Document:

Exhibit 10.6.3

 

Exhibit 10.6.3

THIRD AMENDMENT TO

SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

1. Section 5.5 of the SERP is amended and restated in its entirety to read as follows:

5.5 Form of Payment

     Except as provided in Section 5.6, the Supplemental Retirement Benefit shall be paid in the
form of benefit as provided below, specified by the Participant in the Form of Payment Designation.
The form of benefit specified by the Participant shall be effective on the date of receipt of the
Form of Payment Designation by the Corporation, unless otherwise required under Section 409A of the
Code. If, upon termination or Retirement, the Participant’s most recent election as to the form
of payment was made within one (1) year of such termination or Retirement, then only to the extent
required under Section 409A of the Code, the prior election shall be used to determine the form of
payment. The forms of benefit payment are:

	 	(a)	 	A single-life annuity commencing at Retirement, which is the normal form of payment;
	 
	 	(b)	 	A one hundred percent (100%) Joint and Survivor annuity commencing at Retirement;
	 
	 	(c)	 	A fifty percent (50%) Joint and Survivor annuity commencing at Retirement;
	 
	 	(d)	 	Life and Ten (10) Year Certain annuity, commencing at Retirement;
	 
	 	(e)	 	Life and Five (5) Year Certain annuity, commencing at Retirement; and
	 
	 	(f)	 	Any Actuarial Equivalent method that the Committee may, from time to time, approve.Shareholder Rights Plan Agreement

 

Exhibit 4.5

SHAREHOLDER RIGHTS PLAN AGREEMENT

BETWEEN

OSI GEOSPATIAL INC.

AND

COMPUTERSHARE INVESTOR SERVICES INC.

DATED AS OF APRIL 19, 2001

AS AMENDED AND RESTATED AS OF MARCH 19, 2007

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	ARTICLE 1 INTERPRETATION	 	 2
	1.1

	 	Certain Definitions
	 	 2
	1.2

	 	Currency
	 	 11
	1.3

	 	Number and Gender
	 	 11
	1.4

	 	Sections and Headings
	 	 11
	1.5

	 	Statutory References
	 	 12
	1.6

	 	Determination of Percentage Ownership
	 	 12
	1.7

	 	Acting Jointly or in Concert
	 	 12
	1.8

	 	Generally Accepted Accounting Principles
	 	 12
	 
	 	 	 	 
	ARTICLE 2 THE RIGHTS	 	 13
	2.1

	 	Legend on Common Share Certificates
	 	 13
	2.2

	 	Initial Exercise Price; Exercise of Rights; Detachment of Rights
	 	 13
	2.3

	 	Adjustments to Exercise Price; Number of Rights
	 	 16
	2.4

	 	Date on Which Exercise is Effective
	 	 20
	2.5

	 	Execution, Authentication, Delivery and Dating of Rights Certificates
	 	 20
	2.6

	 	Registration, Transfer and Exchange
	 	 21
	2.7

	 	Mutilated, Lost, Stolen and Destroyed Rights Certificates
	 	 21
	2.8

	 	Persons Deemed Owners
	 	 22
	2.9

	 	Delivery and Cancellation of Certificates
	 	 22
	2.10

	 	Agreement of Rights Holders
	 	 22
	 
	 	 	 	 
	ARTICLE 3 ADJUSTMENTS TO THE RIGHTS	 	 23
	3.1

	 	Flip-in Event
	 	 23
	3.2

	 	Fiduciary Duties of the Board of Directors of the Corporation
	 	 24
	 
	 	 	 	 
	ARTICLE 4 THE RIGHTS AGENT	 	 25
	4.1

	 	General
	 	 25
	4.2

	 	Merger, Amalgamation, Consolidation or Change of Name of Rights Agent
	 	 25
	4.3

	 	Duties of Rights Agent
	 	 26
	4.4

	 	Change of Rights Agent
	 	 27
	 
	 	 	 	 
	ARTICLE 5 MISCELLANEOUS	 	 28
	5.1

	 	Redemption, Waiver and Termination
	 	 28
	5.2

	 	Expiration
	 	 29
	5.3

	 	Issuance of New Rights Certificates
	 	 29
	5.4

	 	Supplements and Amendments
	 	 29
	5.5

	 	Fractional Rights and Fractional Shares
	 	 31
	5.6

	 	Rights of Action
	 	 31
	5.7

	 	Holder of Rights Not Deemed a Shareholder
	 	 31
	5.8

	 	Notice of Proposed Actions
	 	 32
	5.9

	 	Notices
	 	 32
	5.10

	 	Costs of Enforcement
	 	 32
	5.11

	 	Regulatory Approvals
	 	 32
	5.12

	 	Declaration as to Non-Canadian and Non-U.S. Holders
	 	 33
	5.13

	 	Successors
	 	 33
	5.14

	 	Benefits of this Agreement
	 	 33
	5.15

	 	Shareholder Review
	 	 33
	5.16

	 	Determination and Actions by the Board of Directors
	 	 33
	5.17

	 	Governing Law
	 	 33
	5.18

	 	Language
	 	 34
	5.19

	 	Counterparts
	 	 34
	5.20

	 	Severability
	 	 34

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	5.21

	 	Effective Date
	 	 34
	5.22

	 	Time of the Essence
	 	 34
	 
	 	 	 	 
	EXHIBIT A	 	 
	 
	 	 	 	 
	 

	 	FORM OF RIGHTS CERTIFICATE
	 	 A-1
	 

	 	FORM OF ELECTION TO EXERCISE
	 	 A-3
	 

	 	FORM OF ASSIGNMENT
	 	 A-5

3

 

SHAREHOLDER RIGHTS PLAN AGREEMENT

THIS AGREEMENT dated as of March 19, 2007

BETWEEN:

	 	 	 	OSI GEOSPATIAL INC.
	 
	 	 	 	(the “Corporation”)

OF THE FIRST PART

AND:

	 	 	 	COMPUTERSHARE INVESTOR SERVICES INC.
	 
	 	 	 	(the “Rights Agent”)

OF THE SECOND PART

WHEREAS:

	A.	 	The Corporation adopted a shareholder rights plan dated April 19, 2001 (the “2001 Rights
Plan”).
	 
	B.	 	On April 22, 2004, the shareholders of the Corporation voted in favour of the continued
existence of the 2001 Rights Plan until the close of business on April 19, 2007.
	 
	C.	 	The Corporation has changed its name and its authorized share capital.
	 
	D.	 	The Corporation’s governing corporate legislation has changed.
	 
	E.	 	The Corporation wishes to extend the term of the 2001 Rights Plan until March 19, 2010;
	 
	F.	 	The Board of Directors, in the exercise of its fiduciary duties, has determined that it is
advisable to amend the 2001 Rights Plan and to adopt an amended and restated shareholder
rights plan to among other things, extend the term of the rights plan until March 19, 2010
(the “Rights Plan”) to ensure, to the extent possible, that all shareholders of the
Corporation are treated fairly in connection with any takeover offer for the Corporation or
other acquisition of control of the Corporation.
	 
	G.	 	In order to implement the Rights Plan, the Board of Directors has:

	 	(a)	 	authorized and declared a distribution of one right (a “Right”) effective at
the Close of Business at the Record Time in respect of each Common Share and each
Convertible Security that carries a right to elect directors (a “Voting Convertible
Share”) outstanding at the Close of Business at the Record Time;
	 
	 	(b)	 	authorized the issuance of one Right in respect of each Common Share and each
Voting Convertible Share issued after the Record Time and prior to the earlier of the
Separation Time and the Expiration Time; and

 

 

	 	(c)	 	authorized the issuance of Rights Certificates to holders of Rights pursuant to
the terms and subject to the conditions set forth herein.

	H.	 	Each Right entitles the holder thereof, after the Separation Time, to purchase securities of
the Corporation pursuant to the terms and subject to the conditions set forth herein.
	 
	I.	 	The Corporation desires to appoint the Rights Agent to act on behalf of the Corporation, and
the Rights Agent is willing to so act, in connection with the issuance, transfer, exchange and
replacement of Rights Certificates, the exercise of Rights and other matters referred to
herein.

NOW THEREFORE in consideration of the premises and respective agreements set forth herein, the
parties hereby agree as follows:

ARTICLE 1 INTERPRETATION

	1.1	 	Certain Definitions

For the purposes of this Agreement, including the recitals hereto, the following terms have the
meanings indicated:

	 	(a)	 	“Acquiring Person” means any Person who is at any time after the date
hereof the Beneficial Owner of 20% or more of the outstanding Voting Shares of the
Corporation; provided, however, that the term “Acquiring Person” shall not include:

	 	(i)	 	the Corporation or any corporation controlled by the
Corporation;
	 
	 	(ii)	 	any Person who becomes the Beneficial Owner of 20% or more of
the outstanding Voting Shares as a result of one or any combination of:

	 	A.	 	a Voting Share Reduction;
	 
	 	B.	 	a Permitted Bid Acquisition;
	 
	 	C.	 	an Exempt Acquisition;
	 
	 	D.	 	a Pro Rata Acquisition; or
	 
	 	E.	 	a Convertible Security Acquisition.
	 
	 	 	 	provided, however, that if a Person shall become the Beneficial
Owner of 20% or more of the outstanding Voting Shares by reason of
one or any combination of a Voting Share Reduction, a Permitted Bid
Acquisition, an Exempt Acquisition or a Pro Rata Acquisition, and
thereafter becomes the Beneficial Owner of an additional one per
cent of the Voting Shares then outstanding (otherwise than pursuant
to a Voting Share Reduction, a Permitted Bid Acquisition, an Exempt
Acquisition or a Pro Rata Acquisition), then, as of the date that
such Person becomes a Beneficial Owner of such additional Voting
Shares, such Person shall become an “Acquiring Person"'

	 	(iii)	 	for the period of 10 days after the Disqualification Date (as
hereinafter defined), any Person who becomes the Beneficial Owner of 20% or
more of the outstanding Voting Shares as a result of such Person becoming
disqualified from relying on subclause 1.1(d)(v) hereof where such
disqualification results solely because such Person is making or has announced
a current intention to make a Take-over Bid, either alone or by

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	 	 	 	acting jointly or in concert with any other Person. For the purposes of
this definition, “Disqualification Date” means the first date of
public announcement that such Person is making or has announced a current
intention to make a Take-over Bid, alone or by acting jointly or in concert
with another Person; or

	 	(iv)	 	an underwriter that becomes the Beneficial Owner of 20% or
more of the Voting Shares in connection with a distribution of securities
pursuant to an underwriting agreement with the Corporation.

	 	(b)	 	“Affiliate”, when used to indicate a relationship with a specified
Person, means a Person that directly or indirectly controls, or is controlled by, or
is under common control with, such specified Person,
	 
	 	(c)	 	“Associate” means, when used to indicate a relationship with a
specified Person:

	 	(i)	 	a corporation of which that Person Beneficially Owns shares or
securities currently convertible into shares carrying more than 10% of the
voting rights exercisable with respect to the election of directors under all
circumstances or by reason of the occurrence of an event that has occurred and
is continuing, or a currently exercisable option or right to purchase such
shares or such convertible securities;
	 
	 	(ii)	 	a partner of that Person;
	 
	 	(iii)	 	a trust or estate in which that Person has a substantial
beneficial interest or in respect of which he serves as a trustee or in a
similar capacity provided, however, that a Person shall not be an Associate of
a trust by reason only of the fact that such Person serves as trustee or in a
similar capacity in relation to such trust if such person is duly licensed to
carry on the business of a trust company under the laws of Canada or any
province thereof or if a substantial portion of the ordinary business of such
Person is the management of investment funds for unaffiliated investors and
such Person acts as trustee or in a similar capacity in relation to such trust
in the ordinary course of such business;
	 
	 	(iv)	 	a spouse of that Person or any Person of the opposite sex with
whom that Person is living in a conjugal relationship outside marriage or a
child of that Person; and
	 
	 	(v)	 	a relative of a Person mentioned in Clause 1.1(c)(iv) if that
relative has the same residence as that Person;

	 	(d)	 	A Person shall be deemed the “Beneficial Owner” of, and to have
“Beneficial Ownership” of, and to “Beneficially Own”:

	 	(i)	 	any securities of which such Person or any of such Person’s
Affiliates or Associates is owner at law or in equity;
	 
	 	(ii)	 	any securities which the Person or any of such Person’s
Affiliates or Associates has the right to acquire, within 60 days (whether
such right is exercisable immediately or after the passage of not more than 60
days thereafter or upon the occurrence of a contingency or the making of a
payment) pursuant to any Convertible Security, agreement, arrangement, pledge
or understanding, whether or not in writing (other than (A) customary
agreements with and between underwriters and/or banking group and/or

3

 

	 	 	 	selling group members with respect to a distribution of securities and (B)
pledges of securities in the ordinary course of the pledgee’s business);
and

	 	(iii)	 	any securities that are Beneficially Owned within the meaning
of clauses (i) or (ii) of this Subsection 1.1(b) by any other Person with
which such Person is acting jointly or in concert;
	 
	 	 	 	provided, however, that a Person shall not be deemed the “Beneficial Owner”
of, or to have “Beneficial Ownership” of, or to “Beneficially Own”, any
security:
	 
	 	(iv)	 	because such security has been deposited or tendered pursuant
to a Take-over Bid made by such Person or any of such Person’s Affiliates or
Associates or any other person acting jointly or in concert with such Person
until the earlier of such tendered security being (A) accepted unconditionally
for payment or exchange and (B) taken up and paid for;
	 
	 	(v)	 	because (A) such Person or any of the Affiliates or Associates
of such Person or any other Person acting jointly or in concert with such
Person, holds such security provided that the ordinary business of any such
Person (the “Fund Manager”) includes the management of investment
funds for others and such security is held by the Fund Manager in the ordinary
course of such business in the performance of such Fund Manager’s duties for
the account of any other Person ( a “Client”), (B) such Person (the
“Trust Company”) is licensed to carry on the business of a trust
company under applicable laws and, as such, acts as trustee or administrator
or in a similar capacity in relation to the estates of deceased or incompetent
Persons ( each an “Estate Account”) or in relation to other accounts (
each an “Other Account”) and holds such security in the ordinary
course of such duties for such Estate Accounts or for such Other Accounts, (C)
such Person (the “Administrator”) is the administrator or the trustee
of one or more pension funds or plans (a “Plan”) registered under the
laws of Canada or any province thereof or the laws of the United States of
America or any state thereof, (D) such Person (the “Crown Agent”) is
established by statute for purposes that include, and the ordinary business or
activity of such Person includes, the management of investment funds for
employee benefit plans, pension plans, insurance plans, or various public
bodies, or (E) such Person is a Plan; provided, however, that in any of the
foregoing cases the Fund Manager, the Trust Company, the Plan Administrator,
the Crown Agent or the Plan, as the case may be, is not then making or has not
then announced an intention to make a Take-over Bid, alone or by acting
jointly or in concert with any other Person, other than an Offer to Acquire
Voting Shares or other securities (X) pursuant to a distribution by the
Corporation or (Y) by means of a Permitted Bid, or (Z) by means of market
transactions made in the ordinary course of the business of such Person
(including pre-arranged trades entered into the ordinary course of business of
such Person) executed through the facilities of a stock exchange or organized
over-the-counter market;
	 
	 	(vi)	 	because such Person is a Client of the same Fund Manager as
another Person on whose account the Fund Manager holds such security, or
because such Person is an Estate Account or an Other Account of the same Trust
Company as another Person on whose account the Trust Company holds such
security, or because such Person is a Plan with the same Plan Administrator as
another Plan on whose account the Plan Administrator holds such securities;

4

 

	 	(vii)	 	because such Person is a Client of a Fund Manager and such
security is owned at law or in equity by the Fund Manager or because such
Person is an Estate Account or an Other Account of a Trust Company and such
security is owned at law or in equity by the Trust Company or such Person is a
Plan and such security is owned at law or in equity by the Plan Administrator;
or
	 
	 	(viii)	 	because such Person is the registered holder of securities as a result of
carrying on the business of or acting as a nominee of a securities depositary.

For purposes of this Agreement in determining the percentage of the outstanding Voting Shares with
respect to which a Person is or is deemed to be the Beneficial Owner, any unissued Voting Shares as
to which such Person is deemed the Beneficial Owner pursuant to this Subsection 1.1(d) shall be
deemed outstanding.

	 	(e)	 	“BCBCA” means the Business Corporations Act (British Columbia), S.B.C.
2002, C.57 as amended, and the regulations thereunder, and any comparable or successor
laws or regulations thereto.
	 
	 	(f)	 	“Board of Directors” means the board of directors of the Corporation
or any duly constituted and empowered committee thereof.
	 
	 	(g)	 	“Business Day” means any day, other than a Saturday or Sunday or a day
on which banking institutions in the City of Vancouver are authorized or obligated by
law to close.
	 
	 	(h)	 	“Canadian Dollar Equivalent” of any amount which is expressed in
United States dollars means on any day the Canadian dollar equivalent of such amount
determined by reference to the Canadian-U.S. Exchange Rate in effect on such date.
	 
	 	(i)	 	“Close of Business” on any given date shall mean the time on such date
(or, if such date is not a Business Day, the time on the next Business Day) at which
the principal office of the transfer agent for the Common Shares in Vancouver, British
Columbia (or after the Separation Time, the principal office of the Rights Agent in
Vancouver, British Columbia) is closed to the public.
	 
	 	(j)	 	“Closing Price” per security of any securities on any date of
determination means:

	 	(i)	 	the closing board lot sale price or, if such price is not
available, the average of the closing bid and asked prices, for such
securities as reported by the stock exchange or national securities quotation
system on which such securities are listed or admitted to trading (provided
that, if at the date of determination such securities are listed or admitted
to trading on more than one stock exchange or national securities quotation
system, such price or prices shall be determined based on the stock exchange
or quotation system on which such securities are then listed or admitted to
trading on which the largest number of such securities were traded during the
most recently completed calendar year); or
	 
	 	(ii)	 	if for any reason none of such prices is available on such day
or the securities are not listed or admitted to trading on a stock exchange or
a national securities quotation system, the last sale price, or in case no
sale takes place on such date, the average of the high bid and low asked
prices for each of such securities in the over-the-counter market;

	 	 	 	provided, however, that (A) if for any reason none of such prices are available on
such date, the “Closing Price” per security of such securities on such date shall
mean

5

 

	 	 	 	the fair value per security of the securities on such date as determined by a
nationally or internationally recognized investment dealer or investment banker with
respect to the fair value per security of such securities and (B) if the Closing
Price so determined is expressed in United States dollars, such amount shall be
converted to the Canadian Dollar Equivalent.

	 	(k)	 	“Common Shares” means the common shares in the share capital of the
Corporation and for the purposes of paragraph 2.1, all Convertible Securities in the
capital of the Corporation that are entitled to vote generally on the election of
directors of the Corporation as presently constituted, as such shares may be
subdivided, consolidated, reclassified or otherwise changed from time to time, and
“common shares” when used with reference to any Person other than the Corporation
means the class or classes of shares (or similar equity interest) with the greatest
per share voting power entitled to vote generally in the election of all directors of
such other Person or the equity securities or other equity interest having power
(whether or not exercised) to control or direct the management of such other Person
or, if such other Person is a corporation controlled by another Person, the Person
(other than an individual) which ultimately controls such first mentioned other
Person.
	 
	 	(l)	 	“Competing Permitted Bid” means a Take-over Bid that:

	 	(i)	 	is made after a Permitted Bid has been made and prior to the
expiry of the Permitted Bid;
	 
	 	(ii)	 	satisfies all components of the definition of a Permitted Bid
other than the requirement in Clause (ii)(A)(x) thereof; and
	 
	 	(iii)	 	contains, and the take-up and payment for securities tendered
or deposited is subject to, irrevocable and unqualified provisions that no
Voting Shares shall be taken up or paid for pursuant to the Takeover Bid prior
to the Close of Business on a date that is no earlier than the later of: (i)
35 days after the date of the Take-over Bid, and (ii) the 60th day
after the earliest date on which any other Permitted Bid that is then in
existence was made.

	 	(m)	 	“controlled” a body corporate is “controlled” by another Person if and
only if:

	 	(i)	 	securities entitled to vote in the election of directors
carrying more than 50% of the votes for the election of directors are held,
directly or indirectly, by or for the benefit of the other Person; and
	 
	 	(ii)	 	the votes carried by such securities are entitled, if
exercised, to elect a majority of the board of directors of such body
corporate;

	 	 	 	and “controls”, “controlling” and “under common control”;
shall be interpreted accordingly.
	 
	 	(n)	 	“Convertible Security” means, with respect to any security, a security
convertible into or exchangeable for the first-mentioned security.
	 
	 	(o)	 	“Convertible Security Acquisition” means the acquisition of Voting
Shares from the Corporation upon the exercise or pursuant to the terms and conditions
of any Convertible Securities acquired by a person pursuant to a Permitted Bid
Acquisition, an Exempt Acquisition or a Pro Rata Acquisition.
	 
	 	(p)	 	“Co-Rights Agents” shall have the meaning ascribed thereto in
Subsection 4.1(a).

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	 	(q)	 	“Disposition Date” has the meaning ascribed thereto in Subsection
5.1(b).
	 
	 	(r)	 	“Disqualification Date” has the meaning ascribed thereto in Clause 1.1
(a)(iii) hereof.
	 
	 	(s)	 	“Effective Date” means the later of the Close of Business on: (i) May
25, 2007 and (ii) the date of the Corporation being advised by counsel that all
appropriate regulatory approvals have been obtained by the Corporation.
	 
	 	(t)	 	“Election to Exercise” has the meaning ascribed thereto in Subsection
2.2(d).
	 
	 	(u)	 	“Exempt Acquisition” means an acquisition of Voting Shares: (i) a
share acquisition in respect of which the Board of Directors has waived the
application of Section 3.1 pursuant to Subsection 5.1(b), 5.1(d) or 5.1(e); (ii) which
was made on or prior to the date of this Agreement; and (iii) by way of private
placement or other distribution exempt from the prospectus requirements of applicable
law and which was approved by the Board of Directors.
	 
	 	(v)	 	“Exercise Price” means, as of any date, the price at which a holder of
a Right may purchase the securities issuable upon exercise of one whole Right and,
until adjustment thereof in accordance with the terms hereof, the Exercise Price shall
be $30.00.
	 
	 	(w)	 	“Expansion Factor” has the meaning ascribed thereto in subclause
2.3(b)(iv)(A)(1).
	 
	 	(x)	 	“Expiration Time” means the earlier of (i) the Termination Time; and
(ii) the Close of Business on the date on which the first annual meeting of
shareholders of the Corporation following the third anniversary of the date of this
Agreement is held; provided, however, that if the resolution referred to in Section
5.15 is approved by the Independent Shareholders in accordance with Section 5.15 at or
prior to such annual meeting, “Expiration Time” means the earlier of (i) the
Termination Time; and (ii) the Close of Business on the sixth anniversary of the date
of this Agreement.
	 
	 	(y)	 	“Fiduciary” means a trust company registered under the trust company
legislation of Canada or any province thereof, a trust company organized under the
laws of any state of the United States, a portfolio manager registered under the
securities legislation of one or more provinces of Canada or an investment adviser
registered under the United States Investment Advisers Act of 1940 or any other
securities legislation of the United States or any state, of the United States.
	 
	 	(z)	 	“Flip-in Event” means a transaction or event in or pursuant to which
any Person becomes an Acquiring Person.
	 
	 	(aa)	 	“holder” shall have the meaning ascribed thereto in Section 2.8.
	 
	 	(bb)	 	“Independent Shareholders” means holders of outstanding Voting Shares,
other than Voting Shares Beneficially Owned by (i) any Acquiring Person; (ii) any
Offeror other than a Person who at the relevant time is deemed not to Beneficially Own
such Voting Shares by reason of Clause 1.1(d)(v) hereof; (iii) any Person acting
jointly or in concert with such Acquiring Person or Offeror referred to in (ii); (iv)
any Associate or Affiliate of such Acquiring Person or Offeror referred to in (ii);
and (v) any employee benefit plan, deferred profit sharing plan and any similar plan
or trust for the benefit of employees of the Corporation unless the beneficiaries of
the plan or trust direct the manner in which the Voting Shares are to be voted or
withheld from voting or direct whether the Voting Shares are to be tendered to a
Take-over Bid.

7

 

	 	(cc)	 	“Market Price” per security of any securities on any date of
determination shall mean the average of the daily Closing Prices per security of such
securities on each of the 20 consecutive Trading Days through and including the
Trading Day immediately preceding such date of determination; provided, however, that
if an event of a type analogous to any of the events described in Section 2.3 hereof
shall have caused any Closing Price used to determine the Market Price on any Trading
Day not to be fully comparable with the Closing Price on the Trading Day immediately
preceding such date of determination, each such Closing Price so used shall be
appropriately adjusted in a manner analogous to the applicable adjustment provided for
in Section 2.3 hereof in order to make it fully comparable with the Closing Price on
the Trading Day immediately preceding such date of determination.
	 
	 	(dd)	 	“Nominee” has the meaning ascribed thereto in Subsection 2.2(c).
	 
	 	(ee)	 	“Offer to Acquire” shall include:

	 	(i)	 	an offer to purchase or a solicitation of an offer to sell
Voting Shares, or a public announcement of an intention to make such an offer
or solicitation; and
	 
	 	(ii)	 	an acceptance of an offer to sell Voting Shares, whether or
not such offer to sell has been solicited;

	 	 	 	or any combination thereof, and the Person accepting an offer to sell shall be
deemed to be making an Offer to Acquire to the Person that made the offer to sell.
	 
	 	(ff)	 	“Offerer” means a Person who has announced a current intention to
make, or who is making, a Take-over Bid.
	 
	 	(gg)	 	“Offerer’s Securities” means the Voting Shares Beneficially Owned on
the date of a Take-over Bid by an Offerer.
	 
	 	(hh)	 	“Permitted Bid” means a Take-over Bid made by way of a Take-over Bid
circular which also complies with the following additional provisions:

	 	(i)	 	the Take-over Bid is made to all holders of record of Voting
Shares wherever resident as registered on the books of the Corporation, other
than the Offerer;
	 
	 	(ii)	 	the Take-over Bid contains, and the take-up and payment for
securities tendered or deposited thereunder is subject to irrevocable and
unqualified conditions that:

	 	A.	 	no Voting Shares shall be taken up or paid for
pursuant to the Take-over Bid (x) prior to the Close of Business on a
date which is not less than 60 days following the date of the
Take-over Bid and (y) unless, at the Close of Business on that date,
the Voting Shares deposited or tendered pursuant to the Take-over Bid
and not withdrawn constitute more than 50% of the Voting Shares
outstanding which are held by Independent Shareholders;
	 
	 	B.	 	unless the Take-over Bid is withdrawn, Voting
Shares may be deposited pursuant to such Take-over Bid at any time
prior to the Close of Business on the date of the first take-up of or
payment for Voting Shares;

8

 

	 	C.	 	any Voting Shares deposited pursuant to the
Take-over Bid may be withdrawn until taken up and paid for; and
	 
	 	D.	 	in the event that the requirement set forth in
subclause (A)(y) of this clause 1.1(ag)(ii) is satisfied, the Offeror
will make a public announcement of that fact and the Take-over Bid
will remain open for deposits and tenders of Voting Shares for not
less than 10 Business Days from the date of such public announcement.

	 	 	 	For purposes of this Agreement, (A) should a Take-over Bid which qualified as a
Permitted Bid when made cease to be a Permitted Bid because it ceases to meet any or
all of the requirements mentioned above prior to the time it expires (after giving
effect to any extension) or is withdrawn, any acquisition of Voting Shares made
pursuant to such Take-over Bid shall not be a Permitted Bid Acquisition and (B) the
term “Permitted Bid” shall include a Competing Permitted Bid.
	 
	 	(ii)	 	“Permitted Bid Acquisition” means an acquisition of Voting Shares made
pursuant to a Permitted Bid or a Competing Permitted Bid.
	 
	 	(jj)	 	“Person” includes any individual, firm, partnership, association,
trust, trustee, executor, administrator, legal personal representative, government,
governmental body or authority, corporation, or other incorporated or unincorporated
organization, syndicate or other entity.
	 
	 	(kk)	 	“Pro Rata Acquisition” means an acquisition by a Person of Voting
Shares pursuant to (i) any dividend reinvestment plan or share purchase plan of the
Corporation made available to all holders of Voting Shares (other than holders
resident in any jurisdiction where participation in any such plan is restricted or
impractical as a result of applicable law), (ii) a stock dividend, a stock split or
other event pursuant to which such Person becomes the Beneficial Owner of Voting
Shares on the same pro rata basis as all other holders of Voting Shares of the same
class or series, (iii) the acquisition or exercise of rights to purchase Voting Shares
distributed to all holders of Voting Shares (other than holders resident in any
jurisdiction where such distribution is restricted or impractical as a result of
applicable law) by the Corporation pursuant to a rights offering (but only if such
rights are acquired directly from the Corporation) or (iv) a distribution of Voting
Shares or Convertible Securities in respect thereof offered pursuant to a prospectus
or by way of a private placement or a conversion or exchange of any such Convertible
Security, provided such Person does not thereby acquire a greater percentage of Voting
Shares or Convertible Securities so offered than the Person’s percentage of Voting
Shares Beneficially Owned immediately prior to such acquisition.
	 
	 	(ll)	 	“Record Time” means the Close of Business on the Effective Date.
	 
	 	(mm)	 	“Redemption Price” shall have the meaning attributed thereto in Subsection 5.1(a).
	 
	 	(nn)	 	“Regular Periodic Cash Dividend” means cash dividends paid on the
Common Shares at regular intervals in any fiscal year of the Corporation to the extent
that such cash dividends do not exceed in the aggregate in any fiscal year, on a per
share basis, the greatest of:

	 	(i)	 	200% of the aggregate amount of cash dividends declared
payable by the Corporation on its Common Shares in its immediately preceding
fiscal year divided by the number of Common Shares outstanding as at the end
of such fiscal year;

9

 

	 	(ii)	 	300% of the arithmetic mean of the aggregate amounts of cash
dividends declared payable by the Corporation on its Common Shares in its
three immediately preceding fiscal years divided by the arithmetic mean of the
number of Common Shares outstanding as at the end of each of such fiscal
years; and
	 
	 	(iii)	 	100% of the aggregate consolidated net income of the
Corporation, before extraordinary items, for its immediately preceding fiscal
year divided by the number of Common Shares outstanding as at the end of such
fiscal year.

	 	(oo)	 	“Right” means the herein described rights to purchase securities
pursuant to the terms and subject to the conditions set forth herein.
	 
	 	(pp)	 	“Rights Certificate” means the certificates representing the Rights
after the Separation Time which shall be substantially in the form attached hereto as
Exhibit A.
	 
	 	(qq)	 	“Rights Register” and “Rights Registrar” shall have the
respective meanings ascribed thereto in Subsection 2.6(a).
	 
	 	(rr)	 	“Securities Act (British Columbia)” means the Securities Act (British
Columbia), R.S.B.C 1996, c.418, as amended and the regulations and rules made
thereunder, as now in effect or as the same may from time to time be amended,
re-enacted or replaced.
	 
	 	(ss)	 	“Separation Time” means the Close of Business on the eighth Business
Day after the earlier of:

	 	(i)	 	the Stock Acquisition Date; and
	 
	 	(ii)	 	the date of the commencement of, or first public announcement
or disclosure of the intent of any Person (other than the Corporation or any
corporation controlled by the Corporation) to commence, a Take-over Bid (other
than a Permitted Bid, so long as such Take-over Bid continues to satisfy the
requirements of a Permitted Bid) or such later Business Day as may be
determined at any time or from time to time by the Board of Directors;

	 	 	 	provided, however, that if any such Take-over Bid expires, is cancelled, is
terminated or is otherwise withdrawn prior to the Separation Time, such Take-over
Bid shall be deemed, for purposes of this Subsection 1.1(ar) never to have been
made, and, provided further, that if the Board of Directors determines, pursuant to
Section 5.1, to waive the application of Section 3.1 to a Flip-In Event, the
Separation Time in respect of such Flip-In Event shall be deemed never to have
occurred.
	 
	 	(tt)	 	“Stock Acquisition Date” means the first date of public announcement
or disclosure by the Corporation or an Acquiring Person of facts indicating that a
Person has become an Acquiring Person (which, for the purposes of this definition,
shall include, without limitation, a report filed pursuant to Section 141 of the
Securities Act (Alberta), Section 101 of the Securities Act (British Columbia) or
Section 13(d) of the U.S. Exchange Act disclosing such information).
	 
	 	(uu)	 	“Take-over Bid” means an Offer to Acquire Voting Shares of any class,
or Convertible Securities with respect thereto, where the Voting Shares subject to the
Offer to Acquire, together with the Voting Shares into or for which the securities
subject to the Offer to Acquire are convertible or exchangeable and the Offerer’s

10

 

	 	 	 	Securities constitute in the aggregate 20% or more of the outstanding Voting Shares
at the date of the Offer to Acquire.

	 	(vv)	 	“Termination Time” means the time at which the right to exercise
Rights shall terminate pursuant to Section 5.1 hereof.
	 
	 	(ww)	 	“Trading Day” when used with respect to any securities, means the day
on which the principal Canadian or United States securities exchange (as determined by
the Board of Directors) on which such securities are listed or admitted to trading is
open for the transaction of business or, if the securities are not listed or admitted
to trading on any Canadian or United States securities exchange, a Business Day.
	 
	 	(xx)	 	“U.S. — Canadian Exchange Rate” on any date means:

	 	(i)	 	if on such date the Bank of Canada sets an average noon spot
rate of exchange for the conversion of one United States dollar into Canadian
dollars, such rate; and
	 
	 	(ii)	 	in any other case, the rate for such date for the conversion
of one United States dollar into Canadian dollars which is calculated in the
manner which shall be determined by the Board of Directors from time to time
acting in good faith;

	 	(yy)	 	“U.S. Exchange Act” means the United States Securities Exchange Act of
1934, as amended, and the rules and regulations thereunder as from time to time in
effect.
	 
	 	(zz)	 	“Voting Share Reduction” means an acquisition or redemption by the
Corporation of Voting Shares which, by reducing the number of Voting Shares
outstanding, increases the percentage of Voting Shares Beneficially Owned by any
Person to 20% or more of the Voting Shares then outstanding.
	 
	 	(aaa)	 	“Voting Shares” means the Common Shares, the Class A Preference
Shares Series A Convertible, the Class B Series 1 Preference Shares and the Class B
Series 2 Convertible Preference Shares and any other securities the holders of which
are entitled to vote generally on the election of directors of the Corporation, and
“voting shares”, when used with reference to any Person other than the
Corporation, means common shares of such other Person and any other securities the
holders of which are entitled to vote generally in the election of the directors of
such other Person.

	1.2	 	Currency

All sums of money which are referred to in this Agreement are expressed in lawful money of Canada,
unless otherwise specified.

	1.3	 	Number and Gender

Wherever the context will require, terms (including defined terms) used herein importing the
singular number only include the plural and vice versa and words importing anyone gender shall
include all others.

	1.4	 	Sections and Headings

The division of this Agreement into Articles, Sections, Subsections, Clauses and Subclauses and the
insertion of headings are for convenience of reference only and shall not affect the construction
or interpretation of this Agreement. The terms this “Agreement”, “hereunder”,
“hereof’, and similar expressions refer to this Agreement as amended or supplemented from
time to time and not to any

11

 

particular Article, Section or other portion hereof and include any Agreement or instrument
supplemental or ancillary hereto. Unless something in the subject matter or context is
inconsistent therewith, references herein to Articles, Sections, Subsections, Clauses and
Subclauses are to Articles, Sections, Subsections, Clauses and Subclauses of this Agreement.

	1.5	 	Statutory References

Unless the context otherwise requires, any reference to a specific Section, Subsection, Clause or
Rule of any statute or regulation shall be deemed to refer to the same as it may be amended,
re-enacted or replaced or, if repealed and there shall be no replacement therefor, to the same as
it is in effect on the date of this Agreement.

	1.6	 	Determination of Percentage Ownership

The percentage of Voting Shares Beneficially Owned by any Person, shall, for the purposes of this
Agreement, be and be deemed to be the product determined by the formula:

	 	 	 
	100 x

	 	A
	 

	 	B
	 
	 	 
	where:
	 	 
	 
	 	 
	A =

	 	the aggregate number of votes for the election of all directors
generally attaching to the Voting Shares Beneficially Owned by such
Person; and
	 
	 	 
	B =

	 	the aggregate number of votes for the election of all directors
generally attaching to all outstanding Voting Shares.

Where any person is deemed to Beneficially Own unissued Voting Shares pursuant to Subsection
1.1(d), such Voting Shares shall be deemed to be outstanding for the purpose of both A and B in the
formula above.

	1.7	 	Acting Jointly or in Concert

For the purposes of this Agreement, a Person is acting jointly or in concert with every Person who
is a party to an agreement, commitment or understanding, whether formal or informal, with the first
Person for the purpose of acquiring or offering to acquire Voting Shares or Convertible Securities
in respect thereof (other than customary agreements with and between underwriters and banking group
or selling group members with respect to a distribution of securities; or pursuant to a pledge of
securities in the ordinary course of the pledgee’s business).

	1.8	 	Generally Accepted Accounting Principles

Wherever in this Agreement reference is made to generally accepted accounting principles, such
reference shall be deemed to be the recommendations at the relevant time of the Canadian Institute
of Chartered Accountants, or any successor institute, applicable on a consolidated basis (unless
otherwise specifically provided herein to be applicable on an unconsolidated basis) as at the date
on which a calculation is made or required to be made in accordance with generally accepted
accounting principles. Where the character or amount of any asset or liability or item of revenue
or expense is required to be determined, or any consolidation or other accounting computation is
required to be made for the purpose of this Agreement or any document, such determination or
calculation shall, to the extent applicable and except as otherwise specified herein or as
otherwise agreed in writing by the parties, be made in accordance with generally accepted
accounting principles applied on a consistent basis.

12

 

ARTICLE 2 THE RIGHTS

	2.1	 	Legend on Common Share Certificates

	 	(a)	 	Certificates representing the Common Shares, including without limitation
Common Shares issued upon the conversion of Convertible Securities, issued after the
Record Time but prior to the Close of Business on the earlier of the Separation Time
and the Expiration Time shall evidence one Right for each Common Share represented
thereby and shall have impressed on, printed on, written on or otherwise affixed to
them the following legend:
	 
	 	 	 	“Until the Separation Time (as defined in the Rights Agreement referred to below),
this certificate also evidences and entitles the holder hereof to certain Rights as
set forth in an Amended and Restated Shareholder Rights Plan Agreement, dated as of
March 19, 2007 (the “Rights Agreement”), between the Corporation and Computershare
Investor Services Inc., as Rights Agent, the terms of which are hereby incorporated
herein by reference and a copy of which is on file at the registered office of the
Corporation. Under certain circumstances, as set forth in the Rights Agreement,
such Rights may be amended or redeemed, may expire, may become void (if, in certain
cases, they are “Beneficially Owned” by an “Acquiring Person”, as such terms are
defined in the Rights Agreement, or a transferee thereof) or may be evidenced by
separate certificates and may no longer be evidenced by this certificate. The
Corporation will mail or arrange for the mailing of a copy of the Rights Agreement
to the holder of this certificate without charge as soon as practicable after the
receipt of a written request therefor.”
	 
	 	(b)	 	Certificates representing Common Shares that are issued and outstanding at the
Record Time shall evidence one Right for each Common Share evidenced thereby,
notwithstanding the absence of the foregoing legend, until the earlier of the
Separation Time and the Expiration Time.

	2.2	 	Initial Exercise Price; Exercise of Rights; Detachment of Rights

	 	(a)	 	Subject to adjustment as herein set forth, including without limitation as set
forth in Article 3, each Right will entitle the holder thereof, from and after the
Separation Time and prior to the Expiration Time, to purchase one Common Share for the
Exercise Price as at the Business Day immediately preceding Separation Time (which
Exercise Price and number of Common Shares are subject to adjustment as set forth
below). Notwithstanding any other provision of this Agreement, any Rights held by the
Corporation or any of its Subsidiaries shall be void.
	 
	 	(b)	 	Until the Separation Time, (i) the Rights shall not be exercisable and no
Right may be exercised; and (ii) for administrative purposes, each Right will be
evidenced by the certificate for the associated Common Share registered in the name of
the holder thereof (which certificate shall be deemed to represent a Rights
Certificate) and will be transferable only together with, and will be transferred by a
transfer of, such associated Common Share.
	 
	 	(c)	 	From and after the Separation Time and prior to the Expiration Time, the
Rights may be exercised, and the registration and transfer of the Rights shall be
separate from and independent of Common Shares. Promptly following the Separation
Time, the Corporation will prepare or cause to be prepared and the Rights Agent will
mail to each holder of record of Common Shares as of the Separation Time and, in
respect of each Convertible Security converted into Common Shares after the Separation
Time and prior to the Expiration Time, promptly after such conversion, the Corporation
will prepare or cause to be prepared and the Rights Agent will mail to the holder so

13

 

	 	 	 	converting (other than an Acquiring Person and in respect of any Rights
Beneficially Owned by such Acquiring Person which are not held of record by such
Acquiring Person, the holder of record of such rights (a “Nominee”)) at
such holder’s address as shown by the records of the Corporation (the Corporation
hereby agreeing to furnish copies of such record to the Rights Agent for this
purpose):

	 	(i)	 	a Rights Certificate in substantially the form of Exhibit A
hereto appropriately completed, representing the number of Rights held by such
holder at the Separation Time and having such marks of identification or
designation and such legends, summaries or endorsements printed thereon as the
Corporation may deem appropriate and as are not inconsistent with the
provisions of this Agreement, or as may be required to comply with any law,
rule or regulation or judicial or administrative order, or with any article or
regulation of any stock exchange or quotation system on which the Rights may
from time to time be listed or traded, or to conform to usage; and
	 
	 	(ii)	 	a disclosure statement prepared by the Corporation describing
the Rights,

	 	 	 	provided that a Nominee shall be sent the materials provided for in (i) and (ii)
only in respect of all Common Shares held of record by it which are not Beneficially
Owned by an Acquiring Person and the Corporation may require any Nominee or
suspected Nominee to provide such information and documentation as the Corporation
may reasonably require for such purpose.
	 
	 	(d)	 	Rights may be exercised in whole or in part on any Business Day after the
Separation Time and prior to the Expiration Time by submitting to the Rights Agent, at
its principal office in Vancouver:

	 	(i)	 	the Rights Certificate evidencing such Rights;
	 
	 	(ii)	 	an election to exercise (an “Election to Exercise”)
substantially in the form attached to the Rights Certificate duly completed,
and executed in a manner acceptable to the Rights Agent; and
	 
	 	(iii)	 	payment in cash, or by certified cheque, banker’s draft or
money order payable to the order of the Corporation, of a sum equal to the
Exercise Price multiplied by the number of Rights being exercised and a sum
sufficient to cover any transfer tax or charge which may be payable in respect
of any transfer involved in the transfer or delivery of Rights Certificates or
the issuance or delivery of certificates for Common Shares in a name other
than that of the holder of the Rights being exercised.

	 	(e)	 	Upon receipt of a Rights Certificate, which is accompanied by an appropriately
completed and duly executed Election to Exercise (which does not indicate that such
Right is null and void as provided by Subsection 3.1(b) and payment as set forth in
Subsection 2.2(d), the Rights Agent (unless otherwise instructed by the Corporation)
will thereupon promptly:

	 	(i)	 	requisition from the transfer agent of the Common Shares
certificates representing the number of Common Shares to be purchased (the
Corporation hereby irrevocably authorizing its transfer agent to comply with
all such requisitions);
	 
	 	(ii)	 	after receipt of such Common Share certificates, deliver such
certificates to, or to the order of, the registered holder of such Rights
Certificate, registered in such name or names as may be designated by such
holder;

14

 

	 	(iii)	 	when appropriate, requisition from the Corporation the amount
of cash, if any, to be paid in lieu of issuing fractional Common Shares;
	 
	 	(iv)	 	when appropriate, after receipt of such cash, deliver such
cash to, or to the order of, the registered holder of the Rights Certificate;
and
	 
	 	(v)	 	tender to the Corporation all payments received on exercise of
the Rights.

	 	(f)	 	If the holder of any Rights shall exercise less than all the Rights evidenced
by such holder’s Rights Certificate, a new Rights Certificate evidencing the Rights
remaining unexercised will be issued by the Rights Agent to such holder or to such
holder’s duly authorized assigns.
	 
	 	(g)	 	The Corporation shall:

	 	(i)	 	take all such action as may be necessary and within its power
to ensure, that all Common Shares delivered upon the exercise of Rights shall,
at the time of delivery of the certificates for such Common Shares (subject to
payment of the Exercise Price), be duly and validly authorized, executed,
issued and delivered as fully paid and non-assessable;
	 
	 	(ii)	 	take all such action as may reasonably be considered to be
necessary and within its power to comply with any applicable requirements of
the BCBCA, the Securities Act (British Columbia), the U.S. Exchange Act, the
United States Securities Act of 1933, as amended, and comparable legislation
of each of the provinces and territories of Canada and states of the United
States of America, or the rules and regulations thereunder or any other
applicable law, rule or regulation, in connection with the issuance and
delivery of the Rights, the Rights Certificates and the issuance of any Common
Shares upon exercise of the Rights;
	 
	 	(iii)	 	use reasonable efforts to cause all Common Shares issued upon
exercise of the Rights to be listed on the stock exchanges on which the Common
Shares are listed at that time;
	 
	 	(iv)	 	cause to be reserved and kept available out of its authorized
and unissued Common Shares, the number of Common Shares that, as provided in
this Agreement, will from time to time be sufficient to permit the exercise in
full of all outstanding Rights;
	 
	 	(v)	 	pay when due and payable, if applicable, any and all federal,
provincial, state and municipal taxes (not in the nature of income, capital
gains or withholding taxes) and charges which may be payable in respect of the
original issuance or delivery of the Rights Certificates or certificates for
Common Shares issued upon the exercise of Rights, provided that the
Corporation shall not be required to pay any transfer tax or charge which may
be payable in respect of any transfer of Rights or the issuance or delivery of
certificates for Common Shares issued upon the exercise of Rights, in a name
other than that of the holder of the Rights being transferred or exercised;
and
	 
	 	(vi)	 	after the Separation Time, except as permitted by Section 5.1
or Section 5.4 hereof, not take (or permit any corporation it controls to
take) any action if at the time such action is taken it is reasonably
foreseeable that such action will diminish substantially or otherwise
eliminate the benefits intended to be afforded by the Rights.

15

 

	2.3	 	Adjustments to Exercise Price; Number of Rights

	 	(a)	 	The Exercise Price, the number and kind of securities subject to purchase upon
exercise of each Right and the number of Rights outstanding are subject to adjustment
from time to time as provided in this Section 2.3 and in Article 3.
	 
	 	(b)	 	In the event that the Corporation shall at any time after the Record Time and
prior to the Expiration Time:

	 	(i)	 	declare or pay a dividend on the Common Shares payable in
Voting Shares or Convertible Securities in respect thereof other than pursuant
to any dividend reinvestment plan;
	 
	 	(ii)	 	subdivide or change the then outstanding Common Shares into a
greater number of Common Shares;
	 
	 	(iii)	 	consolidate or change the then outstanding Common Shares into
a smaller number of Common Shares; or
	 
	 	(iv)	 	issue any Voting Shares (or Convertible Securities in respect
thereof) in respect of, in lieu of or in exchange for existing Common Shares,
whether in a reclassification, amalgamation, statutory arrangement,
consolidation or otherwise;

	 	 	 	the Exercise Price and the number of Rights outstanding (or, if the payment or
effective date therefor shall occur after the Separation Time, the securities
purchasable upon the exercise of Rights) shall be adjusted as follows:

	 	A.	 	If the Exercise Price and number of Rights
outstanding are to be adjusted:

	 	I.	 	the Exercise Price in effect
after such adjustment will be equal to the Exercise Price in
effect immediately prior to such adjustment divided by the
number of Common Shares (or other securities of the
Corporation) (the “Expansion Factor”) that a holder of
one Common Share immediately prior to such dividend,
subdivision, change, combination or issuance would hold
thereafter as a result thereof; and
	 
	 	II.	 	each Right held prior to such
adjustment will become that number of Rights equal to the
Expansion Factor, and the adjusted number of Rights will be
deemed to be allocated among the Common Shares with respect to
which the original Rights were associated (if they remain
outstanding) and the securities of the Corporation issued in
respect of such dividend, subdivision, change, consolidation
or issuance, so that each such Common Share (or other security
of the Corporation) will have exactly one Right associated
with it.

	 	B.	 	If the securities purchasable upon exercise of
Rights are to be adjusted, the securities purchasable upon exercise of
each Right after such adjustment will be the securities that a holder
of the securities purchasable upon exercise of one Right immediately
prior to such dividend, subdivision, change, consolidation or issuance
would hold thereafter as a result thereof.

16

 

	 	(c)	 	Adjustments pursuant to Subsection 2.3(b) shall be made successively, whenever
an event referred to in Subsection 2.3(b) occurs.
	 
	 	(d)	 	If an event occurs which would require an adjustment under both this Section
2.3 and Section 3.1 hereof, the adjustment provided for in this Section 2.3 shall be
in addition to, and shall be made prior to, any adjustment required pursuant to
Section 3.1 hereof.
	 
	 	(e)	 	In the event the Corporation shall at any time after the Record Time and prior
to the Separation Time issue any Common Shares otherwise than in a transaction
referred to in Subsection 2.3(b), each such Common Share so issued shall automatically
have one new Right associated with it, which Right shall be evidenced by the
certificate representing such Common Share.
	 
	 	(f)	 	In the event the Corporation shall, at any time after the Record Time and
prior to the Expiration Time, fix a record date for the making of a distribution to
all holders of Common Shares of rights or warrants entitling them (for a period
expiring within 45 calendar days after such record date) to subscribe for or purchase
Common Shares (or Convertible Securities in respect of Common Shares) at a price per
Common Share (or, in the case of such a Convertible Security, having a conversion,
exchange or exercise price per share (including the price required to be paid to
purchase such Convertible Security)) that is 1ess than 90% of the Market Price per
Common Share on such record date, the Exercise Price in effect after such record date
will equal the Exercise Price in effect immediately prior to such record date
multiplied by a fraction;

	 	(i)	 	of which the numerator shall be the number of Common Shares
outstanding on such record date plus the number of Common Shares which the
aggregate offering price of the total number of Common Shares so to be offered
(and/or the aggregate initial conversion, exchange or exercise price of the
Convertible Securities so to be offered (including the price required to be
paid to purchase such Convertible Securities)) would purchase at such Market
Price per Common Share; and
	 
	 	(ii)	 	of which the denominator shall be the number of Common Shares
outstanding on such record date plus the number of additional Common Shares to
be offered for subscription or purchase (or into which the Convertible
Securities so to be offered are initially convertible, exchangeable or
exercisable).

	 	 	 	In case such subscription price is satisfied, in whole or in part, by consideration
other than cash, the value of such consideration shall be as determined in good
faith by the Board of Directors. Such adjustment shall be made successively whenever
such a record date is fixed. To the extent that such rights or warrants are not
exercised prior to the expiration thereof, the Exercise Price shall be readjusted in
the manner contemplated above based on the number of Common Shares (or securities
convertible into or exchangeable for Common Shares) actually issued on the exercise
of such rights or warrants.
	 
	 	 	 	For purposes of this Agreement, the granting of the right to purchase Common Shares
(whether from treasury or otherwise) pursuant to any dividend or interest
reinvestment plan or any share purchase plan providing for the reinvestment of
dividends or interest payable on securities of the Corporation or the investment of
periodic optional payments or employee benefit or similar plans (so long as such
right to purchase is in no case evidenced by the delivery of rights or warrants by
the Corporation) shall not be deemed to constitute an issue of rights or warrants by
the

17

 

	 	 	 	Corporation; provided, however, that in the case of any dividend or interest
reinvestment or share purchase plan, the right to purchase Common Shares is at a
price per share of not less than 90% of the current market price per share
(determined as provided in such plans) of the Common Shares.
	 
	 	(g)	 	In the event the Corporation shall at any time after the Record Time and prior
to the Expiration Time fix a record date for the making of a distribution to all
holders of Common Shares of (i) evidences of indebtedness or assets (other than a
Regular Periodic Cash Dividend or a dividend paid in Common Shares, but including any
dividend payable in securities other than Common Shares), (ii) rights or warrants
entitling them to subscribe for or purchase Voting Shares (or Convertible Securities
in respect of Voting Shares), at a price per Voting Share (or, in the case of a
Convertible Security in respect of Voting Shares, having a conversion, exchange or
exercise price per share (including the price required to be paid to purchase such
Convertible Security)) less than 90% of the Market Price per Common Share on such
record date (excluding rights or warrants referred to in Subsection 2.3(f)) or (iii)
other securities of the Corporation, the Exercise Price in effect after such record
date shall be equal to the Exercise Price in effect immediately prior to such record
date less the fair market value (as determined in good faith by the Board of
Directors) of the portion of the assets, evidences of indebtedness, rights or warrants
or other securities so to be distributed applicable to each of the securities
purchasable upon exercise of one Right. Such adjustment shall be made successively
whenever such a record date is fixed.
	 
	 	(h)	 	Each adjustment made pursuant to Section 2.3 shall be made as of:

	 	(i)	 	the payment or effective date for the applicable dividend,
subdivision, change, combination or issuance, in the case of an adjustment
made pursuant to Subsection 2.3(b) above; and
	 
	 	(ii)	 	the record date for the applicable dividend or distribution,
in the case of an adjustment made pursuant to Subsections 2.3(f) or 2.3(g)
above, subject to readjustment to reverse the same if such distribution shall
not be made.

	 	(i)	 	In the event the Corporation shall at any time after the Record Time and prior
to the Expiration Time issue any shares (other than Common Shares), or rights or
warrants to subscribe for or purchase any such shares, or Convertible Securities in
respect of any such shares, in a transaction referred to in any of subclauses
2.3(b)(i) to (iv) above, if the Board of Directors acting in good faith determines
that the adjustments contemplated by Subsections 2.3(b), 2.3(f) and 2.3(g) above in
connection with such transaction will not appropriately protect the interests of the
holders of Rights, the Board of Directors may from time to time, but subject to
obtaining the prior approval of the holders of the Rights obtained as set forth in
Subsection 5.4(b), determine what other adjustments to the Exercise Price, number of
Rights or securities purchasable upon exercise of Rights would be appropriate and,
notwithstanding Subsections 2.3(b), 2.3(f) and 2.3(g) above, such adjustments, rather
than the adjustments contemplated by Subsections 2.3(b), 2.3(f) and 2.3(g) above,
shall be made upon the Board of Directors providing written certification thereof to
the Rights Agent pursuant to Subsection 2.3(q).
	 
	 	(j)	 	Notwithstanding anything herein to the contrary, no adjustment of the Exercise
Price shall be required unless such adjustment would require an increase or decrease
of at least 1% in such Exercise Price; provided, however, that any adjustments which
by reason of this Subsection 2.3(j) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment. All adjustments to the
Exercise Price made pursuant to this Section 2.3 shall be calculated to the nearest
cent.

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	 	(k)	 	All Rights originally issued by the Corporation subsequent to any adjustment
made to an Exercise Price hereunder shall evidence the right to purchase, at the
adjusted Exercise Price, the number of Common Shares purchasable from time to time
hereunder upon exercise of the Rights, all subject to further adjustment as provided
herein.
	 
	 	(l)	 	Unless the Corporation shall have exercised its election, as provided in
Subsection 2.3(m), upon each adjustment of an Exercise Price as a result of the
calculations made in Subsections 2.3(f) and 2.3(g), each Right outstanding immediately
prior to the making of such adjustment shall thereafter evidence the right to
purchase, at the adjusted Exercise Price, that number of Common Shares obtained by:

	 	(i)	 	multiplying (A) the number of Common Shares covered by a Right
immediately prior to such adjustment, by (B) the Exercise Price in effect
immediately prior to such adjustment; and
	 
	 	(ii)	 	dividing the product so obtained by the Exercise Price in
effect immediately after such adjustment.

	 	(m)	 	The Corporation may elect on or after the date of any adjustment of an
Exercise Price to adjust the number of Rights, in lieu of any adjustment in the number
of Common Shares purchasable upon the exercise of a Right. Each of the Rights
outstanding after the adjustment in the number of Rights shall be exercisable for the
number of Common Shares for which a Right was exercisable immediately prior to such
adjustment. Each Right held of record prior to such adjustment of the number of
Rights shall become the number of Rights obtained by dividing the relevant Exercise
Price in effect immediately prior to adjustment of the relevant Exercise Price by the
relevant Exercise Price in effect immediately after adjustment of the relevant
Exercise Price. The Corporation shall make a public announcement of its election to
adjust the number of Rights, indicating the record date for the adjustment, and, if
known at the time, the amount of the adjustment to be made. This record date may be
the date on which the relevant Exercise Price is adjusted or any day thereafter, but,
if the Rights Certificates have been issued, shall be at least 10 calendar days later
than the date of the public announcement. If Rights Certificates have been issued,
upon each adjustment of the number of Rights pursuant to this Subsection 2.3(m), the
Corporation shall, as promptly as practicable, cause to be distributed to holders of
record of Rights Certificates on such record date, Rights Certificates evidencing,
subject to Section 5.5, the additional Rights to which such holders shall be entitled
as a result of such adjustment, or, at the option of the Corporation, shall cause to
be distributed to such holders of record in substitution and replacement for the
Rights Certificates held by such holders prior to the date of adjustment, and upon
surrender thereof, if required by the Corporation, new Rights Certificates evidencing
all the Rights to which such holders shall be entitled after such adjustment. Rights
Certificates so to be distributed shall be issued, executed and countersigned in the
manner provided for herein and may bear, at the option of the Corporation, the
relevant adjusted Exercise Price and shall be registered in the names of holders of
record of Rights Certificates on the record date specified in the public announcement.
	 
	 	(n)	 	In any case in which this Section 2.3 shall require that an adjustment in an
Exercise Price be made effective as of a record date for a specified event, the
Corporation may elect to defer until the occurrence of such event the issuance to the
holder of any Right exercised after such record date of the number of Common Shares
and other securities of the Corporation, if any, issuable upon such exercise over and
above the number of Common Shares and other securities of the Corporation, if any,
issuable upon such exercise on the basis of the relevant Exercise Price in effect
prior to such adjustment; provided, however, that the Corporation shall deliver to
such holder an

19

 

	 	 	 	appropriate instrument evidencing such holder’s right to receive such additional
Common Shares (fractional or otherwise) or other securities upon the occurrence of
the event requiring such adjustment.
	 
	 	(o)	 	Notwithstanding anything in this Section 2.3 to the contrary, the Corporation
shall be entitled to make such adjustments in the Exercise Price, in addition to those
adjustments expressly required by this Section 2.3, as and to the extent that in its
good faith judgment the Board of Directors shall determine to be advisable in order
that any (i) subdivision or consolidation of the Common Shares, (ii) issuance wholly
for cash of any Common Shares at less than the applicable Market Price, (iii) issuance
wholly for cash of any Common Shares or securities that by their terms are
exchangeable for or convertible into or give a right to acquire Common Shares, (iv)
stock dividends, or (v) issuance of rights, options or warrants referred to in this
Section 2.3, hereafter made by the Corporation to holders of its Common Shares, shall
not be taxable to such shareholders.
	 
	 	(p)	 	Irrespective of any adjustment or change in the securities purchasable upon
exercise of the Rights, the Rights Certificates theretofore and thereafter issued may
continue to represent the securities so purchasable which were represented in the
initial Rights Certificates issued hereunder.
	 
	 	(q)	 	Whenever an adjustment to the Exercise Price is made pursuant to this Section
2.3, the Corporation shall:

	 	(i)	 	promptly prepare a certificate setting forth such adjustment
and a brief statement of the facts accounting for such adjustment; and
	 
	 	(ii)	 	promptly file with the Rights Agent and with each transfer
agent for the Common Shares a copy of such certificate and mail a brief
summary thereof to each holder of Rights who requests a copy.

	 	 	 	Failure to file such certificate or to cause such notice to be given as aforesaid, or any
defect therein, shall not affect the validity of any such adjustment or change.

	2.4	 	Date on Which Exercise is Effective

Each Person in whose name any certificate for Common Shares is issued upon the exercise of Rights
shall for all purposes be deemed to have become the holder of record of the Common Shares
represented thereby on, and such certificate shall be dated, the date upon which the Rights
Certificate evidencing such Rights was duly surrendered (together with a duly completed Election to
Exercise) and payment of the Exercise Price for such Rights (and any applicable transfer taxes and
other governmental charges payable by the exercising Person hereunder) was made; provided, however,
that if the date of such surrender and payment is a date upon which the Common Share transfer books
of the Corporation are closed, such Person shall be deemed to have become the record holder of such
shares on, and such certificate shall be dated, the next Business Day on which the Common Share
transfer books of the Corporation are open.

	2.5	 	Execution, Authentication, Delivery and Dating of Rights Certificates

	 	(a)	 	The Rights Certificates shall be executed on behalf of the Corporation by its
Chief Executive Officer, its Chief Financial Officer or its Secretary. The signature
of any of these officers on the Rights Certificates may be manual or facsimile.
Rights Certificates bearing the manual or facsimile signatures of individuals who were
at any time the proper officers of the Corporation shall bind the Corporation,
notwithstanding that such individuals or any of them have ceased to hold such offices
prior to the countersignature and delivery of such Rights Certificates.

20

 

	 	(b)	 	Promptly following the Separation Time, the Corporation will notify the Rights
Agent of such Separation Time and will deliver Rights Certificates executed by the
Corporation to the Rights Agent for countersignature, and the Rights Agent shall
countersign (manually or by facsimile signature in a manner satisfactory to the
Corporation) and deliver such Rights Certificates to the holders of the Rights
pursuant to Section 2.2 hereof. No Rights Certificate shall be valid for any purpose
until countersigned by the Rights Agent as aforesaid.
	 
	 	(c)	 	Each Rights Certificate shall be dated the date of countersignature thereof.

	2.6	 	Registration, Transfer and Exchange

	 	(a)	 	After the Separation Time, the Corporation shall cause to be kept a register
(the “Rights Register”) in which, subject to such reasonable regulations as it may
prescribe, the Corporation will provide for the registration and transfer of Rights.
The Rights Agent is hereby appointed “Rights Registrar” for the purpose of maintaining
the Rights Register for the Corporation and registering Rights and transfers of Rights
as herein provided and the Rights Agent hereby accepts such appointment. In the event
that the Rights Agent shall cease to be the Rights Registrar, the Rights Agent will
have the right to examine the Rights Register at all reasonable times.
	 
	 	(b)	 	After the Separation Time and prior to the Expiration Time, upon surrender for
registration of transfer or exchange of any Rights Certificate, and subject to the
provisions of Subsections 2.6(d) and 3.1(b) below, the Corporation will execute, and
the Rights Agent will countersign, deliver and register, in the name of the holder or
the designated transferee or transferees, as required pursuant to the holder’s
instructions, one or more new Rights Certificates evidencing the same aggregate number
of Rights as did the Rights Certificates so surrendered.
	 
	 	(c)	 	All Rights issued upon any registration of transfer or exchange of Rights
Certificates shall be valid obligations of the Corporation, and such Rights shall be
entitled to the same benefits under this Agreement as the Rights surrendered upon such
registration of transfer or exchange.
	 
	 	(d)	 	Every Rights Certificate surrendered for registration of transfer or exchange
shall be duly endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Corporation or the Rights Agent, as the case may be, duly executed
by the holder thereof or such holder’s attorney duly authorized in writing. As a
condition to the issuance of any new Rights Certificate under this Section 2.6, the
Corporation may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other expenses
(including the fees and expenses of the Rights Agent) in connection therewith.

	2.7	 	Mutilated, Lost, Stolen and Destroyed Rights Certificates

	 	(a)	 	If any mutilated Rights Certificate is surrendered to the Rights Agent prior
to the Expiration Time, the Corporation shall execute and the Rights Agent shall
countersign and deliver in exchange therefor a new Rights Certificate evidencing the
same number of Rights as did the Rights Certificate so surrendered.
	 
	 	(b)	 	If there shall be delivered to the Corporation and the Rights Agent prior to
the Expiration Time: (i) evidence to their reasonable satisfaction of the destruction,
loss or theft of any Rights Certificate; and (ii) such security or indemnity as may be
reasonably required by them to save each of them and any of their agents harmless,
then, in the absence of notice to the Corporation or the Rights Agent that such Rights

21

 

	 	 	 	Certificate has been acquired by a bona fide purchaser, the Corporation shall
execute and, upon the Corporation’s request the Rights Agent shall countersign and
deliver, in lieu of any such destroyed, lost or stolen Rights Certificate, a new
Rights Certificate evidencing the same number of Rights as did the Rights
Certificate so destroyed, lost or stolen.
	 
	 	(c)	 	As a condition to the issuance of any new Rights Certificate under this
Section 2.7, the Corporation may require the payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Rights Agent) connected therewith.
	 
	 	(d)	 	Every new Rights Certificate issued pursuant to this Section 2.7 in lieu of
any destroyed, lost or stolen Rights Certificate shall evidence a contractual
obligation of the Corporation, whether or not the destroyed, lost or stolen Rights
Certificate shall be at any time enforceable by anyone, and shall be entitled to all
the benefits of this Agreement equally and proportionately with any and all other
Rights duly issued hereunder.

	2.8	 	Persons Deemed Owners

The Corporation, the Rights Agent and any agent of the Corporation or the Rights Agent may deem and
treat the person in whose name a Rights Certificate (or, prior to the Separation Time, the
associated Common Share certificate) is registered as the absolute owner thereof and of the Rights
evidenced thereby for all purposes whatsoever. As used in this Agreement, unless the context
otherwise requires, the term “holder” of any Rights shall mean the registered holder of such Rights
(or, prior to the Separation Time, the associated Common Shares).

	2.9	 	Delivery and Cancellation of Certificates

All Rights Certificates surrendered upon exercise or for redemption, for registration of transfer
or exchange shall, if surrendered to any person other than the Rights Agent, be delivered to the
Rights Agent and, in any case, shall be promptly cancelled by the Rights Agent. The Corporation
may at any time deliver to the Rights Agent for cancellation any Rights Certificates previously
countersigned and delivered hereunder which the Corporation may have acquired in any manner
whatsoever, and all Rights Certificates so delivered shall be promptly cancelled by the Rights
Agent. No Rights Certificate shall be countersigned in lieu of or in exchange for any Rights
Certificates cancelled as provided in this Section 2.9 except as expressly permitted by this
Agreement. The Rights Agent shall, subject to applicable law, destroy all cancelled Rights
Certificates and deliver a certificate of destruction to the Corporation.

	2.10	 	Agreement of Rights Holders

Every holder of Rights, by accepting such Rights, consents and agrees with the Corporation and the
Rights Agent and with every other holder of Rights:

	 	(a)	 	to be bound by and subject to the provisions of this Agreement, as amended
from time to time in accordance with the terms hereof, in respect of all Rights held;
	 
	 	(b)	 	that, prior to the Separation Time, each Right will be transferable only
together with, and will be transferred by a transfer of, the associated Common Share;
	 
	 	(c)	 	that, after the Separation Time, the Rights will be transferable only on the
Rights Register as provided herein;
	 
	 	(d)	 	that, prior to due presentment of a Rights Certificate (or, prior to the
Separation Time, the associated Common Share certificate) for registration of
transfer, the

22

 

	 	 	 	Corporation, the Rights Agent and any agent of the Corporation or the Rights Agent
may deem and treat the Person in whose name the Rights Certificate (or, prior to
the Separation Time, the associated Common Share certificate) is registered as the
absolute owner thereof and of the Rights evidenced thereby (notwithstanding any
notations of ownership or writing on such Rights Certificate or the associated
Common Share certificate made by anyone other than the Corporation or the Rights
Agent) for all purposes whatsoever, and neither the Corporation nor the Rights
Agent shall be affected by any notice to the contrary;
	 
	 	(e)	 	that such holder of Rights has waived its right to receive any fractional
Rights or any fractional Common Shares or other securities upon exercise of a Right
(except as provided herein);
	 
	 	(f)	 	that, subject to the provisions of Section 5.4 without the approval of any
holder of Rights or Voting Shares and upon the sole authority of the Board of
Directors acting in good faith, this Agreement may be supplemented or amended from
time to time as provided herein; and
	 
	 	(g)	 	notwithstanding anything in this Agreement to the contrary, neither the
Corporation nor the Rights Agent shall have any liability to any Holder of a Right or
any other person as a result of its inability to perform any of its obligations under
this Agreement by reason of any preliminary or permanent injunction or any other
order, decree or ruling issued by a court of competent jurisdiction or by a
governmental, regulatory or administrative agency or commission or any statute, rule,
regulation or executive order promulgated or enacted by any governmental authority,
prohibiting or otherwise restraining performance of such obligation.

ARTICLE 3 ADJUSTMENTS TO THE RIGHTS

3.1 Flip-in Event

	 	(a)	 	Subject to Sections 3.1(b) and 5.1, in the event that prior to the Expiration
Time a Flip-in Event occurs, each Right shall thereafter constitute the right to
purchase from the Corporation, upon exercise thereof in accordance with the terms
hereof, that number of Common Shares of the Corporation having an aggregate Market
Price on the date of consummation or occurrence of such Flip-in Event equal to twice
the Exercise Price for an amount in cash equal to the Exercise Price (such right to be
appropriately adjusted in a manner analogous to the applicable adjustment provided for
in Section 2.3 in the event that, after such date of consummation or occurrence, an
event of a type analogous to any of the events described in Section 2.3 shall have
occurred with respect to such Common Shares).
	 
	 	(b)	 	Notwithstanding anything in this Agreement to the contrary, upon the
occurrence of any Flip-in Event, any Rights that are or were Beneficially Owned on or
after the earlier of the Separation Time and the Stock Acquisition Date, or which may
thereafter be Beneficially Owned, by:

	 	(i)	 	an Acquiring Person (or any Affiliate or Associate of an
Acquiring Person or any other Person acting jointly or in concert with an
Acquiring Person or any Associate or Affiliate of such other Person); or
	 
	 	(ii)	 	a transferee, direct or indirect, of an Acquiring Person (or
any Affiliate or Associate of an Acquiring Person or any Person acting jointly
or in concert with an Acquiring Person or any Associate or Affiliate thereon
in a transfer of Rights occurring subsequent to the Acquiring Person becoming
such;

23

 

	 	 	 	shall become null and void without any further action and any holder of such Rights
(including any transferee of, or other successor entitled to, such Rights, whether
directly or indirectly) shall thereafter have no right to exercise such Rights under
any provisions of this Agreement and further shall thereafter not have any rights
whatsoever with respect to such Rights, whether under any provision of this
Agreement or otherwise. The holder of any Rights represented by a Rights
Certificate which is submitted to the Rights Agent upon exercise or for registration
of transfer or exchange which does not contain the necessary certifications set
forth in the Rights Certificate establishing that such Rights are not void under
this Subsection 3.1(b) shall be deemed to be an Acquiring Person for the purposes of
this Subsection 3.1(b) and such Rights shall become null and void.
	 
	 	(c)	 	Any Rights Certificate that represents Rights Beneficially Owned by a Person
described in either of subclauses 3.1(b)(i) or 3.1(b)(ii) or transferred to any
Nominee of any such Person, and any Rights Certificate issued upon transfer, exchange,
replacement or adjustment of any other Rights Certificate, referred to in this
sentence, shall contain or will be deemed to contain the following legend:
	 
	 	 	 	“The Rights represented by this Rights Certificate were issued to a Person who was
an Acquiring Person or an Affiliate or an Associate of an Acquiring Person (as such
terms are defined in the Rights Agreement) or acting jointly or in concert with any
of them. This Rights Certificate and the Rights represented hereby shall be void in
the circumstances specified in Subsection 3.1(b) of the Rights Agreement.”
	 
	 	 	 	The Rights Agent shall not be under any responsibility to ascertain the existence of
facts that would require the imposition of such legend but shall be required to
impose such legend only if instructed to do so by the Corporation or if a holder
fails to certify upon transfer or exchange in the space provided to do so.
	 
	 	(d)	 	After the Separation Time, the Corporation shall do all such acts and things
necessary and within its power to ensure compliance with the provisions of this
Section 3.1 including, without limitation, all such acts and things as may be required
to satisfy the requirements of the BCBCA, the Securities Act (British Columbia) and
the securities laws or comparable legislation in each of the provinces of Canada and
in any other jurisdiction where the Corporation is subject to such laws and the rules
of the stock exchanges where the Common Shares are listed at such time in respect of
the issue of Common Shares upon the exercise of Rights in accordance with this
Agreement.

	3.2	 	Fiduciary Duties of the Board of Directors of the Corporation

For clarification it is understood that nothing contained in this Article 3 shall be considered to
affect the obligations of the Board of Directors to exercise its fiduciary duties. Without
limiting the generality of the foregoing, nothing contained herein shall be construed to suggest or
imply that the Board of Directors shall not be entitled to recommend that holders of the Voting
Shares reject or accept any Take-over Bid or take any other action including, without limitation,
the commencement, prosecution, defence or settlement of any litigation and the submission of
additional or alternative Take-over Bids or other proposals to the shareholders of the Corporation
with respect to any Takeover Bid or otherwise that the Board of Directors believes is necessary or
appropriate in the exercise of its fiduciary duties.

24

 

ARTICLE 4 THE RIGHTS AGENT

	4.1	 	General

	 	(a)	 	The Corporation hereby appoints the Rights Agent to act as agent for the
Corporation and the holders of the Rights in accordance with the terms and conditions
hereof, and the Rights Agent hereby accepts such appointment. The Corporation may
from time to time appoint such co-rights agents (“Co-Rights Agents”) as it may deem
necessary or desirable. In the event the Corporation appoints one or more Co-Rights
Agents, the respective duties of the Rights Agent and Co-Rights Agents shall be as the
Corporation may determine. The Corporation agrees to pay to the Rights Agent
reasonable compensation for all services rendered by it hereunder and, from time to
time, on demand of the Rights Agent, its reasonable expenses and other disbursements
reasonably incurred in the administration and execution of this Agreement and the
exercise and performance of its duties hereunder, including the reasonable fees and
disbursements of counsel and other experts consulted by the Rights Agent pursuant to
Subsection 4.3(a). The Corporation also agrees to indemnify the Rights Agent for, and
to hold it harmless against, any loss, liability, or expense, incurred without
negligence, bad faith or wilful misconduct on the part of the Rights Agent, for
anything done or omitted by the Rights Agent in connection with the acceptance and
administration of this Agreement, including the costs and expenses of defending
against any claim of liability, which right to indemnification will survive the
termination of this Agreement.
	 
	 	(b)	 	The Rights Agent shall be protected and shall incur no liability for or in
respect of any action taken, suffered or omitted by it in connection with its
administration of this Agreement in reliance upon any certificate for Common Shares,
Rights Certificate, certificate for other securities of the Corporation, instrument of
assignment or transfer, power of attorney, endorsement, affidavit, letter, notice,
direction, consent, certificate, statement, or other paper or document believed by it
to be genuine and to be signed, executed and, where necessary, verified or
acknowledged, by the proper Person or Persons.
	 
	 	(c)	 	The Corporation shall inform the Rights Agent in a reasonably timely manner of
events which may materially affect the administration of this Agreement by the Rights
Agent and, at any time upon request, shall provide to the Rights Agent an incumbency
certificate certifying the then current officers of the Corporation.

	4.2	 	Merger, Amalgamation, Consolidation or Change of Name of Rights Agent

	 	(a)	 	Any corporation into which the Rights Agent or any successor Rights Agent may
be merged or amalgamated or with which it may be consolidated, or any corporation
resulting from any merger, amalgamation or consolidation to which the Rights Agent or
any successor Rights Agent is a party, or any corporation succeeding to the
shareholder services business of the Rights Agent or any successor Rights Agent, will
be the successor to the Rights Agent under this Agreement without the execution or
filing of any document or any further act on the part of any of the parties hereto,
provided that such corporation would be eligible for appointment as a successor Rights
Agent under the provisions of Section 4.4 hereof. In case at the time such successor
Rights Agent succeeds to the agency created by this Agreement any of the Rights
Certificates have been countersigned but not delivered any such successor Rights Agent
may adopt the countersignature of the predecessor Rights Agent and deliver such Rights
Certificates so countersigned; and in case at that time any of the Rights Certificates
have not been countersigned, any successor Rights Agent may countersign such Rights
Certificates either in the name of the predecessor Rights Agent or in the name of the
successor Rights Agent; and in all such cases such Rights

25

 

	 	 	 	Certificates will have the full force provided in the Rights Certificates and in
this Agreement.
	 
	 	(b)	 	In case at any time the name of the Rights Agent is changed and at such time
any of the Rights Certificates shall have been countersigned but not delivered, the
Rights Agent may adopt the countersignature under its prior name and deliver Rights
Certificates so countersigned; and in case at that time any of the Rights Certificates
shall not have been countersigned, the Rights Agent may countersign such Rights
Certificates either in its prior name or in its changed name; and in all such cases
such Rights Certificates shall have the full force provided in the Rights Certificates
and in this Agreement.

	4.3	 	Duties of Rights Agent

The Rights Agent undertakes the duties and obligations imposed by this Agreement upon the following
terms and conditions, by all of which the Corporation and the holders of Rights Certificates, by
their acceptance thereof, shall be bound:

	 	(a)	 	The Rights Agent may consult with legal counsel (who may be legal counsel for
the Corporation) and the opinion of such counsel will be full and complete
authorization and protection to the Rights Agent as to any action taken or omitted by
it in good faith and in accordance with such opinion; the Rights Agent may also, with
the approval of the Corporation (such approval not to be unreasonably withheld),
consult with such other experts as the Rights Agent shall consider necessary or
appropriate to properly carry out the duties and obligations imposed under this
Agreement and the Rights Agent shall be entitled to rely in good faith on the advice
of any such expert.
	 
	 	(b)	 	Whenever in the performance of its duties under this Agreement the Rights
Agent deems it necessary or desirable that any fact or matter be proved or established
by the Corporation prior to taking or suffering any action hereunder, such fact or
matter (unless other evidence in respect thereof be herein specifically prescribed)
may be deemed to be conclusively proved and established by a certificate signed by a
person believed by the Rights Agent to be the Chief Executive Officer, Chief Financial
Officer or the Secretary or Assistant Secretary of the Corporation and delivered to
the Rights Agent; and such certificate will be full authorization to the Rights Agent
for any action taken or suffered in good faith by it under the provisions of this
Agreement in reliance upon such certificate.
	 
	 	(c)	 	The Rights Agent will be liable hereunder only for its own negligence, bad
faith or wilful misconduct.
	 
	 	(d)	 	The Rights Agent will not be liable for or by reason of any of the statements
of fact or recitals contained in this Agreement or in the certificates for Common
Shares, or the Rights Certificates (except its countersignature thereof) or be
required to verify the same, and all such statements and recitals are and will be
deemed to have been made by the Corporation only.
	 
	 	(e)	 	The Rights Agent will not be under any responsibility in respect of the
validity of this Agreement or the execution and delivery hereof (except the due
authorization, execution and delivery hereof by the Rights Agent) or in respect of the
validity or execution of any Common Share certificate, or Rights Certificate (except
its countersignature thereon) nor will it be responsible for any breach by the
Corporation of any covenant or condition contained in this Agreement or in any Rights
Certificate; nor will it be responsible for any change in the exercisability of the
Rights (including the Rights becoming void pursuant to Subsection 3.1(b) hereof or any
adjustment required under the provisions of Section 2.3) hereof or responsible for

26

 

	 	 	 	the manner, method or amount of any such adjustment or the ascertaining of the
existence of facts that would require any such adjustment (except with respect to
the exercise of Rights after receipt of the certificate contemplated by Section 2.3
describing any such adjustment or any written notice from the Corporation or any
holder that a Person has become an Acquiring Person); nor will it by any act
hereunder be deemed to make any representation or warranty as to the authorization
of any Common Shares to be issued pursuant to this Agreement or any Rights or as to
any Common Shares, when issued, being duly and validly authorized, issued and
delivered as fully paid and non-assessable.
	 
	 	(f)	 	The Corporation agrees that it will perform, execute, acknowledge and deliver
or cause to be performed, executed, acknowledged and delivered all such further and
other acts, instruments and assurances as may reasonably be required by the Rights
Agent for the carrying out or performing by the Rights Agent of the provisions of this
Agreement.
	 
	 	(g)	 	The Rights Agent is hereby authorized and directed to accept instructions with
respect to the performance of its duties hereunder from any individual believed by the
Rights Agent to be the Chief Executive Officer, Chief Financial Officer or the
Secretary or Assistant Secretary of the Corporation, and to apply to such individuals
for advice or instructions in connection with its duties, and it shall not be liable
for any action taken or suffered by it in good faith in accordance with instructions
of any such individual. It is understood that instructions to the Rights Agent shall,
except where circumstances make it impractical or the Rights Agent otherwise agrees,
be given in writing and, where not in writing, such instructions shall be confirmed in
writing as soon as reasonably practicable after the giving of such instructions.
	 
	 	(h)	 	Subject to applicable law, the Rights Agent and any shareholder or director,
officer or employee of the Rights Agent may buy, sell or deal in Common Shares, Rights
or other securities of the Corporation or become pecuniarily interested in any
transaction in which the Corporation may be interested, or contract with or lend money
to the Corporation or otherwise act as fully and freely as though it were not the
Rights Agent under this Agreement. Nothing herein shall preclude the Rights Agent from
acting in any other capacity for the Corporation or for any other legal entity.

	4.4	 	Change of Rights Agent

The Rights Agent may resign and be discharged from its duties under this Agreement by giving 60
days’ prior written notice (or such lesser notice as is acceptable to the Corporation) to the
Corporation, to each transfer agent of Common Shares and to the holders of the Rights, all in
accordance with Section 5.9 and at the expense of the Corporation. The Corporation may remove the
Rights Agent by giving 30 days’ prior written notice to the Rights Agent, to each transfer agent of
the Common Shares and to the holders of the Rights in accordance with Section 5.9. If the Rights
Agent should resign or be removed or otherwise become incapable of acting, the Corporation will
appoint a successor to the Rights Agent. If the Corporation fails to make such appointment within
a period of 30 days after such removal or after it has been notified in writing of such resignation
or incapacity by the resigning or incapacitated Rights Agent or by the holder of any Rights (which
holder shall, with such notice, submit such holder’s Rights Certificate for inspection of the
Corporation), then the holder of any Rights may apply to any court of competent jurisdiction for
the appointment of a new Rights Agent. Any successor Rights Agent, whether appointed by the
Corporation or by such a court, must be a corporation incorporated under the laws of Canada or a
province thereof and authorized to carry on the business of a trust company in the Province of
British Columbia. After appointment, the successor Rights Agent will be vested with the same
powers, rights, duties and responsibilities as if it had been originally named as Rights Agent
without further act or deed; but the predecessor Rights Agent shall deliver and transfer to the
successor Rights Agent any property at the time held by it

27

 

hereunder, and execute and deliver any further assurance, conveyance, act or deed necessary for the
purpose. Not later than the effective date of any such appointment, the Corporation will file
notice thereof in writing with the predecessor Rights Agent and each transfer agent of the Common
Shares and mail a notice thereof in writing to the holders of the Rights in accordance with Section
5.9. Failure to give any notice provided for in this Section 4.4, however, or any defect therein,
shall not affect the legality or validity of the resignation or removal of the Rights Agent or the
appointment of the successor Rights Agent, as the case may be.

ARTICLE 5 MISCELLANEOUS

	5.1	 	Redemption, Waiver and Termination

	 	(a)	 	The Board of Directors acting in good faith may, after having obtained the
approval of the holders of Voting Shares or Rights as set forth in Section 5.4, at any
time prior to the later of the Stock Acquisition Date and the Separation Time, elect
to redeem all but not less than all of the then outstanding Rights at a redemption
price of $0.0001 per Right appropriately adjusted in a manner analogous to the
applicable adjustments provided for in Section 2.3 in the event that an event of the
type analogous to any of the events described in Section 2.3 shall have occurred (such
redemption price being herein referred to as the “Redemption Price”).
	 
	 	(b)	 	The Board of Directors shall waive the application of Section 3.1 in respect
of the occurrence of any Flip-in Event if the Board of Directors has determined,
following the Stock Acquisition Date and prior to the Separation Time, that a Person
became an Acquiring Person by inadvertence and without any intention to become, or
knowledge that it would become, an Acquiring Person under this Agreement and, in the
event that such a waiver is granted by the Board of Directors, such Stock Acquisition
Date shall be deemed not to have occurred. Any such waiver pursuant to this Subsection
5.1(b) may only be given on the condition that such Person, within 10 days after the
foregoing determination by the Board of Directors or such later date as the Board of
Directors may determine (the “Disposition Date”), has reduced its Beneficial Ownership
of Voting Shares such that the Person is no longer an Acquiring Person. If the Person
remains an Acquiring Person at the Close of Business on the Disposition Date, the
Disposition Date shall be deemed to be the date of occurrence of a further Stock
Acquisition Date and Section 3.1 shall apply thereto.
	 
	 	(c)	 	In the event that a Person acquires Voting Shares pursuant to a Permitted Bid
or an Exempt Acquisition referred to in Subsection 5.1(d), then the Board of Directors
of the Corporation shall, immediately upon the consummation of such acquisition and
without further formality, be deemed to have elected to redeem the Rights at the
Redemption Price.
	 
	 	(d)	 	The Board of Directors acting in good faith may, prior to the occurrence of
the relevant Flip-in Event, upon prior written notice delivered to the Rights Agent,
determine to waive the application of Section 3.1 to a Flip-in Event that may occur by
reason of a Take-over Bid made by means of a Take-over Bid circular to all holders of
record of Voting Shares provided that if the Board of Directors waives the application
of Section 3.1 in respect of a Take-over Bid pursuant to this Subsection 5.1(d), the
Board of Directors shall also be deemed to have waived the application of Section 3.1
in respect of any other Take-over Bid made by means of a circular to all holders of
record of Voting Shares prior to the expiry of any Take-over Bid in respect of which a
waiver is, or is deemed to have been, granted under this Subsection 5.1(d).
	 
	 	(e)	 	The Board of Directors may, prior to the Close of Business on the eighth
Business Day following a Stock Acquisition Date or such later Business Day as they may
from time to time determine, upon prior written notice delivered to the Rights Agent,

28

 

	 	 	 	waive the application of Section 3.1 to the related Flip-in Event, provided that
the Acquiring Person has reduced its Beneficial Ownership of Voting Shares (or has
entered into a contractual arrangement with the Corporation, acceptable to the
Board of Directors, to do so within 10 days of the date on which such contractual
arrangement is entered into or such later date as the Board of Directors may
determine) such that at the time the waiver becomes effective pursuant to this
Subsection 5.1(e) such Person is no longer an Acquiring Person. In the event of
such a waiver becoming effective prior to the Separation Time, for the purposes of
this Agreement, such Flip-in Event shall be deemed not to have occurred.
	 
	 	(f)	 	Where a Take-over Bid that is not a Permitted Bid Acquisition is withdrawn or
otherwise terminated after the Separation Time has occurred and prior to the
occurrence of a Flip-in Event, or if the Board of Directors grants a waiver under
Subsection 5.1(e) after the Separation Time, the Board of Directors may elect to
redeem all the outstanding Rights at the Redemption Price. Upon the Rights being
redeemed pursuant to this Subsection 5.1(f), all the provisions of this Agreement
shall continue to apply as if the Separation Time had not occurred and Rights
Certificates representing the number of Rights held by each holder of record of Common
Shares at the Separation Time had not been mailed to each such holder, for all
purposes of this Agreement the Separation Time shall be deemed not to have occurred
and the Corporation shall be deemed to have issued replacement Rights to the holders
of its then outstanding Common Shares.
	 
	 	(g)	 	If the Board of Directors is deemed under Subsection 5.1(c) to have elected or
elects under Subsection 5.1(a) to redeem the Rights, the right to exercise the Rights
will thereupon, without further action and without notice, terminate and the only
right thereafter of the holders of Rights shall be to receive the Redemption Price.
	 
	 	(h)	 	Within 10 days after the Board of Directors is deemed under Subsection 5.1(c)
to have elected or elects under Subsection 5.1(a) or (f) to redeem the Rights, the
Corporation shall give notice of redemption to the holders of the then outstanding
Rights by mailing such notice to each such holder at his last address as it appears
upon the registry books of the Rights Agent or, prior to the Separation Time, on the
registry books of the transfer agent for the Voting Shares. Any notice which is
mailed in the manner herein provided shall be deemed given, whether or not the holder
receives the notice. Each such notice of redemption will state the method by which
the payment of the Redemption Price will be made.

	5.2	 	Expiration

No person will have any rights pursuant to this Agreement or in respect of any Right after the
Expiration Time, except in respect of any right to receive cash, securities or other property which
has accrued at the Expiration Time and except as specified in Subsections 4.1(a) and 4.1(b) hereof.

	5.3	 	Issuance of New Rights Certificates

Notwithstanding any of the provisions of this Agreement or of the Rights to the contrary, the
Corporation may, at its option, issue new Rights Certificates evidencing Rights in such form as may
be approved by its Board of Directors to reflect any adjustment or change in the number or kind or
class of shares purchasable upon exercise of Rights made in accordance with the provisions of this
Agreement.

	5.4	 	Supplements and Amendments

	 	(a)	 	Subject to Subsections 5.4(b) and (c) and this Subsection 5.4(a), the
Corporation may from time to time amend, vary or delete any of the provisions of this
Agreement and

29

 

	 	 	 	the Rights provided that no amendment, variation or deletion made on or after the
date of the meeting of Shareholders at which the resolution referred to in Section
5.21 is to be considered shall be made without the prior consent of the holders of
the Rights, given as provided in Subsection 5.4(b) below, except that amendments,
variations or deletions made for any of the following purposes shall not require
such prior approval but shall be subject to subsequent ratification in accordance
with Subsection 5.4(b):

	 	(i)	 	in order to make such changes as are necessary in order to
maintain the validity of this Agreement and the Rights as a result of any
change in any applicable legislation, regulations or rules;
	 
	 	(ii)	 	in order to make such changes as are necessary in order to
cure any clerical or typographical error.

	 	(b)	 	Any amendment, variation or deletion made by the Board of Directors pursuant
to Subsection 5.4(a) shall:

	 	(i)	 	if made prior to the Separation Time, be submitted to the
shareholders of the Corporation at the next meeting of shareholders and the
shareholders may, by resolution passed by a majority of the votes cast by
Independent Shareholders who vote in respect of such amendment, variation or
deletion, confirm or reject such amendment or supplement; or
	 
	 	(ii)	 	if made after the Separation Time, be submitted to the holders
of Rights at a meeting to be held on a date not later than the date of the
next meeting of shareholders of the Corporation and the holders of Rights may,
by resolution passed by a majority of the votes cast by the holders of Rights
which have not become void pursuant to Subsection 3.1(b) who vote in respect
of such amendment, variation or deletion, confirm or reject such amendment or
supplement.

	 	 	 	Any amendment, variation or deletion pursuant to Subsection 5.4(a) shall be
effective only when so consented to by the holders of Voting Shares or Rights, as
applicable (except in the case of an amendment, variation or deletion referred to in
any of Clauses 5.4(a)(i) or (ii), which shall be effective from the date of the
resolution of the Board of Directors adopting such amendment, variation or deletion
and shall continue in effect until it ceases to be effective (as in this paragraph
described) and, where such amendment, variation or deletion is confirmed, it shall
continue in effect in the form so confirmed). If an amendment, variation or
deletion pursuant to Clause 5.4(a)(i) or (ii) is rejected by the shareholders or the
holders of Rights or is not submitted to the shareholders or holders of Rights as
required, then such amendment, variation or deletion shall cease to be effective
from and after the termination of the meeting at which it was rejected or to which
it should have been but was not submitted or from and after the date of the meeting
of holders of Rights that should have been but was not held, and no subsequent
resolution of the Board of Directors to amend, vary or delete any provision of this
Agreement to substantially the same effect shall be effective until confirmed by the
shareholders or holders of Rights, as the case may be.
	 
	 	(c)	 	For greater certainty, (i) no amendment, variation or deletion to the
provisions of Article 4 shall be made except with the concurrence of the Rights Agent
thereto, and (ii) neither the exercise by the Board of Directors of any power or
discretion conferred on it hereunder nor the making by the Board of Directors of any
determination or the granting of any waiver it is permitted to make or give hereunder
shall constitute an amendment, variation or deletion of the provisions of this
Agreement or the Rights, for purposes of this Section 5.4 or otherwise.

30

 

	 	(d)	 	The approval, confirmation or consent of the holders of Rights with respect to
any matter arising hereunder shall be deemed to have been given if the action
requiring such approval, confirmation or consent is authorized by the affirmative
votes of the holders of Rights present or represented at and entitled to be voted at a
meeting of the holders of Rights and representing a majority of the votes cast in
respect thereof. For the purposes hereof, each outstanding Right (other than Rights
which are void pursuant to the provisions hereof or which, prior to the Separation
Time, are held otherwise than by Independent Shareholders) shall be entitled to one
vote, and the procedures for the calling, holding and conduct of the meeting shall be
those, as nearly as may be, which are provided in the Corporation’s by-laws and the
BCBCA with respect to meetings of shareholders of the Corporation.

	5.5	 	Fractional Rights and Fractional Shares

	 	(a)	 	The Corporation will not be required to issue fractions of Rights or to
distribute Rights Certificates which evidence fractional Rights. After the Separation
Time there shall be paid, in lieu of such fractional Rights, to the registered holders
of the Rights Certificates with regard to which fractional Rights would otherwise be
issuable, an amount in cash equal to the same fraction of the Market Price of a whole
Right.
	 
	 	(b)	 	The Corporation shall not be required to issue fractional Common Shares upon
exercise of the Rights or to distribute certificates that evidence fractional Common
Shares. In lieu of issuing fractional Common Shares, the Corporation shall pay to the
registered holder of Rights Certificates at the time such Rights are exercised as
herein provided, an amount in cash equal to the same fraction of the Market Price of
one Common Share at the date of such exercise.

	5.6	 	Rights of Action

Subject to the terms of this Agreement, rights of action in respect of this Agreement, other than
rights of action vested solely in the Rights Agent, are vested in the respective holders of the
Rights; and any holder of any Rights, without the consent of the Rights Agent or of the holder of
any other Rights may, on such holder’s own behalf and for such holder’s own benefit and the benefit
of other holders of Rights, enforce, and may institute and maintain any suit, action or proceeding
against the Corporation to enforce, or otherwise act in respect of, such holder’s right to exercise
such holder’s Rights in the manner provided in this Agreement and in such holder’s Rights
Certificate. Without limiting the foregoing or any remedies available to the holders of Rights, it
is specifically acknowledged that the holders of Rights would not have an adequate remedy at law
for any breach of this Agreement and will be entitled to specific performance of the obligations
under, and injunctive relief against actual or threatened violations of, the obligations of any
Person subject to this Agreement.

	5.7	 	Holder of Rights Not Deemed a Shareholder

No holder, as such, of any Rights shall be entitled to vote, receive dividends or be deemed for any
purpose the holder of Common Shares or any other securities which may at any time be issuable on
the exercise of Rights, nor shall anything contained herein or in any Rights Certificate be
construed to confer upon the holder of any Rights, as such, any of the rights of a shareholder of
the Corporation or any right to vote for the election of directors or upon any matter submitted to
shareholders at any meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting shareholders (except as provided in Section
5.8 hereof) or to receive dividends or subscription rights or otherwise, until such Rights shall
have been exercised in accordance with the provisions hereof.

31

 

	5.8	 	Notice of Proposed Actions

In case the Corporation proposes after the Separation Time and prior to the Expiration Time to
effect the liquidation, dissolution or winding up of the Corporation or the sale of all or
substantially all of the Corporation’s assets, then, in each such case, the Corporation shall give
to each holder of a Right, in accordance with Section 5.9 hereof, a notice of such proposed action,
which shall specify the date on which such liquidation, dissolution, or winding up is to take
place, and such notice shall be so given at least 20 Business Days prior to the date of the taking
of such proposed action by the Corporation.

	5.9	 	Notices

Notices or demands authorized or required by this Agreement to be given or made to or by the Rights
Agent, the holder of any Rights or the Corporation will be sufficiently given or made and shall be
deemed to be received if delivered or sent by first-class mail, postage prepaid, or by fax machine
or other means of printed telecommunication, charges prepaid and confirmed in writing by mail or
delivery, addressed (until another address is filed in writing with the Rights Agent or the
Corporation, as applicable), as follows:

	 	(a)	 	if to the Corporation:

107 – 930 West 1st Avenue

North Vancouver, British Columbia V7P 3N7

Attention:     President

Facsimile:     (604) 987-2555

	 	(b)	 	if to the Rights Agent:

3rd Floor, 510 Burrard Street

Vancouver, British Columbia V6C 3B9

Attention:     Client Services

Facsimile:     (604) 661-9401

	 	(c)	 	if to the holder of any Rights, to the address of such holder as it appears on
the registry books of the Rights Agent or, prior to the Separation Time, on the
registry books of the Corporation for the Common Shares.

	5.10	 	Costs of Enforcement

The Corporation agrees that if the Corporation or any other Person the securities of which are
purchasable upon exercise of Rights fails to fulfil any of its obligations pursuant to this
Agreement, then the Corporation or such Person will reimburse the holder of any Rights for the
costs and expenses (including legal fees) incurred by such holder in actions to enforce his rights
pursuant to any Rights or this Agreement.

	5.11	 	Regulatory Approvals

Any obligation of the Corporation or action or event contemplated by this Agreement, shall be
subject to applicable law and to the receipt of any requisite approval or consent from any
governmental or regulatory authority. Without limiting the generality of the foregoing, any
issuance or delivery of debt or equity securities (other than non-convertible debt securities) of
the Corporation upon the exercise of Rights and any amendment to this Agreement shall be subject to
the prior consent of the stock exchanges on which the Corporation is from time to time listed or
has been listed during the six months prior to such amendment.

32

 

	5.12	 	Declaration as to Non-Canadian and Non-U.S. Holders

If in the opinion of the Board of Directors (who may rely upon the advice of counsel), any action
or event contemplated by this Agreement would require compliance with the securities laws or
comparable legislation of a jurisdiction outside Canada and the United States of America, its
territories and possessions, the Board of Directors acting in good faith may take such actions as
it may deem appropriate to ensure that such compliance is not required, including without
limitation establishing procedures for the issuance to a Canadian resident Fiduciary of Rights or
securities issuable on exercise of Rights, the holding thereof in trust for the Persons entitled
thereto (but reserving to the Fiduciary or to the Fiduciary and the Corporation, as the Corporation
may determine, absolute discretion with respect thereto) and the sale thereof and remittance of the
proceeds of such sale, if any, to the Persons entitled thereto. In no event shall the Corporation
or the Rights Agent be required to issue or deliver Rights or securities issuable on exercise of
Rights to Persons who are citizens, residents or nationals of any jurisdiction other than Canada
and a province or territory thereof and the United States of America and any state thereof in which
such issue or delivery would be unlawful without registration of the relevant Persons or securities
for such purposes.

	5.13	 	Successors

All the covenants and provisions of this Agreement by or for the benefit of the Corporation or the
Rights Agent shall bind and enure to the benefit of their respective successors and assigns
hereunder.

	5.14	 	Benefits of this Agreement

Nothing in this Agreement shall be construed to give to any Person other than the Corporation, the
Rights Agent and the holders of the Rights any legal or equitable right, remedy or claim under this
Agreement; this Agreement shall be for the sole and exclusive benefit of the Corporation, the
Rights Agent and the holders of the Rights.

	5.15	 	Shareholder Review

At or prior to the first annual meeting of shareholders of the Corporation following the third
anniversary of the date of this Agreement, provided that a Flip-in Event has not occurred prior to
such time, the Board of Directors shall submit a resolution ratifying the continued existence of
this Agreement to the Independent Shareholders for their consideration and, if thought advisable,
approval. Unless a majority of the votes cast by Independent Shareholders who vote in respect of
such resolution are voted in favour of the continued existence of this Agreement, the Board of
Directors shall, immediately upon the confirmation by the chairman of such shareholders’ meeting of
the result of the vote on such resolution and without further formality, be deemed to have elected
to redeem the Rights at the Redemption Price.

	5.16	 	Determination and Actions by the Board of Directors

The Board of Directors shall have the authority to administer and, subject to Section 5.4, amend
this Agreement and to exercise all rights and powers specifically granted to the Board or the
Corporation hereunder or as may be necessary or advisable in the administration of this Agreement.

All such actions, calculations, interpretations and determinations (including all omissions with
respect to the foregoing) which are done or made by the Board of Directors, in good faith, (x) may
be relied on by the Rights Agent, and (y) shall not subject the Board of Directors to any liability
to the holders of the Rights or to any other parties.

	5.17	 	Governing Law

This Agreement and the Rights issued hereunder shall be deemed to be a contract made under the laws
of the Province of British Columbia and for all purposes will be governed by and construed in

33

 

accordance with the laws of such province applicable to contracts to be made and performed entirely
within such province.

	5.18	 	Language

Les parties aux presentes ont exige que la presente convention ainsi que tous les documents et avis
qui s’y rattachent et/ou qui en coulent soient redieds en langue anglaise. The parties hereto have
required that this Agreement and all documents and notices related thereto and/or resulting
therefrom be drawn up in English.

	5.19	 	Counterparts

This Agreement may be executed in any number of counterparts and each of such counterparts will for
all purposes be deemed to be an original, and all such counterparts shall together constitute one
and the same instrument.

	5.20	 	Severability

If any term or provision hereof or the application thereof to any circumstance is, in any
jurisdiction and to any extent, invalid or unenforceable, such term or provision will be
ineffective only to the extent of such invalidity or unenforceability without invalidating or
rendering unenforceable the remaining terms and provisions hereof or the application of such term
or provision to circumstances other than those as to which it is held invalid or unenforceable.

	5.21	 	Effective Date

This Agreement is effective as of the Effective Date. If the Rights Plan is not confirmed by
resolution passed by a majority of the votes cast by Independent Shareholders who vote in respect
of such Rights Plan at a meeting to be held not later than May 31, 2007 then this Agreement and any
outstanding Rights shall be of no further force and effect from the earlier of (a) the date of the
meeting, and (b) May 31, 2007.

	5.22	 	Time of the Essence

Time shall be of the essence hereof.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed effective as
of the day first above written.

	 	 	 	 	 
	OSI GEOSPATIAL INC.
	 
	 	 	 	 
	 
	 	 	 	 
	Per:
	 	 	 	 
	 

	 	 

Ken Kirkpatrick
	 	 
	 

	 	Chief Executive Officer	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	COMPUTERSHARE INVESTOR SERVICES INC.
	 
	 	 	 	 
	 
	 	 	 	 
	Per:
	 	 	 	 
	 

	 	 

Authorized Signatory
	 	 

34

 

EXHIBIT A

FORM OF RIGHTS CERTIFICATE

Certificate No.

Rights

THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE CORPORATION, ON THE TERMS SET FORTH IN
THE SHAREHOLDER RIGHTS PLAN AGREEMENT. UNDER CERTAIN CIRCUMSTANCES (SPECIFIED IN SUBSECTION 3.1(b)
OF SUCH AGREEMENT), RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON, CERTAIN RELATED PARTIES OF AN
ACQUIRING PERSON OR A TRANSFEREE OF AN ACQUIRING PERSON OR ANY SUCH RELATED PARTIES WILL BECOME
VOID WITHOUT FURTHER ACTION.

Rights Certificate

This certifies that                                          is the registered holder of the number of Rights set forth
above, each of which entitles the registered holder thereof, subject to the terms, provisions and
conditions of the Shareholder Rights Plan Agreement made as of March 19, 2007 (the “Rights
Agreement”) between OSI Geospatial Inc., a corporation subsisting under the laws of the Province of
British Columbia (the “Corporation”) and Computershare Investor Services Inc., a trust company
incorporated under the laws of Canada, as Rights Agent (the “Rights Agent”), which term shall
include any successor Rights Agent under the Rights Agreement, to purchase from the Corporation, at
any time after the Separation Time and prior to the Expiration Time (as such terms are defined in
the Rights Agreement), one fully paid common share of the Corporation (a “Common Share”) at the
Exercise Price referred to below, upon presentation and surrender of this Rights Certificate,
together with the Form of Election to Exercise appropriately completed and duly executed, to the
Rights Agent at its principal office in Vancouver. Until adjustment thereof in certain events as
provided in the Rights Agreement, the Exercise Price shall be $30.00 per Right (payable in cash,
certified cheque or money order payable to the order of the Corporation). The number of Common
Shares which may be purchased for the Exercise Price is subject to adjustment as set forth in the
Rights Agreement.

This Rights Certificate is subject to all of the terms, provisions and conditions of the Rights
Agreement, which terms, provisions and conditions are hereby incorporated by reference and made a
part hereof and to which Rights Agreement reference is hereby made for a full description of the
rights, limitations of rights, obligations, duties and immunities thereunder of the Rights Agent,
the Corporation and the holder of the Rights Certificates. Copies of the Rights Agreement are on
file at the registered office of the Corporation and are available upon written request.

This Rights Certificate, with or without other Rights Certificates, upon surrender at the principal
office of the Rights Agent in Vancouver, may be exchanged for another Rights Certificate or Rights
Certificates of like tenor evidencing an aggregate number of Rights equal to the aggregate number
of Rights evidenced by the Rights Certificate or Rights Certificates surrendered. If this Rights
Certificate shall be exercised in part, the registered holder shall be entitled to receive, upon
surrender hereof, another Rights Certificate or Rights Certificates for the number of whole Rights
not exercised.

Subject to the provisions of the Rights Agreement the Rights evidenced by this Certificate may be
redeemed by the Corporation at a redemption price of $0.0001 per Right subject to adjustment in
certain events.

No fractional Common Shares will be issued upon the exercise of any Right or Rights evidenced
hereby, but in lieu thereof a cash payment will be made, as provided in the Rights Agreement.

A - 1

 

No holder of this Rights Certificate, as such, shall be entitled to vote or receive dividends or be
deemed for any purpose the holder of Common Shares or any other securities which may at any time be
issuable upon the exercise hereof, nor shall anything contained in the Rights Agreement or herein
be construed to confer upon the holder hereof, as such, any of the rights of a shareholder of the
Corporation or any right to vote for the election of directors or upon any matter submitted to
shareholders at any meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of any meeting or other actions affecting shareholders (except as provided in the
Rights Agreement), or to receive dividends or subscription rights or otherwise, until the Rights
evidenced by this Rights Certificate shall have been exercised as provided in the Rights Agreement.

This Rights Certificate shall not be valid for any purpose until it shall have been countersigned
by the Rights Agent.

WITNESS the facsimile signature of the proper officers of the Corporation.

				
	Date:	 	
 
	 

	 	 	 	 	 
	OSI GEOSPATIAL INC.
	 
	 	 	 	 
	 
	 	 	 	 
	Per:
	 	 	 	 
	 

	 	 

Ken Kirkpatrick
	 	 
	 

	 	Chief Executive Officer	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	COMPUTERSHARE INVESTOR SERVICES INC.
	 
	 	 	 	 
	 
	 	 	 	 
	Per:
	 	 	 	 
	 

	 	 

Authorized Signatory
	 	 

A - 2

 

FORM OF ELECTION TO EXERCISE

			
	TO:          	 	OSI GEOSPATIAL INC.

			
	AND TO:	 	COMPUTERSHARE INVESTOR SERVICES INC.

The undersigned hereby irrevocably elects to exercise                      whole Rights represented by this Rights
Certificate to purchase the Common Shares issuable upon the exercise of such Rights and requests
that certificates for such Common Shares be issued in the name of and delivered to:

Rights Certificate No.                                         

	 	 	 
	 

Name

	 	 
	 
	 	 
	 

Address

	 	 
	 
	 	 
	 

City and Province

	 	 
	 
	 	 
	 

Social Insurance No. or other taxpayer
identification number

	 	 

If such number of Rights shall not be all the Rights evidenced by this Rights Certificate, a new
Rights Certificate for the balance of such Rights shall be registered in the name of and delivered
to:

	 	 	 	 	 
	 	 	 
	Name	 	 
	 
	 	 	 	 
	 	 	 
	Address	 	 
	 
	 	 	 	 
	 	 	 
	City and Province	 	 
	 
	 	 	 	 
	 	 	 
	Social Insurance No. or other
taxpayer identification number	 	 
	 
	 	 	 	 
	Date:
	 	 	 	 
	 

	 	 
	 	 
	 

	 	 	 	Signature

Signature Guaranteed

(Signature must
correspond to name as
written upon the face of
this Rights Certificate
in every particular,
without alteration or
enlargement or any change
whatsoever)

Signature must be guaranteed by a Canadian chartered bank, a Canadian trust company, a member of a
recognized stock exchange or a member of the Securities Transfer Association Medallion Program
(Stamp).

A - 3

 

CERTIFICATE

(To be completed by the holder if true)

The undersigned hereby represents, for the benefit of the Corporation and all holders of Rights and
Common Shares, that the Rights evidenced by this Rights Certificate are not and, to the knowledge
of the undersigned, have never been, Beneficially Owned by an Acquiring Person or by an Affiliate
or Associate of an Acquiring Person, any other Person acting jointly or in concert with an
Acquiring Person or any Affiliate or Associate of any such other Person (as such terms are defined
in the Shareholder Rights Agreement of OSI Geospatial Inc.).

	 	 	 
	 
	 	 
	 

Signature

	 	 

NOTICE

In the event that the certifications set forth above in the Forms of Election to Exercise and
Assignment are not completed, the Corporation shall deem the Beneficial Owner of the Rights
represented by this Rights Certificate to be an Acquiring Person (as defined in the Shareholder
Rights Agreement of OSI Geospatial Inc.) and, accordingly, such Rights shall be null and void. No
Rights Certificate shall be issued in exchange for a Rights Certificate owned or deemed to have
been owned by an Acquiring Person or an Affiliate or Associate thereof, or by a Person acting
jointly or in concert with an Acquiring Person or an Affiliate or Associate thereof.

A - 4

 

FORM OF ASSIGNMENT

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

	 	 	 
	 
	 	 
	 

(Please print name and address of transferee)

	 	 

the Rights represented by this Rights Certificate, together with all right, title and interest
therein.

	 	 	 	 	 
	Date:
	 	 	 	 
	 

	 	 
	 	 
	 

	 	 	 	Signature

(Signature Guaranteed)

(Signature must correspond to name as
written upon the face of this Rights Certificate
in every particular, without alteration or
enlargement or any change whatsoever)

Signature must be guaranteed by a Canadian chartered bank, a Canadian trust company, a member of a
recognized stock exchange or a member of the Securities Transfer Association Medallion Program
(Stamp).

(To be completed by the assignor if true)

The undersigned hereby represents, for the benefit of the Corporation and all holders of Rights and
Common Shares, that the Rights evidenced by this Rights Certificate are not and, to the knowledge
of the undersigned have never been, Beneficially Owned by an Acquiring Person or by an Affiliate or
Associate of an Acquiring Person, any other Person acting jointly or in concert with an Acquiring
Person or any Affiliate or Associate of any such other Person (as such terms are deemed in the
Rights Agreement).

	 	 	 
	 
	 	 
	 

	 	 
	 

	 	Signature
	 
	 	 
	 
	 	 
	 

	 	 
	 

	 	(Please print name below signature)

NOTICE

In the event that the certifications set forth above in the Forms of Election to Exercise and
Assignment are not completed, the Corporation shall deem the Beneficial Owner of the Rights
represented by this Rights Certificate to be an Acquiring Person (as defined in the Shareholder
Rights Agreement of OSI Geospatial Inc.) and, accordingly, such Rights shall to be null and void.
No Rights Certificate shall be issued in exchange for a Rights Certificate owned or deemed to have
been owned by an Acquiring Person or an Affiliate or Associate thereof, or by a Person acting
jointly or in concert with an Acquiring Person or an Affiliate or Associate thereof.

A - 5

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