Document:

Exhibit 10.52

 

AMENDMENT NO. 3 TO CREDIT AND GUARANTY AGREEMENT

 

Dated December 10, 2018

 

among

 

LANNETT COMPANY, INC.,

 

as the Borrower

 

MORGAN STANLEY SENIOR FUNDING, INC.,

 

as Administrative Agent

 

and

 

Each Lender Party Hereto

 

 

AMENDMENT NO. 3 TO CREDIT AND GUARANTY AGREEMENT

 

This AMENDMENT NO. 3 TO CREDIT AND GUARANTY AGREEMENT, dated as of December 10, 2018 (this “Amendment”), is made by and among Lannett Company, Inc., a Delaware corporation (the “Borrower”), each lender party hereto and Morgan Stanley Senior Funding, Inc., as administrative agent (in such capacity, the “Administrative Agent”). Capitalized terms used but not otherwise defined herein shall have the meanings set forth in the Credit Agreement referred to below.

 

RECITALS

 

WHEREAS, the Borrower, certain subsidiaries of the Borrower, as Guarantors, the lenders party thereto, and Morgan Stanley Senior Funding, Inc., as Administrative Agent and Collateral Agent, are party to that certain Credit and Guaranty Agreement, dated as of November 25, 2015 (as amended by Amendment No. 1 to Credit and Guaranty Agreement, dated as of June 17, 2016 (the “First Amendment”), among the Borrower, each incremental term lender party thereto and the Administrative Agent, as further amended by Amendment No. 2 to Credit and Guaranty Agreement, dated as of June 17, 2016 (the “Second Amendment”), among the Borrower, each lender party thereto and the Administrative Agent and as otherwise amended, restated, amended and restated, supplemented or otherwise modified from time to time immediately prior to the effectiveness of this Amendment, the “Existing Credit Agreement” and, as amended by this Amendment and as may be further amended, restated, amended and restated, supplemented or otherwise modified from time to time after the date hereof, the “Credit Agreement”); and

 

WHEREAS, the Borrower has requested certain amendments to the Credit Agreement as more fully set forth herein; and

 

WHEREAS, the Lenders party hereto, constituting no less than the Requisite Financial Covenant Lenders and the Requisite Class Lenders in respect of the Initial Tranche A Term Loans (in each case, determined immediately prior to giving effect to this Amendment) are willing to so amend the Credit Agreement.

 

NOW THEREFORE, in consideration of the foregoing premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

 

1.                                      Definitions.  Capitalized terms not otherwise defined herein, including in the introduction and the recitals hereto, shall have the respective meanings ascribed to them in Credit Agreement.

 

2.                                      Amendments to the Credit Agreement.  As of the Third Amendment Effective Date (as defined below) and subject to the satisfaction of the applicable conditions precedent set forth in Section 5 of this Amendment, the Credit Agreement is amended as follows:

 

1

 

(a)                                 Section 1.01 of the Credit Agreement is hereby amended by adding the following new defined terms in their correct alphabetical order:

 

“Availability” means, as of any date of determination, an amount (which shall not be less than zero) equal to (I) if as of the last day of the applicable Test Period the First Lien Net Leverage Ratio is greater than the ratio set forth in Section 6.10 for such Test Period, (a) 30% of the aggregate amount of Revolving Commitments in effect at such time, minus (b) the Total Utilization of Revolving Commitments in effect at such time (excluding (i) up to $5.0 million of undrawn Letters of Credit and (ii) any drawn Letters of Credit that have been Cash Collateralized) and (II) if as of the last day of the applicable Test Period the First Lien Net Leverage Ratio is less than or equal to the ratio set forth in Section 6.10 for such Test Period, the lesser of (x)(a) the aggregate amount of Revolving Commitments in effect at such time, minus (b) the Total Utilization of Revolving Commitments in effect at such time (excluding (i) up to $5.0 million of undrawn Letters of Credit and (ii) any drawn Letters of Credit that have been Cash Collateralized) and (y) the amount of Revolving Loans which could have been incurred by the Borrower as of the last day of the applicable Test Period without causing the First Lien Net Leverage Ratio to exceed the ratio set forth in Section 6.10 for such Test Period.

 

“Liquidity” means, as of any date of determination, the sum of (a) Availability plus (b) Unrestricted Cash.

 

“Third Amendment Effective Date” means December 10, 2018.

 

(b)                                 Clause (a) of the definition of “Applicable Margin” in Section 1.01 of the Credit Agreement is hereby amended and restated in its entirety as follows:

 

“(a) (i) prior to the Third Amendment Effective Date, with respect to Initial Tranche A Term Loans that are Eurocurrency Rate Loans, 4.75% per annum and with respect to Initial Tranche A Term Loans that are Base Rate Loans, 3.75% per annum and (ii) on or after the Third Amendment Effective Date, with respect to Initial Tranche A Term Loans that are Eurocurrency Rate Loans, 5.00% per annum and with respect to Initial Tranche A Term Loans that are Base Rate Loans, 4.00% per annum”

 

(c)                                  The definition of “Tranche A Term Loan Financial Performance Covenant” is deleted and replaced in its entirety as follows:

 

“Tranche A Term Loan Financial Covenants” means the covenants set forth in Section 6.11.”

 

(d)                                 Each reference to “Tranche A Term Loan Financial Performance Covenant” in the Credit Agreement is hereby replaced with “Tranche A Term Loan Financial Covenants”.

 

(e)                                  Section 6.11 of the Credit Agreement is hereby amended and restated in its entirety as follows:

 

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“Tranche A Term Loan Financial Performance Covenant and Minimum Liquidity Covenant.

 

(a) The Borrower shall not permit the Secured Net Leverage Ratio (calculated on a Pro Forma Basis) as of the last day of any Test Period (i) prior to December 31, 2017, to be greater than 4.25:1.00, (ii) as of December 31, 2017 and prior to December 31, 2019 to be greater than 3.75:1.00, (iii) as of December 31, 2019 and prior to September 30, 2020, 4.25:1.00 and (iv) as of September 30, 2020 and thereafter to be greater than 4.00:1.00.

 

(b) Commencing with the first full fiscal quarter after the Third Amendment Effective Date, the Borrower shall maintain minimum Liquidity of $75,000,000 as of the last day of any Test Period.  The Borrower will furnish to the Administrative Agent, who shall furnish to each Lender, within five Business Days of any delivery of any financial statements under paragraphs (a) or (b) of Section 5.4, a certificate of a Financial Officer of the Borrower setting forth the calculation of the Liquidity (calculated on a Pro Forma Basis) as of the end of the applicable fiscal period.”

 

3.                                      Representations and Warranties.  Borrower hereby represents and warrants that:

 

(a)                                 The execution, delivery and performance by the Borrower of this Amendment (a) have been duly authorized by all corporate, stockholder or limited liability company or partnership or organizational action required to be obtained by the Borrower and (b) will not (A) violate (i) any provision of applicable law, statute, rule or regulation, (ii) any provision of the certificate or articles of incorporation or other constitutive documents or by-laws of the Borrower, (iii) any applicable order of any court or any rule, regulation or order of any Governmental Authority that has jurisdiction over the Borrower or (iv) any provision of any indenture, certificate of designation for preferred stock, agreement or other instrument to which the Borrower is a party or by which it or any of its property is or may be bound or (B) be in conflict with, result in a breach of or constitute a default under, give rise to a right of or result in any cancellation or acceleration of any right or obligation (including any payment) under any such indenture, certificate of designation for preferred stock, agreement or other instrument, where any such conflict, violation, breach or default referred to in clause (b)(A)(i), (iii) or (iv) or (b)(B), would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

 

(b)                                 This Amendment has been duly executed and delivered by the Borrower. This Amendment constitutes, a legal, valid and binding obligation of the Borrower, enforceable against the Borrower in accordance with the terms hereof, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, receivership, moratorium or other laws affecting creditors’ rights generally and by general principles of equity.

 

(c)                                  No action, consent or approval of, registration or filing with or any other action by any Governmental Authority or third party is or will be required in connection with the Transactions, the perfection or maintenance of the Liens created under the Collateral Documents (other than Liens with respect to Intellectual Property, the perfection of which is addressed in Section 4.17(c) of the Credit Agreement) or the exercise by any Agent or any Lender of its rights under the Credit Documents or the remedies in respect of the Collateral, except for (a) the filing of UCC and financing statements (or similar documents), (b) filings with the United States Patent and Trademark Office and the United States Copyright Office, (c) recordation of any mortgages, (d) such as have been made or obtained and are in full force and effect, (e) such other actions, consents and approvals with respect to which the failure to be obtained or made would not reasonably be expected to have a Material Adverse Effect and (f) filings or other actions listed on Schedule 4.4 of the Credit Agreement.

 

3

 

(d)                                 The representations and warranties contained in the Credit Agreement or in any other Credit Document shall be true and correct in all material respects on and as of the Third Amendment Effective Date to the same extent as though made on and as of that date, except to the extent such representations and warranties specifically relate to an earlier date, in which case such representations and warranties shall be true and correct in all material respects as of such earlier date; provided that, in each case, such materiality qualifiers shall not be applicable to any representations or warranties that already are qualified or modified by materiality in the text thereof.

 

(e)                                  No Default or Event of Default has occurred and is continuing after giving effect to this Amendment.

 

4.                                      Reaffirmation of the Credit Parties.  Borrower hereby consents to the amendment of the Existing Credit Agreement effected hereby and confirms and agrees that, notwithstanding the effectiveness of this Amendment, each Credit Document is, and the obligations of each Credit Party contained in the Existing Credit Agreement, this Amendment and in any other Credit Document to which it is a party are, and shall continue to be, in full force and effect and are hereby ratified and confirmed in all respects, in each case as amended by this Amendment. For greater certainty and without limiting the foregoing, Borrower hereby confirms that the existing security interests granted by each Credit Party in favor of the Secured Parties pursuant to the Credit Documents in the Collateral described therein shall continue to secure the obligations of the Credit Parties under the Credit Agreement and the other Credit Documents as and to the extent provided in the Credit Documents.

 

5.                                      Third Amendment Effective Date.  This Amendment shall become effective as of the date when, and only when, each of the following conditions have been satisfied or waived in accordance with the terms herein (the “Third Amendment Effective Date”):

 

(a)                                 Consents.  The Administrative Agent shall have received copies of this Amendment duly executed and delivered by the Administrative Agent, the Requisite Financial Covenant Lenders and the Requisite Class Lenders in respect of the Initial Tranche A Term Loans (determined immediately prior to giving effect to this Amendment) and the Borrower.

 

(b)                                 Fees and Expenses.  The Administrative Agent and the Lenders shall have received all accrued and reasonable fees, costs and expenses (including legal fees and expenses) and other amounts due and payable in connection with this Amendment on or prior to the Third Amendment Effective Date, to the extent invoiced at least one Business Day prior to the Third Amendment Effective Date.

 

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(c)                                  Consent Fee. The Administrative Agent shall have received, for the account of each Initial Tranche A Term Lender holding Initial Tranche A Term Loans under the Credit Agreement, that has consented to this Amendment on or prior to the Third Amendment Effective Date, a fee for each such Initial Tranche A Term Lender in an amount equal to 0.50% of the aggregate principal amount of such existing Initial Tranche A Term Lender’s Initial Tranche A Term Loans (as of immediately prior to giving effect to this Amendment).

 

6.                                      GOVERNING LAW.  THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ITS PRINCIPLES OR RULES OF CONFLICT OF LAWS TO THE EXTENT SUCH PRINCIPLES OR RULES ARE NOT MANDATORILY APPLICABLE BY STATUTE AND WOULD REQUIRE OR PERMIT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION. SECTIONS 10.11, 10.15 AND 10.16 OF THE CREDIT AGREEMENT ARE HEREBY INCORPORATED BY REFERENCE INTO THIS AMENDMENT MUTATIS MUTANDIS AND SHALL APPLY HERETO.

 

7.                                      Amendment, Modification and Waiver. This Amendment may not be amended, modified or waived except with the written consent of the parties hereto and in accordance with Section 10.8 of the Credit Agreement.

 

8.                                      Entire Agreement. This Amendment, the Credit Agreement, and the other Credit Documents constitute the entire agreement among the parties hereto relating to the subject matter hereof and thereof and supersede all previous agreements and understandings, oral or written, relating to the subject matter hereof and thereof. Except as expressly set forth herein, this Amendment shall not by implication or otherwise limit, impair, constitute a waiver of, or otherwise affect the rights and remedies of any party under, the Existing Credit Agreement, nor alter, modify, amend or in any way affect any of the terms, conditions, obligations, covenants or agreements contained in the Existing Credit Agreement, all of which are ratified and affirmed in all respects and shall continue in full force and effect. It is understood and agreed that each reference in each Credit Document to the Credit Agreement, whether direct or indirect, shall hereafter be deemed to be a reference to the Existing Credit Agreement as amended hereby and that this Amendment is a Credit Document. This Amendment shall not constitute a novation of any amount owing under the Existing Credit Agreement and all amounts owing in respect of principal, interest, fees and other amounts pursuant to the Existing Credit Agreement and the other Credit Documents shall, to the extent not paid or exchanged on or prior to the Third Amendment Effective Date, shall continue to be owing under the Credit Agreement or such other Credit Documents until paid in accordance therewith.

 

9.                                      Severability.  If any provision of this Amendment is held to be illegal, invalid or unenforceable, the legality, validity and enforceability of the remaining provisions of this Amendment shall not be affected or impaired thereby. The invalidity of a provision in a particular jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

 

10.                               Counterparts.  This Amendment may be executed in one or more counterparts (and by different parties hereto in different counterparts), each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Delivery by fax or other electronic transmission of an original executed counterpart of this Amendment shall be effective as delivery of an original executed counterpart of this Amendment.

 

[SIGNATURE PAGES FOLLOW]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and delivered as of the day and year first above written.

 

	
 
    	
LANNETT   COMPANY, INC., as the Borrower
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Timothy C. Crew
    
	
 
    	
 
    	
Name:
    	
Timothy   C. Crew
    
	
 
    	
 
    	
Title:
    	
Chief   Executive Officer
    

 

 

	
 
    	
[LENDER],   as Lender (1)
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

(1) Signature Pages are on file with the Administrative Agent.

 

 

	
 
    	
MORGAN   STANLEY SENIOR FUNDING, INC., as   Administrative Agent
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:   
    	
/s/   Lisa Hanson
    
	
 
    	
 
    	
Name:
    	
Lisa   Hanson
    
	
 
    	
 
    	
Title:
    	
Authorized   SignatoryCounterPath Corporation - Exhibit 4.1 - Filed by newsfilecorp.com

 

 

COUNTERPATH CORPORATION 

EMPLOYEE SHARE PURCHASE PLAN 

 

 

 

 

 

 

Adopted October 1, 2008 

Amended November 6, 2008, October 22, 2009, September 10,
2015, November 2, 2015 and October 22, 2018

COUNTERPATH CORPORATION 

EMPLOYEE SHARE PURCHASE PLAN 

 

Table of Contents 

	1.
      	Purpose
      of the Plan 	2
      
	 	 	 
	2.
      	Definitions
      	3
      
	 	 	 
	3.
      	Eligibility
      for Membership in the Plan 	5
      
	 	 	 
	4.
      	Contributions
      	6
      
	 	 	 
	5.
      	Dividend
      and Interest Payments and Voting Rights 	7
      
	 	 	 
	6.
      	Purchase
      of Shares 	8
      
	 	 	 
	7.
      	Vesting
      of Contributions 	8
      
	 	 	 
	8.
      	Withdrawals,
      Transfers, Sales and Suspensions 	9
      
	 	 	 
	9.
      	Distribution
      on Retirement, Termination of Employment or Death 	10
      
	 	 	 
	10.
      	Distribution
      of Benefits on Termination of Membership 	10
      
	 	 	 
	11.
      	Amendment
      or Termination of Plan 	11
      
	 	 	 
	12.
      	Trustee
      	12
      
	 	 	 
	13.
      	Administration
      	13
      
	 	 	 
	14.
      	Market
      Fluctuation and Selling of Shares 	13
      
	 	 	 
	15.
      	Miscellaneous
      Provisions 	13
      
	 	 	 
	Appendix
      A – Form of Election to Purchase Shares 	16
      
	 	 
	Appendix
      B – Form of Instrument Changing Employee Contribution Level 	17
      
	 	 
	Appendix
      C – Form of Withdrawal, Transfer or Sale of Shares 	18
      
	 	 
	Appendix
      D – Form of Instrument Suspending Contributions 	20
      
	 	 
	Appendix
      E – Form of Instrument Resuming Contributions 	21
      
	 	 
	Appendix
      F – Form of Instrument Cancelling Participation 	22
      

	1. 	
      PURPOSE OF THE PLAN

	 	 
	1.1 	
      The Company hereby establishes a share purchase plan (the
      “Plan”) for the Employees of the Company and its Subsidiaries.

	 	 
	1.2 	
      Subject to all required regulatory approvals, this Plan
      shall be effective as of and from October 1, 2008 (the “Commencement
      Date”) until the Expiry Date, unless earlier terminated as provided
      herein.

	 	 
	1.3 	
      The purpose of this plan is to give employees of the
      Company access to another equity participation vehicle by way of an
      opportunity to purchase common shares of the Company through payroll
      deductions and encourage them to use their combined best efforts on behalf
      of the Company to improve its profits through increased sales, reduction
      of costs and increased efficiency.

2 

	2. 	
      DEFINITIONS

	 	 
	2.1 	
      In this Plan, the following terms shall have the meanings
      set forth below.

	 	(a) 	
      “Account(s)” means one or more of a Cash Account, an RRSP
      Account, or a TFSA Account created by the Trustee for a Participant, in
      which the assets held by the Trustee for such Participant under the terms
      of this Plan are held and recorded.

	 	 	 
	 	(b) 	
      “Acquirer” means the successor to all or substantially
      all of the assets or capital shares of the Company, or any other successor
      of the business of the Company as determined by the Board of Directors, in
      either case pursuant to a Change of Control, and includes the affiliated
      entities of any such successor;

	 	 	 
	 	(c) 	
      “Basic Compensation” means the base salary received by an
      Employee in the applicable Pay Period but does not include, without
      limitation, overtime pay, commissions, bonus payments, or the value of
      other benefits or amounts contributed by the Company under this
    Plan.

	 	 	 
	 	(d) 	
      “Board of Directors” means the board of directors of the
      Company, or if the Board of Directors has delegated administration of the
      Plan to a compensation committee, then “Board of Directors” shall mean
      such compensation committee.

	 	 	 
	 	(e) 	
      “Business Day” means any day other than a Saturday,
      Sunday or statutory or civic holiday on which chartered banks in
      Vancouver, British Columbia are open for business.

	 	 	 
	 	(f) 	
      “Cash Account” means an account, which is not a
      registered retirement savings plan account, created by the Trustee for a
      Participant in which the assets subject to this Plan are held and
      recorded.

	 	 	 
	 	(g) 	
      “Cessation Date” means the date that the Participant
      ceases for any reason (other than death or Retirement, but otherwise
      including, without limitation, resignation, Disability, or termination of
      employment with or without cause), to render Service to the Company or a
      Subsidiary; provided, that, notwithstanding any other term or provision of
      this Plan, in the event of the termination of the Participant’s Service
      without cause, the Cessation Date shall be the date the Participant is
      given actual notice of termination by the Company or a Subsidiary, without
      reference to any period of notice of termination to which the Participant
      may be entitled at law or pursuant to any employment agreement, whether or
      not such termination has been effected in accordance with applicable
      law.

	 	 	 
	 	(h) 	
      “Change of Control” means (i) a merger, amalgamation,
      consolidation, reorganization or arrangement of the Company with or into
      another corporation (other than a merger, amalgamation, consolidation,
      reorganization or arrangement of the Company with one or more of its
      related entities (as defined in NI 45-106); (ii) a tender offer for all or
      substantially all of the outstanding common shares of the Company; (iii)
      the sale of all or substantially all of the assets of the Company; or (iv)
      any other acquisition of the business of the Company as determined by the
      Board of Directors.

	 	 	 
	 	(i) 	
      “Commencement Date” has the meaning set forth in Section
      1.2 of this Plan.

	 	 	 
	 	(j) 	
      “Company” means CounterPath Corporation, and any
      successor company resulting from the amalgamation of the Company and any
      other company or other entity resulting from any other form of corporate
      reorganization thereof.

	 	 	 
	 	(k) 	
      “Disability” means the inability of the Participant to
      engage in substantial gainful activity by reason of a medically
      determinable physical or mental impairment (which state shall
  be determined by the Company on the basis of such medical
  evidence as the Company deems warranted in the circumstances).

3 

	 	(l) 	
      “Election to Purchase Shares” means an election,
      substantially in the form as set forth in Appendix A hereto, setting out
      the terms of an Employee’s election to participate in, and purchase Shares
      under, the Plan.

	 	 	 
	 	(m) 	
      “Employee” means a person (including a resident of the
      United States or outside of North America) under a permanent full-time or
      part-time contract of employment with the Company or a Subsidiary who
      participates in the Company’s or any of its Subsidiaries’ regular benefit
      plans (which fact shall be determined exclusively by the Board of
      Directors) including, without limitation, any such person who is also an
      officer or a director of the Company or a Subsidiary.

	 	 	 
	 	(n) 	
      “Expiry Date” means October 1, 2028.

	 	 	 
	 	(o) 	
      “Exchange” means the Toronto Stock Exchange in the case
      of shares purchased in Canada and the NASDAQ in the case of shares
      purchased in the United States or any other share exchange upon which the
      Shares are then listed and traded.

	 	 	 
	 	(p) 	
      “form” means any paper-based, web-based or any other
      electronic form as determined by the Company from time to time and
      includes the forms attached hereto which may be delivered, executed or
      otherwise completed in a method determined by the Company including the
      determination that such delivery, execution or completion be by way of any
      electronic or web- based means.

	 	 	 
	 	(q) 	
      “Insider” has the meaning set forth in the Securities Act
      and includes associates and affiliates (as such terms are defined by the
      Exchange) of the Insider.

	 	 	 
	 	(r) 	
      “Market Price” means the closing trading price of the
      Shares on the Exchange on such date in question, or, if Shares were not
      traded on such date on the Exchange, then on the preceding trading day
      during which a trade occurred.

	 	 	 
	 	(s) 	
      “Matching Assets” means all dividends and other assets
      allocated to a Participant’s Account on account of the Matching
    Shares.

	 	 	 
	 	(t) 	
      “Matching Shares” means Shares issued by the Company, or
      purchased by the Trustee on behalf of the Company, as contemplated by
      Section 4.2 of this Plan.

	 	 	 
	 	(u) 	
      “NI 45-106” means National Instrument 45-106 – Prospectus
      Exemptions, promulgated under the Securities Act, as such instrument may
      be amended from time to time, or any successor instrument
  thereto;

	 	 	 
	 	(v) 	
      “Participant” means any eligible Employee (as determined
      solely by the Board of Directors) who has elected to participate in the
      Plan, who has submitted an Election to Purchase Shares and who has not
      subsequently withdrawn from the Plan.

	 	 	 
	 	(w) 	
      “Participant Assets” means all dividends and other assets
      allocated to a Participant’s Account on account of the Participant
      Shares.

	 	 	 
	 	(x) 	
      “Participant Shares” means Shares purchased by the
      Trustee on behalf of the Participant with monies contributed by the
      Participant.

	 	 	 
	 	(y) 	
      “Pay Period” means the normal weekly, bi-weekly or
      monthly pay period as determined by the Company from time to
  time.

4 

	 	(z) 	
      “Payroll Administrator” means, initially, ADP and
      thereafter the Payroll Administrator selected by the Company, and the
      successor or successors thereto from time to time.

	 	 	 
	 	(aa) 	
      “Purchase Price” means, on any particular day with
      reference to Shares, the volume weighted average trading price of the
      Shares on the Exchange for the five trading days immediately preceding the
      end of the month in question as determined by the Company.

	 	 	 
	 	(bb) 	
      “Retirement” means retirement at age sixty-five (65) or
      older.

	 	 	 
	 	(cc) 	
      “RRSP Account” means a registered retirement savings plan
      account.

	 	 	 
	 	(dd) 	
      “Securities Act” means the Securities Act (British
      Columbia), as the same may be amended from time to time.

	 	 	 
	 	(ee) 	
      “Service” means continuous service to the Company or any
      of its Subsidiaries as an Employee.

	 	 	 
	 	(ff) 	
      “Share Compensation Arrangement” means a plan or program
      established or maintained by the Company providing for the acquisition of
      securities of the Company as compensation or as an incentive or benefit
      for services provided to the Company.

	 	 	 
	 	(gg) 	
      “Shares” means the common shares in the capital of the
      Company as presently constituted; provided that upon any subdivision,
      consolidation or reorganization of such shares or other change in the
      corporate structure or share capital of the Company, “Shares” shall mean
      such ordinary shares as are subdivided, consolidated, reorganized or
      changed, with such adjustment in the number thereof as may be thereby
      deemed appropriate by the Company.

	 	 	 
	 	(hh) 	
      “Subsidiary” means a corporation (located in Canada, the
      United States or outside of North America) or other entity which is
      controlled by the Company. For the purposes of this definition, the
      Company controls a body corporate or other entity
if:

	 	(i) 	
      in the case of a body corporate:

	 	 	 	 
	 		A. 	
      securities of the body corporate to which are attached
      more than 50% of the votes that may be cast to elect directors of the body
      corporate are held, other than by way of security only, by or for the
      benefit of the Company, and

	 	 	 	 
	 		B. 	
      the votes attached to those securities are sufficient, if
      exercised, to elect a majority of the directors of the body corporate;
      and

	 	 	 	 
	 	(ii) 	
      in the case of an entity other than a body corporate,
      more than 50% of the voting or equity interests of such entity are
      controlled, directly or indirectly, by or for the benefit of the
      Company.

	 	(ii) 	
      “TFSA Account” means a tax-free savings
account.

	 	 	 
	 	(jj) 	
      “Trustee” means the agent or agents of the Plan appointed
      by the Company in accordance with Section 12.1 of this Plan, and the
      successor or successors thereto from time to
time.

	3. 	
      ELIGIBILITY FOR MEMBERSHIP IN THE PLAN

	 	 
	3.1 	
      The Plan is open to all eligible Employees (as determined
      solely by the Board of Directors) at any time after the Employee has
      completed his/her probationary employment period with the Company subject
      to the rules set forth below. Participation in the Plan is entirely
      voluntary.

5 

	 	(a) 	
      Enrolment. An Employee shall become a Participant
      by duly executing and delivering to the Company an Election to Purchase
      Shares; provided that, the Participant’s participation in the Plan shall
      only be effective on the first day of the first Pay Period following the
      date that is thirty (30) days after such Election to Purchase Shares is
      received by the Company. The Election to Purchase Shares authorizes the
      Company or a Subsidiary, as applicable, to make regular payroll deductions
      for contributions to the Plan in respect of Participants.

	 	 	 
	 	(b) 	
      Termination of Employment. Participation in the
      Plan shall cease on the Cessation Date (in the event that the
      Participant’s Service is terminated for any reason other than death or
      Retirement) or the death or Retirement of the Employee, whichever is first
      to occur.

	 	 	 
	 	(c) 	
      Re-Employment. Except in cases of leave of absence
      approved in writing by the Company or a Subsidiary, a former Employee who
      is subsequently re-employed by the Company or a Subsidiary shall be
      considered a new Employee for the purposes of the Plan.

	 	 	 
	 	(d) 	
      Leave of Absence. A Participant who is on leave of
      absence or is absent due to illness or Disability shall not be permitted
      to make any contribution for that period of absence; during that period of
      absence, such Participant shall be deemed to remain in the employ of the
      Company or a Subsidiary for all other purposes of the Plan.

	 	 	 
	 	(e) 	
      Election to Purchase Shares. Each Employee who
      requests information about the Plan shall have delivered to him or her a
      copy of the Plan together with an Election to Purchase Shares to become a
      Participant. Execution of an Election to Purchase Shares by the Employee
      and admittance by the Company of the Employee as a Participant shall be
      deemed to be an acceptance by the Employee of the terms and forms of the
      Plan without further action or other formality.

	 	 	 
	 	(f) 	
      Plan Shares. The Participant Shares that may be
      purchased by the Trustee from the Company on behalf of the Participants,
      and, the Matching Shares that may be issued by the Company to the Trustee
      on behalf of the Participants, in accordance with the terms of the Plan at
      any time, shall be authorized and unissued Shares of the Company in an
      amount up to but not exceeding an aggregate of 220,000 Shares, and such
      number of Shares shall be set aside for the purposes of the Plan. The
      Company reserves the right to allocate Shares to Participants on a
      pro-rata basis should the number of Shares to be purchased or issued under
      the Plan exceed 220,000 Shares.

	 	 	 
	 	(g) 	
      Price of Shares. The price at which Participant
      Shares purchased from the Company and Matching Shares issued by the
      Company in accordance with the terms hereof shall be the Purchase Price or
      the price at which purchased on the open
market.

	4. 	
      CONTRIBUTIONS

	 	 
	4.1 	
      Employee
Contributions.

	 	(a) 	
      Each Participant shall contribute through payroll
      deductions to the Plan in each Pay Period, at the Participant’s option as
      designated by the Participant, an amount equal to or between the following
      minimum and maximum amounts (in whole percentages only):

	 	 	 	 
	 		(i) 	
      a minimum of one percent (1%) of the Participant’s Basic
      Compensation; and

	 	 	 	 
	 		(ii) 	
      a maximum of six percent (6%) of the Participant’s Basic
      Compensation.

	 	(b) 	
      If a Participant is resident in Canada, a Participant
      shall be permitted to contribute Participant Shares and Matching Shares to
      such Participant’s RRSP Account or TFSA Account. The Participant is solely
      responsible for ensuring that contributions made to the Plan do not exceed
      the maximum dollar limit under the Income Tax Act (Canada) for
      contributions to registered retirement savings plans. For greater
      certainty, neither the Company nor any Subsidiary nor
the Trustee shall be responsible for any taxes or penalties
      that result from a breach of the maximum dollar limit under the Income Tax
  Act (Canada).

6 

	 	(c) 	
      The Company or a Subsidiary, as agent of the Participant,
      shall make (or direct the Payroll Administrator to make) the payroll
      deductions required by the terms of the Plan and pay (or direct the
      Payroll Administrator to pay) the Participant’s contribution to the
      Trustee in accordance with Section 4.1(e) below, and the Company, its
      Subsidiaries and each Payroll Administrator is authorized by the
      Participant to do so by such Participant’s execution of an Election to
      Purchase Shares.

	 	 	 
	 	(d) 	
      The Participant may change his or her contribution level
      twice in any 12 month period by filing a form with the Company,
      substantially in the form as set forth in Appendix B hereto (or other
      applicable form as provided by the Trustee), indicating the change to the
      Company, at least 30 days prior to the applicable effective date of such
      change.

	 	 	 
	 	(e) 	
      On the last day Business Day of each month, the Company
      shall (or shall direct the Payroll Administrator to) forward all monies
      deducted from Participants by means of payroll deductions (as provided in
      Section 4.1 hereof), to the Trustee who shall hold such monies for the
      benefit of each of the Participants (subject to the provisions of Section
      7 hereof). The Trustee shall maintain a separate Account or Accounts for
      each Participant to which shall be credited all of such Participant’s
      contributions.

	4.2 	
      Corporate Contribution. On the last Business Day
      of each month, the Company will either (1) forward monies equal to fifty
      (50%) of the Participant’s contributions such that the Trustee may acquire
      Matching Shares equal to fifty (50%) of the aggregate number of
      Participant Shares purchased by the Trustee on behalf of the Participants
      for such month as set out in Section 6 herein, or (2) issue to the Trustee
      that number of Matching Shares equal to fifty (50%) of the aggregate
      number of Participant Shares purchased by the Trustee on behalf of the
      Participants for such month. All Matching Shares so issued or purchased
      shall be immediately released and transferred to the Participant’s Cash
      Account, RRSP Account, or TFSA Account, as directed by the Participant,
      for the benefit of the Participant.

	 	 
	4.3 	
      Tax Treatment of Contributions. The tax
      ramifications for Participants participating in the Plan will depend on a
      number of factors, including whether or not a Participant elects to
      purchase Shares pursuant to the Plan in an RRSP, TFSA, 401K, or other
      Account. Participants should note that income tax laws are subject to
      change and such changes may affect the tax treatment of the Plan and the
      Participant’s individual tax treatment. Participants should consult their
      tax advisors to determine their individual tax treatment in connection
      with their participation in the Plan. The Corporation will withhold
      appropriate income taxes and other required withholdings on the basis of
      each Participant’s actual salary.

	 	 
	4.4 	
      Costs and Expenses. The Company or its
      Subsidiaries shall pay all administration expenses in connection with the
      operation of the Plan, including, without limitation, all commissions for
      purchases of Shares. Commissions, taxes and all governmental or other
      charges in connection with sales, as well as all charges for or associated
      with any transfers, withdrawals or personal administrative requests, are
      payable by the Participant who orders the transaction for his or her
      Account.

	 	 
	5. 	
      DIVIDEND AND INTEREST PAYMENTS AND VOTING
      RIGHTS

	 	 
	5.1 	
      Dividends and Interest. Dividends on Shares will
      be allocated to the appropriate Accounts by the Trustee upon receipt of
      such amounts by the Trustee. Cash dividends are reinvested in the Shares
      as soon as possible subject to available trading volumes. Contributions
      are withheld by the Trustee without interest or benefit accruing to the
      Participant.

	 	 
	5.2 	
      Reports and Voting. The Trustee will deliver to
      each Participant, as promptly as practicable, by mail or otherwise, all
      notices of meetings, proxy statements and other material distributed by
      the Company to its shareholders. There is no charge to the Participants
      for the Trustee’s retention of share certificates, or
in connection with the notices, proxies or other such
      material. The full Shares in each Participant’s Account shall be voted in
      accordance with such Participant’s signed proxy instructions duly
      delivered. In the absence of such instructions, the Shares will not be
      voted. In the alternative, the Trustee may sign a proxy granting a
      Participant a right to vote, on behalf of the Trustee, the Shares held by
the Trustee in the Participant’s Account.

7 

	6. 	
      PURCHASE OF SHARES

	 	 
	6.1 	
      Purchase of Participant Shares. On the last
      Business Day of each month, the Trustee shall pool all contributions
      received from the Participants and the Company during such month and shall
      forthwith, at the written direction of the Company,
  either:

	 	(a) 	
      subscribe for and purchase from the Company such number
      of Participant Shares, at the Purchase Price, that those contributions can
      buy; or

	 	 	 
	 	(b) 	
      purchase through a stock broker on the open market
      through the facilities of the Exchange such number of Participant Shares,
      at the price on the open market, that those contributions can buy;
      provided that if such purchase cannot be completed within fifteen (15)
      days, then the Trustee shall purchase the Participant Shares from the
      Company as provided for in Section 6.1(a)
hereof.

		
      Such direction by the Company to the Trustee shall be and
      remain effective until the Company provides a subsequent direction to the
      Trustee. The Company shall pay all brokers’ commissions, or similar fees,
      incurred in connection with any purchases of Shares by the Trustee. The
      Company shall have no control over the timing or price of Participant
      Shares purchased on the open market in accordance with Section
    6.1(b).

	 	 
	6.2 	
      Issuance of Matching Shares. On the last Business
      Day of each month, if applicable, the Company shall issue to the Trustee
      such number of Matching Shares equal to fifty (50%) of the aggregate
      number of Participant Shares purchased by the Trustee pursuant to Section
      6.1 above.

	 	 
	6.3 	
      Share Certificates. Certificates or an applicable
      book entry representing the Shares purchased, issued or otherwise received
      by the Trustee pursuant to the Plan shall be registered in the name of the
      Trustee and shall be held by the Trustee for the benefit of the Company
      and the Participants in accordance with the terms of this Plan.

	 	 
	6.4 	
      Crediting of Shares to Accounts. The monthly
      aggregate number of Shares purchased by the Trustee with the contributions
      made by the Participants shall be allocated by the Trustee to each Account
      of the Participants, in proportion to the contributions made by or on
      behalf of the Participant. If applicable, the monthly aggregate number of
      Matching Shares issued by the Company to the Trustee shall be allocated by
      the Trustee to each Account of the Participants, as being attributable to
      the Participant in respect to whom such Matching Shares were issued.
      Allocations of fractional shares shall be permitted.

	 	 
		
      Stock dividends, stock splits, or both, as applicable, in
      respect of Shares that are held in the Participant’s Account will be
      credited to the Account without charge. Distributions of other securities
      (except pursuant to a merger, consolidation or other reorganization of the
      Company) and rights to subscribe may be sold and the proceeds will be
      handled in the same manner as a cash dividend.

	 	 
	7. 	
      VESTING OF CONTRIBUTIONS

	 	 
	7.1 	
      Participant Shares. All Participant Shares,
      Participant Assets, Matching Shares and Matching Assets shall be fully
      vested immediately upon receipt of such Shares or assets, as applicable,
      by the Trustee.

8 

	7.2 	
      Rights of Matching Shares The Matching Shares
      shall have the same rights (including, without limitation, voting,
      dividend or liquidation rights) as the Company’s common shares and shall
      be eligible for inclusion in an RRSP or TFSA.

	 	 
	7.3 	
      Termination of Service. On the termination of the
      Participant’s Service for any reason: (i) the Participant Shares and
      Participant Assets, and (ii) any and all Matching Shares and Matching
      Assets, shall be dealt with as provided in Section 9.

	 	 
	8. 	
      WITHDRAWALS, TRANSFERS, SALES AND
    SUSPENSIONS

	 	 
	8.1 	
      Withdrawal, Transfer or Sale. At the end of any
      month and subject to prior express notice to the Company and the Trustee
      (such notice being in a form as determined by the Company and the
      Trustee), a Participant may withdraw, transfer or sell up to 100% of the
      Shares in such Participant’s Account; provided that during the previous
      twelve (12) calendar months such Participant has not made more than one
      other withdrawal, transfer or sale from the Plan. After obtaining approval
      from the Company for such withdrawal, transfer or sale, the Trustee shall
      satisfy such withdrawal, transfer or sale request by: (i) in the case of a
      withdrawal or transfer request, delivering all Shares (other than
      fractional Shares) requested to be withdrawn or transferred by the
      Participant, held in the Participant’s Account, to the Participant or such
      third party as designated by the Participant, and (ii) in the case of a
      sale, by selling all Shares (other than fractional Shares) requested to be
      sold by the Participant, held in the Participant’s Account, and distribute
      the cash proceeds to the Participant, less any commissions or fees, as
      applicable, provided that any such sale of Shares is in accordance with
      Section 14.2. No withdrawal or transfer of any cash amount in a
      Participant’s Account shall be permitted as part of a withdrawal or
      transfer of Shares from such Account pursuant to the provisions of this
      Section 8.1. The value of any fractional Shares requested to be withdrawn,
      transferred or sold shall be converted to cash by the Trustee and
      allocated to such Participant’s Account for payment to such
      Participant.

	 	 
		
      If a Participant makes two withdrawals, transfers or
      sales from the Plan in any twelve (12) month period pursuant to the
      provisions of Section 8.1 hereof, then such Participant shall be
      prohibited from making further contributions to, or withdrawals, transfers
      or sales from, the Plan (other than a withdrawal, transfer or sale of the
      remaining assets in such Participant’s Account upon termination of such
      Participant’s membership in the Plan as set forth in Section 10 hereof)
      until the first Business Day of the month following the first anniversary
      of such second withdrawal, transfer or sale. The form to be used by a
      Participant for the withdrawal, transfer or sale of Shares shall be
      substantially in the form as set forth in Appendix C hereto, which shall
      indicate, among other things, the number of Shares such Participant wishes
      to withdraw, transfer or sell and, in the case of a withdrawal or
      transfer, the particulars relating to the registration of the Shares that
      are to be delivered, if any.

	 	 
		
      Notwithstanding the foregoing, the Company, in its sole
      discretion, has the right to vary or amend the number of withdrawals,
      transfers or sales permitted by any Participant in accordance with this
      Section 8.1 based on extenuating circumstances or compassionate grounds.
      Such variance or amendment shall only apply to the Participant in
      question.

	 	 
	8.2 	
      Suspension of Contributions. A Participant may
      elect at any time to suspend contributions to the Plan by giving at least
      thirty (30) days prior express written notice to the Company to that
      effect. During such period of suspension, the rights and obligations of
      such Participant, the Company and its Subsidiaries, and the Trustee shall
      remain in full force and effect. A Participant who has suspended
      contributions under this Section 8.2 may resume contributions to the Plan
      on a subsequent date by express written notice to the Company to that
      effect at least thirty (30) days prior to such date. The form to be used
      by a Participant for such a suspension shall be substantially in the form
      as set forth in Appendix D hereto. The form to be used by a Participant to
      resume contributions to the Plan shall be substantially in the form as set
      forth in Appendix E hereto.

9 

	9. 	
      DISTRIBUTION ON RETIREMENT, TERMINATION OF EMPLOYMENT
      OR DEATH

	 	 
	9.1 	
      Termination of Employment or Retirement of
      Participant. A Participant whose Service is terminated for any reason
      other than death, or a Participant who retires, must withdraw or otherwise
      transfer all of the Participant Shares, Participant Assets, Matching
      Shares and Matching Assets in the Participant’s Account within ninety (90)
      days of such termination of Service (for greater certainty, the number of
      Matching Shares to be released to the Participant under this Section 9.1
      shall be determined as of the date the actual notice of termination of
      Service is given by the Corporation to the Participant without reference
      to any “notice period” or “severance period” or any other period after the
      date that actual notice of termination of Service is given) or retirement.
      In the absence of specific instructions as to the method of distribution
      or transfer within the said ninety (90) day period, Participant shall be
      deemed to have elected to request that:

	 	(a) 	
      such Shares in the non-registered component of his or her
      Cash Account be transferred to an account in his or her name administered
      by the Trustee (ongoing administration costs being borne by the
      Participant); and

	 	 	 
	 	(b) 	
      if the Participant’s Shares are held in his or her RRSP
      Account, such Shares be transferred to a registered retirement savings
      plan of the former Participant under a group plan trusteed by the Trustee
      (ongoing RRSP administration costs being borne by the Participant);
    and

	 	 	 
	 	(c) 	
      if the Participant’s Shares are held in his or her TFSA
      Account, request such Shares and be transferred to a TFSA of the former
      Participant under a group plan trusteed by the Trustee (ongoing TFSA
      administration costs being borne by the
Participant).

	9.2 	
      Death of Participant. Following the death of a
      Participant, the Shares and other assets in such Participant’s Account
      will be distributed by the Trustee to such Participant’s estate or Account
      beneficiary, if any. The distribution shall be made by the Trustee in
      accordance with the written instructions of the legal representative of
      the Participant’s estate (provided that the Trustee has been provided with
      all relevant supporting documentation that it customarily requires) or by
      the Account beneficiary by:

	 	(a) 	
      the delivery of all Shares (other than any fractional
      Shares) and any cash held in the Participant’s Account;

	 	 	 
	 	(b) 	
      the distribution of cash realized from the sale of such
      Shares by the Trustee;

	 	 	 
	 	(c) 	
      a transfer to another registered retirement savings plan,
      if permitted by law; or

	 	 	 
	 	(d) 	
      a combination thereof.

		
      The value of any fractional Shares shall be distributed
      in cash in an amount equal to the fraction multiplied by the Market Price
      on the Business Day prior to the date of payment. If the legal
      representative of the Participant’s estate or Account beneficiary fails to
      make an election within ninety (90) days of the Participant’s death, then
      the Trustee shall make delivery in accordance with the provisions set
      forth in Section 9.2(a) above.

	 	 
	9.3 	
      Notifications to Trustee. The Company shall notify
      the Trustee in writing upon the Retirement, termination of employment or
      death of a Participant.

	 	 
	10. 	
      DISTRIBUTION OF BENEFITS ON TERMINATION OF
      MEMBERSHIP

	 	 
	10.1 	
      Cancellation of Participation. A Participant may
      cancel his or her Election to Purchase Shares at any time by express
      notice of cancellation delivered to and receipted for by the Company and
      the Trustee (such notice being in a form as determined by the Company and
      the Trustee). Upon receipt of such notice of cancellation, the Trustee
      shall return to the Participant the appropriate portion of the
      Participant’s Account in the manner set out in Section 9.1 hereof. Payment
      thereof shall constitute a discharge of the
Company’s and its Subsidiaries’ obligations to the Participant
      under the Plan. If a Participant cancels his or her Election to Purchase
      Shares under the Plan, then the Participant shall not be entitled to
      rejoin or otherwise participate in such Plan until the first anniversary
      of such cancellation. The form to be used by a Participant to cancel his
      or her Election to Purchase Shares shall be substantially in the form as
  set forth in Appendix F hereto.

10 

	11. 	
      AMENDMENT OR TERMINATION OF PLAN

	 	 
	11.1 	
      Amendment or Termination. The Company reserves the
      right to discontinue use of payroll deductions at any time such action is
      deemed advisable, in its sole discretion. The Plan may be amended, altered
      or discontinued by the Company at any time, subject to obtaining: (i) any
      necessary approval of any applicable regulatory authority including,
      without limitation, the Exchange if the Shares are listed on the Exchange
      or any other stock exchange or market on which the Shares are then listed
      or admitted to trading; and (ii) if required by the rules of the Exchange
      if the Shares are listed on the Exchange, the approval of the shareholders
      of the Company in accordance with the rules, regulations and policies of
      the Exchange at a duly constituted meeting of shareholders (“Shareholder
      Approval”). Notwithstanding the foregoing, the following amendments to the
      Plan may be made by the Board without Shareholder
  Approval:

	 	(a) 	
      amendments of a technical, clerical or “housekeeping”
      nature, or to clarify any provision of the Plan, including without
      limiting the generality of the foregoing, any amendment for the purpose of
      curing any ambiguity, error or omission in the Plan or to correct or
      supplement any provision of the Plan that is inconsistent with any other
      provision of the Plan;

	 	 	 
	 	(b) 	
      suspension or termination of the Plan;

	 	 	 
	 	(c) 	
      amendments to respond to changes in legislation,
      regulations, instruments (including NI 45- 106), stock exchange rules
      (including the rules, regulations and policies of the Exchange) or
      accounting or auditing requirements;

	 	 	 
	 	(d) 	
      amendments respecting administration of the
  Plan;

	 	 	 
	 	(e) 	
      any amendment to the definition of “Employee”;

	 	 	 
	 	(f) 	
      any amendment to the definition of
“Subsidiary”;

	 	 	 
	 	(g) 	
      changes to the vesting provisions for any outstanding
      Matching Shares;

	 	 	 
	 	(h) 	
      amendments to the Participant contribution provisions of
      the Plan;

	 	 	 
	 	(i) 	
      amendments to the withdrawal and suspension provisions of
      the Plan;

	 	 	 
	 	(j) 	
      amendments to the number or percentage of Matching Shares
      contributed by the Company;

	 	 	 
	 	(k) 	
      amendments to the termination provisions of the
    Plan;

	 	 	 
	 	(l) 	
      adjustments to reflect stock dividends, stock splits,
      reverse stock splits, share combinations or other alterations of the
      capital stock of the Company; and

	 	 	 
	 	(m) 	
      any other amendment, whether fundamental or otherwise,
      not requiring shareholder approval under applicable law (including,
      without limitation, the rules, regulations and policies of the
      Exchange).

Shareholder Approval will be required
for the following types of amendments: 

11 

	 	(i) 	
      amendments to the number of Shares issuable under the
      Plan, including an increase to the fixed maximum number of Shares or a
      change from a fixed maximum number of Shares to a fixed maximum
      percentage; and

	 	 	 
	 	(ii) 	
      amendments required to be approved by shareholders under
      applicable law (including, without limitation, the rules, regulations and
      policies of the Exchange).

		
      In the event of any conflict between subsections (a) to
      (m) and subsections (i) to (ii), above, the latter shall prevail to the
      extent of any conflict.

	 	 
		
      In the event of any amendment or termination of the Plan
      in accordance with this Section 11, such amendment or termination will not
      result in the forfeiture of any funds deducted from the Basic Compensation
      of any Participant, or any dividends or other distributions in respect of
      the Participant Shares, effective before the effective date of amendment
      or termination of the Plan. In the event of any termination, each
      Participant shall be entitled to 100% of the Participant Shares,
      Participant Assets, Matching Shares and Matching Assets in the
      Participant’s Account as of the date of such termination, which shall be
      distributed to each Participant within ninety (90) days following
      termination of the Plan.

	 	 
	12. 	
      TRUSTEE

	 	 
	12.1 	
      The Company shall designate the Trustee to open and
      maintain Accounts for the benefit of the Participants and to arrange for
      purchases of the Participant Shares and receipt of the Matching Shares.
      The Company may, in its discretion, substitute another corporation as
      Trustee under the Plan and the Trustee may terminate its services,
      provided such substitution or termination, as the case may be, shall be on
      ninety (90) days notice given by the party effecting the action.

	 	 
	12.2 	
      The Trustee is authorized and directed by the Company and
      the Participants to purchase Participant Shares and receive Matching
      Shares, provided that the Trustee has been provided with the contributions
      and necessary payroll information. The Trustee agrees to make such
      purchases of Participant Shares as soon as such contributions are
      received, and if such Participant Shares are being purchased on the open
      market subject to the trading volume of the Shares. Participant Shares
      shall be allocated absolutely, and Matching Shares shall be allocated
      subject to the terms and provisions of the Plan (including without
      limitation Section 7.2 hereof) by the Trustee to such Participant’s
      Account.

	 	 
	12.3 	
      The Trustee shall maintain an Account for each
      Participant showing a record of the assets held in each such Participant’s
      Account under the Plan, and the interest accrued thereon, if any. The
      Trustee shall furnish to the Participants a summary by way of a
      password-protected web-page containing the following
  information:

	 	(a) 	
      the total amount of the contributions made by such
      Participant; and

	 	 	 
	 	(b) 	
      the number of Shares in such Participant’s
  Account.

		
      Each such statement shall be deemed to have been accepted
      by the Participant as correct unless written notice to the contrary shall
      have been received by the Trustee within three (3) months of the date of
      such statement.

	 	 
	12.4 	
      The Trustee shall be protected in acting and relying upon
      any written notice, certificate, confirmation, request, waiver, consent,
      receipt, statutory declaration or other paper or document (collectively
      referred to as the “Documents”) furnished to it and signed by any person
      required to or entitled to execute and deliver to the Trustee any such
      Documents in connection with any action or omission of the Trustee
      hereunder, not only as to its due execution and the validity and
      effectiveness of the Documents’ provisions, but also as to the truth and
      accuracy of any information therein contained, which the Trustee in good
      faith believes to be genuine.

12 

	12.5 	
      No amendment, change or modification to the Plan shall be
      made which will, without the Trustee’s consent, alter the duties of the
      Trustee under the Plan.

	 	 
	13. 	
      ADMINISTRATION

	 	 
	13.1 	
      The Trustee shall act on behalf of the Company and its
      Subsidiaries in the day-to-day administration of the Plan.

	 	 
	13.2 	
      Subject to the provisions of the Plan, the Company shall
      be authorized to interpret the Plan and to establish, amend and rescind
      any rules and regulations relating to the Plan and to make all other
      determinations necessary or advisable for the administration of the Plan.
      The Company may correct any defect, supply any omission and reconcile any
      inconsistency in the Plan and, to the extent it shall be deemed desirable
      by the Company, to carry it into effect. The determinations of the Company
      in the administration of the Plan, as described herein, shall be final and
      conclusive. The Company shall provide the Trustee with written notice of
      any amendments or changes to the Plan as described herein.

	 	 
	14. 	
      MARKET FLUCTUATION AND SELLING OF SHARES

	 	 
	14.1 	
      THERE IS NO GUARANTEE UNDER THE PLAN AGAINST LOSS OF
      VALUE OF THE SHARES. IN SEEKING THE BENEFITS OF PARTICIPATION IN THE PLAN,
      AN EMPLOYEE MUST ACCEPT THE RISK OF A DECLINE IN THE MARKET PRICE OF THE
      SHARES AND THE TOTAL LOSS OF HIS OR HER INVESTMENT IN THE SHARES.
      Neither the Company nor its Subsidiaries nor the Trustee will bear any
      responsibility for any loss that may occur as a result of such market
      fluctuation or otherwise. Neither the Company nor its Subsidiaries nor the
      Trustee makes any representation or warranty that the Shares are suitable
      investments for any particular eligible Employee. Subject to Section 6,
      any purchase or sale of the Shares or any other security by the Trustee
      provided for in this Plan may be at such price or prices and at such time
      or times for the purchase or sale of such Shares or securities, as are
      readily available on the Exchange. Subject to Section 6, neither the
      Trustee nor the Company nor its Subsidiaries shall be liable for the
      failure to purchase or sell the Shares or any other securities at any
      particular price, time or at all.

	 	 
	14.2 	
      Issuance and Selling of Shares. No Shares issued
      to the Participant, or on behalf of the Participant, may be sold by the
      Participant, or on behalf of the Participant, unless such sale is in
      accordance with all applicable securities laws and the Company’s insider
      trading policy in effect from time to time. Accordingly, the Trustee shall
      obtain the approval of the Company for each sale by or on behalf of a
      Participant to ensure compliance with all applicable securities laws and
      the Company’s insider trading policy.

	 	 
	15. 	
      MISCELLANEOUS PROVISIONS

	 	 
	15.1 	
      The fiscal year of the Plan shall coincide with the
      Company’s fiscal year end.

	 	 
	15.2 	
      Subject to Section 12.5, the Company reserves the right,
      at any time, to make rules regarding the interpretation, implementation
      and organization of the Plan, to prescribe, modify, amend or rescind the
      provisions of this Plan or to suspend this Plan; provided that no
      prescription, modification, amendment, rescission or suspension shall
      deprive a Participant of benefits vested in the Participant under the Plan
      or divert the use of the funds in the Accounts for purposes other than the
      exclusive benefit of the Participants.

	 	 
	15.3 	
      Participants shall provide to the Company, its
      Subsidiaries and the Trustee any information that might be required of
      them in the administration of this Plan.

	 	 
	15.4 	
      Neither this Plan nor any Trustee agreement entered into
      between the Company and the Trustee pursuant to this Plan shall give any
      Employee the right to be employed, or to continue to be employed, by the
      Company or any of its Subsidiaries.

13 

	15.5 	
      No right or interest of any Participant in or under this
      Plan shall be subject to assignment, sale, transfer, pledge, encumbrance
      or charge, in whole or in part, either directly or by operation of law or
      otherwise in any manner otherwise than by death or mental incompetency,
      and shall be exercisable, during the Participant’s lifetime, only by the
      Participant. No attempted assignment, sale, transfer, pledge, encumbrance
      or charge thereof shall be effective and any attempt to do so shall be
      void. Any attempt to violate the provisions of this Section 15.5 shall be
      deemed a decision by the Participant to terminate participation in this
      Plan whereupon all of the Employee’s contributions credited to a violating
      Participant’s Account shall be immediately refunded to the Participant and
      the Participant shall no longer be considered a participant in the Plan.
      The Company shall notify the Trustee in writing of the need for such a
      refund.

	 	 
	15.6 	
      No Participant or any other person shall have any right
      in or to any part of the corpus or income of the Accounts of the Plan, or
      any part of the assets thereof (including, without limitation, the
      assignment of any part of the Plan as a pledge or collateral for any loan
      or debt), except as and when and to the extent expressly provided by the
      Plan.

	 	 
	15.7 	
      Participation in the Plan will not give any Participant
      any right or claim to any payment except as such payment is provided for
      under the provisions of the Plan and only to the extent that assets are
      available in the hands of the Trustee for the making of such payment and
      to the extent provided for in the Plan.

	 	 
	15.8 	
      Any act or matter to be taken or decided by the Company
      under the Plan may be taken by or decided by the Board of Directors or the
      Company unless otherwise expressly set forth in this Plan.

	 	 
	15.9 	
      The laws of the Province of British Columbia shall apply
      to this Plan, any amendments thereto, and the administration thereof, and
      all rights and obligations thereunder shall be determined in accordance
      with such laws and according to such Province.

	 	 
	15.10 	
      Any purchase, sale or offering of Shares under the Plan
      shall be made on the express condition that an application to purchase
      Shares may not be made, nor may the purchase of any Shares thereunder be
      effected, under circumstances which would constitute a violation of any
      applicable securities or other law or regulation or any listing
      requirement, by-law or regulation of the Exchange or any other stock
      exchange on which the Shares are listed. The operation of the Plan may be
      suspended at any time, in the discretion of the Company, if necessary to
      ensure compliance with any applicable securities or other law or
      regulation or any listing requirement, by-law or regulation of the
      Exchange or any other stock exchange on which the Shares are listed or
      proposed to be listed. The Shares under the Plan may not be offered, sold,
      transferred, pledged hypothecated or otherwise assigned in the United
      States or any other jurisdiction unless pursuant to an available exemption
      under applicable securities laws. The Shares under the Plan have not been
      registered under the United States Securities Act of 1933, as amended, nor
      qualified under or pursuant to the securities or “Blue Sky” laws of any
      state. The Company’s obligation to issue and deliver Shares is subject to
      the availability, on terms and conditions reasonably satisfactory to the
      Company, of an exemption from prospectus and registration requirements in
      respect of the issuance, sale and delivery of such Shares under applicable
      securities and “Blue Sky” laws.

	 	 
	15.11 	
      The Plan is effective beginning on the Commencement Date
      and will terminate on the Expiry Date.

	 	 
	15.12 	
      Nothing contained in this Plan shall restrict or limit or
      be deemed to restrict or limit the rights or power of the Board of
      Directors in connection with any allotment and issuance of any securities
      of the Company.

14 

	15.13 	
      Any word contained herein importing gender shall include
      the masculine and feminine and neuter. All references in this Plan to the
      words “herein”, “hereby”, “hereto”, “hereof”, and words of similar import
      refer to this Plan as a whole and not to any particular Section, schedule
      or appendix unless otherwise stated or the context otherwise
    requires.

ADOPTED as of October 1, 2008, as amended November 6, 2008,
October 22, 2009, September 10, 2015, November 2, 2015 and October 22, 2018.

	 	COUNTERPATH CORPORATION

By:

            
Name: David Karp

            
Title: Interim Chief Executive Officer 

15 

Appendix A – Form of Election to Purchase Shares

Employee Share Purchase Plan 
effective __________________,
2008 

	To: 	COUNTERPATH CORPORATION
      (the “Company”) 
	  	Attention: Trustee, Employee
      Share Purchase Plan 

           
The undersigned employee acknowledges that he/she has been advised by the
Company of the Company’s employee share purchase plan (the “Plan”) that the
undersigned is eligible to participate in the Plan and that the undersigned has
received a copy of the Plan and has read and understands the terms of the Plan.

           
The undersigned irrevocably accepts the terms, conditions and forms of the Plan
and hereby elects to participate in the Plan and hereby directs and authorizes
the Company to deduct from the undersigned’s salary, by way of payroll deduction
on each Pay Period, the amount (the “Employee Contribution”) of _____ % of the
undersigned’s Participant’s Basic Compensation (minimum of 1% of the
undersigned’s Participant’s Basic Compensation, maximum 6% of the undersigned’s
Participant’s Basic Compensation, in whole percentages only). The Employee
Contribution shall be used by the Trustee to purchase common shares (“Shares”)
in the capital of the Company in accordance with the terms and subject to the
conditions of the Plan. 

           
The undersigned hereby authorizes and directs the Trustee to purchase Shares on
behalf of the undersigned in accordance with the terms of the Plan, and directs
that the Shares be allocated by the Trustee to the Participant’s Account. In
consideration of the Company establishing the Plan, the undersigned hereby
irrevocably directs and authorizes the Trustee to carry out and perform the
trusts created by the Plan and to hold the Shares purchased by the Trustee on
behalf of the undersigned in accordance with the terms of the Plan and all of
the rights, privileges and benefits conferred by the Plan for the benefit of the
undersigned, on the terms and subject to the conditions contained in the Plan.

           
In case of the undersigned’s death, the undersigned hereby designates that all
assets then contained in the undersigned’s Account shall be distributed to
______________________ as my beneficiary for such assets. The name of the
trustee, if any, in the event such beneficiary is a minor child is
_______________________. 

           
Whenever used herein, any words or terms not otherwise defined in this Election
to Purchase Shares, but defined in the Plan, shall have the meanings ascribed
thereto in the Plan. 

DATED as of the ______ day of ______________, 20_____. 

	 	 	 
	(Witness) 	 	(Signature of Employee) 
	 	 	 
	 	 	 
	 	 	 
	  	 	(Please Print Name) 
	 	 	 
	 	 	 
	 	 	 
	  	 	(Please Print Address) 

16 

Appendix B – Form of Instrument Changing Employee
Contribution Level 
Employee Share Purchase Plan 
effective
__________________, 2008 

	To: 	COUNTERPATH CORPORATION
      (the “Company”) 
	  	Attention: Trustee, Employee
      Share Purchase Plan 

           
The undersigned employee hereby gives notice to, and directs, the Company to
change the undersigned’s contribution to the Company’s employee share purchase
plan (the “Plan”) to _______% of the undersigned’s Participant’s Basic
Compensation (minimum of 1% of the undersigned’s Participant’s Basic
Compensation, maximum 6% of the undersigned’s Participant’s Basic Compensation,
in whole percentages only), to be calculated accordingly and deducted per Pay
Period pursuant to the terms of such Plan. 

           
Whenever used herein, any words or terms not otherwise defined in this
Instrument Changing Employee Contribution Level, but defined in the Plan, shall
have the meanings ascribed thereto in the Plan. 

DATED as of the ______ day of ______________, 20_____. 

 

	 	 	 
	(Witness) 	 	(Signature of Employee) 
	 	 	 
	 	 	 
	 	 	 
	(Account Number) 	 	(Please Print Name) 
	 	 	 
	 	 	 
	 	 	 
	  	 	(Please Print Address) 

17 

Appendix C – Form of Withdrawal, Transfer or Sale of Shares

Employee Share Purchase Plan 
effective __________________,
2008 

	To: 	COUNTERPATH CORPORATION (the “Company”),
    
		Attention: Trustee, Employee Share Purchase
      Plan  

In connection with the Company’s employee share purchase plan
(the “Plan”) and pursuant to the terms of the Plan, the undersigned employee
hereby requests to: 

	 	[   ] 	(1) 	
      withdraw __________ Shares from the undersigned’s account
      and register such Shares in the undersigned’s name and delivered to the
      undersigned’s address below; 

	 	  	  	
       

	 	[   ] 	(2) 	
      transfer __________ Shares from the undersigned’s account
      to _______________________________________, registered as follows
      _______________________________________________________________________;
      

	 	  	  	
       

	 	[   ] 	(3) 	
      sell __________ Shares from the undersigned’s account and
      forward the proceeds (net of fees, commissions and withholding taxes) to
      the undersigned by cheque at the address below; 

	 	  	  	
       

	 	[   ] 	(4) 	
      sell __________ Shares from the undersigned’s account and
      transfer the proceeds (net of fees and commissions) to another RRSP
      Account or TFSA Account as set out below; and 

	 	  	  	
       

	 	[   ] 	(5) 	
      transfer __________ Shares from the undersigned’s account
      to another RRSP Account or TFSA Account as set out below.
  

For requests to transfer Shares or cash to another financial
institution: 

	 	Institution Name: 	 
	 	 	 
	 	Institution Address: 	 
	 	 	 
	 	Contact Name: 	 
	 	 	 
	 	Contact Phone Number: 	 
	 	 	 
	 	CUID: 	 
	 	 	 
	 	RRSP/TFSA Account Details: 	 
	 	 	 
	 	Account Number: 	 

In the past 12 months, this withdrawal, transfer or sale is my:

	 	First 	  
	 	  	  
	 	Second 	
      (I understand that I am restricted from making further
      contributions to, or withdrawals, transfers or sales from, the Plan for a
      period of 12 months from the date of this withdrawal, transfer or sale)
      

	 	  	     
	 	Third 	
      (I understand that I must terminate my membership in the
      Plan with this withdrawal, transfer or sale) 

18 

Whenever used herein, any words or terms not otherwise defined
in this Withdrawal, Transfer or Sale of Shares, but defined in the Plan, shall
have the meanings ascribed thereto in the Plan. 

DATED as of the ______ day of ______________, 20_____. 

 

	 	 	 
	(Witness) 	 	(Signature of Employee) 
	 	 	 
	 	 	 
	 	 	 
	(Account Number) 	 	(Please Print Name) 
	 	 	 
	 	 	 
	 	 	 
	  	 	(Please Print Address) 

The Company hereby authorizes the above withdrawal, transfer or
sale by the Trustee. 

	 	COUNTERPATH CORPORATION 
	 	  
	 	  
	 	Per:           
      ______________________________________________
	 	           
             Name: _______________________________
	 	           
             Title:  
      _______________________________

19 

Appendix D – Form of Instrument Suspending Contributions

Employee Share Purchase Plan 
effective __________________,
2008 

	To: 	COUNTERPATH CORPORATION
      (the “Company”) 
	  	Attention: Trustee, Employee
      Share Purchase Plan (the “Plan”) 

           
The undersigned employee hereby elects to suspend the undersigned’s
contributions to the Plan until further notice, pursuant to the terms of the
Plan. 

DATED as of the ______ day of ______________, 20_____. 

 

	 	 	 
	(Witness) 	 	(Signature of Employee) 
	 	 	 
	 	 	 
	 	 	 
	(Account Number) 	 	(Please Print Name) 
	 	 	 
	 	 	 
	 	 	 
	  	 	(Please Print Address) 

20 

Appendix E – Form of Instrument Resuming Contributions

Employee Share Purchase Plan 
effective __________________,
2008 

	To: 	COUNTERPATH CORPORATION
      (the “Company”) 
	  	Attention: Trustee, Employee
      Share Purchase Plan (the “Plan”) 

           
The undersigned employee hereby requests to resume the undersigned’s
contribution to the Company’s employee share purchase plan (the “Plan”) in an
the amount of ______ % of the undersigned’s Participant’s Basic Compensation
(minimum of 1% of the undersigned’s Participant’s Basic Compensation, maximum 6%
of the undersigned’s Participant’s Basic Compensation, in whole percentages
only), pursuant to the Plan. 

           
Whenever used herein, any words or terms not otherwise defined in this
Instrument Resuming Contributions, but defined in the Plan, shall have the
meanings ascribed thereto in the Plan. 

DATED as of the ______ day of ______________, 20_____. 

 

	 	 	 
	(Witness) 	 	(Signature of Employee) 
	 	 	 
	 	 	 
	 	 	 
	(Account Number) 	 	(Please Print Name) 
	 	 	 
	 	 	 
	 	 	 
	  	 	(Please Print Address) 

21 

Appendix F – Form of Instrument Cancelling Participation

Employee Share Purchase Plan 
effective __________________,
2008 

	To: 	COUNTERPATH CORPORATION (the “Company”)
    
	  	Attention: Trustee, Employee Share Purchase
      Plan (the “Plan”) 

           
The undersigned employee hereby gives notice to, and directs, the Company to
cancel the undersigned’s Election to Purchase Shares and the undersigned’s
participation in the Plan, pursuant to the terms of the Plan. 

           
The undersigned hereby directs the Company and the Trustee to forward the assets
in my account to which I am entitled pursuant to the terms of the Plan as
follows: 

	 	[   ] 	(1) 	
      Please forward a share certificate to me, registered in
      my name as set forth below, for all of the Shares in my Account to which I
      am entitled. I understand that any fractional shares in my account will be
      converted to cash and forwarded to me, with any cash in my account, by
      cheque. 

	 	  	  	     
	 	[   ] 	(2) 	
      Please transfer all of the Shares in my account to which
      I am entitled to ___________________________, at the following address,
      ___________________________________________ ____________________________________________
      registered as follows
      _____________________________________________________. I understand that
      any fractional shares in my account will be converted to cash and
      forwarded to me, with any cash in my account, by cheque. 

	 	  	  	     
	 	[   ] 	(3) 	
      Please sell all of the Shares in my account to which I am
      entitled and forward the proceeds (net of fees and commissions) to me by
      cheque. 

DATED as of the ______ day of ______________, 20_____. 

 

	 	 	 
	(Witness) 	 	(Signature of Employee) 
	 	 	 
	 	 	 
	 	 	 
	(Account Number) 	 	(Please Print Name) 
	 	 	 
	 	 	 
	 	 	 
	  	 	(Please Print Address) 

22

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