Exhibit 99.25
INVESTOR'S RIGHTS AGREEMENT
BETWEEN
POINTS INVESTMENTS, INC.
AND
USA INTERACTIVE
AND
POINTS INTERNATIONAL LTD.
April 11, 2003
TABLE OF CONTENTS
ARTICLE I DEFINITIONS..................................................... 1
1.1 Defined Terms..................................................... 1
ARTICLE II RESTRICTIONS ON ADDITIONAL REGISTRATION RIGHTS................. 5
2.1 Registration Rights Agreements.................................... 5
ARTICLE III REGISTRATION RIGHTS........................................... 5
3.1 Demand Registration............................................... 5
3.2 Piggyback Registrations........................................... 6
3.3 Expenses of Registration.......................................... 8
3.4 Obligation of the Corporation..................................... 8
3.5 Miscellaneous..................................................... 11
3.6 Indemnification................................................... 11
ARTICLE IV PRE-EMPTIVE RIGHTS............................................. 14
4.1 Pre-emptive Rights................................................ 14
ARTICLE V MATCHING RIGHT.................................................. 16
5.1 Notification of Matching Right Transaction........................ 16
5.2 Matching Right.................................................... 16
5.3 Acceptance of Matching Right Transaction.......................... 17
5.4 Unsolicited Take-over Bids........................................ 17
5.5 No Break Fee...................................................... 18
5.6 Amendments to Matching Right Transaction.......................... 18
5.7 CIBC Debenture.................................................... 18
ARTICLE VI BOARD OF DIRECTORS; GOVERNANCE................................. 18
6.1 Size and Composition of Board of Directors and Committees......... 18
6.2 Board of Directors Representation................................. 19
6.3 Shareholders' Meetings............................................ 20
ARTICLE VII RIGHTS OF APPROVAL............................................ 20
7.1 Rights of Approval................................................ 20
ARTICLE VIII INFORMATION RIGHTS AND OPERATIONAL COVENANTS................. 21
8.1 Information Delivered to Common Shareholders...................... 21
8.2 Cash Flow Management.............................................. 21
8.3 Use of Proceeds - Issuance of Preferred Share and Warrants........ 22
8.4 Use of Proceeds - Exercise of Warrants............................ 22
ARTICLE IX MISCELLANEOUS.................................................. 22
9.1 No Derogation of Rights........................................... 22
9.2 Term of Agreement................................................. 22
9.3 Public Announcements.............................................. 23
9.4 Assignment........................................................ 23
9.5 Binding Effect.................................................... 23
9.6 Time............................................................... 23
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9.7 Notices........................................................... 23
9.8 Governing Law..................................................... 24
9.9 Injunctive Relief................................................. 25
9.10 Currency.......................................................... 25
9.11 Entire Agreement.................................................. 25
9.12 Further Assurances................................................ 25
9.13 Waivers and Modifications......................................... 25
9.14 Counterparts...................................................... 25
9.15 Date For Any Action............................................... 26
9.16 Construction...................................................... 26
9.17 Interpretation.................................................... 26
9.18 Knowledge......................................................... 26
9.19 Severability...................................................... 26
INVESTOR'S RIGHTS AGREEMENT
THIS AGREEMENT made as of the 11th day of April, 2003.
BETWEEN:
POINTS INVESTMENTS, INC., a corporation
incorporated under the laws of Delaware (the
"Investor")
-and-
USA INTERACTIVE, a corporation incorporated
under the laws of Delaware
(the "Parent")
-and-
POINTS INTERNATIONAL LTD., a corporation
continued under the laws of Ontario (the
"Corporation")
RECITALS:
WHEREAS the Investor owns one Preferred Share, Series 2 (the
"Preferred Share");
AND WHEREAS the Investor is the holder of warrants (the "Warrants")
dated April 11, 2003 to purchase common shares (the "Common Shares") in the
capital of the Corporation;
AND WHEREAS the Investor and the Corporation wish to set forth certain
rights of the Investor for so long as the Investor owns the Preferred Share,
Common Shares and/or any of the Warrants, as the case may be;
NOW THEREFORE in consideration of the premises and the mutual
covenants and agreements herein contained, and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto hereby covenant and agree as follows:
ARTICLE I
DEFINITIONS
1.1 DEFINED TERMS.
As used herein:
(a) "Act" means the Business Corporations Act (Ontario).
(b) "affiliate" shall be construed such that one person shall be deemed to
be an affiliate of another person if one of them is controlled
(directly or indirectly) by
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the other or both are controlled (directly or indirectly) by the same
person or group of persons, and for this purpose "control" shall be
construed such that any combination of a person, its affiliates and
persons acting jointly or in concert with either of them (the "Control
Group") shall control another person if the Control Group is the
beneficial owner of securities of such person sufficient to elect a
majority of the board of directors (or, if the person is not a
corporation, any comparable body) of such person.
(c) "Agency" means any domestic or xxxxxxx xxxxx, xxxxxxxx, xxxxxxx,
xxxxx, provincial or local government or governmental agency or
authority or other regulatory authority (including the TSXV) or
administrative agency or commission (including the Ontario Securities
Commission and the U.S. Commission) or any elected or appointed public
official.
(d) "Agreement" means this investor's rights agreement between the
Corporation and the Investor, as amended from time to time.
(e) "Board of Directors" means the Board of Directors of the Corporation.
(f) "Business Day" means every day except a Saturday, Sunday or a day,
which is a statutory holiday in Toronto, Ontario or a federal holiday
in the United States of America.
(g) "Canadian Prospectus" means a prospectus filed by the Corporation with
a Canadian Securities Regulator for a public offering and sale of
securities of the Corporation.
(h) "Canadian Securities Act" means the Securities Act (Ontario).
(i) "CIBC Debenture" has the meaning ascribed thereto in Section 2.1.
(j) "Common Shares" means the common shares in the capital of the
Corporation.
(k) "Consent and Amending Agreement" means the agreement dated March 21,
2003 between the Corporation, the Parent and CIBC Capital Partners.
(l) "Corporation" means Points International Ltd., a corporation continued
under the laws of Ontario.
(m) "Employee Option Plan" means the Corporation's Amended and Restated
Employee Option Plan, dated June 26, 2002, as the same may be amended,
restated or replaced from time to time.
(n) "Exchange Act" means the United States Securities Exchange Act of
1934, as amended, or any successor federal statute, and the rules and
regulations of the U.S. Commission issued under such Act, as they each
may, from time to time, be in effect.
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(o) "Investor" means Points Investments, Inc., a corporation incorporated
pursuant to the laws of Delaware.
(p) "Investor Directors" shall have the meaning ascribed thereto in
Section 6.2(a).
(q) "Jurisdictions" means those provinces and territories of Canada in
which the Corporation is now or at any relevant time a reporting
issuer or equivalent status (including, without limitation, Ontario,
Alberta and British Columbia) and at any time includes the United
States of America if the Corporation has previously registered any
securities pursuant to applicable securities Laws.
(r) "Laws" means all laws, statutes, by-laws, rules, regulations, orders,
decrees, ordinances, protocols, codes, guidelines, policies, notices,
directions and judgements or other requirements of any Agency,
including the Canadian Securities Act, the U.S. Securities Act and the
Exchange Act.
(s) "Matching Notice" shall have the meaning ascribed thereto in Section
5.2(b).
(t) "Matching Offer" shall have the meaning ascribed thereto in Section
5.2(d).
(u) "Matching Right Transaction" means an offer to effect any transaction
(by purchase, merger, amalgamation, arrangement, business combination,
liquidation, dissolution, recapitalization, take-over bid or
otherwise) that could result in any person (or group of persons) other
than the Investor or its affiliates acquiring (a) assets of the
Corporation and/or its Subsidiaries that are, individually or in the
aggregate, material to the Corporation or any of its Subsidiaries, or
(b) 20% or more of the equity of, or voting rights in respect of, (or
rights thereto) the Corporation or any of its Subsidiaries.
(v) "Minimum Amount" has the meaning ascribed thereto in Section 3.1(c).
(w) "Outstanding Rights" means the rights to acquire Common Shares set out
in Schedule 1.1(w).
(x) "Parent" means USA Interactive, a corporation incorporated under the
laws of Delaware and any successors thereto.
(y) "person" means an individual, corporation, incorporated or
unincorporated association, syndicate or organization, partnership,
trust, trustee, executor, administrator or other legal representative.
(z) "Pre-emptive Right" has the meaning ascribed thereto in Section 4.1
(a).
(aa) "Preferred Share" has the meaning ascribed thereto in the recitals to
this Agreement.
(bb) "Registrable Securities" has the meaning ascribed thereto in Section
3.1(a).
(cc) "Registration Expenses" shall mean all expenses incurred by the
Corporation in complying with Sections 3.1 or 3.2, including, without
limitation, all registration,
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filing and qualification fees, printing expenses, accounting fees,
state Blue Sky fees and expenses and fees and disbursements of counsel
for the Corporation.
(dd) "Registration Statement" means a registration statement filed by the
Corporation with the U.S. Commission for a public offering and sale of
securities of the Corporation (other than a registration statement on
Form S-8, Form X-0, Xxxx X-0, or Form F-4 or their successors, or any
other form for a similar limited purpose, or any registration
statement covering only securities proposed to be issued in exchange
for securities or assets of another corporation).
(ee) "Response Period" shall have the meaning ascribed thereto in Section
5.2(c).
(ff) "Second Response Period shall have the meaning ascribed thereto in
Section 5.3(c).
(gg) "Securities Regulators" shall mean the Canadian and U.S. securities
regulatory authorities.
(hh) "Selling Expenses" shall mean, with respect to any sale of Registrable
Securities effected pursuant to Article III hereof, all underwriting
fees and selling commissions applicable to such sale.
(ii) "Subscription Agreement" means the subscription agreement, dated March
21, 2003, pursuant to which the Investor subscribed for the Preferred
Share and the Warrants.
(jj) "Subsidiaries" means, in respect of a person, each of the corporate
entities, partnerships and other entities over which it exercises
direction or control.
(kk) "Transfer" means to directly or indirectly sell, give, transfer,
assign, pledge, encumber, hypothecate or otherwise dispose of in any
manner whatsoever.
(ll) "U.S. Commission" means the Securities and Exchange Commission, or any
other federal agency at the time administering the U.S. Securities
Act.
(mm) "U.S. Securities Act" means the United States Securities Act of 1933,
as amended, or any successor federal statute, and the rules and
regulations of the U.S. Commission issued under such Act, as they each
may, from time to time, be in effect.
(nn) "U.S. Prospectus" means the prospectus included in any Registration
Statement, as amended or supplemented by an amendment or prospectus
supplement, including post-effective amendments, and all material
incorporated by reference or deemed to be incorporated by reference in
such U.S. Prospectus.
(oo) "Warrants" has the meaning ascribed thereto in the recitals to this
Agreement.
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ARTICLE II
RESTRICTIONS ON ADDITIONAL REGISTRATION RIGHTS
2.1 REGISTRATION RIGHTS AGREEMENTS.
The Corporation represents and warrants that, other than certain registration
rights provided to CIBC Capital Partners pursuant to an Amended and Restated
Convertible Debenture (the "CIBC Debenture") in the original principal amount of
$6,000,000 issued by the Corporation on March 15, 2001 and amended and restated
on February 8, 2002, no person has any right to require the Corporation to
qualify for distribution or register the sale of any securities under any
applicable securities Laws and the Corporation covenants that it will not grant
or permit to exist any such right, other than under the CIBC Debenture, during
the term of this Agreement.
ARTICLE III
REGISTRATION RIGHTS
3.1 DEMAND REGISTRATION.
(a) Subject to the conditions of this Section 3.1, if the Investor
delivers to the Corporation a written request that the Corporation
file a Registration Statement or file and obtain a receipt for a
(final) Canadian Prospectus to qualify the distribution of or register
in the Jurisdictions the Common Shares held or to be held by the
Investor (including, without limitation, the Common Shares issued or
issuable on the conversion of the Preferred Share and the exercise of
the Warrants, and, for the purposes of this Article III, shares that
are issued or distributed to the Investor in respect of the Common
Shares by way of conversion, stock dividends or stock split or other
distribution, recapitalization or reclassification) (the "Registrable
Securities") then the Corporation shall, subject to the limitations of
this Section 3.1, use its best efforts to file, as soon as practicable
and in any event within twenty (20) Business Days a preliminary
Canadian Prospectus or a Registration Statement with respect to the
subject Registrable Securities and use its best efforts to cause such
preliminary Canadian Prospectus to be cleared and a receipt for a
final Canadian Prospectus to be obtained as soon as practicable
thereafter. The qualification and/or registration of Registrable
Securities pursuant to this Article III, as the case may be, is
sometimes referred to in this Agreement as either a "qualification" or
a "registration".
(b) If the Investor intends to distribute the Registrable Securities
covered by its request by means of an underwriting, the Investor shall
so advise the Corporation as a part of its request made pursuant to
Section 3.1(a). The Investor shall enter into an underwriting
agreement in customary form with the underwriter or underwriters
selected for such underwriting (which underwriter or underwriters
shall be reasonably acceptable to the Corporation). Notwithstanding
any other provision of Section 3.1, if the underwriter advises the
Corporation that marketing factors require a limitation of the number
of securities to be underwritten (including Registrable Securities),
then the Corporation shall so advise the Investor, and the number of
shares that may be included in the underwriting shall be reduced
accordingly; provided, however, that the number of shares of
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Registrable Securities to be included in such underwriting shall not
be reduced unless all other securities of the Corporation are first
entirely excluded from the underwriting. If the number of Registrable
Securities requested to be registered pursuant to Section 3.1(a), but
that are excluded from registration pursuant to this Section 3.1(b),
is equal to or greater than thirty percent (30%) of the total number
of Registrable Securities requested to be so registered, then such
registration by the Corporation shall not count as a registration for
the purposes of Section 3.l(c)(iii).
(c) The Corporation shall not be required to effect a registration
pursuant to this Section 3.1:
(i) prior to that date that is the one year anniversary of the date
hereof; or
(ii) unless the number of Registrable Securities to be included in
such registration is not less than the greater of (the "Minimum
Amount"):
(A) 25% of the aggregate number of Registrable Securities held
by the Investor and its affiliates at the time of delivery
of a request for registration of Registrable Securities; and
(B) such number of Registrable Securities as is required to
effect a distribution of Common Shares pursuant to such
registration of at least $2,500,000; or
(iii) if a registration has been completed within the preceding six
(6) month period; or
(iv) if the Corporation shall furnish to the Investor a certificate
signed by the Chief Executive Officer of the Corporation stating
that in the good faith judgment of the Board of Directors, in
accordance with the advice of applicable counsel, it would be
materially detrimental to the Corporation and its shareholders
(including, without limitation, materially interfering with any
material financing, acquisition, corporate reorganization or
merger or other transaction involving the Corporation or any of
its Subsidiaries for which a letter of intent has been entered
into and the disclosure of which would be required in any
Canadian Prospectus or Registration Statement utilized in a
registration) for such registration to be effected at such time,
in which event the Corporation shall have the right to defer such
preparation and filing for a period of not more than ninety (90)
days after receipt of the request of the Investor; provided that
such right to delay a request shall be exercised by the
Corporation not more than once per request for registration of
Registrable Securities.
3.2 PIGGYBACK REGISTRATIONS.
(a) The Corporation shall promptly notify (which notice shall indicate an
outside date for the proposed distribution) the Investor in writing if
the Corporation proposes to distribute securities by way of a
Registration Statement or a Canadian
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Prospectus (including, but not limited to, Registration Statements or
Canadian Prospectuses relating to secondary offerings of securities of
the Corporation) (other than a Registration Statement or Canadian
Prospectus filed pursuant to Section 3.1), and will afford the
Investor an opportunity to include in such Registration Statement or
Canadian Prospectus not less than the Minimum Amount of the
Registrable Securities. If the Investor desires to have included in
such Registration Statement or such Canadian Prospectus not less than
the Minimum Amount of the Registrable Securities, it shall, within ten
(10) Business Days after the above-described notice from the
Corporation, so notify the Corporation in writing. Such notice shall
state the intended method of disposition of the Registrable Securities
by the Investor. If the Investor decides not to include all of its
Registrable Securities in any Registration Statement or Canadian
Prospectus thereafter filed by the Corporation, the Investor shall
nevertheless continue to have the right to include not less than the
Minimum Amount of Registrable Securities in any subsequent
Registration Statement or Canadian Prospectus as may be filed by the
Corporation with respect to offerings of its securities, all upon the
terms and conditions set forth herein. Nothing contained in this
Section 3.2 shall in any way be construed so as to limit any of the
Investor's rights under Section 3.1.
(b) If the Canadian Prospectus or Registration Statement in respect of
which the Corporation gives notice under this Section 3.2 is for an
underwritten offering, the Corporation shall so advise the Investor.
In such event, the right of the Investor to have Registrable
Securities qualified for distribution by the Canadian Prospectus or
included in the Registration Statement pursuant to this Section 3.2
shall be conditioned upon the Investor's participation in such
underwriting and the inclusion of the Registrable Securities in the
underwriting to the extent provided herein. If the Investor proposes
to distribute its Registrable Securities through such underwriting, it
shall enter into an underwriting agreement in customary form with the
underwriter or underwriters selected for such underwriting by the
Corporation. Notwithstanding any other provision of this Agreement, if
the underwriter determines in its sole discretion that marketing
factors make it advisable to limit the number of shares to be
underwritten, the number of shares that may be included in the
underwriting shall be allocated, (i) if such Canadian Prospectus or
Registration Statement filing was initiated by the Corporation in
respect of an offering of treasury securities, then first to the
Corporation and second to the Investor and any selling shareholder
pursuant to rights granted in the CIBC Debenture on a pro rata basis,
(ii) if such Canadian Prospectus or Registration Statement filing was
initiated by a selling shareholder in respect of a secondary offering
pursuant to a right to require the Corporation to file a Canadian
Prospectus or a Registration Statement under the CIBC Debenture, then
first to such initiating selling shareholder, second to the Investor
and third to the Corporation, or (iii) in such manner as may be agreed
among the Corporation and any selling shareholders. If the Investor
disapproves of the terms of any such underwriting or the amount of
securities of the Investor included in the qualification or
registration is reduced below 30% of the Registrable Securities it had
proposed to include in such qualification or registration, the
Investor may elect to withdraw therefrom by written notice to the
Corporation and the
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underwriter, delivered at least fifteen (15) Business Days prior to
the filing of the (final) Canadian Prospectus or the effective date of
the Registration Statement.
(c) The Corporation shall have the right to terminate or withdraw any
qualification or registration initiated by it under this Section 3.2
prior to the effectiveness of such qualification or registration, upon
notice to the Investor, whether or not the Investor has elected to
include Registrable Securities in such qualification or registration.
Notwithstanding anything else contained herein, the Registration
Expenses and Selling Expenses in connection with such qualification or
registration shall be borne by the Corporation.
(d) Subject to the approval of the managing underwriter as to the size of
its participation, the Corporation shall be entitled to include in any
Canadian Prospectus or Registration Statement filed pursuant to a
registration request under Section 3.1 in respect of an underwritten
offering, Common Shares to be sold by the Corporation for its own
account.
3.3 EXPENSES OF REGISTRATION.
Except as specifically provided herein, all Registration Expenses incurred in
connection with any registration, qualification or compliance pursuant to
Sections 3.1 and 3.2 shall be borne as follows:
(a) if initiated prior to the date that is six (6) years following the
date hereof, by the Corporation; and
(b) if initiated on or after the date that is six (6) years following the
date hereof, all Registration Expenses shall be borne by the
Corporation, other than an amount equal to the Investor's pro rata
portion thereof in accordance with the proceeds received by the
Investor in such registration or qualification, which amount shall be
borne by the Investor.
All Selling Expenses incurred in connection with any registration or
qualification pursuant to Sections 3.1 and 3.2 shall be borne by the
participants in such registration or qualification pro rata in accordance with
the proceeds received by such participants in such registration or
qualification.
3.4 OBLIGATION OF THE CORPORATION.
Whenever required to effect the qualification or registration of any Registrable
Securities, the Corporation shall, as soon as reasonably practicable:
(a) prepare and file with the Securities Regulators in the Jurisdictions
in which the Registrable Securities are to be distributed a
Registration Statement or a preliminary Canadian Prospectus with
respect to such Registrable Securities and use its commercially
reasonable efforts to cause such Registration Statement to become
effective or such preliminary Canadian Prospectus to be cleared and a
receipt for a final prospectus to be obtained within one hundred and
twenty (120) days thereafter, and, upon the request of the Investor,
provided the Investor is
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holding Registrable Securities qualified thereunder, keep such
Canadian Prospectus or Registration Statement effective for up to one
hundred and eighty days (180) or, if earlier, until the Investor has
completed the distribution related thereto;
(b) prepare and file with the Securities Regulators in the Jurisdictions
referred to in Section 3.4(a) such amendments and supplements to the
Registration Statement and the U.S. Prospectus included therein or
Canadian Prospectus used in connection with such registration and
qualification as may be necessary to comply with the provisions of the
applicable securities Laws with respect to the disposition of all
securities covered by such Canadian Prospectus or Registration
Statement for the period set forth in Section 3.4(a);
(c) furnish to the Investor such number of copies of the U.S. Prospectus,
including any preliminary U.S. Prospectus, or such number of copies of
the Canadian Prospectus, in the English and, if applicable, French
language, including a preliminary Canadian Prospectus, in conformity
with the requirements of the applicable securities Laws, and such
other documents as it may reasonably request in order to facilitate
the disposition of Registrable Securities owned by it;
(d) use all commercially reasonable efforts to register and qualify the
securities covered by such Canadian Prospectus or Registration
Statement under such other securities laws of such other jurisdictions
(for greater certainty, other than the Jurisdictions) as shall be
reasonably requested by the Investor provided that (i) notwithstanding
Section 3.3, all Registration Expenses incurred in connection with
such registration and qualification and all expenses that may
thereafter be incurred by the Corporation as a result of complying
with any ongoing requirements under applicable Laws that the
Corporation was not subject to prior to such registration or
qualification in such other jurisdiction (the "Ongoing Expenses")
shall be borne by the participants in such registration or
qualification pro rata in accordance with the proceeds received by
such participants in such registration or qualification (provided,
however, if the Corporation participates in such registration, then
the Ongoing Expenses shall be borne entirely by the Corporation, or if
the Corporation at any time otherwise registers or qualifies any
securities in such jurisdiction, the Ongoing Expenses shall thereafter
be borne entirely by the Corporation), and (ii) the average closing
price of the Common Shares, on the stock exchange or quotation system
on which they are then listed, for the forty (40) trading days
preceding such request is not less than US$1.00;
(e) in the event of any underwritten public offering, enter into and
perform its obligations under an underwriting agreement, in usual and
customary form, with the managing underwriter(s) of such offering;
(f) notify the Investor if a U.S. Prospectus or Canadian Prospectus
relating to Registrable Securities, as then in effect, to its
knowledge, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to
make the statements therein not misleading in the light of the
circumstances then existing, and, as promptly as practicable, prepare
and file
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with the applicable Securities Regulators an amendment to such U.S.
Prospectus or amend or supplement such Canadian Prospectus such that
such U.S. Prospectus or Canadian Prospectus, as so amended, shall not
contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances
then existing, and, as promptly as is practicable, furnish to the
Investor a reasonable number of copies of the supplement to or the
amendment of such U.S. Prospectus or Canadian Prospectus;
(g) promptly notify the Investor (i) when a Registration Statement
relating to Registrable Securities has become effective or any
supplement to or amendment of any U.S. Prospectus forming a part of
such Registration Statement has been filed, (ii) when a receipt is
obtained for a (final) Canadian Prospectus relating to Registrable
Securities, (iii) when any amendment of or supplement to a Canadian
Prospectus relating to Registrable Securities shall have been filed,
(iv) of any request by the applicable Securities Regulators to amend
or supplement such Registration Statement, U.S. Prospectus or Canadian
Prospectus or for additional information, (v) of the issuance by the
Securities Regulators of any order preventing or suspending the use of
any preliminary Canadian Prospectus or U.S. Prospectus, and (vi) of
the suspension of the qualification of such securities for offering or
sale in any jurisdiction, or of the institution of any proceedings for
any such purposes;
(h) use commercially reasonable efforts (i) to list such securities on any
securities exchange and automated quotation system on which the Common
Shares are then listed or, if no Common Shares are then listed, on an
exchange or automated quotation system selected by the Corporation, if
such listing is then permitted under the rules of such exchange or
automated quotation system, (ii) to provide a transfer agent and
registrar for such Registrable Securities not later than the date of
the receipt for the (final) Canadian Prospectus or the effective date
of the Registration Statement relating to such securities, and (iii)
to obtain a CUSIP number for the Registrable Securities;
(i) use commercially reasonable efforts to obtain the lifting of any order
that might be issued preventing or suspending the use of any
preliminary Canadian Prospectus or U.S. Prospectus;
(j) use commercially reasonable efforts to furnish, on the date that such
Registrable Securities are delivered to the underwriters for sale, if
such securities are being sold through underwriters, (i) opinions,
dated as of such date, of the counsel representing the Corporation for
the purposes of such prospectus, in form and substance as is
customarily given to the underwriters in an underwritten public
offering, addressed to the underwriters, if any, and (ii) a letter,
dated as of such date, from the independent certified public
accountants of the Corporation, in form and substance as is
customarily given by independent certified public accountants to
underwriters in an underwritten public offering, addressed to the
underwriters, if any; and
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(k) cooperate in reasonable marketing efforts, including participation by
senior executives of the Corporation in any "roadshow" or similar
meeting with potential investors, in order to expedite or facilitate
the disposition of the Registrable Securities.
3.5 MISCELLANEOUS.
The Corporation may require the Investor, in connection with a prospectus
relating to Registrable Securities, to:
(a) furnish to the Corporation such information regarding such seller and
the distribution of such securities as the Corporation may from time
to time reasonably request in writing and as shall be required by Law
in connection therewith;
(b) execute any certificate forming part of a preliminary Canadian
Prospectus, final Canadian Prospectus, amendment or supplement thereto
to be filed with the applicable Securities Regulators;
(c) notify the Corporation if a Canadian Prospectus or U.S. Prospectus
relating to Registrable Securities, as then in effect, to the
knowledge of the Investor, would include an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading in
light of the circumstances then existing, insofar as such facts or
statements were provided by or relate to the Investor, provided that
the Corporation shall, at all times during the preparation of any
Canadian Prospectus or U.S. Prospectus in respect of Registrable
Securities, keep the Investor fully apprised of all developments in
respect of the registration of Registrable Securities and shall
provide the Investor with the right to review and participate in the
preparation of such Canadian Prospectus or U.S. Prospectus prior to
the filing thereof;
(d) not breach any applicable published policies, rules and regulations of
the applicable Securities Regulators and any stock exchange, automated
quotation system and over-the-counter market on which the Common
Shares are then listed or quoted; and
(e) not take any action that would reasonably be expected to restrain,
enjoin, materially hinder or materially delay any registration or
prospectus qualification under the securities Laws as the result of
any disagreement that may arise with respect to the interpretation of
this Agreement, and the Investor agrees not to do so.
3.6 INDEMNIFICATION.
(a) In the event that any Registrable Securities are registered or
qualified for distribution by way of a Canadian Prospectus or
Registration Statement filed with the Securities Regulators pursuant
to this Article III, the Corporation will indemnify and hold harmless
the seller of such securities, its directors, officers,
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and employees and each other person who participates as an
underwriter, broker or dealer in the offering or sale of such
securities, and each person, if any, who controls such seller or
underwriter within the meaning of the U.S. Securities Act or the
Exchange Act against any and all losses, claims, damages or
liabilities, joint or several, to which such seller or any such
director, officer, employee or participating person may become subject
under the applicable securities Laws or otherwise, insofar as such
losses, claims, damages or liabilities (or actions or proceedings in
respect thereof) arise out of or are based upon (i) any untrue
statement or alleged untrue statement of a fact contained in any
Registration Statement, including any preliminary or final U.S.
Prospectus contained therein, or any preliminary Canadian Prospectus
or final Canadian Prospectus, or any amendment or supplement thereto,
or (ii) any omission or alleged omission to state a fact required to
be stated in any Registration Statement, including any preliminary or
final U.S. Prospectus contained herein, or any preliminary Canadian
Prospectus or final Canadian Prospectus, amendment or supplement or
necessary to make the statements therein not misleading, or (iii) any
violation or alleged violation by the Corporation of any applicable
securities Laws; and the Corporation will reimburse such seller and
each such director, officer, employee and participating person for any
legal or any other expenses reasonably incurred by them in connection
with investigating or defending any such loss, claim, liability,
action or proceeding, provided that the Corporation shall not be
liable in any such case to the extent that any such loss, claim,
damage, liability or expense arises out of or is based upon an untrue
statement or omission made in any such Registration Statement,
including any preliminary or final U.S. Prospectus contained herein,
or any preliminary Canadian Prospectus, final Canadian Prospectus,
amendment or supplement in reliance upon and in conformity with
written information furnished to the Corporation by such seller or
participating person expressly for use in the preparation thereof.
Such indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of such seller or any such
director, officer, employee or participating person and shall survive
the transfer of such securities by such seller.
(b) In the event that any Registrable Securities are registered or
qualified for distribution by way of a Canadian Prospectus or
Registration Statement filed with the Securities Regulators pursuant
to this Article III, each of the prospective sellers of such
securities will indemnify and hold harmless the Corporation, each
director of the Corporation, each officer of the Corporation who shall
sign such Registration Statement or Canadian Prospectus, and each
other person who participates as an underwriter, broker or dealer in
the offering or sale of such securities, and each person, if any, who
controls the Corporation or any such underwriter within the meaning of
the U.S. Securities Act or the Exchange Act against any and all
losses, claims, damages or liabilities, joint or several, to which the
Corporation or any such director, officer, employee or participating
person may become subject under the applicable securities Laws or
otherwise, insofar as such losses, claims, damages or liabilities (or
actions or proceedings in respect thereof) arise out of or are based
upon (i) any untrue statement or alleged untrue statement of a fact
contained in any Registration Statement, including any preliminary or
final U.S. Prospectus contained therein, or any preliminary
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Canadian Prospectus or final Canadian Prospectus, or any amendment or
supplement thereto, if such statement or omission was made in reliance
upon and in conformity with written information furnished to the
Corporation by such seller expressly for use in the preparation of
such Registration Statement, including any preliminary or final U.S.
Prospectus contained herein, or any preliminary Canadian Prospectus,
final Canadian Prospectus, amendment or supplement, or (ii) any
omission or alleged omission to state a fact with respect to such
seller required to be stated in any such Registration Statement,
including any preliminary or final U.S. Prospectus contained therein,
or any preliminary Canadian Prospectus, final Canadian Prospectus,
amendment or supplement or necessary to make the statements therein
not misleading, or (iii) any violation or alleged violation by the
seller of any applicable securities Laws; and the seller will
reimburse the Corporation and each such director, officer, employee
and participating person for any legal or any other expenses
reasonably incurred by them in connection with investigating or
defending any such loss, claim, liability, action or proceeding,
provided that the liability of each such seller will be in proportion
to and limited to the net proceeds received by such seller (after
deducting any underwriting discount and expenses) from the sale of
Registrable Securities pursuant to such Registration Statement or
Canadian Prospectus. Such indemnity shall remain in full force and
effect regardless of any investigation made by or on behalf of the
Corporation or any such director, officer, participating person or
controlling person and shall survive the transfer of such securities
by such seller.
(c) Promptly after receipt by an indemnified party of notice of the
commencement of any action or proceeding involving a claim referred to
in the preceding paragraphs of this Section 3.6, such indemnified
party will, if a claim in respect thereof is to be made against an
indemnifying party hereunder, give written notice to the latter of the
commencement of such action, provided that the failure of any
indemnified party to give notice as provided therein shall not relieve
the indemnifying party of its obligations under the preceding
paragraphs of this Section 3.6. In case any such action is brought
against an indemnified party, the indemnified party will be entitled
to assume the defence thereof by representatives of their own choosing
and shall provide the indemnifying party with the right to participate
in the defence of such Claim or co-defend such Claim, at the
indemnifying party's own cost. No indemnifying party, in the defence
of any such claim or litigation, shall, except with the consent of
such indemnified party, which consent shall not be unreasonably
withheld, consent to entry of any judgment or enter into any
settlement, provided that any withholding of consent to any judgement
or settlement involving an admission of wrongdoing shall not be
considered unreasonable. The indemnified party will have the right to
employ counsel of its choice in each applicable jurisdiction (if more
than one jurisdiction is involved) to represent the indemnified party
and the fees and expenses of such counsel shall be paid as incurred by
the indemnifying party. Each party will provide the other party
reasonable access to all records and documents of the other in
relation to any claim hereunder, other than any claim by one party or
its affiliates against the other party or its affiliates.
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(d) If for any reason the foregoing indemnity is unavailable, or is
insufficient to hold harmless an indemnified party, other than by
reason of the exceptions provided therein, then the indemnifying party
shall contribute to the amount paid or payable by the indemnified
party as a result of such losses, claims, damages, liabilities or
expenses (i) in such proportion as is appropriate to reflect the
relative benefits received by the indemnifying party on the one hand
and the indemnified party on the other from the offering of
Registrable Securities (taking into account the portion of the
proceeds of the offering realized by each such party), or (ii) if the
allocation provided by clause (i) above is not permitted by applicable
law, or provides a lesser sum to the indemnified party than the amount
hereinafter calculated, in such proportion as is appropriate to
reflect not only the relative benefits received by the indemnifying
party on the one hand and the indemnified party the other but also the
relative fault of the indemnifying party and the indemnified party as
well as any other relevant equitable considerations. No person guilty
of fraudulent misrepresentations shall be entitled to contribution
from any person who was not guilty of such fraudulent
misrepresentation. No party shall be liable for contribution under
this Section 3.6(d) except to the extent and under such circumstances
as such party would have been liable to indemnify under Sections
3.6(a) or 3.6(b) if such indemnification were enforceable under
applicable law.
(e) The obligations of the Corporation and the Investor under this Section
3.6 shall survive the completion of any offering of Registrable
Securities in a Canadian Prospectus or Registration Statement under
this Article III or otherwise.
(f) As used in this Section 3.6, the terms "officers" and "directors"
shall include the general partners of the holders of Registrable
Securities which are partnerships and the trustees of the holders of
Registrable Securities which are trusts.
ARTICLE IV
PRE-EMPTIVE RIGHTS
4.1 PRE-EMPTIVE RIGHTS.
(a) If (and, for greater certainty, every time) the Corporation proposes
to issue, grant or sell any securities, the Corporation shall first
give to the Investor, on behalf of the Investor and its affiliates,
written notice setting forth in reasonable detail the price and other
terms on which such securities are proposed to be issued or sold, the
terms of any such securities and the amount thereof proposed to be
issued, granted or sold. The Investor and its affiliates shall
thereafter have the pre-emptive right (the "Pre-emptive Right"),
exercisable by written notice to the Corporation no later than fifteen
(15) Business Days after the Corporation's notice is given, to
purchase any or all of such securities as the Investor and its
affiliates set forth in such notice (provided that if the Investor and
its affiliates wish to exercise the Pre-emptive Right in respect of
greater than 75% of the securities subject thereto, the Pre-Emptive
Right must be exercised for 100% of such securities), at the price and
on the other terms set forth in the Corporation's notice. Any notice
by the Investor and its affiliates exercising the Pre-emptive
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Right to purchase securities shall constitute a commitment to purchase
from the Corporation the securities specified in such notice, subject
only to obtaining any necessary regulatory approvals. If the Investor
and its affiliates exercise the Preemptive Right to the full extent
and thereby commits to purchase all of the securities proposed to be
issued, granted or sold by the Corporation, then the closing of the
purchase of securities by the Investor and its affiliates shall take
place on such date, no less than ten (10) and no more than fifteen
(15) Business Days after the expiration of the fifteen (15) Business
Day period referred to above (or, if all necessary regulatory
approvals have not been obtained or received upon the expiry of such
period, then such period shall be extended until such time as all
necessary regulatory approvals have been obtained or received), as the
Corporation may select, and the Corporation shall notify the Investor
on behalf of the Investor and its affiliates of such closing at least
five (5) Business Days prior thereto. If the Investor and its
affiliates do not exercise the Pre-emptive Right to the full extent
and thereby commit to purchase less than all of the securities
proposed to be issues, granted or sold by the Corporation or do not
exercise the Pre-emptive Right in any way, and the Corporation
proposes to issue, grant or sell securities to persons other than the
Investor and its affiliates, then the closing of the purchase of such
securities shall take place at the same time as the reasonable closing
of such issuance, grant or sale (or, if all necessary regulatory
approvals have not been obtained or received at such time, then five
(5) Business Days following all necessary regulatory approvals being
obtained or received).
(b) If not all securities proposed to be issued, granted or sold are
purchased pursuant to Section 4.1(a), the Corporation shall use
commercially reasonable efforts to issue, grant or sell the remaining
subject securities on the terms set forth in its notice to the
Investor, unless the Board of Directors determines in good faith that
the remaining number or amount is too small to be reasonably sold.
From the expiration of the fifteen (15) Business Day period first
referred to in Section 4.1(a) and for a period of forty-five (45)
Business Days thereafter, the Corporation may offer, issue, grant and
sell (for greater certainty, the closing of such sale to take place
within such forty-five (45) Business Day period) to any person or
entity securities having the terms set forth in the Corporation's
notice relating to such securities at a price and on other terms no
less favourable to the Corporation than those set forth in such notice
(without deduction for reasonable underwriting, sales agency and
similar fees payable in connection therewith); provided, however, that
the Corporation may not issue, grant or sell securities in an amount
greater than the amount set forth in such notice minus the amount
purchased or committed to be purchased by the Investor. For greater
certainty, following the expiry of such forty-five (45) Business Day
period, the Pre-emptive Right shall again apply to any and each issue,
grant or sale of any securities by the Corporation.
(c) Notwithstanding the foregoing provisions of this Section 4.1, the
Pre-emptive Right shall not apply in respect of: (i) issuances of
securities in the ordinary course of business pursuant to the Employee
Option Plan, (ii) issuances of securities pursuant to the Outstanding
Rights, including under the provisions attaching to the Series One
Preferred Share of the Corporation or the CIBC
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Debenture (as modified by the Consent and Amending Agreement), or
(iii) issuances of securities pursuant to the exercise of rights to
acquire such securities granted or issued after the date hereof with
the consent of the Investor pursuant to Section 7.1(d).
ARTICLE V
MATCHING RIGHT
5.1 NOTIFICATION OF MATCHING RIGHT TRANSACTION.
The Corporation shall immediately notify the Investor, at first orally and then
promptly in writing, if management of the Corporation is considering
recommending to the Board of Directors or the Board of Directors is otherwise
considering a Matching Right Transaction. Subject to the Investor agreeing to
requirements as to the confidentiality to be afforded in respect of the Matching
Right Transaction that the person proposing such transaction may reasonably
request (which, for greater certainty, shall not include any standstill or
non-competition requirements), such notice shall include a description of the
material terms and conditions of the Matching Right Transaction, the status of
the negotiations regarding the Matching Right Transaction, the identity of the
third party proposing the Matching Right Transaction, inquiry or contact and
such other details of and information relating to the Matching Right Transaction
as the Investor may, in its sole discretion, request, and shall attach copies of
all letters, agreements and other documentation (whether executed or in draft)
in respect of such Matching Right Transaction. The Corporation shall further
provide to the Investor access to all information provided to the person
proposing the Matching Right Transaction or its representatives in connection
with the Matching Right Transaction. Notwithstanding any other provision of this
Agreement, the Corporation shall keep the Investor informed by way of further
such notices of the status (including any change to the material terms) of any
such Matching Right Transaction. The Corporation shall not enter into any
non-disclosure agreement or other agreement with a person proposing a Matching
Right Transaction that prohibits or restricts the Corporation from providing any
information contemplated by this section to the Investor (who may provide any of
such information to its and its affiliates' directors, officers, employees,
financial advisors, legal counsel and other professional advisors).
5.2 MATCHING RIGHT
Before the Board of Directors considers a Matching Right Transaction:
(a) the Corporation shall have complied with its obligations under
Sections 5.1 and 5.2;
(b) the Corporation shall have provided written notice (the "Matching
Notice") to the Investor of the bona fide intention of the Board of
Directors to consider a Matching Right Transaction and confirmation
that the Corporation has complied with its obligations under Sections
5.1 and 5.2;
(c) a period (the "Response Period") of twelve (12) Business Days shall
have elapsed from the date on which the Investor has received the
Matching Notice; and
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(d) the Board of Directors shall review, consider and discuss with its
financial advisors and outside legal counsel and management of the
Corporation the terms of any offer (the "Matching Offer") proposed by
the Investor during the Response Period (which Matching Offer, for
greater certainty, may include an offer of securities of the Investor
or its affiliates).
5.3 ACCEPTANCE OF MATCHING RIGHT TRANSACTION.
The Board of Directors may accept, approve or recommend or enter into an
agreement, understanding or arrangement to implement a Matching Right
Transaction only if:
(a) the Corporation has complied with its obligations under Sections 5.1
and 5.2;
(b) a period (the "Second Response Period") of ten (10) Business Days
shall have elapsed from the date upon which the Investor received
written notice from the Board of Directors that (i) the Board of
Directors has determined by formal resolution, in good faith, acting
reasonably and in the proper discharge of its fiduciary duties after
considering any Matching Offer then proposed by the Investor (after
consultation with its financial advisors and outside legal counsel),
subject only to compliance with this Section 5.3, to accept, approve
or recommend or enter into an agreement to implement the Matching
Right Transaction, and (ii) the Corporation has complied with its
obligations under Sections 5.1 and 5.2; and
(c) the Board of Directors has considered every Matching Offer (including,
for greater certainty, any revised Matching Offer delivered after the
commencement of the Second Response Period) proposed by the Investor
before the end of the Second Response Period and has determined by
formal resolution, in good faith, acting reasonably and in the proper
discharge of its fiduciary duties after consultation with its
financial advisors and outside legal counsel, that the Matching Right
Transaction is more favourable to the shareholders of the Corporation
from a financial point of view than each such Matching Offer.
Notwithstanding the foregoing, if a notice referred to in Section 5.3(b) is
received by the Investor without a Matching Notice having been received by the
Investor pursuant to Section 5.2(c) in connection with the applicable Matching
Right Transaction, then the Second Response Period shall be twenty-two (22)
Business Days instead of ten (10) Business Days.
5.4 UNSOLICITED TAKE-OVER BIDS.
For greater certainty, in the event of a Matching Right Transaction that is an
unsolicited takeover bid under applicable securities Laws, the provisions of
Sections 5.2 and 5.3 shall not restrict the Board of Directors from the exercise
of its obligation to issue a directors' circular in respect of a take-over bid
pursuant to applicable securities Laws, provided that the provisions of this
Article V, including for greater certainty, the time periods in Sections 5.2 and
5.3, shall otherwise continue to apply to the maximum extent, including that the
Board of Directors shall, prior to entering into an agreement, understanding or
arrangement to implement such a Matching Right Transaction, have considered
every Matching Offer and shall have determined by formal resolution, in good
faith, acting reasonably and in the proper discharge of its fiduciary duties
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after consultation with its financial advisors and outside legal counsel, that
the Matching Right Transaction is more favourable to the shareholders of the
Corporation from a financial point of view than each Matching Offer.
5.5 NO BREAK FEE.
In no event shall the Corporation or the Board of Directors take any action that
could obligate the Corporation to pay or otherwise become liable for a "break
fee", reimbursement or other inducement to pursue a Matching Right Transaction
to a person proposing a Matching Right Transaction unless and until the expiry
of the Second Response Period and the Board of Directors has determined in
accordance with Section 5.3(c) that the Matching Right Transaction is more
favourable to the shareholders of the Corporation from a financial point of view
than each Matching Offer proposed by the Investor.
5.6 AMENDMENTS TO MATCHING RIGHT TRANSACTION.
(a) Each successive amendment to the terms and conditions of any Matching
Right Transaction that solely results in an increase in the amount of
consideration to be received by the Corporation or its shareholders
under the Matching Right Transaction shall extend the then current
Response Period or Second Response Period, as the case may be, by five
(5) Business Days;
(b) For greater certainty, each successive amendment to the terms and
conditions of any Matching Right Transaction other than an amendment
referred to in Section 5.6(a) shall constitute a new Matching Right
Transaction for the purposes of this Article V and, without limiting
the foregoing, a new Response Period shall commence in respect of each
such new Matching Right Transaction.
5.7 CIBC DEBENTURE
Notwithstanding anything contained in this Article V, any receiver properly
appointed pursuant to the provisions of the CIBC Debenture upon a default of any
payment under the CIBC Debenture shall have no obligation under any provision of
this Article V in respect of the sale of any assets of the Corporation and/or
its Subsidiaries.
ARTICLE VI
BOARD OF DIRECTORS; GOVERNANCE
6.1 SIZE AND COMPOSITION OF BOARD OF DIRECTORS AND COMMITTEES.
Effective as of the date of this Agreement, the Corporation shall use its best
efforts to cause:
(a) the Board of Directors to be comprised of not more that eleven (11)
directors (including, without limitation, to cause an amendment to the
articles of the Corporation to be approved at the next annual meeting
or special meeting of shareholders of the Corporation to fix the
maximum number of directors of the Corporation at eleven (11)
directors);
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(b) each committee of the Board of Directors and each committee of the
boards of directors of the Corporation's Subsidiaries to be comprised
of not more than four (4) directors (other than any independent
committee formed in connection with matters that relate to the
Investor or its affiliates); and
(c) such members of the Board of Directors, each committee of the Board of
Directors and each committee of the boards of directors of the
Corporation's Subsidiaries, other than the nominees of the Investor,
to be "resident Canadians" (as defined in the Act) to the extent
necessary to at all times enable any nominees of the Investor to be
non-residents of Canada.
6.2 BOARD OF DIRECTORS REPRESENTATION.
Following the conversion of the Preferred Share into Common Shares, for so long
as the Investor or any affiliate of the Investor holds any Warrants and, in the
event of the exercise of such Warrants in full by the Investor, until the first
annual meeting following the exercise of all of such Warrants at which the
Investor or an affiliate of the Investor may vote the Common Shares received
upon such exercise of all the Warrants:
(a) the Investor or such affiliate of the Investor shall, subject to
compliance with applicable Laws with respect to qualification for
service as a director, be entitled to nominate two (2) directors (the
"Investor Directors") to stand for election to the Board of Directors
and the Corporation shall use its best efforts to have the Investor
Directors so elected to the Board of Directors;
(b) except as required by applicable Laws regarding committees of boards
of directors, to the extent that any committees of the Board of
Directors are established, one (1) Investor Director shall be entitled
to participate on each such committee, other than any independent
committee formed in connection with matters that may relate to the
Investor or its affiliates;
(c) the Investor or such affiliate of the Investor shall, subject to
compliance with applicable Laws with respect to qualification for
service as a director, be entitled to nominate one (1) director to the
Board of Directors of each Subsidiary of the Corporation, and the
Corporation, as shareholder of such Subsidiaries, shall vote its
shares and take all actions that may be required to ensure the
election or appointment of the nominees contemplated by this Section
6.2(c);
(d) except as required by applicable Laws regarding committees of boards
of directors, to the extent that any committees of any board of
directors of any Subsidiary of the Corporation are established, one
(1) member of each such committee shall be the person nominated
pursuant to Section 6.2(c), other than any independent committee
formed in connection with matters that may relate to the Investor or
its affiliates; and
(e) if a vacancy is created on the Board of Directors or the board of
directors of any of the Subsidiaries of the Corporation at any time by
reason of death, disability, retirement, resignation, removal or
otherwise of an Investor Director or the nominee of the investor or
the affiliate of the Investor, as the case may be, the
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Investor or such affiliate of the Investor shall be entitled to
forthwith designate a successor director to fill the vacancy created
thereby and the Corporation shall use its best efforts to have such
successor director elected or appointed to the Board of Directors.
6.3 SHAREHOLDERS' MEETINGS.
Not earlier than ninety (90) days prior to any shareholder meeting at which any
Investor Director is to be elected, the Corporation shall request that the
Investor provide it with the name of its proposed nominee(s) for election as a
director of the Corporation and shall allow the Investor no less than ten (10)
Business Days to respond. The Investor shall provide such name to the
Corporation, accompanied by such other information as the Corporation may
reasonably request, for inclusion in a management proxy circular, and the
Corporation shall solicit proxies in favour of the nominee(s) of the Investor.
If the Corporation does not approve of the person proposed or nominated by the
Investor (which approval shall not be unreasonably or arbitrarily withheld), the
Corporation shall request the name of a new proposed nominee from the Investor.
ARTICLE VII
RIGHTS OF APPROVAL
7.1 RIGHTS OF APPROVAL.
The Corporation covenants and agrees to and in favour of the Investor that,
without the prior written approval of:
(a) the holder of the Warrants, until such time as all of the Warrants are
exercised or terminated; and
(b) the Investor, for the period from the exercise of all of the Warrants
until the first annual meeting of shareholders of the Corporation
thereafter at which the Investor or affiliate of the Investor may vote
the Common Shares received upon such exercise of all of the Warrants,
the Corporation shall not, and shall not permit any of its Subsidiaries to:
(c) except in compliance with Article V, enter into any transaction or
series of related transactions whereby all or any material assets of
the Corporation or its Subsidiaries (or, in the case of the
Corporation, any of the securities of its Subsidiaries) would become
the property of any other person (other than the Corporation or any of
its wholly-owned Subsidiaries) whether by way of reorganization,
consolidation, amalgamation, arrangement, winding-up, merger,
transfer, sale, sale-leaseback or otherwise;
(d) create any class or series of securities of the Corporation
(including, without limitation, equity, debt or hybrid securities) or
issue any securities of the Corporation other than pursuant to (i) the
Outstanding Rights, (ii) options issued in the ordinary course
pursuant to the Employee Option Plan and (iii) the exercise of rights
to acquire such securities granted or issued after the date hereof
with the consent of the Investor pursuant to this Section 7.1 (d);
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(e) without limiting Section 7.1(d), create, incur, assume, or otherwise
become directly or indirectly liable upon or in respect of, or suffer
to exist, any debt, other than in the ordinary course of business;
(f) except in compliance with Article V, without limiting Section 7.1(d),
propose or effect a capital restructuring, reorganization,
amalgamation, merger, arrangement, continuation, liquidation,
dissolution or winding-up or any other corporate reorganization or
restructuring of the Corporation;
(g) redeem, repurchase, purchase for cancellation or otherwise acquire for
value any of its outstanding securities; or
(h) cease to carry on in any material respect the business currently
carried on by the Corporation and its Subsidiaries or engage in any
business not currently carried on or undertaken by or reasonably
related to the business currently carried on and undertaken by the
Corporation or its Subsidiaries,
provided that no such approval shall be required for the Corporation to comply
with its legal obligations under the terms (as they exist on the date hereof) of
the Series One Preferred Share of the Corporation or the CIBC Debenture (as
modified by the Consent and Amending Agreement), or for the holder of the Series
One Preferred Share or the CIBC Debenture to exercise their rights thereunder.
ARTICLE VIII
INFORMATION RIGHTS AND OPERATIONAL COVENANTS
8.1 INFORMATION DELIVERED TO COMMON SHAREHOLDERS.
The Corporation shall deliver to the Investor all financial statements, meeting
materials, proxy and management information circulars and other information
delivered to the holders of Common Shares, and such delivery to the Investor
shall be made concurrently with delivery to the holders of Common Shares.
8.2 CASH FLOW MANAGEMENT.
The Corporation shall, within thirty (30) days from the date hereof:
(a) put into effect cash management procedures and policies to ensure that
any funds received from third parties by the Corporation or any of its
Subsidiaries in trust, deemed trust or implied trust shall not be used
to finance the operations of the business of the Corporation or any of
its Subsidiaries except in payment of obligations to the intended
recipient or beneficiary of such trust, deemed trust or implied trust;
and
(b) take all necessary actions to ensure that as of the date hereof and
for a period of 36 months following the date hereof the aggregate of
(i) the Corporation's cash on hand (which includes cash received from
customers that is payable to the Corporation's corporate partners) and
cash due from but not yet received from any of the Corporation's
credit card processing vendors is greater than (ii) the
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aggregate of the Corporation's deposits categorized as liabilities
(which includes liabilities in respect of cash received from customers
that is payable to the Corporation's corporate partners).
8.3 USE OF PROCEEDS - ISSUANCE OF PREFERRED SHARE AND WARRANTS.
The Corporation shall, within sixty (60) days from the date hereof, deliver to
the Investor a plan describing the intended use of the proceeds of the issuance
of the Preferred Share and the Warrants, and shall, following meaningful
consultations with the Investor, submit such plan to the Board of Directors for
approval.
8.4 USE OF PROCEEDS - EXERCISE OF WARRANTS.
The Corporation shall, upon receipt of the proceeds received on exercise in full
of the Warrants, use such proceeds to repay, on or before the date which is
thirty (30) days following such exercise, all amounts owing under, and in
accordance with, the terms of the CIBC Debenture and the Series One Preferred
Share of the Corporation.
ARTICLE IX
MISCELLANEOUS
9.1 NO DEROGATION OF RIGHTS.
The granting of any rights hereunder to the Investor, and the exercise thereof,
shall in no way detract from or restrict the rights otherwise possessed by the
Investor as a holder of securities of the Corporation, including, without
limitation, the right of the Investor to exercise its ability to exercise the
Warrants or its rights, voting or otherwise, as a shareholder of the
Corporation.
9.2 TERM OF AGREEMENT.
Except as specifically provided herein, this Agreement shall terminate upon the
earlier of:
(a) the written agreement of the Investor and the Corporation;
(b) with respect to the provisions of this Agreement other than Article
III, the earliest of:
(i) the date which is thirty-one (31) days following the date on
which the Investor or an affiliate of the Investor has exercised
the Warrants in full;
(ii) the date on which the Investor of an affiliate of the Investor no
longer holds the Warrants; and
(iii) the date on which the Warrants expire, unless exercised in full
on or prior thereto,
and with respect to Article III, together with the relevant provisions
of Article I, until 5:01 p.m. (local time in Toronto) on March 31,
2013; and
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(c) the date on which the Investor or any successor to the Investor
hereunder ceases to be an affiliate of USA Interactive.
9.3 PUBLIC ANNOUNCEMENTS.
The Corporation shall not make any press release or other public announcement
concerning the transactions contemplated by this Agreement without the prior
written consent of the Investor except as and to the extent that the Corporation
shall be obligated to make any such disclosure under applicable Law and then
only after reasonable consultation with the Investor regarding the basis of such
obligation and the content of such press release or other public announcement.
The Investor shall be entitled to make any such press release or other
announcement without the consent of the Corporation provided that such release
or announcement does not contain any misrepresentation or any misleading
information pertaining to the Corporation or the transactions contemplated by
this Agreement.
9.4 ASSIGNMENT.
No assignment of this Agreement may be made by either party at any time, whether
or not by operation of Law, without the other party's prior written consent;
provided, however, the Investor may assign any of its rights hereunder to an
affiliate of the Investor to whom the Preferred Share or Warrants are
transferred without the Corporation's consent provided that such affiliate or
other party expressly assumes in writing all of the Investor's obligations
hereunder as if an original signatory hereto.
9.5 BINDING EFFECT.
This Agreement shall be binding upon and shall enure to the benefit of and be
enforceable by the Corporation and the Investor and their respective successors
and permitted assigns.
9.6 TIME.
Time shall be of the essence of this Agreement in each and every matter or thing
herein provided.
9.7 NOTICES.
(a) Each party shall give prompt notice to the other of any breach of its
obligations under this Agreement, provided that no such notification
shall affect the covenants or agreements of the parties under this
Agreement.
(b) Any notice or other communications required or permitted to be given
under this Agreement shall be sufficiently given if delivered in
person or if sent by facsimile transmission (provided such
transmission is recorded as being transmitted successfully):
-24-
(i) in the case of the Investor, to the following address:
Points Investments, Inc.
c/o USA Interactive
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier: 000-000-0000
Attention: General Counsel
with a copy to:
Goodmans LLP
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx
X0X 0X0
Telecopier: 000-000-0000
Attention: Xxxxxxxx Xxxxx
(ii) in the case of the Corporation, to the following address:
Points International Ltd.,
000 Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx X0X 0X0
Telecopier: 000-000-0000
Attention: President
with a copy to:
Davies Xxxx Xxxxxxxx & Xxxxxxxx LLP
P.O. Box 63
44th Floor
0 Xxxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxx X0X 0X0
Telecopier: 000-000-0000
Attention: Xxxxxxx X. Xxxxxx
or at such other address as the party to which such notice or other
communication is to be given has last notified the party giving the same in the
manner provided in this Section 9.7, and if so given the same shall be deemed to
have been received on the date of such delivery or sending.
9.8 GOVERNING LAW.
This Agreement shall be governed by and construed in accordance with the laws of
the Province of Ontario and the federal laws of Canada applicable therein. Each
party hereto irrevocably
-25-
submits to the non-exclusive jurisdiction of the courts of the Province of
Ontario with respect to any matter arising hereunder or related hereto.
9.9 INJUNCTIVE RELIEF.
The parties agree that the remedy at law for any breach of the provisions of
this Agreement will be inadequate and that the party that is not in breach, on
any application to a court, shall be entitled, without the need to post any bond
or provide any indemnity, to temporary and permanent injunctive relief, specific
performance and any other equitable relief against the party or parties in
breach of the provisions of this Agreement.
9.10 CURRENCY.
Except as expressly indicated otherwise, all sums of money referred to in this
Agreement are expressed and shall be payable in Canadian dollars.
9.11 ENTIRE AGREEMENT.
This Agreement, together with the Subscription Agreement and the Warrants,
constitutes the entire agreement of the Corporation and the Investor with
respect to the subject matter hereof, as of the date of this Agreement, and
shall supersede all agreements, understanding, negotiations and discussions
whether oral or written, between the parties with respect to the subject matter
hereof on or prior to the date of this Agreement.
9.12 FURTHER ASSURANCES.
Each party shall, from time to time, and at all times hereafter, at the request
of the other party hereto, but without further consideration, do all such
further acts and execute and deliver all such further documents and instruments
as shall be reasonably required in order to fully perform and carry out the
terms and intent hereof.
9.13 WAIVERS AND MODIFICATIONS.
The Corporation and the Investor may waive or consent to the modification of, in
whole or in part, any inaccuracy of any representation or warranty made to it
under this Agreement or in any document to be delivered pursuant to this
Agreement and may waive or consent to the modification of any of the obligations
contained in this Agreement for its benefit or waive or consent to the
modification of any of the obligations of the other party. Any waiver or consent
to the modification of any of the provisions of this Agreement, to be effective,
must be in writing executed by the party granting such waiver or consent.
9.14 COUNTERPARTS.
This Agreement may be signed in any number of counterparts (by facsimile or
otherwise), each of which shall be deemed to be original and all of which, when
taken together, shall be deemed to constitute one and the same instrument. It
shall not be necessary in making proof of this Agreement to produce more than
one counterpart.
-26-
9.15 DATE FOR ANY ACTION.
In the event that any date on which any action is required to be taken under
this Agreement by either of the parties hereto is not a Business Day, such
actions shall be required to be taken on the next succeeding day which is a
Business Day.
9.16 CONSTRUCTION.
In this Agreement:
(a) words denoting the singular include the plural and vice versa and
words denoting any gender include all genders;
(b) the words "including", "include", and "includes" shall mean "including
without limitation", "include, without limitation" and "includes,
without limitation", respectively;
(c) any reference to a statute shall mean the statute in force as at the
date hereof and any regulation in force thereunder, unless otherwise
expressly provided; and
(d) the use of headings is for convenience of reference only and shall not
affect the construction of this Agreement.
9.17 INTERPRETATION.
When a reference is made in this Agreement to a Section or Schedule, such
reference shall be to a Section or Schedule to this Agreement unless otherwise
indicated. The table of contents and headings contained in this agreement are
for reference purposes only and shall not affect in any way the meaning,
construction or interpretation of this Agreement.
9.18 KNOWLEDGE.
Where a statement is made "to the knowledge of" the Corporation or refers to
information "known to" the Corporation, it is based on information available to
any of the Chief Executive Officer, Chief Financial Officer and President of the
Corporation after due enquiry. Those officers will be deemed to have "knowledge"
of a particular fact or other matter if a prudent individual could be expected
to discover or otherwise become aware of such fact or other matter in the course
of conducting a reasonably comprehensive investigation concerning the existence
of such fact or other matters, including having had complete and thorough
consultations with the Chief Technology Officer, General Counsel, Executive
Vice-President Business Development, Executive Vice-President Marketing, and
each of Xxxxxxx Xxxxxxxx and Xxxx Xxxxxxx, or their successors.
9.19 SEVERABILITY.
If any term or other provision of this Agreement is invalid, illegal or
incapable of being enforced by any rule or Law, or public policy, all other
conditions and provisions of this Agreement shall nevertheless remain in full
force and effect so long as the economic or legal substance of the matters that
are the subject of this Agreement is not affected in a manner materially adverse
to
-27-
any party to this Agreement. Upon a determination by an Agency having
jurisdiction that any term or other provision of this Agreement is invalid,
illegal or incapable of being enforced, the Corporation and the Investor shall
negotiate in good faith to modify this Agreement so as to effect their original
intent as closely as possible.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.
POINTS INVESTMENTS, INC.
By: /s/ Xxx Xxxxxxxx
------------------------------------
Name: Xxx Xxxxxxxx
Title: Vice President
USA INTERACTIVE
By: /s/ Xxx Xxxxxxxx
------------------------------------
Name: Xxx Xxxxxxxx
Title: Senior Vice President,
Strategic Planning
POINTS INTERNATIONAL LTD.
By: /s/ Illegible
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
By: /s/ Illegible
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
-28-
SCHEDULE 1.1(W)
OUTSTANDING RIGHTS TO ACQUIRE COMMON SHARES
AS AT APRIL 11, 2003
See attached.
SCHEDULE 1.1 (W) RIGHTS TO ACQUIRE COMMON SHARES OF POINTS INTERNATIONAL LTD.
(PIL)
CIBC Debenture 18,908,070
Series One Preferred Preferred Share 1
PIL Options
Expiration Other Similar
Holder Date of Grant Options Exercise Price Date Terms
------ ------------- ------- -------------- ---------- -------------
Xxxxxxx Xxxxxx 28-Feb-03 10,000 $0.280 27-Feb-08
Xxxxxxx Xxxxxxxx 17-Feb-03 50,000 $0.220 16-Feb-08
Xxxxxx lvers 17-Feb-03 10,000 $0.220 16-Feb-08
Xxxx Xxxxx 17-Feb-03 65,000 $0.220 16-Feb-08
Xxxxxx Xxxxx 17-Feb-03 65,000 $0.220 16-Feb-08
Xxxx Xxxxx 17-Feb-03 5,000 $0.220 16-Feb-08
Xxxxx Xxxxxxx 17-Feb-03 65,000 $0.220 16-Feb-08
Xxxx Xxxxxx 17-Feb-03 5,000 $0.220 16-Feb-08
Xxx Xxxxxxxxxx 17-Feb-03 5,000 $0.220 16-Feb-08
Xxxxxxx Xxxxxxxxx 17-Feb-03 5,000 $0.220 16-Feb-08
Xxxxxxx Xxxxxx 17-Feb-03 10,000 $0.220 16-Feb-08
Xxxxx Xxxxxxx 17-Feb-03 5,000 $0.220 00-Xxx-00
Xxx Xx Melo 17-Feb-03 5,000 $0.220 16-Feb-08
Xxxx XxXxxxx 17-Feb-03 3,000 $0.220 16-Feb-08
Xxxx Xxxx 17-Feb-03 5,000 $0.220 16-Feb-08
Xxxxxx Xxxxxxxxxx 17-Feb-03 3,000 $0.220 00-Xxx-00
Xxxxx Xxxx 00-Xxx-00 5,000 $0.250 00-Xxx-00
Xxxxx Xxxxx 00-Xxx-00 5,000 $0.250 00-Xxx-00
Xxxxx Xxxxxx 00-Xxx-00 5,000 $0.250 00-Xxx-00
Xxxxx Xxxxx 00-Xxx-00 10,000 $0.250 14-Nov-07
Xxxx Xxxxxxx 26-Jun-02 120,000 $0.250 26-Jun-07
Xxxxxxx Xxxxxxxxx 26-Jun-02 10,000 $0.250 26-Jun-07
Xxxx Xxxxx 26-Jun-02 7,500 $0.250 26-Jun-07
Xxxxxx Xx Xxxx 26-Jun-02 7,500 $0.250 26-Jun-07
Xxxxx Xxxxxxx 26-Jun-02 5,000 $0.250 26-Jun-07
Xxxxx Xxxxxxxxx 26-Jun-02 5,000 $0.250 26-Jun-07
Xxxxxx Xxxxx 17-Apr-02 40,000 $0.380 17-Apr-07
Xxxxxx Xxxxx 05-Apr-02 3,000 $0.280 05-Apr-07
Fatma Jahazi 05-Apr-02 3,000 $0.280 05-Apr-07
Xxx Xxxxxxx 2l-Feb-02 30,000 $0.250 21-Feb-07
Xxxx Xxx 21-Feb-02 30,000 $0.250 21-Feb-07
Xxxx Xxxxxxxx 21-Feb-02 30,000 $0.250 21-Feb-07
Xxxx Xxxxx 21-Feb-02 30,000 $0.250 21-Feb-07
Xxxxxxx Xxxxxxx 21-Feb-02 30,000 $0.250 00-Xxx-00
Xxxxx Xxxxxxxxxx 00-Xxx-00 3,000 $0.250 21-Feb-07
Xxxx Xxxxxxxx 21-Feb-02 3,000 $0.250 21-Feb-07
Xxxxx Xxxxxxx 21-Feb-02 3,000 $0.250 21-Feb-07
Xxxxxx Xxxxx 21-Feb-02 15,000 $0.250 21-Feb-07
Xxxx Carly 08-Feb-02 100,000 $0.270 08-Feb-07
Xxxx Xxx 08-Feb-02 100,000 $0.270 08-Feb-07
Xxxx Xxxxxxxx 08-Feb-02 100,000 $0.270 08-Feb-07
Xxxx Xxxxxx 08-Feb-02 100,000 $0.270 08-Feb-07
Xxxxxxx Xxxxxxx 08-Feb-02 100,000 $0.270 08-Feb-07
Xxxx Xxxxxxxxx 08-Feb-02 90,000 $0.270 08-Feb-07
Xxxxxxx Xxxxxx 08-Feb-02 20,000 $0.270 08-Feb-07
Xxxxx Xxxxxx 08-Feb-02 20,000 $0.270 08-Feb-07
Xxxxx Brisboise 08-Feb-02 20,000 $0.270 08-Feb-07
Xxx Xxxxxxxx 08-Feb-02 20,000 $0.270 00-Xxx-00
Xxxxxxx Xxxxxxxxxxxxxxx 00-Xxx-00 20,000 $0.270 08-Feb-07
Xxxxxx Xxxxx 08-Feb-02 80,000 $0.270 08-Feb-07
Xxxxx Xxxxxx 08-Feb-02 120,000 $0.270 08-Feb-07
Xxxx Xxxxxx 08-Feb-02 10,000 $0.270 08-Feb-07
Xxx XxXxxxxxxx 08-Feb-02 10,000 $0.270 08-Feb-07
Xxxx Xxxxx 08-Feb-02 15,000 $0.270 08-Feb-07
Xxxxx Xxxxx 08-Feb-02 10,000 $0.270 08-Feb-07
Xxxxx Xxxxxxx 08-Feb-02 7,500 $0.270 08-Feb-07
Xxxxx Xxxxxxx 08-Feb-02 15,000 $0.270 08-Feb-07
Xxxxxxx Xxxxxx 08-Feb-02 15,000 $0.270 08-Feb-07
Xxxxx Xxxxx 08-Feb-02 5,000 $0.270 08-Feb-07
Xxxxxx Xxxxxxxxx 08-Feb-02 3,000 $0.270 08-Feb-07
Xxxx XxXxxxx 08-Feb-02 3,000 $0.270 00-Xxx-00
Xxxx Xxxxxx 07-May-01 637,500 $0.560 07-May-06
Xxxxxxx Xxxxx 07-May-01 33,750 $0.560 07-May-06
Xxxxx Xxxxxx 03-Nov-00 250,000 $1.000 03-Nov-05
Xxxx Xxxx 05-Sep-00 25,000 $0.690 22-Aug-05
Page 1 of 3
Xxxx Xxxxxxxx 14-Mar-00 25,000 $0.500 14-Mar-05
Xxxx Xxxxx 14-Mar-00 25,000 $0.500 14-Mar-05
Xxxxxxxxx Xxxxx 14-Mar-00 25,000 $0.500 14-Mar-05
Xxxx Kojfman 14-Mar-00 25,000 $0.500 14-Mar-05
Xxxx Xxxxxxx 14-Mar-00 25,000 $0.500 14-Mar-05
Xxxxxx Xxxxxxx 14-Mar-00 25,000 $0.500 14-Mar-05
Xxxxxxx Xxxxxxxx 14-Mar-00 25,000 $0.500 14-Mar-05
Xxxxxx Xxxxxx 14-Mar-00 25,000 $0.500 14-Mar-05
Connor O'Brien 14-Mar-00 25,000 $0.500 14-Mar-05
Xxxxx Xxxxxx 14-Mar-00 1,400 $0.500 14-Mar-05
Xxxx Xxxxxx 14-Feb-00 350,000 $0.500 14-Feb-05
Xxxxxxxxxxx Xxxxxxx 14-Feb-00 650,000 $0.500 14-Feb-05
Xxxxxxx Xxxxx 14-Feb-00 150,000 $0.500 14-Feb-05
Xxxxxx Xxxxx 14-Feb-00 75,000 $0.500 14-Feb-05
Xxxxxx XxxXxxx 14-Feb-00 125,000 $0.500 14-Feb-05
Xxxxx Xxxxxxxx 14-Feb-00 100,000 $0.500 14-Feb-05
Xxxxx XxXxxxxxxx 14-Feb-00 100,000 $0.500 14-Feb-05
Xxx Xxxxxxx 14-Feb-00 100,000 $0.500 14-Feb-05
Xxxxxxxx Xxxxxxx 14-Feb-00 25,000 $0.500 14-Feb-05
Xxxxxx Xxxxxxxxx 14-Feb-00 25,000 $0.500 14-Feb-05
Xxxxxxx Jacond 14-Feb-00 25,000 $0.500 14-Feb-05
Xxxxxx Xxxxxxx 14-Feb-00 25,000 $0.500 14-Feb-05
Mandrake Management Consultants 14-Feb-00 30,000 $0.500 14-Feb-05
Xxxxx Xxxxxx, Senior Consultant at Mandrake 14-Feb-00 10,000 $0.500 14-Feb-05
Xxxx Xxxxxx, Consultant at Mandrake 14-Feb-00 10,000 $0.500 14-Feb-05
Continental Communications 14-Feb-00 25,000 $0.500 14-Feb-05
Xxxx Dams 14-Feb-00 2,000 $0.500 14-Feb-05
Xxxxxxxxxxx Xxxxxxx 22-Mar-99 531,250 $0.200 22-Mar-04
Gowling Strathy & Xxxxxxxxx (Xxxx Xxxxxx) 22-Mar-99 50,000 $0.200 22-Mar-04
Xxxxx Xxxxxxxx 22-Mar-99 162,500 $0.200 22-Mar-04
---------
Total PIL Options 5,442,900
---------
PCI Options With Put Adjusted to PIL Shares Issuable
Expiration Other Similar
Holder Date of Grant Options Exercise Price Date Terms
------ ------------- --------- -------------- ---------- --------------------
Xxx Xxxxxxx 31-Mar-00 1,060,745 $0.005 31-Mar-05 Assuems FMV @ 2.5039
Xxxxx xxxxxx 31-Mar-00 655,567 $0.005 31-Mar-05 Assuems FMV @ 2.5039
Xxxxx Xxxxx 31-Mar-00 655,567 $0.005 31-Mar-05 Assuems FMV @ 2.5039
Xxxxxxx Xxxxxx-Xxxxxxx 09-Jul-00 655,567 $0.005 09-Jul-05 Assuems FMV @ 2.5039
Xxx Xxxxxxx 31-Mar-00 988,120 $0.005 31-Mar-05 Assuems FMV @ 2.5039
Xxxxx xxxxxx 31-Mar-00 752,854 $0.005 31-Mar-05 Assuems FMV @ 2.5039
Xxxxx Xxxxx 31-Mar-00 752,854 $0.005 31-Mar-05 Assuems FMV @ 2.5039
Xxxxxxx Xxxxxx-Xxxxxxx 09-Jul-00 262,850 $0.005 09-Jul-05 Assuems FMV @ 2.5039
X. Xxxxxxxx 13-Aug-00 306,658 $0.005 13-Aug-05 Assuems FMV @ 2.5039
C Xxxxxxxx 01-Sep-00 216,337 $0.005 01-Sep-05 Assuems FMV @ 2.5039
Xxxxx Xxxx 20-Aug-00 144,225 $0.005 20-Aug-05 Assuems FMV @ 2.5039
Xxxx Xxxxxx 17-Feb-00 135,211 $0.005 17-Feb-05 Assuems FMV @ 2.5039
Xxxxxxxxxxx Xxxxxxx 17-Feb-00 135,211 $0.005 17-Feb-05 Assuems FMV @ 2.5039
Xxxxx Xxxxx 17-Feb-00 99,155 $0.005 17-Feb-05 Assuems FMV @ 2.5039
Xxxx Xxxxxx 17-Feb-00 -- $0.005 17-Feb-05 Assuems FMV @ 2.5039
Xxxxxx Xxxxx 17-Feb-00 -- $0.005 17-Feb-05 Assuems FMV @ 2.5039
Xxx Xxxxxxx 17-Feb-00 36,056 $0.005 17-Feb-05 Assuems FMV @ 2.5039
Xxxxx Xxxxxxx 17-Feb-00 36,056 $0.005 17-Feb-05 Assuems FMV @ 2.5039
Xxxxx XxXxxxxxxx 17-Feb-00 36,056 $0.005 17-Feb-05 Assuems FMV @ 2.5039
Xxxxx Xxxxxxxx 17-Feb-00 36,056 $0.005 17-Feb-05 Assuems FMV @ 2.5039
Delta between Option Agreements and TSXV (126,207)
Approval ---------
Total PIL Shares Issuable 6,838,938
---------
Warrants
Expiration Other Similar
Holder Date of Grant Warrants Exercise Price Date Terms
------ ------------- --------- -------------- ---------- --------------------
CIBC World Markets 08-Feb-02 595,667 $0.250 15-Mar-06
Kensington Capital Partners Limited 08-Feb-02 966,985 $0.250 30-Nov-04
Xxxxxxxx & Company Inc. 08-Feb-02 539,797 $0.250 30-Nov-04
Xxxx Xxxxxxxx 08-Feb-02 298,997 $0.250 30-Nov-04
1216752 Ontario Inc. 08-Feb-02 298,997 $0.250 30-Nov-04
Xxxxxxx Xxxxx 08-Feb-02 298,997 $0.250 30-Nov-04
Xxxxx Xxxxxxxx 08-Feb-02 298,997 $0.250 30-Nov-04
Xxxxxxx Xxxxxxxx 08-Feb-02 293,847 $0.250 30-Nov-04
Canada World Wide Trading Corp. 08-Feb-02 290,093 $0.250 30-Nov-04
Romajola Holdings Inc. 08-Feb-02 209,317 $0.250 30-Nov-04
Xxxxxxx Xxxxx 08-Feb-02 203,067 $0.250 30-Nov-04
1381931 Ontario Ltd. 08-Feb-02 188,931 $0.250 30-Nov-04
Xxxx Xxxxxxxx 08-Feb-02 137,196 $0.250 30-Nov-04
Davies Xxxx Xxxxxxxx & Xxxxxxxx 08-Feb-02 120,902 $0.250 00-Xxx-00
Xxxxxxxxxx Securities Inc. 08-Feb-02 88,525 $0.250 30-Nov-04
Lauruss Investments Limited 08-Feb-02 49,185 $0.250 00-Xxx-00
XXXX Investments Limited 08-Feb-02 29,511 $0.250 30-Nov-04
Permanent Developments Limited 08-Feb-02 22,975 $0.250 30-Nov-04
Casaral Inc. 08-Feb-02 22,974 $0.250 30-Nov-04
Shulwood Inc. 08-Feb-02 19,671 $0.250 30-Nov-04
Page 2 of 3
Xxxxxx Xxxx 08-Feb-02 17,485 $0.250 30-Nov-04
First Associates Investments Inc. 15-Feb-02 318,286 $0.250 15-Aug-03
Orbiz 18-Jul-02 1,000,000 $0.250 18-Jul-05
Kensington Securities Inc. 24-Jul-02 50,000 $0.280 08-Feb-04
Mallet Group 22-Oct-02 92,000 $0.280 21-Oct-04
---------
Total Warrants 6,452,402
---------
Page 3 of 3
