Document:

a6231769ex4_29.htm

Exhibit 4.29

 

 

RESPONSE BIOMEDICAL CORPORATION

 

 

-and-

 

 

COMPUTERSHARE TRUST COMPANY OF CANADA

 

 

WARRANT INDENTURE

 

Providing for the Issue of up to

42,166,666 Warrants

 

 

May 21, 2009

 

  

-1-

  

 

TABLE OF CONTENTS

 

	
ARTICLE ONE INTERPRETATION

	 	 	1	 
	 	1.1	 	
Definitions

	 	 	1	 
	 	1.2	 	
Words Importing the Singular and Gender

	 	 	4	 
	 	1.3	 	
Interpretation Not Affected by Headings

	 	 	4	 
	 	1.4	 	
Day Not a Business Day

	 	 	4	 
	 	1.5	 	
Time of the Essence

	 	 	4	 
	 	1.6	 	
Currency

	 	 	5	 
	 	1.7	 	
Applicable Law

	 	 	5	 
	 	1.8	 	
English Language

	 	 	5	 
	 	1.9	 	
Meaning of "outstanding" for Certain Purposes

	 	 	5	 
	 	 	 	 	 	 	 	 
	
ARTICLE TWO ISSUE OF WARRANTS

	 	 	6	 
	 	2.1	 	
Creation and Issue of Warrants

	 	 	6	 
	 	2.2	 	
Terms of Warrants

	 	 	6	 
	 	2.3	 	
Warrant Certificates

	 	 	6	 
	 	2.4	 	
Issue in Substitution for Lost Warrants

	 	 	7	 
	 	2.5	 	
Warrantholder not a Shareholder

	 	 	8	 
	 	2.6	 	
Warrants to Rank Pari Passu

	 	 	8	 
	 	2.7	 	
Signing of Warrant Certificates

	 	 	8	 
	 	2.8	 	
Certification by the Warrant Agent or Co-transfer Agent

	 	 	8	 
	 	 	 	 	 	 	 	 
	
ARTICLE THREE EXCHANGE AND OWNERSHIP OF WARRANTS

	 	 	9	 
	 	3.1	 	
Exchange of Warrants

	 	 	9	 
	 	3.2	 	
Charges for Exchange or Transfer

	 	 	9	 
	 	3.3	 	
Ownership of Warrants

	 	 	9	 
	 	3.4	 	
Registration and Transfer of Warrants

	 	 	9	 
	 	 	 	 	 	 	 	 
	
ARTICLE FOUR EXERCISE OF WARRANTS

	 	 	11	 
	 	4.1	 	
Method of Exercise of Warrants

	 	 	11	 
	 	4.2	 	
Effect of Exercise of Warrants

	 	 	13	 
	 	4.3	 	
Partial Exercise of Warrants

	 	 	13	 
	 	4.4	 	
No Fractional Shares or Warrants

	 	 	13	 
	 	4.5	 	
Accounting and Recording

	 	 	13	 
	 	4.6	 	
Cancellation of Surrendered Warrants

	 	 	14	 
	 	4.7	 	
Expiration of Warrants

	 	 	14	 
	 	4.8	 	
Share Certificates

	 	 	14	 
	 	 	 	 	 	 	 	 

	
ARTICLE FIVE ADJUSTMENT OF EXERCISE NUMBER

	 	 	14	 
	 	5.1	 	
Definitions

	 	 	14	 
	 	5.2	 	
Adjustment of Exercise Number

	 	 	15	 
	 	5.3	 	
Subscription Rights Adjustment Rules

	 	 	18	 
	 	5.4	 	
Postponement of Subscription

	 	 	19	 
	 	5.5	 	
Notice of Certain Events

	 	 	19	 
	 	5.6	 	
Protection of Warrant Agent

	 	 	19	 
	 	5.7	 	
Proceedings Prior to Any Action Requiring Adjustment

	 	 	20	 
	 	 	 	 	 	 	 	 
	
ARTICLE SIX RIGHTS AND COVENANTS

	 	 	20	 
	 	6.1	 	
Purchase of Warrants

	 	 	20	 
	 	6.2	 	
General Covenants of the Corporation

	 	 	20	 
	 	6.3	 	
Warrant Agent's Remuneration and Expenses

	 	 	21	 
	 	
6.4

	 	
No Dividends or Distributions

	 	 	
21

	 

 

  

-i-

  

 

	 	6.5	 	
Performance of Covenants by Warrant Agent

	 	 	21	 
	 	 	 	 	 	 	 	 
	
ARTICLE SEVEN MEETING OF WARRANTHOLDERS

	 	 	22	 
	 	7.1	 	
Right to Convene Meeting

	 	 	22	 
	 	7.2	 	
Notice

	 	 	22	 
	 	7.3	 	
Chairman

	 	 	22	 
	 	7.4	 	
Quorum

	 	 	22	 
	 	7.5	 	
Power to Adjourn

	 	 	23	 
	 	7.6	 	
Show of Hands

	 	 	23	 
	 	7.7	 	
Poll

	 	 	23	 
	 	7.8	 	
Voting

	 	 	23	 
	 	7.9	 	
Persons Entitled to be Present

	 	 	23	 
	 	7.10	 	
Regulations

	 	 	23	 
	 	7.11	 	
Certain Powers Exercisable by Extraordinary Resolution

	 	 	24	 
	 	7.12	 	
Definition of "Extraordinary Resolution"

	 	 	25	 
	 	7.13	 	
Resolutions Binding on all Warrantholders

	 	 	25	 
	 	7.14	 	
Holdings by Corporation Disregarded

	 	 	25	 
	 	7.15	 	
Minutes

	 	 	26	 
	 	7.16	 	
Powers Cumulative

	 	 	26	 
	 	7.17	 	
Instruments in Writing

	 	 	26	 
	 	 	 	 	 	 	 	 
	
ARTICLE EIGHT ENFORCEMENT

	 	 	26	 
	 	8.1	 	
Suits by Warrantholders

	 	 	26	 
	 	8.2	 	
Immunity of Shareholders, Directors and Officers

	 	 	26	 
	 	8.3	 	
Limitation of Liability

	 	 	27	 
	 	 	 	 	 	 	 	 
	
ARTICLE NINE SUPPLEMENTAL INDENTURES AND SUCCESSOR COMPANIES

	 	 	27	 
	 	9.1	 	
Provision for Supplemental Indentures for Certain Purposes

	 	 	27	 
	 	9.2	 	
Correction of Manifest Errors

	 	 	28	 
	 	9.3	 	
Amending Adjustment Provisions

	 	 	28	 
	 	9.4	 	
Successor Companies

	 	 	28	 
	 	 	 	 	 	 	 	 
	
ARTICLE TEN CONCERNING THE WARRANT AGENT

	 	 	28	 
	 	10.1	 	
Trust Indenture Legislation

	 	 	28	 
	 	10.2	 	
Rights and Duties of Warrant Agent

	 	 	29	 
	 	10.3	 	
Evidence, Experts and Advisers

	 	 	29	 
	 	10.4	 	
Securities, Documents and Monies Held by Warrant Agent

	 	 	30	 
	 	10.5	 	
Action by Warrant Agent to Protect Interests

	 	 	30	 
	 	10.6	 	
Warrant Agent not Required to Give Security

	 	 	30	 
	 	10.7	 	
Protection of Warrant Agent

	 	 	30	 
	 	10.8	 	
Indemnification

	 	 	31	 
	 	10.9	 	
Replacement of Warrant Agent

	 	 	31	 
	 	10.10	 	
Conflict of Interest

	 	 	32	 
	 	10.11	 	
Acceptance of Trust

	 	 	33	 
	 	10.12	 	
Warrant Agent not to be Appointed Receiver

	 	 	33	 
	 	10.13	 	
Third Party Interests

	 	 	33	 
	 	10.14	 	
Compliance with Money Laundering Legislation

	 	 	33	 
	 	10.15	 	
Compliance with Privacy Laws

	 	 	33	 
	 	 	 	 	 	 	 	 
	
ARTICLE ELEVEN GENERAL

	 	 	34	 
	 	11.1	 	
Notice to Corporation and Warrant Agent

	 	 	34	 
	 	11.2	 	
Notice to Warrantholders

	 	 	35	 
	 	11.3	 	
Satisfaction and Discharge of Indenture

	 	 	35	 
	 	11.4	 	
Sole Benefit of Parties and WarranthoIders

	 	 	35	 

 

  

-ii-

  

 

	 	11.5	 	
Discretion of Directors

	 	 	36	 
	 	11.6	 	
Counterparts and Formal Date

	 	 	36	 
	 	 	 	  	 	 	 	 
	
SCHEDULE “A”

	 	 	A-1	 
	
SCHEDULE "B"

	 	 	B-1	 

 

  

-iii-

  

 

THIS WARRANT INDENTURE dated as of May 21, 2009,

 

BETWEEN:

 

RESPONSE BIOMEDICAL CORPORATION, a corporation continued under the laws of the Province of British Columbia, having an office at Suite 1781-75th Avenue West, Vancouver, British Columbia, V6P 6P2

 

(the "Corporation")

 

AND:

 

 

COMPUTERSHARE TRUST COMPANY OF CANADA, a trust company organized under the laws of Canada, having an office at 510 Burrard Street, Vancouver, British Columbia, V6C 3B9

 

(the "Warrant Agent") 

 

WITNESSES THAT WHEREAS:

 

A.                      the Corporation proposes to create and issue up to 42,166,666 Warrants exercisable by the holders thereof on the terms hereinafter set forth for the acquisition of common shares in the capital of the Corporation;

 

B.                      the Corporation is duly authorized to create and issue the Warrants to be issued as herein provided;

 

C.                      all things necessary have been done and performed to make the Warrants, when certified by the Warrant Agent and issued and delivered as provided in this Indenture, legal, valid and binding upon the Corporation with the benefits of and subject to the terms of this Indenture; and

 

D.                      the Warrant Agent has agreed to enter into this Indenture and to hold all rights, interests and benefits contained herein for and on behalf of those persons who become holders of Warrants from time to time issued pursuant to this Indenture;

 

NOW THEREFORE in consideration of the premises and the covenants of the parties, the Corporation hereby appoints the Warrant Agent as Warrant Agent for the Warrantholders, to hold all rights, interests and benefits contained herein for and on behalf of those persons who become holders of Warrants from time to time issued pursuant to this Indenture and it is hereby agreed and declared as follows:

 

ARTICLE ONE 

INTERPRETATION 

 

1.1    Definitions

 

 In this Indenture and in the recitals and schedules hereto, unless there is something in the subject matter or context inconsistent therewith, the following phrases and words shall have the following meanings:

 

  

-1-

  

 

	
(a)

	
"Applicable Legislation" means the provisions of any statute of the Province of British Columbia or of the federal government of Canada applicable therein, and the regulations under any such statute, relating to trust indentures or the rights, duties or obligations of corporations and trustees under trust indentures as are from time to time in force and applicable to this Indenture;

 

	
(b)

	
"board" means the Board of Directors of the Corporation;

          

	
(c)

	

"business day" means a day that is not a Saturday, Sunday, or civic or statutory holiday in the City of Vancouver, British Columbia;

 

	
(d)

	

"Corporation" means Response Biomedical Corporation and its lawful successors from time to time as provided for in section 9.4;

 

	
(e)

	

"Corporation's auditors" means the firm of chartered accountants duly appointed as auditors of the Corporation from time to time;

 

	
(f)

	

"Convertible Security" means a security of the Corporation (other than the Warrants) or any other issuer convertible into or exchangeable for or otherwise carrying the right to acquire Shares;

 

	
(g)

	

"Co-transfer Agent" has the meaning given in section 2.1;

 

	

(h)

  

	
 

	
"counsel" means a barrister or solicitor (who may be an employee of the Corporation) or a firm of barristers and solicitors (who may be counsel for the Corporation) in both cases acceptable to the Warrant Agent;

 

	

(i)

  

	
 

	
"Current Market Price" of the Shares at any date means the weighted average trading price of the Shares on the Toronto Stock Exchange or, if the Shares are not then listed on the Toronto Stock Exchange, on such other Canadian or United States stock exchange as may be selected for that purpose by the board, or, if the Shares are not then listed on any Canadian or United States stock exchange, in the over-the-counter market, during the ten consecutive trading days ending on a date which is the fifth trading day before such date; provided that the weighted average trading price shall be determined by dividing that aggregate sale price of all Shares sold on the said exchange or market, as the case may be, during the said ten consecutive trading days by the total number of Shares so sold; and provided further that, if the Shares are not listed and posted for trading on any stock exchange in Canada or the United States or traded in the over-the-counter market, the Current Market Price shall be determined by the board of directors in accordance with generally accepted accounting principles;

 

	
(j)  

	
"director" means a director of the Corporation for the time being, and reference without more to action by the directors means action by the directors of the Corporation as a board or, whenever duly empowered, action by an executive committee of the board, in each case by resolution duly passed;

 

	

(k) 

	
 

	
"dividends" means dividends or distributions (payable in cash or in securities, property or assets of equivalent value) declared payable on the Shares;

 

	
(l)  

	
"dividends paid in the ordinary course" means such dividends or distributions declared payable on a Share in any fiscal year of the Corporation to the extent that such dividends or distributions in the aggregate do not exceed 5% of the applicable Exercise Price and for such purposes the amount of any dividends or distributions paid in other than cash or shares shall be the fair market value of such dividends or distributions as determined by the directors;

  

-2-

  

 

	
(m)

	
"Exercise Date" with respect to any Warrant means the date on which the Warrant Certificate evidencing such Warrant is duly surrendered in accordance with the provisions of section 4.1;

 

	
(n)

	
"Exercise Number" at any time, means that number of Shares that Warrantholders are entitled to receive from time to time for each Warrant held upon exercise of the rights attached to the Warrant as that number may be adjusted by Article Five hereof and that number, as at the date hereof, is equal to one Share for each Warrant;

 

	
(o)

	
"Exercise Price" has the meaning given in section 2.2;

 

	
(p)

	

"Exercise Period" means the period commencing on the date the Warrants are issued in accordance with Section 2.1 and ending at 4:00 p.m. (Vancouver time) on the Expiry Date;

 

	
(q)

	

"Expiry Date" means 4:00 pm (Vancouver time) on May 21, 2011;

 

	
(r)

	

"Extraordinary Resolution" means an extraordinary resolution of Warrantholders as defined in Section 7.12 and includes a written instrument signed by Warrantholders pursuant to the provisions of Section 7.17;

 

	
(s)

	

"person" means an individual, a corporation, a partnership, a trust or any unincorporated organization, and words importing persons have a similar meaning;

 

	
(t)

	

"Registrar" means a registrar, from time to time, of the Warrants appointed pursuant to subsection 3.4(1);

 

	
(u)

	

"Registrar" means a registrar, from time to time, of the Warrants appointed pursuant to subsection 3.4(1);

 

	
(v)

	

"Regulation D" means Regulation D under the U.S. Securities Act;

 

	
(w)

	
"Shares" means common shares without par value in the capital of the Corporation, provided that if the exercise rights are subsequently adjusted or altered pursuant to subsection 5.2(4) or (5), "Shares" shall thereafter mean the shares or other securities or property that a Warrantholder is entitled to on an exchange after the adjustment;

 

	
(x)

	

"shareholder" means an owner of record of one or more Shares or shares of any other class or series of the Corporation;

 

	
(y)

	

"this Warrant Indenture", "this Indenture", "herein", "hereby" and similar expressions mean or refer to this Warrant Indenture and any indenture, deed or instrument supplemental or ancillary hereto; and the expressions "Article", "section", "subsection", "paragraph" or "clause" followed by a number or letter mean and refer to the specified Article, section, subsection, paragraph or clause of this Indenture;

 

	
(z)

	

"trading day" with respect to a stock exchange means a day on which Shares may be traded through the facilities of such stock exchange, and with respect to the over-the-counter market means a day on which Shares may be traded through facilities of such over-the-counter market;

 

  

-3-

  

 

	
  

	
(aa)

	
"Transfer Agent" means the transfer agent for the time being of the Shares;

	
  

	
(bb)

	
"United States" means the United States of America, its territories and possessions, any state of the United States and the District of Columbia;

 

	
  

	
(cc)

	"U.S. Person" means a U.S. person as that term is defined in Regulation S;

 

	
  

	
(dd)

	"U.S. Securities Act" means the United States Securities Act of 1933, as amended;

 

	
  

	
(ee)

	"Warrant Agent" means Computershare Trust Company of Canada, or any lawful successor thereto in the trusts hereby created including through the operation of section 10.9;

 

	
  

	
(ff)

	
"Warrant Certificates" means certificates substantially in the form attached as Schedule "A" hereto or such other form as may be approved under subsection 2.3(1) evidencing Warrants;

 

	
  

	
(gg)

	
"Warrantholders" or "holders" means the registered holders of Warrants;

 

	
  

	
(hh)

	

"Warrants" means the warrants authorized to be created by the Corporation under section 2.1 and issued and certified under this Indenture entitling the holders thereof to acquire Shares and includes warrants and rights evidenced by Warrant Certificates; and

 

	
  

	
(hh)

	

"Warrants" means the warrants authorized to be created by the Corporation under section 2.1 and issued and certified under this Indenture entitling the holders thereof to acquire Shares and includes warrants and rights evidenced by Warrant Certificates; and

 

	
  

	
(ii)

	

"written order of the Corporation", "written direction of the Corporation", "written request of the Corporation", "written consent of the Corporation" and "certificate of the Corporation" mean respectively a written order, request, consent and certificate signed in the name of the Corporation by any one director or officer and may consist of one or more instruments so executed.

 

1.2                    Words Importing the Singular and Gender

 

Words importing the singular include the plural and vice versa and words importing a particular gender include all genders.

 

1.3                    Interpretation Not Affected by Headings

 

The division of this Indenture into Articles, sections, subsections and paragraphs, the provision of a table of contents and the insertion of headings are for convenience of reference only and shall not affect the construction or interpretation of this Indenture.

 

1.4                    Day Not a Business Dav

 

In the event that the Expiry Date or any day on or before which any action is required to be taken hereunder is not a business day, then the Expiry Date shall be on or the action shall be required to be taken on or before the next succeeding day that is a business day.

 

1.5                    Time of the Essence

 

Time shall be of the essence in all respects in this Indenture, the Warrants and the Warrant Certificates.

 

 

-4-

 

 

1.6.  Currency

 

Except as otherwise stated, all dollar amounts herein are expressed in lawful money of Canada.

 

1.7.   Applicable Law

 

This Indenture, the Warrants and the Warrant Certificates shall be govemed by, construed and enforced in accordance with the laws of the Province of British Columbia and the federal laws of Canada applicable therein and shall be treated in all respects as British Columbia contracts.

 

1.8    English Language

 

The parties hereto have declared that they have required that this Indenture and all other documents related hereto be in the English language.

 

1.9  Meaning of "outstanding" for Certain Purposes

 

Except as provided in section 4.7, every Warrant Certificate certified and delivered by the hereunder shall be deemed to be outstanding until it has been surrendered to the Warrant to this Indenture, provided however that:

 

	
(a)     

	
where the number of Warrants that has been exercised is less than the number represented by a Warrant Certificate surrendered in connection with the exercise, only the unexercised Warrants shall be deemed to be outstanding;

 

	
(b)      

	
where a Warrant Certificate has been issued in substitution for a Warrant Certificate that has been lost, stolen or destroyed, only the latest Warrant Certificate issued shall be counted for the purpose of determining the Warrants outstanding; and

 

	
(c)       

	
for the purpose of any provision of this Indenture entitling holders of outstanding Warrants to vote, sign consents, requests or other instruments or take any other action under this Indenture, Warrants owned legally or equitably by the Corporation or any subsidiary of the Corporation shall be disregarded, except that:

 

	
  

	
(i)

	
for the purpose of determining whether the Warrant Agent shall be protected in relying on any vote, consent, request or other instrument or other action, only the Warrants of which the Warrant Agent has notice that they are so owned shall be so disregarded; and

 

	
  

	
(ii)

	
Warrants so owned that have been pledged in good faith other than to the Corporation or any subsidiary of the Corporation shall not be so disregarded if the pledgee establishes to the satisfaction of the Warrant Agent the pledgee's right to vote the Warrants in the pledgee's discretion free from the control of the Corporation or any subsidiary of the Corporation pursuant to the terms of the pledge.

                 

  

-5-

  

 

ARTICLE TWO

 

ISSUE OF WARRANTS

 

2.1           Creation and Issue of Warrants

 

A total of up to 42,166,667 Warrants, each entitling the holder thereof to acquire from the Corporation on exercise thereof, subject to adjustment as provided for in section 2.2 and Article Five, one Share, are hereby authorized to be created and issued by the Corporation upon the terms and conditions herein set forth and the Warrant Certificates shall be executed by the Corporation and certified by or on behalf of the Warrant Agent, or by such other person as the Corporation may from time to time appoint with the approval of the Warrant Agent (hereinafter referred to as the "Co-transfer Agent"), upon the written direction of the Corporation and delivered by the Warrant Agent in accordance with section 2.3.

 

2.2                    Terms of Warrants

 

(1)                     Subject to the provisions of Articles Four and Five, each of the Warrants issued under section 2.1 shall entitle the holder thereof to acquire from the Corporation, the number of Shares equal to the Exercise Number at any time during the Exercise Period, at an exercise price of $0.25 per Warrant (the "Exercise Price").

 

	  	
(2)

	
Fractional Warrants shall not be issued or otherwise provided for.

 

2.2                    Warrant Certificates

 

(1)  Warrants shall be issued in registered form only and shall be evidenced only by Warrant Certificates, which shall be substantially in the form attached as Schedule "A" hereto, with such additions, variations or omissions as may be permitted by the provisions of this Indenture or may from time to time be agreed upon between the Corporation and the Warrant Agent, shall be dated as of the date of the receipt by the Warrant Agent of the written direction referred to in section 2.1 above (regardless of their actual dates of issue), shall bear such legends and distinguishing letters and numbers as the Corporation shall, with the approval of the W an•ant Agent, prescribe, and shall be issuable in any denomination excluding fractions.

 

(2)                     The Warrant Agent understands and acknowledges that the Warrants and the Shares issuable upon exercise thereof have not been and will not be registered under the U.S. Securities Act, or under any state securities laws, and that the Corporation has no present intention to effect such registration. Each Warrant Certificate originally issued to a person in the United States or to, or for the account or benefit of, a U.S. Person, as well as all certificates issued in exchange therefor or in substitution thereof, will bear a legend to the following effect:

 

"THE SECURITIES REPRESENTED HEREBY AND THE SECURITIES ISSUABLE UPON EXERCISE THEREOF HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "U.S. SECURITIES ACT"). THE HOLDER HEREOF, BY PURCHASING SUCH SECURITIES, AGREES FOR THE BENEFIT OF THE CORPORATION THAT SUCH SECURITIES MAY BE OFFERED, SOLD OR OTHERWISE TRANSFERRED ONLY (A) TO THE CORPORATION,(B)       OUTSIDE THE UNITED STATES IN COMPLIANCE WITH RULE 904 OF REGULATION S UNDER THE U.S. SECURITIES ACT AND IN COMPLIANCE WITH APPLICABLE LOCAL LAWS AND REGULATIONS, (C) IN COMPLIANCE WITH THE EXEMPTION FROM REGISTRATION UNDER THE U.S. SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER, IF AVAILABLE, AND IN COMPLIANCE WITH ANY APPLICABLE STATE SECURITIES LAWS, OR (D) IN A TRANSACTION THAT DOES NOT REQUIRE REGISTRATION UNDER THE U.S. SECURITIES ACT OR ANY APPLICABLE STATE SECURITIES LAWS. DELIVERY OF THIS CERTIFICATE MAY NOT CONSTITUTE "GOOD DELIVERY" IN SETTLEMENT OF TRANSACTIONS ON STOCK EXCHANGES IN CANADA.";

 

provided that if the Warrants are being sold in compliance with the requirements of Rule 904 of Regulation S and in compliance with Canadian local laws and regulations, and provided that the Corporation is a "foreign issuer" (within the meaning of Regulation S) at the time of sale, the above legend may be removed by providing a declaration to the Warrant Agent or Registrar, as applicable, in the form attached hereto as Schedule "B" (or such other evidence of exemption as the Corporation or the Warrant Agent or Registrar, as applicable may require from time to time, including but not limited to an opinion of U.S. counsel), and the Corporation shall use its commercially reasonable best efforts to cause the removal of such legend within three (3) business days of the receipt of such written declaration; and

 

provided further that if any such Warrants are being sold pursuant to Rule 144 under the U.S. Securities Act, if available, and in compliance with any applicable state securities laws, the legend may be removed by delivery to the Corporation and the Warrant Agent or Registrar, as applicable, of an opinion of counsel of recognized standing in form and substance reasonably satisfactory to the Corporation and the Warrant Agent or Registrar, as applicable, to the effect that such legend is no longer required under applicable requirements of the U.S. Securities Act or state securities laws, and the Corporation shall use its commercially reasonable best efforts to cause the removal of such legend within three (3) business days of the receipt of such opinion.

 

(3)           The Warrant Agent shall maintain and make available to the Corporation lists of all persons who are entitled to Warrant Certificates, and the Warrant Agent shall mail or deliver Warrant Certificates evidencing whole Warrants to those persons.

 

2.4                     Issue in Substitution for Lost Warrants

 

(1)           If a Warrant Certificate becomes mutilated or is lost, destroyed or stolen, the Corporation, subject to applicable law and to subsection 2.4(2), shall issue and thereupon the Warrant Agent shall countersign or certify and deliver a new Warrant Certificate of like date and tenor as the one mutilated, lost, destroyed or stolen upon surrender of and in place of and upon cancellation of the mutilated Warrant Certificate or in lieu of and in substitution for the lost, destroyed or stolen Warrant Certificate and the substituted Warrant Certificate shall be in a form approved by the Warrant Agent and shall be entitled to the benefit hereof, rank equally in accordance with its terms with all other Warrant Certificates issued or to be issued hereunder and will bear the same legends as the Warrant Certificate being replaced. Any new Warrant Certificate issued pursuant to this Section 2.4 shall contain all restrictive legends required by all applicable securities legislation and requirements of regulatory authorities.

 

(2)           The applicant for the issue of a new Warrant Certificate pursuant to this section 2.4 shall bear the cost of the issue thereof and in case of loss, destruction or theft shall, as a condition precedent to the issue thereof, furnish to the Corporation and to the Warrant Agent such evidence of ownership and of the loss, destruction or theft of the Warrant Certificate so lost, destroyed or stolen as shall be satisfactory to the Corporation and to the Warrant Agent in their discretion, and if required, furnish an indemnity and surety bond in amount and form satisfactory to them in their discretion, and pay the reasonable charges of the Corporation and the Warrant Agent in connection therewith.

 

  

-6-

  

 

2.5                     Warrantholder not a Shareholder

 

Nothing in this Indenture or in the holding of a Warrant evidenced by a Warrant Certificate, or otherwise, shall be construed as conferring upon a Warrantholder any right or interest whatsoever as a shareholder of the Corporation, including but not limited to the right to vote at, to receive notice of, or to attend meetings of shareholders or any other proceedings of the Corporation or the right to receive any dividend and other distribution.

 

2.6                     Warrants to Rank Pari Passu

 

Except as otherwise provided herein, a Warrant shall rank pari passu with all other Warrants issued under this Indenture, whatever may be the actual date of issue of the Warrant Certificates that evidence them.

 

2.7                     Signing of Warrant Certificates

 

The Warrant Certificates shall be signed by any one director or officer of the Corporation and need not be under the seal of the Corporation. The signatures of any of the director or officer may be mechanically reproduced in facsimile and Warrant Certificates bearing those facsimile signatures shall be binding upon the Corporation as if they had been manually signed by the director or officer. Notwithstanding that any of the persons whose manual or facsimile signature appears on any Warrant Certificate as an officer or director may no longer hold office at the date of the Warrant Certificate or at the date of certification or delivery thereof, any Warrant Certificate signed as aforesaid shall, subject to section 2.8, be valid and binding upon the Corporation.

 

2.8                     Certification by the Warrant Agent or Co-transfer Agent

 

(1)            The Warrant Agent shall certify Warrant Certificates upon the written direction of the Corporation. No Warrant Certificate shall be issued or, if issued, shall be valid or entitle the holder to the benefit hereof until it has been certified by manual signature by or on behalf of the Warrant Agent, or by manual signature by the Co-transfer Agent, substantially in the form approved by the Corporation and the Warrant Agent and the certification by the Wan-ant Agent or by the Co-transfer Agent upon any Warrant Certificate shall be conclusive evidence as against the Corporation that the Warrant Certificate so certified has been duly issued hereunder and that the holder is entitled to the attributes and characteristics of the Warrants provided for in this Indenture.

 

(2)            The certification of the Warrant Agent or of the Co-transfer Agent on Warrant Certificates issued hereunder shall not be construed as a representation or warranty by the Warrant Agent or by the Co-transfer Agent as to the validity of this Indenture or of the Warrant Certificates (except the due certification thereof) and the Warrant Agent or the Co-transfer Agent shall in no respect be liable or answerable for the use made of the Warrants or any of them or of the consideration therefor, except as otherwise specified herein.

 

ARTICLE THREE

EXCHANGE AND OWNERSHIP OF WARRANTS 

 

3.1          Exchange of Warrants

 

(1)                     Upon the request of a Warrantholder one or more Warrant Certificates may, upon compliance with the reasonable requirements of the Warrant Agent, be exchanged for one or more Warrant Certificates of different denominations evidencing, in the aggregate, the same number of Warrants as the Warrant Certificate or Warrant Certificates being exchanged. Any new Warrant Certificate issued pursuant to this Section 3.1 shall contain all restrictive legends required by all applicable securities legislation and requirements of regulatory authorities.

 

  

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(2) Warrants may be exchanged only at the principal transfer offices of the Warrant Agent in the Cities of Vancouver or Toronto, or at the principal transfer office of the Co-transfer Agent designated by the Corporation or at any other place that is designated by the Corporation with the approval of the Warrant Agent. Any Warrant Certificates tendered for exchange shall be surrendered to the Warrant Agent or to its agent or the Co-transfer Agent and, upon issuance of new Warrants in exchange therefor, cancelled. The Corporation shall sign all Warrant Certificates necessary to carry out exchanges as aforesaid and those Warrant Certificates shall be certified by or on behalf of the Warrant Agent.

 

3.2                    Charges for Exchange or Transfer

 

For each Warrant transferred or Warrant Certificate exchanged, the Warrant Agent or the Co-transfer Agent except as otherwise herein provided, may charge a reasonable sum in respect of each Warrant transferred or Warrant Certificate exchanged. The party requesting the transfer or exchange, as a condition precedent thereto, shall pay such charges and shall pay or reimburse the Warrant Agent, the Co-transfer Agent or the Corporation for all exigible transfer taxes or governmental or other similar transfer charges required to be paid in connection therewith.

 

3.3                    Ownership of Warrants

 

The Corporation and the Warrant Agent and their respective agents may deem and treat the person whose name any Warrant is registered as the absolute owner of that Warrant for all purposes, and the Corporation and the Warrant Agent and their respective agents shall not be affected by any notice or knowledge to the contrary except as required by statute or by order of a court of competent jurisdiction. The registered holder of any Warrant shall be entitled to the rights evidenced by that Warrant free from all equities or rights of set-off or counterclaim between the Corporation and the original or any intermediate holder thereof and all persons may act accordingly and the receipt from any holder for the Shares, Warrants or monies obtainable pursuant thereto shall be a good discharge to the Corporation and the Warrant Agent for the same and neither the Corporation nor the Warrant Agent shall be bound to inquire into the title of any such registered holder.

 

3.4                    Registration and Transfer of Warrants

 

(1)           The Corporation hereby appoints the Warrant Agent as registrar of the Warrants. The Corporation may hereafter, with the consent of the Warrant Agent, appoint one or more other additional registrars of the Warrants, including any Co-transfer Agent.

 

(2)           The Corporation shall cause a register to be kept by the Warrant Agent, and the Warrant Agent agrees to maintain such a register, at its principal transfer office in the cities of Vancouver and Toronto, in which shall be entered alphabetically the names and addresses of the holders of Warrants and other particulars of the Warrants held by them respectively and all transfers of Warrants and the date and other particulars of each transfer. Such registration shall be noted on the Warrant Certificates by the Warrant Agent or other Registrar. The Corporation shall also cause a branch register containing the foregoing information to be maintained by the Warrant Agent in such other place or places as the Corporation with the approval of the Warrant Agent may designate.

 

  

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(3)           No transfer of a Warrant shall be valid unless made on any one of the registers upon surrender of the Warrant Certificate to the Warrant Agent or other Registrar accompanied by a written instrument of transfer in form satisfactory to the Warrant Agent or other Registrar executed by the registered holder or his executors, administrator or other legal representatives or his attorney duly appointed by an instrument in writing in form and execution satisfactory to the Warrant Agent or other Registrar and upon compliance with such reasonable requirements as the Warrant Agent or other Registrar may prescribe.

 

(4)           The registers referred to in this section 3.4 shall at all reasonable times be open for inspection by the Corporation, by the Warrant Agent and by any Warrantholder.

 

(5)           The registered holder of a Warrant may at any time and from time to time have the registration of the Warrant transferred from the register in which the registration thereof appears to another authorized register upon compliance with such reasonable requirements as the Warrant Agent or other Registrar may prescribe.

 

(6)           Subject to subsection 3.4(7), the holder of a Warrant may at any time and from time to time have the Warrant transferred at any of the places at which a register of transfers is kept pursuant to this section 3.4 in accordance with the conditions herein, such reasonable requirements as the Registrar may prescribe and all applicable securities legislation and requirements of regulatory authorities, provided however that the transfer of Warrants shall be accompanied by a transfer form.

 

(7)           Except as required by law, neither the Warrant Agent nor any other Registrar nor the Corporation shall be charged with notice of or be bound to see to the execution of any trust, whether express, implied or constructive, in respect of any Warrant and may transfer any Warrant on the written direction of the person registered as the holder thereof, whether named as Warrant Agent or otherwise, as though that person were the beneficial owner thereof.

 

(8)           The register required to be kept in the Cities of Vancouver and Toronto shall not be closed at any time. In the event that an office of the Warrant Agent or a Co-transfer Agent in any place is closed, notice of the closing shall be given, in the manner provided in section 11.2, to the Warrantholders.

 

(9)           The Warrant Agent and every other Registrar shall from time to time, when requested by the Corporation, or by the Warrant Agent furnish the Corporation, or the Warrant Agent, as the case may be, with a list of names and addresses of the holders of Warrants entered on the register kept by such Warrant Agent or other Registrar showing the number of Warrants held by each such holder.

 

(10)           Warrants bearing the legend set forth in subsection 2.3(2) are "restricted securities" as such term is defined in Rule 144 under the U.S. Securities Act and shall not be offered, sold, pledged or otherwise transferred, except (a) to the Corporation, (b) outside the United States in a transaction meeting the requirements of Rule 904 of Regulation S and in compliance with applicable local laws and regulations, (c) in compliance with the exemption from the registration requirements under the U.S. Securities Act provided by Rule 144 thereunder, if available, and in accordance with any applicable state securities laws, or (d) in a transaction that does not require registration under the U.S. Securities Act or any applicable state laws and regulations governing the offer and sale of securities. Notwithstanding anything contained in this Indenture, or the Warrant Certificate, the Warrant Agent or Registrar, as applicable: (i) shall only register a transfer of Warrants imprinted with the legend specified in subsection 2.3(2) if the Warrant Agent or Registrar, as applicable, has received, in addition to a properly completed and executed transfer form in the form included as Appendix "B" to the Warrant Certificate, either (A) in the case of a transfer pursuant to (b) above, a properly completed and executed declaration in the form attached as Schedule "B" to the Indenture, or as otherwise prescribed by the Corporation or the Warrant Agent or Registrar, as applicable, at any time the Corporation is a "foreign issuer" as defined in Regulation S or (B) in the case of a transfer pursuant to (c) or (d), an opinion of counsel or other evidence satisfactory to the Corporation and the Warrant Agent or Registrar, as applicable, acting reasonably, to the effect that the transfer of such Warrants is in compliance with applicable United States federal and state securities laws, and the Corporation has provided a direction to the Warrant Agent or Registrar, as applicable, to proceed with such registration including, if deemed required by the Corporation, instructions to imprint the Warrants issued to such transferee with the legend specified in subsection 2.3(2); and (ii) shall not register any transfer of Warrants if it has reasonable grounds to believe that such transfer is otherwise not in accordance with applicable law.

 

  

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ARTICLE FOUR

EXERCISE OF WARRANTS 

 

4.1 Method of Exercise of Warrants

 

(I) The holder of any Warrants may, during the Exercise Period, exercise the right thereby conferred to acquire Shares by surrendering to the Warrant Agent at its principal transfer office in the Cities of Vancouver or Toronto, or at any other place or places that may be designated by the Corporation with the approval of the Warrant Agent, or to the Co-transfer Agent at its principal transfer office designated by the Corporation, with the approval of the Warrant Agent, a Warrant Certificate or Warrant Certificates representing the Warrants held by such holder that are to be exercised, together with: (i) a duly completed and executed exercise form in the form set out in Appendix "A" to Schedule "A" hereto; and (ii) a certified cheque, bank draft or money order in lawful money of Canada payable to or to the order of the Corporation in an amount equal to the Exercise Price multiplied by the number of Warrants being exercised. The Warrants shall only be deemed to have been surrendered upon personal delivery thereof to, or if sent by mail or other means of transmission upon actual receipt thereof by, the Warrant Agent or the Co-transfer Agent at the office specified in this section. Any such exercise shall be subject to the holder providing such assurances and executing such documents as may, in the reasonable opinion of the Corporation or the Warrant Agent or the Co-transfer Agent, be required to ensure compliance with all applicable securities legislation.

 

(2)           Any exercise form delivered pursuant to subsection 4.1(1) shall be signed by the Warrantholder or the Warrantholder's executors or administrators or other legal representatives or an attorney of the Warrantholder duly appointed by an instrument in writing satisfactory to the Warrant Agent or the Co-transfer Agent, as the case may be. The exercise form attached to the Warrant Certificate shall specify the number of Warrants being exercised, the person or persons in whose name or names the Shares to be issued upon exercise are to be issued, the person's or persons' address or addresses and the number of Shares to be issued to each person if more than one is so specified. If any of the Shares to be acquired are to be issued to a person or persons other than the Warrantholder, the Warrantholder shall pay to the Warrant Agent or to its agent all exigible transfer taxes or governmental or other charges required to be paid in respect of the transfer of the Shares and the Corporation will not be required to issue or deliver any certificate evidencing any Shares unless or until that amount has been so paid or the Warrantholder has established to the satisfaction of the Corporation that the taxes and charges have been paid or that no taxes or charges are owing.

 

(3)           The Warrants and the Shares issuable upon exercise thereof have not been and will not be registered under the U.S. Securities Act or the securities laws of any state of the United States, and the Warrants may not be exercised within the United States or by or on behalf of any U.S. Person unless an exemption from the registration requirements of the U.S. Securities Act and the securities laws of all applicable states is available. The Warrant Agent shall not issue or register Shares or the certificates representing such Shares unless the holder has executed and delivered to the Warrant Agent an exercise form included as Appendix "A" to the Warrant Certificate set forth in Schedule "A" hereto, and the Warrantholder provides:

 

  

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(a)

	
a written certification that the Warrantholder at the time of exercise of the Warrants (i) is not in the United States; (ii) is not a U.S. Person and is not exercising the Warrants on behalf of a U.S. Person or a person in the United States; and (iii) did not execute or deliver the exercise form for such security in the United States;

 

	
  

	
(b)

	
a written certification that the Warrantholder (i) purchased the Warrants directly from the Corporation pursuant to a subscription agreement for U.S. purchasers for the purchase of units of the Corporation; (ii) is exercising the Warrants solely for its own account or for the account of the original beneficial purchaser, if any; and (iii) each of it and any beneficial purchaser was on the date the Warrants were purchased from the Corporation, and is on the date of exercise of the Warrants, an "accredited investor" (as defined in Rule 501(a) of Regulation D under the U.S. Securities Act); or

 

	
  

	
(c)

	
an opinion of counsel of recognized standing in form and substance reasonably satisfactory to the Corporation to the effect that the exercise of the Warrants and the issuance of the Shares does not require registration under the U.S. Securities Act or any applicable state securities laws.

 

The Warrant Agent may rely solely on the exercise form included in the Warrant Certificate and any materials received pursuant to subsection (c) above, if applicable, in determining whether the holder has complied with all applicable securities legislation.

 

(4)          No certificates representing Shares will be registered or delivered to an address in the United States unless the Warrantholder complies with the requirements set forth in subsection 4.1(3)(b) or (c) and, in the case of subsection (c), the Corporation has confirmed in writing to the Warrant Agent that the opinion of counsel is satisfactory to the Corporation. The certificates representing any Shares issued in connection with the exercise of Warrants pursuant to clause (b) or clause (c) of subsection 4.1(3) shall bear the legend set forth in subsection 4.8 of this Indenture. Certificates representing Shares issued in connection with the exercise of Warrants pursuant to clause (a) of this subsection 4.1(3) shall not bear the legend set forth in subsection 4.8.

 

(5)          If at the time of exercise of the Warrants there remain restrictions on resale under applicable securities laws on the Shares acquired, the Corporation may, on the advice of counsel, endorse the certificates representing the Shares and Warrants with respect to those restrictions.

 

(6)          The Warrant Agent shall record the particulars of the Warrants exercised which particulars shall include the names and addresses of the persons who become holders of Shares, if any, on exercise, the Exercise Date and the Exercise Price. Within five business days of each Exercise Date, the Warrant Agent shall provide such particulars in writing to the Corporation and the Transfer Agent.

 

4.2                     Effect of Exercise of Warrants

 

(1) Upon exercise of the Warrants in accordance with section 4.1, and subject to sections 2.2, 4.3, 4.4, and 5.4, the Corporation shall cause the holder thereof to be entered forthwith on its register of shareholders as the holder of the Shares and the Shares so acquired shall be deemed to have been issued, and the person or persons to whom those Shares are to be issued shall be deemed to have become the shareholder or shareholders of record of the Shares on the Exercise Date unless the register of the Corporation shall be closed on that date, in which case the Shares so acquired shall be deemed to be issued and the person or persons shall be deemed to become the shareholder or shareholders of record of the Shares on the date on which the register is reopened and the Shares shall be issued on the later date.

 

  

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(2) Upon the due exercise of the Warrants as aforesaid, the Corporation shall, forthwith cause to be delivered to the Warrant Agent as agent for the person or persons in whose name or names the Shares so acquired are to be issued as specified in the exercise form(s) attached to the Warrant Certificates, certificate(s) for the appropriate number of Shares that the Warrantholders are entitled to pursuant to the Warrants surrendered. Upon receipt by the Warrant Agent of such certificate(s) the Warrant Agent shall cause such certificates to be delivered forthwith in accordance with the written delivery instructions of the holder, or in the absence of such instructions, by registered mail without charge therefor, to the person or persons in whose name or names the Shares have been issued at the addresses specified in the exercise form(s).

 

4.3                    Partial Exercise of Warrants

 

A Warrantholder may exercise any number of Warrants up to the aggregate number of Warrants represented by the Warrant Certificates surrendered. In the event of any exercise of a number of Warrants less than the number which the holder is entitled to exercise, the holder of the Warrants upon such exercise shall be entitled to receive, without charge therefor, a new Warrant Certificate in respect of the balance of the Warrants represented by the surrendered Warrant Certificate and which were not then exercised and the Warrant Agent shall issue a new Warrant Certificate upon surrender of such Warrant Certificate, if satisfied that the new Warrant Certificate is properly issuable.

 

4.4                    No Fractional Shares or Warrants

 

Notwithstanding anything herein contained including any adjustment provided for in section 2.2 or Article Five, the Corporation shall not be obliged to issue any fractional Shares or to distribute certificates which evidence fractional Shares upon the exercise of one or more Warrants. To the extent that the holder of one or more Warrants would otherwise have been entitled to receive on the exercise or partial exercise thereof a fraction of a Share that holder may exercise that right in respect of the fraction only in combination with other Warrants that in the aggregate entitle the holder to acquire a whole number of Shares. If not so exercised, the Corporation shall not pay any amounts to the holder in satisfaction of the right to otherwise have received a fraction of a Share.

 

4.5                    Accounting and Recording

 

The Warrant Agent shall record the particulars of the Warrants exercised, including the name or names and addresses of the persons who become holders of Shares on exercise and the Exercise Date. Within five business days of each Exercise Date, upon request by the Corporation, the Warrant Agent shall provide those particulars in writing to the Corporation.

 

4,6                     Cancellation of Surrendered Warrants

 

All Warrant Certificates surrendered to the Warrant Agent shall be cancelled by the Warrant Agent and, upon request therefor of the Corporation, the Warrant Agent shall furnish the Corporation with a certificate identifying the Warrant Certificates so cancelled and the number of Shares which have been issued pursuant to each.

 

  

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4.7                     Expiration of Warrants

 

After the expiry of the Exercise Period, all rights under any Warrant in respect of which the right of subscription and payment herein and therein provided for shall not theretofore have been exercised shall wholly cease and terminate and the Warrant shall be void and of no effect.

 

4.8                     Share Certificates

 

Certificates representing any Shares issued pursuant to subparagraphs 4.1(3)(b) or (c) will bear the following legend:

 

"THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "U.S. SECURITIES ACT"). THE HOLDER HEREOF, BY PURCHASING SUCH SECURITIES, AGREES FOR THE BENEFIT OF THE CORPORATION THAT SUCH SECURITIES MAY BE OFFERED, SOLD OR OTHERWISE TRANSFERRED ONLY (A) TO THE CORPORATION, (B) OUTSIDE THE UNITED STATES IN COMPLIANCE WITH RULE 904 OF REGULATION S UNDER THE U.S. SECURITIES ACT AND IN COMPLIANCE WITH APPLICABLE LOCAL LAWS AND REGULATIONS, (C) IN COMPLIANCE WITH THE EXEMPTION FROM REGISTRATION UNDER THE U.S. SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER, IF AVAILABLE, AND IN COMPLIANCE WITH ANY APPLICABLE STATE SECURITIES LAWS, OR (D) IN ' A TRANSACTION THAT DOES NOT REQUIRE REGISTRATION UNDER THE U.S. SECURITIES ACT OR ANY APPLICABLE STATE SECURITIES LAWS. DELIVERY OF THIS CERTIFICATE MAY NOT CONSTITUTE "GOOD DELIVERY" IN SETTLEMENT OF TRANSACTIONS ON STOCK EXCHANGES IN CANADA."

 

ARTICLE FIVE

 

ADJUSTMENT OF EXERCISE NUMBER 

 

5.1 Definitions

 

In this Article the terms "record date" and "effective date" where used herein shall mean 4:00 p.m. (Vancouver time) on the relevant date.

 

5.2                     Adjustment of Exercise Number

 

The Exercise Number (or the number and kind of Shares or securities to be received upon exercise in the case of subsections 5.2(4) and 5.2(5) below) shall be subject to adjustment from time to time in the events and in the manner provided in section 5.3 and as follows:

 

(1)          If during the Exercise Period the Corporation:

 

	
(a)  

	
fixes the record date for the issue, or issues to, all or substantially all of the holders of the Shares by way of a stock dividend or otherwise Shares or Convertible Securities, other than (i) the issue from time to time of Shares or Convertible Securities by way of stock dividend to shareholders who elect to receive Shares or Convertible Securities in lieu of cash dividends in the ordinary course or pursuant to a dividend reinvestment plan or (ii) as dividends paid in the ordinary course; or

 

  

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(b)           subdivides or redivides its outstanding Shares into a greater number of Shares; or

 

(c)  combines, consolidates or reduces its outstanding Shares into a smaller number of Shares (any of those events being herein called a "Share Reorganization"), 

 

the Exercise Number shall be adjusted effective immediately after the record date at which the holders of Shares are determined for the purposes of the Share Reorganization or the effective date of the Share Reorganization if no record date is fixed to a number that is the product of (1) the Exercise Number in effect on the record date and (2) a fraction:

 

	
  

	
(i)

	
the numerator of which shall be the number of Shares outstanding after giving effect to the Share Reorganization; and

 

	
  

	
(ii)

	
the denominator of which shall be the number of Shares outstanding on the record date, or effective date if no record date is fixed, before giving effect to the Share Reorganization.

 

For the purposes of determining the number of Shares outstanding at any particular time for the purpose of this subsection 5.2(1) there shall be included that number of Shares which would have resulted from the conversion at that time of all outstanding Convertible Securities.

 

(2) If during the Exercise Period the Corporation fixes a record date for the issuance of rights, options or warrants to all or substantially all the holders of the Shares pursuant to which those holders are entitled to subscribe for, purchase or otherwise acquire Shares or Convertible Securities within a period of not more than 45 days from such record date at a price per share, or at a conversion price per share, of less than 95% of the Current Market Price on such record date (any such issuance being herein called a "Rights Offering" and Shares that may be acquired in exercise of the Rights Offering, or upon conversion of the Convertible Securities offered by the Rights Offering, being herein called the "Offered Shares"), the Exercise Number shall be adjusted effective immediately after the applicable record date to an Exercise Number that is the product of (1) the Exercise Number in effect on the record date and (2) a fraction:

 

	
  

	
(a)

	
the numerator of which shall be the sum of (i) the number of Shares outstanding on the record date plus (ii) the number of Offered Shares offered pursuant to the Rights Offering or the maximum number of Offered Shares into which the Convertible Securities so offered pursuant to the Rights Offering may be converted, as the case may be; and

 

	
  

	
(b)

	
the denominator of which shall be the sum of:  

 

	
  

	
(i)

	
the numerator of which shall be the number of Shares outstanding after giving effect to the Share Reorganization; and

 

	
  

	
(ii)

	the denominator of which shall be the number of Shares outstanding on the record date, or effective date if no record date is fixed, before giving effect to the Share Reorganization.

 

  

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If by the terms of the rights, options, or warrants referred to in this subsection 5.2(2), there is more than one purchase, conversion or exchange price per Offered Share, the aggregate price of the total number of additional Offered Shares offered for subscription or purchase, or the aggregate conversion or exchange price of the Convertible Securities so offered, shall be calculated for purposes of the adjustment on the basis of the lowest purchase, conversion or exchange price per Offered Share, as the case may be. Any Offered Shares owned by or held for the account of the Corporation or a subsidiary of the Corporation shall be deemed not to be outstanding for the purpose of any such computation; if all the rights, options or warrants are not so issued or if all rights, options or warrants are not exercised prior to the expiration thereof, the Exercise Number shall be readjusted to the Exercise Number in effect immediately prior to the record date, and the Exercise Number shall be further adjusted based upon the number of Offered Shares (or Convertible Securities that are convertible into Offered Shares) actually delivered upon the exercise of the rights, options or warrants, as the case may be, but subject to any other adjustment required hereunder by reason of any event arising after that record date.

 

(3) If during the Exercise Period the Corporation issues or distributes to all or substantially all the holders of Shares, (i) shares of any class other than Shares, or (ii) rights, options or warrants to acquire Shares or Convertible Securities other than rights, options or warrants exercisable within 45 days from the date of issue thereof at a price, or at a conversion price, of at least 95% of the Current Market Price at the record date for such distribution, or (iii) evidences of indebtedness, or (iv) any other cash, securities or other property or assets and that issuance or distribution does not constitute a Share Reorganization or a Rights Offering (any of those events being herein called a "Special Distribution"), the Exercise Number shall be adjusted effective immediately after the record date at which the holders of Shares are determined for purposes of the Special Distribution to an Exercise Number that is the product of (1) the Exercise Number in effect on the record date and (2) a fraction:

 

	
  

	
(a)

	
the numerator of which shall be the product of (I) the sum of the number of Shares outstanding on the record date plus the number of Shares which the Warrantholders would be entitled to receive upon exercise of all their outstanding Warrants if they were exercised on the record date and (II) the Current Market Price thereof on that date; and

 

(b)           the denominator of which shall be:

 

	
  

	
(i)

	
the product of (I) the sum of the number of Shares outstanding on the record date plus the number of Shares which the Warrantholders would be entitled to receive upon exercise of all their outstanding Warrants if they were exercised on the record date and (II) the Current Market Price thereof on the earlier of such record date and the date on which the Corporation announces its intention to make such distribution; less

 

	
  

	
(ii)

	
the aggregate fair market value, as determined by the board, and subject to the acceptance of the Toronto Stock Exchange, whose determination shall be conclusive, of the shares, rights, options, warrants, evidences of indebtedness or other assets issued or distributed in the Special Distribution.

 

Any Shares owned by or held for the account of the Corporation shall be deemed not to be outstanding for the purpose of any such computation; to the extent that the distribution of shares, rights, options, warrants, evidences of indebtedness or assets is not so made or to the extent that any rights, options or warrants so distributed are not exercised, the Exercise Number shall be readjusted to the Exercise Number that would then be in effect based upon shares, rights, options, warrants, evidences of indebtedness or assets actually distributed or based upon the number of Shares or Convertible Securities actually delivered upon the exercise of the rights, options or warrants, as the case may be, but subject to any other adjustment required hereunder by reason of any event arising after the record date.

 

  

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(4)           If during the Exercise Period there is a reorganization of the Corporation not otherwise provided for in subsection 5.2(1) or a consolidation, merger, arrangement, amalgamation or acquisition of the Corporation by, with or into another body corporate including a transaction whereby all or substantially all of the Corporation's undertaking and assets become the property of any other corporation through sale, lease, exchange or otherwise (any such event being herein called a "Capital Reorganization") any holder of a Warrant who has not exercised his right to exchange his Warrant for Shares prior to the effective date of the Capital Reorganization shall be entitled to receive and shall accept, upon the exercise of his right at any time after the effective date of the Capital Reorganization, in lieu of the number of Shares (and any other securities or properties to which holders are entitled upon exercise of the Warrants) to which he or she was theretofore entitled upon exercise of the Warrant, the aggregate amount of cash and/or the aggregate number of shares or other securities or property of the Corporation, or the continuing, successor or purchasing corporation, as the case may be, under the Capital Reorganization that the holder would have been entitled to receive as a result of the Capital Reorganization if, on the effective date thereof, he or she had been the holder of the number of Shares (and any other securities to which holders are entitled upon exercise of the Warrants) to which immediately before the transaction he or she was entitled upon exercise of the Warrants; no Capital Reorganization shall be carried into effect unless all necessary steps have been taken so that the holders of Warrants shall thereafter be entitled to receive the requisite amount of cash and/or the number of shares or other securities or property of the Corporation, or of the continuing, successor or purchasing corporation, as the case may be, under the Capital Reorganization, subject to adjustment thereafter in accordance with provisions the same, as nearly as may be possible, as those contained in this section 5.2 and in section 5.3. In addition, if necessary, as a result of any such Capital Reorganization, appropriate adjustments shall be made in the application of the provisions of this Indenture with respect to the rights and interests thereafter of the Warrantholder to the end that the provisions shall thereafter correspondingly be made applicable as nearly as may reasonably be possible in relation to any shares or other securities or property thereafter deliverable upon the exercise of the Warrants. Any such adjustments shall be made by and set forth in an indenture supplemental hereto approved by action by the directors and shall for all purposes be conclusively deemed to be an appropriate adjustment.

 

(5)           If the Corporation reclassifies or otherwise changes the outstanding Shares, the exercise right shall be adjusted effective immediately upon the reclassification becoming effective so that holders of Warrants who exercise their rights thereafter shall be entitled to receive such shares as they would have received had the Warrants been exercised immediately prior to the effective date, subject to adjustment thereafter in accordance with provisions the same, as nearly as may reasonably be possible, as those contained in this section 5.2 and in section 5.3.

 

5.3                     Subscription Rights Adjustment Rules

 

The following rules and procedures are applicable to adjustments made pursuant to section 5.2:

 

(1)           The adjustments and readjustments provided for in this Article Five are cumulative and, subject to subsection 5.3(2), apply (without duplication) to successive issues, subdivisions, combinations, consolidations, distributions and any other events that require adjustment of the Exercise Number or the number or kind of shares or securities purchasable hereunder.

 

(2)           No adjustment in the Exercise Number is required unless the adjustment will result in a change of at least 2% in the Exercise Number then in effect provided, however, that any adjustments that, except for the provisions of this subsection 5.3(2) would otherwise have been required to be made, are carried forward and taken into account in any subsequent adjustment.

 

  

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(3)           If at any time after the Exercise Period the Corporation shall take any action affecting the Shares, other than an action described in section 5.2, which in the opinion of the directors would have a material adverse effect upon the rights of Warrantholders, the Exercise Number shall be adjusted in such manner and at such time as the directors, in their sole discretion, but subject to the receipt of any necessary regulatory approvals (including the prior written consent of the Toronto Stock Exchange), determine to be equitable in the circumstances. Failure of the taking of action by the directors so as to provide for an adjustment prior to the effective date of any action by the Corporation affecting the Shares shall be deemed to be conclusive evidence that the directors have determined that it is equitable to make no adjustment in the circumstances.

 

(4)           No adjustment in the Exercise Number shall be made in respect of any event described in paragraph 5.2(1)(a) or subsections 5.2(2) or 5.2(3) if the holders of the Warrants are entitled to participate in the event on the same terms, mutatis mutandis, as if they had exercised their Warrants immediately prior to the effective date or record date of the event. Any such participation is subject to regulatory approval.

 

(5)           No adjustment in the Exercise Number shall be made pursuant to section 5.2 in respect of the issue of Shares, rights, options or warrants pursuant to:

 

(a)           this Indenture;

 

	
  

	
(b)

	
the exercise of director, officer and employee options or options granted for services in accordance with the rules of the Toronto Stock Exchange;

 

	
  

	
(c)

	
the exercise of special rights to acquire Shares of the Corporation issued to employees of a subsidiary of the Corporation as part of the acquisition by the Corporation of options to acquire securities of such subsidiary held by such employees;

 

(d)           the exercise of Warrants; or

 

	
  

	
(e)

	
the issuance of Shares by the Corporation pursuant to any agreements in effect as at the date of this Indenture,

 

and any such issue shall be deemed not to be a Share Reorganization, a Rights Offering or a Special Distribution.

 

(6)            If a dispute at any time arises with respect to adjustments of the Exercise Number, the dispute shall be conclusively determined (as between the Corporation, the Warrantholders, the Warrant Agent and all transfer agents and shareholders of the Corporation) by the auditors of the Corporation or if they are unable or unwilling to act, by such firm of independent chartered accountants as may be selected by the directors and any such determination shall be binding upon the Corporation, the Warrantholders, the Warrant Agent and all transfer agents and shareholders of the Corporation.

 

(7)            If the Corporation sets a record date to determine the holders of Shares for the purpose of entitling them to receive any dividend or distribution or any subscription or purchase rights and thereafter legally abandons its plans to pay or deliver the dividend, distribution or subscription or purchase rights, then no adjustment in the Exercise Number shall be required by reason of the setting of the record date.

 

  

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5.4                     Postponement of Subscription

 

In any case where the application of section 5.2 results in an increase of the Exercise Number taking effect immediately after the record date for or occurrence of a specific event, if any Warrants are exercised after that record date or occurrence and prior to completion of the event or of the period for which a calculation is required to be made, the Corporation may postpone the issuance to the holder of the Warrants of the Shares to which the holder is entitled by reason of the increase of the Exercise Number but the Shares shall be so issued and delivered to that holder upon completion of that event or period, with the number of those Shares calculated on the basis of the Exercise Number on the Exercise Date adjusted for completion of that event or period, and the Corporation shall forthwith after the Exercise Date deliver to the person or persons in whose name or names the Shares are to be issued an appropriate instrument evidencing the person's or persons' right to receive the Shares.

 

5.5                     Notice of Certain Events

 

(1)           Upon the occurrence of any event referred to in sections 5.2 or 5.3 that requires an adjustment in the Exercise Number, the Corporation shall promptly thereafter:

 

	
  

	
(a)

	
file with the Warrant Agent a certificate of the Corporation specifying the particulars of the event and, if determinable, the adjustment and a computation of the adjustment; and

 

	
  

	
(b)

	
give notice to the Warrantholders of the particulars of the event and, if determinable, the adjustment.

 

(2)           If notice has been given under subsection 5.5(1) and the adjustment is not then determinable, the Corporation shall promptly after the adjustment is determinable:

 

	
  

	
(a)

	
file with the Warrant Agent a certificate of the Corporation evidencing the computation of the adjustment; and

 

(b)           give notice to the Warrantholders of the adjustment.

 

5.6                     Protection of Warrant Agent

 

The Warrant Agent shall not at any time be under any duty or responsibility to any Warrantholder to determine whether any facts exist which may require any adjustment contemplated by section 5.2, or with respect to the nature or extent of any such adjustment when made, or with respect to the method employed in making the same.

 

5.7                     Proceedings Prior to Any Action Requiring Adjustment

 

As a condition precedent to the taking of any action which would require an adjustment in any of the acquisition rights pursuant to any of the Warrants, including the number of Shares which are to be received upon the exercise of the Warrants, the Corporation shall take any corporate action which may, in the opinion of counsel, be necessary in order that the Corporation has unissued and reserved in its authorized capital and may validly and legally issue as fully paid and non-assessable all the Shares which the holders of such Warrants are entitled to receive on the full exercise thereof in accordance with the provisions hereof.

 

  

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ARTICLE SIX

 

RIGHTS AND COVENANTS

 

6.1           Purchase of Warrants

 

The Corporation may purchase in the market, by a private contract, by tender or otherwise, all or any portion of the Warrants in such manner, from such persons and on such terms as the Corporation and such persons may determine. All Warrants so purchased shall forthwith be delivered to the Warrant Agent and cancelled by it and no Warrants shall be issued in substitution therefor.

 

6.2                    General Covenants of the Corporation

 

The Corporation covenants with the Warrant Agent, for the benefit of the Warrant Agent and the Warrantholders that so long as any Warrants remain outstanding and may be exercised for Shares:

 

(1)           The Corporation will at all times maintain its existence, carry on and conduct its business in a prudent manner in accordance with industry standards and good business practice, keep or cause to be kept proper books of account in accordance with applicable law, and if and whenever required in writing by the Warrant Agent, file with the Warrant Agent copies of all annual financial statements of the Corporation furnished to its shareholders during the term of this Indenture.

 

(2)           The Corporation is duly authorized to create and issue the Warrants to be issued hereunder and the Warrant Certificates when issued and certified as herein provided will be legal, valid and binding obligations of the Corporation.

 

(3)           The Corporation will cause the Shares from time to time subscribed for pursuant to the exercise of the Warrants issued by the Corporation hereunder, in the manner herein provided, to be duly issued in accordance with the Warrants and the terms hereof.

 

(4)           The Corporation will reserve and keep available a sufficient number of Shares for issuance upon the exercise of Warrants issued by the Corporation hereunder.

 

(5)           Upon the exercise by the holder of any Warrant of the right to purchase provided for therein and herein and, upon payment of the Exercise Price applicable thereto for each Share in respect of which the right of purchase is so exercised, all Shares issuable upon the exercise of Warrants shall be issued as fully paid and non-assessable.

 

(6)           The Corporation will cause the certificates representing the Shares from time to time to be acquired pursuant to the exercise of the Warrants in the manner herein provided, to be duly issued and delivered in accordance with the Warrants and the terms hereof.

 

(7)           The Corporation will use commercially reasonable efforts to maintain the listing of the Shares on the Toronto Stock Exchange and will use commercially reasonable efforts to ensure that the Shares issuable upon exercise of the Warrants will be listed and posted for trading on the Toronto Stock Exchange upon their issue.

 

(8)           The Corporation shall prepare and file under the securities laws any documents required to be filed therewith relating to the proposed distribution of Shares to holders of Warrants upon the exercise thereof.

 

  

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(9)           Generally, the Corporation will well and truly perform and carry out all the acts or things to be done by it as provided in this Indenture.

 

(10)           If the Corporation is a party to any transaction in which the Corporation is not the continuing corporation, the Corporation shall use commercially reasonable efforts to obtain all consents which may be necessary or appropriate under Canadian and United States law to enable the continuing corporation to give effect to the Warrants.

 

6.3                     Warrant Agent's Remuneration and Expenses

 

The Corporation covenants that it will pay to the Warrant Agent time to time such reasonable remuneration for its services hereunder as may be agreed upon between the Corporation and the Warrant Agent and will pay or reimburse the Warrant Agent upon its request for all reasonable expenses, disbursements and advances incurred or made by the Warrant Agent in the administration or execution of the trusts hereby created (including the reasonable compensation and the disbursements of counsel and all other advisers and assistants not regularly in its employ), both before any default hereunder and thereafter until all duties of the Warrant Agent under the trusts hereof have been finally and fully performed, except any expense, disbursement or advance as may arise from the gross negligence or fraud of the Warrant Agent.

 

6.4                     No Dividends or Distributions

 

During the Exercise Period, the Corporation shall not pay any dividend or make any distribution to all or substantially all of the holders of Shares or declare any such dividend, or provide for any such distribution, payable to all or substantially all the holders of Shares of record during that period. Such restrictions shall not apply to stock dividends or distributions in respect of which an adjustment can be made in the Exercise Number pursuant to paragraph 5.2(1)(a) or subsections 5.2(2) or 5.2(3).

 

6.5                     Performance of Covenants by Warrant Agent

 

If the Corporation fails to perform any of its covenants and obligations contained in this Indenture, and the Warrant Agent is aware of such failure, the Warrant Agent may notify the Warrantholders of the failure on the part of the Corporation or may itself perform any of the said covenants capable of being performed by it, but shall be under no obligation to do so or to notify the Warrantholders. All sums expended or advanced by the Warrant Agent in so doing shall be repayable as provided in section 6.3. No performance, expenditure or advance by the Warrant Agent shall be deemed to relieve the Corporation of any default or of its continuing obligations hereunder.

 

ARTICLE SEVEN

 

MEETING OF WARRANTHOLDERS 

 

7.1 Right to Convene Meeting

 

(1) The Warrant Agent or the Corporation may at any time and from time to time, and the Warrant Agent shall on receipt of a requisition in writing signed by the holders of Warrants sufficient to purchase not less than 15% of the aggregate number of Shares which would be purchased under the Warrants then outstanding and upon being indemnified and funded to its reasonable satisfaction by the Corporation or by the Warrantholders signing the requisition against the costs which may be incurred in connection with the calling and holding of the meeting, convene a meeting of the Warrantholders.

 

  

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(2)           If the Warrant Agent fails to convene a meeting within 10 days after receipt of the requisition, funding and indemnity referred to in subsection (1), the Corporation or the Warrantholders, as the case may be, may convene the meeting.

 

(3)           Every meeting of Warrantholders shall be held in the City of Vancouver, British Columbia, or at such other place as may be mutually agreed to in writing by the Corporation and the Warrant Agent, each acting reasonably.

 

7.2                     Notice

 

(1)           At least 21 days' prior notice specifying the place, day and hour of meeting and the general nature of business to be transacted shall be given before any meeting of Warrantholders but it shall not be necessary to specify in the notice the terms of any resolution to be proposed.

 

(2)           Notice of a meeting of Warrantholders shall be given to the Warrantholders in the manner provided in Section 11.2. Notice shall be given to the Corporation unless the meeting is convened by the Corporation and to the Warrant Agent unless the meeting is convened by the Warrant Agent. Any accidental omission in the notice of a meeting shall not invalidate any resolution passed at the meeting.

 

7.3                     Chairman

 

The person, who need not be a Warrantholder, nominated in writing by the Warrant Agent shall be entitled to act as the chairman at any meeting of Warrantholders, but if no such person is nominated or if the person nominated shall not be present within 15 minutes after the time appointed for holding the meeting, the Warrantholders present in person or by proxy shall choose a person present to be chairman.

 

7.4                     Quorum

 

(1)          At any meeting of the Warrantholders a quorum shall consist of two or more Warrantholders present in person or by proxy holding not less than 10% of the Warrants then outstanding.

 

(2)          If a quorum of the Warrantholders is not present within half an hour from the time fixed for holding any meeting, the meeting, if convened by Warrantholders or by a requisition of Warrantholders, shall be dissolved; but if otherwise convened, the meeting shall stand adjourned without notice to the same day in the next week following (unless that day is not a business day, in which case the meeting shall stand adjourned to the next business day thereafter) at the same time and place. At the adjourned meeting, the Warrantholders present in person or by proxy shall form a quorum and may transact the business for which the meeting was originally convened notwithstanding that they may not hold 10% of the Warrants then outstanding.

 

7.5                     Power to Adiourn

 

The chairman of any meeting at which a quorum of Warrantholders is present may, with the consent of the meeting, adjourn any meeting and no notice of the adjournment need be given except such notice, if any, as the meeting may prescribe.

 

7.6                     Show of Hands

 

Every question submitted to a meeting other than a question to be resolved by an Extraordinary Resolution shall be decided in the first place by a majority of the votes given on a show of hands and unless a poll is duly demanded as herein provided, a declaration by the chairman that a resolution has been carried or carried unanimously or by a particular majority or lost or not carried by a particular majority shall be conclusive evidence of that fact.

 

  

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7.7                    Poll

 

On every Extraordinary Resolution to be passed at a meeting and on any other question submitted to a meeting when directed by the chairman or when demanded by one or more of the Warrantholders acting in person or by proxy, a poll shall be taken in the manner as the chairman shall direct. Questions other than those to be resolved by Extraordinary Resolution shall, if a poll be taken, be decided by the votes of the holders of a majority of the Warrants represented at the meeting and voted on the poll. If at any meeting a poll is so demanded as aforesaid on the election of a chaiiuian or on a question of adjournment, it shall be taken forthwith. If at any meeting a poll is so demanded on any other question, or an Extraordinary Resolution is to be voted upon, a poll shall be taken in such manner and either at once or after an adjournment as the chairman directs. The result of a poll shall be deemed to be the decision of the meeting at which the poll was demanded and shall be binding on all holders of Warrants.

 

7.8                    Voting

 

On a show of hands, every person who is present and entitled to vote, whether as a Warrantholder or as proxy for one or more absent Warrantholders or both, shall have one vote. On a poll, each Warrantholder present in person or represented by a proxy duly appointed by instrument in writing shall be entitled to one vote in respect of each Share purchasable under Warrants of which he shall then be the holder, A proxy need not be a Warrantholder. The chairman of any meeting shall be entitled both on a show of hands and on a poll to vote in respect of the Warrants, if any, held or represented by him but shall not be entitled to a casting vote in the case of an equality of votes.

 

7.9                    Persons Entitled to be Present

 

The Corporation and the Warrant Agent by their respective officers and directors and the counsel of the Corporation and the Warrant Agent may attend any meeting of Warrantholders but shall have no vote as such.

 

7.10                    Regulations

 

The Warrant Agent, or the Corporation with the approval of the Warrant Agent, may from time to time make or vary such regulations as it shall think fit providing for and governing the following:

 

(1)           the issue of voting certificates:

 

(2)           by any bank, trust Corporation or other depository approved by the Warrant Agent, certifying that specified Warrants have been deposited with it by a named holder and will remain on deposit until after the meeting; or

 

(3)           by any bank, trust Corporation, insurance Corporation, governmental department or agency approved by the Warrant Agent, certifying that it is the holder of specified Warrants and will continue to hold the same until after the meeting,

 

which voting certificates shall entitle the holders named therein to be present and vote at any meeting and at any adjournment thereof or to appoint a proxy or proxies to represent them and vote for them at any meeting and at any adjournment thereof, in the same manner and with the same effect as though the holders named in the voting certificates were the actual holders of the specified Warrants;

 

  

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(4)           the form of the instrument appointing a proxy (which shall be in writing), the manner in which the same shall be executed and the form of any authority under which a person executes a proxy on behalf of a Warrantholder;

 

(5)           the deposit certificates, instruments appointing proxies or authorities at such place or places as the Warrant Agent (or the Corporation or Warrantholders in case the meeting is convened by the Corporation or the Warrantholders, as the case may be) may in the notice convening the meeting direct and the time (if any) before the holding of the meeting or adjourned meeting at which the same shall be deposited;

 

(6)           the deposit of voting certificates or instruments appointing proxies at some place or places other than the place at which the meeting is to be held and for particulars of the voting certificates or instruments appointing proxies to be cabled or telegraphed or notified by other means of communication before the meeting to the Corporation or to the Warrant Agent and for the voting of voting certificates and proxies so deposited as if the voting certificates or the instruments themselves were produced at the meeting or deposited at any other place required pursuant to subsection (3); and

 

(7)           generally for the calling of meetings of Warrantholders and the conduct of business thereat.

 

Any regulations so made shall be binding and effective and votes given in accordance therewith shall be valid and shall be counted. Except as the regulations may provide, the only persons who shall be recognized at any meeting as the holders of any Warrants, or as entitled to vote or to be present at the meeting in respect thereof, shall be registered Warrantholders and persons whom registered Warrantholders have by instrument in writing duly appointed as their proxies.

 

7.11                     Certain Powers Exercisable by Extraordinary Resolution

 

In addition to all other powers conferred on them by the other provisions of this Indenture or by law but subject to obtaining the approval of the Exchange, the Warrantholders shall have the following powers, exercisable from time to time by Extraordinary Resolution:

 

(1)          power to agree to any amendment, modification, abrogation, alteration, compromise or arrangement of the rights of Warrantholders or the Warrant Agent in that capacity or on behalf of the Warrantholders against the Corporation whether the rights arise under this Indenture or otherwise;

 

(2)          power to agree to any change in or omission from the provisions of the Warrant Certificate and this Indenture or any ancillary or supplemental instrument which may be agreed to by the Corporation and to authorize the Warrant Agent to concur in and execute any ancillary or supplemental indenture embodying any change or omission;

 

(3)          power to require the Warrant Agent, subject to compliance with Section 10.4, to enforce any of the obligations of the Corporation under this Indenture or any supplemental instrument or to enforce any of the rights of the Warrantholders in any manner specified in an Extraordinary Resolution or to refrain from enforcing any such covenant or right, upon the Warrant Agent being furnished with such funding and indemnity as it may in its discretion reasonably require;

 

(4)          power to remove the Warrant Agent or its successor or successors in office and to appoint a new Warrant Agent or Warrant Agents to take the place of the Warrant Agent or Warrant Agents so removed;

 

  

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(5)           power to waive and direct the Warrant Agent to waive any default on the part of the Corporation in complying with any provision of this Indenture either unconditionally or upon conditions specified in the Extraordinary Resolution;

 

(6)           power to restrain any Warrantholder from taking or instituting or continuing any suit, action or proceeding against the Corporation for the enforcement of any of the obligations of the Corporation under this Indenture or to enforce any right of the Warrantholders; and

 

(7)           power to amend, alter or repeal any Extraordinary Resolution previously passed or consented to by Warrantholders.

 

7.12                    Definition of "Extraordinary Resolution"

 

The expression "Extraordinary Resolution" when used in this Indenture means a resolution passed at a meeting (including an adjourned meeting) of Warrantholders duly convened and held in accordance with the provisions of this Indenture at which a quorum is present and carried by the affirmative vote, on a poll or by the consent in writing (which may be in one or more instruments), of Warrantholders entitled to acquire not less than 66 2/3% of the aggregate number of Shares that can be acquired pursuant to the then outstanding Warrants.

 

7.13                    Resolutions Binding on all Warrantholders

 

Every resolution and every Extraordinary Resolution duly passed at a meeting of the Warrantholders duly convened and held or any consent in writing having the effect of an Extraordinary Resolution shall be binding upon all the Warrantholders (including their successors and assigns) whether or not present or represented or voting at the meting or signatories to the consent, as the case may be, and each of the Warrantholders and the Warrant Agent, subject to the provisions for its indemnity contained in this Indenture, shall be bound to give effect thereto.

 

7.14                    Holdings by Corporation Disregarded

 

In determining whether the requisite number of Warrantholders are present for the purpose of obtaining a quorum or have voted or consented to any resolution, Extraordinary Resolution, consent, waiver or other action under this Indenture, Warrants owned by the Corporation or any Subsidiary of the Corporation shall be deemed to be not outstanding.

 

7.15                    Minutes

 

Minutes of all resolutions and proceedings at every meeting of Warrantholders shall be made and duly entered in books to be provided for that purpose by the Warrant Agent at the expense of the Corporation and any minutes if purporting to be signed by the chairman of the meeting, or by the chairman of the next succeeding meeting of Warrantholders, shall be prima facie evidence of the matters therein stated and, until the contrary is proved, every meeting for which minutes have been made shall be deemed to have been duly convened and held and all resolutions passed or proceedings taken thereat to have been duly passed and taken.

 

7.16                    Powers Cumulative

 

Any one or more of the powers or combination of the powers in this Indenture exercisable by the Warrantholders by Extraordinary Resolution or otherwise may be exercised from time to time and the exercise of any one or more of the powers or any combination of powers from time to time shall not be deemed to exhaust the rights of the Warrantholders to exercise the same or any other power or powers or combination of powers then or any power or powers or combinations of powers thereafter.

 

  

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7.17                    Instruments in Writing

 

All actions that may be taken and all powers that may be exercised by the Warrantholders at a meeting held as hereinbefore in this Article provided may also be taken and exercised by Warrantholders entitled to acquire 66 2/3% of the aggregate number of Shares that can be acquired pursuant to all the then outstanding Warrants by an instrument in writing signed in one or more counterparts by Warrantholders in person or by attorney duly appointed in writing and the expression "resolution" or "Extraordinary Resolution" when used in this Indenture shall include an instrument so signed.

 

ARTICLE EIGHT

 

ENFORCEMENT

 

8.1           Suits by Warrantholders

 

All or any of the rights conferred upon any Warrantholder by any of the terms of the Warrants, the Warrant Certificates or of this Indenture, or both of them, may be enforced by the Warrantholder by appropriate legal proceedings, but without prejudice to the right which is hereby conferred upon the Warrant Agent to proceed in its own name to enforce each and all of the provisions herein contained for the benefit of all Warrantholders.

 

8.2                    Immunity of Shareholders, Directors and Officers

 

The Warrant Agent, and by their acceptance of the Warrant Certificates and as part of the consideration for the issue of the Warrants, the Warrantholders, hereby waive and release any right, cause of action or remedy now or hereafter existing in any jurisdiction against any past, present or future shareholder, director or officer of the Corporation or of any of the subsidiaries of the Corporation, or any subsidiary of the Corporation, in their capacity as such, for the issue of Shares pursuant to any Warrants or on any covenant, agreement, representation or warranty by the Corporation contained herein or in the Warrant Certificates.

 

8.3                    Limitation of Liability

 

The obligations hereunder are not personally binding upon, nor shall resort hereunder be had to, the private property of any of the past, present or future directors, shareholders, officers, employees or agents of the Corporation or any of the subsidiaries of the Corporation, or any subsidiary of the Corporation, but only the property of the Corporation (or any successor corporation) shall be bound in respect hereof.

 

ARTICLE NINE

 

SUPPLEMENTAL INDENTURES AND SUCCESSOR COMPANIES

 

9.1            Provision for Supplemental Indentures for Certain Purposes

 

From time to time the Corporation and the Warrant Agent may, subject to the provisions hereof, and they shall, when so directed hereby, execute and deliver by their proper officers or directors, as the case may be, indentures or instruments supplemental hereto, which thereafter shall form part hereof, for any one or more or all of the following purposes:

 

  

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(a)

	
setting forth any adjustments resulting from the application of the provisions of Article Five;

 

	
  

	
(b)

	
adding to the provisions hereof such additional covenants and enforcement provisions as, in the opinion of counsel, are necessary or advisable, provided that the same are not in the opinion of the Warrant Agent, based on the opinion of counsel, prejudicial to the interests of the Warrantholders as a group;

 

	
  

	
(c)

	
adding to, deleting or altering the provisions hereof in respect of the transfer of Warrants, the exchange of Warrants and the making of any modification in the form of a Warrant Certificate which additions, deletions or alterations, in the opinion of the Warrant Agent, based on the opinion of counsel, do not affect the substance thereof;

 

	
  

	
(d)

	
making any additions to, deletions from or alterations of the provisions of this Indenture which, in the opinion of the Warrant Agent, based on the opinion of counsel, do not materially and adversely affect the interests of the Warrantholders and are necessary or advisable in order to incorporate, reflect or comply with any Applicable Legislation;

 

	
  

	
(e)

	
making provisions not inconsistent with this Indenture as may be necessary or desirable with respect to matters or questions arising hereunder or for the purpose of obtaining a listing or quotation of the Shares issuable under the Warrants on a stock exchange, or over-the-counter market, provided that the provisions are not, in the opinion of the Warrant Agent, based on the opinion of counsel, prejudicial to the interests of the Warrantholders as a group;

 

	
(f)  

	
modifying any of the provisions of this Indenture or relieving the Corporation from any of the obligations, conditions or restrictions herein contained, provided that no such modification or relief shall be or become operative or effective if in the opinion of the Warrant Agent and which may be based on the opinion of counsel, the modification or relief impairs any of the rights of the Warrantholders provided hereunder, or of the Warrant Agent, and provided that the Warrant Agent may in its uncontrolled discretion decline to enter into any supplemental indenture which in its opinion may not afford adequate protection to the Warrant Agent when the same shall become operative;

 

	
  

	
(g)

	
evidencing any succession, or successive successions, of other bodies corporate to the Corporation and the assumption by any successor of the obligations of the Corporation herein and in the Warrant Certificates as provided hereafter in this Article Nine; and

 

	
  

	
(h)

	
for any other purpose not inconsistent with the terms of this Indenture, including the correction or rectification of any ambiguities, defective provisions, errors or omissions herein, provided that, in the opinion of the Warrant Agent, based on the opinion of counsel, the rights of the Warrant Agent and the Warrantholders provided hereunder, are in no way prejudiced thereby.

 

9.2                    Correction of Manifest Errors

 

The Corporation and the Warrant Agent may correct typographical, clerical and other manifest errors in this Indenture in writing provided that such corrections shall, in the opinion of the Warrant Agent which may be based on advice from its counsel, in no way prejudice the rights of the Warrant Agent or of the Warrantholders hereunder, and the Corporation and the Warrant Agent may execute and deliver all such documents as may be necessary to correct such errors.

 

  

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9.3                     Amending Adjustment Provisions

 

The Corporation and the Warrant Agent may modify the adjustments resulting from the application of the provisions of Article Five if a modification is required as a result of any approval of the Toronto Stock Exchange contemplated by the provisions of Article Five and the Corporation and the Warrant Agent may execute and deliver such documents as may be necessary to effect the modification.

 

9.4                     Successor Companies

 

In the case of the consolidation, amalgamation, arrangement, merger or transfer of the undertaking or assets of the Corporation as an entirety or substantially as an entirety to another entity ("successor corporation"), the successor corporation resulting from the consolidation, amalgamation, arrangement, merger or transfer (if not the Corporation) shall be bound by the provisions hereof and all obligations for the due and punctual performance and observance of each and every covenant and obligation contained in this Indenture to be performed by the Corporation and, if requested by the Warrant Agent the successor corporation shall by supplemental indenture satisfactory in form to the Warrant Agent and executed and delivered to the Warrant Agent, expressly assume those obligations.

 

ARTICLE TEN

 

CONCERNING THE WARRANT AGENT 

 

10.1 Trust Indenture Legislation

 

(1)          If and to the extent that any provision of this Indenture limits, qualifies or conflicts with a mandatory requirement of Applicable Legislation, the mandatory requirement shall prevail.

 

(2)          The Corporation and the Warrant Agent agree that each will, at all times in relation to this Indenture and any action to be taken hereunder, observe and comply with and be entitled to the benefits of Applicable Legislation.

 

10.2                     Rights and Duties of Warrant Agent

 

(1)          In the exercise of the rights, duties and obligations prescribed or conferred by the terms of this Indenture, the Warrant Agent shall act honestly and in good faith with a view to the best interests of the Warrantholders and shall exercise that degree of care, diligence and skill that a reasonably prudent Warrant Agent would exercise in comparable circumstances.

 

(2)          No provision of this Indenture will be construed to relieve the Warrant Agent from liability for its own gross negligence or fraud.

 

(3)          The obligation of the Warrant Agent to commence or continue any act, action or proceeding for the purpose of enforcing any rights of the Warrant Agent or the Warrantholders or obligations of the Corporation hereunder shall be conditional upon the Warrantholders furnishing, when required by notice in writing by the Warrant Agent, sufficient funds to commence or continue the act, action or proceeding and an indemnity reasonably satisfactory to the Warrant Agent to protect and hold harmless the Warrant Agent against the costs, charges and expenses and liabilities to be incurred thereby and any loss and damage it may suffer by reason thereof. None of the provisions contained in this Indenture shall require the Warrant Agent to expend or risk its own funds or otherwise incur financial liability in the performance of any of its duties or in the exercise of any of its rights or powers unless indemnified and funded as aforesaid.

 

  

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(4)           The Warrant Agent may, before commencing any such act, action or proceeding, or at any time during the continuance thereof require the Warrantholders at whose instance it is acting to deposit with the Warrant Agent the Warrant Certificates held by them, for which Warrant Certificates the Warrant Agent shall issue receipts.

 

(5)           Every provision of this Indenture that by its terms relieves the Warrant Agent of liability or entitles it to rely upon any evidence submitted to it is subject to the provisions of Applicable Legislation, and of this section 10.2 and sections 10.3 and 10.8.

 

10.3                    Evidence, Experts and Advisers

 

(1)           In addition to the reports, certificates, opinions and other evidence required by this Indenture, the Corporation shall furnish to the Warrant Agent such additional evidence of compliance with any provision hereof, and in such form, as may be prescribed by Applicable Legislation or as the Warrant Agent may reasonably require by written notice to the Corporation.

 

(2)           In the exercise of its rights and duties hereunder the Warrant Agent may, if it is acting in good faith, rely as to due execution and as to the truth of the statements and the accuracy of the opinions expressed therein, upon statutory declarations, opinions, reports, certificates or other evidence furnished to the Warrant Agent pursuant to any provision hereof or pursuant to a request of the Warrant Agent.

 

(3)           The Warrant Agent may employ or retain such counsel, accountants, or other experts or advisers as it may reasonably require for the purpose of discharging its duties hereunder and may pay reasonable remuneration for all services so performed by any of them payable by the Corporation in accordance with section 6.3, without taxation of costs of any counsel, and shall not be responsible for any misconduct on the part of any of them who has been selected with due care by the Warrant Agent.

 

(4)           The Warrant Agent may as a condition precedent to any action to be taken by it under this Indenture require such opinions, statutory declarations, reports, certificates or other evidence as it, acting reasonably, considers necessary or advisable in the circumstances.

 

10.4                    Securities, Documents and Monies Held by Warrant Agent

 

Any securities, documents of title or other instruments that may at any time be held by the Warrant Agent subject to the trusts hereof may be placed in the deposit vaults of the Warrant Agent or of any of the Canadian Imperial Bank of Commerce, BMO Bank of Montreal, Bank of Nova Scotia, The Toronto-Dominion Bank, RBC Royal Bank and HSBC Bank Canada or deposited for safekeeping with any of those Canadian chartered banks. Unless herein otherwise expressly provided, any money so held pending the application or withdrawal thereof under any provision of this Indenture shall be deposited in the name of the Warrant Agent in any of the foregoing Canadian chartered banks at the rate of interest, if any, then current on similar deposits or, with the consent of the Corporation, be:

 

	
  

	
(a)

	
deposited in the deposit department of the Warrant Agent or of any other loan or trust company authorized to accept deposits under the laws of Canada or a province thereof whose short term debt obligations or deposits have a rating of at least Rl as rated by Dominion Bond Rating Service; or

 

	
  

	
(b)

	
invested in securities issued or guaranteed by the Government of Canada or a province thereof or in obligations maturing not more than one year from the date of investment of or guaranteed by any of the foregoing Canadian chartered banks.

  

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Unless the Corporation is in default hereunder, all interest or other income received by the Warrant Agent in respect of deposits and investments will belong to the Corporation.

 

10.5                     Action by Warrant Agent to Protect Interests

 

The Warrant Agent shall have power to institute and to maintain such actions and proceedings as it may consider necessary or expedient to preserve, protect or enforce its interests and the interests of the Warrantholders.

 

10.6                     Warrant Agent not Required to Give Security

 

The Warrant Agent shall not be required to give any bond or security in respect of the execution of the trusts and powers of this Indenture or otherwise in respect of the premises contained herein.

 

10.7                     Protection of Warrant Agent

 

By way of supplement to the provisions of any law from time to time applicable to Warrant Agents, it is expressly declared and agreed as follows:

 

(1)          The Warrant Agent shall not be liable for or by reason of any representations, statements of fact or recitals in this Indenture or in the Warrant Certificates (except the representation contained in section 10.10 or by virtue of the certification by the Warrant Agent of the Warrant Certificates) or required to verify the same, but all those statements or recitals are and shall be deemed to be made by the Corporation;

 

(2)          Nothing herein contained shall impose any obligation on the Warrant Agent to see to or to require evidence of the registration (or filing or renewal thereof) of this Indenture or any instrument ancillary or supplemental hereto;

 

(3)          The Warrant Agent shall not be bound to give notice to any person or persons of the execution hereof;

 

(4)          The Warrant Agent shall not incur any liability or responsibility whatever or be in any way responsible for the consequence of any breach on the part of the Corporation of any of the covenants or warranties herein contained or of any acts of any director, officer, employee or agent of the Corporation;

 

(5)          The Warrant Agent shall not be bound to give any notice or to do or take any act, action or proceeding by virtue of the powers conferred on it hereby unless and until it has been required to under the terms hereof nor shall the Warrant Agent be required to take notice of any default of the Corporation hereunder unless and until notified in writing of the default (which notice must specify the nature of the default) and, in the absence of that notice, the Warrant Agent may for all purposes hereunder conclusively assume that no default by the Corporation hereunder has occurred. The giving of any notice shall in no way limit the discretion of the Warrant Agent hereunder as to whether any action is required to be taken in respect of any default hereunder;

 

(6)          The Warrant Agent shall not be accountable with respect to the validity or value (or the kind or amount) of any Shares or Warrants or other securities or property which may at any time be issued or delivered upon the exercise of the rights attaching to any Warrant; and

 

(7)          The Warrant Agent is not responsible for any failure of the Corporation to make any cash payment or to issue, transfer or deliver Shares or certificates for the same upon the surrender or deemed surrender of any Warrant Certificates for the purpose of the exercise of the Warrants represented by such Warrant Certificates.

 

  

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10.8                     Indemnification

 

Without limiting any protection or indemnity of the Warrant Agent under any other provision hereof, or otherwise at law, the Corporation hereby agrees to indemnify and hold harmless the Warrant Agent, its directors, officers, employees and agents (collectively, the "Indemnified Parties") from and against any and all liabilities, losses, damages, penalties, claims, actions, suits, costs, expenses and disbursements, including reasonable legal or advisor fees and disbursements, of whatever kind and nature which may at any time be imposed on, incurred by or asserted against the Indemnified Parties in connection with the performance of its duties and obligations hereunder, other than such liabilities, losses, damages, penalties, claims, actions, suits, costs, expenses and disbursements arising by reason of the gross negligence or fraud of the Indenmified Parties. This provision shall survive the resignation or removal of the Warrant Agent, or the termination of the Indenture. The Indemnified Parties shall not be under any obligation to prosecute or to defend any action or suit in respect of the relationship which, in the opinion of their counsel, may involve them in expense or liability, unless the Corporation shall, so often as required, furnish the Indemnified Parties with satisfactory indemnity and funding against such expense or liability.

 

10.9                     Replacement of Warrant Agent

 

(1)          The Warrant Agent may resign its trust and be discharged from all further duties and liabilities hereunder, except as provided in this Article Ten, by giving to the Corporation and the Warrantholders not less than 60 days' notice in writing or, if a new Warrant Agent has been appointed such shorter notice as the Corporation may accept as sufficient. The Warrantholders by Extraordinary Resolution shall have power at any time, with the consent of the Corporation, not to be unreasonably withheld, to remove the Warrant Agent and to appoint a new Warrant Agent. In the event of the Warrant Agent resigning or being removed as aforesaid or being dissolved, becoming bankrupt, going into liquidation or otherwise becoming incapable of acting hereunder, the Corporation shall forthwith appoint a new Warrant Agent unless a new Warrant Agent has already been appointed by the Warrantholders; failing that appointment by the Corporation, the retiring Warrant Agent or any Warrantholder may apply to the Supreme Court of British Columbia, on such notice as the Court may direct, for the appointment of a new Warrant Agent; but any new Warrant Agent so appointed by the Corporation or by the Court shall be subject to removal as aforesaid by the Warrantholders and the Corporation. Any new Warrant Agent appointed under any provision of this section 10.9 shall be a corporation authorized to carry on the business of a trust company in the provinces of British Columbia and Ontario and, if required by the Applicable Legislation of any other province, in that other province. On any appointment, the new Warrant Agent shall be vested with the same powers, rights, duties and responsibilities as if it had been originally named herein as Warrant Agent without any further assurance, conveyance, act or deed; but there shall be immediately executed, at the expense of the Corporation, all such conveyances or other instruments as may, in the opinion of counsel, be necessary or advisable for the purpose of assuring such powers, rights, duties and responsibilities of the new Warrant Agent.

 

(2)          Upon the appointment of a new Warrant Agent, the Corporation shall promptly give notice thereof to the Warrantholders.

 

(3)          Any corporation into or with which the Warrant Agent may be merged or consolidated or amalgamated, or any corporation succeeding to the trust business of the Warrant Agent, shall be the successor to the Warrant Agent hereunder without any further act on its part or any of the parties hereto provided that the corporation would be eligible for appointment as a new Warrant Agent under subsection 10.9(1).

 

  

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(4) Any Warrant Certificates certified but not delivered by a predecessor Warrant Agent may be certified by the new or successor Warrant Agent in the name of the predecessor or new or successor Warrant Agent.

 

10.10                     Conflict of Interest

 

(1)           The Warrant Agent represents to the Corporation that at the time of the execution and delivery hereof no material conflict of interest exists between the Warrant Agent's role as a fiduciary hereunder and its role in any other capacity and agrees that in the event of a material conflict of interest arising hereafter it will, within 90 days after ascertaining that it has a material conflict of interest, either eliminate the same or assign its trust hereunder to a successor Warrant Agent approved by the Corporation and meeting the requirements set forth in subsection 10.9(1). Notwithstanding the foregoing provisions of this subsection 10.10(1), if any such material conflict of interest exists or hereafter shall exist, the validity and enforceability of this Indenture and the Warrant Certificate shall not be affected in any manner whatsoever by reason thereof.

 

(2)           Subject to subsection 10.10(1), the Warrant Agent, in its personal or any other capacity, may buy, lend upon and deal in securities of the Corporation, may act as registrar and transfer agent for the Shares and Warrant Agent for the Warrants under the Warrant Indenture and generally may contract and enter into financial transactions with the Corporation or any subsidiary of the Corporation, all without being liable to account for any profit made thereby.

 

10.11                     Acceptance of Trust

 

The Warrant Agent hereby accepts the trusts in this Indenture declared and provided for, agrees to perform the same upon the terms and conditions herein set forth and agrees to hold all rights, interests and benefits contained herein for and on behalf of those persons who become holders of Warrants from time to time issued pursuant to this Indenture.

 

10.12                     Warrant Agent not to be Appointed Receiver

 

The Warrant Agent and any person related to the Warrant Agent shall not be appointed a receiver, a receiver and manager or liquidator of all or any part of the assets or undertaking of the Corporation.

 

10.13                     Third Party Interests

 

The Corporation hereby represents to the Warrant Agent that any account to be opened by, or interest held by, the Warrant Agent in connection with this Indenture, for or to the credit of the Corporation, either: (i) is not intended to be used by or on behalf of any third party; or (ii) is intended to be used by or on behalf of a third party, in which case the Corporation agrees to complete and execute forthwith a declaration in the Warrant Agent's prescribed form as to the particulars of such third party.

 

10.14                     Compliance with Money Laundering Legislation

 

The Warrant Agent shall retain the right not to act and shall not be liable for refusing to act if, due to a lack of information or for any other reason whatsoever, the Warrant Agent reasonably determines that such act might cause it to be in non-compliance with any applicable anti-money laundering or anti-terrorist legislation, regulation or guideline. Further, should the Warrant Agent reasonably determine at any time that its acting under this Indenture has resulted in its being in non-compliance with any applicable anti-money laundering or anti-terrorist legislation, regulation or guideline, then it shall have the right to resign on 10 days written notice to the Corporation, provided: (i) that the Warrant Agent's written notice shall describe the circumstances of such non-compliance; and (ii) that if such circumstances are rectified to the Warrant Agent's satisfaction within such 10 day period, then such resignation shall not be effective.

 

  

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10.15                     Compliance with Privacy Laws

 

The parties acknowledge that federal and/or provincial legislation that addresses the protection of individuals' personal information (collectively, "Privacy Laws") applies to obligations and activities under this Indenture. Despite any other provision of this Indenture, neither party shall take or direct any action that would contravene, or cause the other to contravene, applicable Privacy Laws. The Corporation shall, prior to transferring or causing to be transferred personal information to the Warrant Agent, obtain and retain required consents of the relevant individuals to the collection, use and disclosure of their personal information, or shall have determined that such consents either have previously been given upon which the parties can rely or are not required under the Privacy Laws. The Warrant Agent shall use commercially reasonable efforts to ensure that its services hereunder comply with Privacy Laws. Specifically, the Warrant Agent agrees: (a) to have a designated chief privacy officer; (b) to maintain policies and procedures to protect personal information and to receive and respond to any privacy complaint or inquiry; (c) to use personal information solely for the purposes of providing its services under or ancillary to this Indenture and not to use it for any other purpose except with the consent of or direction from the Corporation or the individual involved; (d) not to sell or otherwise improperly disclose personal information to any third party; and (e) to employ administrative, physical and technological safeguards to reasonably secure and protect personal information against loss, theft, or unauthorized access, use or modification.

 

ARTICLE ELEVEN

 

GENERAL

 

11.1                     Notice to Corporation and Warrant Agent

 

(1) Unless herein otherwise expressly provided, any notice to be given hereunder to the Corporation or the Warrant Agent shall be given in writing and shall be deemed to be validly given if delivered or if sent by registered letter, postage prepaid or if transmitted by telecopy:

 

  

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(a)           if to the Corporation:

 

Response Biomedical Corporation Suite

1781 - 75th Avenue West

Vancouver, British Columbia

V6P 6P2

 

Attention: Bill Wickson

 

Facsimile No.: (604) 456-6066

 

(b)           if to the Warrant Agent:

 

Computershare Trust Company of Canada

2nd Floor, 510 Burrard Street

Vancouver, British Columbia

V6C 3B9

 

Attention: Manager, Corporate Trust 

 

Facsimile No.: (604) 661-9403

 

and any notice given in accordance with the foregoing shall be deemed to have been received on the date of delivery or, if mailed, on the fifth business day following the day of the mailing of the notice or, if transmitted by telecopy, on the day following the transmission.

 

(2)           The Corporation or the Warrant Agent, as the case may be, may from time to time notify the other in the manner provided in subsection 11.1(1) of a change of address which, from the effective date of the notice and until changed by like notice, shall be the address of the Corporation or the Warrant Agent, as the case may be, for all purposes of this Indenture.

 

(3)           If, by reason of a strike, lockout or other work stoppage, actual or threatened, involving postal employees, any notice to be given to the Warrant Agent or to the Corporation hereunder could reasonably be considered unlikely to reach or to be delayed in reaching its destination, the notice shall be valid and effective only if it is delivered to an officer of the party to which it is addressed or if it is delivered to that party at the appropriate address provided in subsection 11.1(1) by cable, telegram, telex, telecopy or other means of prepaid, transmitted, or written communication and any notice delivered in accordance with the foregoing shall be deemed to have been received on the date of delivery to the officer or if delivered by cable, telegram, telex, telecopy or other means of prepaid, transmitted, recorded communication, on the first business day following the date of the sending of the notice by the person giving the notice.

 

11.2                     Notice to Warrantholders

 

(1) Unless herein otherwise expressly provided, any notice to be given hereunder to Warrantholders shall be written and shall be deemed to be validly given if the notice is sent by prepaid mail, addressed to the holder or delivered by hand or transmitted by telecopy (or so mailed to certain holders and so delivered to other holders and so telecopied to other holders) at their respective addresses and telecopy numbers appearing on the register maintained by the Warrant Agent; and if in the case of joint holders of any Warrants more than one address or telecopy number appears on the register in respect of that joint holding, the notice shall be addressed or delivered, as the case may be, only to the first address or telecopier number, as the case may be, so appearing. Any notice so given shall be deemed to have been received on the day of delivery by hand or telecopy or, if mailed, on the next business day following the day of mailing of the notice. Accidental error or omission in giving notice or accidental failure to mail notice to any Warrantholder shall not invalidate any action or proceeding founded thereon.

 

  

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(2) If, by reason of strike, lock-out or other work stoppage, actual or threatened, involving postal employees, any notice to be given to the Warrantholders hereunder could reasonably be considered unlikely to reach or be delayed in reaching its destination, the notice shall be valid and effective if published or distributed once in the Report on Business section of the national edition of The Globe and Mail newspaper, or, in the event of a disruption in the circulation of that newspaper, once in a daily newspaper in the English language approved by the Warrant Agent of general circulation in the City of Toronto and Vancouver; provided that in the case of a notice convening a meeting of the holders of Warrants, the Warrant Agent may require such additional publications of that notice, in the same or in other cities or both, as it may deem necessary for the reasonable protection of the holders of Warrants or to comply with any applicable requirement of law or any stock exchange. Any notice so given shall be deemed to have been given on the day on which it has been published in all of the cities in which publication was required (or first published in a city if more than one publication in that city is required). In determining under any provision hereof, the date when notice of any meeting or other event must be given, the date of giving notice shall be included and the date of the meeting or other event shall be excluded.

 

11.3                     Satisfaction and Discharge of Indenture

 

Upon the earlier of (i) the date by which certificates representing Shares shall have been delivered to Warrantholders to the full extent of the rights attached to all Warrants theretofore certified hereunder and the monies to be paid hereunder, if any, have been paid and (ii) the Expiry Date; this Indenture shall cease to be of further effect and the Warrant Agent, on demand of and at the cost and expense of the Corporation and upon delivery to the Warrant Agent of a certificate of the Corporation stating that all conditions precedent to the satisfaction and discharge of this Indenture have been complied with and upon payment to the Warrant Agent of the fees and other remuneration payable to the Warrant Agent, shall execute proper instruments acknowledging satisfaction of and discharging this Indenture.

 

11.4                     Sole Benefit of Parties and Warrantholders

 

Nothing in this Indenture or in the Warrant Certificates, expressed or implied, shall give or be construed to give to any person other than the parties hereto and the Warrantholders any legal or equitable right, remedy or claim under this Indenture, or under any covenant or provision therein contained, all such covenants and provisions being for the sole benefit of the parties hereto and the Warrantholders.

 

11.5                     Discretion of Directors

 

Any matter provided herein to be determined by the directors will be determined acting reasonably in their sole discretion, and a determination so made will be conclusive.

 

  

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11.6                    Counterparts and Formal Date

 

This Indenture may be executed in several original or facsimile counterparts, each of which when so executed shall be deemed to be an original and the counterparts together shall constitute one and the same instrument and notwithstanding their date of execution shall be deemed to bear the date first above written.

 

IN WITNESS WHEREOF the parties hereto have executed this Indenture under the hands of their proper officers in that behalf as of the date first written above.

 

	 	 
	 	 
	 	 
	 	By: /s/ S. Wayne Kay
	 	Authorized Signatory
	 	 
	 	COMPUTERSHARE TRUST COMPANY OF CANADA
	 	 
	 	By:
	 	Authorized Signatory
	 	 
	 	By:
	 	Authorized Signatory

 

  

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SCHEDULE "A"

 

[For Warrant Certificates issued to a person in the United States or to, or for the account or benefit of, a U.S. person]

 

THE SECURITIES REPRESENTED HEREBY AND THE SECURITIES ISSUABLE UPON EXERCISE THEREOF HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "U.S. SECURITIES ACT"). THE HOLDER HEREOF, BY PURCHASING SUCH SECURITIES, AGREES FOR THE BENEFIT OF THE CORPORATION THAT SUCH SECURITIES MAY BE OFFERED, SOLD OR OTHERWISE TRANSFERRED ONLY (A) TO THE CORPORATION, (B) OUTSIDE THE UNITED STATES IN COMPLIANCE WITH RULE 904 OF REGULATION S UNDER THE U.S. SECURITIES ACT AND IN COMPLIANCE WITH APPLICABLE LOCAL LAWS AND REGULATIONS, (C) IN COMPLIANCE WITH THE EXEMPTION FROM REGISTRATION UNDER THE U.S. SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER, IF AVAILABLE, AND IN COMPLIANCE WITH ANY APPLICABLE STATE SECURITIES LAWS, OR (D) IN A TRANSACTION THAT DOES NOT REQUIRE REGISTRATION UNDER THE U.S. SECURITIES ACT OR ANY APPLICABLE STATE SECURITIES LAWS. DELIVERY OF THIS CERTIFICATE MAY NOT CONSTITUTE "GOOD DELIVERY" IN SETTLEMENT OF TRANSACTIONS ON STOCK EXCHANGES IN CANADA.

 

WARRANT

 

to acquire common shares of

 

RESPONSE BIOMEDICAL CORPORATION

 

	
Warrant Certificate

	
Certificate for___________________________

	
No.

	
Warrants, each entitling the holder to acquire one Share of Response Biomedical Corporation

 

THIS IS TO CERI'1FY THAT, for value received,

 

(the "Holder") is the registered Holder of the number of common share purchase warrants (the "Warrants") of Response Biomedical Corporation (the "Corporation", and is entitled, on exercise of these Warrants upon and subject to the terms and conditions set forth herein and in the Warrant Indenture hereinafter referred to, to purchase at any time before 4:00 p.m. (Vancouver time) on •, 2011 (the "Expiry Date"), one fully paid and non-assessable common share without par value in the capital of the Corporation as constituted on the date hereof (a "Share") for each Warrant by surrendering to the Warrant Agent at its principal transfer office in the Cities of Vancouver or Toronto with this certificate an exercise form in the form attached hereto duly completed and executed, accompanied by cash, a certified cheque, bank draft or money order in lawful money of Canada payable to or to the order of the Corporation at par in the city where this Warrant Certificate is so surrendered in an amount equal to the purchase price of the Shares so subscribed for.

 

Surrender of this Warrant Certificate, the duly completed exercise form and payment as provided above will be deemed to have been effected only on personal delivery thereof to, or if sent by mail or other means of transmission on actual receipt thereof by, the Warrant Agent at the Cities of Vancouver and Toronto.

 

  

A-1

  

 

Subject to adjustment thereof in the events and in the manner set forth in the Warrant Indenture hereinafter referred to, the exercise price (the "Exercise Price") upon the exercise of a Warrant shall be CDN.$0.25 per Warrant.

 

Certificates for the Shares subscribed for will be mailed to the persons specified in the exercise form at their respective addresses specified therein or, if so specified in the exercise form, delivered to such persons at the office where this Warrant Certificate is surrendered. If fewer Shares are purchased than the number that can be purchased pursuant to this Warrant Certificate, the Holder hereof will be entitled to receive without charge a new Warrant Certificate in respect of the balance of the Shares not so purchased. No fractional Shares will be issued upon exercise of any Warrant.

 

THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE THEREOF HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "U.S. SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES. THIS WARRANT MAY NOT BE EXERCISED IN THE UNITED STATES OR BY OR ON BEHALF OF A U.S. PERSON UNLESS THE WARRANT AND THE UNDERLYING SECURITIES HAVE BEEN REGISTERED UNDER THE U.S. SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR UNLESS AN EXEMPTION FROM SUCH REGISTRATION REQUIREMENTS IS AVAILABLE. "UNITED STATES" AND "U.S. PERSON" ARE AS DEFINED BY REGULATION S UNDER THE U.S. SECURITIES ACT.

 

This Warrant Certificate evidences Warrants of the Corporation issued or issuable under the provisions of a warrant indenture (which indenture together with all other instruments supplemental or ancillary thereto is herein referred to as the "Warrant Indenture") dated as of •, 2009 between the Corporation and the Warrant Agent, as Warrant Agent, to which Warrant Indenture reference is hereby made for particulars of the rights of the Holders of Warrants, the Corporation and the Warrant Agent in respect thereof and the terms and conditions on which the Warrants are issued and held, all to the same effect as if the provisions of the Warrant Indenture were herein set forth, to all of which the Holder by acceptance hereof assents. The Corporation will furnish to the Holder, on request and without charge, a copy of the Warrant Indenture.

 

On presentation at the principal transfer office of the Warrant Agent in the Cities of Vancouver or Toronto as specified below, subject to the provisions of the Warrant Indenture and on compliance with the reasonable requirements of the Warrant Agent, one or more Warrant Certificates may be exchanged for one or more Warrant Certificates entitling the Holder thereof to purchase in the aggregate an equal number of Shares as are purchasable under the Warrant Certificate or Certificates so exchanged.

 

The Warrant Indenture contains provisions for the adjustment of the number and kind of Shares issuable upon the exercise of Warrants in the events and in the manner set forth therein.

 

Nothing contained in this Warrant Certificate, the Warrant Indenture or elsewhere shall be construed as conferring upon the Holder hereof any right or interest whatsoever as a Holder of Shares or any other right or interest except as herein and in the Warrant Indenture expressly provided.

 

Warrants are issuable only as fully registered Warrants. Warrants may only be transferred in compliance with the conditions of the Warrant Indenture on one of the registers to be kept by and at the principal offices of the Warrant Agent in Vancouver or Toronto, and by the Warrant Agent or such other registrar as the Corporation, with the approval of the Warrant Agent, may appoint at such other place or places, if any, as may be designated, upon surrender of this Warrant Certificate to the Warrant Agent or other registrar accompanied by a written instrument of transfer in form and execution satisfactory to the Warrant Agent or other registrar and upon compliance with the conditions prescribed in the Warrant Indenture and with such reasonable requirements as the Warrant Agent or other registrar may prescribe and upon the transfer being duly noted thereon by the Warrant Agent or other registrar.

 

In the event of any discrepancy between anything contained in this Warrant Certificate and the terms and conditions of the Warrant Indenture, the terms and conditions of the Warrant Indenture shall govern.

 

Time is of the essence hereof.

 

This Warrant Certificate will not be valid for any purpose until it has been countersigned by or on behalf of the Warrant Agent from time to time under the Warrant Indenture.

 

The parties hereto have declared that they have required that these presents and all other documents related hereto be in the English language. Les parties aux presentes declarent qu'elles ont exige que la presente convention, de meme que tous les documents s'y rapportant, soient rediges en anglais.

 

IN WITNESS WHEREOF Response Biomedical Corporation has caused this Warrant Certificate to be duly executed as of theday of, 200_.

 

 

	 	 
	 	 
	 	By:____________________________________
	 	
Authorized Signatory

 

Countersigned and Registered by:

 

COMPUTERSHARE TRUST COMPANY OF CANADA

 

 

	By:_____________________________________________	 
	
Authorized Signatory

	 

 

  

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APPENDIX "A" EXERCISE FORM

 

 

	
TO:

	Response Biomedical Corporation
	 	c/o Computershare Trust Company of Canada  
	 	510 Burrard Street
	 	Vancouver, British Columbia
	 	V6C 3B9
	 	 
	 	Attention:                      Stock Transfer Department

 

The undersigned holder of the within Warrants hereby exercises______________________of the Warrants represented hereby and the right provided for in such exercised Warrants to receive the common shares of Response Biomedical Corporation (the "Corporation") issuable pursuant to such Warrants.

 

The undersigned hereby irrevocably directs that the said common shares be issued and delivered as follows:

 

	 	 	Numbers(s) of
	Name(s) in Full	Address(es) (include Postal/Zip Code)	common shares
	________________________ 	_________________________ 	___________________________ 
	________________________ 	_________________________ 	___________________________ 

 

(Please print in full the name in which certificates are to be issued. If any of the securities are to be issued to a person or persons other than the Warrantholder, the Transfer of Warrants form must be completed and the Warrantholder must pay to the Warrant Agent all exigible transfer taxes or other government charges.)

 

The undersigned represents, warrants and certifies as follows (one (only) of the following must be checked):

 

A.     q The undersigned holder at the time of exercise of the Warrants (a) is not in the United States; (b) is not a U.S. person and is not exercising the Warrants on behalf of a U.S. person or a person in the United States; and (c) did not execute or deliver the exercise form in the United States. For purposes hereof "United States" and "U.S. person" shall have the meanings given to such terms in Regulation S under the United States Securities Act of 1933, as amended (the "U.S. Securities Act").

 

B.     q The undersigned holder (a) purchased the Warrants directly from the Corporation pursuant to a subscription agreement for U.S. purchasers for the purchase of units of the Corporation; (b) is exercising the Warrants solely for its own account or for the account of the original beneficial purchaser, if any; and (c) each of it and any beneficial purchaser was on the date the Warrants were purchased from the Corporation, and is on the date of exercise of the Warrants, an "accredited investor" (as defined in Rule 501(a) of Regulation D under the U.S. Securities Act).

 

C.     q The undersigned holder has delivered to the Warrant Agent an opinion of counsel of recognized standing in form and substance reasonably satisfactory to the Corporation to the effect that the exercise of the Warrants and the issuance of the common shares does not require registration under the U.S. Securities Act or any applicable state securities laws.

 

  

A-3

  

 

The undersigned holder understands that unless Box A above is checked, the certificate representing the common shares issued upon exercise of the Warrants will bear a legend restricting transfer without registration under the U.S. Securities Act and applicable state securities laws unless an exemption from registration is available.

 

DATED this_____________________day of___________________, _________________.

 

	_____________________________	 	_________________________________ 
	Witness or Signature Guarantee*	 	Signature of Registered Holder
	 	 	 
	 	 	_________________________________ 
	 	 	Name of Registered Holder
	 	 	 
	 	 	_________________________________ 
	 	 	Address of Registered Holder

 

* If the underlying securities are to be issued to a person other than the registered holder then the signature must be guaranteed by a Schedule I Canadian Chartered Bank or a guarantee under the North American STAMP, SEMP or MSP Medallion Programs.

 

	
q

	
Please check box if these certificates are to be delivered to the office where this Warrant Certificate is surrendered, failing which the certificates will be mailed to the address shown on the register.

 

** The common shares shall be subject to hold periods under applicable securities legislation and may be endorsed with legends to that effect.

 

  

A-4

  

 

APPENDIX "B"

TRANSFER OF WARRANTS

 

FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto 

(name)                                                     (the "transferee")

 

(address)

 

________________________of the Warrants registered in the name of the undersigned represented by the within certificate.

 

The undersigned hereby certifies that the Warrants are being sold, assigned or transferred in

accordance with applicable securities laws covering any such transaction.

 

DATED the___________day of__________________, __________________________.

 

Signature of Warrantholder______________________________________________________________

Guaranteed by:                                                             (Signature of Warrantholder)

 

 

 

* Authorized Signature Number 

 

NOTES:

 

	
1.  

	
The signature to this transfer must correspond with the name as recorded on the Warrants in every particular without alteration or enlargement or any change whatever. The signature of the person executing this transfer must be guaranteed by a Schedule I Canadian Chartered Bank or a guarantee under the North American STAMP, SEMP or MSP Medallion Programs.

 

  

  

  

 

	
2.  

	
Warrants shall only be transferable in accordance with the Warrant Indenture among Response Biomedical Corporation and Computershare Trust Company of Canada dated •, 2009, applicable laws and the rules and policies of any applicable stock exchange. Without limiting the foregoing, if the Warrant Certificate bears a legend restricting the transfer of the Warrants except pursuant to an exemption from registration under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") and applicable state securities laws, this Transfer Form must be accompanied by a properly completed and executed declaration in the form attached as Schedule "B" to the Warrant Indenture, or an opinion of counsel or other evidence as is satisfactory to the Corporation and the Warrant Agent to the effect that the transfer is exempt from registration under the U.S. Securities Act and applicable state securities laws.

 

  

A-5

  

 

SCHEDULE "B"

FORM OF DECLARATION FOR REMOVAL OF LEGEND

 

	
TO:

	
Computershare Investor Services Inc., as registrar and transfer agent for the common shares, or Computershare Trust Company of Canada, as warrant trustee for the warrants, as applicable, of Response Biomedical Corp.

 

The undersigned (a) acknowledges that the sale of the securities of Response Biomedical Corp. (the "Corporation") to which this declaration relates is being made in reliance on Rule 904 of Regulation S under the United States Securities Act of 1933, as amended (the "U.S. Securities Act"), and (b) certifies that (1) the undersigned is not an "affiliate" of the Corporation as that term is defined in Rule 405 under the U.S. Securities Act, (2) the offer of such securities was not made to a person in the United States and either (A) at the time the buy order was originated, the buyer was outside the United States, or the seller and any person acting on its behalf reasonably believed that the buyer was outside the United States or (B) the transaction was executed in, on or through the facilities of The Toronto Stock Exchange or the TSX Venture Exchange, Inc. and neither the seller nor any person acting on its behalf knows that the transaction has been prearranged with a buyer in the United States, (3) neither the seller nor any affiliate of the seller nor any person acting on any of their behalf has engaged or will engage in any directed selling efforts in the United States in connection with the offer and sale of such securities, (4) the sale is bona fide and not for the purpose of "washing off' the resale restrictions imposed because the securities are "restricted securities" (as that term is defined in Rule 144(a)(3) under the U.S. Securities Act), (5) the seller does not intend to replace such securities with fungible unrestricted securities and (6) the contemplated sale is not a transaction, or part of a series of transactions, which, although in technical compliance with Regulation S, is part of a plan or scheme to evade the registration provisions of the U.S. Securities Act. Terms used herein have the meanings given to them by Regulation S under the U.S. Securities Act.

 

Date:________________________________

 

____________________________________

(Name of the Seller - please print)

 

____________________________________

(Authorized Signature)

 

____________________________________

(Name and Official Capacity or Title of Signatory - please print)

 

B-1a6231769ex4_30.htm

Exhibit 4.30

 

WARRANT

to acquire common shares of

RESPONSE BIOMEDICAL CORPORATION

 

	
CUSIP 76123L 113

	
ISIN CA 76123L1132

	
Warrant Certificate

No. 13-M09

	
Certificate for 27,259,832 Warrants, each entitling the holder to acquire one Share of Response Biomedical Corporation

 

THIS IS TO CERTIFY THAT, for value received,

 

CDS & Co.

85 Richmond Street West

Toronto, Ontario

M5H 2C9

 

(the “Holder”) is the registered Holder of the number of common share purchase warrants (the “Warrants”) of Response Biomedical Corporation (the “Corporation”, and is entitled, on exercise of these Warrants upon and subject to the terms and conditions set forth herein and in the Warrant Indenture hereinafter referred to, to purchase at any time before 4:00 p.m. (Vancouver time) on May 21, 2011 (the “Expiry Date”), one fully paid and non-assessable common share without par value in the capital of the Corporation as constituted on the date hereof (a “Share”) for each Warrant by surrendering to the Warrant Agent at its principal transfer office in the Cities of Vancouver or Toronto with this certificate an exercise form in the form attached hereto duly completed and executed, accompanied by cash, a certified cheque, bank draft or money order in lawful money of Canada payable to or to the order of the Corporation at par in the city where this Warrant Certificate is so surrendered in an amount equal to the purchase price of the Shares so subscribed for.

 

Surrender of this Warrant Certificate, the duly completed exercise form and payment as provided above will be deemed to have been effected only on personal delivery thereof to, or if sent by mail or other means of transmission on actual receipt thereof by, the Warrant Agent at the Cities of Vancouver and Toronto.

 

Subject to adjustment thereof in the events and in the manner set forth in the Warrant Indenture hereinafter referred to, the exercise price (the “Exercise Price”) upon the exercise of a Warrant shall be CDN.$0.25 per Warrant.

 

Certificates for the Shares subscribed for will be mailed to the persons specified in the exercise form at their respective addresses specified therein or, if so specified in the exercise form, delivered to such persons at the office where this Warrant Certificate is surrendered.  If fewer Shares are purchased than the number that can be purchased pursuant to this Warrant Certificate, the Holder hereof will be entitled to receive without charge a new Warrant Certificate in respect of the balance of the Shares not so purchased.  No fractional Shares will be issued upon exercise of any Warrant.

 

This Warrant Certificate evidences Warrants of the Corporation issued or issuable under the provisions of a warrant indenture (which indenture together with all other instruments supplemental or ancillary thereto is herein referred to as the “Warrant Indenture”) dated as of May 21, 2009 between the Corporation and the Warrant Agent, as Warrant Agent, to which Warrant Indenture reference is hereby made for particulars of the rights of the Holders of Warrants, the Corporation and the Warrant Agent in respect thereof and the terms and conditions on which the Warrants are issued and held, all to the same effect as if the provisions of the Warrant Indenture were herein set forth, to all of which the Holder by acceptance hereof assents.  The Corporation will furnish to the Holder, on request and without charge, a copy of the Warrant Indenture.

 

  

1

  

On presentation at the principal transfer office of the Warrant Agent in the Cities of Vancouver or Toronto as specified below, subject to the provisions of the Warrant Indenture and on compliance with the reasonable requirements of the Warrant Agent, one or more Warrant Certificates may be exchanged for one or more Warrant Certificates entitling the Holder thereof to purchase in the aggregate an equal number of Shares as are purchasable under the Warrant Certificate or Certificates so exchanged.

 

The Warrant Indenture contains provisions for the adjustment of the number and kind of Shares issuable upon the exercise of Warrants in the events and in the manner set forth therein.

 

Nothing contained in this Warrant Certificate, the Warrant Indenture or elsewhere shall be construed as conferring upon the Holder hereof any right or interest whatsoever as a Holder of Shares or any other right or interest except as herein and in the Warrant Indenture expressly provided.

 

Warrants are issuable only as fully registered Warrants.  Warrants may only be transferred in compliance with the conditions of the Warrant Indenture on one of the registers to be kept by and at the principal offices of the Warrant Agent in Vancouver or Toronto, and by the Warrant Agent or such other registrar as the Corporation, with the approval of the Warrant Agent, may appoint at such other place or places, if any, as may be designated, upon surrender of this Warrant Certificate to the Warrant Agent or other registrar accompanied by a written instrument of transfer in form and execution satisfactory to the Warrant Agent or other registrar and upon compliance with the conditions prescribed in the Warrant Indenture and with such reasonable requirements as the Warrant Agent or other registrar may prescribe and upon the transfer being duly noted thereon by the Warrant Agent or other registrar.

 

In the event of any discrepancy between anything contained in this Warrant Certificate and the terms and conditions of the Warrant Indenture, the terms and conditions of the Warrant Indenture shall govern.

 

Time is of the essence hereof.

 

  

2

  

 

This Warrant Certificate will not be valid for any purpose until it has been countersigned by or on behalf of the Warrant Agent from time to time under the Warrant Indenture.

 

The parties hereto have declared that they have required that these presents and all other documents related hereto be in the English language.  Les parties aux présentes déclarent qu’elles ont exigé que la présente convention, de même que tous les documents s’y rapportant, soient rédigés en anglais.

 

IN WITNESS WHEREOF Response Biomedical Corporation has caused this Warrant Certificate to be duly executed as of the 21st day of May, 2009.

 

RESPONSE BIOMEDICAL CORPORATION

 

 

 

By: __________________________________

Authorized Signatory

 

Countersigned and Registered by:

 

COMPUTERSHARE TRUST COMPANY OF CANADA

 

 

 

By: __________________________________

Authorized Signatory

 

  

3

  

 

APPENDIX “A”

EXERCISE FORM

 

	
TO:

	
Response Biomedical Corporation

 

	
  

	
c/o Computershare Trust Company of Canada

 

	
  

	
510 Burrard Street

 

	
  

	
Vancouver, British Columbia

 

	
  

	
V6C 3B9

 

 

	
Attention:

	
Stock Transfer Department

 

The undersigned holder of the within Warrants hereby exercises _____________ of the Warrants represented hereby and the right provided for in such exercised Warrants to receive the common shares of Response Biomedical Corporation (the “Corporation”) issuable pursuant to such Warrants.

 

The undersigned hereby irrevocably directs that the said common shares be issued and delivered as follows:

 

	
 

 

Name(s) in Full

	  	
 

 

Address(es) (include Postal/Zip Code)

	  	
 

Numbers(s) of common shares

	  	  	  	  	  
	  	  	  	  	  
	  	  	  	  	  
	  	  	  	  	  

(Please print in full the name in which certificates are to be issued.  If any of the securities are to be issued to a person or persons other than the Warrantholder, the Transfer of Warrants form must be completed and the Warrantholder must pay to the Warrant Agent all exigible transfer taxes or other government charges.)

 

The undersigned represents, warrants and certifies as follows (one (only) of the following must be checked):

 

A.  ̈           The undersigned holder at the time of exercise of the Warrants (a) is not in the United States; (b) is not a U.S. person and is not exercising the Warrants on behalf of a U.S. person or a person in the United States; and (c) did not execute or deliver the exercise form in the United States.  For purposes hereof “United States” and “U.S. person” shall have the meanings given to such terms in Regulation S under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”).

 

B.  ̈           The undersigned holder (a) purchased the Warrants directly from the Corporation pursuant to a subscription agreement for U.S. purchasers for the purchase of units of the Corporation; (b) is exercising the Warrants solely for its own account or for the account of the original beneficial purchaser, if any; and (c) each of it and any beneficial purchaser was on the date the Warrants were purchased from the Corporation, and is on the date of exercise of the Warrants, an “accredited investor” (as defined in Rule 501(a) of Regulation D under the U.S. Securities Act).

 

C.  ̈           The undersigned holder has delivered to the Warrant Agent an opinion of counsel of recognized standing in form and substance reasonably satisfactory to the Corporation to the effect that the exercise of the Warrants and the issuance of the common shares does not require registration under the U.S. Securities Act or any applicable state securities laws.

 

  

4

  

The undersigned holder understands that unless Box A above is checked, the certificate representing the common shares issued upon exercise of the Warrants will bear a legend restricting transfer without registration under the U.S. Securities Act and applicable state securities laws unless an exemption from registration is available.

 

DATED this ______ day of ________________, _____________.

 

 

	 	 	 
	 Witness or Signature Guarantee* 	 	 Signature of Registered Holder
	 	 	 
	 	 	 
	 	 	 Name of Registered Holder
	 	 	 
	 	 	 
	 	 	 Address of Registered Holder

 

*  If the underlying securities are to be issued to a person other than the registered holder then the signature must be guaranteed by a Schedule I Canadian Chartered Bank or a guarantee under the North American STAMP, SEMP or MSP Medallion Programs.

 

	
o

	
Please check box if these certificates are to be delivered to the office where this Warrant Certificate is surrendered, failing which the certificates will be mailed to the address shown on the register.

 

**  The common shares shall be subject to hold periods under applicable securities legislation and may be endorsed with legends to that effect.

 

  

5

  

APPENDIX “B”

 

TRANSFER OF WARRANTS

 

FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto

 

	 	 	 
	 	 (name) 	 (the “transferee”)
	 	 	 
	 	 	 
	 	 (address)	 

 

 

_______________ of the Warrants registered in the name of the undersigned represented by the within certificate.

 

The undersigned hereby certifies that the Warrants are being sold, assigned or transferred in accordance with applicable securities laws covering any such transaction.

 

DATED the _____ day of ______________, ________________.

 

Signature of Warrantholder                                                                                                                                         

Guaranteed by:                                                                (Signature of Warrantholder)

 

____________________________        *

                   1

* Authorized Signature Number

 

NOTES:

 

	
1.

	
The signature to this transfer must correspond with the name as recorded on the Warrants in every particular without alteration or enlargement or any change whatever.  The signature of the person executing this transfer must be guaranteed by a Schedule I Canadian Chartered Bank or a guarantee under the North American STAMP, SEMP or MSP Medallion Programs.

 

  

1

  

	
2.

	
Warrants shall only be transferable in accordance with the Warrant Indenture among Response Biomedical Corporation and Computershare Trust Company of Canada dated •, 2009, applicable laws and the rules and policies of any applicable stock exchange.  Without limiting the foregoing, if the Warrant Certificate bears a legend restricting the transfer of the Warrants except pursuant to an exemption from registration under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”) and applicable state securities laws, this Transfer Form must be accompanied by a properly completed and executed declaration in the form attached as Schedule “B” to the Warrant Indenture, or an opinion of counsel or other evidence as is satisfactory to the Corporation and the Warrant Agent to the effect that the transfer is exempt from registration under the U.S. Securities Act and applicable state securities laws.

 

THE SECURITIES REPRESENTED HEREBY AND THE SECURITIES ISSUABLE UPON EXERCISE THEREOF HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “U.S. SECURITIES ACT”).  THE HOLDER HEREOF, BY PURCHASING SUCH SECURITIES, AGREES FOR THE BENEFIT OF THE CORPORATION THAT SUCH SECURITIES MAY BE OFFERED, SOLD OR OTHERWISE TRANSFERRED ONLY (A) TO THE CORPORATION, (B) OUTSIDE THE UNITED STATES IN COMPLIANCE WITH RULE 904 OF REGULATION S UNDER THE U.S. SECURITIES ACT AND IN COMPLIANCE WITH APPLICABLE LOCAL LAWS AND REGULATIONS, (C) IN COMPLIANCE WITH THE EXEMPTION FROM REGISTRATION UNDER THE U.S. SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER, IF AVAILABLE, AND IN COMPLIANCE WITH ANY APPLICABLE STATE SECURITIES LAWS, OR (D) IN A TRANSACTION THAT DOES NOT REQUIRE REGISTRATION UNDER THE U.S. SECURITIES ACT OR ANY APPLICABLE STATE SECURITIES LAWS.  DELIVERY OF THIS CERTIFICATE MAY NOT CONSTITUTE “GOOD DELIVERY” IN SETTLEMENT OF TRANSACTIONS ON STOCK EXCHANGES IN CANADA.

 

WARRANT

to acquire common shares of

RESPONSE BIOMEDICAL CORPORATION

 

	
Warrant Certificate

No.

	
Certificate for _________________________ Warrants, each entitling the holder to acquire one Share of Response Biomedical Corporation

 

THIS IS TO CERTIFY THAT, for value received,

 

 

(the “Holder”) is the registered Holder of the number of common share purchase warrants (the “Warrants”) of Response Biomedical Corporation (the “Corporation”, and is entitled, on exercise of these Warrants upon and subject to the terms and conditions set forth herein and in the Warrant Indenture hereinafter referred to, to purchase at any time before 4:00 p.m. (Vancouver time) on ·, 2011 (the “Expiry Date”), one fully paid and non-assessable common share without par value in the capital of the Corporation as constituted on the date hereof (a “Share”) for each Warrant by surrendering to the Warrant Agent at its principal transfer office in the Cities of Vancouver or Toronto with this certificate an exercise form in the form attached hereto duly completed and executed, accompanied by cash, a certified cheque, bank draft or money order in lawful money of Canada payable to or to the order of the Corporation at par in the city where this Warrant Certificate is so surrendered in an amount equal to the purchase price of the Shares so subscribed for.

 

  

2

  

Surrender of this Warrant Certificate, the duly completed exercise form and payment as provided above will be deemed to have been effected only on personal delivery thereof to, or if sent by mail or other means of transmission on actual receipt thereof by, the Warrant Agent at the Cities of Vancouver and Toronto.

 

Subject to adjustment thereof in the events and in the manner set forth in the Warrant Indenture hereinafter referred to, the exercise price (the “Exercise Price”) upon the exercise of a Warrant shall be CDN.$0.25 per Warrant.

 

Certificates for the Shares subscribed for will be mailed to the persons specified in the exercise form at their respective addresses specified therein or, if so specified in the exercise form, delivered to such persons at the office where this Warrant Certificate is surrendered.  If fewer Shares are purchased than the number that can be purchased pursuant to this Warrant Certificate, the Holder hereof will be entitled to receive without charge a new Warrant Certificate in respect of the balance of the Shares not so purchased.  No fractional Shares will be issued upon exercise of any Warrant.

 

THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE THEREOF HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “U.S. SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES.  THIS WARRANT MAY NOT BE EXERCISED IN THE UNITED STATES OR BY OR ON BEHALF OF A U.S. PERSON UNLESS THE WARRANT AND THE UNDERLYING SECURITIES HAVE BEEN REGISTERED UNDER THE U.S. SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR UNLESS AN EXEMPTION FROM SUCH REGISTRATION REQUIREMENTS IS AVAILABLE.  “UNITED STATES” AND “U.S. PERSON” ARE AS DEFINED BY REGULATION S UNDER THE U.S. SECURITIES ACT.

 

This Warrant Certificate evidences Warrants of the Corporation issued or issuable under the provisions of a warrant indenture (which indenture together with all other instruments supplemental or ancillary thereto is herein referred to as the “Warrant Indenture”) dated as of ·, 2009 between the Corporation and the Warrant Agent, as Warrant Agent, to which Warrant Indenture reference is hereby made for particulars of the rights of the Holders of Warrants, the Corporation and the Warrant Agent in respect thereof and the terms and conditions on which the Warrants are issued and held, all to the same effect as if the provisions of the Warrant Indenture were herein set forth, to all of which the Holder by acceptance hereof assents.  The Corporation will furnish to the Holder, on request and without charge, a copy of the Warrant Indenture.

 

On presentation at the principal transfer office of the Warrant Agent in the Cities of Vancouver or Toronto as specified below, subject to the provisions of the Warrant Indenture and on compliance with the reasonable requirements of the Warrant Agent, one or more Warrant Certificates may be exchanged for one or more Warrant Certificates entitling the Holder thereof to purchase in the aggregate an equal number of Shares as are purchasable under the Warrant Certificate or Certificates so exchanged.

 

The Warrant Indenture contains provisions for the adjustment of the number and kind of Shares issuable upon the exercise of Warrants in the events and in the manner set forth therein.

 

  

3

  

Nothing contained in this Warrant Certificate, the Warrant Indenture or elsewhere shall be construed as conferring upon the Holder hereof any right or interest whatsoever as a Holder of Shares or any other right or interest except as herein and in the Warrant Indenture expressly provided.

 

Warrants are issuable only as fully registered Warrants.  Warrants may only be transferred in compliance with the conditions of the Warrant Indenture on one of the registers to be kept by and at the principal offices of the Warrant Agent in Vancouver or Toronto, and by the Warrant Agent or such other registrar as the Corporation, with the approval of the Warrant Agent, may appoint at such other place or places, if any, as may be designated, upon surrender of this Warrant Certificate to the Warrant Agent or other registrar accompanied by a written instrument of transfer in form and execution satisfactory to the Warrant Agent or other registrar and upon compliance with the conditions prescribed in the Warrant Indenture and with such reasonable requirements as the Warrant Agent or other registrar may prescribe and upon the transfer being duly noted thereon by the Warrant Agent or other registrar.

 

In the event of any discrepancy between anything contained in this Warrant Certificate and the terms and conditions of the Warrant Indenture, the terms and conditions of the Warrant Indenture shall govern.

 

Time is of the essence hereof.

 

This Warrant Certificate will not be valid for any purpose until it has been countersigned by or on behalf of the Warrant Agent from time to time under the Warrant Indenture.

 

The parties hereto have declared that they have required that these presents and all other documents related hereto be in the English language.  Les parties aux présentes déclarent qu’elles ont exigé que la présente convention, de même que tous les documents s’y rapportant, soient rédigés en anglais.

 

IN WITNESS WHEREOF Response Biomedical Corporation has caused this Warrant Certificate to be duly executed as of the ____ day of _________________, 200__.

 

RESPONSE BIOMEDICAL CORPORATION

 

 

 

By: ______________________________

Authorized Signatory

 

Countersigned and Registered by:

 

COMPUTERSHARE TRUST COMPANY OF CANADA

 

 

 

 

 

 

By: ______________________________

Authorized Signatory

 

  

4

  

 

APPENDIX “A”

EXERCISE FORM

 

	
TO:

	
Response Biomedical Corporation

 

	
  

	
c/o Computershare Trust Company of Canada

 

	
  

	
510 Burrard Street

 

	
  

	
Vancouver, British Columbia

 

	
  

	
V6C 3B9

 

 

	
Attention:

	
Stock Transfer Department

 

The undersigned holder of the within Warrants hereby exercises _____________ of the Warrants represented hereby and the right provided for in such exercised Warrants to receive the common shares of Response Biomedical Corporation (the “Corporation”) issuable pursuant to such Warrants.

 

The undersigned hereby irrevocably directs that the said common shares be issued and delivered as follows:

 

	
 

 

Name(s) in Full

	  	
 

 

Address(es) (include Postal/Zip Code)

	  	
 

Numbers(s) of common shares

	  	  	  	  	  
	  	  	  	  	  
	  	  	  	  	  
	  	  	  	  	  

(Please print in full the name in which certificates are to be issued.  If any of the securities are to be issued to a person or persons other than the Warrantholder, the Transfer of Warrants form must be completed and the Warrantholder must pay to the Warrant Agent all exigible transfer taxes or other government charges.)

 

The undersigned represents, warrants and certifies as follows (one (only) of the following must be checked):

 

A.  ̈           The undersigned holder at the time of exercise of the Warrants (a) is not in the United States; (b) is not a U.S. person and is not exercising the Warrants on behalf of a U.S. person or a person in the United States; and (c) did not execute or deliver the exercise form in the United States.  For purposes hereof “United States” and “U.S. person” shall have the meanings given to such terms in Regulation S under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”).

 

B.  ̈           The undersigned holder (a) purchased the Warrants directly from the Corporation pursuant to a subscription agreement for U.S. purchasers for the purchase of units of the Corporation; (b) is exercising the Warrants solely for its own account or for the account of the original beneficial purchaser, if any; and (c) each of it and any beneficial purchaser was on the date the Warrants were purchased from the Corporation, and is on the date of exercise of the Warrants, an “accredited investor” (as defined in Rule 501(a) of Regulation D under the U.S. Securities Act).

 

C.  ̈           The undersigned holder has delivered to the Warrant Agent an opinion of counsel of recognized standing in form and substance reasonably satisfactory to the Corporation to the effect that the exercise of the Warrants and the issuance of the common shares does not require registration under the U.S. Securities Act or any applicable state securities laws.

 

  

A-5

  

The undersigned holder understands that unless Box A above is checked, the certificate representing the common shares issued upon exercise of the Warrants will bear a legend restricting transfer without registration under the U.S. Securities Act and applicable state securities laws unless an exemption from registration is available.

 

DATED this ______ day of ________________, _____________.

 

 

 

	 	 	 
	 Witness or Signature Guarantee* 	 	 Signature of Registered Holder
	 	 	 
	 	 	 
	 	 	 Name of Registered Holder
	 	 	 
	 	 	 
	 	 	 Address of Registered Holder

 

 

*  If the underlying securities are to be issued to a person other than the registered holder then the signature must be guaranteed by a Schedule I Canadian Chartered Bank or a guarantee under the North American STAMP, SEMP or MSP Medallion Programs.

 

	
o

	
Please check box if these certificates are to be delivered to the office where this Warrant Certificate is surrendered, failing which the certificates will be mailed to the address shown on the register.

 

**  The common shares shall be subject to hold periods under applicable securities legislation and may be endorsed with legends to that effect.

 

  

A-6

  

 

 

APPENDIX “B”

 

TRANSFER OF WARRANTS

 

FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto

 

	 	 	 
	 	 (name) 	 (the “transferee”)
	 	 	 
	 	 	 
	 	 (address)	 

 

_______________ of the Warrants registered in the name of the undersigned represented by the within certificate.

 

The undersigned hereby certifies that the Warrants are being sold, assigned or transferred in accordance with applicable securities laws covering any such transaction.

 

DATED the _____ day of ______________, ________________.

  

 

Signature of Warrantholder                                                                                                                                         

Guaranteed by:                                                                (Signature of Warrantholder)

 

____________________________       *

               2

* Authorized Signature Number

NOTES:

 

	
1.

	
The signature to this transfer must correspond with the name as recorded on the Warrants in every particular without alteration or enlargement or any change whatever.  The signature of the person executing this transfer must be guaranteed by a Schedule I Canadian Chartered Bank or a guarantee under the North American STAMP, SEMP or MSP Medallion Programs.

 

	
2.

	
Warrants shall only be transferable in accordance with the Warrant Indenture among Response Biomedical Corporation and Computershare Trust Company of Canada dated •, 2009, applicable laws and the rules and policies of any applicable stock exchange.  Without limiting the foregoing, if the Warrant Certificate bears a legend restricting the transfer of the Warrants except pursuant to an exemption from registration under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”) and applicable state securities laws, this Transfer Form must be accompanied by a properly completed and executed declaration in the form attached as Schedule “B” to the Warrant Indenture, or an opinion of counsel or other evidence as is satisfactory to the Corporation and the Warrant Agent to the effect that the transfer is exempt from registration under the U.S. Securities Act and applicable state securities laws.

 

A-7

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