APOLLO GOLD CORPORATION - and - CIBC MELLON TRUST COMPANY SHAREHOLDER RIGHTS PLAN AGREEMENT
APOLLO
GOLD CORPORATION
-
and
-
CIBC
MELLON TRUST COMPANY
Table
of
Contents
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Page
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Article 1
INTERPRETATION
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2
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1.1
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Certain
Definitions
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2
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1.2
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Currency
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11
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1.3
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Descriptive
Headings
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11
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1.4
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References
to Agreement
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11
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1.5
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Grandfather
Provision
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12
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1.6
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Calculation
of Number and Percentage of Beneficial Ownership of Outstanding
Voting
Shares
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12
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1.7
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Acting
Jointly or in Concert
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12
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Article 2
THE RIGHTS
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13
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2.1
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Legend
on Certificates
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13
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2.2
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Execution,
Authentication, Delivery and Dating of Rights Certificates
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13
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2.3
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Registration,
Registration of Transfer and Exchange
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14
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2.4
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Mutilated,
Destroyed, Lost and Stolen Rights Certificates
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14
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2.5
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Persons
Deemed Owners of Rights
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15
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2.6
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Delivery
and Cancellation of Certificates
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15
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2.7
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Agreement
of Rights Holders
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16
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2.8
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Rights
Certificate Holder Not Deemed a Shareholder
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16
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Article 3
EXERCISE OF THE RIGHTS
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17
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3.1
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Initial
Exercise Price; Exercise of Rights; Detachment of Rights
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17
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3.2
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Adjustments
to Exercise Prices; Number of Rights
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19
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Article 4
ADJUSTMENTS TO THE RIGHTS IN THE EVENT OF CERTAIN
TRANSACTIONS
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25
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4.1
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Flip-in
Event
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25
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Article 5
THE RIGHTS AGENT
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26
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5.1
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General
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26
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5.2
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Merger
or Amalgamation or Change of Name of Rights Agent
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27
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5.3
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Duties
of Rights Agent
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27
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5.4
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Change
of Rights Agent
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29
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Article 6
MISCELLANEOUS
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30
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6.1
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Redemption
and Waiver
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30
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6.2
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Expiration
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32
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6.3
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Shareholder
Review
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32
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6.4
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Issuance
of New Rights Certificate
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32
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Table
of
Contents
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Page
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6.5
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Fractional
Rights and Fractional Shares
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32
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6.6
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Supplements
and Amendments
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33
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6.7
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Rights
of Action
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34
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6.8
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Notice
of Proposed Actions
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35
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6.9
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Notices
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35
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6.10
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Costs
of Enforcement
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36
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6.11
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Successors
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36
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6.12
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Benefits
of this Agreement
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36
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6.13
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Governing
Law
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36
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6.14
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Language
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37
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6.15
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Approvals
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37
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6.16
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Declaration
as to Non-Canadian Holders
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37
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6.17
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Counterparts
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37
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6.18
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Severability
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37
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6.19
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Effective
Date
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37
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6.20
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Successors
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38
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6.21
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Time
of the Essence
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38
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MEMORANDUM
OF AGREEMENT
made as
of the 17th
day of
January,
2007.
BETWEEN:
APOLLO
GOLD CORPORATION,
a
corporation existing under the laws of the Yukon Territory,
(hereinafter
called the "Corporation")
OF
THE
FIRST PART
-
and
-
CIBC
MELLON TRUST COMPANY,
a trust
company existing under the laws of Canada, as Rights Agent
(hereinafter
called the "Rights Agent")
OF
THE
SECOND PART
WHEREAS
in order
to maximize shareholder value and ensure equal treatment of shareholders in
transactions affecting control of the Corporation, the Board of Directors of
the
Corporation has determined that it is advisable for the Corporation to adopt
a
shareholder rights plan (the "Rights
Plan");
AND
WHEREAS
in order
to implement the Rights Plan the Board of Directors of the Corporation
has:
1. Authorized
the issuance of one right (a "Right")
in
respect of each Common Share (as hereinafter defined) of the Corporation
outstanding at the Close of Business on January
17, 2007 (the
"Record
Time"),
such
distribution to be made to Shareholders of record at the Record Time;
and
2. Authorized
the issuance of one Right in respect of each Common Share issued after the
Record Time and prior to the earlier of the Separation Time (as hereinafter
defined) and the Expiration Time (as hereinafter defined);
AND
WHEREAS
each
Right entitles the holder thereof, after the Separation Time, to purchase
securities of the Corporation (or, in certain cases, of certain other entities)
pursuant to the terms and subject to the conditions set forth
herein;
AND
WHEREAS
the
Corporation desires to appoint the Rights Agent to act on behalf of the
Corporation and holders of Rights, and the Rights Agent is willing so to act,
in
connection with the issuance, transfer, exchange and replacement of Rights
Certificates (as hereinafter defined), the exercise of Rights and other matters
referred to herein;
NOW
THEREFORE
in
consideration of the premises and the respective covenants and agreements set
forth herein, the parties hereby agree as follows:
ARTICLE 1
INTERPRETATION
1.1 Certain
Definitions
For
the
purposes of this Agreement, the following terms have the meanings
indicated:
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(a)
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"Acquiring
Person"
means, subject to section 1.5,
any Person who is the Beneficial Owner of 20% or more of the outstanding
Voting Shares of the Corporation; provided, however, that the term
"Acquiring
Person"
shall not include:
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(i)
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the
Corporation or any Subsidiary of the
Corporation;
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(ii)
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any
Person who becomes the Beneficial Owner of 20% or more of the outstanding
Voting Shares of the Corporation as a result of one or any combination
of:
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(A)
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an
acquisition or redemption by the Corporation or a Subsidiary of the
Corporation of Voting Shares of the Corporation that, by reducing
the
number of Voting Shares of the Corporation outstanding, increases
the
percentage of outstanding Voting Shares of the Corporation Beneficially
Owned by such Person to 20% or
more;
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(B)
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share
acquisitions made pursuant to a Permitted Bid or a Competing Permitted
Bid
("Permitted
Bid Acquisitions");
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(C)
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share
acquisitions in respect of which the Board of Directors has waived
the
application of section 4.1
pursuant to the provisions of subsection 6.1(f),
6.1(g)
or
6.1(h)
or
that were made on or prior to the date of this Agreement ("Exempt
Acquisitions");
or
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(D)
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share
acquisitions pursuant to Pro-Rata
Acquisitions;
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provided,
however, that if a Person shall become the Beneficial Owner of 20% or more
of
the Voting Shares of the Corporation then outstanding by reason of share
acquisitions or redemptions by the Corporation or a Subsidiary of the
Corporation, Permitted Bid Acquisitions, Exempt Acquisitions, Pro-Rata
Acquisitions or Convertible Security Acquisition and, after such share
acquisitions or redemptions by the Corporation or a Subsidiary of the
Corporation or Permitted Bid Acquisitions, Exempt Acquisitions or Pro-Rata
Acquisitions, such Person, while such Person is the Beneficial Owner of 20%
of
more of the Voting Shares of the Corporation then outstanding, becomes the
Beneficial Owner of an additional 1% of outstanding Voting Shares of the
Corporation other than pursuant to such share acquisitions or redemptions or
pursuant to Permitted Bid Acquisitions or through Exempt Acquisitions or as
a
result of a Pro-Rata Acquisition, then as of the date such Person becomes the
Beneficial Owner of such additional outstanding Voting Shares, such Person
shall
be an "Acquiring
Person";
2
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(iii)
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for
the period of 10 days after the Disqualification Date (as hereinafter
defined), any Person who becomes the Beneficial Owner of 20% or more
of
the outstanding Voting Shares of the Corporation as a result of such
Person becoming disqualified from relying on clause 1.1(d)(iv) hereof
where such disqualification results solely because such Person has
made or
proposes to make a Take-over Bid in respect of securities of the
Corporation alone or by acting jointly or in concert with any other
Person
the first date of public announcement (which, for purposes of this
definition, shall include, without limitation, a report filed pursuant
to
the Securities Act) by such Person or the Corporation of the intent
of
such Person to commence such a Take-over Bid being herein referred
to as
the "Disqualification
Date";
and
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(iv)
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an
underwriter or member of a banking or selling group that acquires
Shares
from the Corporation in connection with the distribution of
securities.
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(b)
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"Affiliate"
when used to indicate a relationship with a specified Person, shall
mean a
Person that controls, or is controlled by, or is under common control
with, such specified Person.
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(c)
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"Associate"
means any spouse of such specified Person or any person of the same
or
opposite sex to whom such specified Person is married or with whom
such
specified Person is living in a conjugal relationship outside marriage,
or
any relative of such specified Person, such spouse or other person
who has
the same home as such specified
Person;
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(d)
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Subject
to section 1.5,
a
Person shall be deemed the "Beneficial
Owner"
of, and to have "Beneficial
Ownership"
of, and to "Beneficially
Own":
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(i)
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any
securities as to which such Person, or any of such Person's Affiliates
or
Associates, is the owner at law or in
equity;
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(ii)
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any
securities as to which such Person or any of such Person's Affiliates
or
Associates has, directly or indirectly the right to acquire (whether
such
right is exercisable immediately or upon the occurrence of a contingency)
within 60 days pursuant to any agreement, arrangement or understanding
(other than customary agreements with and between underwriters and
banking
group or selling group members with respect to a distribution of
securities and other than pledges of securities in the ordinary course
of
business) or upon the exercise of any conversion right, exchange
right,
share purchase right (other than a Right), warrant or option ;
and
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(iii)
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any
securities that are Beneficially Owned, directly or indirectly, within
the
meaning of the foregoing provisions of this subsection 1.1(d)
by
any other Person with which such Person is acting jointly or in
concert;
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3
provided,
however, that a Person shall not be deemed the Beneficial Owner of, or to have
Beneficial Ownership of, or to Beneficially Own, any security:
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(iv)
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because
(A) the holder of such security has agreed to deposit or tender such
security to a Take-Over Bid made by such Person or any of such Person's
Affiliates or Associates or to any other Person referred to in clause
(iii) of this definition pursuant to a Permitted Lock-Up Agreement
or (B)
such security has been deposited or tendered pursuant to any Take-over
Bid
made by such Person or made by any of such Person's Affiliates or
Associates or any other Person referred to in clause (iii) of this
definition until such deposited security has been taken up or paid
for,
whichever shall occur first;
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(v)
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because
such Person holds such security; provided
that:
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(A)
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the
ordinary business of such Person (the "Investment
Manager")
is the management of investment funds for others and such security
is held
by the Investment Manager in the ordinary course of such business
in the
performance of such Investment Manager's duties for the managed account
of
any other Person; or
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(B)
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such
Person (the "Trust
Company")
is licensed to carry on the business of a trust company under applicable
laws and as such, acts as trustee or administrator or in a similar
capacity in relation to the estates of deceased or incompetent Persons
or
in relation to other accounts and holds such security in the ordinary
course of such duties for the estate of any such deceased or incompetent
Person (each an "Estate
Account")
or such other accounts (each an "Other
Account");
or
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(C)
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such
Person is established by statute for purposes that include, and the
ordinary business or activity of such Person (the "Statutory
Body")
includes, the management of investment funds for employee benefit
plans,
pension plans, insurance plans or various public bodies;
or
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(D)
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such
Person (the "Administrator")
is the administrator or trustee of one or more pension funds or plans
(a
"Plan"),
or is a Plan, registered under the laws of Canada or any Province
thereof
or the laws of the United States of America or any State thereof;
or
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(E)
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such
person is a Crown Agent or agency;
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provided,
in any of the above cases mentioned in clauses A, B, C, D or E above, that
the
Investment Manager, the Trust Company, the Statutory Body, the Administrator
or
the Plan, or Crown Agency, as the case may be, is not then making a Take-over
Bid or has not then announced a current intention to make a Take-over Bid,
other
than an Offer to Acquire Voting Shares or other securities (x) by means of
a
distribution by the Corporation or by means of ordinary market transactions
(including prearranged trades) executed through the facilities of a stock
exchange or organized over-the-counter market, alone or by acting jointly or
in
concert with any other Person, (y) pursuant to a distribution by the Corporation
or (z) by means of a Permitted Bid;
4
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(vi)
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because
such Person is a Client of the same Investment Manager as another
Person
on whose account the Investment Manager holds such security, or because
such Person is an Estate Account or an Other Account of the same
Trust
Company as another Person on whose account the Trust Company holds
such
security, or because such Person is a Plan with the same Administrator
as
another Plan on whose account the Administrator holds such securities;
or
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(vii)
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because
such Person is a Client of an Investment Manager and such security
is
owned at law or in equity by the Investment Manager or because such
Person
is an Estate Account or an Other Account of a Trust Company and such
security is owned at law or in equity by the Trust Company or such
Person
is a Plan and such security is owned at law or in equity by the
Administrator; or
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(viii)
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because
such Person is the registered holder of securities as a result of
carrying
on the business of or acting as a nominee of a securities
depository.
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For
purposes of this Agreement in determining the percentage of the outstanding
Voting Shares with respect to which a Person is or is deemed to be the
Beneficial Owner, any unissued Voting Shares as to which such Person is deemed
the Beneficial Owner pursuant to this subsection 1.1(d)
shall be
deemed outstanding.
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(e)
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"Board
of Directors"
means the board of directors of the Corporation, or if duly constituted
and whenever duly empowered, the executive committee of the board
of
directors of the Corporation;
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(f)
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"Business
Day"
means any day other than a Saturday, a Sunday or a day on which banking
institutions in Toronto, Ontario are authorized or obligated by law
to
close;
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(g)
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"Close
of Business"
on
any given date means the time of such date (or, if such date is not
a
Business Day, the time on the next succeeding Business Day) at which
the
offices of the transfer agent for the Common Shares in Toronto (or,
after
the Separation Time, the offices of the Rights Agent in Toronto)
are
closed to the public;
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(h)
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"Common
Shares",
when used with reference to the Corporation, shall mean the Common
Shares
in the capital of the Corporation;
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(i)
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"Competing
Permitted Bid"
means a Take-over Bid that:
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(i)
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is
made after a Permitted Bid has been made and prior to the expiry
of the
Permitted Bid;
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5
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(ii)
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satisfies
all components of the definition of a Permitted Bid other than the
requirement in clause (ii) thereof;
and
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(iii)
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contains,
and the take-up and payment for securities tendered or deposited
is
subject to, irrevocable and unqualified provisions that no Voting
Shares
shall be taken up or paid for pursuant to the Take-over Bid prior
to the
Close of Business on a date that is no earlier than the later of
(i) 35
days after the date of the Take-over Bid, and (ii) the 60th day after
the
earliest date on which any other Permitted Bid that is then in existence
was made.
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(j)
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"controlled":
a
body corporate is "controlled" by another Person if, and only
if:
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(i)
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securities
entitled to vote in the election of directors carrying more than
50% of
the votes for the election of directors are held, directly or indirectly,
by or for the benefit of the other Person;
and
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(ii)
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the
votes carried by such securities are entitled, if exercised, to elect
a
majority of the board of directors of such body
corporate;
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and
"controls",
"controlling",
"under
common control with"
shall
be interpreted accordingly.
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(k)
|
"Convertible
Security"
means, with respect to any security, a security convertible into
or
exchangeable for the first-mentioned
security.
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(l)
|
"Convertible
Security Acquisition"
means the acquisition of Voting Shares upon the exercise of a Convertible
Security received by a Person pursuant to a Permitted Bid Acquisition,
an
Exempt Acquisition or a Pro-Rata
Acquisition.
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(m)
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"Exempt
Acquisition"
shall have the meaning ascribed thereto in subclause
1.1(a)(ii)(C);
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(n)
|
"Exercise
Price"
shall mean, as of any date, the price at which a holder of a Right
may
purchase the securities issuable upon exercise of such Right. Until
adjustment thereof in accordance with the terms hereof, the Exercise
price
for each Right shall be $100;
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(o)
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"Expiration
Time"
shall mean the earlier of
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(i)
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the
Termination Time; and
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(ii)
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subject
to section 6.19,
the Close of Business on the 5th anniversary of the date
hereof;
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(p)
|
"Flip-in
Event"
shall mean a transaction occurring subsequent to the date of this
Agreement as a result of or pursuant to which any Person shall become
an
Acquiring Person, provided that a Flip-in Event shall be deemed to
occur
at the Close of Business on the 10th day (or such earlier day as
the Board
of Directors may determine) after the Share Acquisition
Date;
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(q)
|
"Independent
Shareholders"
means holders of Voting Shares of the Corporation other than Voting
Shares
of the Corporation Beneficially Owned
by:
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(i)
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any
Acquiring Person;
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6
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(ii)
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any
Offeror, other than a person described in subclause 1.1(d)(v)
hereof;
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(iii)
|
any
Associate or Affiliate of any such Acquiring Person or and
Offeror;
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(iv)
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any
Person acting jointly or in concert with such Acquiring Person or
Offeror;
and
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(v)
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any
employee benefit plan, deferred profit sharing plan and any similar
plan
or trust for the benefit of employees of the Corporation unless the
beneficiaries of the plan or trust direct the manner in which the
Voting
Shares are to be voted or withheld from voting or direct whether
the
Voting Shares are to be tendered to a Take-over
Bid.
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(r)
|
"Market
Price"
per share of any securities on any date of determination shall mean
the
average of the daily closing prices per share of such securities
(determined as described below) on each of the 20 consecutive Trading
Days
through and including the Trading Day immediately preceding such
date;
provided, however, that if an event of a type analogous to any of
the
events described in section 3.2
shall have caused the closing price in respect of any Trading Day
used to
determine the Market Price not to be fully comparable with the closing
price on such date of determination or, if the date of determination
is
not a Trading Day, on the immediately preceding Trading Day, each
such
closing price so used shall be appropriately adjusted in a manner
analogous to the applicable adjustment provided for in section
3.2
in
order to make it fully comparable with the closing price on such
date of
determination or, if the date of determination is not a Trading Day,
on
the immediately preceding Trading Day. The closing price per share
of any
securities on any date shall be:
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(i)
|
the
closing board lot sale price or, in case no such sale takes place
on such
date, the average of the closing bid and asked prices, for each share
of
such securities as reported by the principal stock exchange in Canada
on
which such securities are listed and posted for
trading;
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(ii)
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if
the securities are not listed and posted for trading on any stock
exchange
in Canada, the last sale price, regular way, or, in case no such
sale
takes place on such date, the average of the closing bid and asked
prices,
regular way, for each share of such securities as reported in the
principal consolidated transaction reporting system with respect
to
securities listed or admitted to trading on the principal national
securities exchange in the United States on which such securities
are
listed or admitted to trading;
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(iii)
|
if
for any reason none of such prices is available on such day or the
securities are not listed and posted for trading on a stock exchange
in
Canada or a national securities exchange in the United States, the
last
quoted price, or if not so quoted, the average of the reported high
bid
and low asked prices for each share of such securities in an
over-the-counter market then in use;
or
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7
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(iv)
|
if
on any such date the securities are not quoted by any such organization,
the average of the closing bid and asked prices as furnished by a
professional market maker making a market in the
securities;
|
provided,
however, that if on any such date the securities are not traded on any exchange
or in the over-the-counter market, the closing price per share of such
securities on such date shall mean the fair value per share of such securities
on such date determined by a recognized investment dealer or investment banker
with respect to the fair value per share of such securities.
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(s)
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"Permitted
Bid"
means a Take-over Bid that complies with the following
provisions:
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(i)
|
the
Take-over Bid is made by way of a Take-over Bid circular delivered
to all
holders of Voting Shares of the Corporation or registered on the
books of
the Corporation;
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(ii)
|
the
Take-over Bid shall contain, and the take up and payment for securities
tendered or deposited thereunder shall be subject to, an irrevocable
and
unqualified condition that no Shares shall be taken up or paid for
pursuant to the Take-over Bid prior to the Close of Business or a
date
which is not less than 60 days following the date of the Take-over
Bid;
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(iii)
|
the
Take-over Bid shall contain irrevocable and unqualified provisions
that
all Shares may be deposited pursuant to the Take-over Bid at any
time
prior to the Close of Business on the date referred to in clause
(ii)
hereof and that all Shares deposited pursuant to the Take-over Bid
may be
withdrawn at any time prior to the Close of Business on such
date;
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(iv)
|
the
Take-over Bid shall contain an irrevocable and unqualified condition
that
not less than 50 percent of the then outstanding Voting Shares owned
by
Independent Shareholders must be deposited to the Take-over Bid and
not
withdrawn at the Close of Business on the date referred to in clause
(iii)
hereof;
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(v)
|
the
Take-over Bid shall contain an irrevocable and unqualified provision
that,
should the condition referred to in clause (iv) hereof be met, the
Offeror
will make a public announcement of that fact, the Take-over Bid will
be
extended on the same terms for a period of not less than 10 Business
Days
from the date of such public
announcement;
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The
term
"Permitted
Bid"
shall
include a Competing Permitted Bid.
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(t)
|
"Permitted
Bid Acquisitions"
shall have the meaning ascribed thereto in subclause
1.1(a)(ii)(B);
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(u)
|
"Permitted
Lock-Up Agreement"
means an agreement between an Offeror, any of its Affiliates or Associates
or any other Person acting jointly or in concert with the Offeror
and a
Person (the "Locked-up
Person")
who is not an Affiliate or Associate of the Offeror or a Person acting
jointly or in concert with the Offeror whereby the Locked-up Person
agrees
to deposit or tender Voting Shares held by the Locked-up Person to
the
Offeror's Take-over Bid or to any Take-over Bid made by any of the
Offeror's Affiliates or Associates or made by any other Person acting
jointly or in concert with the Offeror (the "Lock-up
Bid"),
provided that:
|
8
|
(i)
|
the
agreement:
|
|
(A)
|
permits
the Locked-up Person to withdraw the Voting Shares from the agreement
in
order to tender or deposit the Voting Shares to another Take-over
Bid or
to support another transaction that contains an offering price for
each
Voting Share that is higher than the offering price contained in
or
proposed to be contained in the Lock-up
Bid;
|
|
(B)
|
(a)
permits the Locked-up Person to withdraw the Voting Shares from the
agreement in order to tender or deposit the Voting Shares to another
Take-over Bid or to support another transaction that contains an
offering
price for each Voting Share that exceeds by as much as or more than
a
specified amount (the "Specified
Amount")
the offering price for each Voting Share contained in or proposed
to be
contained in the Lock-up Bid; and (b) does not by its terms provide
for a
Specified Amount that is greater than 7% of the offering price contained
in or proposed to be contained in the Lock-up Bid;
and
|
|
(ii)
|
no
"break-up" fees, "top-up" fees, penalties or other amounts that exceed
in
the aggregate one half of the cash equivalent of any amount in excess
of
the amount offered under the Lock-up Bid and that the Locked-up Person
receives pursuant to another Take-over Bid or transaction shall be
payable
pursuant to the agreement in the event that the Locked-up Person
fails to
tender Voting Shares pursuant thereto in order to accept the Take-over
Bid
or support another transaction.
|
|
(v)
|
"Person"
shall include any individual, firm, partnership, association, trust,
trustee, executor, administrator, legal personal representative,
group,
body corporate, corporation, unincorporated organization, syndicate
or
other entity;
|
|
(w)
|
"Pro
Rata Acquisition"
shall mean an acquisition of Voting Shares of the Corporation (i)
as a
result of a stock dividend, a stock split, or other event pursuant
to
which such Person receives or acquires Voting Shares of the Corporation
or
Convertible Securities on the same pro rata basis as all other holders
of
Voting Shares of the same class or series of the Corporation, or
(ii)
pursuant to a regular dividend reinvestment or other plan of the
Corporation made available by the Corporation to the holders of Voting
Shares of the Corporation to subscribe for or purchase Voting Shares
of
the Corporation or Convertible Securities, provided that such rights
are
acquired directly from the Corporation and not from any other Person,
or
(iv) pursuant to a distribution by the Corporation of Voting Shares,
or
securities convertible into or exchangeable for Voting Shares or
Convertible Securities, pursuant to a prospectus or a securities
exchange
take-over, bid circular, or to an amalgamation, merger or other statutory
procedure requiring shareholders' approval, or (v) pursuant to a
distribution by the Corporation of Voting Shares or Convertible Securities
by way of a private placement by the Corporation or upon the exercise
by
an individual employee of stock options granted under a stock option
plan
of the Corporation or rights to purchase securities granted under
a share
purchase plan of the Corporation, provided that (1) all necessary
stock
exchange approvals for such private placement, stock option plan
or share
purchase plan have been obtained and such private placement, stock
option
plan or share purchase plan complies with the terms and conditions
of such
approvals and (2) such Person does not become the Beneficial Owner
of more
than 25% of the Voting Shares outstanding immediately prior to the
distribution, and in making this determination the Voting Shares
to be
issued to such Person in the distribution shall be deemed to be held
by
such Person but shall not be included in the aggregate number of
outstanding Voting Shares immediately prior to the
distribution.
|
9
|
(x)
|
"Record
Time"
shall mean 5:00 p.m. (Toronto time) on January
17, 2007;
|
|
(y)
|
"Right"
shall have the meaning ascribed thereto in the recitals
hereto;
|
|
(z)
|
"Rights
Agent"
means CIBC Mellon Trust Company, and includes any successor Rights
Agent
hereunder;
|
|
(aa)
|
"Rights
Certificates"
shall mean the certificates representing the Rights after the Separation
Time, which shall be in the form attached hereto as Exhibit
A;
|
|
(bb)
|
"Securities
Act"
means the Securities Act, R.S.O. 1990, c. S5, as amended, and the
regulations and rules thereunder, and any comparable or successor
laws or
regulations thereto;
|
|
(cc)
|
"Separation
Time"
shall mean, subject to section 6.1,
the Close of Business on the eighth Trading Day after the earlier
of:
|
|
(i)
|
the
Share Acquisition Date; and
|
|
(ii)
|
the
date of the commencement of, or first public announcement (provided
such
announcement is made after the Record Time) of the intent of any
Person
(other than the Corporation or any Subsidiary of the Corporation)
to
commence a Take-over Bid (other than a Permitted Bid), or such later
time
as may be determined by the Board of
Directors;
|
provided
that, if the foregoing results in the Separation Time being prior to the Record
Time, the Separation Time shall be the Record Time and provided further that,
if
any Take-over Bid referred to in clause (ii) of this subsection 1.1(cc)
expires,
or is cancelled, terminated or otherwise withdrawn prior to the Separation
Time,
such Take-over Bid shall be deemed, for the purposes of this subsection
1.1(cc),
never
to have been made;
|
(dd)
|
"Shares"
means shares in the capital of the
Corporation;
|
10
|
(ee)
|
"Share
Acquisition Date"
means the first date of public announcement (including a report filed
pursuant to the Securities Act by the Corporation or an Acquiring
Person)
of facts indicating that a Person has become an Acquiring
Person;
|
|
(ff)
|
"Subsidiary"
of
a Person shall have the meaning ascribed thereto in the Securities
Act;
|
|
(gg)
|
"Take-over
Bid"
means an Offer to Acquire Voting Shares of the Corporation or other
securities of the Corporation if, assuming that the Voting Shares
of the
Corporation subject to the Offer to Acquire are acquired at the date
of
such Offer to Acquire by the Person making such offer to Acquire,
the
Voting Shares Beneficially Owned by the Person making the offer to
Acquire
would constitute in the aggregate 20 % or more of the Voting Shares
of the
Corporation then outstanding;
|
|
(hh)
|
"Termination
Time"
means the time at which the right to exercise Rights shall terminate
pursuant to sections 6.1,
6.3,
6.6
or
6.19;
|
|
(ii)
|
"Trading
Day",
when used with respect to any securities, means a day on which the
principal Canadian securities exchange on which such securities are
listed
or admitted to trading is open for the transaction of business or,
if the
securities are not listed or admitted to trading on any Canadian
securities exchange, a Business Day;
and
|
|
(jj)
|
"Voting
Share",
when used with reference to the Corporation, means any share in the
capital of the Corporation to which is attached a right to vote for
the
election of all directors, generally, and when used with reference
to any
Person other than the Corporation, shall mean a Common Share of such
Person and any other share of capital stock or voting interests of
such
Person entitled to vote generally in the election of all
directors.
|
1.2 Currency
All
sums
of money that are referred to in this Agreement are expressed in lawful money
of
Canada, unless otherwise specified.
1.3 Descriptive
Headings
Descriptive
headings appear herein for convenience only and shall not control or affect
the
meaning or construction of any of the provisions hereof.
1.4 References
to Agreement
References
to "this
Agreement",
"hereto",
"herein",
"hereby",
"hereunder",
"hereof"
and
similar expressions refer to this Agreement and not to any particular Article,
section, subsection, clause, subclause, subdivision or other portion hereof
and
include any and every instrument supplemental or ancillary hereto.
11
1.5 Grandfather
Provision
For
the
purposes of determining whether a Person is an Acquiring Person and interpreting
the definition of Acquiring Person, a Person shall not be and shall not be
deemed to be an Acquiring Person if such Person (a "Grandfathered
Person")
is the
Beneficial Owner of 20% or more of the outstanding Voting Shares of the
Corporation determined as at the Record Time; provided, however, that this
exception shall not be, and shall cease to be, applicable to a Grandfathered
Person in the event that a Grandfathered Person shall, after the Record Time,
become the Beneficial Owner of an additional 1% of the outstanding Voting Shares
of the Corporation other than pursuant to share acquisitions or redemptions
by
the Corporation or a Subsidiary of the Corporation, Permitted Bid Acquisitions,
Exempt Acquisitions, Pro-Rata Acquisitions or Convertible Security Acquisition;
provided further that, in the event that this exception shall cease to be
applicable to a Grandfathered Person as aforesaid, such a Grandfathered Person
shall be and shall be deemed to be an Acquiring Person as at and from the time
that this exception shall not be so applicable.
1.6 Calculation
of Number and Percentage of Beneficial Ownership of Outstanding Voting
Shares
For
the
purposes of this Agreement, in determining the percentage of the outstanding
Voting Shares of the Corporation with respect to which a Person is or is deemed
to be the Beneficial owner, all Voting Shares of the Corporation as to which
such Person is deemed the Beneficial Owner shall be deemed to be
outstanding.
The
percentage of outstanding Voting Shares Beneficially Owned by any Person shall,
for the purposes of this Agreement, be and be deemed to be the product
determined by the formula:
| 100 |
X
|
A | ||
| B |
where:
A
= the
number of votes for the election of all directors generally attaching to the
outstanding Voting Shares Beneficially Owned by such Person; and
B
= the
number of votes for the election of all directors generally attaching to all
outstanding Voting Shares.
The
percentage of outstanding Voting Shares represented by any particular group
of
Shares acquired or held by any Person shall be determined in like manner mutatis
mutandis.
1.7 Acting
Jointly or in Concert
For
purposes of this Agreement, a Person is acting jointly or in concert with every
other Person who is a party to any agreement, commitment or understanding,
whether formal or informal, with the first mentioned Person, for the purpose
of
acquiring or offering to acquire Voting Shares (other than customary agreements
with and between underwriters and banking group or selling group members with
respect to a distribution of securities by way of prospectus or private
placement or pursuant to a pledge of securities in the ordinary course of
business).
12
ARTICLE 2
THE
RIGHTS
2.1 Legend
on Certificates
Certificates
for Common Shares issued after the Record Time but prior to the Close of
Business on the earlier of the Separation Time and the Expiration Time shall
evidence, in addition to the Common Shares, one Right for each Common Share
evidenced thereby and shall have impressed on, printed on, written on or
otherwise affixed to them the following legend:
Until
the
Separation Time (as defined in the Rights Agreement referred to below), this
certificate also evidences and entitles the holder hereof to certain Rights
as
set forth in a Shareholder Rights Plan Agreement, dated as of the 17th
day of
January,
2007 (the
"Rights
Agreement"),
between the Corporation and CIBC Mellon Trust Company, as rights agent, the
terms of which are hereby incorporated herein by reference and a copy of which
may be inspected during normal business hours at the principal executive offices
of the Corporation. Under certain circumstances, as set forth in the Rights
Agreement, such Rights may be terminated, may expire, may become void (if,
in
certain cases, they are "Beneficially
Owned"
by an
"Acquiring
Person",
as
such terms are defined in the Rights Agreement, whether currently held by or
on
behalf of such Person or any subsequent holder) or may be evidenced by separate
certificates and may no longer be evidenced by this certificate. The Corporation
will mail or arrange for the mailing of a copy of the Rights Agreement to the
holder of this certificate without charge as soon as is practicable after the
receipt of a written request therefor.
Certificates
representing Common Shares that are issued and outstanding at the Record Time
shall evidence one Right for each Common Share evidenced thereby,
notwithstanding the absence of the foregoing legend until the earlier of the
Separation Time and the Expiration Time.
2.2 Execution,
Authentication, Delivery and Dating of Rights Certificates
|
(a)
|
The
Rights Certificates shall be executed on behalf of the Corporation
by any
of the Chairman of the Board, the President or any Vice-President
(including any Senior Vice-President), together with any other of
such
persons or together with any one of the Secretary, the Treasurer,
any
Assistant Secretary or any Assistant Treasurer, under the corporate
seal
of the Corporation, which shall be reproduced thereon. The signature
of
any of the officers of the Corporation on the Rights Certificates
may be
manual or facsimile. Rights Certificates bearing the manual or facsimile
signatures of individuals who were at any time the proper officers
of the
Corporation shall bind the Corporation, notwithstanding that such
individuals or any of them have ceased to hold such offices prior
to the
countersignature and delivery of such Rights
Certificates.
|
|
(b)
|
Promptly
after the Corporation learns of the Separation Time, the Corporation
will
notify the Rights Agent in writing of such Separation Time and will
deliver Rights Certificates executed by the Corporation to the Rights
Agent for countersignature and disclosure statements describing the
Rights, and the Rights Agent shall manually in a manner satisfactory
to
the Corporation countersign and mail such Rights Certificates and
disclosure statements to the holders of the Rights pursuant to subsection
3.1(c).
No Rights Certificate shall be valid for any purpose until countersigned
by the Rights Agent as aforesaid.
|
13
|
(c)
|
Each
Rights Certificate shall be dated the date of the countersignature
thereof.
|
2.3 Registration,
Registration of Transfer and Exchange
|
(a)
|
After
the Separation Time, the Corporation will cause to be kept a register
(the
"Rights
Register")
in which, subject to such reasonable regulations as it may prescribe,
the
Corporation will provide for the registration and transfer of Rights.
The
Rights Agent is hereby appointed the "Rights
Registrar"
for the purpose of maintaining the Rights Register for the Corporation
and
registering Rights and transfers of Rights as herein provided. In
the
event that the Rights Agent shall cease to be the Rights Registrar,
the
Rights Agent will have the right to examine the Rights Register at
all
reasonable times. After the Separation Time and prior to the Expiration
Time, upon surrender for registration of transfer or exchange of
any
Rights Certificate, and subject to the provisions of subsection
(c)
of
this section 2.3,
the Corporation will execute, and the Rights Agent will manually
countersign and deliver, in the name of the holder or the designated
transferee or transferees, as required pursuant to the holder's
instructions, one or more new Rights Certificates evidencing the
same
aggregate number of Rights as did the Rights Certificates so
surrendered.
|
|
(b)
|
All
Rights issued upon any registration of transfer or exchange of Rights
Certificates shall be valid obligations of the Corporation, and such
Rights shall be entitled to the same benefits under this Agreement
as the
Rights surrendered upon such registration of transfer or
exchange.
|
|
(c)
|
Every
Rights Certificate surrendered for registration of transfer or exchange
shall be duly endorsed, or be accompanied by a written instrument
of
transfer in form satisfactory to the Corporation or the Rights Agent,
as
the case may be, duly executed by the holder thereof or such holder's
attorney duly authorized in writing. As a condition to the issuance
of any
new Rights Certificate under this section 2.3,
the Corporation may require the payment of a sum sufficient to cover
any
tax or other governmental charge that may be imposed in relation
thereto
and any other expenses (including the fees and expenses of the Rights
Agent) in connection therewith or in relation
thereto.
|
2.4 Mutilated,
Destroyed, Lost and Stolen Rights Certificates
|
(a)
|
If
any mutilated Rights Certificate is surrendered to the Rights Agent
prior
to the Expiration Time, the Corporation shall execute and the Rights
Agent
shall manually countersign and deliver in exchange therefor a new
Rights
Certificate evidencing the same number of Rights as the Rights Certificate
so surrendered.
|
|
(b)
|
If
there shall be delivered to the Corporation and the Rights Agent
prior to
the Expiration Time:
|
14
|
(i)
|
evidence
to their satisfaction of the destruction, loss or theft of any Rights
Certificate; and
|
|
(ii)
|
such
security or indemnity as may be required by each of them in their
sole
discretion to save each of them and any of their agents harmless,
then, in
the absence of notice to the Corporation or the Rights Agent that
such
Rights Certificate has been acquired by a bona fide purchaser, the
Corporation shall execute and upon its request the Rights Agent shall
countersign and deliver, in lieu of any such destroyed, lost or stolen
Rights Certificate, a new Rights Certificate evidencing the same
number of
Rights as did the Rights Certificate so destroyed, lost or
stolen.
|
|
(c)
|
As
a condition to the issuance of any new Rights Certificate under this
section 2.4,
the Corporation may require the payment of a sum sufficient to cover
any
tax or other governmental charge that may be imposed in relation
thereto
and any other expenses (including the fees and expenses of the Rights
Agent) in connection therewith.
|
|
(d)
|
Every
new Rights Certificate issued pursuant to this section 2.4
in
lieu of any destroyed, lost or stolen Rights Certificate shall evidence
the contractual obligation of the Corporation, whether or not the
destroyed, lost or stolen Rights Certificate shall be at any time
enforceable by anyone, and shall be entitled to all the benefits
of this
Agreement equally and proportionately with any and all other Rights
duly
issued by the Corporation
hereunder.
|
2.5 Persons
Deemed Owners of Rights
The
Corporation, the Rights Agent and any agent of the Corporation or the Rights
Agent may deem and treat the Person in whose name such Rights Certificate (or,
prior to the Separation Time, the associated Share certificate) is registered
as
the absolute owner thereof and of the Rights evidenced thereby for all purposes
whatsoever. As used in this Agreement, unless the context otherwise requires,
the term "holder"
of any
Rights shall mean the registered holder of, such Rights (or, prior to the
Separation Time, the associated Shares).
2.6 Delivery
and Cancellation of Certificates
All
Rights Certificates surrendered upon exercise or for redemption, registration
of
transfer or exchange shall, if surrendered to any Person other than the Rights
Agent, be delivered to the Rights Agent and, in any case, shall be promptly
cancelled by the Rights Agent. The Corporation may at any time deliver to the
Rights Agent for cancellation any Rights Certificates previously countersigned
and delivered hereunder that the Corporation may have acquired in any manner
whatsoever, and all Rights Certificates so delivered shall be promptly cancelled
by the Rights Agent. No Rights Certificate shall be countersigned in lieu of
or
in exchange for any Rights Certificates cancelled as provided in this section
2.6,
except
as expressly permitted by this Agreement. The Rights Agent shall destroy all
cancelled Rights Certificates and upon written request by the Corporation,
deliver a certificate of destruction to the Corporation.
15
2.7 Agreement
of Rights Holders
Every
holder of Rights, by accepting the same, consents and agrees with Corporation
and the Rights Agent and with every other holder of Rights:
|
(a)
|
to
be bound by and subject to the provisions of this Agreement, as amended
from time to time in accordance with the terms hereof, in respect
of the
Rights held;
|
|
(b)
|
that
prior to the Separation Time, each Right will be transferable only
together with, and will be transferred by a transfer of, the Share
representing such Right;
|
|
(c)
|
that
after the Separation Time, the Rights Certificates will be transferable
only upon registration of the transfer on the Rights Register as
provided
herein;
|
|
(d)
|
that
prior to due presentment of a Rights Certificate (or, prior to the
Separation Time, the associated Share certificate) for registration
of
transfer, the Corporation, the Rights Agent and any agent of the
Corporation or the Rights Agent may deem and treat the Person in
whose
name the Rights Certificate (or, prior to the Separation Time, the
associated Share certificate) is registered as the absolute owner
thereof
and of the Rights evidenced thereby (notwithstanding any notations
of
ownership or writing on such Rights Certificate or the associated
Share
certificate made by anyone other than the Corporation or the Rights
Agent)
for all purposes whatsoever, and neither the Corporation nor the
Rights
Agent shall be affected by any notice to the
contrary;
|
|
(e)
|
that
such holder of Rights has waived his right to receive any fractional
Rights or any fractional Shares upon exercise of a Right (except
as
provided herein);
|
|
(f)
|
that
subject to the provisions of Section 6.6,
without the approval of any holder of Rights and upon the sole authority
of the Board of Directors acting in good faith, this Agreement may
be
supplemented or amended from time to time pursuant to and as provided
herein; and
|
|
(g)
|
that
notwithstanding anything in this Agreement to the contrary, neither
the
Corporation nor the Rights Agent shall have any liability to any
holder of
a Right or any other Person as a result of its inability to perform
any of
its obligations under this Agreement by reason of any preliminary
or
permanent injunction or other order, decree or ruling issued by a
court of
competent jurisdiction or by a governmental, regulatory or administrative
agency or commission, or any statute, rule, regulation or executive
order
promulgated or enacted by a governmental authority, prohibiting or
otherwise restraining performance of such
obligations.
|
2.8 Rights
Certificate Holder Not Deemed a Shareholder
No
holder, as such, of any Right or Rights Certificate shall be entitled to vote,
receive dividends or be deemed for any purpose whatsoever the holder of any
Share that may at any time be issuable on the exercise of such Rights, nor
shall
anything contained herein or in any Rights Certificate be construed or deemed
to
confer upon the holder of any Right or Rights Certificate, as such, any of
the
rights, titles, benefits or privileges of a shareholder of the Corporation
or
any right to vote at any meeting of shareholders of the Corporation whether
for
the election of directors or otherwise or upon any matter submitted to holders
of any Shares at any meeting thereof, or to give or withhold consent to any
action of the Corporation, or to receive notice of any meeting or other action
affecting any shareholder of the Corporation except as expressly provided
herein, or to receive dividends, distributions or subscription rights, or
otherwise, until the Right or Rights evidenced by any Rights Certificate shall
have been duly exercised in accordance with the terms and provisions
hereof.
16
ARTICLE 3
EXERCISE
OF THE RIGHTS
3.1 Initial
Exercise Price; Exercise of Rights; Detachment of Rights
|
(a)
|
Subject
to adjustment as herein set forth, from and after the Separation
Time and
prior to the Expiration Time, each Right will entitle the holder
thereof
to purchase one Common Share for the Exercise Price (which Exercise
Price
and number of Shares are subject to adjustment as set forth below).
Notwithstanding any other provision of this Agreement, any Rights
held by
the Corporation or any of its subsidiaries shall be
void.
|
|
(b)
|
Until
the Separation Time:
|
|
(i)
|
the
Rights shall not be exercisable and no Right may be exercised;
and
|
|
(ii)
|
for
administrative purposes, each Right will be evidenced by the certificate
for the associated Share registered in the name of the holder thereof
(which certificates shall also be deemed to be Rights Certificates)
and
will be transferable only together with, and will be transferred
by a
transfer of, such associated Share.
|
|
(c)
|
From
and after the Separation Time and prior to the Expiration
Time:
|
|
(i)
|
the
Rights shall be exercisable; and
|
|
(ii)
|
the
registration and transfer of the Rights shall be separate from and
independent of Shares.
|
Promptly
following the Separation Time, the Corporation shall prepare and the Rights
Agent will mail to each holder of record of Common Shares as of the Separation
Time (other than an Acquiring Person and other than, in respect of any Rights
Beneficially Owned by such Acquiring Person that are not held of record by
such
Acquiring Person, the holder of Record of such Rights (a "Nominee")),
at
such holder's address as shown by the records of the Corporation (and the
Corporation hereby agrees to furnish copies of such records to the Rights Agent
for this purpose):
|
(A)
|
Rights
Certificates representing the number of Rights held by such holder
at the
Separation Time in substantially the form of Exhibit A hereto,
appropriately completed and having such marks of identification or
designation and such legends, summaries or endorsements printed thereon
as
the Corporation may deem appropriate and as are not inconsistent
with the
provisions of this Agreement, or as may be required to comply with
any
law, rule, regulation or judicial or administrative order or with
any rule
or regulation made pursuant thereto or with any rule or regulation
of any
stock exchange or quotation system on which the Rights may from time
to
time be listed or traded, or to conform to usage;
and
|
17
|
(B)
|
a
disclosure statement describing the
Rights;
|
provided
that a Nominee shall be sent the materials provided for in subclauses (A) and
(B) only in respect of all Common Shares held of record by it that are not
Beneficially Owned by an Acquiring Person.
|
(d)
|
Rights
may be exercised in whole or in part on any Business Day after the
Separation Time and prior to the Expiration Time by submitting to
the
Rights Agent (at its office in Toronto or at any other office of
the
Rights Agent in the cities designated from time to time for such
purpose
by the Corporation) the Rights Certificate evidencing such Rights
together
with:
|
|
(i)
|
an
election to exercise such Rights (an "Election
to Exercise")
substantially in the form attached to the Rights Certificate duly
completed and executed by the holder or his executors or administrators
or
other personal representatives or his or their legal attorney duly
appointed by an instrument in writing in form and executed in a manner
satisfactory to the Rights Agent;
|
|
(ii)
|
payment
by certified cheque, banker's draft or money order payable to the
order of
the Rights Agent, of a sum equal to the applicable Exercise Price
multiplied by the number of Rights being exercised and a sum sufficient
to
cover any transfer tax or charge that may be payable in respect of
any
transfer involved in the transfer or delivery of Rights Certificates
or
the issuance or delivery of certificates for the relevant Shares
in a name
other than that of the holder of the Rights being
exercised.
|
|
(e)
|
Upon
receipt of the Rights Certificate that is accompanied
by:
|
|
(i)
|
a
completed Election to Exercise that does not indicate that such Right
is
null and void as provided by subsection 4.1(b);
and
|
|
(ii)
|
payment
as set forth in subsection 3.1(d),
|
the
Rights Agent will thereupon promptly:
|
(iii)
|
requisition
from a transfer agent for the relevant Shares, certificates representing
the number of such Shares to be purchased (the Corporation hereby
irrevocably authorizing its transfer agents to comply with all such
requisitions);
|
|
(iv)
|
when
appropriate, requisition from the Corporation the amount of cash
to be
paid in lieu of issuing fractional
Shares;
|
|
(v)
|
after
receipt of such certificate, deliver the same to or to the order
of the
registered holder of such Rights Certificate, registered in such
name or
names as may be designated by such holder;
|
18
|
(vi)
|
when
appropriate, after receipt, deliver such cash to or to the order
of the
registered holder of the Rights Certificate;
and
|
|
(vii)
|
tender
to the Corporation all payments received on exercise of the
Rights.
|
|
(f)
|
In
case the holder of any Rights shall exercise less than all the Rights
evidenced by such holder's Rights Certificate, a new Rights Certificate
evidencing the Rights remaining unexercised will be issued by the
Rights
Agent to such holder or to such holder's duly authorized
assigns.
|
|
(g)
|
The
Corporation covenants and agrees that it
will:
|
|
(i)
|
take
all such action as may be necessary and within its power to ensure
that
all Shares delivered upon exercise of Rights shall, at the time of
delivery of the certificates representing such Shares (subject to
payment
of the Exercise Price), be duly and validly authorized, issued and
delivered as fully paid and
non-assessable;
|
|
(ii)
|
take
all such action as may be necessary and within its power to comply
with
any applicable requirements of the Securities Act and any other applicable
law, rule or regulation, in connection with the issuance and delivery
of
the Rights Certificates and the issuance of any Shares upon exercise
of
Rights;
|
|
(iii)
|
use
reasonable efforts to cause all Shares issued upon exercise of Rights
to
be listed on the principal exchanges on which the Shares of such
class or
series were traded prior to the Share Acquisition
Date;
|
|
(iv)
|
cause
to be reserved and kept available out of its authorized and unissued
Shares, the number of Shares that, as provided in this Agreement,
will
from time to time be sufficient to permit the exercise in full of
all
outstanding Rights; and
|
|
(v)
|
pay
when due and payable, any and all federal and provincial transfer
taxes
(for greater certainty, not including any income taxes of the holder
or
exercising holder or any liability of the Corporation to withhold
tax) and
charges that may be payable in respect of the original issuance or
delivery of the Rights Certificates, provided that the Corporation
shall
not be required to pay any transfer tax or charge that may be payable
in
respect of any transfer involved in the transfer or delivery of Rights
Certificates or the issuance or delivery of certificates for Shares
in a
name other than that of the holder of the Rights being transferred
or
exercised.
|
3.2 Adjustments
to Exercise Prices; Number of Rights
The
Exercise Price, the number and kind of Shares subject to purchase upon the
exercise of each Right and the number of Rights outstanding are subject to
adjustment from time to time as provided in this section 3.2.
|
(a)
|
In
the event the Corporation shall at any time after the Record Time
and
prior to the Expiration Time:
|
19
|
(i)
|
declare
or pay a dividend on the Common Shares payable in Common Shares (or
other
securities exchangeable for or convertible into or giving a right
to
acquire Common Shares) other than pursuant to any optional stock
dividend
program;
|
|
(ii)
|
subdivide
or change the outstanding Common Shares into a greater number of
Shares;
|
|
(iii)
|
combine
or change the outstanding Common Shares into a smaller number of
Shares;
or
|
|
(iv)
|
issue
any Common Shares (or other securities exchangeable for or convertible
into or giving a right to acquire Common Shares in respect of, in
lieu of
or in exchange for existing Common Shares in a reclassification,
amalgamation, merger, arrangement or consolidation, except as otherwise
provided in this section 3.2,
|
the
Exercise Price in effect at the time of the record date for such dividend or
of
the effective date of such subdivision, combination or other change, and the
number and kind of Shares or other securities, as the case may be, issuable
on
such date, shall be proportionately adjusted so that the holder of any Right
exercised after such time shall be entitled to receive, upon payment of the
applicable Exercise Price then in effect, the aggregate number and kind of
Shares or other securities, as the case may be, that, if such Right had been
exercised immediately prior to such date and at a time when the Share transfer
books of the Corporation were open, he would have been entitled to receive
by
virtue of such dividend, subdivision, combination or reclassification,
amalgamation, merger, arrangement or consolidation. If an event occurs that
would require an adjustment under both this section 3.2and
section 4.1,
the
adjustment provided for in this section 3.2shall
be
in addition to, and shall be made prior to, any adjustment required pursuant
to
section 4.1.
|
(b)
|
In
case the Corporation shall at any time after the Record Time and
prior to
the Expiration Time fix a record date for the issuance of rights,
options
or warrants to all holders of Common Shares entitling them to subscribe
for or purchase (for a period expiring within 45 calendar days after
such
record date) Common Shares (or shares having the same rights, privileges
and preferences as Common Shares ("equivalent
common shares"))
or securities convertible into Common Shares or equivalent common
shares
at a price per Common Share or per equivalent common share (or having
a
conversion price per share, if a security convertible into Common
Shares
or equivalent common shares) less than the Market Price per Common
Share
on such record date, the Exercise Price in respect of the Rights
to be in
effect after such record date shall be determined by multiplying
the
Exercise Price in respect of the Rights in effect immediately prior
to
such record date by a fraction:
|
|
(i)
|
the
numerator of which shall be the number of Common Shares outstanding
on
such record date, plus the number of Common Shares that the aggregate
offering price of the total number of Common Shares and/or equivalent
common shares so to be offered (and/or the aggregate initial conversion
price of the convertible securities so to be offered) would purchase
at
such Market Price per Common Share;
and
|
20
|
(ii)
|
the
denominator of which shall be the number of Common Shares outstanding
on
such record date, plus the number of additional Common Shares and/or
equivalent common shares to be offered for subscription or purchase
(or
into which the convertible securities so to be offered are initially
convertible).
|
In
case
such subscription price may be paid by delivery of consideration, part or all
of
which may be in a form other than cash, the value of such consideration shall
be
as determined in good faith by the Board of Directors, whose determination
shall
be described in a statement filed with the Rights Agent and shall be binding
on
the Rights Agent and the holders of the Rights. Such adjustment shall be made
successively whenever such a record date is fixed and, in the event that such
rights or warrants are not so issued, the Exercise Price in respect of the
Rights shall be adjusted to be the Exercise Price that would then be in effect
if such record date had not been fixed. The granting of the right to purchase
Common Shares or equivalent Common Shares (whether from treasury or otherwise)
pursuant to any distribution or interest reinvestment plan and/or any share
purchase plan providing for the reinvestment of dividends payable on securities
of the Corporation and/or the investment of periodic optional payments and/or
employee benefit or similar plans (so long as such right to purchase is in
no
case evidenced by the delivery of rights or warrants) shall not be deemed to
constitute an issue of rights or warrants by the Corporation; provided, however,
that in the case of any dividend reinvestment plan, the right to purchase Common
Shares is at a price per share of not less than 90% of the current market price
per Share (determined as provided in such plans) of the Common
Shares.
|
(c)
|
In
case the Corporation shall at any time after the Record Time and
prior to
the Expiration Time fix a record date for a distribution to all holders
of
Common Shares (including any such distribution made in connection
with a
merger in which the Corporation is the continuing corporation) of
evidences of indebtedness, cash (other than a dividend paid in the
ordinary course or dividends paid in Common Shares, but including
any
dividend payable in securities other than Common Shares), assets
or
subscription rights or warrants (excluding those referred to in subsection
3.2(b)),
the Exercise Price in respect of the Rights to be in effect after
such
record date shall be determined by multiplying the Exercise Price
in
respect of the Rights in effect immediately prior to such record
date by a
fraction:
|
|
(i)
|
the
numerator of which shall be the Market Price per Common Share on
such
record date, less the fair market value (as determined in good faith
by
the Board of Directors, whose determination shall be described in
a
statement filed with the Rights Agent and shall be binding on the
Rights
Agent and the holders of the Rights) of the portion of the cash,
assets or
evidences of indebtedness so to be distributed or of such subscription
rights or warrants applicable to a Common Share;
and
|
|
(ii)
|
the
denominator of which shall be such Market Price per Common
Share.
|
21
Such
adjustments shall be made successively whenever such a record date is fixed
and,
in the event that such distribution is not so made, the Exercise Price in
respect of the Rights shall be adjusted to be the Exercise Price in respect
of
the Rights that would have been in effect if such record date had not been
fixed.
For
the
purposes hereof, "dividends paid in the ordinary course" means cash dividends
paid at regular intervals in any fiscal year of the Corporation to the extent
that such cash dividends do not exceed, in the aggregate, the greatest
of,
|
(iii)
|
200%
of the aggregate amount of cash dividends declared payable by the
Corporation on its Common Shares in its immediately preceding fiscal
year;
|
|
(iv)
|
300%
of the arithmetic average of the aggregate amounts of cash dividends
declared payable by the Corporation on its Common Shares in its three
immediately preceding fiscal years;
and
|
|
(v)
|
100%
of the aggregate consolidated net income of the corporation, before
extraordinary items, for its immediately preceding fiscal
year.
|
|
(d)
|
Notwithstanding
anything herein to the contrary, no adjustment in an Exercise Price
shall
be required unless such adjustment would require an increase or decrease
of at least 1% in such Exercise Price; provided, however, that any
adjustments that by reason of this subsection 3.2(d)
are not required to be made shall be carried forward and taken into
account in any subsequent adjustment. All calculations under this
section
3.2
shall be made to the nearest cent or to the nearest ten-thousandth
of a
Common Share, or other Share, as the case may be. Notwithstanding
the
first sentence of this subsection 3.2(d),
any adjustment required by this section 3.2
shall be made no later than the earlier
of:
|
|
(i)
|
three
years from the date of the transaction that mandates such adjustment;
and
|
|
(ii)
|
the
Termination Date.
|
|
(e)
|
If,
as a result of an adjustment made pursuant to section 4.1,
the holder of any Right thereafter exercised shall become entitled
to
receive any shares other than Common Shares, thereafter the number
of such
other shares so receivable upon exercise of any Right and the applicable
Exercise Price thereof shall be subject to adjustment from time to
time in
a manner and on terms as nearly equivalent as is practicable to the
provisions with respect to the Common Shares contained in subsections
3.2(a),
(b),
(c),
(d),
(f),
(g),
(h),
(i),
(j)
and (k)
and the provisions of this Agreement with respect to the Common Shares
shall apply on like terms to any such other
shares.
|
|
(f)
|
All
Rights originally issued by the Corporation subsequent to any adjustment
made to an Exercise Price hereunder shall evidence the right to purchase,
at the adjusted Exercise Price, the respective number of Common Shares,
purchasable from time to time hereunder upon exercise of the Rights,
all
subject to further adjustment as provided
herein.
|
22
|
(g)
|
Unless
the Corporation shall have exercised its election as provided in
subsection 3.2(h),
upon each adjustment of an Exercise Price as a result of the calculations
made in subsections 3.2(b)
and (c),
each Right outstanding immediately prior to the making of such adjustment
shall thereafter evidence the right to purchase, at the adjusted
Exercise
Price, that number of Common Shares, (calculated to the nearest one
ten-thousandth), obtained by:
|
|
(i)
|
multiplying:
|
|
(A)
|
the
number of such Shares covered by a Right immediately prior to this
adjustment; by
|
|
(B)
|
the
relevant Exercise Price in effect immediately prior to such adjustment
of
the relevant Exercise Price; and
|
|
(ii)
|
dividing
the product so obtained by the relevant Exercise Price in effect
immediately after such adjustment of the relevant Exercise
Price.
|
|
(h)
|
The
Corporation may elect on or after the date of any adjustment of an
Exercise Price to adjust the number of Rights, in lieu of any adjustment
in the number of Shares purchasable upon the exercise of a Right.
Each of
the Rights outstanding after the adjustment in the number of Rights
shall
be exercisable for the number and kind of Shares for which such a
Right
was exercisable immediately prior to such adjustment. Each Right
held of
record prior to such adjustment of the number of Rights shall become
that
number of Rights (calculated to the nearest one ten-thousandth) obtained
by dividing the relevant Exercise Price in effect immediately prior
to
adjustment of the relevant Exercise Price by the relevant Exercise
Price
in effect immediately after adjustment of the relevant Exercise Price.
The
Corporation shall make a public announcement of its election to adjust
the
number of Rights, indicating the record date for the adjustment,
and, if
known at the time, the amount of the adjustment to be made. This
record
date may be the date on which the relevant Exercise Price is adjusted
or
any day thereafter, but, if the Rights Certificates have been issued,
shall be at least 10 days later than the date of the public announcement.
If Rights Certificates have been issued, upon each adjustment of
the
number of Rights pursuant to this subsection 3.2(h),
the Corporation shall, as promptly as is practicable, cause to be
distributed to holders of record of Rights Certificates on such record
date, Rights Certificates evidencing, subject to section 6.4,
the additional Rights to which such holders shall be entitled as
a result
of such adjustment, or, at the option of the Corporation, shall cause
to
be distributed to such holders of record in substitution and replacement
for the Rights Certificates held by such holders prior to the date
of
adjustment, and upon surrender thereof, if required by the Corporation,
new Rights Certificates evidencing all the Rights to which such holders
shall be entitled after such adjustment. Rights Certificates to be
so
distributed shall be issued, executed and countersigned in the manner
provided for herein and may bear, at the option of the Corporation,
the
relevant adjusted Exercise Price and shall be registered in the names
of
holders of record of Rights Certificates on the record date specified
in
the public announcement.
|
23
|
(i)
|
Irrespective
of any adjustment or change in an Exercise Price or the number of
Shares
issuable upon the exercise of the Rights, the Rights Certificates
theretofore and thereafter issued may continue to express the relevant
Exercise Price per Share and the number of Shares that were expressed
in
the initial Rights Certificates issued
hereunder.
|
|
(j)
|
In
any case in which this section 3.2
shall require that an adjustment in an Exercise Price be made effective
as
of a record date for a specified event, the Corporation may elect
to
defer, until the occurrence of such event, the issuance to the holder
of
any Right exercised after such record date of the number of Shares
and
other securities of the Corporation, if any, issuable upon such exercise
over and above the number of Shares and other securities of the
Corporation, if any, issuable upon such exercise on the basis of
the
relevant Exercise Price in effect prior to such adjustment; provided,
however, that the Corporation shall deliver to such holder a due
xxxx or
other appropriate instrument evidencing such holder's right to receive
such additional Shares (fractional or otherwise) or other securities
upon
the occurrence of the event requiring such
adjustment.
|
|
(k)
|
Notwithstanding
anything in this section 3.2
to
the contrary, the Corporation shall be entitled to make such reductions
in
each Exercise Price, in addition to those adjustments expressly required
by this section 3.2,
as and to the extent that in their good faith judgment the Board
of
Directors shall determine to be advisable in order that
any:
|
|
(i)
|
consolidation
or subdivision of Shares;
|
|
(ii)
|
issuance
wholly for cash of any Shares at less than the applicable Market
Price;
|
|
(iii)
|
issuance
wholly for cash of any Common Shares or securities that by their
terms are
convertible into or exchangeable for
Shares;
|
|
(iv)
|
stock
dividends; or
|
|
(v)
|
issuance
of rights, options or warrants referred to in this section 3.2.
hereafter made by the Corporation to holders of its
Shares,
|
shall
not
be taxable to such shareholders.
|
(l)
|
Whenever
an adjustment to the Exercise Price or a change in the securities
purchasable upon exercise of the Rights is made at any time after
the
Separation Time pursuant to this section 3.2,
the Corporation shall promptly:
|
|
(i)
|
file
with the Rights Agent and with the transfer agent for the Common
Shares a
certificate specifying the particulars of such adjustment or change;
and
|
|
(ii)
|
cause
notice of the particulars of such adjustment or change to be given
to the
holders of the Rights.
|
Failure
to file such certificate or to cause such notice to be given as aforesaid,
or
any defect therein, shall not affect the validity of any such adjustment of
change.
24
ARTICLE 4
ADJUSTMENTS
TO THE RIGHTS IN THE EVENT OF CERTAIN TRANSACTIONS
4.1 Flip-in
Event
|
(a)
|
Subject
to subsection 4.1(b)
and section 6.1,
in the event that prior to the Expiration Time a Flip-in Event shall
occur, each Right shall constitute, effective on and after the Share
Acquisition Date, the right to purchase from the Corporation, upon
payment
of the relevant Exercise Price and otherwise exercising such Right
in
accordance with the terms hereof, that number of Common Shares having
an
aggregate Market Price on the date of consummation or occurrence
of such
Flip-in Event equal to twice the relevant Exercise Price for an amount
in
cash equal to the relevant Exercise Price (such right to be appropriately
adjusted in a manner analogous to the applicable adjustments provided
for
in section 3.2
upon each occurrence after the Share Acquisition Date of any event
analogous to any of the events described in section 3.2).
|
|
(b)
|
Notwithstanding
anything in this Agreement to the contrary, upon the occurrence of
any
Flip-in Event, any Rights that are Beneficially Owned
by:
|
|
(i)
|
an
Acquiring Person (or any Affiliate or Associate of an Acquiring Person
or
any Person acting jointly or in concert with an Acquiring Person
or any
Affiliate or Associate of an Acquiring Person);
or
|
|
(ii)
|
a
transferee or other successor in title directly or indirectly (a
"Transferee")
of Rights held by an Acquiring Person (or any Affiliate or Associate
of an
Acquiring Person or any Person acting jointly or in concert with
an
Acquiring Person or any Affiliate or Associate of an Acquiring Person)
who
becomes a Transferee concurrently with or subsequent to the Acquiring
Person becoming an Acquiring Person
|
shall
become null and void without any further action, and any holder of such Rights
(including any Transferee) shall not have any right whatsoever to exercise
such
Rights under any provision of this Agreement and shall not have thereafter
any
other rights whatsoever with respect to such Rights, whether under any provision
of this Agreement or otherwise.
|
(c)
|
Any
Rights Certificate that represents Rights Beneficially Owned by a
Person
described in either clauses (i) or (ii) of subsection 4.1(b)
or
transferred to any nominee of any such Person, and any Rights Certificate
issued upon transfer, exchange, replacement or adjustment of any
other
Rights Certificate referred to in this sentence, shall contain the
following legend:
|
"The
Rights represented by this Rights Certificate were Beneficially Owned by a
Person who was an Acquiring Person or who was an Affiliate or an Associate
of an
Acquiring Person (as such terms are defined in the Rights Agreement) or was
acting jointly or in concert with any of them. This Rights Certificate and
the
Rights represented hereby shall become void in the circumstances specified
in
subsection 4.1(b)
of the
Rights Agreement."
25
provided
that the Rights Agent shall not be under any responsibility to ascertain the
existence of facts that would require the imposition of such legend but shall
be
required to impose such legend only if instructed in writing to do so by the
Corporation or if a holder fails to certify upon transfer or exchange in the
space provided on the Rights Certificate that such holder is not a Person
described in either clauses (i) or (ii) of subsection 4.1(b).
|
(d)
|
In
the event that there shall not be sufficient Shares authorized for
issuance to permit the exercise in full of the Rights in accordance
with
this section 4.1,
the Corporation shall take all such action as may be necessary to
authorize additional Shares for issuance upon the exercise of the
Rights.
|
ARTICLE 5
THE
RIGHTS AGENT
5.1 General
|
(a)
|
The
Corporation hereby appoints the Rights Agent to act as agent for
the
Corporation and the holders of Rights in accordance with the terms
and
conditions hereof, and the Rights Agent hereby accepts such appointment.
The Corporation may from time to time appoint one or more co-Rights
Agents
as it may deem necessary or desirable subject to the approval of
the
Rights Agent. In the event the Corporation appoints one or more co-Rights
Agents, the respective duties of the Rights Agents and co-Rights
Agents
shall be as the Corporation may determine with the approval of the
Rights
Agent. The Corporation agrees to pay to the Rights Agent reasonable
compensation for all services rendered by it hereunder and, from
time to
time, on demand of the Rights Agent, its reasonable expenses and
counsel
fees and other disbursements incurred in the execution and administration
of this Agreement and the exercise and performance of its duties
hereunder
(including the reasonable fees and other disbursements of any expert
retained by the Rights Agent with the approval of the Corporation,
such
approval not to be unreasonably withheld). The Corporation also agrees
to
indemnify the Rights Agent, its officers, directors, employees and
agents,
for, and to hold them harmless against, any loss, liability, cost,
claim,
action, damage, charges, counsel fees, payments or expense, incurred
without negligence, bad faith or wilful misconduct on the part of
the
Rights Agent, for anything done, suffered or omitted by the Rights
Agent
in connection with the acceptance, execution and administration of
this
Agreement, including the costs and expenses of defending against
any claim
of liability, which right to indemnification will survive the termination
of this Agreement or the resignation or removal of the Rights Agent.
Any
liability of the Rights Agent will be limited in the aggregate to
an
amount equal to the annual fee paid by the Company pursuant to this
Agreement. The Corporation shall inform the Rights Agent in a reasonably
timely manner of events which may materially affect the administration
of
this Agreement by the Rights Agent and at any time, upon request,
shall
provide to the Rights Agent an incumbency certificate with respect
to the
then current directors of the
Corporation.
|
26
|
(b)
|
The
Rights Agent shall be protected and shall incur no liability for
or in
respect of any action taken, suffered or omitted by it in connection
with
its administration of this Agreement in reliance upon any certificate
for
Shares, Rights Certificate, certificate for other securities of the
Corporation, instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction, consent, certificate,
statement or other paper or document believed by it to be genuine
and to
be signed, executed and, where necessary, verified or acknowledged,
by the
proper Person or Persons.
|
5.2 Merger
or Amalgamation or Change of Name of Rights Agent
|
(a)
|
Any
corporation into which the Rights Agent or any successor Rights Agent
may
be merged or amalgamated or with which it may be consolidated, or
any
corporation resulting from any merger, amalgamation or consolidation
to
which the Rights Agent or any successor Rights Agent is a party,
or any
corporation succeeding to the shareholder or stockholder services
business
of the Rights Agent or any successor Rights Agent, will be the successor
to the Rights Agent under this Agreement without the execution or
filing
of any paper or any further act on the part of any of the parties
hereto,
provided that such corporation would be eligible for appointment
as a
successor Rights Agent under the provisions of section 5.4
hereof. In case at the time such successor Rights Agent succeeds
to the
agency created by this Agreement any of the Rights Certificates have
been
countersigned but not delivered, any such successor Rights Agent
may adopt
the countersignature of the predecessor Rights Agent and deliver
such
Rights Certificates so countersigned; and in case at that time any
of the
Rights Certificates have not been countersigned, any successor Rights
Agent may countersign such Rights Certificates either in the name
of the
predecessor Rights Agent or in the name of the successor Rights Agent;
and
in all such cases such Rights Certificates will have the full force
provided in the Rights Certificates and in this
Agreement.
|
|
(b)
|
In
case at any time the name of the Rights Agent is changed and at such
time
any of the Rights Certificates shall have been countersigned but
not
delivered, the Rights Agent may adopt the countersignature under
its prior
name and deliver Rights Certificates so countersigned; and in case
at that
time any of the Rights Certificates shall not have been countersigned,
the
Rights Agent may countersign such Rights Certificates either in its
prior
name or in its changed name; and in all such cases such Rights
Certificates shall have the full force provided in the Rights Certificates
and in this Agreement.
|
5.3 Duties
of Rights Agent
The
Rights Agent undertakes the duties and obligations imposed by this Agreement
upon the following terms and conditions, by all of which the Corporation and
the
holders of Rights Certificates, by their acceptance thereof, shall be
bound:
|
(a)
|
the
Rights Agent may retain and consult with legal counsel (who may be
legal
counsel for the Corporation) and the opinion of such counsel will
be full
and complete authorization and protection to the Rights Agent as
to any
action taken or omitted by it in good faith and in accordance with
such
opinion. The Rights Agent may also, with the approval of the Corporation
(such approval not to be unreasonably withheld), consult with such
other
experts as the Rights Agent shall consider necessary or appropriate
to
properly carry out the duties and obligations imposed under this
Agreement
(at the Corporation's expense) and the Rights Agent shall be entitled
to
act and rely in good faith on the advice of any such
expert;
|
27
|
(b)
|
whenever
in the performance of its duties under this Agreement the Rights
Agent
deems it necessary or desirable that any fact or matter be proved
or
established by the Corporation prior to taking or suffering any action
hereunder, such fact or matter (unless other evidence in respect
thereof
be herein specifically prescribed) may be deemed to be conclusively
proved
and established by a certificate signed by a Person believed by the
Rights
Agent to be the Chairman of the Board, the President or any Vice-President
and by the Treasurer or any Assistant Treasurer or the Secretary
or any
Assistant Secretary of the Corporation and delivered to the Rights
Agent;
and such certificate will be full authorization to the Rights Agent
for
any action taken or suffered in good faith by it under the provisions
of
this Agreement in reliance upon such
certificate;
|
|
(c)
|
the
Rights Agent will be liable hereunder only for its own negligence,
bad
faith or wilful misconduct;
|
|
(d)
|
the
Rights Agent will not be liable for or by reason of any of the statements
of fact or recitals contained in this Agreement or in the certificates
for
Shares or the Rights Certificates (except its countersignature thereof)
or
be required to verify the same, but all such statements and recitals
are
and will be deemed to have been made by the Corporation
only;
|
|
(e)
|
the
Rights Agent will not be under any responsibility in respect of the
validity of this Agreement or the execution and delivery hereof (except
the due authorization, execution and delivery hereof by the Rights
Agent)
or in respect of the validity or execution of any Share certificate
or
Rights Certificate (except its countersignature thereof); nor will
it be
responsible for any breach by the Corporation of any covenant or
condition
contained in this Agreement or in any Rights Certificate; nor will
it be
responsible for any change in the exercisability of the Rights (including
the Rights becoming void pursuant to subsection 4.14.1(b))
or any adjustment required under the provisions of section 3.2
or
responsible for the manner, method or amount of any such adjustment
or the
ascertaining of the existence of facts that would require any such
adjustment (except with respect to the exercise of Rights after receipt
of
the certificate contemplated by section 3.2
describing any such adjustment); nor will it by any act hereunder
be
deemed to make any representation or warranty as to the authorization
of
any Shares to be issued pursuant to this Agreement or any Rights
or as to
whether any Shares will, when issued, be duly and validly authorized,
executed, issued and delivered as fully paid and
nonassessable;
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28
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(f)
|
the
Corporation agrees that it will perform, execute, acknowledge and
deliver
or cause to be performed, executed, acknowledged and delivered all
such
further and other acts, instruments and assurances as may reasonably
be
required by the Rights Agent for the carrying out or performing by
the
Rights Agent of the provisions of this
Agreement;
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(g)
|
the
Rights Agent is hereby authorized and directed to accept instructions
with
respect to the performance of its duties hereunder from any Person
believed by the Rights Agent to be the Chairman of the Board, the
President, any Vice-President or the Secretary or any Assistant-Secretary
or the Treasurer or any Assistant-Treasurer of the Corporation, and
to
apply to such Persons for advice or instructions in connection with
its
duties, and it shall not be liable for any action taken or suffered
by it
in good faith in accordance with instructions of any such Person;
it being
understood that instructions to the Rights Agent shall, except where
circumstances make it impracticable or the Rights Agent otherwise
agrees,
be given in writing and, where not in writing, such instructions
shall be
confirmed in writing as soon as reasonably possible after the giving
of
such instructions;
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(h)
|
the
Rights Agent and any shareholder or stockholder, director, officer
or
employee of the Rights Agent may buy, sell or deal in Shares, Rights
or
other securities of the Corporation or become pecuniarily interested
in
any transaction in which the Corporation may be interested, or contract
with or lend money to the Corporation or otherwise act as fully and
freely
as though it were not the Rights Agent under this Agreement. Nothing
herein shall preclude the Rights Agent from acting in any other capacity
for the Corporation or for any other legal entity;
and
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(i)
|
the
Rights Agent may execute and exercise any of the rights or powers
hereby
vested in it or perform any duty hereunder either itself or by or
through
its attorneys or agents, and the Rights Agent will not be answerable
or
accountable for any act, default, neglect or misconduct of any such
attorneys or agents or for any loss to the Corporation resulting
from any
such act, default, neglect or misconduct, provided reasonable care
was
exercised in the selection and continued employment
thereof.
|
5.4 Change
of Rights Agent
The
Rights Agent may resign and be discharged from its duties under this Agreement
upon 60 days' notice in writing (or such lesser notice as is acceptable to
the
Corporation (mailed to the Corporation and to each transfer agent of Shares
by
registered or certified mail, and to the holders of Rights in accordance with
section 6.9,
all of
which shall be at the Corporation's expense. The Corporation may remove the
Rights Agent upon 30 days notice in writing, mailed to the Rights Agent and
to
each transfer agent of the Shares by registered or certified mail. If the Rights
Agent should resign or be removed or otherwise become incapable of acting,
the
Corporation will appoint a successor to the Rights Agent. If the Corporation
fails to make such appointment within a period of 30 days after such removal
or
after it has been notified in writing of such resignation or incapacity by
the
resigning or incapacitated Rights Agent or by the holder of any Rights (which
holder shall, with such notice, submit such holder's Rights Certificate for
inspection by the Corporation), then, by prior written notice to the Corporation
the resigning Rights Agent, at the Corporation's expense, may apply to any
court
of competent jurisdiction for the appointment of a new Rights Agent. Any
successor Rights Agent, whether appointed by the Corporation or by such a court,
shall be a corporation incorporated under the laws of Canada or a province
thereof authorized to carry on the business of a trust company in the Province
of Ontario. After appointment, the successor Rights Agent will be vested with
the same powers, rights, duties and responsibilities as if it had been
originally named as Rights Agent without further act or deed; but the
predecessor Rights Agent shall deliver and transfer to the successor Rights
Agent upon receipt of all outstanding fees and expenses owing by the Corporation
to the predecessor Rights Agent under this Agreement, any property at the time
held by it hereunder and execute and deliver any further assurance, conveyance,
act or deed necessary for such purpose. Not later than the effective date of
any
such appointment, the Corporation will file notice thereof in writing with
the
predecessor Rights Agent and each transfer agent of the Shares, and mail a
notice thereof in writing to the holders of the Rights. Failure to give any
notice provided for in this section 5.4,
however, or any defect therein, shall not affect the legality or validity of
the
resignation or removal of the Rights Agent or the appointment of the successor
Rights Agent, as the case may be.
29
ARTICLE 6
MISCELLANEOUS
6.1 Redemption
and Waiver
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(a)
|
Subject
to the prior consent of the holders of Voting Shares obtained in
accordance with section 6.6,
the Board of Directors may, at its option, at any time prior to the
occurrence of a Flip-in Event as to which the application of section
4.1
has not been waived pursuant to this section 6.1,
elect to redeem all but not less than all of the then outstanding
Rights
at a redemption price of $.0001 per Right appropriately adjusted
in a
manner analogous to the applicable adjustment provided for in section
3.2
in
the event that an event of the type analogous to any of the events
described in section 3.2
shall have occurred (such redemption price being herein referred
to as the
"Redemption Price").
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(b)
|
If
before the occurrence of a Flip-in Event a Person acquires, pursuant
to a
Permitted Bid or a Competing Permitted Bid, outstanding Voting Shares
other than Voting Shares Beneficially Owned by such Person at the
date of
the Permitted Bid or the Competing Permitted Bid, the Board of Directors
of the Corporation shall, immediately upon such acquisition and without
further formality be deemed to have elected to redeem the Rights
at the
Redemption Price.
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(c)
|
Where
a Take-over Bid that is not a Permitted Bid or a Competing Permitted
Bid
is withdrawn or otherwise terminated after the Separation Time has
occurred and prior to the occurrence of a Flip-in Event, the Board
of
Directors may elect to redeem all the outstanding Rights at the Redemption
Price. Upon the Rights being redeemed pursuant to section 6.1(c),
all the provisions of this Agreement shall continue to apply as if
the
Separation Time had not occurred and Rights Certificates representing
the
number of Rights held by each holder of record of Voting Shares as
of the
Separation Time had not been mailed to each such holder and for all
purposes of this Agreement the Separation Time shall be deemed not
to have
occurred.
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30
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(d)
|
Within
ten Business Days after the Board of Directors electing or being
deemed to
have elected to redeem the Rights or, if section 6.1(a)
is
applicable, within 10 Business Days after the holders of Voting Shares
or
the holders of Rights have approved a redemption of Rights in accordance
with section 6.1,
the Corporation shall give notice of such redemption to the holders
of the
then outstanding Rights by mailing such notice to each such holder
at his
last address as it appears on the Rights Register (as defined in
section
2.3(a))
or, prior to the Separation Time, on the register of Shares maintained
by
the Corporation's transfer agent. Each such notice of redemption
shall
state the method by which the payment of the Redemption Price shall
be
made. The Corporation may not redeem, acquire or purchase for any
value
any Rights at any time in any manner other than that specifically
set
forth in this section 6.1
or
in connection with the purchase of Voting Shares prior to the Separation
Time.
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(e)
|
If
the Board of Directors elects to or is deemed to have elected to
redeem
the Rights and, in circumstances where section 6.1(a)
is applicable, such redemption is approved by the holders of Voting
Shares
or the holders of Rights in accordance with section 6.6,
(A) the right to exercise the Rights will thereupon without further
action
and without notice terminate and the only right thereafter of the
holder
of a Right shall be to receive the Redemption Price and (B) no further
Rights shall thereafter be issued.
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(f)
|
The
Board of Directors may, in respect of any Flip-in Event, waive the
application of section 4.1
to
that Flip-in Event provided that both of the following conditions
are
satisfied: (i) the Board of Directors has determined that the Acquiring
Person became an Acquiring Person by inadvertence and without any
intent
or knowledge that it would become an Acquiring Person; and (ii) such
Acquiring Person has reduced its Beneficial Ownership of Voting Shares
such that at the time of waiver pursuant to this section 6.1(f)
it
is no longer an Acquiring Person.
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(g)
|
The
Board of Directors may, until a Flip-in Event shall have occurred,
upon
written notice delivered to the Rights Agent determine to waive the
application of section 4.1
to
a Flip-in Event but only if such Flip-in Event occurs by reason of
a
Take-over Bid made by way of a take-over bid circular to all holders
of
record of Voting Shares which are subject to the Take-over Bid (which,
for
greater certainty, does not include the circumstances described in
section
6.1(f));
provided however, that if the Board of Directors waives the application
of
section 4.1
to
a particular Flip-in Event pursuant to this section 6.1(g),
the Board of Directors shall be deemed to have waived the application
of
section 4.1
to
any other Flip-in Event occurring by reason of any Take-over Bid
which is
made by means of a take-over bid circular to all holders of record
of the
class or classes of Voting Shares which are subject to the Take-over
Bid
prior to the expiry of any Take-over Bid in respect of which a waiver
is,
or is deemed to have been, granted under this section 6.1(g).
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31
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(h)
|
The
Board of Directors may, with the prior consent of the holders of
Voting
Shares given in accordance with section 6.6,
determine, at any time prior to the occurrence of a Flip-in Event
as to
which the application of section 4.1
has not been waived pursuant to this section 6.1,
if such Flip-in Event would occur by reason of an acquisition of
Voting
Shares otherwise than pursuant to a Take-over Bid made by means of
a
Take-over Bid circular to all holders of record of Voting Shares
and
otherwise than in the circumstances set forth in Subsection 6.1(f),
to waive the application of section 4.1
to
such Flip-in Event. In the event that the Board of Directors proposes
such
a waiver, the Board of Directors shall extend the Separation Time
to a
date subsequent to and not more than 10 Business Days following the
meeting of shareholders called to approve such
waiver.
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(i)
|
The
Corporation shall give prompt written notice to the Rights Agent
of any
waiver of the application of section 4.1
made by the Board of Directors under this section 6.1.
|
6.2 Expiration
No
Person
shall have any rights pursuant to this Agreement or in respect of any Right
after the Expiration Time, except the Rights Agent as specified in section
5.1.
6.3 Shareholder
Review
At
the
first annual meeting of shareholders of the Corporation following the third
anniversary of the date of this Agreement, provided that a Flip-in Event has
not
occurred prior to such time, the Board of Directors shall submit a resolution
to
the holders of Voting Shares of the Corporation for their consideration and,
if
thought advisable, approval, ratifying the continued existence of the Rights.
Unless a majority of the votes cast by Independent Shareholders who vote in
respect of such resolution are voted in favour of the continued existence of
this Agreement, the Board of Directors shall, immediately upon the confirmation
by the Chairman of such shareholders meeting of the result of the vote on such
resolution and without further formality, be deemed to have elected to redeem
the Rights at the Redemption Price.
6.4 Issuance
of New Rights Certificate
Notwithstanding
any of the provisions of this Agreement or of the Rights to the contrary, the
Corporation may, at its option, issue new Rights Certificates evidencing Rights
in such form as may be approved by the Board of Directors to reflect any
adjustment or change in the number or kind or class of shares purchasable upon
exercise of Rights made in accordance with the provisions of this
Agreement.
6.5 Fractional
Rights and Fractional Shares
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(a)
|
The
Corporation shall not be required to issue fractions of Rights or
to
distribute Rights Certificates that evidence fractional Rights. In
lieu of
such fractional Rights, there shall be paid to the registered holders
of
the Rights Certificates with regard to which such fractional Right
would
otherwise be issuable, an amount in cash equal to the same fraction
of the
Market Price of a whole Right. The Rights Agent shall have no obligation
to make any payments in lieu of fractional Rights unless the Corporation
shall have provided the Rights Agent with the necessary funds to
pay in
full all amounts payable in accordance with section 3.1(e).
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32
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(b)
|
The
Corporation shall not be required to issue fractions of Shares upon
exercise of the Rights or to distribute certificates that evidence
fractional Shares. In lieu of issuing fractional Shares, the Corporation
shall pay to the registered holders of Rights Certificates at the
time
such Rights are exercised as herein provided, an amount in cash equal
to
the same fraction of the Market Price of a whole
Share.
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6.6 Supplements
and Amendments
|
(a)
|
The
Corporation may make, without the approval of the holders of Rights
or
Voting Shares, any amendments to this Agreement (i) to correct any
clerical or typographical error or (ii) which are required to maintain
the
validity and effectiveness of the Agreement as a result of any change
in
any applicable laws, rules or regulatory requirements. The Corporation
may, prior to the date of the shareholders' meeting referred to in
section
6.19,
supplement, amend, vary, rescind or delete any of the provisions
of this
Agreement without the approval of any holders of Rights or Voting
Shares
(whether or not such action would materially adversely affect the
interest
of the holders of Rights generally) where the Board of Directors
acting in
good faith deemed such action necessary or desirable. Notwithstanding
anything in this section 6.6
to
the contrary, no amendment shall be made to the provisions of Article
5
except with the written concurrence of the Rights Agent to such supplement
or amendment.
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|
(b)
|
Subject
to Subsection 6.6(a),
the Corporation may, with the prior consent of the holders of Voting
Shares obtained as set forth below, at any time before the Separation
Time, amend, vary or rescind any of the provisions of this Agreement
and
the Rights (whether or not such action would materially adversely
affect
the interests of the holders of Rights generally). Such consent shall
be
deemed to have been given in provided by the holders of Voting Shares
at a
special meeting called and held in compliance with applicable laws,
rules
and regulatory requirements and the requirements in the articles
and
by-laws of the Corporation. Subject to compliance with any requirements
imposed by the foregoing, consent shall be given if the proposed
amendment, variation or rescission is approved by the affirmative
vote of
a majority of the votes cast by Independent Shareholders represented
in
person or by proxy at the special
meeting.
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|
(c)
|
The
Corporation may, with the prior consent of the holders of Rights
obtained
as set forth below, at any time after the Separation Time and before
the
Expiration Time, amend, vary or rescind any of the provisions of
this
Agreement and the Rights (whether or not such action would materially
adversely affect the interests of the holders of Rights generally).
Such
consent shall be deemed to have been given if provided by the holders
of
Rights at a special meeting of holders of Rights called and held
in
compliance with applicable laws and regulatory requirements and,
to the
extent possible, with the requirements in the articles and by-laws
of the
Corporation applicable to meetings of holders of Voting Shares, applied
mutatis
mutandis.
Subject to compliance with any requirements imposed by the foregoing,
consent shall be given if the proposed amendment, variation or rescission
is approved by the affirmative vote of a majority of the votes cast
by
holders of Rights (other than holders of Rights whose Rights have
become
null and void pursuant to section 4.1(b)),
represented in person or by proxy at the special
meeting.
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33
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(d)
|
Any
amendments made by the Corporation to this Agreement pursuant to
Subsection 6.6(a)
which are required to maintain the validity and effectiveness of
this
Agreement as a result of any change in any applicable laws, rules
or
regulatory requirements shall:
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|
(i)
|
if
made before the Separation Time, be submitted to the holders of Voting
Shares of the Corporation at the next meeting of shareholders and
the
shareholders may, by the majority referred to in section 6.6(b)confirm
or reject such amendment; and
|
|
(ii)
|
if
made after the Separation Time, be submitted to the holders of Rights
at a
meeting to be called for on a date not later than immediately following
the next meeting of shareholders of the Corporation and the holders
of
Rights may, by resolution passed by the majority referred to in section
6.6(c),
confirm or reject such amendment.
|
Any
such
amendment shall be effective from the date of the resolution of the Board of
Directors adopting such amendment, until it is confirmed or rejected or until
it
ceases to be effective (as described in the next sentence) and, where such
amendment is confirmed, it continues in effect in the form so confirmed. If
such
amendment is or is not submitted to the shareholders of the Corporation or
holders of Rights as required, then such amendment shall cease to be effective
from and after the termination of the meeting at which it was rejected or to
which it should have been but was not submitted or from and after the date
of
the meeting of holders of Rights that should have been but was not held, and
no
subsequent resolution of the Board of Directors to amend this Agreement to
substantially the same effect shall be effective until confirmed by the
shareholders of the Corporation or holders of Rights as the case may
be.
|
(e)
|
The
Corporation shall be required to provide the Rights Agent with notice
in
writing of any such amendment, rescission or variation to this Agreement
as referred to in this section 6.6
within five days of effecting such amendment, rescission or
variation.
|
6.7 Rights
of Action
Subject
to the terms of this Agreement, all rights of action in respect of this
Agreement, other than rights of action vested solely in the Rights Agent, are
vested in the respective holders of the Rights; and any holder of any Rights,
without the consent of the Rights Agent or of the holder of any other Rights,
may, on such holder's own behalf and for such holder's own benefit and the
benefit of other holders of Rights, enforce, and may institute and maintain
any
suit, action or proceeding against the Corporation to enforce, or otherwise
act
in respect of, such holder's right to exercise such holder's Rights in the
manner provided in such holder's Rights Certificate and in this Agreement.
Without limiting the foregoing or any remedies available to the holders of
Rights, it is specifically acknowledged that the holders of Rights would not
have an adequate remedy at law for any breach of this Agreement and will be
entitled to specific performance of the obligations under, and injunctive relief
against, actual or threatened violations of, the obligations of any Person
subject to this Agreement.
34
6.8 Notice
of Proposed Actions
In
case
the Corporation shall propose after the Separation Time and prior to the
Expiration Time:
|
(a)
|
to
effect or permit (in cases where the Corporation's permission is
required)
any Flip-in Event; or
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(b)
|
to
effect the liquidation, dissolution or winding-up of the Corporation
or
the sale of all or substantially all of the Corporation's
assets,
|
then,
in
each such case, the Corporation shall give to each holder of a Right, in
accordance with section 6.9,
a
notice of such proposed action, which shall specify the date on which such
Flip-in Event, liquidation, dissolution or winding-up is to take place, and
such
notice shall be so given at least 20 Business Days prior to the date of taking
such proposed action.
6.9 Notices
Notices
or demands authorized or required by this Agreement to be given or made by
the
Rights Agent or by the holder of any Rights to or on the Corporation shall
be
sufficiently given or made if delivered or sent by first class mail, postage
prepaid, or by fax (with, in the case of fax, an original copy of the notice
or
demand sent by first class mail, postage prepaid, to the Corporation following
the giving of the notice or demand by fax) addressed (until another address
is
filed in writing with the Rights Agent) as follows:
Apollo
Gold Corporation
0000
X.
Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx
Xxxxxxx, XX
00000-0000
Attention: President
Fax: (000)
000-0000
Any
notice or demand authorized or required by this Agreement to be given or made
by
the Corporation or by the holder of any Rights to or on the Rights Agent shall
be sufficiently given or made if delivered or sent by first-class mail, postage
prepaid, or by fax (with, in the case of fax, an original copy of the notice
or
demand sent by first class mail, postage prepaid, to the Corporation following
the giving of the notice or demand by fax) addressed (until another address
is
filed in writing with the Corporation) as follows:
CIBC
Mellon Trust Company
000
Xxx
Xxxxxx, X.X. Xxx 0
Xxxxxxx,
Xxxxxxx
X0X
0X0
35
Attention: Vice
President, Client Services
Fax: (000)
000-0000
Notices
or demands authorized or required by this Agreement to be given or made by
the
Corporation or the Rights Agent to or on the holder of any Rights shall be
sufficiently given or made if delivered or sent by first-class mail, postage
prepaid, or by fax (with, in the case of fax, an original copy of the notice
or
demand sent by first class mail, postage prepaid, to the Corporation following
the giving of the notice or demand by fax) addressed to such holder at the
address of such holder as it appears upon the registry books of the Rights
Agent
or, prior to the Separation Time, on the registry books of the Corporation
for
the Common Shares. If mail service is or is threatened to be interrupted at
a
time when the Corporation or the Rights Agent wishes to give a notice or demand
hereunder to or on the holders of the Rights, the corporation or the Rights
Agent may, notwithstanding the foregoing provisions of this section 6.9,
give
such notice by means of publication once in each of two successive weeks in
the
business section of the Financial Post or in such other publication or
publications as may be designated by the Corporation and notice so published
shall be deemed to have been given on the date on which the first publication
of
such notice in any such publication has taken place. Any notice that is mailed
in the manner herein provided shall be deemed given, whether or not the holder
receives the notice.
6.10 Costs
of Enforcement
The
Corporation agrees that if the Corporation or any other Person the securities
of
which are purchasable upon exercise of Rights fails to fulfil any of its
obligations pursuant to this Agreement, then the Corporation or such Person
will
reimburse the holder of any Rights for the costs and expenses (including legal
fees) incurred by such holder in actions to enforce his rights pursuant to
any
Rights or this Agreement.
6.11 Successors
All
the
covenants and provisions of this Agreement by or for the benefit of the
Corporation or the Rights Agent shall bind and enure to the benefit of their
respective successors and assigns hereunder.
6.12 Benefits
of this Agreement
Nothing
in this Agreement shall be construed to give to any Person other than the
Corporation, the Rights Agent and the holders of the Rights any legal or
equitable right, remedy or claim under this Agreement; but this Agreement shall
be for the sole and exclusive benefit of the Corporation, the Rights Agent
and
the holders of the Rights.
6.13 Governing
Law
This
Agreement and each Right issued hereunder shall be deemed to be a contract
made
under the laws of the Province of Ontario and for all purposes shall be governed
by and construed in accordance with the laws of such province applicable to
contracts to be made and performed entirely within such province.
36
6.14 Language
Les
parties aux presents ont exigees que la presente convention ainsi que tous
les
documents et avis qui s'y rattachent et/ou qui en decouleront soient rediges
en
langue anglaise. The parties hereto have required that this Agreement and all
documents and notices related thereto and/or resulting therefrom be drawn up
in
the English language.
6.15 Approvals
Any
obligation of the Corporation or action or event contemplated by this Agreement
shall be subject to the receipt of any requisite approval or consent from any
governmental or regulatory authority, and shall be subject to approval by
ordinary resolution of the shareholders of the Corporation.
6.16 Declaration
as to Non-Canadian Holders
If
in the
opinion of the Board of Directors (who may rely upon the advice of counsel)
any
action or event contemplated by this Agreement would require compliance with
the
securities laws or comparable legislation of a jurisdiction outside Canada,
the
Board of Directors acting in good faith may take such actions as it may deem
appropriate to ensure that such compliance is not required, including without
limitation establishing procedures for the issuance to an appropriate Canadian
resident acting as a fiduciary (a "Fiduciary")
of
Rights or securities issuable on exercise of Rights, the holding thereof in
trust for the Person entitled thereto (but reserving to the Fiduciary or to
the
Fiduciary and the Corporation as the Corporation may determine, absolute
instrument discretion with respect thereto) and the sale thereof and remittance
of the proceeds of such sale, if any, to the persons entitled thereto. In no
event shall the Corporation or the Rights Agent be required to issue or deliver
Rights or securities issuable on exercise of Rights to persons who are citizens,
residents or nationals of any jurisdiction other than Canada and any province
or
territory thereof in which such issue or delivery would be unlawful without
registration of the relevant Persons or securities for such
purposes.
6.17 Counterparts
This
Agreement may be executed in any number of counterparts and each of such
counterparts shall for all purposes be deemed to be an original, and all such
counterparts shall together constitute but one and the same
instrument.
6.18 Severability
If
any
section, subsection, clause, subclause, term or provision hereof or the
application thereof to any circumstance shall, in any jurisdiction and to any
extent be invalid or unenforceable, such section, subsection, clause, subclause,
term or provision shall be ineffective as to such jurisdiction to the extent
of
such invalidity or unenforceability without invalidating or rendering
unenforceable the remaining sections, subsections, clauses, subclauses, terms
and provisions hereto or the application of such section, subsection, clause,
subclause, term or provision to circumstances other than those as to which
it is
held invalid or unenforceable.
6.19 Effective
Date
This
Agreement is in full force and effect in accordance with its terms from the
date
hereof. If this Agreement is not confirmed by the requisite number of votes
cast
by the holders of Common Shares of the Corporation represented in person or
by
proxy at the 2006 annual meeting of shareholders of the Corporation who vote
in
respect of confirmation of this Agreement at such meeting, then this Agreement
and any then outstanding Rights shall be of no further force and effect from
the
date of the 2006 annual meeting of shareholders of the Corporation.
37
6.20 Successors
All
the
covenants and provisions of this Agreement by or for the benefit of the
Corporation or the Rights Agent shall bind and insure to the benefit of their
respective successors and assigns hereunder.
6.21 Time
of the Essence
Time
shall be of the essence in this Agreement.
IN
WITNESS WHEREOF, the
parties hereto have caused this Agreement to be duly executed as of the date
first above written.
| APOLLO GOLD CORPORATION. | ||
| |
|
|
| Per: |
/s/
R. Xxxxx Xxxxxxx
|
|
|
|
||
| Per: |
/s/
Xxxxxx Xxxxxxxx
|
|
|
|
||
| CIBC MELLON TRUST COMPANY | ||
| |
|
|
| Per: |
/s/
Xxxxxxx Xxxxx
|
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38
Exhibit
A
[FORM
OF
RIGHTS CERTIFICATE]
Certificate
No.
Rights
THE
RIGHTS REPRESENTED BY THIS RIGHTS CERTIFICATE WERE BENEFICIALLY OWNED BY A
PERSON WHO WAS AN ACQUIRING PERSON OR WHO WAS AN AFFILIATE OR AN ASSOCIATE
OF AN
ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) OR WAS
ACTING JOINTLY OR IN CONCERT WITH ANY OF THEM. THIS RIGHTS CERTIFICATE AND
THE
RIGHTS REPRESENTED HEREBY SHALL BECOME VOID IN THE CIRCUMSTANCES SPECIFIED
IN
SUBSECTION 4.1(b)
OF THE
RIGHTS AGREEMENT.
RIGHTS
CERTIFICATE
This
certifies that ►,
or
registered assigns, is the registered holder of the number of Rights set forth
above, each of which entitles the registered holder thereof, subject to the
terms, provisions and conditions of the Shareholder Rights Plan Agreement dated
as of January
17, 2007,
(the
"Rights Agreement") between Apollo Gold Corporation, a corporation subsisting
under the Business Corporations Act (Yukon) (the "Corporation") and CIBC Mellon
Trust Company, a trust company existing under the laws of Canada as rights
agent
(the "Rights Agent", which term shall include any successor Rights Agent under
the Rights Agreement) to purchase from the Corporation at any time after the
Separation Time (as such term is defined in the Rights Agreement) and prior
to
the close of business on the ►
day of
►,
200►,
one
fully paid and non-assessable Common Share of the Corporation (a "Common Share")
at the Exercise Price referred to below, upon presentation and surrender of
this
Rights Certificate together with the Form of Election to Exercise duly executed
and submitted to the Rights Agent at its principal office in any of the cities
of Toronto and Vancouver. The Exercise Price shall initially be $100.00
(Canadian) per Right and shall be subject to adjustment in certain events as
provided in the Rights Agreement.
In
certain circumstances described in the Rights Agreement, each Right evidenced
hereby may entitle the registered holder thereof to purchase or receive assets,
debt securities or other equity securities of the Corporation (or a combination
thereof), all as provided in the Rights Agreement.
This
Rights Certificate is subject to all of the terms, provisions and conditions
of
the Rights Agreement, which terms, provisions and conditions are hereby
incorporated herein by reference and made a part hereof and to which Rights
Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities thereunder of the
Rights Agent, the Corporation and the holders of the Rights Certificates. Copies
of the Rights Agreement are on file at the registered office of the Corporation
and are available upon written request.
This
Rights Certificate, with or without other Rights Certificates, upon surrender
at
any of the offices of the Rights Agent designated for such purpose, may be
exchanged for another Rights Certificate or Rights Certificates of like tenor
and date evidencing an aggregate number of Rights entitling the holder to
purchase a like aggregate number of Common Shares as the Rights evidence by
the
Rights Certificate or Rights Certificates surrendered. If this Rights
Certificate shall be exercised in part, the registered holder shall be entitled
to receive, upon surrender hereof, another Rights Certificate or Rights
Certificates for the number of whole Rights not exercised.
Subject
to the provisions of the Rights Agreement, the Rights evidenced by this Rights
Certificate (i) may be, and under certain circumstances are required to be,
redeemed by the Corporation at a redemption price of $0.0001 per Right or (ii)
may be exchanged at the option of the Corporation in whole or in part for debt
or equity securities or other assets (or a combination thereof) of the
Corporation.
No
fractional Common Shares will be issued upon the exercise of any Right or Rights
evidenced hereby.
No
holder
of this Rights Certificate, as such, shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of Common Shares or of any
other securities of the Corporation which may at any time be issuable upon
the
exercise hereof, nor shall anything contained in the Rights Agreement or herein
be construed to confer upon the holder, any of the rights of a shareholder
of
the Corporation or any right to vote for the election of directors or upon
any
matter submitted to shareholders of the Corporation at any meeting thereof,
or
to give or withhold consent to any corporate action, or to receive notice of
meetings or other actions affecting shareholders of the Corporation (except as
provided in the Rights Agreement), or to receive dividends, distributions or
subscription rights, or otherwise, until the Rights evidenced by this Rights
Certificate shall have been exercised as provided in the Rights
Agreement.
This
Rights Certificate shall not be valid or obligatory for any purpose until it
shall have been manually countersigned by the Rights Agent.
WITNESS
the facsimile signature of the proper officers of the Corporation and its
corporate seal.
Date:
| APOLLO GOLD CORPORATION | |||||
| By: | By: | ||||
|
|
|
||||
Countersigned:
| CIBC MELLON TRUST COMPANY | |||||
| By: | By: | ||||
|
Authorized Signature |
|
||||
A
- 2
(To
be
attached to each Rights Certificate)
FORM
OF ELECTION TO EXERCISE
TO:
Apollo
Gold Corporation
The
undersigned hereby irrevocably elects to exercise
whole
Rights represented by the attached Rights Certificate to purchase the Common
Shares issuable upon the exercise of such Rights and requests that certificates
for such Shares be issued to:
(NAME)
(ADDRESS)
(CITY
AND
STATE OR PROVINCE)
(SOCIAL
INSURANCE NUMBER)
If
such
number of Rights shall not be all the Rights evidenced by this Rights
Certificate, a new Rights Certificate for the balance of such Rights shall
be
registered in the name of and delivered to:
(NAME)
(ADDRESS)
(CITY
AND
STATE OR PROVINCE)
| |
|
|
| Date: | ||
|
Signature |
||
|
(Signature
must correspond to name as written upon the face of this
Rights Certificate in every particular, without alteration or enlargement
or any change whatsoever)
|
||
A
- 3
(To
be
completed if true)
The
undersigned hereby represents, for the benefit of all holders of Rights and
Common Shares, that the Rights evidenced by this Rights Certificate are not,
and, to the knowledge of the undersigned, have never been, Beneficially Owned
by
an Acquiring Person or an Affiliate or Associate thereof or any Person acting
jointly or in concert with any of the foregoing or any Affiliate or Associate
of
such Person (as defined in the Rights Agreement).
| |
|
|
|
Signature |
||
|
|
||
In
the
event the certification set forth in the Form of Election to Exercise is not
completed, the Corporation will deem the Beneficial Owner of the Rights
evidenced by this Rights Certificate to be an Acquiring Person or an Affiliate
or Associate thereof (as defined in the Rights Agreement) and accordingly such
Rights shall be null and void.
A
- 4
FORM
OF ASSIGNMENT
(To
be
executed by the registered holder if such
holder
desires to transfer the Rights Certificate)
FOR
VALUE
RECEIVED
hereby
sells, assigns and transfers unto
the
Rights represented by this Rights Certificate, together with all right, title
and interest therein, and does hereby irrevocably constitute and
appoint
,
as
attorney, to transfer the within Rights on the books of the Corporation, with
full power of substitution.
| |
|
|
| Date: | ||
|
Signature
Guaranteed:
|
||
|
Signature |
||
|
(Signature
must correspond to name as written upon the face of this
Rights Certificate in every particular, without alteration or enlargement
or any change whatsoever)
|
||
Signature
must be guaranteed by a major Canadian Schedule 1 Chartered Bank, major Canadian
Trust Company, or a member of a recognized Medallion Program.
The
undersigned hereby represents, for the benefit of all holders of Rights and
Common Shares, that the Rights evidenced by this Rights Certificate are not,
and, to the knowledge of the undersigned, have never been, Beneficially Owned
by
an Acquiring Person or an Affiliate or Associate thereof or any Person acting
jointly or in concert with any of the foregoing (as defined in the Rights
Agreement).
| |
|
|
|
Signature |
||
|
|
||
In
the
event the certification set forth in the Form of Assignment is not completed,
the Corporation will deem the Beneficial Owner of the Rights evidenced by this
Rights Certificate to be an Acquiring Person or an Affiliate or Associate
thereof (as defined in the Rights Agreement) and accordingly such Rights shall
be null and void.
A
- 5
