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EXHIBIT 4.3
SHAREHOLDER RIGHTS PLAN AGREEMENT
MEMORANDUM OF AGREEMENT, dated as of October 5, 1998 between Gold
Reserve Inc. (the "Corporation"), a corporation incorporated under the laws of
the Yukon Territory, and Montreal Trust Company of Canada, a trust company
incorporated under the laws of Canada (the "Rights Agent");
WHEREAS in order to maximize shareholder value 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") WHEREAS in order to
implement the adoption of a shareholder rights plan as established by this
Agreement, the board of directors of the Corporation has:
(a) authorized the issuance, effective immediately following the
Effective Time (as hereinafter defined), of one Right (as hereinafter defined)
in respect of each Common Share (as hereinafter defined) outstanding immediately
following the Effective Time (the "Record Time"); and
(b) provided that the Separation Time occurs after the Record Time,
authorized the issuance of one Right in respect of each Common Share of the
Corporation 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, when issued, will entitle the holder thereof,
after the Separation Time, to purchase securities of the Corporation 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 the holders of Rights, and the Rights Agent is
willing to so 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, and subject to such covenants and
agreements, the parties hereby agree as follows:
ARTICLE 1
INTERPRETATION
1.1 Certain Definitions
For purposes of this Agreement, the following terms have the meanings
indicated:
(a) "ACQUIRING PERSON" shall mean any Person who is the Beneficial
Owner of 20 per cent or more of the outstanding Voting Shares;
provided, however, that the term Acquiring Person" shall not
include:
(i) the Corporation or any Subsidiary of the Corporation;
(ii) any Person who becomes the Beneficial Owner of 20
per cent or more of the outstanding Voting Shares as
a result of one or any combination of (A) a Voting
Share Reduction, (B) Permitted Bid Acquisitions, (C)
an Exempt Acquisition or (D) Pro Rata Acquisitions;
provided, however, that if a Person becomes the
Beneficial Owner of 20 per cent or more of the
outstanding Voting Shares by reason of one or any
combination of the operation of Paragraphs (A), (B),
(C) or (D) above and such Person's Beneficial
Ownership of Voting Shares thereafter increases by
more than 1 per cent of the number of Voting Shares
outstanding (other than pursuant to one or any
combination of a Voting Share Reduction, a Permitted
Bid Acquisition, an Exempt Acquisition or a Pro Rata
Acquisition), then as of the date such Person becomes
the Beneficial Owner of such additional Voting
Shares, such Person shall become an "Acquiring
Person";
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(iii) for a period of ten days after the Disqualification
Date (as defined below), any Person who becomes the
Beneficial Owner of 20 per cent or more of the
outstanding Voting Shares as a result of such Person
becoming disqualified from relying on Clause
1.1(g)(B) because such Person makes or announces a
current intention to make a Take-over Bid, either
alone or by acting jointly or in concert with any
other Person. For the purposes of this definition,
"Disqualification Date" means the first date of
public announcement that any Person is making or
intends to make a Take-over Bid;
(iv) an underwriter or member of a banking or selling
group that becomes the Beneficial Owner of 20 per
cent or more of the Voting Shares in connection with
a distribution to the public of securities of the
Corporation; or
(v) a Person (a "Grandfathered Person") who is the
Beneficial Owner of 20 per cent or more of the
outstanding Voting Shares of the Corporation
determined as of 12:01 am (Toronto time) on the
Agreement Date, provided, however, that this
exception shall not be, and shall cease to be,
applicable to a Grandfathered Person in the event
that such Grandfathered Person shall, after 12:01 am
(Toronto time) on the Agreement Date, become the
Beneficial Owner of any additional Voting Shares of
the Corporation that increases its Beneficial
Ownership of Voting Shares by more than 1 per cent of
the number of Voting Shares outstanding, other than
through one or any combination of a Permitted Bid
Acquisition, an Exempt Acquisition, a Voting Share
Reduction, or a Pro Rata Acquisition;
(b) "AFFILIATE": when used to indicate a relationship with a
specified Person, shall mean a Person that directly, or
indirectly through one or more intermediaries, controls, or is
controlled by, or is under common control with, such specified
Person;
(c) "AGREEMENT" shall mean this shareholder rights plan agreement
dated as of October 5,1998 between the Corporation and the
Rights Agent, as amended or supplemented from time to time;
"hereof", "herein", "hereto" and similar expressions mean and
refer to this Agreement as a whole and not to any particular
part of this Agreement;
(d) "AGREEMENT DATE" means October 5,1998;
(e) "ANNUAL CASH DIVIDEND" shall mean cash dividends paid in any
fiscal year of the Corporation to the extent that such cash
dividends do not exceed, in the aggregate, the greatest of:
(i) 200 per cent of the aggregate amount of cash
dividends declared payable by the Corporation on its
Common Shares in its immediately preceding fiscal
year;
(ii) 300 per cent of the arithmetic mean of the aggregate
amounts of the annual cash dividends declared payable
by the Corporation on its Common Shares in its three
immediately preceding fiscal years; and
(iii) 100 per cent of the aggregate consolidated net income
of the Corporation, before extraordinary items, for
its immediately preceding fiscal year;
(f) "ASSOCIATE" means, when used to indicate a relationship with a
specified Person, a spouse of that Person, any Person of the
same or opposite sex with whom that Person is living in a
conjugal relationship outside marriage, a child of that Person
or a relative of that Person if that relative has the same
residence as that Person;
(g) A Person shall be deemed the "BENEFICIAL OWNER" of, and to
have "BENEFICIAL OWNERSHIP" of, and to "BENEFICIALLY OWN",
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(i) any securities as to which such Person or any of such
Person's Affiliates or Associates is the owner at law
or in equity;
(ii) any securities as to which such Person or any of such
Person's Affiliates or Associates has the right to
acquire (whether such right is exercisable
immediately or within a period of 60 days thereafter
and whether or not on condition or the happening of
any contingency) pursuant to any agreement,
arrangement, pledge or understanding, whether or not
in writing (other than (x) customary agreements with
and between underwriters and/or banking group members
and/or selling group members with respect to a
distribution of securities by the Corporation, and
(y) pledges of securities in the ordinary course of
business), or upon the exercise of any conversion
right, exchange right, share purchase right (other
than the Rights), warrant or option;
(iii) any securities owned through a trustee, legal
representative, agent or other intermediary;
(iv) any securities which are Beneficially Owned within
the meaning of Clauses 1.1(g)(i), (ii) or (iii) by
any other Person with which such Person is acting
jointly or in concert; 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:
(A) where such security has been deposited or
tendered pursuant to any Take-over Bid made
by such Person, made by any of such Person's
Affiliates or Associates or made by any
other Person acting jointly or in concert
with such Person, until such deposited or
tendered security has been taken up or paid
for, whichever shall first occur;
(B) where such Person, any of such Person's
Affiliates or Associates or any other Person
referred to in Clause 1.1(g)(iv), holds such
security provided that (1) the ordinary
business of any such Person (the "Investment
Manager") includes the management of
investment funds for others (which others,
for greater certainty, may include or be
limited to one or more employee benefit
plans or pension plans) 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 account of any other Person
or Persons (a "Client"); or (2) 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 (each an
"Estate Account") or in relation to other
accounts (each an "Other Account") and holds
such security in the ordinary course of such
duties for the estate of any such deceased
or incompetent Person or for such Other
Accounts, (3) such Person is a pension plan
or fund (a "Plan") or is a Person
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 of various
public bodies; or (4) such Person (the
"Administrator") is the administrator or
trustee of one or more Plans; provided, in
any of the above cases, that the Investment
Manager, the Trust Company, the Statutory
Body, the Administrator or the Plan, as the
case may be, is not then making or has not
then announced an intention to make a
Take-over Bid, (other than an Offer to
Acquire Voting Shares or other securities 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;
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(C) where such Person or any of such Person's
Affiliates or Associates is (1) a Client of
the same Investment Manager as another
Person on whose account the Investment
Manager holds such security, (2) an Estate
Account or an Other Account of the same
Trust Company as another Person on whose
account the Trust Company holds or exercises
voting or dispositive power over such
security, or (3) a Plan with the same
Administrators as another Plan on whose
account the Administrator holds such
security;
(D) where such Person is (1) a Client of an
Investment Manager and such security is
owned at law or in equity by the Investment
Manager, (2) 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 (3) a Plan and such security is
owned at law or in equity by the
Administrator of the Plan; or
(E) where 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.
(h) "BOARD OF DIRECTORS" shall mean the board of directors of the
Corporation or any duly constituted and empowered committee
thereof;
(i) "BUSINESS DAY" shall mean any day other than a Saturday,
Sunday or a day on which banking institutions in Toronto,
Ontario are authorized or obligated by law to close;
(j) "CANADIAN DOLLAR EQUIVALENT" of any amount which is expressed
in United States Dollars means, on any date, the Canadian
dollar equivalent of such amount determined by multiplying
such amount by the U.S. - Canadian Exchange Rate in effect on
such date;
(k) "CANADIAN - U.S. EXCHANGE RATE" means, on any date, the
inverse of the U.S. - Canadian Exchange Rate in effect on such
date;
(l) "CLASS A SHARES" means the class A common shares in the
capital of the Corporation;
(m) "CLASS B SHARES" means the class B common shares in the
capital of the Corporation;
(n) "CLOSE OF BUSINESS" on any given date shall mean the time on
such date (or, if such date is not a Business Day, the time on
the next succeeding Business Day) at which the transfer office
of the transfer agent (or co-transfer agent) for the Common
Shares in the City of Toronto (or, after the Separation Time,
the office of the Rights Agent in the City of Toronto) is
closed to the public;
(o) "COMMON SHARES" shall mean the Class A Shares and the Class B
Shares in the capital of the Corporation and, for the purposes
of this Agreement, except as specifically otherwise provided
herein, the Class A Shares and the Class B Shares shall be
treated as a single class of common shares;
(p) "COMPETING PERMITTED BID" means a Take-over Bid that
(i) is made after a Permitted Bid has been made and prior
to the expiry of the Permitted Bid;
(ii) satisfies all of the provisions of a Permitted Bid
other than the condition set forth in Clause (ii) of
the definition of a Permitted Bid; and
(iii) contains, and the take-up and payment for securities
tendered or deposited is subject to, an irrevocable
and unqualified provision that no Voting Shares will
be taken up or paid for pursuant to the Take-over Bid
prior to the close of business on the date that is no
earlier than the later of (A) 21 days after the date
of the Take-over Bid constituting the Competing
Permitted Bid; and (B) 60 days following the date on
which the earliest
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Permitted Bid which preceded the Competing Permitting
Bid was made; and only if at the date that the Voting
Shares are to be taken up more than 50% of the Voting
Shares held by Independent Shareholders shall have
been deposited or tendered pursuant to the Competing
Permitted Bid and not withdrawn;
(q) "CONTROLLED": a corporation shall be deemed to be "controlled"
by another Person if:
(i) securities entitled to vote in the election of
directors carrying more than 50 per cent of the votes
for the election of directors are held, directly or
indirectly, by or for the benefit of the other
Person; and
(ii) the votes carried by such securities are entitled, if
exercised, to elect a majority of the board of
directors of such corporation; and "controls",
"controlling" and "under common control with" shall
be interpreted accordingly;
(r) "CO-RIGHTS AGENTS" shall have the meaning ascribed thereto in
Subsection 4.1(a);
(s) "DIVIDEND REINVESTMENT ACQUISITION" shall mean an acquisition
of Voting Shares of any class pursuant to a Dividend
Reinvestment Plan;
(t) "DIVIDEND REINVESTMENT PLAN" means a regular dividend
reinvestment or other plan of the Corporation made available
by the Corporation to holders of its securities where such
plan permits the holder to direct that some or all of:
(i) dividends paid in respect of shares of any class of
the Corporation;
(ii) proceeds of redemption of shares of the Corporation;
(iii) interest paid on evidences of indebtedness of the
Corporation; or
(iv) optional cash payments;
be applied to the purchase from the Corporation of Common
Shares;
(u) "EFFECTIVE TIME" means the time at which articles of merger
are accepted for filing by the Secretary of State of the State
of Montana with respect to the merger of Gold Reserve
Corporation and GR Merger Corp., a wholly-owned subsidiary of
the Corporation or at such later time as is specified in such
articles of merger;
(v) "ELECTION TO EXERCISE" shall have the meaning ascribed thereto
in Clause 2.2(d)(ii);
(w) "EXEMPT ACQUISITION" means a share acquisition in respect of
which the Board of Directors has waived the application of
Section 3.1 pursuant to the provisions of Subsection 5.1(b),
(c) or (d);
(x) "EXERCISE PRICE" shall mean, as of any date, the price at
which a holder may purchase the securities issuable upon
exercise of one whole Right which, until adjustment thereof in
accordance with the terms hereof, shall be $70.00;
(y) "EXPANSION FACTOR" shall have the meaning ascribed thereto in
Clause 2.3(a)(x);
(z) "EXPIRATION TIME" shall mean the close of business on that
date which is the earliest of the date of termination of this
Agreement pursuant to Section 5.15 or, if this Agreement is
confirmed pursuant to Section 5.15 and the Reorganization is
approved as contemplated by Section 5.15, the date of
termination of this Agreement pursuant to Section 5.16 or, if
this Agreement is reconfirmed pursuant to Section 5.16, June
17, 2002;
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(aa) "FLIP-IN EVENT" shall mean a transaction in or pursuant to
which any Person becomes an Acquiring Person;
(bb) "HOLDER" shall have the meaning ascribed thereto in Section
2.8;
(cc) "INDEPENDENT SHAREHOLDERS" shall mean holders of Voting
Shares, other than:
(i) any Acquiring Person;
(ii) any Offeror, other than a Person referred to in
Clause 1.1(g)(B);
(iii) any Affiliate or Associate of any Acquiring Person or
Offeror;
(iv) any Person acting jointly or in concert with any
Acquiring Person or Offeror; and
(v) any employee benefit plan, deferred profit sharing
plan, stock participation plan and any other similar
plan or trust for the benefit of employees of the
Corporation or a Subsidiary of the Corporation,
unless the beneficiaries of the plan or trust direct
the manner in which the Voting Shares are to be voted
or direct whether the Voting Shares are to be
tendered to a Take-over Bid;
(dd) "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 2.3 hereof shall have
caused the closing prices used to determine the Market Price
on any Trading Days 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 2.3 hereof 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:
(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 of such
securities as reported by the principal Canadian
stock exchange on which such securities are listed or
admitted to trading;
(ii) if for any reason none of such prices is available on
such day or the securities are not listed or posted
for trading on a Canadian stock exchange, the last
sale price or, in case no such sale takes place on
such date, the average of the closing bid and asked
prices for each of such securities as reported by the
principal national United States securities exchange
or market on which such securities are listed or
admitted to trading;
(iii) if for any reason none of such prices is available on
such day or the securities are not listed or admitted
to trading on a Canadian stock exchange or a national
United States securities exchange or market, the last
sale price or, in case no sale takes place on such
date, the average of the high bid and low asked
prices for each of such securities in the
over-the-counter market, as quoted by any reporting
system then in use; or
(iv) if for any reason none of such prices is available on
such day or the securities are not listed or admitted
to trading on a Canadian stock exchange or a national
United States securities exchange or market or quoted
by any such reporting system, the average of the
closing bid and asked prices as furnished by a
professional market maker making a market in the
securities;
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provided, however, that if for any reason none of such prices
is available on such day, the closing price per share of such
securities on such date means the fair value per share of such
securities on such date as determined by a nationally or
internationally recognized investment dealer or investment
banker with respect to the fair value per share of such
securities. The Market Price shall be expressed in Canadian
dollars and, if initially determined in respect of any day
forming part of the 20 consecutive Trading Day period in
question in United States dollars, such amount shall be
translated into Canadian dollars on such date at the Canadian
Dollar Equivalent thereof.
(ee) "1933 SECURITIES ACT" means the Securities Act of 1933 of the
United States, as amended, and the rules and regulations
thereunder as now in effect or as the same may from time to
time be amended, re-enacted or replaced;
(ff) "1934 EXCHANGE ACT" means the Securities Exchange Act of 1934
of the United States, as amended, and the rules and
regulations thereunder as now in effect or as the same may
from time to time be amended, re-enacted or replaced;
(gg) "NOMINEE" shall have the meaning ascribed thereto in
Subsection 2.2(c);
(hh) "OFFER TO ACQUIRE" shall include:
(i) an offer to purchase or a solicitation of an offer to
sell; and
(ii) an acceptance of an offer to sell, whether or not
such offer to sell has been solicited;
or any combination thereof, and the Person accepting an offer
to sell shall be deemed to be making an Offer to Acquire to
the Person that made the offer to sell;
(ii) "OFFEROR" shall mean a Person who has announced an intention
to make or who is making a Take-over Bid;
(jj) "PERMITTED BID" means a Take-over Bid made by an Offeror by
way of take-over bid circular which also complies with the
following additional provisions:
(i) the Take-over Bid is made to all holders of Voting
Shares as registered on the books of the Corporation,
other than the Offeror;
(ii) the Take-over Bid contains, and the take-up and
payment for securities tendered or deposited is
subject to, an irrevocable and unqualified provision
that no Voting Shares will be taken up or paid for
pursuant to the Take-over Bid prior to the close of
business on the date which is not less than 60 days
following the date of the Take-over Bid and only if
at such date more than 50 per cent of the Voting
Shares held by Independent Shareholders shall have
been deposited or tendered pursuant to the Take-over
Bid and not withdrawn;
(iii) the Take-over Bid contains an irrevocable and
unqualified provision that unless the Take-over Bid
is withdrawn, Voting Shares may be deposited pursuant
to such Take-over Bid at any time during the period
of time between the date of the Take-over Bid and the
date on which Voting Shares may be taken up and paid
for and that any Voting Shares deposited pursuant to
the Take-over Bid may be withdrawn until taken up and
paid for; and
(iv) the Take-over Bid contains an irrevocable and
unqualified provision that if, on the date on which
Voting Shares may be taken up and paid for, more than
50% of the Voting Shares held by Independent
Shareholders shall have been deposited pursuant to
the Take-over Bid and not withdrawn, the Offeror will
make a public announcement of that fact
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and the Take-over Bid will remain open for deposits
and tenders of Voting Shares for not less than ten
Business Days from the date of such public
announcement;
(kk) "PERMITTED BID ACQUISITION" shall mean an acquisition of
Voting Shares made pursuant to a Permitted Bid or a Competing
Permitted Bid;
(ll) "PERSON" shall include an individual, body corporate, firm,
partnership, limited partnership, limited liability company,
syndicate or other form of unincorporated association, trust,
trustee, executor, administrator, legal personal
representative, group, unincorporated organization, a
government and its agencies or instrumentalities, any entity
or group whether or not having legal personality;
(mm) "PRO RATA ACQUISITION" shall mean an acquisition by a Person
of Voting Shares pursuant to:
(i) a Dividend Reinvestment Acquisition;
(ii) a stock dividend, stock split or other event in
respect of securities of the Corporation of one or
more particular classes or series pursuant to which
such Person becomes the Beneficial Owner of Voting
Shares on the same pro rata basis as all other
holders of securities of the particular class,
classes or series;
(iii) the acquisition or the exercise by the Person of
rights to purchase Voting Shares issued by the
Corporation to all holders of securities of the
Corporation of one or more particular classes or
series pursuant to a rights offering or pursuant to a
prospectus, provided that such rights are acquired
directly from the Corporation and not from any other
Person; or
(iv) a distribution of Voting Shares, or securities
convertible into or exchangeable for Voting Shares
(and the conversion or exchange of such convertible
or exchangeable securities), made pursuant to a
prospectus or by way of a private placement by the
Corporation provided that the Person does not thereby
acquire beneficial ownership of a greater percentage
of such Voting Shares or securities convertible into
or exchangeable for Voting Shares so offered than the
Person's percentage of Voting Shares beneficially
owned immediately prior to such acquisition;
(nn) "RECORD TIME" has the meaning set forth in the recitals
hereto;
(oo) "Reorganization" shall mean the merger of GR Merger Corp. with
and into Gold Reserve Corporation, pursuant to which the
Company will become the parent of Gold Reserve Corporation;
(pp) "RIGHT" means a right to purchase a Class A Share of the
Corporation, upon the terms and subject to the conditions set
forth in this Agreement;
(qq) "RIGHTS CERTIFICATE" means the certificates representing the
Rights after the Separation Time, which shall be substantially
in the form attached hereto as Attachment 1;
(rr) "RIGHTS REGISTER" shall have the meaning ascribed thereto in
Subsection 2.6(a);
(ss) "SECURITIES ACT (ONTARIO)" shall mean the Securities Act,
R.S.O. 1990, c.S.5, as amended, and the regulations
thereunder, and any comparable or successor laws or
regulations thereto;
(tt) "SEPARATION TIME" shall mean, subject to Sub-section 5.1(d),
the later of
(i) the close of business on the tenth Trading Day after
the earlier of:
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(ii) the Stock Acquisition Date; and
(iii) the date of the commencement of or first public
announcement 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 a Competing Permitted Bid),
(iv) or such later time as may be determined by the Board
of Directors, provided that, if any Take-over Bid
referred to in clause (B) above expires, is not made,
is cancelled, terminated or otherwise withdrawn prior
to the Separation Time, such Take-over Bid shall be
deemed, for the purposes of this definition, never to
have been commenced, made or announced; and
(v) the Record Time;
(uu) "SHARE CAPITAL INCREASE APPROVAL" shall have the meaning
ascribed thereto in Section 5.15;
(vv) "STOCK ACQUISITION DATE" shall mean the first date of public
announcement (which, for purposes of this definition, shall
include, without limitation, a report filed pursuant to
Section 101 of the Securities Act (Ontario) or Section 13(d)
of the 1934 Exchange Act) by the Corporation or an Acquiring
Person of facts indicating that a Person has become an
Acquiring Person;
(ww) "SUBSIDIARY": a corporation shall be deemed to be a Subsidiary
of another corporation if:
(i) it is controlled by:
(ii) that other; or
(iii) that other and one or more corporations each of which
is controlled by that other; or
(iv) two or more corporations each of which is controlled
by that other; or
(v) it is a Subsidiary of a corporation that is that
other's Subsidiary;
(xx) "TAKE-OVER BID" shall mean an Offer to Acquire Voting Shares
or other securities of the Corporation, if, assuming that the
Voting Shares or other securities 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 per cent or more of the
outstanding Voting Shares at the date of the Offer to Acquire;
(yy) "TRADING DAY", when used with respect to any securities, shall
mean a day on which the principal Canadian stock 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 stock
exchange, a Business Day;
(zz) "U.S.-CANADIAN EXCHANGE RATE" means, on any date:
(i) if on such date the Bank of Canada sets an average
noon spot rate of exchange for the conversion of one
United States dollar into Canadian dollars, such
rate; and
(ii) in any other case, the rate for such date for the
conversion of one United States dollar into Canadian
dollars calculated in such manner as may be
determined by the Board of Directors from time to
time acting in good faith;
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(aaa) "U.S. DOLLAR EQUIVALENT" of any amount which is expressed in
Canadian dollars means, on any date, the United States dollar
equivalent of such amount determined by multiplying such
amount by the Canadian-U.S. Exchange Rate in effect on such
date;
(bbb) "VOTING SHARE REDUCTION" shall mean an acquisition or
redemption by the Corporation of Voting Shares which, by
reducing the number of Voting Shares outstanding, increases
the percentage of outstanding Voting Shares Beneficially Owned
by any person to 20 per cent or more of the Voting Shares then
outstanding; and
(ccc) "VOTING SHARES" shall mean the Common Shares of the
Corporation and any other shares in the capital of the
Corporation entitled to vote generally in the election of all
directors.
(ddd) "YUKON BUSINESS CORPORATIONS ACT" means the Business
Corporations Act (Yukon), as amended, and the regulations made
thereunder and any comparable or successor laws or regulations
thereto;
1.2 Currency
All sums of money which are referred to in this Agreement are expressed
in lawful money of Canada, unless otherwise specified.
1.3 Headings
The division of this Agreement into Articles, Sections, Subsections,
Clauses, Paragraphs, Subparagraphs or other portions hereof and the insertion of
headings, subheadings and a table of contents are for convenience of reference
only and shall not affect the construction or interpretation of this Agreement.
1.4 Calculation of Number and Percentage of Beneficial Ownership of
Outstanding Voting Shares
(a) For purposes of this Agreement, in determining the percentage
of outstanding Voting Shares of the Corporation with respect
to which a Person is or is deemed to be the Beneficial Owner,
all unissued Voting Shares of the Corporation of which such
person is deemed to be the Beneficial Owner shall be deemed to
be outstanding.
(b) For purposes of this Agreement, the percentage of Voting
Shares Beneficially Owned by any Person shall be and be deemed
to be the product (expressed as a percentage) determined by
the formula:
100 x A/B
where:
A= the number of votes for the election of all directors
generally attaching to the 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 Voting Shares acquired or held by any Person shall
be determined in like manner mutatis mutandis.
1.5 Acting Jointly or in Concert
For purposes of this Agreement a Person is acting jointly or in concert
with another Person, if such Person has any agreement, commitment, arrangement
or understanding, whether formal or informal and whether or not in writing, with
such other Person for the purpose of acquiring or Offering to Acquire any Voting
Shares (other than (x) customary agreements with and between underwriters and/or
banking group members and/or selling group
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members with respect to a distribution of securities by the Corporation, and (y)
pledges of securities in the ordinary course of business).
1.6 Generally Accepted Accounting Principles
Wherever in this Agreement reference is made to generally accepted
accounting principles, such reference shall be deemed to be generally accepted
accounting principles followed in Canada applicable on a consolidated basis
(unless otherwise specifically provided herein to be applicable on an
unconsolidated basis) as at the date on which a calculation is made or required
to be made in accordance with generally accepted accounting principles. Where
the character or amount of any asset or liability or item of revenue or expense
is required to be determined, or any consolidation or other accounting
computation is required to be made for the purpose of this Agreement or any
document, such determination or calculation shall, to the extent applicable and
except as otherwise specified herein or as otherwise agreed in writing by the
parties, be made in accordance with generally accepted accounting principles
applied on a consistent basis.
ARTICLE 2
THE RIGHTS
2.1 Legend on Share Certificates
Certificates representing Common Shares which are issued after the
Record Time but prior to the earlier of the Separation Time and the Expiration
Time, shall also evidence one Right for each Common Share represented thereby
until the earlier of the Separation Time or the Expiration Time and the
Corporation shall cause such certificates to have impressed thereon, printed
thereon, written thereon or otherwise affixed to them the following legend:
Until the close of business on the earlier of the Separation Time or
the Expiration Time (as both terms are defined in the Shareholder
Rights Agreement referred to below), this certificate also evidences
rights of the holder described in a Shareholder Rights Plan Agreement
dated as of October 5, 1998 (the "Shareholder Rights Agreement")
between Gold Reserve Inc. (the "Corporation") and Montreal Trust
Company of Canada, as supplemented and amended, the terms of which are
incorporated herein by reference and a copy of which is on file at the
principal executive offices of the Corporation. Under certain
circumstances set out in the Shareholder Rights Agreement, the rights
may be terminated, may expire, may become null and void (if, in certain
cases they are "Beneficially Owned" by an "Acquiring Person" as such
terms are defined in the Shareholder Rights Agreement, whether
currently held by or on behalf of such Person or a subsequent holder)
or may be evidenced by separate certificates and no longer evidenced by
this certificate. The Corporation will mail or arrange for the mailing
of a copy of the Shareholder Rights Agreement to the holder of this
certificate without charge as soon as practicable after the receipt of
a written request therefor.
Provided that the Record Time occurs prior to the Separation Time,
certificates representing Common Shares that are issued and outstanding at the
Record Time shall also evidence one Right for each Common Share represented
thereby notwithstanding the absence of the foregoing legend, until the close of
business on the earlier of the Separation Time and the Expiration Time.
2.2 Initial Exercise Price; Exercise of Rights; Detachment of Rights
(a) Subject to adjustment as herein set forth, each Right will
entitle the holder thereof, from and after the Separation Time
and prior to the Expiration Time, to purchase one Class A
Share for the Exercise Price or the U.S. Dollar Equivalent as
at the Business Day immediately preceding the day of exercise
of the Right (and the Exercise Price and number of Class A
Shares are subject to adjustment as set forth below).
(b) Until the Separation Time,
(i) the Rights shall not be exercisable and no Right may
be exercised; and
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(ii) provided the Record Time occurs prior to the
Separation Time, each Right, when issued, will be
evidenced by the certificate for the associated
Common Share of the Corporation registered in the
name of the holder thereof (which certificate shall
also be deemed to represent a Rights Certificate) and
will be transferable only together with, and will be
transferred by a transfer of, such associated Common
Share of the Corporation.
(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 Rights shall be
separate from and independent of Common Shares.
Promptly following the Separation Time, the
Corporation will 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, in respect of any Rights Beneficially Owned by
such Acquiring Person which 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 (the
Corporation hereby agreeing to furnish copies of such
records to the Rights Agent for this purpose):
(x) a Rights Certificate appropriately
completed, representing the number of Rights
held by such holder at the Separation Time
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 or regulation or with any
rule or regulation of any self-regulatory
organization, stock exchange or quotation
system on which the Rights may from time to
time be listed or traded, or to conform to
usage; and
(y) a disclosure statement describing the
Rights, provided that a Nominee shall be
sent the materials provided for in (x) and
(y) only in respect of all Common Shares
held of record by it which 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,
Ontario or any other office of the Rights Agent (or any
Co-Rights Agent) in cities designated from time to time for
that purpose by the Corporation:
(i) the Rights Certificate evidencing such Rights;
(ii) an election to exercise such Rights (an "Election to
Exercise") substantially in the form attached to the
Rights Certificate appropriately 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; and
(iii) payment by certified cheque, banker's draft or money
order payable to the order of the Corporation, of a
sum equal to the Exercise Price multiplied by the
number of Rights being exercised and a sum sufficient
to cover any transfer tax or charge which 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 Class A
Shares in a name other than that of the holder of the
Rights being exercised.
(e) Upon receipt of a Rights Certificate, together with a
completed Election to Exercise executed in accordance with
Clause 2.2(d)(ii), which does not indicate that such Right is
null and void as provided by Subsection 3.1(b), and payment as
set forth in Clause 2.2(d)(iii), the Rights Agent
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(unless otherwise instructed by the Corporation in the
event that the Corporation is of the opinion that the Rights
cannot be exercised in accordance with this Agreement) will
thereupon promptly:
(i) requisition from the transfer agent certificates
representing the number of such Class A Shares to be
purchased (the Corporation hereby irrevocably
authorizing its transfer agent to comply with all
such requisitions);
(ii) when appropriate, requisition from the Corporation
the amount of cash to be paid in lieu of issuing
fractional Class A Shares;
(iii) after receipt of the certificates referred to in
Clause 2.2(e)(i), deliver the same to or upon the
order of the registered holder of such Rights
Certificates, registered in such name or names as may
be designated by such holder;
(iv) when appropriate, after receipt, deliver the cash
referred to in Clause 2.2(e)(ii) to or to the order
of the registered holder of such Rights Certificate;
and
(v) remit to the Corporation all payments received on the
exercise of 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 (subject to the provisions of Subsection 5.5(a))
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 Class A Shares delivered
upon exercise of Rights shall, at the time of
delivery of the certificates for such Class A Shares
(subject to payment of the Exercise Price), be duly
and validly authorized, executed, 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 the requirements of the
YUKON BUSINESS CORPORATIONS ACT, the SECURITIES ACT
(ONTARIO) and the securities laws or comparable
legislation of each of the provinces of Canada, the
1993 SECURITIES ACT and the 1934 EXCHANGE 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 Class A
Shares upon exercise of Rights;
(iii) use reasonable efforts to cause all Class A Shares
issued upon exercise of Rights to be listed on the
stock exchanges and markets on which such Class A
Shares were traded immediately prior to the Stock
Acquisition Date;
(iv) pay when due and payable, if applicable, any and all
federal, provincial and municipal transfer taxes and
charges (not including any income or capital taxes of
the holder or exercising holder or any liability of
the Corporation to withhold tax) which may be payable
in respect of the original issuance or delivery of
the Rights Certificates, or certificates for Class A
Shares to be issued upon exercise of any Rights,
provided that the Corporation shall not be required
to pay any transfer tax or charge which 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 Class A
Shares in a name other than that of the holder of the
Rights being transferred or exercised; and
(v) after the Separation Time, except as permitted by
Sections 5.1 and 5.4, not take (or permit any
Subsidiary to take) any action if at the time such
action is taken it is reasonably foreseeable that
such action will diminish substantially or otherwise
eliminate the benefits intended to be afforded by the
Rights.
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2.3 Adjustments to Exercise Price; Number of Rights
The Exercise Price, the number and kind of securities subject to
purchase upon exercise of each Right and the number of Rights outstanding are
subject to adjustment from time to time as provided in this Section 2.3.
(a) In the event the Corporation shall at any time after the
Agreement Date:
(i) declare or pay a dividend on Common Shares payable in
Common Shares (or other securities exchangeable for
or convertible into or giving a right to acquire
Common Shares or other securities of the Corporation)
other than pursuant to any Dividend Reinvestment
Plan;
(ii) subdivide or change the then outstanding Common
Shares into a greater number of Common Shares;
(iii) consolidate or change the then outstanding Common
Shares into a smaller number of Common Shares; or
(iv) issue any Common Shares (or other securities
exchangeable for or convertible into or giving a
right to acquire Common Shares or other securities of
the Corporation) in respect of, in lieu of or in
exchange for existing Common Shares except as
otherwise provided in this Section 2.3, the Exercise
Price and the number of Rights outstanding, or, if
the payment or effective date therefor shall occur
after the Separation Time, the securities purchasable
upon exercise of Rights shall be adjusted as of the
payment or effective date in the manner set forth
below. If the Exercise Price and number of Rights
outstanding are to be adjusted:
(x) the Exercise Price in effect after such
adjustment will be equal to the Exercise
Price in effect immediately prior to such
adjustment divided by the number of Common
Shares (or other capital stock) (the
"Expansion Factor") that a holder of one
Common Share immediately prior to such
dividend, subdivision, change, consolidation
or issuance would hold thereafter as a
result thereof; and
(y) each Right held prior to such adjustment
will become that number of Rights equal to
the Expansion Factor,
and the adjusted number of Rights will be
deemed to be distributed among the Common
Shares with respect to which the original
Rights were associated (if they remain
outstanding) and the shares issued in
respect of such dividend, subdivision,
change, consolidation or issuance, so that
each such Common Share (or other capital
stock) will have exactly one Right
associated with it.
For greater certainty, if the securities
purchasable upon exercise of Rights are to
be adjusted, the securities purchasable upon
exercise of each Right after such adjustment
will be the securities that a holder of the
securities purchasable upon exercise of one
Right immediately prior to such dividend,
subdivision, change, consolidation or
issuance would hold thereafter as a result
of such dividend, subdivision, change,
consolidation or issuance.
If, after the Record Time and prior to the
Expiration Time, the Corporation shall issue
any shares of capital stock other than
Common Shares in a transaction of a type
described in Clause 2.3(a)(i) or (iv),
shares of such capital stock shall be
treated herein as nearly equivalent to
Common Shares as may be practicable and
appropriate under the circumstances and the
Corporation and the Rights Agent agree to
amend this Agreement in order to effect such
treatment. In the event the Corporation
shall at any time after the Record Time and
prior to the Separation
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Time issue any Common Shares otherwise than
in a transaction referred to in this
Subsection 2.3(a), each such Common Share so
issued shall automatically have one new
Right associated with it, which Right shall
be evidenced by the certificate representing
such associated Common Share.
(b) In the event the Corporation shall at any time after the
Record Time and prior to the Separation Time fix a record date
for the issuance of rights, options or warrants to all holders
of Common Shares entitling them (for a period expiring within
45 calendar days after such record date) to subscribe for or
purchase Common Shares (or securities convertible into or
exchangeable for or carrying a right to purchase Common
Shares) at a price per Common Share (or, if a security
convertible into or exchangeable for or carrying a right to
purchase or subscribe for Common Shares, having a conversion,
exchange or exercise price, including the price required to be
paid to purchase such convertible or exchangeable security or
right per share) less than the Market Price per Common Share
on such record date, the Exercise Price to be in effect after
such record date shall be determined by multiplying the
Exercise Price 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 so to be
offered (and/or the aggregate initial conversion,
exchange or exercise price of the convertible or
exchangeable securities or rights so to be offered,
including the price required to be paid to purchase
such convertible or exchangeable securities or
rights) would purchase at such Market Price per
Common Share; and
(ii) the denominator of which shall be the number of
Common Shares outstanding on such record date plus
the number of additional Common Shares to be offered
for subscription or purchase (or into which the
convertible or exchangeable securities or rights so
to be offered are initially convertible, exchangeable
or exercisable).
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 Rights. Such adjustment shall be made successively
whenever such a record date is fixed, and in the event that
such rights, options or warrants are not so issued, or if
issued, are not exercised prior to the expiration thereof, the
Exercise Price shall be readjusted to the Exercise Price which
would then be in effect if such record date had not been
fixed, or to the Exercise Price which would be in effect based
upon the number of Common Shares (or securities convertible
into, or exchangeable or exercisable for Common Shares)
actually issued upon the exercise of such rights, options or
warrants, as the case may be.
For purposes of this Agreement, the granting of the right to
purchase Common Shares from treasury pursuant to the Dividend
Reinvestment Plan or any employee benefit, stock option or
similar plans shall be deemed not to constitute an issue of
rights, options or warrants by the Corporation; provided,
however, that, in all such cases, the right to purchase Common
Shares is at a price per share of not less than 90 per cent of
the current market price per share (determined as provided in
such plans) of the Common Shares.
(c) In the event the Corporation shall at any time after the
Record Time and prior to the Separation Time fix a record date
for the making of a distribution to all holders of Common
Shares (including any such distribution made in connection
with a merger or amalgamation) of evidences of indebtedness,
cash (other than an annual cash dividend or a dividend paid in
Common Shares, but including any dividend payable in
securities other than Common Shares), assets or rights,
options or warrants (excluding those referred to in Subsection
2.3(b)) to purchase Common Shares at a
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price per Common Share that is less than the Market Price per
Common Share on such record date, the Exercise Price to be in
effect after such record date shall be determined by
multiplying the Exercise Price 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 (the determination of which shall be
described in a statement filed with the Rights Agent
and shall be binding on the Rights Agent and the
holders of Rights), on a per share basis, of the
portion of the cash, assets, evidences of
indebtedness, rights, options or warrants so to be
distributed; and
(ii) the denominator of which shall be such Market Price
per Common Share.
Such adjustments shall be made successively whenever such a
record date is fixed, and in the event that such a
distribution is not so made, the Exercise Price shall be
adjusted to be the Exercise Price which would have been in
effect if such record date had not been fixed.
(d) Notwithstanding anything herein to the contrary, no adjustment
in the Exercise Price shall be required unless such adjustment
would require an increase or decrease of at least one per cent
in the Exercise Price; provided, however, that any adjustments
which by reason of this Subsection 2.3(d) are not required to
be made shall be carried forward and taken into account in any
subsequent adjustment. All calculations under Section 2.3
shall be made to the nearest cent or to the nearest
ten-thousandth of a share. Notwithstanding the first sentence
of this Subsection 2.3(d), any adjustment required by Section
2.3 shall be made no later than the earlier of:
(i) three years from the date of the transaction which
gives rise to such adjustment; or
(ii) the Expiration Time.
(e) In the event the Corporation shall at any time after the
Record Time and prior to the Separation Time issue any shares
of capital stock (other than Common Shares), or rights,
options or warrants to subscribe for or purchase any such
capital stock, or securities convertible into or exchangeable
for any such capital stock, in a transaction referred to in
Clause 2.3(a)(i) or (iv), if the Board of Directors acting in
good faith determines that the adjustments contemplated by
Subsections 2.3(a), (b) and (c) in connection with such
transaction will not appropriately protect the interests of
the holders of Rights, the Board of Directors may determine
what other adjustments to the Exercise Price, number of Rights
and/or securities purchasable upon exercise of Rights would be
appropriate and, notwithstanding Subsections 2.3(a), (b) and
(c), such adjustments, rather than the adjustments
contemplated by Subsections 2.3(a), (b) and (c), shall be
made. Subject to Subsection 5.4(b) and (c), the Corporation
and the Rights Agent shall have authority without the approval
of the holders of the Common Shares or the holders of Rights
to amend this Agreement as appropriate to provide for such
adjustments.
(f) Each Right originally issued by the Corporation subsequent to
any adjustment made to the Exercise Price hereunder shall
evidence the right to purchase, at the adjusted Exercise
Price, the number of Class A Shares purchasable from time to
time hereunder upon exercise of a Right immediately prior to
such issue, all subject to further adjustment as provided
herein.
(g) Irrespective of any adjustment or change in the Exercise Price
or the number of Class A Shares issuable upon the exercise of
the Rights, the Rights Certificates theretofore and thereafter
issued may continue to express the Exercise Price per Class A
Share and the number of Class A Shares which were expressed in
the initial Rights Certificates issued hereunder.
(h) In any case in which this Section 2.3 shall require that an
adjustment in the 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 the
number of Class A Shares and other securities of the
Corporation, if any, issuable upon such
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exercise over and above the number of Class A Shares and other
securities of the Corporation, if any, issuable upon such
exercise on the basis of the Exercise Price in effect prior to
such adjustment; provided, however, that the Corporation shall
deliver to such holder an appropriate instrument evidencing
such holder's right to receive such additional shares
(fractional or otherwise) or other securities upon the
occurrence of the event requiring such adjustment.
(i) Notwithstanding anything contained in this Section 2.3 to the
contrary, the Corporation shall be entitled to make such
reductions in the Exercise Price, in addition to those
adjustments expressly required by this Section 2.3, 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 Common Shares;
(ii) issuance (wholly or in part for cash) of Common
Shares or securities that by their terms are
convertible into or exchangeable for Common Shares;
(iii) stock dividends; or
(iv) issuance of rights, options or warrants referred to
in this Section 2.3,
hereafter made by the Corporation to holders of its Common
Shares, subject to applicable taxation laws, shall not be
taxable to such shareholders or shall subject such
shareholders to a lesser amount of tax.
(j) The Rights Agent shall be entitled to rely on any certificate
received from the Corporation stating that any of the events
giving rise to an adjustment required by this section 2.3 has
occurred.
2.4 Date on Which Exercise Is Effective
Each Person in whose name any certificate for Class A Shares or other
securities, if applicable, is issued upon the exercise of Rights shall for all
purposes be deemed to have become the holder of record of the Class A Shares or
other securities, if applicable, represented thereon, and such certificate shall
be dated the date upon which the Rights Certificate evidencing such Rights was
duly surrendered in accordance with Subsection 2.2(d) (together with a duly
completed Election to Exercise) and payment of the Exercise Price for such
Rights (and any applicable transfer taxes and other governmental charges payable
by the exercising holder hereunder) was made; provided, however, that if the
date of such surrender and payment is a date upon which the Class A Share
transfer books of the Corporation are closed, such Person shall be deemed to
have become the record holder of such shares on, and such certificate shall be
dated, the next succeeding Business Day on which the Class A Share transfer
books of the Corporation are open.
2.5 Execution, Authentication, Delivery and Dating of Rights Certificates
(a) The Rights Certificates shall be executed on behalf of the
Corporation by its Chairman of the Board, President or any
Vice-President and by its Corporate Secretary or any Assistant
Secretary under the corporate seal of the Corporation
reproduced thereon. The signature of any of these officers 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 either before or after 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 of such
Separation Time and will deliver Rights Certificates executed
by the Corporation to the Rights Agent for countersignature,
and the Rights Agent shall manually countersign (in a manner
satisfactory to the Corporation) and send such Rights
Certificates to the
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holders of the Rights pursuant to Subsection 2.2(c) hereof. No
Rights Certificate shall be valid for any purpose until
countersigned by the Rights Agent as aforesaid.
(c) Each Rights Certificate shall be dated the date of
countersignature thereof.
2.6 Registration, Transfer and Exchange
(a) 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, effective from and after the Separation
Time, registrar for the Rights (the "Rights Registrar") for
the purpose of maintaining the Rights Register for the
Corporation and registering Rights and transfers of Rights as
herein provided and the Rights Agent hereby accepts such
appointment. 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 2.6(c), 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 the 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 2.6, 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 reasonable fees
and expenses of the Rights Agent) connected therewith.
2.7 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 countersign and
deliver in exchange therefor a new Rights Certificate
evidencing the same number of Rights as did the Rights
Certificate so surrendered.
(b) If there shall be delivered to the Corporation and the Rights
Agent prior to the Expiration Time:
(i) evidence to their reasonable satisfaction of the
destruction, loss or theft of any Rights Certificate;
and
(ii) such security or indemnity as may be reasonably
required by them 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 the
Corporation's 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.
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(c) As a condition to the issuance of any new Rights Certificate
under this Section 2.7, 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 reasonable fees and
expenses of the Rights Agent) connected therewith.
(d) Every new Rights Certificate issued pursuant to this Section
2.7 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 hereunder.
2.8 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 a Rights
Certificate (or, prior to the Separation Time, the associated Common 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 Right shall mean the
registered holder of such Right (or, from and after the Record Time and prior to
the Separation Time, the registered holder of the associated Common Share).
2.9 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 which 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 2.9, except as expressly permitted by this Agreement.
The Rights Agent shall, subject to applicable laws, destroy all cancelled Rights
Certificates and deliver a certificate of destruction to the Corporation.
2.10 Agreement of Rights Holders
Every holder of Rights, by accepting the same, consents and agrees with
the 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 all Rights held;
(b) that, provided the Separation Time follows the Record Time,
from and after the Record Time and prior to the Separation
Time, each Right will be transferable only together with, and
will be transferred by a transfer of, the associated Common
Share certificate representing such Right;
(c) that after the Separation Time, the Rights Certificates will
be transferable only on the Rights Register as provided
herein;
(d) that prior to due presentment of a Rights Certificate (or,
from and after the Record Time and prior to the Separation
Time, the associated Common 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 Common 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 Common 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;
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(e) that such holder of Rights has waived his right to receive any
fractional Rights or any fractional shares or other securities
upon exercise of a Right (except as provided herein); and
(f) that, without the approval of any holder of Rights or Voting
Shares 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.
2.11 Rights Certificate Holder Not Deemed a Shareholder
No holder, as such, of any Rights or Rights Certificate shall be
entitled to vote, receive dividends or be deemed for any purpose whatsoever the
holder of any Class A Share or any other share or security of the Corporation
which may at any time be issuable on the exercise of the Rights represented
thereby, nor shall anything contained herein or in any Rights Certificate be
construed or deemed or confer upon the holder of any Right or Rights
Certificate, as such, any right, title, benefit or privilege of a holder of
Class A Shares or any other shares or securities 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
Class A Shares or any other shares of the Corporation 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 holder of Class A Shares or
any other shares 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 Rights Certificates shall have been duly exercised
in accordance with the terms and provisions hereof.
ARTICLE 3
ADJUSTMENTS TO THE RIGHTS
3.1 Flip-in Event
(a) Subject to Subsection 3.1(b) and Section 5.1, in the event
that prior to the Expiration Time a Flip-in Event shall occur,
each Right shall constitute, effective at the close of
business on the later of the Effective Time or the tenth
Trading Day after the Stock Acquisition Date, the right to
purchase from the Corporation, upon exercise thereof in
accordance with the terms hereof, that number of Class A
Shares having an aggregate Market Price on the date of
consummation or occurrence of such Flip-in Event equal to
twice the Exercise Price for an amount in cash equal to the
Exercise Price (such right to be appropriately adjusted in a
manner analogous to the applicable adjustment provided for in
Section 2.3 in the event that after such consummation or
occurrence, an event of a type analogous to any of the events
described in Section 2.3 shall have occurred).
(b) Notwithstanding anything in this Agreement to the contrary,
upon the occurrence of any Flip-in Event, any Rights that are
or were Beneficially Owned on or after the earlier of the
Separation Time or the Stock Acquisition Date 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 or Common
Shares 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), where such Transferee becomes a transferee
concurrently with or subsequent to the Acquiring
Person becoming such in a transfer that the Board of
Directors has determined is part of a plan,
arrangement or scheme of 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), that has the purpose or effect of avoiding
Clause 3.1(b)(i), shall become null and void without
any further action, and any holder of such
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Rights (including any Transferee) shall thereafter
have no right to exercise such Rights under any
provision of this Agreement and further shall
thereafter not have any other rights whatsoever with
respect to such Rights, whether under any provision
of this Agreement or otherwise.
(c) From and after the Separation Time, the Corporation shall do
all such acts and things as shall be necessary and within its
power to ensure compliance with the provisions of this Section
3.1, including without limitation, all such acts and things as
may be required to satisfy the requirements of the Yukon
Business Corporations Act, the Securities Act (Ontario) and
the securities laws or comparable legislation of each of the
provinces of Canada and of the United States and each of the
applicable states thereof in respect of the issue of Class A
Shares upon the exercise of Rights in accordance with this
Agreement.
(d) Any Rights Certificate that represents Rights Beneficially
Owned by a Person described in either Clause 3.1(b)(i) or (ii)
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 issued to a Person who was an Acquiring Person
or an Affiliate or an Associate of an Acquiring
Person (as such terms are defined in the Shareholder
Rights Agreement) or a Person who was acting jointly
or in concert with an Acquiring Person or an
Affiliate or Associate of an Acquiring Person. This
Rights Certificate and the Rights represented hereby
are void or shall become void in the circumstances
specified in Subsection 3.1(b) of the Shareholder
Rights Agreement.
provided, however, 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 impose
such legend only if instructed to do so by the Corporation in
writing 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 such legend and
provided further that the fact that such legend does not
appear on a certificate is not determinative of whether any
Rights represented thereby are void under this Section.
ARTICLE 4
THE RIGHTS AGENT
4.1 General
(a) The Corporation hereby appoints the Rights Agent to act as
agent for the Corporation and the holders of the 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 such Co-Rights Agents
("Co-Rights Agents") as it may deem necessary or desirable. In
the event the Corporation appoints one or more Co-Rights
Agents, the respective duties of the Rights Agent and
Co-Rights Agents shall be as the Corporation may determine.
The Corporation agrees to pay all reasonable fees and expenses
of the Rights Agent in respect of the performance of its
duties under this Agreement. The Corporation also agrees to
indemnify the Rights Agent for, and to hold it harmless
against, any loss, liability or expense, incurred without
negligence, bad faith or willful misconduct on the part of the
Rights Agent, for anything done or omitted by the Rights Agent
in connection with the acceptance 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.
(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
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upon any certificate for Common 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.
(c) The Rights Agent shall not be responsible for any inaccuracies
in the shareholder information provided by the Corporation to
the Rights Agent pursuant to subsection 2.2(c).
4.2 Merger, Amalgamation or Consolidation or Change of Name of Rights Agent
(a) Any corporation into which the Rights Agent may be merged or
amalgamated or with which it may be consolidated, or any
corporation resulting from any merger, amalgamation, statutory
arrangement or consolidation to which the Rights Agent is a
party, or any corporation succeeding to the shareholder or
stockholder services business of the 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 4.4 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
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
have not been countersigned, any successor Rights Agent may
countersign such Rights Certificates 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.
4.3 Duties of Rights Agent
The Rights Agent undertakes the duties and obligations imposed by this
Agreement upon the following terms and conditions, all of which the Corporation
and the holders of certificates for Common Shares and the holders of Rights
Certificates, by their acceptance thereof, shall be bound:
(a) the Rights Agent may consult with legal counsel (who may be
legal counsel for the Corporation), at the Corporation's
expense, 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;
(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, President, any Vice-President, Treasurer, Corporate
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 for its own
negligence, bad faith or willful misconduct;
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(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 Common 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 certificate for a Common Share 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 3.1(b) hereof) or
any adjustment required under the provisions of Section 2.3
hereof 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 2.3 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
Class A Shares to be issued pursuant to this Agreement or any
Rights or as to whether any Class A Shares will, when issued,
be duly and validly authorized, executed, issued and delivered
and fully paid and non-assessable;
(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;
(g) the Rights Agent is hereby authorized and directed to accept
instructions in writing with respect to the performance of its
duties hereunder from any individual believed by the Rights
Agent to be the Chairman of the Board, President, any
Vice-President, Treasurer, Corporate Secretary or any
Assistant Secretary of the Corporation, and to apply to such
individuals 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 individual;
(h) the Rights Agent and any shareholder or stockholder, director,
officer or employee of the Rights Agent may buy, sell or deal
in Common 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 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
(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.
4.4 Change of Rights Agent
The Rights Agent may resign and be discharged from its duties under
this Agreement upon 90 days' notice (or such lesser notice as is acceptable to
the Corporation) in writing mailed to the Corporation and to each transfer agent
of Common Shares by registered or certified mail. 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 Common 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
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resigning or incapacitated Rights Agent, then by prior written notice to the
Corporation the resigning Rights Agent or the holder of any Rights (which holder
shall, with such notice, submit such holder's Rights Certificate, if any, for
inspection by the Corporation), 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,
subject to its right to first require payment of all outstanding fees and other
amounts owed to it hereunder, deliver and transfer to the successor Rights Agent
any property at the time held by it hereunder, and execute and deliver any
further assurance, conveyance, act or deed necessary for the 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 Common Shares, and mail a notice thereof in writing to the holders
of the Rights in accordance with Section 5.9. Failure to give any notice
provided for in this Section 4.4, however, or any defect therein, shall not
affect the legality or validly of the resignation or removal of the Rights Agent
or the appointment of any successor Rights Agent, as the case may be.
ARTICLE 5
MISCELLANEOUS
5.1 Redemption and Waiver
(a) The Board of Directors may, with the prior consent of the
holders of Voting Shares or of the holders of Rights given in
accordance with Section 5.1(i) or (j), as the case may be, at
any time prior to the occurrence of a Flip-in Event as to
which the application of Section 3.1 has not been waived
pursuant to the provisions of this Section 5.1, elect to
redeem all but not less than all of the then outstanding
Rights at a redemption price of $0.00001 per Right
appropriately adjusted in a manner analogous to the applicable
adjustment provided for in Section 2.3 in the event that an
event of the type analogous to any of the events described in
Section 2.3 shall have occurred (such redemption price being
herein referred to as the "Redemption Price"). The Board of
Directors may, prior to the date of the shareholders' meeting
referred to in Section 5.15, elect to terminate this
Agreement. If the Board of Directors elects to terminate this
Agreement pursuant to this Section 5.1(a), this Agreement will
thereupon terminate and be void and of no further force or
effect.
(b) The Board of Directors may, with the prior consent of the
holders of Voting Shares given in accordance with Section
5.1(i), determine, at any time prior to the occurrence of a
Flip-in Event as to which the application of Section 3.1 has
not been waived pursuant to this Section 5.1, 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
Section 5.1(d), to waive the application of Section 3.1 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
ten Business Days following the meeting of shareholders called
to approve such waiver.
(c) The Board of Directors may, until the occurrence of a Flip-in
Event upon prior written notice delivered to the Rights Agent,
determine to waive the application of Section 3.1 to such
particular Flip-in Event provided that the Flip-in Event would
occur by reason of a Take-over Bid made by way of take-over
bid circular sent to all holders of Voting Shares (which for
greater certainty shall not include the circumstances
described in Subsection 5.1(d)); provided that if the Board of
Directors waives the application of Section 3.1 to a
particular Flip-in Event pursuant to this Subsection 5.1(c),
the Board of Directors shall be deemed to have waived the
application of Section 3.1 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 Voting
Shares (i) prior to the granting of such waiver, (ii)
thereafter and prior to the expiry of any Take-over Bid (as
the same may be extended
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from time to time) outstanding at the time of the granting of
such waiver or (iii) thereafter and 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 Subsection 5.1(c).
(d) Notwithstanding the provisions of Subsections 5.1(b) and (c)
hereof, the Board of Directors may waive the application of
Section 3.1 in respect of the occurrence of any Flip-in Event,
provided that both of the following conditions are satisfied:
(i) the Board of Directors has determined within ten
Trading Days following a Stock Acquisition Date that
a Person became an Acquiring Person by inadvertence
and without any intention to become, or knowledge
that it would become, an Acquiring Person under this
Agreement, and
(ii) such Person has reduced its Beneficial Ownership of
Voting Shares such that at the time of granting the
waiver pursuant to this Subsection 5.1(d), such
Person is no longer an Acquiring Person and in the
event that such a waiver is granted by the Board of
Directors, such Stock Acquisition Date and Flip-in
Event shall be deemed not to have occurred and the
Separation Time shall be deemed not to have occurred
as a result of such Person having inadvertently
become an Acquiring Person.
(e) The Board of Directors, shall, without further formality, be
deemed to have elected to redeem the Rights at the Redemption
Price on the date that a Person which has made a Permitted
Bid, a Competing Permitted Bid, a Take-Over Bid in respect of
which the Board of Directors has waived, or is deemed to have
waived, pursuant to Section 5.1(c) the application of Section
3.1, takes up and pays for Voting Shares pursuant to the terms
and conditions of such Permitted Bid, Competing Permitted Bid
or Take-over bid, as the case may be.
(f) Where a Take-over Bid that is not a Permitted Bid Acquisition
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 this Subsection 5.1(f), 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 Common
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.
(g) If the Board of Directors elects or is deemed to have elected
to redeem the Rights, and, in circumstances in which
Subsection 5.1(a) is applicable, such redemption is approved
by the holders of Voting Shares or the holders of Rights in
accordance with Subsection 5.1(i) or (j), as the case may be,
the right to exercise the Rights, will thereupon, without
further action and without notice, terminate and the only
right thereafter of the holders of Rights shall be to receive
the Redemption Price.
(h) Within 10 Business Days after the Board of Directors elects or
is deemed to elect, to redeem the Rights or if Subsection
5.1(a) is applicable within 10 Business Days after the holders
of Common Shares of the holders of Rights have approved a
redemption of Rights in accordance with Section 5.1(i) or (j),
as the case may be, the Corporation shall give notice of
redemption to the holders of the then outstanding Rights by
mailing such notice to each such holder at his last address as
it appears upon the registry books of the Rights Agent or,
prior to the Separation Time, on the registry books of the
transfer agent for the Voting Shares. Any notice which is
mailed in the manner herein provided shall be deemed given,
whether or not the holder receives the notice. Each such
notice of redemption will state the method by which the
payment of the Redemption Price will be made. The Corporation
may not redeem, acquire or purchase for value any Rights at
any time in any manner other than specifically set forth in
this Section 5.1 or in connection with the purchase of Common
Shares prior to the Separation Time.
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(i) If a redemption of Rights pursuant to Section 5.1(a) or a
waiver of a Flip-in Event pursuant to Section 5.1(b) is
proposed at any time prior to the Separation Time, such
redemption or waiver shall be submitted for approval to the
holders of Voting Shares. Such approval shall be deemed to
have been given if the redemption or waiver is approved by the
affirmative vote of a majority of the votes cast by
Independent Shareholders represented in person or by proxy at
a meeting of such holders duly held in accordance with
applicable laws and the Corporation's by-laws.
(j) If a redemption of Rights pursuant to Section 5.1(a) is
proposed at any time after the Separation Time, such
redemption shall be submitted for approval to the holders of
Rights. Such approval shall be deemed to have been given if
the redemption is approved by holders of Rights by a majority
of the votes cast by the holders of Rights represented in
person or by proxy at and entitled to vote at a meeting of
such holders. For the purposes hereof, each outstanding Right
(other than Rights which are Beneficially Owned by any Person
referred to in clauses (i) to (v) inclusive of the definition
of Independent Shareholders) shall be entitled to one vote,
and the procedures for the calling, holding and conduct of the
meeting shall be those, as nearly as may be, which are
provided in the Corporation's by-laws and the Yukon Business
Corporations Act with respect to meetings of shareholders of
the Corporation.
5.2 Expiration
No Person shall have any rights whatsoever pursuant to this Agreement
or in respect of any Right after the Expiration Time, except the Rights Agent as
specified in Subsection 4.1 of this Agreement.
5.3 Issuance of New Rights Certificates
Notwithstanding any of the provisions of this Agreement or 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
securities purchasable upon exercise of Rights made in accordance with the
provisions of this Agreement.
5.4 Supplements and Amendments
(a) The Corporation may make amendments to this Agreement to
correct any clerical or typographical error or which are
required to maintain the validity of this Agreement as a
result of any change in any applicable legislation or
regulations thereunder. The Corporation may, prior to the date
of the shareholders' meeting referred to in Section 5.15,
supplement, amend, vary, rescind or delete 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 the Rights generally) without the approval of
any holders of Rights or Voting Shares in order to make any
changes which the Board of Directors acting in good faith may
deem necessary or desirable. Notwithstanding anything in this
Section 5.4 to the contrary, no such supplement or amendment
shall be made to the provisions of Article 4 or to the rights,
duties, obligations or indemnities of the Rights Agent, except
with the written concurrence of the Rights Agent to such
supplement or amendment.
(b) Subject to Subsection 5.4(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,
supplement, amend, vary, rescind or delete 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 the action requiring such approval is
authorized by the affirmative vote of a majority of the votes
cast by Independent Shareholders present or represented at and
entitled to be voted at a meeting of the holders of Voting
Shares duly called and held in compliance with applicable laws
and the articles and by-laws of the Corporation.
(c) Subject to subsection 5.4(a), the Corporation may, with the
prior consent of the holders of Rights, at any time on or
after the Separation Time, supplement, amend, vary, rescind or
delete any of the provisions of this Agreement and the Rights
(whether or not such action would materially
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adversely affect the interests of the holders of Rights
generally), provided that no such amendment, variation or
deletion shall be made to the provisions of Article 4 or to
the rights, duties, obligations or indemnities of the Rights
Agent, except with the written concurrence of the Rights Agent
thereto.
(d) Any approval of the holders of Rights shall be deemed to have
been given if the action requiring such approval is authorized
by the affirmative votes of the holders of Rights present or
represented at and entitled to be voted at a meeting of the
holders of Rights and representing a majority of the votes
cast in respect thereof. For the purposes hereof, each
outstanding Right (other than Rights which are void pursuant
to the provisions hereof) shall be entitled to one vote, and
the procedures for the calling, holding and conduct of the
meeting shall be those, as nearly as may be, which are
provided in the Corporation's by-laws and the Yukon Business
Corporations Act with respect to meetings of shareholders of
the Corporation.
(e) Any amendments made by the Corporation to this Agreement
pursuant to Subsection 5.4(a) which are required to maintain
the validity of this Agreement as a result of any change in
any applicable legislation or regulation thereunder shall:
(i) if made before the Separation Time, be submitted to
the shareholders of the Corporation at the next
meeting of shareholders and the shareholders may, by
the majority referred to in Subsection 5.4(b),
confirm or reject such amendment;
(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 Subsection 5.4(d),
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
rejected by the shareholders or the holders of Rights
or is not submitted to the shareholders or holders of
Rights as required, then such amendment shall cease
to be effective from and after the termination of the
meeting (or any adjournment of such 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 or holders of
Rights as the case may be.
5.5 Fractional Rights and Fractional Shares
(a) The Corporation shall not be required to issue fractions of
Rights or to distribute Rights Certificates which evidence
fractional Rights. After the Separation Time, in lieu of
issuing fractional Rights, the Corporation shall pay to the
holders of record of the Rights Certificates (provided the
Rights represented by such Rights Certificates are not void
pursuant to the provisions of Subsection 3.1(b), at the time
such fractional Rights would otherwise be issuable), an amount
in cash equal to the fraction of the Market Price of one whole
Right that the fraction of a Right that would otherwise be
issuable is of one whole Right.
(b) The Corporation shall not be required to issue fractions of
Class A Shares upon exercise of Rights or to distribute
certificates which evidence fractional Class A Shares. In lieu
of issuing fractional Class A 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 fraction of the Market Price of one Class
A Share that the fraction of a Class A Share that would
otherwise be issuable upon the exercise of such Right is of
one whole Class A Share at the date of such exercise.
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5.6 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. Any holder of 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, as the case may be, enforce, and may
institute and maintain any suit, action or proceeding against the Corporation to
enforce such holder's right to exercise such holder's Rights, or Rights to which
he is entitled, 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, as the case may be, 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.
5.7 Regulatory 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, including without
limiting the generality of the foregoing, any necessary approvals of The Toronto
Stock Exchange and the NASDAQ Small-Cap Market or any other applicable stock
exchange or market.
5.8 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
(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 5.9 hereof, a notice of such proposed action, which
shall specify the date on which such Flip-in Event,
liquidation, dissolution, winding up or sale is to take place,
and such notice shall be so given at least 10 Business Days
prior to the date of taking of such proposed action by the
Corporation.
5.9 Notices
(a) 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, sent by registered or certified mail,
postage prepaid (until another address is filed in writing
with the Rights Agent), or sent by facsimile or other form of
recorded electronic communication, charges prepaid and
confirmed in writing, as follows:
Gold Reserve Inc.
1940 Seafirst Financial Center
West 000 Xxxxxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Attention: President
Telecopy No.: (000) 000-0000
(b) Notices or demands 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, sent by registered or certified mail,
postage prepaid (until another address is filed in writing
with the Corporation), or sent by facsimile or other form of
recorded electronic communication, charges prepaid and
confirmed in writing, as follows:
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Montreal Trust Company of Canada
000 Xxxxx Xxxxxx
0xx Xxxxx
Xxxxxxx, Xxxxxxx X0X 0X0
Attention: Manager, Client Services
Telecopy No.: (000) 000-0000
(c) 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, addressed to such holder at the address of such
holder as it appears upon the register of the Rights Agent or,
prior to the Separation Time, on the register of the
Corporation for its Common Shares. Any notice which is mailed
or sent in the manner herein provided shall be deemed given,
whether or not the holder receives the notice.
(d) Any notice given or made in accordance with this Section 5.9
shall be deemed to have been given and to have been received
on the day of delivery, if so delivered, on the third Business
Day (excluding each day during which there exists any general
interruption of postal service due to strike, lockout or other
cause) following the mailing thereof, if so mailed, and on the
day of telegraphing, telecopying or sending of the same by
other means of recorded electronic communication (provided
such sending is during the normal business hours of the
addressee on a Business Day and if not, on the first Business
Day thereafter). Each of the Corporation and the Rights Agent
may from time to time change its address for notice by notice
to the other given in the manner aforesaid.
5.10 Costs of Enforcement
The Corporation agrees that if the Corporation fails to fulfil any of
its obligations pursuant to this Agreement, then the Corporation will reimburse
the holder of any Rights for the costs and expenses (including legal fees)
incurred by such holder to enforce his rights pursuant to any Rights or this
Agreement.
5.11 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.
5.12 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; further, this
Agreement shall be for the sole and exclusive benefit of the Corporation, the
Rights Agent and the holders of the Rights.
5.13 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.
5.14 Severability
If any term or provision hereof or the application thereof to any
circumstance shall, in any jurisdiction and to any extent, be invalid or
unenforceable, such term or provision shall be ineffective only as to such
jurisdiction and to the extent of such invalidity or unenforceability in such
jurisdiction without invalidating or rendering unenforceable or ineffective the
remaining terms and provisions hereof in such jurisdiction or the application of
such term or provision in any other jurisdiction or to circumstances other than
those as to which it is specifically held invalid or unenforceable.
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5.15 Date Agreement Becomes Effective
This Agreement is effective and in full force and effect in accordance
with its terms from and after the Effective Time. At the first meeting following
the Agreement Date of holders of voting shares of Gold Reserve Corporation held
to approve the merger of Gold Reserve Corporation with GR Merger Corp., a
wholly-owned subsidiary of the Corporation, and to approve the Reorganization,
the Gold Reserve Corporation shareholders shall be requested to confirm this
Agreement.
If, at such meeting (which meeting shall include, if the meeting is
adjourned one or more times, each reconvened meeting resulting from such
adjournment(s)), this Agreement is not confirmed by a majority of the votes cast
by holders of voting shares of Gold Reserve Corporation held by Independent
Shareholders of Gold Reserve Corporation who vote in respect of confirmation of
the Agreement at such meeting or the merger and Reorganization is not approved
in accordance with the applicable requirements of the Montana Business
Corporations Act, then this Agreement shall terminate and be void and of no
further force and effect on and from the close of business on the date of
termination of such meeting (which, in the case such meeting is adjourned one or
more times, means the termination of the last reconvened meeting resulting from
such adjournment(s)).
5.16 Reconfirmation
Notwithstanding the confirmation of this Agreement pursuant to Section
5.15 and the approval of the merger and Reorganization as contemplated by
Section 5.15, this Agreement must be reconfirmed by a resolution passed by a
majority of greater than 50 per cent of the votes cast by holders of Voting
Shares held by Independent Shareholders who vote in respect of such
reconfirmation at a meeting of holders of Voting Shares to be held not earlier
than April 2, 2000 and not later than the date on which the 2000 annual meeting
of holders of Voting Shares terminates. If the Agreement is not so reconfirmed,
the Agreement and all outstanding Rights shall terminate and be void and of no
further force and effect on and from the close of business on that date which is
the earlier of the date of termination of the meeting called to consider the
reconfirmation of this Agreement and the date of termination of the 2000 annual
meeting of holders of Voting Shares; provided, that termination shall not occur
if a Flip-in Event has occurred (other than a Flip-in Event which has been
waived pursuant to Subsection 5.1(c) or (d) hereof), prior to the date upon
which this Agreement would otherwise terminate pursuant to this Section 5.16.
5.17 Determinations and Actions by the Board of Directors
The Board of Directors shall have the exclusive power and authority to
administer this Agreement and to exercise all rights and powers specifically
granted to the Board of Directors or the Corporation, or as may be necessary or
advisable in the administration of this Agreement. All such actions,
calculations and determinations (including all omissions with respect to the
foregoing) which are done or made by the Board of Directors, in good faith,
shall not subject the Board of Directors or any director of the Corporation to
any liability to the holders of the Rights.
5.18 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 by the Corporation with the securities laws or comparable
legislation of a jurisdiction outside Canada, the Board of Directors acting in
good faith shall take such actions as it may deem appropriate to ensure such
compliance. 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
or the United States, in which such issue or delivery would be unlawful without
registration of the relevant Persons or securities for such purposes.
5.19 Time of the Essence
Time shall be of the essence in this Agreement.
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5.20 Execution in 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 one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
GOLD RESERVE INC.
By: /s/ XXXXXX X. XXXXXXXXXX
----------------------------------
MONTREAL TRUST COMPANY OF CANADA
By: /s/ XXX XXXXXXXXXX
----------------------------------
By: /s/ XXX XXXXX
----------------------------------
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ATTACHMENT 1
GOLD RESERVE INC.
SHAREHOLDER RIGHTS PLAN AGREEMENT
[Form of Rights Certificate]
Certificate No.
----------------
Rights
----------------
THE RIGHTS ARE SUBJECT TO TERMINATION ON THE TERMS SET FORTH IN THE
SHAREHOLDER RIGHTS PLAN AGREEMENT. UNDER CERTAIN CIRCUMSTANCES (SPECIFIED IN
SUBSECTION 3.1(b) OF THE SHAREHOLDER RIGHTS PLAN AGREEMENT), RIGHTS BENEFICIALLY
OWNED BY AN ACQUIRING PERSON OR CERTAIN RELATED PARTIES, OR TRANSFEREES OF AN
ACQUIRING PERSON OR CERTAIN RELATED PARTIES, MAY BECOME VOID.
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 October 5, 1998, as the same may be amended or supplemented from time to
time (the "Shareholder Rights Agreement"), between Gold Reserve Inc., a
corporation duly incorporated under the laws of the Yukon Territory (the
"Corporation") and Montreal Trust Company of Canada, a trust company
incorporated under the laws of Canada (the "Rights Agent") (which term shall
include any successor Rights Agent under the Shareholder Rights Agreement), to
purchase from the Corporation at any time after the Separation Time (as such
term is defined in the Shareholder Rights Agreement) and prior to the Expiration
Time (as such term is defined in the Shareholder Rights Agreement), one fully
paid Class A Share of the Corporation (a "Class A Share") at the Exercise Price
referred to below, upon presentation and surrender of this Rights Certificate
with the Form of Election to Exercise (in the form provided hereinafter) duly
executed and submitted to the Rights Agent at its principal office in the City
of Toronto [insert other cities, if applicable]. The Exercise Price shall
initially be $70.00 (Cdn.) or the U.S. Dollar Equivalent per Right and shall be
subject to adjustment in certain events as provided in the Shareholder Rights
Agreement.
This Rights Certificate is subject to all of the terms and provisions
of the Shareholder Rights Agreement, which terms and provisions are incorporated
herein by reference and made a part hereof and to which Shareholder 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 Shareholder Rights Agreement are on file at the registered office of the
Corporation.
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 equal to the
aggregate number of Rights evidenced 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 Shareholder Rights Agreement, the
Rights evidenced by this Rights Certificate may be, and under certain
circumstances are required to be, redeemed by the Corporation at a redemption
price of $0.00001 per Right.
No fractional Class A Shares will be issued upon the exercise of any
Right or Rights evidenced hereby, but in lieu thereof a cash payment will be
made, as provided in the Shareholder Rights Agreement. No holder of this Rights
Certificate, as such, shall be entitled to vote or receive dividends or be
deemed for any purpose the holder of Class A Shares or of any other securities
which may at any time be issuable upon the exercise hereof, nor shall
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anything contained in the Shareholder Rights Agreement or herein be construed to
confer upon the holder hereof, as such, 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 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 (except as provided in the Shareholder Rights
Agreement), or to receive dividends or subscription rights, or otherwise, until
the Rights evidenced by this Rights Certificate shall have been exercised as
provided in the Shareholder Rights Agreement.
This Rights Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the
Corporation and its corporate seal.
Date:
----------------------------------
GOLD RESERVE INC.
By: By:
---------------------------------- --------------------------------
[President] [Corporate Secretary]
Countersigned:
MONTREAL TRUST COMPANY OF CANADA
By:
----------------------------------
Authorized Signature
- - - - - - - - - - - - - -
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
(Please print name and address of transferee.)
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.
Dated:
Signature
Signature Guaranteed: (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 member firm of a recognized stock exchange in
Canada, a registered national securities exchange in the United States, a member
of the Investment Dealers Association of Canada or National Association of
Securities Dealers, Inc. or a commercial bank or trust company having an office
or correspondent in Canada or the United States or a member of the Securities
Transfer Agent Medallion Program (STAMP).
--------------------------------------------------------------------------------
CERTIFICATE
(To be completed if true.)
The undersigned party transferring Rights hereunder, hereby represents, for the
benefit of all holders of Rights and Class A 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 a Person acting jointly or in concert with any of the
foregoing. Capitalized terms shall have the meaning ascribed thereto in the
Shareholder Rights Agreement.
Signature
--------------------------------------------------------------------------------
(To be attached to each Rights Certificate.)
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- - - - - - - - - - - - - -
FORM OF ELECTION TO EXERCISE
(To be executed by the registered holder if such holder desires to exercise the
Rights Certificate.)
TO:
The undersigned hereby irrevocably elects to exercise __________ whole Rights
represented by the attached Rights Certificate to purchase the Class A Shares or
other securities, if applicable, issuable upon the exercise of such Rights and
requests that certificates for such securities be issued in the name of:
(Name)
(Address)
(City and Province)
Social Insurance Number or other taxpayer identification 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 Province)
Social Insurance Number or other taxpayer identification number.
Dated:
Signature
Signature Guaranteed: (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 member firm of a recognized stock exchange in
Canada, a registered national securities exchange in the United States, a member
of the Investment Dealers Association of Canada or National Association of
Securities Dealers, Inc. or a commercial bank or trust company having an office
or correspondent in Canada or the United States or a member of the Securities
Transfer Agent Medallion Program (STAMP).
Signature
--------------------------------------------------------------------------------
(To be attached to each Rights Certificate).
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- - - - - - - - - - - - - -
CERTIFICATE
(To be completed if true.)
The undersigned party exercising Rights hereunder, hereby represents, for the
benefit of all holders of Rights and Class A 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 a Person acting jointly or in concert with any of the
foregoing. Capitalized terms shall have the meaning ascribed thereto in the
Shareholder Rights Agreement.
Signature
--------------------------------------------------------------------------------
(To be attached to each Rights Certificate.)
- - - - - - - - - - - - - -
NOTICE
In the event the certification set forth above in the Forms of Assignment and
Election 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. No Rights Certificates shall be issued in
exchange for a Rights Certificate owned or deemed to have been owned by an
Acquiring Person or an Affiliate or Associate thereof, or by a Person acting
jointly or in concert with an Acquiring Person or an Affiliate or Associate
thereof.
4
