."
2.13 Certain Transfers
(a) If the Warrant Certificates tendered for transfer bears the
legend set forth in Section 2.12 hereof the Trustee shall not
issue or register a Warrant Certificate for the Special Warrants
represented thereby in the name of or for the benefit of a person
outside the United States until the Trustee receives the
declaration referred to in Section 2.12.
(b) If the transferee of a Special Warrant is in the United States,
the Warrant Certificate issued to such transferee shall be
overprinted with the legend set forth in Section 2.12, and the
requirement of Section 2.12 related to legending the Common
Shares and Warrants upon exercise of the Special Warrants shall
also apply, unless the Corporation receives an opinion of counsel
in form and substance satisfactory to it that no legend is
required.
ARTICLE 3 EXERCISE OF
SPECIAL WARRANTS
3.1 Notice of Compliance or Non Compliance
Upon occurrence of the Qualification Date and the Shareholder Approval
Date prior to the Retraction Time, the Corporation shall forthwith, and in any
event not later than the first business day thereafter, give a Notice of
Compliance to the Trustee. In the event that either of the Qualification Date or
the Shareholder Approval Date has not occurred prior to the Retraction Time, the
Corporation shall forthwith, and in any event not later than the first business
day thereafter, give a Notice of Non-Compliance to the Trustee.
3.2 Notice of Qualification Date
Upon receipt by the Trustee of a Notice of Compliance, the Trustee
shall forthwith give notice to the Warrantholders specifying that the
Qualification Date has occurred prior to the Retraction Time and specifying the
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remainder of the Exercise Period. If the Trustee has received a Notice of
Non-Compliance, the Trustee shall forthwith, and in any event not later than the
first business day thereafter, give notice to the Warrantholders specifying that
the Qualification Date and/or the Shareholder Approval Date has not occurred
prior to the Retraction Time and that the Warrantholders are entitled pursuant
to Section 3.6 to surrender their Warrant Certificates to the Trustee and obtain
repayment of the Special Warrant Purchase Price per Special Warrant for the
Special Warrants represented by their Warrant Certificate surrendered to the
Trustee together with interest earned thereon less any withholding tax by way of
repurchase of such Special Warrants and receive a Warrant Certificate
representing the balance of the Special Warrants represented by their Warrant
Certificate which were not so repurchased and, in addition, the Trustee shall
specify the Retraction Expiry Time.
3.3 Right to Exercise
Upon and subject to the provisions and conditions of this Article, the
holder of a Special Warrant may, at his option, at any time and from time to
time after the Shareholder Approval Date and up to the Time of Expiry, exercise
the right to acquire one Common Share and one Warrant for each Special Warrant
held (subject to adjustment as provided in Article 4) without payment of any
consideration by completing the Notice of Exercise attached to the Certificate
and delivering it and the Certificate to the Trustee at its principal office in
the city of Vancouver, British Columbia or Toronto, Ontario, or at any other
place or places that may be designated by the Corporation with the approval of
the Trustee.
3.4 Deemed Exercise
Any Special Warrant not exercised pursuant to subsection 3.3 prior to
the Time of Expiry will be deemed to have been exercised by the holder thereof
and surrendered (without any further action on the part of the holder or the
Corporation) immediately prior to the Time of Expiry, provided that if the
Shareholder Approval Date has not occurred prior to the Time of Expiry any
Special Warrants then outstanding will be deemed to have been retracted without
any further action on the part of the holder or the Corporation, whereupon the
holders will be entitled to receive by the fifth Business Day following the Time
of Expiry an amount equal to the Special Warrant Purchase Price for each Special
Warrant so retracted together with interest earned thereon in accordance with
Section 6.4 hereof from the date hereof to and including the Time of Expiry;.
3.5 Exercise after Non-Compliance
If the Qualification Date does not occur prior to the Retraction Time,
but the Shareholder Approval Date has occurred, the holder of Special Warrants
may nevertheless exercise his Special Warrants not otherwise surrendered for
retraction during the remainder of the Exercise Period. Any such exercise, or
any deemed exercise pursuant to Section 3.4 hereof, shall be subject to the
holder providing such assurances and executing such documents as may, in the
reasonable opinion of the Corporation or the Trustee, be required to ensure
compliance with applicable Securities Laws.
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3.6 Repayment after Non-Compliance
If the Qualification Date and/or the Shareholder Approval Date does
not occur prior to the Retraction Time, a holder of Special Warrants may, during
the period commencing on the first Business Day after the Retraction Date and
ending at the Retraction Expiry Time, elect to exercise, in whole or in part,
his Retraction Right. Such election may only be made by the holder surrendering
the Warrant Certificate representing his Special Warrants, with Part B of the
Notice of Exercise attached thereto having been completed and executed by the
holder, to the Trustee at its principal office in the city of Vancouver, British
Columbia or Toronto, Ontario or at any other place or places that may be
designated by the Corporation with the approval of the Trustee, whereupon the
holder will be entitled to receive, by the fifth Business Day following the
Retraction Expiry Time, an amount equal to the Special Warrant Purchase Price
for that number of the Special Warrants represented by the holder's Warrant
Certificate so surrendered for repurchase together with interest earned thereon
in accordance with Section 6.4 hereof from the date hereof to and including the
Retraction Expiry Time and to have a new Warrant Certificate issued representing
the balance of the Special Warrants of the holder. Warrant Certificates shall
only be deemed to have been surrendered for repurchase upon personal delivery
thereof to or, if sent by mail or other means of transmission, upon actual
receipt by the Trustee at one of the offices specified in this Section.
3.7 Effect of Exercise or Deemed Exercise of Special Warrants
(a) Upon the exercise or deemed exercise of the Special Warrants
pursuant to the provisions of Sections 3.3 or 3.4 hereof,
respectively, the Common Shares and Warrants thereby issuable
shall be deemed to have been issued and the Warrant Certificates
cancelled and the person or persons to whom such securities are
to be issued shall be deemed to have become the holder of record
of such Common Shares and Warrants on the Exercise Date unless
the registers of the Corporation shall be closed on such date, in
which case the Common Shares and Warrants 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 and Warrants on
the date on which such registers are reopened.
(b) As promptly as possible after the Exercise Date of a Special
Warrant as aforesaid, the Corporation shall cause to be delivered
to the person or persons in whose name or names the Common Shares
and Warrants have been issued at the address specified in the
register maintained by the Trustee or, if otherwise specified in
writing, cause to be delivered to such person or persons at the
Warrant Agency, certificates for the appropriate number of Common
Shares and Warrants so issued and shall, if applicable, deliver
to the Warrantholder a Warrant Certificate or Warrant
Certificates representing the balance of the Special Warrants
remaining after such partial exercise.
3.8 Securities Restrictions
(a) Notwithstanding anything herein contained, Common Shares and
Warrants will only be issued upon exercise of the Special
Warrants in compliance with the Securities Laws of any applicable
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jurisdiction, and without limiting the generality of the
foregoing, in the event that the Special Warrants are exercised
pursuant to Section 3.3 or deemed to have been exercised pursuant
to Section 3.4 prior to the issuance of a receipt for the
Prospectus by each of the Securities Commissions, the
certificates representing the Common Shares and Warrants thereby
issued will bear such legend as may, in the opinion of Counsel to
the Corporation, acting reasonably, be necessary in order to
avoid a violation of any Securities Laws of any province in
Canada, the United States or any other jurisdiction or to comply
with the requirements of any stock exchange on which the Common
Shares and Warrants are listed, provided that if, at any time, in
the opinion of Counsel to the Corporation, such legends are no
longer necessary in order to avoid a violation of any such laws,
or the holder of any such legended certificate, at the holder's
expense, provides the Corporation with evidence satisfactory in
form and substance to the Corporation, acting reasonably, (which
may include an opinion of counsel satisfactory to the
Corporation), to the effect that such holder is entitled to sell
or otherwise transfer such Common Shares and Warrants in a
transaction in which such legends are not required, such legended
certificate may thereafter be surrendered to the Corporation in
exchange for a certificate which does not bear such legend.
(b) Special Warrants may not be exercised in the United States or by
or on behalf of a person in the United States, nor will
certificates for Common Shares and Warrants issuable upon
exercise of Special Warrants be registered or delivered to an
address in the United States without registration under the U.S.
Securities Act and the securities laws of all applicable states,
unless an exemption from registration is available. The
Corporation may, at its option, require an opinion of counsel or
other evidence in form and substance satisfactory to the
Corporation, acting reasonably, as to the availability of the
exemption.
ARTICLE 4
ADJUSTMENT OF NUMBER OF COMMON SHARES AND WARRANTS
4.1 Adjustment of Number of Common Shares and Warrants
The acquisition rights in effect at any date attaching to the Special
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 Corporation shall:
(i) subdivide, redivide or change its outstanding Common Shares
into a greater number of shares;
(ii) reduce, combine or consolidate its outstanding Common Shares
into a smaller number of shares, or
(iii)issue Common Shares or securities exchangeable or
convertible to Common Shares ("Convertible Securities") to
the holders of all or substantially all of the outstanding
Common Shares by way of a stock dividend or other
distribution;
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the number of Common Shares and Warrants obtainable under each
Special Warrant shall each be adjusted immediately after the
effective date of the events referred to in (i) and (ii) above or
the record date for the issue of the Common Shares of the
Convertible Securities referred to in (iii) above by multiplying
the number of Common Shares and Warrants theretofore obtainable
on the exercise of the Special Warrants by a fraction of which
the numerator shall be the total number of Common Shares
outstanding immediately after such date or, in the case of the
issue of convertible securities the total number of Common Shares
outstanding immediately after such date plus the total number of
Common Shares issuable upon conversion or exchange of such
convertible securities 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 and any issue of
Common Shares or convertible securities by way of a stock
dividend is deemed to have occurred on the record date for such
dividend for the purpose of calculating the number of outstanding
common shares under this subsection;
(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 Corporation
other than as described in subsection 4.1(a) or a consolidation,
arrangement, amalgamation or merger of the Corporation with or
into any other body corporate, trust, partnership or other
entity, or a sale or conveyance of the property and assets of the
Corporation 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, in lieu of the number of Common Shares and
Warrants then sought to be acquired by him, the number of shares
or other securities or property of the Corporation 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 and Warrants receivable
upon the exercise of Special 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 Corporation, 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
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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 Corporation 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 9 hereof. Any indenture
entered into between the Corporation, any successor to the
Corporation 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;
(c) if and whenever at any time from the date hereof and prior to the
Time of Expiry, the Corporation shall fix a record date for the
issuance of rights, options or warrants to all or substantially
all the holders of the Common Shares pursuant to which those
holders are entitled to subscribe for, purchase or otherwise
acquire Common Shares or securities converted into Common Shares
(the "Convertible Securities") within a period of not more than
45 days from such record date at a price per share, or at a
conversion price per share, of less than 95% of the Current
Market Price on such record date (any such issuance being herein
called a "Rights Offering" and Common Shares that may be acquired
in exercise of the Rights Offering, or upon conversion of the
Convertible Securities offered by the Rights Offering, being
herein called the "Offered Shares"), the number of Common Shares
and Warrants obtainable under each Special Warrant shall be
adjusted effective immediately after the applicable record date
by multiplying the number of Common Shares and Warrants
theretofore obtainable on the exercise of the Special Warrants by
a fraction:
(i) the numerator of which shall be the sum of (a) the number of
Common Shares Shares outstanding on the record date plus (b)
the number of Offered Shares offered pursuant to the Rights
Offering or the maximum number of Offered Shares into which
the Convertible Securities so offered pursuant to the Rights
Offering may be; and
(ii) the denominator of which shall be the sum of:
A. the number of Common Shares outstanding on the record
date; and
B. the number arrived at when (I) either the product of
(a) the number of Offered Shares so offered and (b) the
price at which those shares are offered, or the product
of (c) the conversion price thereof and (d) the number
of Offered Shares for or into which the Convertible
Securities so offered pursuant to the Rights Offering
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may be converted, as the case may be, is divided by
(II) the Current Market Price of the Shares on the
record date.
Any Offered Shares owned by or held for the account of the
Company or a subsidiary of the Company shall be deemed not to be
outstanding for the purpose of any such computation; if all the
rights, options or warrants are not so issued or if all rights,
options or warrants are not exercised prior to the expiration
thereof, the number of Common Shares and Warrants obtainable
under each Special Warrant shall be readjusted to the number of
Common Shares and Warrants obtainable under each Special Warrant
in effect immediately prior to the record date, and the number of
Common Shares and Warrants obtainable under each Special Warrant
shall be further adjusted based upon the number of Offered Shares
(or Convertible Securities that are convertible into Offered
Shares) actually delivered upon the exercise of the rights,
options or warrants, as the case may be, but subject to any other
adjustment required hereunder by reason of any event arising
after that record date;
(d) 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 Corporation may defer, until
the occurrence of such event, issuing to the holder of any
Special Warrant exercised after such record date and before the
occurrence of such event the additional Common Shares and
Warrants issuable upon such exercise by reason of the adjustment
required by such event before giving effect to such adjustment;
provided, however, that the Corporation shall deliver to such
holder an appropriate instrument evidencing such holder's right
to receive such additional Common Shares and Warrants upon the
occurrence of the event requiring such adjustment and the right
to receive any distributions made on such additional Common
Shares and Warrants which may be acquired upon the exercise of
Special Warrants declared in favour of holders of record of
Common Shares and Warrants on and after the Exercise Date or such
later date as such holder would, but for the provisions of this
subsection (d), have become the holder of record of such
additional Common Shares and Warrants pursuant to Section 4.1;
and
(e) the adjustments provided for in this Article 4 in the number of
Common Shares and Warrants and classes of securities which are to
be received on the exercise of Special Warrants, are cumulative.
After any adjustment pursuant to this Section 4.1, the terms
"Common Shares" and "Warrants" 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 Special Warrant, and the number of
Common Shares and Warrants indicated by any exercise made
pursuant to a Special Warrant shall be interpreted to mean the
number of Common Shares and Warrants 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 Special Warrant.
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4.2 Entitlement to Common Shares and Warrants on Exercise of Special
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 Special
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 Special Warrant.
4.3 Determination by Corporation'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 Corporation's auditors who shall have access to all necessary records of the
Corporation, and such determination shall be binding upon the Corporation, the
Trustee, all Warrantholders and all other persons interested therein.
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
Special Warrants, including the number of Common Shares and Warrants which are
to be received upon the exercise thereof, the Corporation shall take any
corporate action which may, in the opinion of counsel, be necessary in order
that the Corporation 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 Special Warrants are entitled to receive on the full
exercise thereof in accordance with the provisions hereof.
4.5 Additional Adjustments
If and whenever at anytime during the Exercise Period, the Corporation
shall take any action affecting or relating to the Common Shares or Warrants,
other than any action described in this Article, which in the opinion of the
directors, acting reasonably and in good faith, would prejudicially affect the
rights of any Warrantholders, the acquisition rights in effect at any date
attaching to the Special Warrants will be adjusted by the directors in such
manner, if any, and at such time, as the directors may, acting reasonably and in
good faith, determine to be equitable in the circumstances to such
Warrantholders.
4.6 Certificate of Adjustment
The Corporation 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 Corporation 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.
4.7 Protection of Trustee
The Trustee:
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(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 and Warrants 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 Special Warrant;
(c) shall not be responsible for any failure of the Corporation to
issue, transfer or deliver Common Shares and Warrants or
certificates for the same upon the surrender of any Special
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 Corporation of any of the representations, warranties
or covenants herein contained or of any acts of the agents or
servants of the Corporation.
ARTICLE 5
RIGHTS OF THE CORPORATION AND COVENANTS
5.1 General Covenants
The Corporation covenants with the Trustee that so long as any Special
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 Special Warrants
and the Warrants.
(b) it will cause the Common Shares and the Warrants and the
certificates representing the same from time to time acquired
pursuant to the exercise of the Special 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 and in the Warrants 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;
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(e) it will use its best efforts to ensure that all Common Shares of
the Corporation outstanding or issuable from time to time
continue to be listed on the Toronto Stock Exchange, NASDAQ
National Market and such other exchange or electronic trading
facility satisfactory to the directors of the Corporation;
(f) it will make all requisite filings under applicable securities
legislation including those necessary to remain a reporting
issuer not in default in the Provinces of British Columbia and
Ontario until fifteen business days following the earlier of the
Qualification Date and the Retraction Date and, if the
Qualification Date has not occurred by the Retraction Date, it
will use its reasonable best efforts to maintain that status for
a period of one year from the date hereof;
(g) it will as soon as practicable file with and use its reasonable
commercial efforts to obtain a Receipt on or before 120 days
after the Closing Date from or on behalf of each of the
Securities Commissions for the Prospectus so that the resale of
Common Shares and Warrants issuable upon exercise of the Special
Warrants and the Common Shares issuable upon exercise of the
Warrants will not be subject to the prospectus requirements nor
any "hold period" under applicable securities legislation in such
Filing Jurisdictions (except that it is not required to take such
steps solely to enable a resale of Common Shares and Warrants
from the holdings of a "control person", as defined in applicable
securities laws, if a "hold period" would otherwise be
applicable);
(h) it will send written notice to the Trustee and to each holder of
Special Warrants of the issuance of the Receipts referred to in
subsection 5.1(g), together with a copy of the Prospectus,
specifying the date on which the Special Warrants expire and, in
the case of the Trustee, copies of the receipts, as soon as
practicable but, in any event, not later than two Business Days
after the latest date on which such a receipt is issued by or on
behalf of any of the Securities Commissions, such notice to be
sent by mail to the addresses of such holders appearing in the
register of the Warrantholders maintained by the Trustee;
(i) if the Corporation pays a dividend or makes any other
distribution in cash or property or securities of the Corporation
(including rights, options or warrants to acquire Common Shares
or securities convertible into or exchangeable for Common Shares
and including evidences of its indebtedness) to Shareholders
prior to the Expiry Date, the Corporation agrees that it will pay
the same amount of such dividend or make the same distribution to
the Warrantholders, as if they were holders of such number of
Common Shares which such Warrantholders are entitled to acquire
upon the exercise of the Special Warrants. The Corporation will
mail a notice to each holder of Special Warrants specifying the
particulars of such payment or distribution within two (2)
Business Days of such payment or distribution;
(j) if the Corporation shall not have received a receipt for the
Prospectus on or before 120 days after the Closing Date, the
Corporation will continue, until such time as the Common Shares
and Warrants issuable upon the exercise or deemed exercise of the
Special Warrants are not subject to a statutory "hold period"
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under applicable securities laws in the Filing Jurisdictions, to
use its reasonable commercial efforts to obtain a Receipt for the
Prospectus from each of the Securities Commissions;
(k) it will provide to Warrantholders copies of all documentation
required to be provided by applicable law to registered holders
of Common Shares, as if such Warrantholders were registered
shareholders of the Corporation; and
(l) 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.
5.2 Trustee's Remuneration and Expenses
The Corporation 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 from the negligence or
bad faith of the Trustee.
5.3 Performance of Covenants by Trustee
If the Corporation 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 Corporation or may itself perform any of the
said covenants capable of being performed by it, but shall be under no
obligation to perform said covenants or to notify the Warrantholders of such
performance or non-performance by it. All sums expended or advanced by the
Trustee in so doing shall be repayable as provided in Section 5.2. No such
performance, expenditure or advance by the Trustee shall relieve the Corporation
of any default hereunder or of its continuing obligations under the covenants
herein contained.
ARTICLE 6
ESCROW OF RESTRICTED PROCEEDS
6.1 Deposit of Restricted Proceeds in Escrow
The Corporation agrees to cause to be deposited on its behalf, the
Restricted Proceeds in escrow with the Trustee and hereby irrevocably authorizes
and instructs the Trustee to retain the Restricted Proceeds in trust for the
benefit of the Corporation and the Warrantholders upon and subject to the
following irrevocable authorizations and instructions to deal with the
Restricted Proceeds in accordance with the provisions of this Article.
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6.2 Investment of Funds
The Restricted Proceeds deposited with the Trustee hereunder, pending
any release or application thereof as required in accordance with the provisions
of this Article, shall be held in the Trustee's trust account or invested by the
Trustee in its name in Permitted Investments in accordance with any directions
of the Corporation from time to time given to the Trustee or, in the absence of
any such directions, shall be invested by the Trustee in its name in accordance
with Section 10.4.
6.3 Release of Funds to the Corporation
If the Trustee has received from the Corporation a Notice of
Compliance prior to the Retraction Time, the Trustee shall pay to the
Corporation forthwith and in any event not later than five Business Days after
receipt of a Notice of Compliance an amount equal to the Restricted Proceeds and
all interest earned thereon while the monies were held by the Trustee less any
amounts paid or to be paid to the Trustee in accordance with Section 5.2.
6.4 Surrender of Special Warrants for Repayment
If the Trustee has received from the Corporation a Notice of
Non-Compliance, the Trustee shall forthwith, and in any event not later than
five Business Days following the Retraction Expiry Time, pay:
(a) to Warrantholders who have elected in accordance with Section 3.6
hereof to require the Corporation to repurchase the Special
Warrants represented by each Warrant Certificate the aggregate
Warrant Purchase Price for those Special Warrants as are required
to be repurchased together with their proportionate share of the
interest earned thereon less any withholding tax; and
(b) to the Corporation an amount equal to the Restricted Proceeds
together with all interest earned thereon while the monies were
held by the Trustee less the aggregate amounts paid to the
Warrantholders pursuant to subsection 6.4(a) above and less any
amounts paid or to be paid to the Trustee under Section 5.2
hereof less any withholding tax.
6.5 Deemed Surrender of Special Warrants for Repayment
If the Trustee has not received a Notice of Shareholder Approval prior
to the Time of Expiry, the Trustee shall forthwith, and in any event not later
than five Business Days following the Expiry Time, pay to Warrantholders in
respect of any Special Warrant then outstanding the aggregate Warrant Purchase
Price for their Special Warrants together with their proportionate shares of the
interest earned thereon less any withholding tax proved that no such payment
shall be made to the Corporation unless and until the Trustee has received a
Notice of Shareholder Approval.
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6.6 Method of Repayment
No later than the fifth Business Day after the Retraction Expiry Time,
the Trustee will mail to each Warrantholder who has elected in accordance with
Section 3.6 hereof to require the Corporation to repurchase the Special Warrants
represented by each Warrant Certificate the holder of such Special Warrant, or
to such person as such holder may otherwise specify by written notice given to
the Trustee prior to such mailing, at the address of such holder or, if so
specified, of such person, or, if specified by written notice given to the
Trustee prior to such mailing, will deliver to such holder or person at the
place where such Warrant Certificate was surrendered, a cheque made payable to
the order of such holder or, if so specified, such person in the applicable
amount as determined in accordance with Section 6.4, whichever is applicable,
plus an amount (less any tax required to be withheld therefrom) equal to the pro
rata portion of the interest earned on the Restricted Proceeds with respect to
such Special Warrants as were repurchased from the date hereof to the Retraction
Expiry Date. Any payment made in accordance with the provisions of this section
shall, to the extent of the sum represented thereby (plus the amount of any tax
so withheld), satisfy and discharge all liability of the Corporation with
respect to such payment, unless such cheque is not paid at par on presentation.
In the event of non-receipt of any such cheque by the person to whom it is so
sent as aforesaid, or the loss or destruction thereof, the Trustee will issue to
such person a replacement cheque for a like amount upon being furnished with
such evidence of non-receipt, loss or destruction and with such indemnity as the
Trustee may reasonably require.
ARTICLE 7
ENFORCEMENT
7.1 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.
7.2 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 Corporation or any successor corporation
or any of the past, present or future officers, employees or agents of the
Corporation or any successor corporation, but only the property of the
Corporation or any successor corporation shall be bound in respect hereof.
7.3 Waiver of Default
Upon the happening of any default hereunder:
(a) the holders of not less than 75% of the Special Warrants then
outstanding shall have power (in addition to the powers
exercisable by extraordinary resolution as provided in Section
8.10) by requisition in writing to instruct the Trustee to waive
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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 8
MEETINGS OF WARRANTHOLDERS
8.1 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 Corporation or of a Warrantholders' Request
and upon being indemnified and funded to its reasonable satisfaction by the
Corporation 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 Corporation or such Warrantholders' Request and
indemnity and funding given as aforesaid, the Corporation or such
Warrantholders, as the case may be, may convene such meeting. Every such meeting
shall be held in the City of Vancouver, British Columbia or at such other place
as may be approved or determined by the Trustee.
8.2 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 Corporation
(unless the meeting has been called by the Corporation). 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 8.
8.3 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.
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8.4 Quorum
Subject to the provisions of Section 8.11, 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 Special
Warrants. 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 Special Warrants.
8.5 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.
8.6 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.
8.7 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 Special 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
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appointed by instrument in writing shall be entitled to one vote in respect of
each whole Common Share which he is entitled to acquire pursuant to the Special
Warrant or Special Warrants then held or represented by him. 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 Special Warrants, if any, held
or represented by him.
8.8 Regulations
The Trustee, or the Corporation 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;
(c) the deposit of voting certificates and instruments appointing
proxies at such place and time as the Trustee, the Corporation 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, cabled, telegraphed
or sent by other means of electronic transmission before the
meeting to the Corporation 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 8.9), shall be Warrantholders or their
counsel, or proxies of Warrantholders.
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8.9 Corporation and Trustee may be Represented
The Corporation and the Trustee, by their respective directors and
officers, and the counsel for the Corporation 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.
8.10 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 8.11, 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 Corporation 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 Corporation 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;
(d) to waive, and to direct the Trustee to waive, any default on the
part of the Corporation 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 Corporation for the
enforcement of any of the covenants on the part of the
Corporation in this Indenture or the Warrant Certificates or to
enforce any of the rights of the Warrantholders.
(f) except as contemplated in subsection 8.10(e) above, 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 Corporation, and to authorize the Trustee to concur in and
execute any ancillary or supplemental indenture embodying the
change or omission;
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(h) with the consent of the Corporation, 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 Corporation.
8.11 Meaning of Extraordinary Resolution
(a) The expression "extraordinary resolution" when used in this
Indenture means, subject as hereinafter provided in this Section
8.11 and in Section 8.14, a resolution proposed at a meeting of
Warrantholders duly convened for that purpose and held in
accordance with the provisions of this Article 8 at which there
are present in person or by proxy Warrantholders entitled to
acquire at least 51% of the aggregate number of Common Shares
which may be acquired pursuant to all the then outstanding
Special 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 Special 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 51% of the aggregate number of Common Shares which may be
acquired pursuant to all the then outstanding Special 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
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 days' prior notice shall be given of the time and place
of such adjourned meeting in the manner provided for in Section
11.2. 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 8.11(a) shall be an
extraordinary resolution within the meaning of this Indenture
notwithstanding that Warrantholders entitled to acquire at least
51% of the aggregate number of Common Shares which may be
acquired pursuant to all the then outstanding Special 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.
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8.12 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.
8.13 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 Corporation, 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.
8.14 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 8 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 Special 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, and the expression
"extraordinary resolution" when used in this Indenture shall include an
instrument so signed.
8.15 Binding Effect of Resolutions
Every resolution and every extraordinary resolution passed in
accordance with the provisions of this Article 8 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 8.14 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.
8.16 Holdings by Corporation 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, Special Warrants
owned legally or beneficially by the Corporation or any subsidiary of the
Corporation shall be disregarded in accordance with the provisions of Section
11.7.
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ARTICLE 9
SUPPLEMENTAL INDENTURES
9.1 Provision for Supplemental Indentures for Certain Purposes
From time to time the Corporation (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 8;
(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 Special 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;
(e) adding to or altering the provisions hereof in respect of the
transfer of Special 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 Corporation 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 or any deed or indenture
supplemental or ancillary hereto, 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.
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9.2 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.
9.3 Successor Corporations
In the case of the consolidation, amalgamation, merger or transfer of
the undertaking or assets of the Corporation 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 Corporation) shall expressly assume, by supplemental indenture
satisfactory in form to the Trustee and executed and delivered by the successor
corporation 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 Corporation.
ARTICLE 10
CONCERNING THE TRUSTEE
10.1 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.
(b) The Corporation 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.
10.2 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
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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 and funded 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 Special Warrants held by them, for which Special
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 10.2 and of Section 10.3.
10.3 Evidence, Experts and Advisers
(a) In addition to the reports, certificates, opinions and other
evidence required by this Indenture, the Corporation 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 Corporation.
(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 Corporation, certificates of the
Corporation 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 Applicable Legislation 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 Corporation 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
Corporation 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.
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10.4 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 or trust accounts of the Trustee or of any Canadian Schedule
"A" 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 Schedule "A" chartered bank at the rate
of interest (if any) then current on similar deposits or, with the consent of
the Corporation, may be 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 Schedule "A"
chartered bank. Unless the Corporation 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 Corporation.
10.5 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.
10.6 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.
10.7 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 10.9 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
Corporation;
(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;
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(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 Corporation of any of the covenants
herein contained or of any acts of any directors, officers,
employees, agents or servants of the Corporation; and
(e) the 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 Corporation
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 Corporation
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.
10.8 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
10.8, by giving to the Corporation not less than 90 days' prior
notice in writing or such shorter prior notice as the Corporation
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 of acting hereunder, the Corporation shall forthwith
appoint a new trustee unless a new trustee has already been
appointed by the Warrantholders; failing such appointment by the
Corporation, the retiring Trustee or any Warrantholder may apply
to a justice of the Supreme Court of the Province of British
Columbia, on such notice as such justice may direct, for the
appointment of a new trustee; but any new trustee so appointed by
the Corporation or by the Court shall be subject to removal as
aforesaid by the Warrantholders. Any new trustee appointed under
any provision of this Section 10.8 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 Corporation
shall promptly notify the Warrantholders thereof in the manner
provided for in Article 11 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 10.8(a).
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(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.
10.9 Conflict of Interest
(a) The Trustee represents to the Corporation 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 Corporation and meeting
the requirements set forth in subsection 10.8(a). Notwithstanding
the foregoing provisions of this subsection 10.9(a), if any such
material conflict of interest exists 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 10.9(a), the Trustee, in its personal or
any other capacity, may buy, lend upon and deal in securities of
the Corporation and generally may contract and enter into
financial transactions with the Corporation or any subsidiary of
the Corporation without being liable to account for any profit
made thereby.
10.10 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 and agrees to hold all rights, interests and benefits contained herein
for and on behalf of those persons who become holders of Special Warrants from
time to time issued pursuant to this Indenture.
10.11 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 Corporation.
10.12 Indemnification
Without limiting any protection or indemnity of the Trustee under any
other provision hereof, or otherwise at law, the Corporation 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,
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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 Corporation shall,
so often as required, furnish the Trustee with satisfactory indemnity and
funding against such expense or liability.
ARTICLE 11
GENERAL
11.1 Notice to the Corporation and the Trustee
(a) Unless herein otherwise expressly provided, any notice to be
given hereunder to the Corporation or the Trustee shall be deemed
to be validly given if delivered or if sent by registered letter,
postage prepaid:
if to the Corporation:
Spectrum Signal Processing Inc.
000 - 0000 Xxxxxxxxxx Xxx
Xxxxxxx, X.X.
X0X 0X0
Attention: Xxxxxx Xxxxxxxxxx
if to the Trustee:
Montreal Trust Company of Canada
0xx Xxxxx, 000 Xxxxxxx Xxxxxx,
Xxxxxxxxx, Xxxxxxx Xxxxxxxx,
X0X 0X0
Attention: Corporate Trust Department
and any such notice delivered in accordance with the foregoing shall be deemed
to have been received on the date of delivery or, if mailed, on the fifth
Business Day following the date of the postmark on such notice.
(b) The Corporation or the Trustee, as the case may be, may from time
to time notify the other in the manner provided in subsection
11.1(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 Corporation 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 11.1(b) shall be
sent to the Warrant Agency, where it shall be available for
inspection by Warrantholders during normal business hours.
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(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 Corporation 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 11.1(a), by cable, telegram, telex or other means of
prepaid, transmitted and recorded communication.
11.2 Notice to Warrantholders
(a) Any notice to the Warrantholders under the provisions of this
Indenture shall be valid and effective if sent by telegram, telex
or telecopier or 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 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 Special Warrants
maintained by the Trustee, by cable, telegram, telex or other
means of prepaid, transmitted and recorded communication.
11.3 Ownership of Special Warrants
The Corporation and the Trustee may deem and treat the registered
owner of any Warrant Certificate as the absolute owner of the Special Warrant
represented thereby for all purposes, and the Corporation and the Trustee shall
not be affected by any notice or knowledge to the contrary except where the
Corporation 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 Corporation 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 and Warrants which may be
acquired pursuant thereto shall be a good discharge to the Corporation and the
Trustee for the same and neither the Corporation nor the Trustee shall be bound
to inquire into the title of any such holder except where the Corporation or the
Trustee is required to take notice by statute or by order of a court of
competent jurisdiction.
11.4 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.
11.5 Satisfaction and Discharge of Indenture
On the earlier of:
(a) the date by which there has been delivered to the Trustee for
exercise, surrender for cancellation or destruction all Special
Warrant Certificates theretofore certified hereunder; or
(b) the Time of Expiry;
and if all certificates representing the Common Shares and Warrants to be issued
in compliance with the provisions hereof have been issued and delivered
hereunder or to the Trustee in accordance with such provisions and all other
obligations of the Corporation to the Warrantholders in connection with the
exercise or deemed exercise of the Special Warrants have bee satisfied, this
Indenture will cease to be of further effect and, on demand of and at the cost
and expense of the Corporation and on delivery to the Trustee of a certificate
of the Corporation stating that all conditions precedent to the satisfaction and
discharge of this Indenture have been complied with and on payment to the
Trustee of the fees, expenses and any other amount whatsoever and other
remuneration payable to the Trustee hereunder, the Trustee will execute proper
instruments acknowledging satisfaction of and discharging this Indenture.
11.6 Provisions of Indentures and Special 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.
11.7 Special Warrants Owned by the Corporation or its Subsidiaries -
Certificate to be Provided
For the purpose of disregarding any Special Warrants owned legally or
beneficially by the Corporation or any subsidiary of the Corporation in Section
8.16, the Corporation shall provide to the Trustee, from time to time, a
certificate of the Corporation setting forth as at the date of such certificate:
(a) the names (other than the name of the Corporation) of the
registered holders of Special Warrants which, to the knowledge of
the Corporation, are owned by or held for the account of the
Corporation or any Subsidiary of the Corporation; and
(b) the number of Special Warrants owned legally or beneficially by
the Corporation or any subsidiary of the Corporation;
and the Trustee, in making the computations in Section 8.16, shall be entitled
to rely on such certificate without more.
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11. Further Assurance
11.1 The parties will execute and deliver all such further documents, do or
cause to be done all such further acts and things, and give all such further
assurances as may be necessary to give full effect to the provisions and intent
of this agreement.
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
SCHEDULE "A"
TO A SPECIAL WARRANT
INDENTURE MADE AS OF SEPTEMBER 12, 2000 BETWEEN
SPECTRUM SIGNAL PROCESSING INC.
AND MONTREAL TRUST COMPANY OF CANADA, AS TRUSTEE
THE SPECIAL WARRANTS REPRESENTED BY THIS CERTIFICATE WILL BE VOID AND OF NO
VALUE UPON EXERCISE PURSUANT TO THE SPECIAL WARRANT INDENTURE MADE AS OF
SEPTEMBER ___, 2000.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A HOLD PERIOD
EXPIRING SEPTEMBER 12, 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.
SPECIAL WARRANT
SEPTEMBER 12, 2000
SPECTRUM SIGNAL PROCESSING INC.
(Incorporated under the laws of the Province of British Columbia)
000 - 0000 Xxxxxxxxxx Xxx
Xxxxxxx, X.X.
X0X 0X0
SPECIAL WARRANT _______ SPECIAL WARRANTS each 1 special
CERTIFICATE NO. __________ warrant entitling the holder to acquire
1 Common Share and 1 Warrant
THIS IS TO CERTIFY THAT _____________________ (herein called the
"holder"), of __________________________________, is entitled to acquire in the
manner herein provided, subject to the restrictions herein contained, on the
Exercise Date, the number of fully paid and non-assessable common shares
("Common Shares") and Warrants without nominal or par value of SPECTRUM SIGNAL
PROCESSING INC. ("the Corporation") as set forth above.
The Special Warrants represented by this Warrant Certificate are
issued under and pursuant to a special warrant indenture (herein called the
"Indenture") made as of September 12, 2000 between the Corporation and Montreal
Trust Company of Canada (the "Trustee") to which Indenture and any instruments
supplemental thereto reference is hereby made for a full description of the
rights of the holders of the Special Warrants and the terms and conditions upon
which the Special Warrants are, or are to be, issued, held, exchanged and
surrendered, 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 Special Warrants by acceptance hereof assents.
Capitalized terms used in this Warrant Certificate and not otherwise defined
shall have the meanings ascribed to them in the Indenture.
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The Exercise Period shall be the period commencing on the Shareholder
Approval Date and ending at the Time of Expiry. The Time of Expiry shall be 4:30
p.m. (Vancouver time) on the earlier of the first Business Day immediately
following the Qualification Date and September 13, 2001, provided that if the
Shareholder Approval Date has not occurred as of the Qualification Date the Time
of Expiry shall be September 13, 2001. The Indenture defines the Qualification
Date as the day a receipt is issued for a final prospectus relating to the
distribution of the Common Shares and Warrants upon the exercise or deemed
exercise of the Special Warrants by the last of the securities regulatory
authorities to do so.
The holder of the Special Warrants represented by this Warrant
Certificate may elect to exercise all or any of the Special Warrants represented
by this Warrant Certificate during the Exercise Period by:
(a) duly completing and executing the exercise form attached to and
forming part of this Warrant Certificate; and
(b) surrendering this Warrant Certificate to the Trustee at the
principal office of the Trustee in any of the cities of
Vancouver, British Columbia or Toronto, Ontario;
and shall be entitled to receive, subject to the terms of the Indenture,
certificates representing the Common Shares and Warrants issuable upon such
exercise, as promptly as possible, after the date of surrender to the Trustee of
this Warrant Certificate.
If the Qualification Date has not occurred on or before January 10,
2001, the holder of the Special Warrants represented by this Warrant Certificate
may, at any time after January 10, 2001 and prior to the Retraction Expiry Time,
elect to have repurchased all of the Special Warrants represented by this
Certificate for an amount equal to the original price of the Special Warrants so
repurchased, together with interest, as provided in the Indenture and to receive
a Warrant Certificate representing the balance of the holder's Special Warrants
by:
(a) duly completing and executing Part B of the exercise form
attached to and forming part of this Warrant Certificate; and
(b) surrendering this Warrant Certificate to the Trustee at the
principal office of the Trustee in any of the cities of
Vancouver, British Columbia or Xxxxxxx, Xxxxxxx,
and shall be entitled to receive, subject to the terms of the Indenture, such
repayment and new Warrant Certificate representing the balance of the Special
Warrants after such repayment, forthwith, and in any event not later than 5
Business Days after the Retraction Expiry Time.
The Indenture provides for adjustments to the right of subscription,
including the amount of and class and kind of securities or other property
issuable upon exercise, upon the happening of certain stated events, including
the subdivision or consolidation of the Common Shares, certain distributions of
Common Shares or securities convertible into Common Shares or of other
securities or assets of the Corporation, certain offerings of rights, warrants
or options, and certain capital reorganizations and for payment of an amount to
compensate for dividends paid on Common Shares.
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If, immediately prior to the Time of Expiry, the Special Warrants
represented by this Warrant Certificate have not been exercised, the Special
Warrants represented hereby shall at that time be deemed to have been exercised
and surrendered by the holder thereof without any further action on the part of
the holder, provided that if the Shareholder Approval Date has not occurred
prior to the Time of Expiry and the Special Warrants represented by this Warrant
Certificate have not been exercised, the Special Warrants represented hereby
shall at that time be deemed to have been retracted and surrendered by the
holder thereof without any further action on the part of the holder and the
holder shall be entitled to receive, subject to the terms of the Indenture, an
amount equal to the original price of the Special Warrants so repurchased,
together with interest, as provided in the Indenture no later than five Business
Days after the Expiry Time.
If the Special Warrants represented by this Warrant Certificate are
exercised or are deemed to be exercised by the holder, notwithstanding that the
Qualification Date has not occurred, the Corporation will be entitled to refuse,
and to direct the Trustee to refuse, to issue any Common Shares and Warrants
thereafter issuable if the issuance of such Common Shares and Warrants would
constitute a violation of the securities laws of any jurisdiction.
The holder of this Warrant Certificate may upon surrender hereof to
the Trustee at its principal transfer office in any of the cities of Vancouver,
British Columbia and Xxxxxxx, Xxxxxxx, exchange this Warrant Certificate for
other Warrant Certificates evidencing Special Warrants entitling the holder to
receive in the aggregate the same number of Common Shares and Warrants as may be
acquired pursuant to the Special Warrants evidenced by this Warrant Certificate.
The holding of the Special Warrants evidenced by this Warrant
Certificate shall not constitute the holder hereof a shareholder of the
Corporation or entitle the holder to any right or interest in respect thereof
except as herein and in the Indenture expressly provided.
The Special Warrants evidenced by this Warrant Certificate may only be
transferred in accordance with applicable securities laws, the rules of any
stock exchanges on which the Common Shares are then listed and upon executing
the transfer form appended hereto and, subject thereto, may be transferred on
the register of Special Warrants of the Corporation kept at the offices of the
Trustee by the holder hereof or his legal representative of this or their
attorney duly appointed by an instrument in writing in form and execution
satisfactory to the Trustee only upon compliance with the conditions prescribed
in the Indenture and upon compliance with such reasonable requirements as the
Trustee may prescribe.
This Warrant Certificate shall not be valid for any purpose whatsoever
unless and until it has been countersigned by or on behalf of the Trustee.
Time shall be of the essence hereof.
IN WITNESS WHEREOF the undersigned has caused this Warrant Certificate
to be duly executed as of the _____ day of September, 2000.
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SPECTRUM SIGNAL PROCESSING INC.
By:_____________________________
TRUSTEE'S CERTIFICATE
This Special Warrant is one of the Special Warrants dated September 12, 2000,
referred to in the Special Warrant Indenture within mentioned.
MONTREAL TRUST COMPANY OF CANADA
By:_____________________________
Authorized Officer
TRANSFER OF SPECIAL WARRANTS
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto______________________________________________, (Name /Address)
the Special Warrants registered in the name of the undersigned represented by
the within certificate.
DATED this _______ day of __________________, 200___.
______________________________ _____________________________
Signature Guarantee (Signature of Warrantholder)
Note The signature of the person signing this transfer must be signature
guaranteed by a Bank or Trust Company, or Medallion Guaranteed by a member
of an acceptable Medallion Guarantee Program.
EXERCISE FORM
TO SPECTRUM SIGNAL PROCESSING INC.
AND TO: MONTREAL TRUST COMPANY OF CANADA
COMPLETE PART A OR PART B* AND SIGN ON PAGE 2
*PART B MAY ONLY BE SELECTED IF THE QUALIFICATION DATE HAS NOT OCCURRED ON OR
BEFORE JANUARY 10, 2001.
PART A - The undersigned holder of Special Warrants hereby exercises in
respect of ________________ Special Warrants the right provided
for in the Special Warrants to receive ______________ Common
Shares and ______________ Warrants of Spectrum Signal
Processing Inc. issuable pursuant to the Special Warrants.
The undersigned acknowledges that the certificates representing the Common
Shares and Warrants to be issued hereunder shall bear the following legend if
issued to a person in the United States on to a U.S. Person (as those terms are
defined in Regulation S under the United States Securities Act of 1933, as
amended):
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 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
REGULATION S UNDER THE SECURITIES ACT.
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The undersigned hereby irrevocably directs that the said Common Shares and
Warrants be issued and delivered as follows:
Name(s) in Full Address(es) Number(s) of Common Shares
and Warrants
_______________________ _______________________ _______________________
_______________________ _______________________ _______________________
(Please print in full the name in which the certificates are to be issued. If
any of the securities are to be issued to a person or persons other than the
Warrantholder, the Transfer of Special Warrants should be endorsed and the
Warrantholder must pay to the Trustee all eligible transfer or taxes or other
government charges.)
PART B - REPURCHASE BY CORPORATION OF PORTION OF SPECIAL WARRANTS AND
ISSUANCE OF CERTIFICATE REPRESENTING BALANCE OF SPECIAL
WARRANTS
The undersigned holder of Special Warrants hereby exercises the right
provided for in the Special Warrants to:
(i) require the Corporation to repurchase the Special Warrants
evidenced by this Certificate; and
(ii) receive a Certificate representing the balance of the Special
Warrants evidenced by this Certificate.
The undersigned hereby elects to require the Corporation to repurchase
________________ Special Warrants and irrevocably directs that the payment for
repurchase of such Special Warrants be made payable as follows:
Name: ________________________________________________________________
Address in Full: _____________________________________________________
_____________________________________________________
Telephone No.: _____________________________________________________
The undersigned hereby irrevocably directs that the Certificate
representing the balance of the Special Warrants evidenced by this Certificate
be issued and delivered as follows:
Name(s) in Full Address(es)
____________________ _______________________________________________
____________________ _______________________________________________
____________________ _______________________________________________
(Please print in full the name in which the certificate is to be issued. If any
of the securities are to be issued to a person or persons other than the
Warrantholder, the Transfer of Special Warrants should be endorsed and the
Warrantholder must pay to the Trustee all eligible transfer or taxes or other
government charges.)
