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Special Warrant Indenture

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Sectors: Health Products and Services
Governing Law: Canada
Effective Date: September 17, 1996
Related Agreement Types:
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SPECIAL WARRANT INDENTURE


Providing for the Issuance of
Special Warrants Between


HEALTHCARE CAPITAL CORP.


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The R-M Trust Company


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Table of Contents


ARTICLE 1
INTERPRETATION


1.1 Definitions..............................................................................................2 1.2 Gender and Number........................................................................................5 1.3 Interpretation not Affected by Headings, etc.............................................................5 1.4 Day not a Business Day...................................................................................5 1.5 Time of the Essence......................................................................................5 1.6 Applicable Law...........................................................................................5


ARTICLE 2
ISSUE OF SPECIAL WARRANTS


2.1 Issue of Special Warrants................................................................................5 2.2 Form and Terms of Special Warrants.......................................................................6 2.3 Warrantholder not a Shareholder..........................................................................6 2.4 Special Warrants to Rank Pari Passu......................................................................6 2.5 Signing of Warrant Certificates..........................................................................7 2.6 Certification by the Trustee.............................................................................7 2.7 Issue in Substitution for Warrant Certificates Lost, etc.................................................7 2.8 Exchange of Warrant Certificates.........................................................................8 2.9 Charges for Exchange.....................................................................................8 2.10 Transfer and Ownership of Special Warrants...............................................................8


ARTICLE 3
EXERCISE OF SPECIAL WARRANTS


3.1 Method of Exercise of Special Warrants...................................................................9 3.2 Effect of Exercise of Special Warrants..................................................................10 3.3 Partial Exercise of Special Warrants; Fractions.........................................................11 3.4 United States Holders...................................................................................12 3.5 Expiration of Special Warrants..........................................................................13 3.6 Cancellation of Surrendered Special Warrants............................................................13 3.7 Accounting and Recording................................................................................13 3.8 Deemed Exercise.........................................................................................14


ARTICLE 4
ADJUSTMENT OF NUMBER OF COMMON SHARES
AND SHARE PURCHASE WARRANTS


4.1 Adjustment of Number of Common Shares and Share Purchase Warrants.......................................14 4.2 Entitlement to Common Shares and Share Purchase Warrants
on Exercise of Special Warrant..........................................................................16 4.3 No Adjustment for Stock Options.........................................................................16 4.4 Determination by Corporation's Auditors.................................................................16


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4.5 Proceedings Prior to any Action Requiring Adjustment....................................................17 4.6 Certificate of Adjustment...............................................................................17 4.7 Notice of Special Matters...............................................................................17 4.8 No Action after Notice..................................................................................17 4.9 Protection of Trustee...................................................................................17


ARTICLE 5
RIGHTS OF THE CORPORATION AND COVENANTS


5.1 Optional Purchases by the Corporation...................................................................18 5.2 General Covenants.......................................................................................18 5.3 Trustee's Remuneration and Expenses.....................................................................20 5.4 Securities Qualification Requirements...................................................................20 5.5 Performance of Covenants by Trustee.....................................................................20


ARTICLE 6
ENFORCEMENT


6.1 Suits by Warrantholders.................................................................................21 6.2 Immunity of Shareholders, etc...........................................................................21 6.3 Limitation of Liability.................................................................................21 6.4 Waiver of Default.......................................................................................21


ARTICLE 7
MEETINGS OF WARRANTHOLDERS


7.1 Right to Convene Meetings...............................................................................22 7.2 Notice..................................................................................................22 7.3 Chairman................................................................................................23 7.4 Quorum..................................................................................................23 7.5 Power to Adjourn........................................................................................23 7.6 Show of Hands...........................................................................................23 7.7 Poll and Voting.........................................................................................24 7.8 Regulations.............................................................................................24 7.9 Corporation and Trustee May be Represented..............................................................25 7.10 Powers Exercisable by Extraordinary Resolution..........................................................25 7.11 Meaning of Extraordinary Resolution.....................................................................26 7.12 Powers Cumulative.......................................................................................27 7.13 Minutes.................................................................................................27 7.14 Instruments in Writing..................................................................................28 7.15 Binding Effect of Resolution............................................................................28 7.16 Holdings by Corporation Disregarded.....................................................................28


ARTICLE 8
SUPPLEMENTAL INDENTURE


8.1 Provision for Supplemental Indentures for Certain Purposes .............................................28 8.2 Successor Corporations..................................................................................29


ARTICLE 9
CONCERNING THE TRUSTEE


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9.1 Trust Indenture Legislation.............................................................................30 9.2 Rights and Duties of Trustee............................................................................30 9.3 Evidence, Experts and Advisers..........................................................................31 9.4 Documents, Monies, etc. Held by Trustee................................................................32 9.5 Actions by Trustee to Protect Interest..................................................................32 9.6 Trustee Not Required to Give Security...................................................................32 9.7 Protection of Trustee...................................................................................32 9.8 Replacement of Trustee; Successor by Merger.............................................................33 9.9 Conflict of Interest....................................................................................34 9.10 Acceptance of Trust.....................................................................................34 9.11 Trustee Not to be Appointed Receiver....................................................................35


ARTICLE 10
GENERAL


10.1 Notice to the Corporation and the Trustee...............................................................35 10.2 Notice to Warrantholders................................................................................36 10.3 Ownership and Transfer of Special Warrants..............................................................36 10.4 Evidence of Ownership...................................................................................36 10.5 Counterparts............................................................................................37 10.6 Satisfaction and Discharge of Indenture.................................................................37 10.7 Provisions of Indenture and Special Warrants for the Sole Benefit of
Parties and Warrantholders..............................................................................38 10.8 Special Warrants Owned by the Corporation or its Subsidiaries - Certificate
to be Provided.........................................................................................38


SPECIAL WARRANT CERTIFICATE.......................................................................................1 SPECIAL WARRANT CERTIFICATE.......................................................................................1


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THIS SPECIAL WARRANT INDENTURE made effective as of the 17th day of September, 1996.


BETWEEN:


HEALTHCARE CAPITAL CORP., a corporation incorporated under the
laws of Alberta (hereinafter referred to as the "Corporation")


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THE R-M TRUST COMPANY, a trust company incorporated under the
laws of Canada and authorized to carry on business in all
Provinces of Canada (hereinafter referred to as the "Trustee")


WHEREAS:


A. the Corporation is proposing to issue Special Warrants in the manner herein set forth;


B. one Special Warrant shall, subject to adjustment, entitle the holder thereof to acquire one Common Share and one Share Purchase Warrant at no additional cost upon the terms and conditions herein set forth; and


C. all acts and deeds necessary have been done and performed to make the Special Warrants, when issued as provided in this Indenture, valid and binding upon the Corporation with the benefits and subject to the terms of this Indenture;


NOW THEREFORE, the parties hereto agree as follows:


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ARTICLE 1
INTERPRETATION


1.1 Definitions


In this Indenture, including the recitals and schedules hereto and in all indentures supplemental hereto:


(a) "Adjustment Period" means the period from and including the date of
issuance of the Special Warrants up to and including the Time of
Expiry;


(b) "Applicable Legislation" means the provisions of the Business
Corporations Act (Alberta), S. A. 1981, c. B-15, as from time to time
amended, and any statute of Canada or a province thereof, and the
regulations under any such named or other statute, relating to trust
indentures or to the rights, duties and obligations of trustees and of
corporations under trust indentures, to the extent that such provisions
are at the time in force and applicable to this Indenture;


(c) "Business Day" means a day which is not Saturday or Sunday or holiday
in the City of Calgary, Alberta;


(d) "Common Shares" means fully paid and non-assessable Common Shares of
the Corporation as presently constituted;


(e) "Corporation's Auditors" means Shikaze Ralston or such other firm of
chartered accountants as may be duly appointed as auditors of the
Corporation from time to time;


(f) "Counsel" means a barrister or solicitor or a firm of barristers and
solicitors retained by the Trustee or retained by the Corporation and
acceptable to the Trustee;


(g) "Director" means a director of the Corporation for the time being and,
unless otherwise specified herein, reference to action "by the
directors" means action by the directors of the Corporation as a board
or, whenever duly empowered, action by any committee of such board;


(h) "Effective Date" means September 17, 1996;


(i) "Exercise Date" means, with respect to any Special Warrant, the date on
which the Warrant Certificate representing such Special Warrant is
surrendered for exercise in accordance with the provisions of Article 3
hereof;


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(j) "Expiry Date" means the earlier of:


(i) the date which is the fifth (5th) day immediately
following the date upon which a receipt for the
Prospectus has been obtained from the Securities
Commissions in all of the Filing Provinces; and


(ii) September 17, 1997;


(k) "Filing Provinces" means each of the Provinces of Alberta and British
Columbia;


(l) "Person" means an individual, body corporate, partnership, trust,
trustee, executor, administrator, legal representative or any
unincorporated organization;


(m) "Prospectus" means a final prospectus and any amendment thereto filed
by the Corporation with the Securities Commissions, in respect of the
distribution of Common Shares and Share Purchase Warrants upon the
exercise of Special Warrants;


(n) "Shareholder" means a holder of record of one or more Common Shares;


(o) "Securities Commissions" means the securities commission in the Filing
Provinces;


(p) "Share Purchase Warrant" means a Common Share purchase warrant
entitling the holder of each Share Purchase Warrant to subscribe for
one Common Share at the subscription price of US$2.00 per Common Share
until August 31, 1998;


(q) "Special Warrants" means the warrants issued and certified hereunder
and for the time being outstanding entitling the holder of each Special
Warrant to acquire one (1) Common Share and one (1) Share Purchase
Warrant;


(r) "this Special Warrant Indenture", "this Indenture", "herein", "hereby"
and similar expressions mean and refer to this Indenture and any
indenture, deed or instrument supplemental hereto; and the expressions
"Article", "Section", "subsection" and "paragraph" followed by a number
mean and refer to the specified article, section, subsection or
paragraph of this Indenture;


(s) "Subsidiary of the Corporation" or "Subsidiary" means any corporation
of which more than fifty (50%) per cent of the outstanding Voting
Shares are owned, directly or indirectly, by or for the Corporation,
provided that the ownership of such shares confers the right to elect
at least a majority of the board of directors of such corporation and
includes any corporation in like relation to a Subsidiary;


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(t) "Time of Expiry" means 4:30 in the afternoon, Calgary time, on the
Expiry Date;


(u) "Trading Day" means, with respect to a stock exchange, a day on which
such exchange is open for the transaction of business and with respect
to the over-the-counter market means a day on which The Alberta Stock
Exchange is open for the transaction of business;


(v) "Transfer Agent" means The R-M Trust Company or such other transfer
agent for the time being of the Common Shares;


(w) "Trustee" means The R-M Trust Company or its successors from time to
time in the trust hereby created;


(x) "Voting Shares" means shares of the capital stock of any class of any
corporation carrying voting rights under all circumstances, provided
that, for the purposes of such definition, shares which only carry the
right to vote conditionally on the happening of an event shall not be
considered Voting Shares, whether or not such event shall have
occurred, nor shall any shares be deemed to cease to be Voting Shares
solely by reason of a right to vote accruing to shares of another class
or classes by reason of the happening of any such event;


(y) "Warrant Agency" means the principal office of the Trustee in the City
of Calgary, Province of Alberta or such other place as may be
designated in accordance with subsection 3.1(c);


(z) "Warrant Certificate" means a certificate issued on or after the
Effective Date to evidence Special Warrants;


(aa) "Warrantholders" or "holders" without reference to Common Shares means
the persons who, on and after the Effective Date, are registered owners
of Special Warrants;


(bb) "Warrantholders' Request" means an instrument signed in one or more
counterparts by Warrantholders entitled to acquire in the aggregate not
less than 25% of the aggregate number of Common Shares which could be
acquired upon the exercise of all Special Warrants then unexercised and
outstanding, requesting the Trustee to take some action or proceeding
specified therein; and


(cc) "Written order of the Corporation", "written request of the
Corporation", "written consent of the Corporation" and "certificate of
the Corporation" mean, respectively, a


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written order, request, consent and certificate signed in the name of
the Corporation by its President, and may consist of one or more
instruments so executed.


1.2 Gender and Number


Unless herein otherwise expressly provided or unless the context otherwise requires, words importing the singular include the plural and vice versa and words importing gender include all genders.


1.3 Interpretation not Affected by Headings, etc.


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


1.4 Day not a Business Day


In the event that any day on or before which any action is required to be taken hereunder is not a Business Day, then such action shall be required to be taken at or before the requisite time on the next succeeding day that is a Business Day.


1.5 Time of the Essence


Time shall be of the essence of this Indenture.


1.6 Applicable Law


This Indenture and the Warrant Certificates shall be construed in accordance with the laws of the Province of Alberta and the federal law applicable therein and shall be treated in all respects as Alberta contracts.


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ARTICLE 2
ISSUE OF SPECIAL WARRANTS


2.1 Issue of Special Warrants


(a) 5,280,000 Special Warrants, each of which entitles the holder thereof
to acquire one (1) Common Share and one (1) Share Purchase Warrant, and
subject to adjustment in accordance with Article 4 hereof, are hereby
created and authorized to be issued.


(b) The Warrant Certificate (including all replacements issued in
accordance with this Indenture) shall be substantially in the
applicable form set out in Schedule "A" hereto or such other form as
the Corporation shall specify, shall be dated as of the Effective Date,
shall bear such distinguishing letters and numbers as the Corporation
may, with the approval of the Trustee, prescribe, and shall be issuable
in any denomination excluding fractions.


2.2 Form and Terms of Special Warrants


(a) Each Special Warrant authorized to be issued hereunder shall entitle
the holder thereof, upon exercise, to acquire one (1) Common Share and
one (1) Share Purchase Warrant, subject to adjustment in accordance
with Article 4 hereof, at any time after the Effective Date until the
Time of Expiry at no additional cost to the holder.


(b) No fractional Special Warrants shall be issued or otherwise provided
for hereunder.


(c) The number of Common Shares and Share Purchase Warrants which may be
acquired pursuant to the Special Warrants shall be adjusted in the
event and in the manner specified in Article 4.


(d) In the event that a receipt for a Prospectus is not issued in each of
the Filing Provinces on or before 5:00 p.m. (Calgary time) on the day
which is 120 days from the date of the final issuance of Warrant
Certificates issuable pursuant to this Indenture, holders of the
Special Warrants shall be entitled to receive one and one-tenth times
the number of Common Shares and Share Purchase Warrants upon the
exercise of the Special Warrants, at no additional cost, in lieu of the
Common Shares and Share Purchase Warrants which they would otherwise
have been entitled to receive.


2.3 Warrantholder not a Shareholder


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Except as provided for in subsection 5.2(i), nothing in this Indenture or in the holding of a Special Warrant or Warrant Certificate or otherwise, shall, in itself, confer or be construed as conferring upon a Warrantholder any right of interest whatsoever as a Shareholder or as any other shareholder of the Corporation, including, but not limited to, the right to vote at, to receive notice of, or to attend, meetings of shareholders or any other proceedings of the Corporation, or the right to receive dividends and other distributions.


2.4 Special Warrants to Rank Pari Passu


All Special Warrants shall rank pari passu, whatever may be the actual date of issue thereof.


2.5 Signing of Warrant Certificates


The Warrant Certificates shall be signed by any one director or officer of the Corporation. The signatures of such director or officer may be mechanically reproduced in facsimile and Warrant Certificates bearing such facsimile signatures shall be binding upon the Corporation as if they had been manually signed by such director or officer. Notwithstanding that any person whose manual or facsimile signature appears on any Warrant Certificate as a director or officer may no longer hold office at the date of such Warrant Certificate or at the date of certification or delivery thereof, any Warrant Certificate signed as aforesaid shall, subject to Section 2.6, be valid and binding upon the Corporation and the holder thereof shall be entitled to the benefits of this Indenture.


2.6 Certification by the Trustee


(a) No Warrant Certificate shall be issued or, if issued, shall be valid
for any purpose or entitle the holder to the benefit hereof until it
has been certified by manual signature by or on behalf of the Trustee
in the form of the certificate set out in Schedule "A" hereto, and such
certification by the Trustee upon any Warrant Certificate shall be
conclusive evidence as against the Corporation that the Warrant
Certificate so certified has been duly issued hereunder and that the
holder is entitled to the benefits hereof.


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


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