Exhibit 4.8
SUBSCRIPTION RECEIPT AGREEMENT
among
ZARLINK SEMICONDUCTOR INC.
- and -
CIBC WORLD MARKETS INC.
- and -
COMPUTERSHARE TRUST COMPANY OF CANADA
Providing for the Issue of
Subscription Receipts
Dated as of July [30], 2007
TABLE OF CONTENTS
ARTICLE 1 INTERPRETATION...................................................... 2
1.1 Definitions.......................................................... 2
1.2 Headings............................................................. 5
1.3 References........................................................... 5
1.4 Certain Rules of Interpretation...................................... 5
1.5 Day Not a Business Day............................................... 6
1.6 Applicable Law....................................................... 6
1.7 Conflict............................................................. 6
1.8 Currency............................................................. 6
1.9 Severability......................................................... 6
1.10 Actions by the Underwriters.......................................... 6
ARTICLE 2 ISSUE OF SUBSCRIPTION RECEIPTS...................................... 6
2.1 Issue of Subscription Receipts....................................... 6
2.2 Payment Acknowledgement.............................................. 7
2.3 Terms of Subscription Receipts....................................... 8
2.4 Fractional Subscription Receipts..................................... 8
2.5 Register for Subscription Receipts................................... 8
2.6 Registers Open for Inspection........................................ 8
2.7 Receiptholder not a Debentureholder or a Shareholder................. 8
2.8 Subscription Receipts to Rank Pari Passu............................. 9
2.9 Signing of Subscription Receipt Certificates......................... 9
2.10 Certification by the Subscription Receipt Agent...................... 9
2.11 Issue in Substitution for Subscription Receipt
Certificates Lost, etc............................................... 9
2.12 Exchange of Subscription Receipt Certificates....................... 10
2.13 Charges for Exchange................................................ 10
2.14 Transfer and Registration of Subscription Receipts.................. 10
2.15 Global Subscription Receipt......................................... 12
2.16 Proceeds to be Placed in Escrow..................................... 13
2.17 Subscription Receipts and Trading................................... 13
2.18 Right of Rescission................................................. 14
2.19 Cancellation of Surrendered Subscription
Receipt Certificates................................................ 14
ARTICLE 3 ISSUANCE OF UNDERLYING CONVERTIBLE DEBENTURES OR
REFUND OF SUBSCRIPTION PRICE................................................ 14
3.1 Notice of Acquisition............................................... 14
3.2 Release of Funds on Acquisition Closing Date........................ 14
3.3 Issue of Underlying Convertible Debentures.......................... 15
3.4 Fractions........................................................... 15
3.5 Payment on Termination.............................................. 16
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ARTICLE 4 INVESTMENT OF ESCROWED FUNDS AND PAYMENT OF INTEREST............... 17
4.1 Investment of Escrowed Funds........................................ 17
4.2 Segregation of Escrowed Funds....................................... 17
4.3 Third Party Interest................................................ 17
ARTICLE 5 RIGHTS AND COVENANTS OF ZARLINK.................................... 17
5.1 Optional Purchases by Zarlink....................................... 17
5.2 General Covenants................................................... 18
5.3 Subscription Receipt Agent's Remuneration, Expenses
and Indemnification................................................. 19
5.4 Performance of Covenants by Subscription Receipt Agent.............. 19
5.5 Accounting.......................................................... 19
5.6 Payments by Subscription Receipt Agent.............................. 20
5.7 Regulatory Matters.................................................. 20
5.8 Anti-Money Laundering and Privacy................................... 20
ARTICLE 6 ENFORCEMENT........................................................ 21
6.1 Suits by Receiptholders............................................. 21
ARTICLE 7 MEETINGS OF RECEIPTHOLDERS......................................... 21
7.1 Right to Convene Meetings........................................... 21
7.2 Notice.............................................................. 22
7.3 Chairperson......................................................... 22
7.4 Quorum.............................................................. 22
7.5 Power to Adjourn.................................................... 22
7.6 Show of Hands....................................................... 22
7.7 Poll and Voting..................................................... 23
7.8 Regulations......................................................... 23
7.9 Zarlink and Subscription Receipt Agent may be Represented........... 24
7.10 Powers Exercisable by Special Resolution............................ 24
7.11 Meaning of Special Resolution....................................... 25
7.12 Powers Cumulative................................................... 26
7.13 Minutes............................................................. 26
7.14 Instruments in Writing.............................................. 27
7.15 Binding Effect of Resolutions....................................... 27
7.16 Holdings by Zarlink Disregarded..................................... 27
ARTICLE 8 SUPPLEMENTAL AGREEMENTS............................................ 27
8.1 Provision for Supplemental Agreements for Certain Purposes.......... 27
ARTICLE 9 CONCERNING THE SUBSCRIPTION RECEIPT AGENT.......................... 28
9.1 Rights and Duties of Subscription Receipt Agent..................... 28
9.2 Evidence, Experts and Advisers...................................... 29
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9.3 Documents, etc. Held by Subscription Receipt Agent.................. 30
9.4 Actions by Subscription Receipt Agent to Protect Interest........... 31
9.5 Subscription Receipt Agent not Required to Give Security............ 31
9.6 Protection of Subscription Receipt Agent............................ 31
9.7 Replacement of Subscription Receipt Agent; Successor by Merger...... 32
9.8 Conflict of Interest................................................ 33
9.9 Acceptance of Appointment........................................... 33
9.10 Subscription Receipt Agent Not to be Appointed Receiver............. 33
ARTICLE 10 GENERAL........................................................... 33
10.1 Notice to Zarlink, Subscription Receipt Agent and the
Lead Underwriter, on behalf of the Underwriters..................... 33
10.2 Notice to Receiptholders............................................ 35
10.3 Ownership of Subscription Receipts.................................. 35
10.4 Evidence of Ownership............................................... 36
10.5 Satisfaction and Discharge of Agreement............................. 36
10.6 Provisions of Agreement and Subscription Receipts for
the Sole Benefit of Parties and Receiptholders...................... 37
10.7 Subscription Receipts Owned by Zarlink or its
Subsidiaries Certificate to be Provided............................. 37
10.8 Effect of Execution................................................. 37
10.9 Time of Essence..................................................... 37
10.10 Counterparts........................................................ 37
Schedule A - Form of Subscription Receipt Certificate....................... A-1
Schedule B - Form of Notice................................................. B-1
SUBSCRIPTION RECEIPT AGREEMENT
THIS SUBSCRIPTION RECEIPT AGREEMENT made as of the [30th] day of
July, 2007.
AMONG:
ZARLINK SEMICONDUCTOR INC., a company duly incorporated under the
laws of Canada (hereinafter referred to as "Zarlink")
- and -
CIBC WORLD MARKETS INC. on behalf of the underwriters who are party
to the Underwriting Agreement (as defined herein) providing for the
issue and sale to investors of Subscription Receipts (as defined
herein) (hereinafter referred to as the "Lead Underwriter")
- and -
COMPUTERSHARE TRUST COMPANY OF CANADA, a trust company existing
under the laws of Canada (hereinafter referred to as the
"Subscription Receipt Agent")
WHEREAS Zarlink is proposing to issue and sell Subscription Receipts
representing, among other things, the right to receive Convertible Debentures
(as defined herein);
AND WHEREAS Zarlink and the Lead Underwriter, on behalf of the
Underwriters, (as defined herein), have agreed that:
(a) the Proceeds (as defined herein) are to be delivered to and held by
the Subscription Receipt Agent and invested on behalf of Zarlink in
the manner set forth herein;
(b) on the Acquisition Closing Date (as defined herein), provided that
such date occurs on or before the Deadline (as defined herein), each
Receiptholder shall automatically receive, without any further
action required by such Receiptholder and without the payment of any
additional consideration, one Convertible Debenture for each
Subscription Receipt held by the Receiptholder;
(c) if a Termination Event (as defined herein) occurs, (i) this
Agreement and all issued and outstanding Subscription Receipts,
shall be automatically terminated and cancelled, and each
Receiptholder shall, on the third Business Day following the
Termination Date be entitled to receive a Termination Payment (as
defined herein).
AND WHEREAS all things necessary have been done and performed to
make the Subscription Receipts, when certified by the Subscription Receipt Agent
and issued as provided in this Agreement, legal, valid and binding obligations
of Zarlink with the benefits and subject to the terms of this Agreement;
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AND WHEREAS the foregoing recitals are made by Zarlink and not by
the Subscription Receipt Agent or the Lead Underwriter;
NOW THEREFORE THIS AGREEMENT WITNESSES that for good and valuable
consideration mutually given and received, the receipt and sufficiency of which
is hereby acknowledged, it is hereby agreed and declared as follows:
ARTICLE 1
INTERPRETATION
1.1 Definitions
In this Agreement and the recitals, unless there is something in the subject
matter or context inconsistent therewith or unless otherwise expressly provided,
the following terms shall have the respective meanings set out below and
grammatical variations of such terms shall have corresponding meanings:
"Acquisition" means the acquisition by Zarlink of LHI by means of the
Merger pursuant to the Acquisition Agreement;
"Acquisition Agreement" means an agreement and plan of merger dated June
25, 2007, between Merger Sub, LHI and Navigant Capital Advisors, LLC, as
representative of LHI's stockholders, pursuant to which Zarlink will
indirectly acquire Legerity through the cash merger of Merger Sub with and
into LHI as the surviving company of such Merger;
"Acquisition Closing Date" means the closing date of the Acquisition,
which is expected to occur on or about July [30], 2007;
"Affiliate" has the meaning attributed to it under the Canada Business
Corporations Act (Canada);
"Agreement" means this agreement, as amended, supplemented or otherwise
modified from time to time in accordance with the provisions hereof;
"Book-Entry Only System" means the book-based securities transfer system
administered by CDS in accordance with its operating rules and procedures
in force from time to time;
"Business Day" means any day which is not Saturday or Sunday or a
statutory holiday in the Province of Ontario or any other day on which
businesses of the Subscription Receipt Agent and Canadian chartered banks
are generally closed;
"CDS" means CDS Clearing and Depository Services Inc. and its successors
in interest;
"Convertible Debenture" means $1,000 principal amount convertible
unsecured subordinated debentures of Zarlink bearing interest at a rate of
6.0% per annum to be issued under and governed by the Trust Indenture;
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"Counsel" means a barrister or solicitor or a firm of barristers or
solicitors, who may be counsel for Zarlink, acceptable to the Subscription
Receipt Agent, acting reasonably;
"Deadline" means 5:00 p.m. (Toronto time) on September 28, 2007;
"Debentureholders" means the holder from time to time of the Convertible
Debentures;
"Designated Office" means the principal corporate trust office of the
Subscription Receipt Agent from time to time in Toronto, Ontario;
"Earned Interest" means the interest or other income earned on the
investment of the Escrowed Funds from the date hereof to, but not
including, the earlier to occur of (i) the Acquisition Closing Date and
(ii) the Termination Date;
"Escrow Account" has the meaning attributed thereto in Section 2.2(a);
"Escrowed Funds" means an amount equal to the Proceeds minus any fees
payable to the Underwriters on the Offering Closing Date plus the Earned
Interest thereon at any given time;
"Global Subscription Receipts" has the meaning attributed thereto in
Section 2.15;
"Issue Time" means 5:00 p.m. (Toronto time) on the Acquisition Closing
Date, provided that such date occurs on or before the Deadline;
"Lead Underwriter" means CIBC World Markets Inc.;
"Legerity" means, collectively, LHI and Legerity Inc.;
"LHI" means Legerity Holdings Inc;
"Merger Sub" means ZLE Inc., a wholly-owned subsidiary of Zarlink;
"NYSE" means the New York Stock Exchange;
"Offering" means the offering of Subscription Receipts pursuant to the
Prospectus;
"Offering Closing Date" means the date hereof;
"Optioned Subscription Receipts" means the Subscription Receipts which may
be issued pursuant to the exercise of the Over-Allotment Option;
"Original Purchasers" has the meaning attributed thereto in Section 2.18;
"Over-Allotment Option" has the meaning ascribed thereto in the
Underwriting Agreement;
"Person" means and includes individuals, corporations, limited
partnerships, general partnerships, joint stock companies, limited
liability companies, joint ventures, associations,
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companies, trusts, banks, trust companies, pension funds, business trusts
or other organizations, whether or not legal entities and governments,
governmental agencies and political subdivisions thereof;
"Proceeds" means the aggregate Subscription Price of the Offering
(including the Optioned Subscription Receipts, if any);
"Prospectus" means the English and French language versions (unless the
context indicates otherwise) of the (final) short form prospectus and
amended registration statement in Form F-10 of Zarlink dated July [23],
2007, qualifying, respectively, among other things, the distribution of
the Subscription Receipts in all of the provinces of Canada and the United
States of America and includes all documents incorporated therein by
reference and any amendments thereto;
"Receiptholders" or "holders" means the Persons who are holders of
Subscription Receipts;
"Receiptholders' Request" means an instrument signed in one or more
counterparts by Receiptholders entitled to acquire, on exchange of their
Subscription Receipts, in the aggregate not less than 25% of the aggregate
number of Underlying Convertible Debentures which could be acquired on
exchange of all Subscription Receipts then outstanding, requesting the
Subscription Receipt Agent to take some action or proceeding specified
therein;
"Special Resolution" shall have the meaning ascribed thereto in Section
7.11;
"Subscription Price" means the sum of $1,000 per Subscription Receipt;
"Subscription Receipt Agent" means Computershare Trust Company of Canada
or its successors from time to time under this Agreement;
"Subscription Receipt Certificate" means a certificate evidencing
Subscription Receipts substantially in the form attached as Schedule A
hereto with such appropriate insertions, deletions, substitutions and
variations as may be required or permitted by the terms of this Agreement
or as may be required to comply with any law or the rules of any
securities exchange or as may be not inconsistent with the terms of this
Agreement and as Zarlink may deem necessary or desirable and until the
termination of the Book-Entry Only System such certificate shall be in the
form of a Global Subscription Receipt;
"Subscription Receipts" means the subscription receipts of Zarlink issued
and certified hereunder and from time to time outstanding (including the
Optioned Subscription Receipts, if any), each Subscription Receipt
evidencing the rights provided for herein;
"Termination Date" means the date on which a Termination Event occurs;
"Termination Event" means any one of the following described events: (i)
the Acquisition Closing Date does not occur on or before the Deadline,
(ii) the other conditions to the exchange of the Subscription Receipts are
not satisfied by the Deadline, (iii) the Acquisition
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Agreement is terminated at any earlier time, or (iv) Zarlink has advised
the Underwriters or announced to the public that it does not intend to
proceed with the Acquisition;
"Termination Payment" means, in respect of each Subscription Receipt, an
aggregate amount equal to (i) the Subscription Price of such Subscription
Receipt plus (ii) the Termination Premium;
"Termination Premium" means, in respect of each Subscription Receipt, an
amount equal to the amount of interest that would have accrued on a
Convertible Debenture if such Convertible Debenture had been issued and
outstanding (and interest thereon had accrued at the rate of 6.0% per
annum) from the Offering Closing Date until the Termination Date;
"Trust Indenture" means the trust indenture dated July [30], 2007 between
Zarlink and Computershare Trust Company of Canada or its successors from
time to time under the Trust Indenture, providing for the issue of the
Convertible Debentures;
"TSX" means the Toronto Stock Exchange;
"Underlying Convertible Debentures" means the Convertible Debentures
automatically issuable to Receiptholders on the Acquisition Closing Date,
provided that such date occurs on or before the Deadline, without any
further action required by such Receiptholders or payment of additional
consideration;
"Underwriters" means, collectively, CIBC World Markets Inc., National Bank
Financial Inc., RBC Dominion Securities Inc. and Scotia Capital Markets
Inc.;
"Underwriting Agreement" means the amended and restated underwriting
agreement dated July 17, 2007 between Zarlink and the Underwriters in
respect of the Offering;
"Zarlink" means Zarlink Semiconductor Inc.
1.2 Headings
The headings, the table of contents and the division of this Agreement into
Articles and Sections are for convenience of reference only and shall not affect
the interpretation of this Agreement.
1.3 References
Unless otherwise specified in this Agreement:
(a) references to Articles, Sections, and Schedules are to Articles,
Sections, and Schedules in this Agreement; and
(b) "hereto", "herein", "hereby", "hereunder", "hereof" and similar
expressions, without reference to a particular provision, refer to
this Agreement.
1.4 Certain Rules of Interpretation
Unless otherwise specified in this Agreement:
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(a) the singular includes the plural and vice versa; and
(b) references to any gender shall include references to all genders.
1.5 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.
1.6 Applicable Law
This Agreement and the Subscription Receipts shall be governed by and construed
in accordance with the laws of the Province of Ontario and the federal laws of
Canada applicable therein.
1.7 Conflict
In the event of a conflict or inconsistency between a provision in the body of
this Agreement and in the Subscription Receipt Certificate issued hereunder, the
provision in the body of this Agreement shall prevail to the extent of the
inconsistency.
1.8 Currency
All dollar amounts expressed in this Agreement and in the Subscription Receipts
are in lawful money of Canada and all payments required to be made hereunder and
thereunder shall be made in Canadian dollars.
1.9 Severability
Each of the provisions in this Agreement is distinct and severable and a
declaration of invalidity or unenforceability of any such provision or part
thereof by a court of competent jurisdiction shall not affect the validity or
enforceability of any of the other provisions hereof.
1.10 Actions by the Underwriters
All steps which must or may be taken by the Underwriters in connection with this
Agreement, shall be taken by the Lead Underwriter, on its own behalf and on
behalf of the Underwriters. The Lead Underwriter, shall consult with the
Underwriters as necessary prior to taking any action on their behalf and shall,
in any event, advise the Underwriters of steps taken on their behalf.
ARTICLE 2
ISSUE OF SUBSCRIPTION RECEIPTS
2.1 Issue of Subscription Receipts
(a) An aggregate of 75,000 Subscription Receipts (up to 86,250 if the
Optioned Subscription Receipts are issued prior to the Acquisition
Closing Date as a result of
7
the exercise in full of the Over-Allotment Option) providing for the
exchange of such Subscription Receipts in certain circumstances, as
provided herein, to acquire an aggregate of 75,000 Convertible
Debentures (up to 86,500 if the Optioned Subscription Receipts are
issued prior to the Acquisition Closing Date as a result of the
exercise in full of the Over-Allotment Option) are hereby created
and authorized to be issued by Zarlink for a price per Subscription
Receipt equal to the Subscription Price, and a Subscription Receipt
Certificate in the form of one or more Global Subscription Receipts
evidencing such Subscription Receipts shall be executed by or on
behalf of Zarlink, certified by or on behalf of the Subscription
Receipt Agent and delivered to the Underwriters in accordance with
this Agreement.
(b) Subject to the terms and conditions hereof, each Subscription
Receipt will be automatically exchanged for one Underlying
Convertible Debenture without any further action on the part of the
holder thereof and without payment of additional consideration at
the Issue Time.
2.2 Payment Acknowledgement
(a) As of the date hereof, the Subscription Receipt Agent hereby
acknowledges receipt from the Underwriters of funds by wire
transfer, in the aggregate amount of $o and confirms that such funds
have been deposited in a segregated account in the name of Zarlink
(the "Escrow Account") or as otherwise directed by Zarlink and the
Lead Underwriter, on behalf of the Underwriters and will be invested
in accordance with Section 4.1 hereof and paid in accordance with
Article 3 hereof;
(b) Zarlink hereby:
(i) acknowledges that the amounts received by the Subscription
Receipt Agent pursuant to Section 2.2(a) in accordance with
Zarlink's direction to the Lead Underwriter, on behalf of the
Underwriters, represents payment in full by the Underwriters
of the aggregate Subscription Price for 75,000 Subscription
Receipts less any fees payable to the Underwriters on the
Offering Closing Date;
(ii) irrevocably directs the Subscription Receipt Agent to retain
such amounts in accordance with the terms of this Agreement
pending payment of such amounts in accordance with the terms
of this Agreement; and
(iii) irrevocably directs the Subscription Receipt Agent,
immediately following the execution and delivery of this
Agreement, to certify and deliver to CDS, in accordance with
written directions, one or more Global Subscription Receipts
representing 75,000 Subscription Receipts registered in the
name of CDS (or its nominee).
(c) Upon the exercise of the Over-Allotment Option before the
Acquisition Closing Date, the Underwriters shall transfer to the
Subscription Receipt Agent an amount equal to the product obtained
when (i) the number of Optioned Subscription Receipts acquired by
the Underwriters upon the exercise of the Over-Allotment Option is
8
multiplied by (ii) the Subscription Price, minus an amount equal to
1.5% of the aggregate Subscription Price for the Optioned
Subscription Receipts. Upon receipt thereof by the Subscription
Receipt Agent, these funds will be deposited in the Escrow Account
to be dealt with in accordance with the terms hereof. Zarlink will
then direct the Subscription Receipt Agent to certify and deliver to
CDS or its nominee, a Global Subscription Receipt representing the
Optioned Subscription Receipts acquired by the Underwriters upon the
exercise of the Over-Allotment Option.
2.3 Terms of Subscription Receipts
Each Subscription Receipt shall evidence the right of the holder to receive the
securities and/or the amounts specified in Sections 3.3 and 3.5 hereof, as
applicable.
2.4 Fractional Subscription Receipts
No fractional Subscription Receipts shall be issued or otherwise provided for
hereunder.
2.5 Register for Subscription Receipts
Zarlink hereby appoints the Subscription Receipt Agent as transfer agent and
registrar of the Subscription Receipts, and Zarlink shall cause to be kept by
the Subscription Receipt Agent at the Designated Office, a securities register
in which shall be entered the names and addresses of holders of Subscription
Receipts and the other particulars, prescribed by law, of the Subscription
Receipts held by them. Zarlink shall also cause to be kept by the Subscription
Receipt Agent at the Designated Office the register of transfers, and may also
cause to be kept by the Subscription Receipt Agent, branch registers of
transfers in which shall be recorded the particulars of the transfers of
Subscription Receipts, registered in that branch register of transfers.
2.6 Registers Open for Inspection
The registers hereinbefore referred to shall be open at all reasonable times
during regular business hours of the Subscription Receipt Agent on any Business
Day for inspection by Zarlink, the Underwriters or any Receiptholder. The
Subscription Receipt Agent shall, from time to time when requested so to do by
Zarlink, furnish Zarlink with a list of the names and addresses of
Receiptholders entered in the registers kept by the Subscription Receipt Agent
and showing the number of Underlying Convertible Debentures which might then be
acquired upon the exchange of the Subscription Receipts held by each such
holder.
2.7 Receiptholder not a Debentureholder or a Shareholder
Holders of Subscription Receipts are not Debentureholders or shareholders or
creditors of the Corporation. Holders of Subscription Receipts are entitled only
to receive Convertible Debentures on exchange of their Subscription Receipts,
which will occur automatically on the Acquisition Closing Date, or
alternatively, if the Subscription Receipts terminate, holders of Subscription
Receipts are entitled only to receive the Termination Payment (including the
Termination Premium).
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2.8 Subscription Receipts to Rank Pari Passu
Each Subscription Receipt shall rank pari passu with respect to all other issued
and outstanding Subscription Receipts, regardless of the actual date of issue of
same.
2.9 Signing of Subscription Receipt Certificates
The Subscription Receipt Certificates shall be signed by two officers of
Zarlink. The signature of such officers may be mechanically reproduced on
facsimile and Subscription Receipt certificates bearing such facsimile signature
shall, subject to Section 2.10, be binding on Zarlink as if they had been
manually signed by such officers. Notwithstanding that an officer whose
signature appears on any Subscription Receipt Certificate as such officer may no
longer hold such position at the date of such Subscription Receipt Certificate
or at the date of certification or delivery thereof, any Subscription Receipt
Certificate signed as aforesaid shall, subject to Section 2.10, be valid and
binding upon Zarlink and the holder thereof shall be entitled to the benefits of
this Agreement.
2.10 Certification by the Subscription Receipt Agent
(a) No Subscription Receipt Certificate shall be issued or, if issued,
shall be valid for any purpose or entitle the holder to the benefits
hereof until it has been certified by manual signature by or on
behalf of the Subscription Receipt Agent, and such certification by
the Subscription Receipt Agent upon any Subscription Receipt
Certificate shall be conclusive evidence as against Zarlink that the
Subscription Receipt Certificate so certified has been duly issued
hereunder and that the holder is entitled to the benefits hereof.
(b) The certification of the Subscription Receipt Agent on Subscription
Receipt Certificates issued hereunder shall not be construed as a
representation or warranty by the Subscription Receipt Agent as to
the validity of this Agreement or the Subscription Receipt
Certificates (except the due certification thereof) and the
Subscription Receipt Agent shall in no respect be liable or
answerable for the use made of the Subscription Receipt Certificates
or any of them or of the consideration therefor except as otherwise
specified herein. The certificate by or on behalf of the
Subscription Receipt Agent on Subscription Receipt Certificates
shall constitute a representation and warranty by the Subscription
Receipt Agent that the said Subscription Receipt Certificates have
been duly certified by or on behalf of the Subscription Receipt
Agent pursuant to the provisions of this Agreement.
2.11 Issue in Substitution for Subscription Receipt Certificates Lost, etc.
(a) In case any of the Subscription Receipt Certificates shall become
mutilated or be lost, destroyed or stolen, Zarlink, subject to
applicable laws and compliance with Section 2.11(b) below, shall
issue and thereupon the Subscription Receipt Agent shall certify and
deliver, a new Subscription Receipt Certificate of like tenor as the
one mutilated, lost, destroyed or stolen in exchange for and in
place of and upon cancellation of such mutilated Subscription
Receipt Certificate, or in lieu of and in substitution for such
lost, destroyed or stolen Subscription Receipt Certificate, and the
substituted Subscription Receipt Certificate shall be in a form
approved by the
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Subscription Receipt Agent and shall be entitled to the benefits
hereof and shall rank equally in accordance with its terms with all
other Subscription Receipt Certificates issued or to be issued
hereunder.
(b) The applicant for the issue of a new Subscription Receipt
Certificate pursuant to this Section 2.11 shall bear the cost of the
issue thereof and in case of loss, destruction or theft shall, as a
condition precedent to the issue thereof, furnish to Zarlink and to
the Subscription Receipt Agent such evidence of ownership and of the
loss, destruction or theft of the Subscription Receipt Certificate
so lost, destroyed or stolen as shall be satisfactory to Zarlink and
to the Subscription Receipt Agent in their sole discretion, and such
applicant may also be required to furnish an indemnity and surety
bond or security in amount and form satisfactory to Zarlink and the
Subscription Receipt Agent, in their sole discretion, and shall pay
the reasonable charges of Zarlink and the Subscription Receipt Agent
in connection therewith.
2.12 Exchange of Subscription Receipt Certificates
(a) Subscription Receipt Certificates may, upon compliance with the
reasonable requirements of the Subscription Receipt Agent, be
exchanged for another Subscription Receipt Certificate or
Subscription Receipt Certificates entitling the holder thereof to,
in the aggregate, the same number of Subscription Receipts as
represented by the Subscription Receipt Certificates so exchanged.
(b) Subscription Receipt Certificates may be surrendered for exchange
only at the Designated Office of the Subscription Receipt Agent
during regular business hours of the Subscription Receipt Agent.
2.13 Charges for Exchange
Except as otherwise herein provided, the Subscription Receipt Agent may charge
to the holder requesting an exchange a reasonable sum for each new Subscription
Receipt Certificate issued in exchange for Subscription Receipt Certificate(s).
Payment of such charges and reimbursement of the Subscription Receipt Agent or
Zarlink for any and all stamp taxes or governmental or other charges required to
be paid shall be made by such holder as a condition precedent to such exchange.
2.14 Transfer and Registration of Subscription Receipts
(a) The Subscription Receipts may only be transferred on the register
kept at the Designated Office of the Subscription Receipt Agent by
the holder or its legal representatives or its attorney duly
appointed by an instrument in writing. Upon surrender for
registration of transfer of Subscription Receipts at the Designated
Office of the Subscription Receipt Agent, Zarlink shall issue and
thereupon the Subscription Receipt Agent shall certify and deliver a
new Subscription Receipt Certificate of like tenor in the name of
the designated transferee. If less than all the Subscription
Receipts evidenced by the Subscription Receipt Certificate(s) so
surrendered are transferred, the transferor shall be entitled to
receive, in the same manner, a new Subscription Receipt Certificate
registered in its name evidencing the
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Subscription Receipts not transferred. However, notwithstanding the
foregoing, Subscription Receipts shall only be transferred upon:
(i) payment to the Subscription Receipt Agent of a reasonable sum
for each new Subscription Receipt Certificate issued upon such
transfer, and reimbursement of the Subscription Receipt Agent
or Zarlink for any and all stamp taxes or governmental or
other charges required to be paid in respect of such transfer;
and
(ii) such reasonable requirements as the Subscription Receipt Agent
may prescribe and as required pursuant to the terms of this
Agreement, and all such transfers shall be duly noted in such
register by the Subscription Receipt Agent.
(b) Zarlink and the Subscription Receipt Agent will deem and treat the
registered owner of any Subscription Receipt as the beneficial owner
thereof for all purposes and neither Zarlink nor the Subscription
Receipt Agent shall be affected by any notice to the contrary.
(c) The transfer register in respect of Subscription Receipts shall be
closed at 5:00 p.m. (Toronto time) at the Designated Office, on the
earlier to occur of the Acquisition Closing Date and the Termination
Date. Trades settling after the Acquisition Closing Date will be
completed by the delivery of Convertible Debentures.
(d) The Subscription Receipt Agent will promptly advise Zarlink of any
requested transfer of Subscription Receipts. Zarlink will be
entitled, and may direct the Subscription Receipt Agent, to refuse
to recognize any transfer, or enter the name of any transferee of
any Subscription Receipts on the registers referred to in this
Article if such transfer would constitute a violation of the
securities laws of any jurisdiction or the rules, regulations or
policies of any regulatory authority having jurisdiction, or would
be contrary to the terms of the constating documents of Zarlink or
this Agreement.
(e) Subject to the provisions of this Agreement and applicable law, a
Receiptholder shall be entitled to the rights and privileges
attaching to the Subscription Receipts. Either (a) the issue of
Convertible Debentures as provided in Section 3.3, or (b) the
payment of the Termination Payment, less applicable withholding
taxes, if any, as provided in Section 3.5, all in accordance with
the terms and conditions herein contained, shall discharge all
responsibilities of Zarlink and the Subscription Receipt Agent with
respect to such Subscription Receipts and neither Zarlink nor the
Subscription Receipt Agent shall be bound to inquire into the title
of a Receiptholder.
(f) Without limitation, signatures must be guaranteed by an authorized
officer of a Canadian chartered bank or a major Canadian trust
company or by a medallion signature guarantee from a member of a
recognized medallion signature guarantee program.
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(g) The Subscription Receipt Agent shall have no duty to determine
compliance of the transferor or transferee of Subscription Receipts
with applicable securities laws.
2.15 Global Subscription Receipt
(a) Unless the Book-Entry Only System is terminated, Subscription
Receipt Certificates will only be issued in the form of one or more
global subscription receipt certificates (the "Global Subscription
Receipts") which will be registered in the name of and deposited
with CDS or its nominee.
(b) Upon the termination of the Book-Entry Only System, owners of
beneficial interests in the Subscription Receipts shall not be
entitled to have Subscription Receipts registered in their names,
shall not receive or be entitled to receive Subscription Receipt
Certificates in definitive form and shall not be considered owners
or holders thereof under this Agreement or any supplemental
agreement except in circumstances where (i) required under
applicable law, (ii) the Book-Entry Only System ceases to exist,
(iii) Zarlink determines, at its option, to terminate the Book-Entry
Only System, and (iv) Zarlink or CDS advises the Subscription
Receipt Agent that CDS is no longer willing or able to properly
discharge its responsibilities as depository with respect to the
Subscription Receipts and Zarlink is unable to locate a qualified
successor. Beneficial interests in the Global Subscription Receipts
will be represented only through the Book-Entry Only System.
Transfers of Subscription Receipts between CDS participants shall
occur in accordance with CDS' applicable rules and procedures.
Neither Zarlink nor the Subscription Receipt Agent shall have any
responsibility or liability for any aspects of the records relating
to or payments made by CDS, or its nominee, on account of the
beneficial interests in the Subscription Receipts. Nothing herein
shall prevent the owners of beneficial interests in the Subscription
Receipts from voting such Subscription Receipts using duly executed
proxies.
(c) All references herein to actions by, notices given or payments made
to Receiptholders shall, where Subscription Receipts are held
through CDS, refer to actions taken by, or notices given or payments
made to, CDS upon instruction from the CDS participants in
accordance with its rules and procedures. For the purposes of any
provision hereof requiring or permitting actions with the consent of
or at the direction of Receiptholders evidencing a specified
percentage of the aggregate Subscription Receipts outstanding, such
direction or consent may be given by holders of Subscription
Receipts acting through CDS and the CDS participants owning
Subscription Receipts evidencing the requisite percentage of the
Subscription Receipts. The rights of a Receiptholder whose
Subscription Receipts are held through CDS shall be exercised only
through CDS and the CDS participants and shall be limited to those
established by law and agreements between such holders and CDS
and/or the CDS participants or upon instructions from the CDS
participants. Each of the Subscription Receipt Agent and Zarlink may
deal with CDS for all purposes (including the making of payments) as
the authorized representative of the respective Receiptholders and
such dealing with CDS shall constitute satisfaction or performance,
as applicable, of their respective obligations hereunder.
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(d) For so long as Subscription Receipts are held through CDS, if any
notice or other communication is required to be given to
Receiptholders, the Subscription Receipt Agent will give such
notices and communications to CDS.
(e) Upon the termination of the Book-Entry Only System on the occurrence
of one of the conditions specified in Subsection 2.15(b) with
respect to the Subscription Receipts, the Subscription Receipt Agent
shall notify all applicable owners of beneficial interests in the
Subscription Receipts (through CDS if available) of the availability
of definitive Subscription Receipt Certificates. Upon surrender by
CDS of the certificate(s) representing the Global Subscription
Receipts and receipt of new registration instructions from CDS,
Zarlink shall issue and the Subscription Receipt Agent shall certify
and deliver the aggregate number of Subscription Receipts then
outstanding in the form of definitive Subscription Receipt
Certificates to the holders thereof in accordance with the new
registration instructions and thereafter, the registration and
transfer of such Subscription Receipts will be governed by the
remaining Sections of this Agreement.
2.16 Proceeds to be Placed in Escrow
Upon the issuance of Subscription Receipts, the Escrowed Funds in respect
thereof shall be delivered by the Lead Underwriter, on behalf of the
Underwriters, to the Subscription Receipt Agent by electronic transfer of funds
into an Escrow Account as directed by the Subscription Receipt Agent to be held
pursuant to the terms hereof. The Subscription Receipt Agent hereby agrees to
hold the same as agent on behalf of Zarlink and to invest, disburse and deal
with the same as provided herein.
2.17 Subscription Receipts and Trading
(a) Zarlink confirms that the Subscription Receipts will be listed for
trading on the TSX.
(b) Notwithstanding any provision of this Agreement, in order to comply
with the policies of the TSX, Zarlink agrees to the following:
(i) when Zarlink reasonably expects the Acquisition to close,
Zarlink will, without delay, provide the TSX with written
notice to that effect specifying the expected Acquisition
Closing Date. At the Issue Time, the Subscription Receipts
will automatically convert into the Underlying Convertible
Debentures; and,
(ii) in the event of a Termination Event, Zarlink will, on or prior
to the Termination Date, give notice to the TSX and holders of
Subscription Receipts on such Termination Date will be paid
the amounts set forth in Section 3.5 of this Agreement on the
third Business Day following the Termination Date.
(c) Zarlink will request that the TSX halt trading of the Subscription
Receipts at 8:00 a.m. (Toronto time) on the Acquisition Closing
Date.
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2.18 Right of Rescission
(a) If (i) the Prospectus contains a misrepresentation (as such term is
defined in the Securities Act (Ontario)) and it was a
misrepresentation on the date hereof, purchasers of Subscription
Receipts to whom the Prospectus was sent or delivered and who were
the original purchasers of the Subscription Receipts (the "Original
Purchasers"), or (ii) the Prospectus is not delivered to an Original
Purchaser, the affected Original Purchaser(s) shall have a right of
action against Zarlink for rescission, exerciseable on notice given
to Zarlink not more than 180 days subsequent to the date hereof to
receive a refund of the Subscription Price paid by them for each
Subscription Receipt purchased by them. The right of action for
rescission is only available to an Original Purchaser either while
it is a holder of the Subscription Receipts purchased or while it is
a holder of the Underlying Convertible Debentures issuable upon
surrender of such Subscription Receipts.
(b) In no event shall Zarlink be liable under this Section 2.18 if the
Original Purchaser purchased the Subscription Receipts with
knowledge of the misrepresentation.
2.19 Cancellation of Surrendered Subscription Receipt Certificates
All Subscription Receipt Certificates surrendered to the Subscription Receipt
Agent pursuant to Sections 2.11, 2.12, 2.14, 3.3, 3.5 and 5.1 shall be returned
to or received by the Subscription Receipt Agent for cancellation and, if
required by Zarlink, the Subscription Receipt Agent shall furnish Zarlink with a
cancellation certificate identifying the Subscription Receipt Certificates so
cancelled and the number of Subscription Receipts evidenced thereby.
ARTICLE 3
ISSUANCE OF UNDERLYING CONVERTIBLE DEBENTURES OR TERMINATION
OF THE SUBSCRIPTION RECEIPTS
3.1 Notice of Acquisition
If the Acquisition Closing Date occurs on or before the Deadline, Zarlink: (a)
shall forthwith (and in any event no later than the Acquisition Closing Date)
cause a notice of the same executed by or on behalf of Zarlink, to be delivered
to the Subscription Receipt Agent (substantially in the form attached as
Schedule B), and (b) shall issue a press release disclosing the Acquisition
Closing Date and that the Underlying Convertible Debentures have been issued to
Receiptholders through the facilities of CDS and that Book-Entry Only System
customer confirmations will be entered on the second Business Day following the
Acquisition Closing Date. The notice delivered to the Subscription Receipt Agent
shall specify the amounts to be released pursuant to Section 3.2 and Section 3.3
and to whom such amounts should be released.
3.2 Release of Funds on Acquisition Closing Date
If the Acquisition Closing Date occurs on or before the Deadline, Zarlink shall:
(i) be entitled to receive from the Subscription Receipt Agent the Escrowed
Funds; (ii) pay or cause to be paid to the Lead Underwriter, on behalf of the
Underwriters, an amount equal to 1.5% of the Proceeds. The Subscription Receipt
Agent shall deliver the funds referred to in (i) of this Section 3.2 to Zarlink,
and
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Zarlink shall deliver or cause to be delivered to the Lead Underwriter, on
behalf of the Underwriters, the amount referred to in (ii) of this Section 3.2,
forthwith upon the delivery of the notice and press release referred to in
Section 3.1 and in any event not later than the Issue Time. Any notice delivered
to the Subscription Receipt Agent shall be received by the Subscription Receipt
Agent no later than 12:00 p.m. (Toronto time) on the day on which the funds are
to be released. Any notice received by the Subscription Receipt Agent after
12:00 p.m. or received on a non-Business Day shall be deemed to have been given
prior to 12:00 p.m. on the next Business Day.
3.3 Issue of Underlying Convertible Debentures
(a) If the Acquisition Closing Date occurs on or before the Deadline,
the Underlying Convertible Debentures shall be, and shall be deemed
to be, automatically issued at the Issue Time to the Receiptholders
pursuant to the Trust Indenture notwithstanding that a Book-Entry
Only System customer confirmation in a holder's account may not yet
have been so entered, and each Receiptholder shall automatically
receive, without any further action required by such Receiptholder
and without the payment of any additional consideration, one
Convertible Debenture for each Subscription Receipt held by such
Receiptholder, and such Receiptholder shall be deemed to have become
the holder of record of such Underlying Convertible Debentures at
the Issue Time.
(b) Upon the issuance or deemed issuance of the Underlying Convertible
Debentures, Zarlink, subject to the provisions of the Trust
Indenture, shall cause to be entered and issued, as the case may be,
to the Person or Persons in whose name or names the Underlying
Convertible Debentures have been issued, a Book-Entry Only System
customer confirmation.
(c) Effective immediately after the Underlying Convertible Debentures
have been, or have been deemed to be, issued as contemplated by this
Section 3.3 and Zarlink has caused a Book-Entry Only System customer
confirmation to be entered as provided in Section 3.3(b), the
Subscription Receipts relating thereto shall be void and of no value
or effect.
(d) The Subscription Receipt Agent shall not be responsible for
calculating the amounts owing under Section 3.2 and Section 3.3, but
shall be entitled to rely absolutely on the written direction of
Zarlink specifying the payments to be made pursuant to Section 3.2
and Section 3.3.
3.4 Fractions
Notwithstanding anything herein contained, Zarlink shall not be required, upon
the exchange or deemed exchange of the Subscription Receipts, to issue
Convertible Debentures in principal amounts other than $ 1,000 and integral
multiples thereof or to distribute certificates which evidence Convertible
Debentures in principal amounts other than $1,000 and integral multiples
thereof.
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3.5 Payment on Termination
(a) If a Termination Event occurs, Zarlink shall forthwith notify the
Lead Underwriter, on behalf of the Underwriters, and the
Subscription Receipt Agent and shall issue a press release setting
forth the Termination Date.
(b) If a Termination Event occurs, the rights evidenced by each
Subscription Receipt shall be automatically terminated and cancelled
and each Receiptholder shall only be entitled to receive, on the
third Business Day following the Termination Date, a Termination
Payment.
(c) The Termination Payment shall be satisfied by the Escrowed Funds;
any amount not satisfied by the Escrowed Funds shall be satisfied by
Zarlink who shall deposit an amount equal to such shortfall in the
Escrow Account prior to the time that the amount is payable to the
Receiptholders under this Section 3.5. The Subscription Receipt
Agent shall only make payments under this Section 3.5 to the extent
that the Escrowed Funds and the monies which have been deposited
with it pursuant to this Section 3.5 are sufficient.
(d) If a Termination Event occurs, registers shall be closed at the
close of business on the Termination Date (subject to settlement in
accordance with this Section 3.5).
(e) The obligation to make the payment of the amount specified in
Section 3.5(b) shall be satisfied by mailing payment by cheque
payable to the registered holder of the Subscription Receipt at its
registered address or by making a wire transfer for the account of
such holder through CDS.
(f) Upon the mailing or delivery of any cheque or the making of any wire
transfer as provided in Section 3.5(e) (and provided any such cheque
has been honoured for payment, if presented for payment within six
months of the date thereof) all rights evidenced by the Subscription
Receipts relating thereto shall be satisfied and such Subscription
Receipts shall be void and of no value or effect.
(g) Zarlink (i) shall be entitled to deduct and withhold from amounts
payable under this Agreement to holders of Subscription Receipts
that are non-residents of Canada (within the meaning of the Income
Tax Act (Canada) ("Non-Resident Holders") and any applicable income
tax convention), such amounts required by law, whether foreign,
federal, provincial or otherwise, to be deducted or withheld for or
on account of income tax or other taxes levied, collected, withheld
or assessed by any governmental authority ("Withholding Amount"),
(ii) shall remit the Withholding Amount to the appropriate
governmental authority on a timely basis, and (iii) shall provide to
Non-Resident Holders a copy of the receipt of payment or such other
proof of remittance issued by the authority. The Withholding Amount
shall be deemed to have been paid to the Non-Resident Holders on the
due dates of the amounts payable under this Agreement, provided that
such amount is remitted to the appropriate governmental authority on
a timely basis. In particular, Zarlink will
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deduct and withhold from the Termination Payment payable to
Non-Resident Holders an amount equal to 25% of the Termination
Premium.
ARTICLE 4
INVESTMENT OF ESCROWED FUNDS AND PAYMENT OF INTEREST
4.1 Investment of Escrowed Funds
Pending disbursement of the Escrowed Funds, the Subscription Receipt Agent shall
hold, invest and reinvest the Escrowed Funds on behalf of Zarlink in short-term
obligations of, or guaranteed by, the Government of Canada, a province of
Canada, or a Canadian chartered bank (which may include an Affiliate of the
Subscription Receipt Agent) or corporate commercial paper, provided that such
obligation is rated at least R1 (middle) by Dominion Bond Rating Service Limited
or an equivalent rating service, as directed in writing by Zarlink. Such
direction to the Subscription Receipt Agent shall be provided by Zarlink no
later than 9:00 a.m. (Toronto time) on the day on which the investment is to be
made. Any direction received by the Subscription Receipt Agent after 9:00 a.m.
or on a day which is not a Business Day, shall be deemed to have been given
prior to 9:00 a.m. on the next Business Day. If at any time the Escrowed Funds
include cash that is not invested and Zarlink has not provided directions to the
Subscription Receipt Agent to invest such cash, the Subscription Receipt Agent
shall deposit all such uninvested cash in an account, a term deposit or
guaranteed investment certificates of the Subscription Receipt Agent or a
Canadian chartered bank, having either no fixed term or no irrevocable term and
which pays interest on the daily balance. The Subscription Receipt Agent shall
have no liability with respect to any loss in value of investments as permitted
to be made hereunder. In making any payment, the Subscription Receipt Agent
shall not be liable for any loss sustained from early termination of an
investment if such termination is required to make a payment hereunder.
4.2 Segregation of Escrowed Funds
The Escrowed Funds received by the Subscription Receipt Agent and any securities
or other instruments received by the Subscription Receipt Agent upon the
investment or reinvestment of such Escrowed Funds shall be received as agent
for, and shall be segregated and kept apart by, the Subscription Receipt Agent
as agent for Zarlink.
4.3 Third Party Interest
Zarlink hereby represents to the Subscription Receipt Agent that any account to
be opened by, or interest to be held by, the Subscription Receipt Agent, in
connection with this Agreement, for or to the credit of Zarlink, is not intended
to be used by or on behalf of any third party.
ARTICLE 5
RIGHTS AND COVENANTS OF ZARLINK
5.1 Optional Purchases by Zarlink
Subject to applicable laws, Zarlink may, from time to time, purchase by private
contract or otherwise any of the Subscription Receipts.
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5.2 General Covenants
(a) Zarlink covenants with the Subscription Receipt Agent and the Lead
Underwriter, on behalf of the Underwriters, that so long as any
Subscription Receipts remain outstanding:
(i) it will use its best efforts to maintain its existence;
(ii) it will make all requisite filings under applicable Canadian
and United States securities legislation including those
necessary to remain a reporting issuer not in default in each
of the provinces of Canada in which it is currently a
reporting issuer;
(iii) it will announce by press release the Acquisition Closing Date
or the Termination Date, and any new Outside Date, as the case
may be, in accordance with the provisions hereof; and
(iv) it will perform and carry out all of the acts or things to be
done by it as provided in this Agreement.
(b) In addition, Zarlink covenants with the Subscription Receipt Agent
and the Lead Underwriter, on behalf of the Underwriters, that, from
the date hereof to the earlier of the Acquisition Closing Date or
Termination Date, it will not do any of the following:
(i) subdivide or redivide its outstanding common shares into a
greater number of common shares;
(ii) reduce, combine or consolidate the outstanding common shares
into a smaller number of common shares;
(iii) issue common shares to holders of all or substantially all of
the outstanding common shares by way of a dividend or
distribution (other than the issue of common shares to holders
of common shares who have elected to receive dividends in the
form of common shares in lieu of cash dividends paid in the
ordinary course on the common shares);
(iv) fix a record date for the issuance of options, rights or
warrants to all or substantially all the holders of its
outstanding common shares;
(v) fix a record date for the making of a distribution to all or
substantially all the holders of its outstanding common shares
of (i) common shares of any class other than common shares
distributed to holders of common shares who have elected to
receive dividends in the form of such common shares in lieu of
dividends paid in the ordinary course, (ii) rights, options or
warrants, (iii) evidences of its indebtedness, or (iv) assets
(excluding dividends or distributions paid in the ordinary
course); or
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(vi) undertake a reorganization of Zarlink or a consolidation,
amalgamation, arrangement or merger of Zarlink with any other
Person or other entity, or a sale or conveyance of the
property and assets of Zarlink as an entirety or substantially
as an entirety to any other Person or entity or a liquidation,
dissolution or winding-up of Zarlink.
5.3 Subscription Receipt Agent's Remuneration, Expenses and Indemnification
(a) Zarlink covenants that it will pay to the Subscription Receipt
Agent, from time to time, reasonable remuneration for its services
hereunder and will pay or reimburse the Subscription Receipt Agent
upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Subscription Receipt Agent in the
administration or execution of this Agreement (including the
reasonable compensation and the disbursements of its counsel and all
other advisers and assistants not regularly in its employ) both
before any default hereunder and thereafter until all duties of the
Subscription Receipt Agent hereunder shall be finally and fully
performed, except any such expense, disbursement or advance as may
arise out of or result from the Subscription Receipt Agent's
negligence, misconduct or bad faith. Any amount owing hereunder and
remaining unpaid after 30 days from the invoice date will bear
interest at the then current rate charged by the Subscription
Receipt Agent against unpaid invoices and shall be payable on
demand.
(b) Zarlink hereby indemnifies and saves harmless the Subscription
Receipt Agent and its officers, directors, employees and agents from
and against any and all liabilities, losses, costs, claims, actions
or demands whatsoever which may be brought against the Subscription
Receipt Agent or which it may suffer or incur as a result or arising
out of the performance of its duties and obligations under this
Agreement, save only in the event of the negligence, misconduct or
bad faith of the Subscription Receipt Agent. It is understood and
agreed that this indemnification shall survive the termination or
the discharge of this Agreement or the resignation or replacement of
the Subscription Receipt Agent.
5.4 Performance of Covenants by Subscription Receipt Agent
If Zarlink shall fail to perform any of its covenants contained in this
Agreement, the Subscription Receipt Agent may notify the Receiptholders and the
Lead Underwriter, on behalf of the Underwriters, of such failure on the part of
Zarlink or may itself perform any of the said covenants capable of being
performed by it, but shall be under no obligation to perform said covenants or
to notify the Receiptholders of such performance by it. All sums expended or
advanced by the Subscription Receipt Agent in so doing shall be repayable as
provided in Section 5.3. No such performance, expenditure or advance by the
Subscription Receipt Agent shall relieve Zarlink of any default hereunder or of
its continuing obligations under the covenants contained herein.
5.5 Accounting
The Subscription Receipt Agent shall maintain accurate books, records and
accounts of the transactions effected or controlled by the Subscription Receipt
Agent hereunder and the receipt,
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investment, reinvestment and disbursement of the Escrowed Funds, and shall
provide to Zarlink and the Underwriters records and statements thereof
periodically upon written request. Zarlink shall have the right to audit any
such books, records, accounts and statements.
5.6 Payments by Subscription Receipt Agent
In the event that any funds to be disbursed by the Subscription Receipt Agent in
accordance herewith are received by the Subscription Receipt Agent in the form
of an uncertified cheque or cheques, the Subscription Receipt Agent shall be
entitled to delay the time for disbursement of such funds hereunder until such
uncertified cheque or cheques have cleared in the ordinary course the financial
institution upon which the same are drawn. The Subscription Receipt Agent will
disburse monies according to this Agreement only to the extent that monies have
been deposited with it.
5.7 Regulatory Matters
Zarlink shall file all such documents, notices and certificates and take such
steps and do such things as may be necessary under applicable securities laws to
permit the issuance of the Convertible Debentures in the circumstances
contemplated by Section 3.3 such that (i) such issuance will comply with the
prospectus and registration requirements of applicable securities laws in each
of the provinces of Canada and in the United States of America, (ii) the first
trade in Convertible Debentures other than from the holdings of a Person who,
alone or in combination with others, hold sufficient Convertible Debentures to
materially affect control of Zarlink will not be subject to, or will be exempt
from, the prospectus or registration requirements of applicable securities laws
in each of the provinces of Canada and the United States of America, and (iii)
the conversion of the Convertible Debentures into common shares of Zarlink will
not be subject to, or will be exempt from, the prospectus and registration
requirements of applicable securities laws of each of the provinces of Canada
and the United States of America.
5.8 Anti-Money Laundering and Privacy
The Subscription Receipt Agent shall retain the right not to act and shall not
be liable for refusing to act if, due to a lack of information or for any other
reason whatsoever, the Subscription Receipt Agent, in its sole judgment, acting
reasonably, determines that such act might cause it to be in non-compliance with
any applicable anti-money laundering or anti-terrorist legislation, regulation
or guideline. Further, should the Subscription Receipt Agent, in its sole
judgment, acting reasonably, determine at any time that its acting under this
Agreement has resulted in its being in non-compliance with any applicable
anti-money laundering or anti-terrorist legislation, regulation or guideline,
then it shall have the right to resign on ten days' prior written notice sent to
all parties provided that (i) the Subscription Receipt Agent's written notice
shall describe the circumstances of such non-compliance; and (ii) that if such
circumstances are rectified to the Subscription Receipt Agent's satisfaction
within such ten day period, then such resignation shall not be effective.
The parties acknowledge that the Subscription Receipt Agent may, in the course
of providing services hereunder, collect or receive financial and other personal
information about such parties and/or their representatives, as individuals, or
about other individuals related to the subject matter hereof, and use such
information for the following purposes:
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(a) to provide the services required under this Agreement and other
services that may be requested from time to time;
(b) to help the Subscription Receipt Agent manage its servicing
relationships with such individuals;
(c) to meet the Subscription Receipt Agent's legal and regulatory
requirements; and
(d) if Social Insurance Numbers or Social Security Numbers are collected
by the Subscription Receipt Agent, to perform tax reporting and to
assist in verification of an individual's identity for security
purposes.
Each party acknowledges and agrees that the Subscription Receipt Agent may
receive, collect, use and disclose personal information provided to it or
acquired by it in the course of this Agreement for the purposes described above
and, generally, in the manner and on the terms described in its privacy code,
which the Subscription Receipt Agent shall make available on its website or upon
request, including revisions thereto. Further, each party agrees that it shall
not provide or cause to be provided to the Subscription Receipt Agent any
personal information relating to an individual who is not a party to this
Agreement unless that party has assured itself that such individual understands
and has consented to the aforementioned uses and disclosures.
ARTICLE 6
ENFORCEMENT
6.1 Suits by Receiptholders
Subject to the powers of Receiptholders exercisable by special resolutions, all
or any of the rights conferred upon any Receiptholder by any of the terms of the
Subscription Receipts or of this Agreement, or of both, may be enforced by the
Receiptholder by appropriate proceedings but without prejudice to the right
which is hereby conferred upon the Subscription Receipt Agent to proceed in its
own name to enforce each and all of the provisions contained herein for the
benefit of the Receiptholders.
ARTICLE 7
MEETINGS OF RECEIPTHOLDERS
7.1 Right to Convene Meetings
The Subscription Receipt Agent may, at any time and from time to time, and shall
on receipt of a written request of Zarlink or of a Receiptholders' Request and
upon being funded and indemnified to its reasonable satisfaction by Zarlink or
by the Receiptholders signing such Receiptholders' Request against the cost
which may be incurred in connection with the calling and holding of such
meeting, convene a meeting of the Receiptholders. In the event of the
Subscription Receipt Agent failing to so convene a meeting within fifteen (15)
days after receipt of such written request of Zarlink or such Receiptholders'
Request and funding and indemnity given as aforesaid, Zarlink or such
Receiptholders, as the case may be, may convene such meeting. Every such meeting
shall be held in Ottawa, Ontario or at such other place as may be determined by
the Subscription Receipt Agent and approved by Zarlink.
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7.2 Notice
At least ten (10) days' prior notice of any meeting of Receiptholders shall be
given to the Receiptholders in the manner provided for in Section 10.2 and a
copy of such notice shall be sent by mail to the Subscription Receipt Agent
(unless the meeting has been called by the Subscription Receipt Agent) and to
Zarlink (unless the meeting has been called by Zarlink). Such notice shall state
the date (which should be a Business Day) and time when, and the place where the
meeting, is to be held, and shall state briefly the general nature of the
business to be transacted thereat and shall contain such information as is
reasonably necessary to enable the Receiptholders to make a reasoned decision on
the matter, but it shall not be necessary for any such notice to set out the
terms of any resolution to be proposed or any of the provisions of this Article
7.
7.3 Chairperson
An individual (who need not be a Receiptholder) designated in writing by the
Subscription Receipt Agent shall be chairperson of the meeting and if no
individual is so designated, or if the individual so designated is not present
within fifteen (15) minutes from the time fixed for the holding of the meeting,
the Receiptholders present in person or by proxy shall choose some individual
present to be chairperson.
7.4 Quorum
Subject to the provisions of Section 7.11, at any meeting of the Receiptholders
a quorum shall consist of not less than two (2) Receiptholders present in person
or by proxy and holding 25% of the then outstanding Subscription Receipts. If a
quorum of the Receiptholders shall not be present within thirty (30) minutes
from the time fixed for holding any meeting, the meeting, if summoned by the
Receiptholders or on a Receiptholders' Request shall be dissolved; but in any
other case the meeting shall be adjourned to the same day in the next week
(unless such day is not a Business Day, in which case it shall be adjourned to
the next following Business Day) at the same time and place and no notice of the
adjournment need be given. Any business may be brought before or dealt with at
an adjourned meeting which might have been dealt with at the original meeting in
accordance with the notice calling the same. No business shall be transacted at
any meeting unless a quorum be present at the commencement of such business. At
the adjourned meeting the Receiptholders present in person or by proxy shall
form a quorum and may transact the business for which the meeting was originally
convened notwithstanding that they may not hold at least 25% of the then
outstanding Subscription Receipts.
7.5 Power to Adjourn
The chairperson of any meeting at which a quorum of the Receiptholders is
present may, with the consent of the Receiptholders present, adjourn any such
meeting and no notice of such adjournment need be given except such notice, if
any, as the meeting may prescribe.
7.6 Show of Hands
Every question submitted to a meeting shall be decided in the first place by a
majority of the votes given on a show of hands except that votes on a special
resolution shall be given in the manner hereinafter provided. At any such
meeting, unless a poll is duly demanded as herein provided, a
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declaration by the chairperson that a resolution has been carried or carried
unanimously or by a particular majority or lost or not carried by a particular
majority shall be conclusive evidence of the fact.
7.7 Poll and Voting
On every special resolution, and on any other question submitted to a meeting
and after a vote by show of hands when demanded by the chairperson or by one or
more of the Receiptholders acting in person or by proxy and holding at least 5%
of the Subscription Receipts then outstanding, a poll shall be taken in such
manner as the chairperson shall direct. Questions other than those required to
be determined by special resolution shall be decided by a majority of the votes
cast on the poll.
On a show of hands, every Person who is present and entitled to vote, whether as
a Receiptholder or as proxy for one or more absent Receiptholders, or both,
shall have one vote. On a poll, each Receiptholder present in person or
represented by a proxy duly appointed by instrument in writing shall be entitled
to one vote in respect of each Convertible Debenture that such person is
entitled to receive pursuant to the Subscription Receipt(s) then held or
represented by such person. A proxy need not be a Receiptholder. In the case of
joint holders, any one of them present in person or by proxy at the meeting may
vote in the absence of the other or others, but in case more than one of them
shall be present in person or by proxy, they shall vote together in respect of
Subscription Receipts of which they are joint registered holders. The
chairperson of any meeting shall be entitled, both on a show of hands and on a
poll, to vote in respect of the Subscription Receipts, if any, that are held or
represented by the chairperson.
7.8 Regulations
The Subscription Receipt Agent, or Zarlink with the approval of the Subscription
Receipt Agent, may from time to time make and from time to time vary such
regulations as it shall think fit for:
(a) the setting of the record date for a meeting of holders of
Subscription Receipts for the purpose of determining Receiptholders
entitled to receive notice of and vote at such meeting;
(b) the issue of voting certificates by any bank, trust company or other
depositary satisfactory to the Subscription Receipt Agent stating
that the Subscription Receipt Certificates specified therein have
been deposited with it by a named Person and will remain on deposit
until after the meeting, which voting certificate shall entitle the
Persons named therein to be present and vote at any such meeting and
at any adjournment thereof or to appoint a proxy or proxies to
represent them and vote for them at any such meeting and at any
adjournment thereof in the same manner and with the same effect as
though the Persons so named in such voting certificates were the
actual holders of the Subscription Receipt Certificates specified
therein;
(c) the deposit of voting certificates and instruments appointing
proxies at such place and time as the Subscription Receipt Agent,
Zarlink or the Receiptholders, convening the meeting, as the case
may be, may in the notice convening the meeting direct;
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(d) the deposit of voting certificates and instruments appointing
proxies at some approved place or places other than the place at
which the meeting is to be held and enabling particulars of such
instruments appointing proxies to be mailed or telecopied before the
meeting to Zarlink or to the Subscription Receipt Agent at the place
where the same is to be held and for the voting of proxies so
deposited as though the instruments themselves were produced at the
meeting;
(e) the form of the instrument of proxy and the manner in which the
instrument of proxy must be executed; and
(f) generally for the calling of meetings of Receiptholders and the
conduct of business thereat.
Any regulations so made shall be binding and effective and the votes given in
accordance therewith shall be valid and shall be counted. Save as such
regulations may provide, the only Persons who shall be recognized at any meeting
as a Receiptholder, or be entitled to vote or be present at the meeting in
respect thereof (subject to Section 7.9), shall be Receiptholders or their
counsel, or duly appointed proxies of Receiptholders.
7.9 Zarlink and Subscription Receipt Agent may be Represented
Zarlink and the Subscription Receipt Agent, by their respective authorized
agents, and the counsel for Zarlink and for the Subscription Receipt Agent may
attend any meeting of the Receiptholders, but shall have no vote as such unless
in their capacity as Receiptholder or a proxy holder.
7.10 Powers Exercisable by Special Resolution
In addition to all other powers conferred upon them by any other provisions of
this Agreement or by law, the Receiptholders at a meeting shall, subject to the
provisions of Section 7.11, have the power, subject to all applicable regulatory
and exchange approvals, exercisable from time to time by special resolution:
(a) to agree to any modification, abrogation, alteration, compromise or
arrangement of the rights of Receiptholders or the Subscription
Receipt Agent (subject to the consent of the Subscription Receipt
Agent) against Zarlink or against its undertaking, property and
assets or any part thereof whether such rights arise under this
Agreement or the Subscription Receipts or otherwise;
(b) to amend, alter or repeal any special resolution previously passed
or sanctioned by the Receiptholders;
(c) to direct or to authorize the Subscription Receipt Agent to enforce
any of the covenants on the part of Zarlink contained in this
Agreement or the Subscription Receipts or to enforce any of the
rights of the Receiptholders in any manner specified in such special
resolution or to refrain from enforcing any such covenant or right;
(d) to waive, and to direct the Subscription Receipt Agent to waive, any
default on the part of Zarlink in complying with any provisions of
this Agreement or the
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Subscription Receipts either unconditionally or upon any conditions
specified in such special resolution;
(e) to restrain any Receiptholder from taking or instituting any suit,
action or proceeding against Zarlink for the enforcement of any of
the covenants on the part of Zarlink in this Agreement or the
Subscription Receipts or to enforce any of the rights of the
Receiptholders;
(f) to direct any Receiptholder who, as such, has brought any suit,
action or proceeding to stay or to discontinue or otherwise to deal
with the same upon payment of the costs, charges and expenses
reasonably and properly incurred by such Receiptholder in connection
therewith;
(g) to assent to any modification of, change in or omission from the
provisions contained in the Subscription Receipts and this Agreement
or any ancillary or supplemental instrument which may be agreed to
by Zarlink, and to authorize the Subscription Receipt Agent to
concur in and execute any ancillary or supplemental agreement
embodying the change or omission;
(h) with the consent of Zarlink (such consent not to be unreasonably
withheld), to remove the Subscription Receipt Agent or its successor
in office and to appoint a new subscription receipt agent to take
the place of the Subscription Receipt Agent so removed; and
(i) to assent to any compromise or arrangement with any creditor or
creditors or any class or classes of creditors, whether secured or
otherwise, and with holders of any common shares or other securities
of Zarlink.
7.11 Meaning of Special Resolution
(a) The expression "special resolution" when used in this Agreement
means, subject as hereinafter provided in this Section 7.11 and in
Section 7.14, a resolution proposed at a meeting of Receiptholders
duly convened for that purpose and held in accordance with the
provisions of this Agreement at which two (2) or more Receiptholders
are present in person either holding personally or representing as
proxies not less in aggregate than 25% of the number of Subscription
Receipts then outstanding and passed by the affirmative votes of
Receiptholders holding more than 66?% of the Subscription Receipts
represented at the meeting and voted on a poll upon such resolution.
(b) Notwithstanding Section 7.11(a), if, at any meeting called for the
purpose of passing a special resolution, at least two (2)
Receiptholders holding not less in aggregate than 25% of the then
outstanding Subscription Receipts are not present in person or by
proxy within thirty (30) minutes after the time appointed for the
meeting, then the meeting, if convened by Receiptholders or on a
Receiptholders' Request, shall be dissolved; but in any other case
it shall stand adjourned to such day, being not less than twenty-one
(21) nor more than sixty (60) days later, and to such place and time
as may be determined by the chairperson. Not less than ten (10)
days' prior notice
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shall be given of the time and place of such adjourned meeting in
the manner provided for in Section 10.2. Such notice shall state
that at the adjourned meeting the Receiptholders present in person
or by proxy shall form a quorum but it shall not be necessary to set
forth the purposes for which the meeting was originally called or
any other particulars. At the adjourned meeting:
(i) if the special resolution purports to exercise any of the
powers conferred pursuant to Sections 7.10(a), 7.10(d) or
7.10(i) or purports to change the provisions of this Section
7.11 or of Section 7.14 or purports to amend, alter or repeal
any special resolution previously passed or sanctioned by the
Receiptholders in exercise of the powers referred to in this
paragraph, a quorum for the transaction of business shall
consist of Receiptholders holding more than 25% of the then
outstanding Subscription Receipts present in person or by
proxy; and
(ii) in any other case, a quorum for the transaction of business
shall consist of such Receiptholders as are present in person
or by proxy.
(c) At any such adjourned meeting, any resolution passed by the
requisite votes as provided in Section 7.11(a) shall be a special
resolution within the meaning of this Agreement notwithstanding that
Receiptholders holding more than 25% of the then outstanding
Subscription Receipts are not present in person or by proxy at such
adjourned meeting.
(d) Votes on a special resolution shall always be given on a poll and no
demand for a poll on a special resolution shall be necessary.
7.12 Powers Cumulative
Any one or more of the powers or any combination of the powers in this Agreement
stated to be exercisable by the Receiptholders by special resolution or
otherwise may be exercised from time to time and the exercise of any one or more
of such powers or any combination of powers from time to time shall not be
deemed to exhaust the right of the Receiptholders to exercise such power or
powers or combination of powers then or thereafter from time to time.
7.13 Minutes
Minutes of all resolutions and proceedings at every meeting of Receiptholders
shall be made and duly entered in books to be provided from time to time for
that purpose by the Subscription Receipt Agent at the expense of Zarlink, and
any such minutes as aforesaid, if signed by the chairperson or the secretary of
the meeting at which such resolutions were passed or proceedings had or by the
chairperson or secretary of the next succeeding meeting held shall be prima
facie evidence of the matters therein stated and, until the contrary is proved,
every such meeting in respect of the proceedings of which minutes shall have
been made shall be deemed to have been duly convened and held, and all
resolutions passed thereat or proceedings taken shall be deemed to have been
duly passed and taken.
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7.14 Instruments in Writing
All actions which may be taken and all powers that may be exercised by the
Receiptholders at a meeting held as provided in this Article 7 may also be taken
and exercised by an instrument in writing signed in one or more counterparts by
such Receiptholders in person or by attorney duly appointed in writing, by
Receiptholders holding at least 66?% of the then outstanding Subscription
Receipts with respect to a special resolution, and the expression "special
resolution" when used in this Agreement shall include an instrument so signed by
Receiptholders holding at least 66?% of the then outstanding Subscription
Receipts.
7.15 Binding Effect of Resolutions
Every resolution and every special resolution passed in accordance with the
provisions of this Article 7 at a meeting of Receiptholders shall be binding
upon all the Receiptholders, whether present at or absent from such meeting, and
every instrument in writing signed by Receiptholders in accordance with Section
7.14 shall be binding upon all the Receiptholders, whether signatories thereto
or not, and each and every Receiptholder and the Subscription Receipt Agent
(subject to the provisions for indemnity herein contained) shall be bound to
give effect accordingly to every such resolution and instrument in writing.
7.16 Holdings by Zarlink Disregarded
In determining whether Receiptholders are present at a meeting of Receiptholders
for the purpose of determining a quorum or have concurred in any consent,
waiver, special resolution, Receiptholders' Request or other action under this
Agreement, Subscription Receipts owned legally or beneficially by Zarlink or any
affiliated entity of Zarlink shall be disregarded in accordance with the
provisions of Section 10.7.
ARTICLE 8
SUPPLEMENTAL AGREEMENTS
8.1 Provision for Supplemental Agreements for Certain Purposes
From time to time Zarlink, the Lead Underwriter, on behalf of the Underwriters,
and the Subscription Receipt Agent may, subject to the provisions hereof and
subject to regulatory approval, and they shall, when so directed in accordance
with the provisions hereof, execute and deliver by their proper officers,
agreements supplemental hereto, which thereafter shall form part hereof, for any
one or more or all of the following purposes:
(a) adding to the provisions hereof such additional covenants and
enforcement provisions as, in the opinion of Counsel, are necessary
or advisable in the circumstances, provided that the same are not in
the opinion of the Subscription Receipt Agent relying on Counsel,
prejudicial to the interests of the Receiptholders;
(b) giving effect to any special resolution passed in accordance with
Article 7;
(c) making such provisions not inconsistent with this Agreement as may
be necessary or desirable with respect to matters or questions
arising hereunder, provided that such
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provisions are not, in the opinion of the Subscription Receipt
Agent, relying on Counsel, prejudicial to the interests of the
Receiptholders;
(d) adding to or altering the provisions hereof in respect of the
transfer of Subscription Receipts, making provision for the exchange
of Subscription Receipt Certificates, and making any modification in
the form of the Subscription Receipt Certificates which does not
affect the substance thereof;
(e) modifying any of the provisions of this Agreement, including
relieving Zarlink from any of the obligations, conditions or
restrictions herein contained, provided that such modification or
relief shall be or become operative or effective only if, in the
opinion of the Subscription Receipt Agent, such modification or
relief in no way prejudices any of the rights of the Receiptholders
or of the Subscription Receipt Agent, and provided further that the
Subscription Receipt Agent may, in its sole discretion, decline to
enter into any such supplemental agreement which in its opinion may
not afford adequate protection to the Subscription Receipt Agent
when the same shall become operative; and
(f) for any other purpose not inconsistent with the terms of this
Agreement, including the correction or rectification of any
ambiguities, defective or inconsistent provisions, errors, mistakes
or omissions herein, provided that in the opinion of the
Subscription Receipt Agent the rights of the Subscription Receipt
Agent and of the Receiptholders are in no way prejudiced thereby.
ARTICLE 9
CONCERNING THE SUBSCRIPTION RECEIPT AGENT
9.1 Rights and Duties of Subscription Receipt Agent
(a) In the exercise of the rights and duties prescribed or conferred by
the terms of this Agreement, the Subscription Receipt Agent shall
exercise that degree of care, diligence and skill that a reasonably
prudent subscription receipt agent would exercise in comparable
circumstances. No provision of this Agreement shall be construed to
relieve the Subscription Receipt Agent from liability for its own
negligent action, its own negligent failure to act, or its own
misconduct or bad faith.
(b) The obligation of the Subscription Receipt Agent to commence or
continue any act, action or proceeding for the purpose of enforcing
any rights of the Subscription Receipt Agent or the Receiptholders
hereunder shall be conditional upon the Receiptholders furnishing,
when required by notice by the Subscription Receipt Agent,
sufficient funds to commence or to continue such act, action or
proceeding and an indemnity reasonably satisfactory to the
Subscription Receipt Agent to protect and to hold harmless the
Subscription Receipt Agent against the costs, charges, expenses and
liabilities to be incurred thereby and any loss and damage it may
suffer by reason thereof. None of the provisions contained in this
Agreement shall require the Subscription Receipt Agent to expend or
to risk its own funds or otherwise to
29
incur financial liability in the performance of any of its duties or
in the exercise of any of its rights or powers unless indemnified as
aforesaid.
(c) The Subscription Receipt Agent may, before commencing or at any time
during the continuance of any such act, action or proceeding,
require the Receiptholders at whose instance it is acting to deposit
with the Subscription Receipt Agent the Subscription Receipts held
by them, for which Subscription Receipts the Subscription Receipt
Agent shall issue receipts.
(d) Every provision of this Agreement that by its terms relieves the
Subscription Receipt Agent of liability or entitles it to rely upon
any evidence submitted to it is subject to the provisions of this
Section 9.1 and of Section 9.2.
(e) The Subscription Receipt Agent shall have no duties except those
expressly set forth herein, and it shall not be bound by any notice
of a claim or demand with respect to, or any waiver, modification,
amendment, termination or rescission of, this Agreement, unless
received by it in writing and signed by the other parties hereto
and, if its duties herein are affected, unless it shall have given
its prior written consent thereto.
(f) The Subscription Receipt Agent shall not be responsible for ensuring
that the Proceeds are used in the manner contemplated by the
Prospectus.
(g) The Subscription Receipt Agent shall retain the right not to act and
shall not be held liable for refusing to act unless it has received
clear and reasonable documentation which complies with the terms of
this Agreement, which documentation does not require the exercise of
any discretion or independent judgment.
(h) The Subscription Receipt Agent shall incur no liability whatsoever
with respect to the delivery or non-delivery of any certificates
whether delivery by hand, mail or any other means;
(i) The Subscription Receipt Agent shall not be responsible or liable in
any manner whatsoever for the deficiency, correctness, genuineness
or validity of any securities deposited with it.
9.2 Evidence, Experts and Advisers
(a) In addition to the reports, certificates, opinions and other
evidence required by this Agreement, Zarlink shall furnish to the
Subscription Receipt Agent such additional evidence of compliance
with any provision hereof, and in such form, as the Subscription
Receipt Agent may reasonably require by written notice to Zarlink.
(b) In the exercise of its rights and duties hereunder, the Subscription
Receipt Agent may, if it is acting in good faith, act and rely as to
the truth of the statements and the accuracy of the opinions
expressed in statutory declarations, opinions, reports, written
requests, consents, or orders of Zarlink, certificates of Zarlink or
other
30
evidence furnished to the Subscription Receipt Agent pursuant to any
provision hereof or pursuant to a request of the Subscription
Receipt Agent.
(c) Whenever it is provided in this Agreement that Zarlink shall deposit
with the Subscription Receipt Agent resolutions, certificates,
reports, opinions, requests, orders or other documents, it is
intended that the truth, accuracy and good faith on the effective
date thereof and the facts and opinions stated in all such documents
so deposited shall, in each and every such case, be conditions
precedent to the right of Zarlink to have the Subscription Receipt
Agent take the action to be based thereon.
(d) Proof of the execution of an instrument in writing, including a
Receiptholders' Request, by any Receiptholder may be made by the
certificate of a notary public, or other officer with similar
powers, that the Person signing such instrument acknowledged to him
the execution thereof, or by an affidavit of a witness to such
execution or in any other manner which the Subscription Receipt
Agent may consider adequate.
(e) The Subscription Receipt Agent may act and rely and shall be
protected in acting and relying upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, consent,
order, letter, or other paper document believed by it to be genuine
and to have been signed, sent or presented by or on behalf of the
proper party or parties.
(f) The Subscription Receipt Agent may employ or retain such Counsel,
accountants, appraisers or other experts or advisers as it may
reasonably require for the purpose of determining and discharging
its duties hereunder and may pay reasonable remuneration for all
services so performed by any of them, without taxation of costs of
any Counsel, and shall not be responsible for any misconduct or
negligence on the part of any such experts or advisers who have been
appointed with due care by the Subscription Receipt Agent.
(g) The Subscription Receipt Agent may act and rely and shall be
protected in acting and relying in good faith on the opinion or
advice of or information obtained from Counsel, or any accountant,
appraiser, or other expert or advisor, whether retained or employed
by Zarlink or by the Subscription Receipt Agent with respect to any
matter arising in relation to the Agreement.
9.3 Documents, etc. Held by Subscription Receipt Agent
Any securities, documents of title or other instruments that may at any time be
held by the Subscription Receipt Agent pursuant to this Agreement may be placed
in the deposit vaults of the Subscription Receipt Agent or of any Canadian
chartered bank or deposited for safekeeping with any such bank. If the
Subscription Receipt Agent has not received a direction under Section 4.1, any
monies so held pending the application or withdrawal thereof under any
provisions of this Agreement may be deposited in the name of the Subscription
Receipt Agent in any Canadian chartered bank, or in the deposit department of
the Subscription Receipt Agent or any other loan or
31
trust company authorized to accept deposits under the laws of Canada or a
province thereof, at the rate of interest (if any) then current on similar
deposits.
9.4 Actions by Subscription Receipt Agent to Protect Interest
The Subscription Receipt Agent shall have the power to institute and to maintain
such actions and proceedings as it may consider necessary or expedient to
preserve, protect or enforce its interests and the interests of the
Receiptholders.
9.5 Subscription Receipt Agent not Required to Give Security
The Subscription Receipt Agent shall not be required to give any bond or
security in respect of the execution of this Agreement or otherwise in respect
of the premises.
9.6 Protection of Subscription Receipt Agent
By way of supplement to the provisions of any law for the time being relating to
trustees, it is expressly declared and agreed as follows:
(a) the Subscription Receipt Agent shall not be liable for or by reason
of any statements of fact or recitals in this Agreement or in the
Subscription Receipt Certificates (except the representation
contained in Section 9.8 or in the certificate of the Subscription
Receipt Agent on the Subscription Receipt Certificates) or be
required to verify the same, but all such statements or recitals are
and shall be deemed to be made by Zarlink;
(b) nothing herein contained shall impose any obligation on the
Subscription Receipt Agent to see to or to require evidence of the
registration or filing (or renewal thereof) of this Agreement or any
instrument ancillary or supplemental hereto;
(c) the Subscription Receipt Agent shall not be bound to give notice to
any Person or Persons of the execution hereof;
(d) the Subscription Receipt Agent shall not incur any liability or
responsibility whatever or be in any way responsible for the
consequence of any breach on the part of Zarlink of any of the
covenants herein contained or of any acts of any officers,
employees, agents or servants of Zarlink; and
(e) Zarlink shall indemnify and save harmless the Subscription Receipt
Agent and its officers, directors, employees and agents from and
against any and all liabilities, losses, costs, claims, actions or
demands whatsoever brought against the Subscription Receipt Agent
which it may suffer or incur as a result of or arising out of the
performance of its duties and obligations under this Agreement,
including any and all reasonable legal fees and disbursements of
whatever kind or nature, save only in the event of the negligent
action, the negligent failure to act, or the misconduct or bad faith
of the Subscription Receipt Agent. It is understood and agreed that
this indemnification shall survive the termination or discharge of
this Agreement or the resignation or removal of the Subscription
Receipt Agent.
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9.7 Replacement of Subscription Receipt Agent; Successor by Merger
(a) The Subscription Receipt Agent may resign its appointment and be
discharged from all other duties and liabilities hereunder, subject
to this Section 9.7, by giving to Zarlink not less than sixty (60)
days' prior notice in writing or such shorter prior notice as
Zarlink may accept as sufficient. The Receiptholders by special
resolution shall have power at any time to remove the existing
Subscription Receipt Agent and to appoint a new subscription receipt
agent. In the event of the Subscription Receipt Agent resigning or
being removed as aforesaid or being dissolved, becoming bankrupt,
going into liquidation or otherwise becoming incapable of acting
hereunder, the Lead Underwriter, on behalf of the Underwriters,
shall forthwith appoint a new subscription receipt agent unless a
new subscription receipt agent has already been appointed by the
Receiptholders; failing such appointment by the Lead Underwriter, on
behalf of the Underwriters, the retiring Subscription Receipt Agent
(at the expense of Zarlink) or any Receiptholder may apply to the
Ontario Superior Court of Justice on such notice as such court may
direct, for the appointment of a new subscription receipt agent; but
any new subscription receipt agent so appointed by the Lead
Underwriter, on behalf of the Underwriters, or by the Court shall be
subject to removal as aforesaid by the Receiptholders. Any new
subscription receipt agent appointed under any provision of this
Section 9.7 shall be a corporation authorized to carry on the
business of a trust company in the Province of Ontario and, if
required by the applicable legislation for any other provinces, in
such other provinces. On any such appointment the new subscription
receipt agent shall be vested with the same powers, rights, duties
and responsibilities as if it had been originally named herein as
Subscription Receipt Agent hereunder. At the request of Zarlink or
the new subscription receipt agent, the retiring Subscription
Receipt Agent, upon payment of the amounts, if any, due to it
pursuant to Section 5.3, shall duly assign, transfer and deliver to
the new subscription receipt agent all property and money held and
all records kept by the retiring Subscription Receipt Agent
hereunder or in connection herewith.
(b) Upon the appointment of a successor subscription receipt agent,
Zarlink shall promptly notify the Receiptholders thereof in the
manner provided for in Article 10 hereof.
(c) Any corporation into or with which the Subscription Receipt Agent
may be merged or consolidated or amalgamated, or any corporation
resulting therefrom to which the Subscription Receipt Agent shall be
a party, or any corporation succeeding to the corporate trust
business of the Subscription Receipt Agent shall be the successor to
the Subscription Receipt Agent hereunder without any further act on
its part or any of the parties hereto, provided that such
corporation would be eligible for appointment as a successor
subscription receipt agent under Section 9.7(a).
(d) Any Subscription Receipt Certificate certified but not delivered by
a predecessor Subscription Receipt Agent may be delivered by the
successor subscription receipt agent in the name of the predecessor
or successor Subscription Receipt Agent.
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9.8 Conflict of Interest
(a) The Subscription Receipt Agent represents to Zarlink and the Lead
Underwriter, on behalf of the Underwriters, that at the time of
execution and delivery hereof no material conflict of interest
exists between its role as a subscription receipt agent hereunder
and its role in any other capacity and agrees that in the event of a
material conflict of interest arising hereafter it will, within
thirty (30) days after ascertaining that it has such material
conflict of interest, either eliminate the same or assign its
appointment as Subscription Receipt Agent hereunder to a successor
subscription receipt agent approved by Zarlink and meeting the
requirements set forth in Section 9.7(a). Notwithstanding the
foregoing provisions of this Section 9.8(a), if any such material
conflict of interest exists or hereafter shall exist, the validity
and enforceability of this Agreement and the Subscription Receipts
shall not be affected in any manner whatsoever by reason thereof.
(b) Subject to Section 9.8(a), the Subscription Receipt Agent, in its
personal or any other capacity, may buy, lend upon and deal in
securities of Zarlink and generally may contract and enter into
financial transactions with Zarlink or any affiliated entity of
Zarlink without being liable to account for any profit made thereby.
9.9 Acceptance of Appointment
The Subscription Receipt Agent hereby accepts the appointment as subscription
receipt agent in this Agreement and agrees to perform its duties hereunder upon
the terms and conditions herein set forth.
9.10 Subscription Receipt Agent Not to be Appointed Receiver
The Subscription Receipt Agent and any person related to the Subscription
Receipt Agent shall not be appointed a receiver, a receiver and manager or
liquidator of all or any part of the assets or undertaking of Zarlink.
ARTICLE 10
GENERAL
10.1 Notice to Zarlink, Subscription Receipt Agent and the Lead Underwriter,
on behalf of the Underwriters
(a) Unless herein otherwise expressly provided, any notice to be given
hereunder to Zarlink, the Underwriters or the Subscription Receipt
Agent shall be deemed to be validly given if delivered by hand
courier or if transmitted by telecopier:
(i) if to Zarlink:
Zarlink Semiconductor Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, (▇▇▇▇▇▇▇) ▇▇▇ ▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
34
Attention: President and Chief Executive Officer
with a copy to:
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP
Suite 2500
▇▇▇▇ ▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ (▇▇▇▇▇▇) ▇▇▇ ▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
(ii) if to the Lead Underwriter, on behalf of the Underwriters:
CIBC World Markets
BCE Place
▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ (▇▇▇▇▇▇▇)
▇▇▇ ▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Executive Director
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to:
Blake, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
P.O. Box 25, Station Commerce Court
Toronto (Ontario) ▇▇▇ ▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Facsimile: 416-863-2653
(iii) if to the Subscription Receipt Agent:
Computershare Trust Company of Canada
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
9th Floor, North Tower
Toronto (Ontario)
M5J 2Y1
Attention: Manager, Corporate Trust
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
35
and any such notice delivered in accordance with the foregoing shall
be deemed to have been received on the date of delivery or, if
telecopied, by 4:00 p.m. (Toronto Time), on the day of transmission
or, if such day is not a Business Day, on the first Business Day
following the day of transmission. Accidental error or omission in
giving notice or accidental failure to mail notice to any
Receiptholder will not invalidate any action or proceeding founded
thereon.
(b) Zarlink, the Lead Underwriter, on behalf of the Underwriters, or the
Subscription Receipt Agent, as the case may be, may from time to
time notify the other parties in the manner provided in Section
10.1(a) of a change of address which, from the effective date of
such notice and until changed by like notice, shall be the address
of Zarlink, the Lead Underwriter, on behalf of the Underwriters, or
the Subscription Receipt Agent, as the case may be, for all purposes
of this Agreement.
10.2 Notice to Receiptholders
(a) Any notice to the Receiptholders under the provisions of this
Agreement shall be valid and effective if delivered or sent by
letter or circular through the ordinary post addressed to such
holders at their post office addresses appearing on the register
hereinbefore mentioned and shall be deemed to have been effectively
given on the date of delivery or, if mailed, five (5) Business Days
following actual posting of the notice.
(b) If, by reason of a strike, lockout or other work stoppage, actual or
threatened, involving postal employees, any notice to be given to
the Receiptholders hereunder could reasonably be considered unlikely
to reach its destination, such notice shall be valid and effective
only if it is delivered personally to such Receiptholders or if
delivered to the address for such Receiptholders contained in the
register of Subscription Receipts maintained by the Subscription
Receipt Agent.
(c) All notices to joint holders of any Subscription Receipt may be
given to whichever one of the holders thereof is named first in the
appropriate register hereinbefore mentioned, and any notice so given
shall be sufficient notice to all such joint holders of the
Subscription Receipt.
10.3 Ownership of Subscription Receipts
Zarlink and the Subscription Receipt Agent may deem and treat the registered
owner of any Subscription Receipt Certificate or, in the case of a transferee
who has surrendered a Subscription Receipt Certificate in accordance with and as
contemplated in Sections 3.3 and 3.5, such transferee, as the absolute owner of
the Subscription Receipt represented thereby for all purposes, and Zarlink and
the Subscription Receipt Agent shall not be affected by any notice or knowledge
to the contrary except where Zarlink or the Subscription Receipt Agent is
required to take notice by statute or by order of a court of competent
jurisdiction. A Receiptholder shall be entitled to the rights evidenced by such
Subscription Receipt Certificate free from all equities or rights of set off or
counterclaim between Zarlink and the original or any intermediate holder thereof
and all Persons may act accordingly and the receipt of any such Receiptholder
for the Convertible Debentures which
36
may be acquired pursuant thereto shall be a good discharge to Zarlink and the
Subscription Receipt Agent for the same and neither Zarlink nor the Subscription
Receipt Agent shall be bound to inquire into the title of any such holder except
where Zarlink or the Subscription Receipt Agent is required to take notice by
statute or by order of a court of competent jurisdiction.
10.4 Evidence of Ownership
(a) Upon receipt of a certificate of any bank, trust company or other
depositary satisfactory to the Subscription Receipt Agent stating
that the Subscription Receipts specified therein have been deposited
by a named Person with such bank, trust company or other depositary
and will remain so deposited until the expiry of the period
specified therein, Zarlink and the Subscription Receipt Agent may
treat the Person so named as the owner, and such certificate as
sufficient evidence of the ownership by such Person of such
Subscription Receipt during such period, for the purpose of any
requisition, direction, consent, instrument or other document to be
made, signed or given by the holder of the Subscription Receipt so
deposited.
(b) Zarlink and the Subscription Receipt Agent may accept as sufficient
evidence of the fact and date of the signing of any requisition,
direction, consent, instrument or other document by any Person (i)
the signature of any officer of any bank, trust company, or other
depositary satisfactory to the Subscription Receipt Agent as witness
of such execution, (ii) the certificate of any notary public or
other officer authorized to take acknowledgements of deeds to be
recorded at the place where such certificate is made that the Person
signing acknowledged to him the execution thereof, or (iii) a
statutory declaration of a witness of such execution.
10.5 Satisfaction and Discharge of Agreement
Upon the earliest of:
(a) the entering of a Book-Entry Only System customer confirmation of
Underlying Convertible Debentures in a CDS account for holders of
Subscription Receipts and the payment of monies if any required to
be paid to Zarlink pursuant to Section 3.2; or
(b) the payment of all monies required where Termination occurs as
provided in Section 3.5(b),
this Agreement shall cease to be of further effect and the Subscription Receipt
Agent, on demand of and at the cost and expense of Zarlink and upon delivery to
the Subscription Receipt Agent of a certificate of Zarlink stating that all
conditions precedent to the satisfaction and discharge of this Agreement have
been complied with, shall execute proper instruments acknowledging satisfaction
of and discharging this Agreement. Notwithstanding the foregoing, the
indemnities provided to the Subscription Receipt Agent by Zarlink hereunder
shall remain in full force and effect and survive the termination of this
Agreement.
37
10.6 Provisions of Agreement and Subscription Receipts for the Sole Benefit
of Parties and Receiptholders
Nothing in this Agreement or in the Subscription Receipt Certificates, expressed
or implied, shall give or be construed to give to any Person other than the
parties hereto, the Receiptholders and the transferees of Subscription Receipts
as contemplated in Sections 3.3 and 3.5, as the case may be, any legal or
equitable right, remedy or claim under this Agreement, or under any covenant or
provision herein or therein contained, all such covenants and provisions being
for the sole benefit of the parties hereto, the Receiptholders and such
transferees.
10.7 Subscription Receipts Owned by Zarlink or its Subsidiaries Certificate
to be Provided
For the purpose of disregarding any Subscription Receipts owned legally or
beneficially by Zarlink or any affiliated entity of Zarlink as contemplated in
Section 7.16, Zarlink shall provide to the Subscription Receipt Agent, from time
to time, a certificate of Zarlink setting forth as at the date of such
certificate the number of Subscription Receipts owned legally or beneficially by
Zarlink or any affiliated entity of Zarlink, and the Subscription Receipt Agent,
in making the computations in Section 7.16, shall be entitled to rely on such
certificate without requiring further evidence thereof.
10.8 Effect of Execution
Notwithstanding any provision of this Agreement, should any Subscription Receipt
Certificates be issued and certified in accordance with the terms hereof prior
to the actual time of execution of this Agreement by Zarlink and the
Subscription Receipt Agent, any such Subscription Receipt Certificates shall be
void and of no value and effect until such actual execution.
10.9 Time of Essence
Time is and shall remain of the essence of this Agreement.
10.10 Counterparts
This Agreement may be executed and delivered in counterparts, each of which when
so executed and delivered shall be deemed to be an original and such
counterparts together shall constitute one and the same instrument and
notwithstanding their date of execution they shall be deemed to be dated as of
the date hereof.
[Signature page follows]
38
IN WITNESS WHEREOF the parties hereto have executed this agreement as of the
date first written above.
ZARLINK SEMICONDUCTOR INC.
By: (s)o
----------------------------------------
Name: o
Title: o
By: (s)o
----------------------------------------
Name: o
Title: o
CIBC WORLD MARKETS INC.
By: (s)o
----------------------------------------
Name: o
Title: o
COMPUTERSHARE TRUST COMPANY OF CANADA
By: (s)o
----------------------------------------
Name: o
Title: o
By: (s)o
----------------------------------------
Name: o
Title: o
SCHEDULE "A"
FORM OF SUBSCRIPTION RECEIPT CERTIFICATE
Unless this Certificate is presented by an authorized representative of CDS
Clearing and Depository Services Inc. ("CDS") to ZARLINK SEMICONDUCTOR INC. or
its agent for registration of transfer, exchange or payment, and any certificate
issued in respect thereof is registered in the name of CDS & Co., or in such
other name as is requested by an authorized representative of CDS (and any
payment is made to CDS & Co. or to such other entity as is requested by an
authorized representative of CDS), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since the registered holder
hereof, CDS & Co., has an interest herein.
ZARLINK SEMICONDUCTOR INC.
(A corporation duly incorporated under
the laws of Canada)
Number: o CUSIP:o
THIS IS TO CERTIFY THAT ____o_ (the "Holder") is the registered
holder of ______o______________ Subscription Receipts represented hereby.
The Subscription Receipts represented by this Subscription Receipt
certificate ("Certificate") are issued pursuant to a Subscription Receipt
Agreement ("Agreement") dated July [30], 2007 between ZARLINK SEMICONDUCTOR INC.
("Zarlink"), COMPUTERSHARE TRUST COMPANY OF CANADA (the "Subscription Receipt
Agent"), and CIBC WORLD MARKETS INC. on its own behalf and on behalf of NATIONAL
BANK FINANCIAL INC., RBC DOMINION SECURITIES INC. and SCOTIA CAPITAL INC.
(collectively, the "Underwriters").
Capitalized terms used in the Agreement have the same meaning herein
as therein, unless otherwise defined.
Each Subscription Receipt entitles the holder to receive, in
accordance with the terms of, and subject to, the Subscription Receipt
Agreement:
(a) if the Acquisition Closing Date occurs on or before the Deadline, to
automatically receive, without any further action required by such
holder and without the payment of any additional consideration, one
Convertible Debenture for each Subscription Receipt held by the
Receiptholder; or
(b) if the Acquisition Closing Date does not occur on or before the
Deadline or if a Termination Event occurs, to receive, on the third
Business Day following the Termination Date, a Termination Payment.
The Subscription Receipts represented hereby are issued under and
pursuant to the Agreement. Reference is hereby made to the Agreement and any and
all other instruments supplemental or ancillary thereto for a full description
of the rights of the holders of the Subscription Receipts and the terms and
conditions upon which such Subscription Receipts are, or are to be,
A-2
issued and held, all to the same effect as if the provisions of the Agreement
and all instruments supplemental or ancillary thereto were herein set forth, and
to all of which provisions the holder of these Subscription Receipts by
acceptance hereof assents. In the event of a conflict or inconsistency between
the terms of the Agreement and this Certificate, the terms of the Agreement
shall prevail.
The Agreement contains provisions making binding upon all holders of
Subscription Receipts outstanding thereunder resolutions passed at meetings of
such holders held in accordance with such provisions and by instruments in
writing signed by the holders of a specified majority of the outstanding
Subscription Receipts.
The Subscription Receipts evidenced by this Certificate may be
transferred on the register kept at the offices of the Subscription Receipt
Agent by the registered holder hereof or his legal representatives or his
attorney duly appointed by an instrument in writing in form and execution
satisfactory to the Subscription Receipt Agent, only upon payment of the charges
provided for in the Agreement and upon compliance with such reasonable
requirements as the Subscription Receipt Agent may prescribe. The transfer
register shall be closed at 5:00 p.m. (Toronto time) on the Termination Date.
This Certificate shall not be valid for any purpose whatever unless
and until it has been countersigned by or on behalf of the Subscription Receipt
Agent.
A-3
Time shall be of the essence hereof. This Certificate is governed by
the laws of the Province of Ontario and the laws of Canada applicable therein.
IN WITNESS WHEREOF Zarlink has caused this Certificate to be signed
by a duly authorized representative as of July o, 2007.
Countersigned by
ZARLINK SEMICONDUCTOR INC.,
By:
------------------------------------
Name:
Title:
By:
------------------------------------
Name:
Title:
COMPUTERSHARE TRUST COMPANY OF CANADA
as Subscription Receipt Agent
By:
------------------------------------
Name:
Title:
By:
------------------------------------
Name:
Title:
SCHEDULE "B"
FORM OF NOTICE
TO: COMPUTERSHARE TRUST COMPANY OF CANADA (the "Subscription Receipt Agent")
Reference is made to the Subscription Receipt Agreement (the "Agreement") dated
as of July [30], 2007 among the undersigned, CIBC World Markets Inc., on behalf
of the Underwriters, and the Subscription Receipt Agent (capitalized terms used
herein without definition having the meanings specified therein).
In accordance with the provisions of the Subscription Receipt
Agreement, Zarlink Semiconductor Inc. ("Zarlink") is writing to advise you that
the Acquisition Closing Date has occurred on or before the Deadline.
In accordance with Section 3.2 of the Agreement, the Escrowed Funds
are to be released as follows:
(a) as to $o to CIBC World Markets Inc, on behalf of the Underwriters;
and
(b) as to the balance to Zarlink.
Payment is to be made forthwith and to be delivered prior to Issue Time as
follows:
(c) as to the above $_____ : to CIBC World Markets Inc.;
(d) as to the balance to Zarlink at:_______ .
The Subscription Receipt Agent in its capacity as trustee of the
Convertible Debentures, is hereby irrevocably directed and authorized to issue
and deliver on behalf of Zarlink a global certificate registered in the name of
CDS or its nominee, representing o Convertible Debentures effective as at the
Acquisition Closing Date, which is o, 2007, all as provided in Section 3.3 of
the Agreement. The Convertible Debentures shall be deemed to be issued at the
Acquisition Closing Date notwithstanding that the certificate evidencing such
Convertible Debentures has not been issued. Zarlink Semiconductor Inc. confirms
that the allotment and issue of these Convertible Debentures has been duly
authorized by all necessary action.
The foregoing direction is irrevocable and shall constitute your
good and sufficient authority for making such payments as directed above.
[Signatures on following page]
B-2
DATED the ________ day of ______________________, 2007.
ZARLINK SEMICONDUCTOR INC.,
By:
---------------------------------------
Authorized Signing Officer
By:
---------------------------------------
Authorized Signing Officer