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PURCHASE WARRANT INDENTURE
Made as of August 7, 1997
Between
SEVEN SEAS PETROLEUM INC.
as Company
and
MONTREAL TRUST COMPANY OF CANADA
as Trustee
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TABLE OF CONTENTS
RECITALS...............................................................1
SECTION 1 -- INTERPRETATION
1.1 Definitions......................................................2
(1) Agent......................................................2
(2) Applicable Legislation.....................................2
(3) Business Day...............................................2
(4) Certificate of the Company.................................2
(5) Closing Date...............................................2
(6) Common Shares..............................................2
(7) Company....................................................2
(8) Counsel....................................................2
(9) Current Market Price.......................................2
(10) Debentures.................................................3
(11) Exercise Date..............................................3
(12) Exercise Price.............................................3
(13) Expiry Date................................................3
(14) GAAP.......................................................3
(15) Indenture..................................................3
(16) Instrument Indenture.......................................3
(17) Issue Date.................................................3
(18) Office of the Trustee......................................3
(19) Person.....................................................3
(20) Preliminary Prospectus.....................................3
(21) Prospectus.................................................3
(22) Purchase Warrant Certificate...............................4
(23) Purchase Warrants..........................................4
(24) Qualifying Jurisdictions...................................4
(25) this Indenture.............................................4
(26) Time of Expiry ............................................4
(27) Trading Day................................................4
(28) Trustee....................................................4
(29) Unit.......................................................4
(30) Warrantholders.............................................4
(31) Warrantholders' Resolution.................................4
(32) Warrant Register...........................................4
1.2 Outstanding Purchase Warrants....................................4
1.3 Currency.........................................................5
1.4 Complete Agreement...............................................5
1.5 Number and Gender................................................5
1.6 Sections; Headings...............................................5
1.7 Governing Law....................................................5
(i)
1.8 Time of Essence..................................................5
SECTION 2 -- ISSUE OF PURCHASE WARRANTS
2.1 Terms of Purchase Warrants.......................................5
2.2 Warrantholder not a Shareholder..................................5
2.3 Signature of Purchase Warrant Certificates.......................6
2.4 Certification....................................................6
2.5 Issue of Purchase Warrant Certificates...........................6
2.6 Lost Purchase Warrant Certificate................................6
2.7 Registration of Purchase Warrants................................7
2.8 Exchange of Purchase Warrant Certificates........................7
2.9 Charges for Exchange.............................................7
2.10 Transfer and Ownership of Purchase Warrants......................7
SECTION 3 -- RIGHTS AND COVENANTS OF THE COMPANY
3.1 Optional Purchases by the Company................................8
3.2 General..........................................................8
3.3 Trustee's Remuneration and Expenses..............................9
SECTION 4 -- EXERCISE OF PURCHASE WARRANTS
4.1 Method of Exercise of Purchase Warrants..........................9
4.2 Effect of Exercise of Purchase Warrants.........................10
4.3 Partial Exercise of Purchase Warrants. ........................11
4.4 Destruction of Purchase Warrant Certificates....................11
4.5 Accounting and Recording........................................11
4.6 Postponement of Delivery of Common Share Certificates...........11
4.7 Securities Restrictions.........................................12
4.8 No Fractional Shares............................................12
4.9 Exercise Price..................................................12
4.10 Adjustment of Exercise Price/Number of Common Shares............12
4.11 No Adjustment for Stock Options.................................16
4.12 Proceedings Prior to any Action Requiring Adjustment............16
4.13 Certificate as to Adjustment....................................17
4.14 Notice of Special Matters.......................................17
4.15 No Action after Notice..........................................17
4.16 Protection of Trustee...........................................17
4.17 Reservation of Shares...........................................18
SECTION 5 -- ENFORCEMENT
5.1 Suits by Warrantholders.........................................18
5.2 Immunity of Shareholders, etc...................................18
5.3 Limitation of Liability.........................................18
5.4 Waiver of Default...............................................18
(ii)
SECTION 6 -- CONCERNING THE WARRANTHOLDERS
6.1 Meetings........................................................19
6.2 Convening Meetings..............................................19
6.3 Place of Meeting................................................19
6.4 Notice..........................................................19
6.5 Persons Entitled to Attend......................................19
6.6 Quorum..........................................................19
6.7 Chairman........................................................19
6.8 Adjourned Meeting...............................................19
6.9 Votes...........................................................20
6.10 Powers of Warrantholders........................................20
6.11 Minutes of Meetings.............................................20
6.12 Written Resolutions.............................................21
6.13 Binding Effect..................................................21
SECTION 7 -- SUPPLEMENTAL INDENTURES
7.1 General.........................................................21
SECTION 8 -- SUCCESSOR COMPANIES
8.1 Amalgamation, Etc...............................................22
8.2 Trustee to Consent..............................................22
8.3 Substitutions of Successor Company..............................22
SECTION 9 -- CONCERNING THE TRUSTEE
9.1 Indemnity.......................................................22
9.2 Duties of Trustee...............................................22
9.3 Action by Trustee...............................................23
9.4 Certificate of the Company......................................23
9.5 Trustee May Employ Experts or Agents............................23
9.6 Resignation of Trustee..........................................23
9.7 Indenture Legislation...........................................23
9.8 Money Held and Deposited........................................23
9.9 Notice..........................................................24
9.10 Use of Proceeds.................................................24
9.11 No Inquiries....................................................24
9.12 Trustee Not Required To Give Security...........................24
9.13 No Conflict Of Interest.........................................24
9.14 Trustee Not Ordinarily Bound....................................24
9.15 Trustee May Deal In Purchase Warrants...........................25
SECTION 10 -- SATISFACTION AND DISCHARGE
10.1 General.........................................................25
(iii)
SECTION 11 -- NOTICES
11.1 Notice to Company...............................................25
11.2 Notice to the Warrantholders. ..................................26
11.3 Notice to Trustee...............................................27
SECTION 12 -- ACCEPTANCE OF TRUST BY TRUSTEE
12.1 General.........................................................27
SECTION 13 -- FURTHER ASSURANCE
13.1 Further Assurances..............................................27
(iv)
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PURCHASE WARRANT INDENTURE
This Indenture is made as of August 7, 1997, between
SEVEN SEAS PETROLEUM INC., a company continued under
the laws of the Yukon Territory, having a head office
in the City of Houston, Texas as the "Company"
and
MONTREAL TRUST COMPANY OF CANADA, a trust company
incorporated under the laws of Canada and authorized to
carry on trust business in the Provinces of Alberta and
Ontario, having a head office in the City of Toronto,
Ontario as the "Trustee"
RECITALS
A. The Company is duly continued under the laws of the Yukon Territory.
B. The Company has entered into the Instrument Indenture (as defined below)
between the Company and the Trustee.
C. The Instrument Indenture provides for the issuance of notes which are
exchangeable for convertible debentures, which are convertible, subject to
certain terms and conditions and at the option of the holders thereof or the
Company, for Units, each consisting of one Common Share of the Company and
one-half (1/2) of one (1) Purchase Warrant.
D. The Company is duly authorized to create and issue the Purchase Warrants to
be constituted in the manner hereinafter provided.
E. One Purchase Warrant shall, subject to adjustment, entitle the holder thereof
to acquire one Common Share upon payment of the Exercise Price, upon the terms
and conditions hereinafter provided.
F. All things necessary have been done and performed so as to make the Purchase
Warrants, when certified by the Trustee and issued as provided herein, legal and
valid obligations of the Company with the benefits and subject to the terms of
this Indenture.
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G. The foregoing recitals are made as representations and statements of fact by
the Company and not by the Trustee.
FOR VALUE RECEIVED, the parties agree as follows:
SECTION 1 -- INTERPRETATION
1.1 DEFINITIONS. In this Indenture, unless the context otherwise requires:
(1) AGENT means Yorkton Securities Inc. and its successors.
(2) APPLICABLE LEGISLATION means the provisions, if any, for the time being, of
any statute of any Qualifying Jurisdiction, and of the regulations under any
such statute, relating to trust indentures and to the rights, duties and
obligations of trustees under trust indentures and of corporations issuing their
obligations under trust indentures, to the extent that any such provisions are
in force and applicable to this Indenture.
(3) BUSINESS DAY means a day, other than a Saturday or a Sunday, on which the
Office of the Trustee is open for business.
(4) CERTIFICATE OF THE COMPANY means a written certificate signed in the name of
the Company by any duly authorized officer of the Company.
(5) CLOSING DATE means August 7, 1997.
(6) COMMON SHARES mean the Common Shares of the Company as constituted at the
date hereof.
(7) COMPANY means Seven Seas Petroleum Inc. and every successor corporation
thereto which shall have complied with the provisions of Section 8.
(8) COUNSEL means any barrister or solicitor or firm of barristers and
solicitors retained by the Trustee, or retained by the Company and approved by
the Trustee.
(9) CURRENT MARKET PRICE means at any date the weighted average trading price at
which the Common Shares have traded on The Toronto Stock Exchange or, if the
Company's Common Shares are not then traded on The Toronto Stock Exchange, such
other North American stock exchange or market (including NASDAQ) on which the
Common Shares are traded, during the twenty (20) consecutive Trading Days ending
three (3) Trading Days before such date. In the event the foregoing cannot be
determined, then the Current Market Price shall be established by the Company's
auditors.
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(10) DEBENTURES means the debentures to be issued in exchange for notes in
accordance with the Instrument Indenture.
(11) EXERCISE DATE means, with respect to any Purchase Warrant, the date on
which the Purchase Warrant Certificate representing such Purchase Warrant is
surrendered for exercise together with full payment of the Exercise Price, in
accordance with Section 4.
(12) EXERCISE PRICE means at any time the applicable price at which one Common
Share may be acquired on the exercise of a Purchase Warrant under Section 4.9.
(13) EXPIRY DATE means August 7, 1998 or, if such day is not a Business Day, the
Expiry Date shall be the next following Business Day.
(14) GAAP means generally accepted accounting principles in Canada consistently
applied as of the Closing Date.
(15) INDENTURE means this purchase warrant indenture as amended, restated,
supplemented or replaced from time to time.
(16) INSTRUMENT INDENTURE means the indenture made as of August 7, 1997 between
the Company and the Trustee, under which the Company issued notes exchangeable
for the Debentures.
(17) ISSUE DATE means the date upon which the Purchase Warrants are issued.
(18) OFFICE OF THE TRUSTEE means the principal office of the Trustee at Calgary,
Alberta, Canada.
(19) PERSON means an individual or corporation, a partnership or joint venture,
a trustee or trust, a government or agency thereof, an unincorporated
organization or entity; and pronouns have a similarly extended meaning.
(20) PRELIMINARY PROSPECTUS means a preliminary prospectus filed with the
securities commissions in the Qualifying Jurisdictions qualifying the
distribution of the Debentures upon exercise of the notes issued under the
Instrument Indenture.
(21) PROSPECTUS means a (final) prospectus filed with the securities commissions
in the Qualifying Jurisdictions qualifying the distribution of the Debentures
upon exercise of the notes issued under the Instrument Indenture.
(22) PURCHASE WARRANT CERTIFICATE means a certificate issued on or after the
Issue Date to evidence Purchase Warrants.
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(23) PURCHASE WARRANTS means the purchase warrants referred to in Section 2
created and authorized by and issuable under this Indenture, each entitling the
holder thereof, upon payment of the Exercise Price and upon tendering one (1)
whole Purchase Warrant, to purchase on or before the Time of Expiry (before any
adjustment under Section 4.10) one (1) Common Share.
(24) QUALIFYING JURISDICTIONS means the provinces of Ontario, British Columbia,
Alberta, Manitoba and Quebec and such other jurisdictions as the Agent may
notify the Company on not less than three (3) Business Days prior to the date of
filing the Preliminary Prospectus.
(25) THIS INDENTURE, HEREIN, HEREOF, HERETO, HEREUNDER or similar expressions as
used in this Indenture shall mean this Indenture (including the schedules
hereto) and any and every deed supplemental hereto and not any particular
Section or Subsection of this Indenture.
(26) TIME OF EXPIRY means 5:00 p.m. (Calgary time) on the Expiry Date.
(27) TRADING DAY means any day on which The Toronto Stock Exchange is open for
trading.
(28) TRUSTEE means Montreal Trust Company of Canada and its successors as
trustee hereunder for the time being of the trusts hereby created.
(29) UNIT means one (1) Common Share and one-half (1/2) of one (1) Purchase
Warrant.
(30) WARRANTHOLDERS means the several persons who are entered from time to time
as the holders of Purchase Warrants in the warrant register.
(31) WARRANTHOLDERS' RESOLUTION shall have the meaning attributed thereto in
Section 6.10.
(32) WARRANT REGISTER means the register maintained at the Office of the Trustee
by the Trustee for Purchase Warrants.
1.2 OUTSTANDING PURCHASE WARRANTS. Every Purchase Warrant issued by the Company
and certified and delivered by the Trustee hereunder shall be deemed to be
outstanding until it shall be exercised for the purchase of Common Shares or
until the passing of the Time of Expiry, whereupon such Purchase Warrant shall
automatically expire and shall have no further effect and where a new Purchase
Warrant Certificate has been issued in lieu of or in substitution for a Purchase
Warrant Certificate which has been lost, stolen, mutilated, destroyed or
defaced, only one of such Purchase Warrant Certificates shall be counted for the
purpose of determining the aggregate number of Purchase Warrants outstanding.
1.3 CURRENCY. All amounts of money are expressed in lawful money of the United
States of America.
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1.4 COMPLETE AGREEMENT. This Agreement constitutes the complete agreement
between the parties with respect to the subject matter hereof and supersedes all
prior agreements, commitments, understandings or inducements, whether oral or
written, expressed or implied.
1.5 NUMBER AND GENDER. Words importing the singular number only shall include
the plural and vice versa and words importing the masculine gender shall include
the feminine and neuter genders.
1.6 SECTIONS; HEADINGS. The division of this Indenture into Sections, paragraphs
and subparagraphs, the provision of a table of contents and the insertion of
headings is for convenience of reference only and shall not affect its
interpretation.
1.7 GOVERNING LAW. This Indenture, the Purchase Warrants and the Purchase
Warrant Certificates shall be governed by, interpreted in accordance with the
laws of the Province of Ontario and the laws of Canada applicable therein.
1.8 TIME OF ESSENCE. Time is of the essence of this Indenture.
SECTION 2 -- ISSUE OF PURCHASE WARRANTS
2.1 TERMS OF PURCHASE WARRANTS. The Purchase Warrant Certificates shall be
designated as "Common Share Purchase Warrants" of the Company, and shall be
issued in the form set forth in Schedule 2.1, with such additions, deletions and
alterations as the Trustee shall approve. The Purchase Warrants shall be issued
from time to time upon the holders of Debentures duly converting the Debentures
pursuant to the Instrument Indenture. All Purchase Warrants and Purchase Warrant
Certificates shall be registered and certified by the Trustee and dated as of
the day on which they are issued and may be typewritten, mimeographed, printed
or lithographed and shall be numbered consecutively. Each Purchase Warrant
authorized to be issued hereunder shall entitle the holder thereof, upon
exercise, together with payment of the Exercise Price, to acquire one (1) Common
Share, subject to adjustment in accordance with Section 4.10, at any time after
the Issue Date and until the Time of Expiry. The Exercise Price and the number
of Common Shares which may be acquired pursuant to the exercise of the Purchase
Warrants shall be adjusted in the events and in the manner specified in Section
4.10.
2.2 WARRANTHOLDER NOT A SHAREHOLDER. Nothing in this Indenture or in the holding
of a Purchase Warrant or Purchase Warrant Certificate or otherwise, shall, in
itself, confer or be construed as conferring upon a Warrantholder any right,
title or interest whatsoever as a shareholder of the Company, including, but not
limited to, the right to vote at, to receive notice of, or to attend, meetings
of shareholders or any other proceedings of the Company, or the right to receive
dividends and other distributions.
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2.3 SIGNATURE OF PURCHASE WARRANT CERTIFICATES. The Purchase Warrant
Certificates shall be executed by any one of the Chairman of the Board, the
President, a Vice-President or the Secretary of the Company and the signature of
any of such officers may be manually applied to the Purchase Warrant
Certificates or may be engraved, lithographed or otherwise mechanically
reproduced in facsimile on the Purchase Warrant Certificates, and in either case
shall bind the Company notwithstanding that the person whose signature is so
applied may not hold such office at the time the Purchase Warrant Certificates
are certified by the Trustee. The Purchase Warrant Certificates shall have the
corporate seal of the Company (or a facsimile reproduction thereof) affixed
thereto.
2.4 CERTIFICATION. No Purchase Warrant Certificate shall be issued or, if
issued, shall be valid until certified by the Trustee by the manual signature of
a duly authorized representative of the Trustee. Certification by the Trustee
does not however constitute any warranty as to the validity or security of the
Purchase Warrant Certificates but only as to their due issuance by the Trustee
pursuant to the Indenture.
2.5 ISSUE OF PURCHASE WARRANT CERTIFICATES.
(1) All Purchase Warrant Certificates issued and outstanding under this
Indenture shall rank PARI PASSU in all respects without priority or
preference of any one Purchase Warrant Certificate over any other
issued and outstanding under this Indenture, whatever may be the
actual date of issue thereof.
(2) Notwithstanding paragraph (1) above, the Warrantholder of each
Purchase Warrant, by acquiring the Purchase Warrant Certificate,
represents to the Company that it:
(a) has full power and capacity under the laws applicable to such
Warrantholder to acquire the Purchase Warrant and such acquisition
of the Purchase Warrant will not violate any provisions of any laws
applicable to such Warrantholder; and
(b) is acquiring the Purchase Warrant as principal, for investment and
not for distribution, redistribution, assignment or resale to
others.
2.6 LOST PURCHASE WARRANT CERTIFICATE. If any outstanding Purchase Warrant
Certificate is lost, stolen, mutilated, destroyed or defaced, the Company shall
execute and deliver and the Trustee shall certify a replacement Purchase Warrant
Certificate representing the same number of Purchase Warrants, upon
indemnification in an amount and subject to terms and conditions satisfactory to
the Company and the Trustee, and upon payment of a reasonable fee. Any such
replacement Purchase Warrant Certificate shall be entitled to the full benefit
hereof and shall rank equally in accordance with its terms with all then
outstanding Purchase Warrant Certificates, whatever the actual date of issue may
be.
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2.7 REGISTRATION OF PURCHASE WARRANTS. The Trustee shall maintain at the Office
of the Trustee a register (the "WARRANT REGISTER") of Warrantholders in which
shall be entered the name and address of the holder of each of the Purchase
Warrant Certificates. Such name shall also be recorded on the Purchase Warrant
Certificate concerned. The Trustee shall also maintain at such location a
register of transfers in which shall be recorded the particulars of all
transfers of Purchase Warrants. The person in whose name any Purchase Warrant
Certificates shall be registered shall be deemed and regarded as the owner and
holder thereof for all purposes of this Indenture.
2.8 EXCHANGE OF PURCHASE WARRANT CERTIFICATES.
(1) One or more Purchase Warrant Certificates representing any number of
Purchase Warrants may, upon compliance with the reasonable
requirements of the Trustee, be exchanged for another Purchase
Warrant Certificate of Purchase Warrant Certificates representing
the same aggregate number of Purchase Warrants as represented under
the Purchase Warrant Certificate or Purchase Warrant Certificates so
exchanged.
(2) Purchase Warrant Certificates may be exchanged only at the Office of
the Trustee or at any other place that is designated by the Company
with the approval of the Trustee. Any Purchase Warrant Certificate
tendered for exchange shall be surrendered and cancelled by the
Trustee.
2.9 CHARGES FOR EXCHANGE. Except as otherwise provided herein, the Trustee may
charge to the holder requesting an exchange a reasonable sum for each new
Purchase Warrant Certificate issued in exchange for a Purchase Warrant
Certificate or Purchase Warrant Certificates, and payment of such charges and
reimbursement of the Trustee or the Company for any and all stamp taxes or
governmental or other charges required to be paid shall be made by such
Warrantholder as a condition precedent to such exchange.
2.10 TRANSFER AND OWNERSHIP OF PURCHASE WARRANTS. The Purchase Warrants may only
be transferred on the Warrant Register by the Warrantholder or its legal
representatives or its attorney duly appointed by an instrument in writing in
form and execution satisfactory to the Trustee upon surrendering to the Trustee
at the Office of the Trustee, the Purchase Warrant Certificate or Purchase
Warrant Certificates representing the Purchase Warrants to be transferred, with
the transfer form thereon in the form set forth in Schedule 2.10 duly completed
and executed, signed by the Warrantholder or by the duly appointed legal
representative thereof or a duly authorized attorney, together with evidence of
authority of any such legal representative or attorney and, if required by the
transfer form, with such signature properly guaranteed, and upon compliance
with:
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(1) the conditions herein;
(2) such reasonable requirements as the Trustee may prescribe; and
(3) all applicable securities legislation and requirements of regulatory
authorities relating to the transferability of the Purchase Warrants
or restrictions thereon;
and such transfer shall be duly noted in the Warrant Register by the Trustee.
Upon compliance with such requirements, the Trustee shall issue to the
transferee a Purchase Warrant Certificate representing the Purchase Warrants
transferred. Such new Purchase Warrant Certificate shall be sent by first class
mail or held for pick up by the transferee in accordance with the instructions
given on the transfer form and, if no such instructions are given, shall be sent
by first class mail to the address of the transferee appearing on the form of
transfer. If less than all the Purchase Warrants represented by a Purchase
Warrant Certificate are transferred, the Trustee shall issue a new Purchase
Warrant Certificate representing those Purchase Warrants not transferred in the
same name as the name appearing on the Warrant Certificate surrendered for
transfer. Such new Purchase Warrant Certificate shall be sent by first class
mail or held for pick up in accordance with instructions given on the transfer
form and, if no instructions are given, shall be sent by first class mail to the
address of the holder of the Purchase Warrants surrendered for transfer
appearing on the Warrant Register.
Neither the Company nor the Trustee shall be bound to take notice of, or to see
to the execution of, any trust whether express, implied or constructive, in
respect of any Purchase Warrant, and may transfer any Purchase Warrant on the
direction of the person registered as the holder thereof whether such person is
named as a trustee or otherwise, as though that person were the beneficial owner
of the Purchase Warrant.
SECTION 3 -- RIGHTS AND COVENANTS OF THE COMPANY
3.1 OPTIONAL PURCHASES BY THE COMPANY. The Company may from time to time
purchase, by private contract or otherwise, any of the Purchase Warrants. Any
such purchase shall be made at the lowest price or prices at which, in the
opinion of the directors, such Purchase Warrants are then obtainable, plus
reasonable costs of purchase, and may be made in such manner, from such persons
and on such other terms as the Company, in its sole discretion, may determine.
Any Purchase Warrant Certificates representing the Purchase Warrants purchased
pursuant to this section shall forthwith be delivered to and cancelled by the
Trustee. No Purchase Warrants shall be issued in replacement thereof.
3.2 GENERAL. The Company covenants with the Trustee as follows:
(1) It will carry on business in accordance with good business practice;
(2) It will keep proper books of account and will record all dealings
and transactions in relation to its business;
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(3) It will observe and perform all of its conditions and covenants
contained in this Indenture or in the Purchase Warrant Certificates;
and
(4) It will at all times, in relation to this Indenture and any action
to be taken hereunder, observe and comply with and be entitled to
the benefits of all Applicable Legislation.
3.3 TRUSTEE'S REMUNERATION AND EXPENSES. The Company covenants that it will pay
to the Trustee from time to time reasonable remuneration for its services
hereunder and will pay or reimburse the Trustee upon its request for all
reasonable expenses, disbursements and advances incurred or made by the Trustee
in the administration or execution of the trusts hereby created (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 Trustee hereunder shall be
finally and fully performed, except any such expense, disbursement or advance as
may arise out of or result from the Trustee's negligence, wilful misconduct or
bad faith. The Trustee shall not have any recourse against proceeds of the
offering of Notes or securities or other property held by it pursuant to this
Indenture for the payment of its fees.
SECTION 4 -- EXERCISE OF PURCHASE WARRANTS
4.1 METHOD OF EXERCISE OF PURCHASE WARRANTS.
(1) The holder of any Purchase Warrant may exercise the right conferred on
such holder to acquire Common Shares by surrendering, after the Issue Date
and prior to the Time of Expiry, to the Trustee, the Purchase Warrant
Certificate with a duly completed and executed exercise form, together
with a certified cheque, money order, cash or bank draft, in lawful money
of the United States of America payable to or to the order of the Trustee
at par in Calgary, Alberta, Canada, for the Exercise Price for the Common
Shares subscribed for.
A Purchase Warrant Certificate with the duly completed and executed
exercise form referred to in this subsection shall be deemed to be
surrendered only upon personal delivery thereof or, if sent by mail or
other means of transmission, upon actual receipt thereof at, in each case,
the Office of the Trustee.
(2) Any exercise form referred to in Section 4.1(1) shall be signed by the
Warrantholder or by the duly appointed legal representative thereof or a
duly authorized attorney, with evidence of authority of any such legal
representative or attorney attached thereto, and, if required by the
exercise form, with such signature properly guaranteed, and shall specify:
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(a) the number of Common Shares which the Warrantholder wishes to
acquire (being not more than those which the holder is entitled to
acquire pursuant to the Purchase Warrant Certificate(s)
surrendered);
(b) the person or persons in whose name or names such Common Shares are
to be registered;
(c) the address or addresses of such person(s); and
(d) the number of Common Shares to be issued to each such person if more
than one is so specified.
If any of the Common Shares subscribed for are to be issued to a person or
persons other than the Warrantholder, each such person shall also complete
and deliver an exercise form in the form attached to the Purchase Warrant
Certificate and the Warrantholder shall pay to the Company or the Trustee
on behalf of the Company, all applicable transfer or similar taxes and the
Company shall not be required to issue or deliver certificates evidencing
Common Shares unless or until such Warrantholder shall have paid to the
Company, or the Trustee on behalf of the Company, the amount of such tax
or shall have established to the satisfaction of the Company that such tax
has been paid or that no tax is due.
4.2 EFFECT OF EXERCISE OF PURCHASE WARRANTS.
(1) Upon compliance by the holder of any Purchase Warrant Certificate with the
provisions of Section 4.1, the Common Shares subscribed for shall be
deemed to have been issued and the person or persons to whom such Common
Shares are to be issued shall be deemed to have become the holder or
holders of record of such Common Shares on the Exercise Date unless the
transfer registers of the Company shall be closed on such date, in which
case the Common Shares subscribed for shall be deemed to have been issued,
and such person or persons deemed to have become the holder or holders of
record of such Common Shares, on the date on which such transfer registers
are reopened.
(2) Within three (3) Business Days after the Exercise Date with respect to a
Purchase Warrant, the Company shall cause to be mailed to the person or
persons in whose name or names the Common Shares so subscribed for have
been issued, as specified in the subscription, at the address specified in
such subscription or, if so specified in such subscription, cause to be
delivered to such person or persons at the Office of the Trustee where the
Purchase Warrant Certificate was surrendered, a certificate or
certificates for the appropriate number of Common Shares subscribed for.
In the absence of instructions to the contrary, such certificates shall be
issued in the name of the registered holder of the surrendered Purchase
Warrant Certificate and shall be mailed by first class mail to the address
of such Warrantholder appearing on the Warrant Register.
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4.3 PARTIAL EXERCISE OF PURCHASE WARRANTS. The holder of any Purchase Warrants
may acquire a number of Common Shares less than the number which the holder is
entitled to acquire pursuant to the surrendered Purchase Warrant Certificate(s).
In the event of any exercise of a number of Purchase Warrants less than the
number which the holder is entitled to exercise, the holder of the Purchase
Warrants upon such exercise shall also be entitled to receive, without charge
therefor, a new Purchase Warrant Certificate(s) in respect of the balance of the
Purchase Warrants represented by the surrendered Purchase Warrant Certificate(s)
not then exercised. In the absence of instructions to the contrary, such
certificate shall be issued in the name of the registered holder of the
surrendered Purchase Warrant Certificate and shall be mailed by first class mail
to the address of such Warrantholder appearing on the Warrant Register.
4.4 DESTRUCTION OF PURCHASE WARRANT CERTIFICATES. All Purchase Warrant
Certificates surrendered to the Trustee shall be, after the expiry of any period
of retention prescribed by law, destroyed by the Trustee. Upon request by the
Company, the Trustee shall furnish to the Company a destruction certificate
identifying the Purchase Warrant Certificates so destroyed and the number of
Purchase Warrants evidenced thereby.
4.5 ACCOUNTING AND RECORDING.
(1) The Trustee shall promptly notify the Company when Purchase Warrants are
exercised and forward to the Company at the times hereinafter set forth
(or into an account or accounts of the Company with the bank or trust
corporation designated by the Company for that purpose) all money received
on the exercise of Purchase Warrants. The Trustee shall hold money
received on the exercise of Purchase Warrants and shall forward such money
to the Company (or into an account or accounts of the Company with the
bank or trust corporation designed by the Company for that purpose) within
three (3) Business Days from the date of receipt thereof. All such money
and any securities or other instruments received by the Trustee shall be
received in trust for and shall be segregated and kept apart by the
Trustee in trust for the Company.
(2) The Trustee shall record the particulars of the Purchase Warrants
exercised which shall include the names and addresses of the persons who
have exercised Purchase Warrants, the number of Common Shares issued upon
such exercise, the Exercise Date and the Exercise Price. Upon request of
the Company, the Trustee shall provide within five (5) Business Days such
particulars in writing to the Company.
4.6 POSTPONEMENT OF DELIVERY OF COMMON SHARE CERTIFICATES. The Company shall not
be required to deliver certificates for Common Shares during the period when the
stock transfer books of the Company are closed due to an impending meeting of
shareholders or a proposed payment of dividends or for any other purpose and in
the event of a surrender of a Purchase Warrant Certificate for the acquisition
of Common Shares during such period, the delivery of Common Share certificates
may be postponed for a period not exceeding ten (10) days after the date of the
re-opening of the stock transfer books.
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4.7 SECURITIES RESTRICTIONS. Notwithstanding anything herein contained, Common
Shares will only be issued pursuant to any Purchase Warrant in compliance with
the securities laws of any Qualifying Jurisdiction and, without limiting the
generality of the foregoing, in the event that Purchase Warrants are exercised
pursuant to Section 4.1 prior to the issuance of a receipt for the Prospectus,
the certificates representing the Common Shares issued thereby will bear such
legend as may, in the opinion of counsel of the Company, be necessary in order
to avoid a violation of any securities laws of any Qualifying Jurisdiction or to
comply with the requirements of any stock exchange on which the Common Shares
are listed; provided that, if at any time, in the opinion of counsel to the
Company, such legends are no longer necessary in order to avoid a violation of
say any such laws, or the holder of any such legended certificate, at the
holder's expense, provides the Company with evidence satisfactory in form and
substance to the Company (which may include an opinion of counsel satisfactory
to the Company) to the effect that such holder is entitled to sell or otherwise
transfer such Common Shares in a transaction in which such legends are not
required, such legended certificate may thereafter be surrendered to the Company
in exchange for a certificate which does not bear such legend.
4.8 NO FRACTIONAL SHARES. No fractional Common Share or scrip certificate
representing a fractional Common Share shall be issued upon the exercise of any
Purchase Warrants. If the exercise of any Purchase Warrants would otherwise
result in a fractional Common Share, the Company shall, in lieu of issuing such
fractional Common Share, pay to the Warrantholder concerned, an amount in lawful
money of the United States of America equal to the value of the fractional
Common Share based on the Current Market Price on the Exercise Date.
4.9 EXERCISE PRICE. The exercise price per acquisition of Common Share (the
"EXERCISE PRICE") for purposes of this Section 4 shall be $15.00 per Common
Share, subject to adjustment in accordance with Section 4.10.
4.10 ADJUSTMENT OF EXERCISE PRICE/NUMBER OF COMMON SHARES. The acquisition
rights in effect at any date attached to the Purchase Warrants shall be subject,
under certain circumstances, to adjustment from time to time as follows:
(1) If and whenever at any time from the date hereof and prior to the
Time of Expiry, the Company shall:
(a) subdivide, redivide or reclassify its outstanding Common Shares into
a greater number of shares; or
(b) reduce, combine or consolidate its outstanding Common Shares into a
smaller number of shares;
the Exercise Price in effect on the effective date of such subdivision or
consolidation shall be adjusted to equal the price determined by multiplying the
Exercise Price in effect immediately prior to such effective date or record date
by a fraction of which the numerator shall be the total number of Common Shares
outstanding immediately prior to such date and the denominator shall
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be the total number of Common Shares immediately after such date. Such
adjustment shall be made successively whenever any event referred to in this
subsection 4.10(1) shall occur. For greater certainty, the issuance of
additional Common Shares by the Company shall not result in any adjustment being
made pursuant to this Section 4.10. Upon any adjustment of the Exercise Price
pursuant to this subsection 4.10(1), the number of Common Shares subject to the
right of purchase under each Purchase Warrant not previously exercised shall be
contemporaneously adjusted by multiplying the number of Common Shares which
theretofore may have been purchased under such Purchase Warrant by a fraction of
which the numerator shall be the respective Exercise Price in effect immediately
prior to such adjustment and the denominator shall be the respective Exercise
Price resulting from such adjustments.
(2) If and whenever at any time from the date hereof and prior to the
Time of Expiry, there is a reclassification of the Common Shares or
a capital reorganization of the Company other than as described in
Section 4.10(1) or a consolidation, amalgamation or merger of the
Company with or into any other body corporate, trust, partnership or
other entity, or a sale or conveyance of the property and assets of
the Company as an entirety or substantially as an entirety to any
other body corporate, trust, partnership or other entity, any
Warrantholder who has not exercised its right of acquisition prior
to the record date or effective date, as the case may be, of such
reclassification, reorganization, consolidation, amalgamation,
merger, sale or conveyance, upon the exercise of such right
thereafter, shall be entitled to receive and shall accept, in lieu
of the number of Common Shares then sought to be acquired by it, the
number of shares or other securities or property of the Company or
any body corporate, trust, partnership or other entity resulting
from such merger, amalgamation or consolidation, or to which such
sale or conveyance has been made, as the case may be, that such
Warrantholder would have been entitled to receive on such
reclassification, reorganization, consolidation, amalgamation,
merger, sale or conveyance, if, on the record date or the effective
date thereof, as the case may be, the Warrantholder had been the
registered holder of the number of Common Shares sought to be
acquired by it. If determined appropriate by the Trustee to give
effect to or to evidence the provisions of this Section 4.10(2), the
Company, any successor to the Company, or such body corporate,
partnership, trust or other entity, as the case may be, shall, prior
to or contemporaneously with any such reclassification,
reorganization, consolidation, amalgamation, merger, sale or
conveyance, enter into an indenture which shall provide, to the
extent possible, for the application of the provisions set forth in
this Indenture with respect to the rights and interests thereafter
of the Warrantholders to the end that the provisions set forth in
this Indenture shall thereafter correspondingly be made applicable,
as nearly as may reasonably be, with respect to any shares, other
securities or property to which a Warrantholder is entitled on the
exercise of its acquisition rights thereafter. Any indenture entered
into between the Company and the Trustee pursuant to the provisions
of this Section 4.10(2) shall be a supplemental indenture entered
into pursuant to the provisions of Section 7 hereof. Any indenture
entered into
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between the Company, any successor to the Company or such body
corporate, partnership, trust or other entity and the Trustee shall
provide for adjustments which shall be as nearly equivalent as may
be practicable to the adjustments provided in this Section 4.10 and
which shall apply to successive reclassifications, reorganizations,
amalgamations, consolidations, mergers, sales or conveyances.
(3) If and whenever at any time from the date hereof and prior to the
Time of Expiry, the Company fixes a record date for the making of a
distribution to all or substantially all the holders of its
outstanding Common Shares of dividends or any other distribution of,
or in the form of, property or securities, including without
limitation: (i) shares of any class; (ii) rights, options or
warrants, (iii) evidences of its indebtedness, or (iv) assets,
including shares of other corporations, any Warrantholder who has
not exercised its right of acquisition prior to such record date,
upon the exercise of such right thereafter, shall be entitled to
receive, without further payment to the Company, and shall accept in
addition to the number of Common Shares to which it was theretofore
entitled upon such exercise, the kind and amount of shares and other
securities or property which such holder would have been entitled to
receive as a result of such distribution, if, on the record date it
had been the registered holder of the number of Common Shares to
which it was theretofore entitled upon exercise.
(4) In any case in which this Section 4.10 shall require that an
adjustment shall become effective immediately after a record date,
for an event referred to herein, the Company may defer, until the
occurrence of such event, issuing to the Warrantholder exercising
his rights after such record date and before the occurrence of such
event, the Common Shares or other securities issuable upon such
exercise by reason of the adjustment required by such event;
provided, however, that the Company shall deliver to such
Warrantholder an appropriate instrument evidencing such
Warrantholder's right to receive such Common Shares or other
securities upon the occurrence of the event requiring such
adjustment and the right to receive any distributions made on such
Common Shares declared in favour of holders of record of Common
Shares on and after the date of exercise or such later date as such
Warrantholder would but for the provisions of this Section 4.10(4),
have become the holder of record of such additional Common Shares.
(5) The adjustments provided for in this Section 4.10 are cumulative.
After any adjustment pursuant to this Section 4.10, the term "Common
Shares" where used in this Indenture shall be interpreted to mean
securities of any class or classes which, as a result of such
adjustment and all prior adjustments pursuant to this Section 4.10,
the Warrantholder is entitled to receive upon the exercise of his
right, and the number of Common Shares indicated in any instrument
of conversion shall be interpreted to mean, the number of Common
Shares or other property or securities a Warrantholder is entitled
to receive as a result of such adjustment and all prior adjustments
pursuant to this Section 4.10, upon the full exercise of the
Purchase Warrant.
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(6) All shares or warrants of any class or other securities which a
Warrantholder is at the time in question entitled to receive on the
exercise of his conversion right, whether or not as a result of
adjustments made pursuant to this Section 4.10 shall, for the
purposes of the interpretation of this Indenture, be deemed to be
shares and warrants which such Warrantholder is entitled to acquire
pursuant to such conversion right.
(7) In the event of any question arising with respect to the adjustments
provided for in this Section 4.10 such question shall be
conclusively determined by the Company's auditors, or if they are
unable or unwilling to act, by such other firm of independent
chartered accountants as may be selected by the directors and which
is acceptable to the Trustee, who shall have access to all necessary
records of the Company, and such determination shall be binding upon
the Company, the Trustee, all Warrantholders and all other persons
interested therein.
(8) The adjustments provided for in this Section 4.10 shall, in the case
of adjustments to the Exercise Price, be computed to the nearest
one-tenth of one cent and no adjustment in the Exercise Price shall
be required unless such adjustment would result in a change of at
least one percent (1%) in the prevailing Exercise Price provided,
however, that any adjustments which, except for the provisions of
this Section 4.10(8) would otherwise have been required to be made,
shall be carried forward and taken into account in the event of any
circumstances requiring any subsequent adjustment.
(9) If the purchase price provided for in any right, warrant or option
issued as described in Section 4.10(3) is decreased, the Exercise
Price shall, subject to Section 4.10(4), forthwith be changed so as
to decrease the Exercise Price to such Exercise Price as would have
been obtained had the adjustment made in connection with the
issuance of all such rights, options or securities been made upon
the basis of such purchase price as so decreased or such rate as so
increased.
(10) No adjustment in the Exercise Price shall be made in respect of any
event described in Section 4.10(2):
(a) if the Warrantholders are entitled to participate in such event on
the same terms MUTATIS MUTANDIS as if they had exercised their
purchase rights prior to the effective date or record date or such
event, subject to the prior approval of The Toronto Stock Exchange
to such participation if the Common Shares or the Purchase Warrants
are then listed on such exchange; or
(b) in respect of any rights to acquire shares which are presently
outstanding.
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(11) In determining at any time and from time to time the number of
Common Shares outstanding at any particular time for purposes of
this Section 4.10 there shall be included that number of Common
Shares which would be outstanding upon conversion of all convertible
securities then outstanding, and upon exercise of all rights,
options or warrants then outstanding to purchase Common Shares, and
there shall be excluded any Common Shares (and Common Shares which
would be outstanding upon conversion of convertible securities) held
by or for the account of the Company.
(12) Upon the expiry of the period for conversion of convertible
securities and the exercise period for rights, options, warrants
(other than rights, options or warrants in respect of which the
Warrantholders are entitled to participate, as contemplated in
Section 4.10(10) to purchase Common Shares or convertible
securities), the Exercise Price shall be adjusted to what it would
have been if such unconverted convertible securities and unexercised
rights, options or warrants had not been issued.
(13) In case the Company after the date of this Indenture shall take any
action affecting the Common Shares, other than an action described
in this Section 4.10 which in the opinion of the board of directors
of the Company would materially adversely affect the rights of the
Warrantholders, the Exercise Price may be reduced in such manner, if
any, and at such time, by action of the directors, in their sole
discretion as they may determine to be equitable in the
circumstances, but subject in all cases to any necessary regulatory
approval. Failure by the directors to take any action so as to
provide for an adjustment on or prior to the effective date or
record date of any action by the Company affecting the Common Shares
shall be conclusive evidence that the board of directors of the
Company has determined that it is equitable to make no adjustment in
the circumstances.
4.11 NO ADJUSTMENT FOR STOCK OPTIONS. For greater certainty, in this Section 4,
no adjustment shall be made in the acquisition rights attached to the Purchase
Warrants if the issue of Common Shares is being made pursuant to this Indenture
or pursuant to any stock option or stock purchase plan for directors, officers,
employees or consultants of the Company in force from time to time.
4.12 PROCEEDINGS PRIOR TO ANY ACTION REQUIRING ADJUSTMENT. As a condition
precedent to the taking of any action which would require an adjustment in any
of the acquisition rights pursuant to any of the Purchase Warrants, including
the number of Common Shares which are to be received upon the exercise thereof,
the Company shall take any corporate action which may, in the opinion of
counsel, be necessary in order that the Company has unissued and reserved in its
authorized capital and may validly and legally issue as fully paid and
non-assessable all the shares which the holders of such Purchase Warrants are
entitled to receive on the full exercise thereof in accordance with the
provisions hereof.
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4.13 CERTIFICATE AS TO ADJUSTMENT. If any of the events referred to in Section
4.10 occur, the Company shall promptly file with the Trustee a Certificate of
the Company setting forth a brief statement of the facts and the consequent
adjustment required to be made by the provisions of this Indenture. The Trustee
shall promptly mail a copy of each such certificate to each of the
Warrantholders.
4.14 NOTICE OF SPECIAL MATTERS. The Company covenants with the Trustee that, so
long as any Purchase Warrant remains outstanding, it will give notice to the
Trustee and to the Warrantholders of its intention to fix a record date that is
prior to the Expiry Date for any event referred to in Sections 4.10(1) or
4.10(3) (other than subdivision, consolidation or reclassification of its Common
Shares) which may give rise to an adjustment in the Exercise Price. Such notice
shall specify the particulars of such event and the record date for such event,
provided that the Company shall only be required to specify in the notice such
particulars of the event as shall have been fixed and determined on the date on
which the notice is given. The notice shall be given in each case not less than
fourteen (14) days prior to such applicable record date.
4.15 NO ACTION AFTER NOTICE. The Company covenants with the Trustee that it will
not close its transfer books or take any other corporate action which might
deprive the holder of a Purchase Warrant of the opportunity to exercise its
right of acquisition pursuant thereto during the period of fourteen (14) days
after the giving of the certificate or notices set forth in Sections 4.13 and
4.14.
4.16 PROTECTION OF TRUSTEE. Except as provided in Section 9.2, the Trustee:
(1) shall not at any time be under any duty or responsibility to any
Warrantholder to determine whether any facts exist which may require
any adjustment contemplated by Section 4.10 or with respect to the
nature or extent of any such adjustment when made, or with respect
to the method employed in making the same;
(2) shall not be accountable with respect to the validity or value (or
the kind or amount) of any Common Shares or of any shares or other
securities or property which may at any time be issued or delivered
upon the exercise of the rights attaching to any Purchase Warrant;
(3) shall not be responsible for any failure of the Company to issue,
transfer or deliver Common Shares or certificates for the same upon
the surrender of any Purchase Warrants for the purpose of the
exercise of such rights or to comply with any of the covenants
contained in this Section; and
(4) shall not incur any liability or responsibility whatsoever or be in
any way responsible for the consequences of any breach on the part
of the Company of any of the representations, warranties or
covenants herein contained or of any acts of the directors,
officers, employees, agents or servants of the Company.
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4.17 RESERVATION OF SHARES. At any time during which the number of authorized
Common Shares in the capital of the Company is limited, the Company shall
reserve out of such authorized, but unissued, Common Shares a sufficient number
thereof to provide for the exercise of any Purchase Warrants issued pursuant
thereto, and shall cause such Common Shares to be issued as fully paid and
non-assessable upon the exercise of Purchase Warrants.
SECTION 5 -- ENFORCEMENT
5.1 SUITS BY WARRANTHOLDERS. All or any rights conferred upon any Warrantholder
by any of the terms of the Purchase Warrant Certificates or the Indenture or
both may be enforced by the Warrantholder by appropriate proceedings but without
prejudice to the right which is hereby conferred upon the Trustee to proceed in
its own name to enforce each and all of the provisions herein contained for the
benefit of the Warrantholders.
5.2 IMMUNITY OF SHAREHOLDERS, ETC. The Trustee and, by the acceptance of the
Purchase Warrant Certificates and as part of the consideration for the issue of
the Purchase Warrants, the Warrantholders hereby waive and release any right,
cause of action or remedy now or hereafter existing in any jurisdiction against
any incorporator or any past, present or future shareholder, director, officer,
employee or agent of the Company or any successor Company on any covenant,
agreement representation or warranty by the Company contained herein or in the
Purchase Warrant Certificates.
5.3 LIMITATION OF LIABILITY. The obligations hereunder are not personally
binding upon, nor shall resort hereunder be had to, the private property of any
of the past, present or future directors or shareholders of the Company or any
successor Company or any of the past, present or future officers, employees or
agents of the Company or any successor Company, but only the property of the
Company or any successor Company shall be bound in respect hereof.
5.4 WAIVER OF DEFAULT. Upon the happening of any default hereunder the Trustee
shall have power to waive any default hereunder upon such terms and conditions
as the Trustee may deem advisable, if, in the Trustee's opinion, the same shall
have been cured or adequate provision made therefor; provided that no delay or
omission of the Trustee to exercise any right or power accruing upon any default
shall impair any such right or power or shall be construed to be a waiver of any
such default or acquiescence therein and provided further that no act or
omission of the Trustee in the premises shall extend to or be taken in any
manner whatsoever to affect any subsequent default hereunder of the rights
resulting therefrom.
SECTION 6 -- CONCERNING THE WARRANTHOLDERS
6.1 MEETINGS. In this Section 6, "meeting" means a meeting of the Warrantholders
and "adjourned meeting" means a meeting adjourned in accordance with Section
6.8.
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6.2 CONVENING MEETINGS. The Trustee may and, upon receipt of a written request
executed under corporate seal by the Company or signed by Warrantholders holding
not less than twenty-five percent (25%) of the aggregate principal amount of
Instruments then outstanding, the Trustee shall convene a meeting, provided
adequate provision has been made by the Company or the Warrantholders for the
costs of convening and holding such a meeting. Any such written request shall
state generally the reason for the meeting and the business to be transacted
thereat.
6.3 PLACE OF MEETING. Every meeting shall be held in Calgary, Alberta, Canada.
6.4 NOTICE. The Trustee shall mail written notice of each meeting to each Holder
in the manner specified in Section 11 at least twenty (20) days before the date
of the meeting. The notice shall state the time and place of the meeting and
shall specify the general nature of business to be conducted thereat. It shall
not be necessary to specify in the notice of an adjourned meeting the nature of
the business to be transacted at the adjourned meeting. The accidental omission
to give notice of a meeting to any Warrantholder shall not invalidate any
resolution passed at any such meeting.
6.5 PERSONS ENTITLED TO ATTEND. The Company may and the Trustee shall, each by
its authorized representatives, attend a meeting but shall have no vote as such.
The respective legal advisers of the Company, of the Trustee and of any
Warrantholders may also attend a meeting but shall have no vote as such.
6.6 QUORUM. A quorum of the Warrantholders shall consist of two or more persons
present in person and owning or representing by proxy the owners of not less
than twenty-five percent (25%) of the aggregate principal amount of the
Instruments then outstanding.
6.7 CHAIRMAN. A Holder or a proxy for a Holder shall be nominated by the Trustee
to be the chairman of the meeting. If the person so nominated is not present
within twenty-five (25) minutes from the time fixed for the holding of the
meeting, the Warrantholders present in person or by proxy shall choose one of
their number to be chairman.
6.8 ADJOURNED MEETING. If a quorum of the Warrantholders is not present within
thirty (30) minutes from the time fixed for holding a meeting, the meeting shall
stand adjourned to a date not less than ten (10) days nor more than thirty (30)
days later and at a place in Calgary, Alberta, Canada, and at a time to be
specified by the chairman of the meeting. The Trustee shall promptly send a
notice of the adjourned meeting to all Warrantholders. At the adjourned meeting
two or more persons present in person and owning or representing by proxy the
owners of outstanding Purchase Warrants shall, in any event, constitute a quorum
for the transaction of the business for which the original meeting was convened.
6.9 VOTES. Votes may be given at a meeting in person or by a proxy appointed in
writing. A proxy need not be a Warrantholder. A poll shall be taken on every
question submitted to a meeting and shall, except as otherwise required herein,
require the affirmative vote of not less than a majority of the votes given on
the poll. If the vote is tied the motion shall not be carried.
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On a poll each Warrantholder shall be entitled to one vote for every Purchase
Warrant of which he is the registered holder. A declaration made by the chairman
of a meeting that a resolution has been carried or lost shall be conclusive
evidence thereof. In the case of joint registered holders of a Purchase Warrant,
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 be present in
person or by proxy, they shall vote together in respect of the Purchase Warrants
of which they are joint registered holders.
6.10 POWERS OF WARRANTHOLDERS. By resolution passed pursuant to this Section 6
by not less than two-thirds (2/3) of the votes cast in respect thereof (a
"WARRANTHOLDERS' RESOLUTION"), the Warrantholders may:
(1) agree to any modification, abrogation, alteration, compromise or
arrangement of the rights of the Warrantholders whether arising
under this Indenture, the Purchase Warrant Certificates or otherwise
in law, including rights of the Trustee held in trust for the
Warrantholders, which shall be agreed to by the Company; or
(2) direct or authorize the Trustee to exercise any discretion, power,
right, remedy or authority given to it by or under this Indenture or
the Purchase Warrant Certificates in the manner specified in such
resolution or to refrain from exercising any such discretion, power,
right, remedy or authority; or
(3) direct the Trustee to enforce any covenant on the part of the
Company contained in this Indenture or in the Instruments or to
waive any default by the Company in compliance with any provision of
this Indenture or the Purchase Warrant Certificates either
unconditionally or upon any conditions specified in such resolution,
whether or not the security hereof has become enforceable by reason
of such default; or
(4) amend, alter or repeal any resolution passed pursuant to this
Section 6.10.
6.11 MINUTES OF MEETINGS. The Trustee shall make and maintain minutes and
records of all resolutions and proceedings at a meeting. Such minutes and
records shall be available at the Office of the Trustee for inspection by a
Warrantholder or his authorized representative at reasonable times. If signed by
the chairman of the meeting or by the chairman of the next succeeding meeting of
the Warrantholders, such minutes shall be prima facie evidence of the matters
therein stated.
6.12 WRITTEN RESOLUTIONS. Notwithstanding the foregoing, a written resolution or
instrument signed in one or more counterparts by the holders of not less than
two-thirds (2/3) of the aggregate outstanding Purchase Warrants shall be deemed
to be the same as and to have the same force and effect as a Warrantholder's
Resolution duly passed at a meeting of the Warrantholders.
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6.13 BINDING EFFECT. A resolution of the Warrantholders passed pursuant to this
Section 6 shall be binding upon all Warrantholders. Upon the passing of a
Warrantholders' resolution at a meeting of the Warrantholders, or upon the
signing of a written resolution or instrument pursuant to Section 6.12 hereof
and delivery by the Company to the Trustee of an original, certified or notarial
copy, or copies, of such resolution as executed or passed by the Warrantholders
the Trustee shall be entitled to and shall give effect thereto, subject always
to Section 9.2 hereof.
SECTION 7 -- SUPPLEMENTAL INDENTURES
7.1 GENERAL. From time to time the Company, when authorized by the directors of
the Company, and the Trustee may, subject to the provisions of this Indenture,
and shall, when so required by this Indenture, execute and deliver indentures
supplemental hereto, which thereafter shall form part hereof, or may do and
perform any other acts and things for any one or more or all of the following
purposes:
(1) adding to the provisions hereof such additional covenants,
enforcement provisions and release provisions (if any) as in the
opinion of counsel are necessary or advisable, provided the same are
not in the opinion of the Trustee prejudicial to the interests of
the Warrantholders;
(2) adding to the covenants of the Company in this Indenture for the
protection of the Warrantholders;
(3) evidencing the succession (or successive successions) of other
companies to the Company and the covenants of, and obligations
assumed by, such successor (or successors) in accordance with the
provisions of this Indenture;
(4) making such provisions not inconsistent with this Indenture as may
be deemed necessary or desirable with respect to matters or
questions arising hereunder;
(5) giving effect to a Warrantholders' resolution;
(6) to rectify any ambiguity, defective provision, clerical omission or
mistake or manifest or other error contained herein or in any deed
or indenture supplemental or ancillary hereto; or
(7) for any other purpose not inconsistent with the provisions of this
Indenture.
SECTION 8 -- SUCCESSOR COMPANIES
8.1 AMALGAMATION, ETC. The Company shall not enter into any transaction whereby
all, or substantially all, of its undertaking and assets would become the
property of a successor company (whether by way of reconstruction,
reorganization, recapitalization, consolidation, amalgamation, merger, transfer,
sale or otherwise) unless prior to, or contemporaneously with, the
- 22 -
consummation of such transaction the successor company covenants with the
Trustee by an indenture or indentures satisfactory to the Trustee to perform all
the obligations on the part of the Company under this Indenture and to execute
and do all other instruments and things that the Trustee may reasonably require;
provided, however, that such reconstruction, reorganization, recapitalization,
consolidation, amalgamation, merger, transfer, sale or other transaction shall
be upon such terms as substantially to preserve, and not to impair, the rights
and powers of the Trustee and of the Warrantholders hereunder.
8.2 TRUSTEE TO CONSENT. Upon obtaining an opinion of Counsel that the provisions
of this Section 8 have been complied with, including an opinion that the
transaction is on such terms as substantially to preserve and not to impair the
rights and powers of the Trustee and the Warrantholders hereunder, the Trustee
shall consent to such transaction and execute and deliver such documents and do
such acts and things as, in its discretion, it may deem advisable, for the
completion of the transaction, whereupon the Company may be released and
discharged from liability under this Indenture and the Trustee may execute and
deliver all instruments which are necessary or reasonably required to that end.
8.3 SUBSTITUTIONS OF SUCCESSOR COMPANY. Whenever the provisions of this Section
8 have been complied with, the successor company shall succeed to, and be
substituted for, the Company with the same effect as if it had been named herein
as the Company, and shall possess and may exercise each and every right of the
Company hereunder.
SECTION 9 -- CONCERNING THE TRUSTEE
9.1 INDEMNITY. Before doing any act or thing pursuant hereto, the Trustee shall
be entitled to be indemnified by the Company or by the Warrantholders in an
amount and subject to terms and conditions satisfactory to it.
9.2 DUTIES OF TRUSTEE. By way of supplement to the provisions of any statute for
the time being relating to trustees, and notwithstanding any other provision of
this Indenture, in the exercise of the right, duties and obligations prescribed
or conferred by the terms of this Indenture, the Trustee shall exercise that
degree of care, diligence and skill that a reasonably prudent trustee would
exercise in comparable circumstances. Provided that the Trustee shall have
exercised such standard of care, diligence and skill, and in the absence of
wilful neglect, misconduct or fraud, the Company shall indemnify and save
harmless the Trustee from all loss, costs or damages it may suffer in
administering the trusts of this Indenture.
9.3 ACTION BY TRUSTEE. The Trustee shall not be obligated to do any act or thing
except when required to do so by this Indenture and, in the case of a default,
only when it has actual notice thereof.
- 23 -
9.4 CERTIFICATE OF THE COMPANY. The Trustee may accept a Certificate of the
Company as conclusive evidence of the truth of any fact relating to the Company
or its assets therein stated, but the Trustee may in its discretion require
further evidence or information before acting or relying on any such
certificate.
9.5 TRUSTEE MAY EMPLOY EXPERTS OR AGENTS. The Trustee may, at the Company's
expense, employ or retain such lawyers, accountants, engineers, appraisers or
other experts, advisers or agents as it may reasonably require for the purpose
of discharging its duties hereunder and shall not be responsible for any
misconduct, mistake or error of judgment on the part of any of them. The Trustee
may rely upon and act upon the opinion or advice of, or information obtained
from, any such lawyer, accountant, engineer, appraiser or other expert, adviser
or agent in relation to any matter arising in the administration of the trusts
hereof. The Trustee shall not incur any liability for the acts or omissions of
such lawyers, accountants, engineers, appraisers or other experts, advisers or
agents employed by the Trustee in good faith.
9.6 RESIGNATION OF TRUSTEE. The Trustee may resign its trust and be discharged
from all further obligations hereunder by giving to the Company written notice
at least ninety (90) days before the effective date of the resignation. If the
Trustee resigns, or becomes incapable of acting hereunder, the Company shall
forthwith appoint a new Trustee. Failing such appointment by the Company, the
retiring Trustee or any Warrantholders may apply to a court of competent
jurisdiction on such notice as such court may direct, for the appointment of a
new Trustee. The Warrantholders may, by Warrantholders' resolution, remove the
Trustee (including a Trustee appointed by the Company or by a court of competent
jurisdiction) and appoint a new Trustee. If any material conflict of interest in
the role of the Trustee as a fiduciary hereunder exists or shall arise, the
Trustee shall within ninety (90) days after ascertaining that it has such a
material conflict of interest, either eliminate such material conflict of
interest, or resign in the manner and with the effect as aforesaid.
9.7 INDENTURE LEGISLATION. The Company and the Trustee agree that each will at
all times in relation to this Indenture and any action to be taken hereunder,
observe and comply with and be entitled to the benefits of all Applicable
Legislation. If and to the extent that any provision of this Indenture limits,
qualifies or conflicts with any mandatory requirement of Applicable Legislation,
such mandatory requirement shall prevail.
9.8 MONEY HELD AND DEPOSITED. Any monies held by the Trustee in accordance with
the trusts hereunder may be deposited in the name of the Trustee in any of the
five largest, in terms of assets, Canadian chartered banks or, with the consent
of the Company, in the deposit department of the Trustee or any other loan or
trust company authorized to accept deposits under the laws of Canada or any
province thereof at the rate of interest then current on similar deposits.
Unless and until the Trustee shall have declared the principal of and interest
on the Instruments to be due and payable, the Trustee shall pay over to the
Company all interest received by the Trustee with respect to any investments or
deposits made pursuant to the provisions of this Section 9.8.
- 24 -
The Trustee shall incur no liability in respect of monies deposited with
anyone, including solicitors, except the Trustee unless the Trustee shall on its
own make such deposit without instructions or directions of the Company.
9.9 NOTICE. The Trustee shall not be required to give notice to third parties,
including the Warrantholders, of the execution of this Indenture.
9.10 USE OF PROCEEDS. The Trustee shall in no way be responsible for the use by
the Company of the proceeds of the issue hereunder.
9.11 NO INQUIRIES. The Trustee, prior to the certification and delivery of any
Purchase Warrant Certificates under any provisions of this Indenture, shall not
be bound to make any inquiry or investigation as to the correctness of the
matters set out in any of the resolutions, opinions, certificates or other
documents required by the provisions of this Indenture, but shall be entitled to
accept and act upon the resolutions, opinions, certificates or other documents.
The Trustee may nevertheless, in its discretion, require further proof in cases
where it deems further proof desirable. The Trustee shall not be bound to make
any inquiry or investigation as to the performance by the Company of the
Company's covenants hereunder.
9.12 TRUSTEE NOT REQUIRED TO GIVE SECURITY. The Trustee shall not be required to
give any bonds or security with respect to the execution of the Trust and powers
of this Indenture.
9.13 NO CONFLICT OF INTEREST. The Trustee represents to the Company that at the
date of execution and delivery by it of this Indenture there exists no material
conflict of interest in the role of the Trustee as a fiduciary hereunder but if,
notwithstanding the provisions of this Section 9.13, such a material conflict of
interest exists, the validity and enforceability of this Indenture and the
Instruments issued hereunder shall not be affected in any manner whatsoever by
reason only that such material conflict of interest exists but the Trustee
shall, within ninety (90) days after ascertaining that it has a material
conflict of interest, either eliminate such material conflict of interest or
resign in the manner and with the effect specified in Section 9.6 hereof.
9.14 TRUSTEE NOT ORDINARILY BOUND. Except as otherwise specifically provided
herein, the Trustee shall not be bound to do, observe or perform or see to the
observance or performance by the Company of any of the obligations herein
imposed upon the Company or of the covenants on the part of the Company herein
contained, nor in any way to supervise or interfere with the conduct of the
Company's business, and then only after it shall have been indemnified to its
satisfaction against all actions, proceedings, claims and demands to which it
may render itself liable and all costs, charges, damages and expenses which it
may incur by so doing. None of the provisions contained in this Indenture shall
require the Trustee to expend or risk its own funds or otherwise to 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.
- 25 -
9.15 TRUSTEE MAY DEAL IN PURCHASE WARRANTS. The Trustee may, in its personal or
other capacity, buy, sell, lend upon and deal in the Purchase Warrants and
generally contract and enter into financial transactions with the Company or
otherwise, without being liable to account for any profits made thereby.
SECTION 10 -- SATISFACTION AND DISCHARGE
10.1 GENERAL. Upon the earlier of:
(1) the date by which there shall have been delivered to the Trustee for
exercise or destruction all Purchase Warrant Certificates
theretofore certified hereunder; or
(2) the Time of Expiry;
and if all certificates representing Common Shares required to be issued in
compliance with the provisions hereof have been issued and delivered hereunder
and if all payments required to be made pursuant to Section 4 have been made in
accordance therewith, this Indenture shall cease to be of further effect and the
Trustee, on demand of and at the cost and expense of the Company and upon
delivery to the Trustee of a certificate of the Company stating that all
conditions precedent to the satisfaction and discharge of this Indenture shave
been complied with, shall execute proper instruments acknowledging satisfaction
of and discharging this Indenture. Notwithstanding the foregoing, the
indemnities provided to the Trustee by the Company hereunder shall remain in
full force and effect and survive the termination of this Indenture.
SECTION 11 -- NOTICES
11.1 NOTICE TO COMPANY. Any notice to the Company under the provisions of this
Indenture shall be valid and effective if delivered, or sent by telecopier
addressed to the Company at:
Seven Seas Petroleum Inc.
Suite 960
Three Post Oak Central
▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
▇.▇.▇.
Attention: Vice President - Finance
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
- 26 -
with a copy to:
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ Bank Plaza
Toronto, Ontario
M5J 2J7
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
and shall be deemed to have been effectively given on the date of delivery if
delivered, or the date of sending if sent by telecopier.
11.2 NOTICE TO THE WARRANTHOLDERS. Any notice to the Holders under the
provisions of this Indenture shall be valid and effective if delivered or sent
by ordinary post or sent by telegram, telex or telecopier addressed to such
Holder at their address appearing on the applicable register and shall be deemed
to have been effectively given on the date of delivery if delivered, on the
fifth Business Day following the date of the postmark on such notice, if mailed,
or the date of sending by telegram, telex or telecopier, with a copy to:
Yorkton Securities Inc.
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇
▇▇▇ ▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Any such notice of communication given with respect to an instrument which is
registered in more than one name may be given to any of the people named on the
register and such notice of communication shall be sufficient to all such
holders. Accidental error or omission in giving notice to any one or more
holders shall not invalidate any action or proceeding founded thereon.
If, by reason of a strike, lockout or other work stoppage, actual or threatened,
involving postal employees, any notice to be given to the Holders 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 Holders
or if delivered to the address for such Holders contained in the register
maintained by the Trustee, by telecopy or other means of prepaid transmitted and
recorded communication.
- 27 -
11.3 NOTICE TO TRUSTEE. Any notice to the Trustee under the provisions of this
Indenture shall be valid and effective if delivered, or sent by telecopier
addressed to the Trustee at:
Montreal Trust Company of Canada
▇▇▇ - ▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇.▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
Attention: Manager, Corporate Trust
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Yorkton Securities Inc.
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇
▇▇▇ ▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
and shall be deemed to have been effectively given on the date of delivery, or
the date of sending if sent by telecopier.
SECTION 12 -- ACCEPTANCE OF TRUST BY TRUSTEE
12.1 GENERAL. The Trustee hereby accepts the trusts declared and provided in
this Indenture and agrees to perform the same upon the terms and conditions
hereinbefore set forth.
SECTION 13 -- FURTHER ASSURANCE
13.1 FURTHER ASSURANCES. The parties agree from time to time, as may be
reasonably required by any party hereto, to execute and deliver such further and
other documents and do all matters and things which may be convenient or
necessary to carry out the intention of this Indenture more effectively and
completely.
- 28 -
The parties have executed this Indenture.
SEVEN SEAS PETROLEUM INC.
By: __________________________
Name:
Title:
MONTREAL TRUST COMPANY OF
CANADA
By: __________________________
Name:
Title:
By: __________________________
Name:
Title:
SCHEDULE 2.1 - FORM OF PURCHASE WARRANT
THE PURCHASE WARRANTS REPRESENTED BY THIS CERTIFICATE ("WARRANTS") AND THE
UNDERLYING COMMON SHARES ("WARRANT SHARES") HAVE NOT BEEN REGISTERED UNDER THE
UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT") OR ANY STATE
SECURITIES LAWS, AND MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES OR TO U.S.
PERSONS (AS DEFINED IN REGULATION S UNDER THE 1933 ACT) WITHOUT REGISTRATION
UNDER THE 1933 ACT AND ANY APPLICABLE STATE SECURITIES LAWS, UNLESS AN EXEMPTION
FROM REGISTRATION IS AVAILABLE.
[ADDITIONAL LANGUAGE TO BE INCLUDED ONLY FOR REG. S INVESTORS:]
IN ADDITION, THE WARRANTS MAY NOT BE EXERCISED BY OR ON BEHALF OF ANY U.S.
PERSON, THE WARRANTS MAY NOT BE EXERCISED IN THE UNITED STATES (EXCEPT AS
PERMITTED BY REGULATION S), AND THE WARRANT SHARES MAY NOT BE DELIVERED IN THE
UNITED STATES (EXCEPT AS PERMITTED BY REGULATION S), UNLESS, IN EACH CASE, THE
WARRANTS AND WARRANT SHARES HAVE BEEN REGISTERED UNDER THE 1933 ACT OR AN
EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE.
THE PURCHASE WARRANTS REPRESENTED BY THIS CERTIFICATE WILL BE VOID
AND OF NO VALUE UNLESS EXERCISED ON OR BEFORE 5:00 P.M. (CALGARY
TIME), AUGUST 7, 1998.
PURCHASE WARRANT CERTIFICATE
SEVEN SEAS PETROLEUM INC.
(A COMPANY CONTINUED UNDER THE LAWS OF THE YUKON TERRITORY)
WARRANT
CERTIFICATE NO. PW ________ ________________________ PURCHASE
WARRANTS entitling the holder to
acquire, subject to adjustment, one
Common Share for each Purchase Warrant
represented hereby.
THIS IS TO CERTIFY THAT _________________ (hereinafter referred to as the
"HOLDER") is the registered holder of that number of Purchase Warrants to
acquire Common Shares (as hereinafter defined) of Seven Seas Petroleum Inc. (the
"COMPANY") as set forth in this Purchase Warrant certificate (the "PURCHASE
WARRANT CERTIFICATE"). Each Purchase Warrant represented hereby entitles the
holder thereof to acquire, in the manner and subject to the restrictions and
adjustments set forth herein, at any time and from time to time until 5:00 p.m.
(Calgary time) (the "TIME OF EXPIRY") on August 7, 1998 (the "EXPIRY DATE"), one
fully paid and non-assessable common share ("COMMON SHARE") of the Company,
without nominal or par value, as such shares were constituted on August 7, 1997,
at a price of $15.00 per share.
2.1 - 1
The right to acquire Common Shares hereunder may only be exercised by the
holder within the time set forth above by:
a. duly completing and executing the exercise form attached hereto (the
"EXERCISE FORM");
b. surrendering this Purchase Warrant Certificate to Montreal Trust Company
of Canada (the "TRUSTEE") at the principal offices of the Trustee in
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇; and
c. remitting cash, certified cheque, bank draft or money order in lawful
money of the United States of America, payable to or to the order of the
Trustee at par in Calgary, Alberta, Canada for the aggregate purchase
price of the Common Shares so subscribed for.
These Purchase Warrants may be surrendered only upon personal delivery
hereof or, if sent by mail or other means of transmission, upon actual receipt
thereof by the Trustee at the office referred to above.
Upon surrender of these Purchase Warrants, the person or persons in whose
name or names the Common Shares issuable upon the exercise of the Purchase
Warrants are to be issued shall be deemed for all purposes (except as provided
in the Indenture hereinafter referred to) to be the holder or holders of record
of such Common Shares and the Company has covenanted that it will (subject to
the provisions of the Indenture) cause a certificate or certificates
representing such Common Shares to be delivered or mailed to the person or
persons at the address or addresses specified in the Exercise Form within five
(5) Business Days.
The registered holder of this Purchase Warrant Certificate may acquire any
lesser number of Common Shares than the number of Common Shares which may be
acquired for the Purchase Warrants represented by this Purchase Warrant
Certificate. In such event, the holder shall be entitled to receive a new
certificate for the balance of the Common Shares which may be acquired. To the
extent that the Warrantholder is entitled to receive on the exercise or partial
exercise thereof a fraction of a Common Share, such right may only be exercised
in respect of such fraction in combination with another Purchase Warrant or
other Purchase Warrants which in the aggregate entitles the Warrantholder to
receive a whole number of Common Shares.
No fractional Common Share or scrip certificate representing a fractional
Common Share shall be issued upon the exercise of any Purchase Warrants. If the
exercise of any Purchase Warrants would otherwise result in a fractional Common
Share, the Company shall, in lieu of issuing such fractional Common Share, pay
to the Warrantholder concerned, an amount in lawful money of the United States
of America equal to the value of the fractional Common Share based on the
Current Market Price on the Exercise Date.
The Purchase Warrants represented by this certificate are issued under and
pursuant to a Purchase Warrant Indenture (herein referred to as the "INDENTURE")
made as of August 7, 1997 between the Company and the Trustee. Reference is made
to the Indenture and any instruments supplemental thereto for a full description
of the rights of the holders of the Purchase Warrants and the terms and
conditions upon which the Purchase Warrants are, or are to be, issued and held,
with the same effect as if the provisions of the Indenture and all instruments
supplemental thereto were
2.1 - 2
set forth herein. By acceptance hereof, the holder assents to all provisions of
the Indenture. In the event of a conflict between the provisions of the Purchase
Warrant Certificate and the indenture, the provisions of the Indenture shall
govern. Capitalized terms used in the Indenture have the meaning herein as
therein, unless otherwise defined.
In the event of any alteration of the Common Shares, including any
subdivision, consolidation or reclassification, and in the event of any form of
reorganization of the Company including any amalgamation, merger or arrangement,
the holders of Purchase Warrants shall, upon exercise of the Purchase Warrants
following the occurrence of any of those events, be entitled to receive the same
number and kind of securities that they would have been entitled to receive had
they exercised their Purchase Warrants immediately prior to the occurrence of
those events.
The registered holder of this Purchase Warrant Certificate may, at any
time prior to the Expiry Date, upon surrender hereof to the Trustee at its
principal offices in ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇, exchange this Purchase Warrant
Certificate for other certificates entitling the holder to acquire, in the
aggregate, the same number of Common Shares as may be acquired under this
Purchase Warrant Certificate.
The holding of the Purchase Warrants evidenced by this Purchase Warrant
Certificate shall not constitute the holder hereof a shareholder of the Company
or entitle the holder to any right or interest in respect thereof except as
expressly provided in the Indenture or in this Purchase Warrant Certificate.
The Indenture provides that all holders of Purchase Warrants shall be
bound by any resolution passed at a meeting of the holders held in accordance
with the provisions of the Indenture and resolutions signed by the holders of
Purchase Warrants entitled to acquire a specified majority of the Common Shares
which may be acquired pursuant to all then outstanding Purchase Warrants.
The Purchase Warrants evidenced by this Purchase Warrant Certificate may
be transferred on the register kept at the Offices of the Trustee in Calgary,
Alberta, Canada, by the registered holder hereof or its legal representatives or
its attorney duly appointed by an instrument in writing in form and execution
satisfactory to the Trustee, only upon compliance with the conditions prescribed
in the Indenture and upon compliance with such reasonable requirements as the
Trustee may prescribe.
This Purchase Warrant Certificate shall not be valid for any purpose
whatever unless and until it has been certified by or on behalf of the Trustee.
Time shall be of the essence hereof. This Purchase Warrant Certificate
shall be governed by and construed in accordance with the laws of the Province
of Ontario and the federal law applicable therein and shall be treated in all
respects as an Ontario contract.
IN WITNESS WHEREOF the Company has caused this Purchase Warrant Certificate to
be signed by its duly authorized officers as of o, 1997.
Certified by:
MONTREAL TRUST COMPANY SEVEN SEAS PETROLEUM INC.
2.1 - 3
OF CANADA
By: ________________________ By: ________________________
Name: Name:
Title: Title:
2.1 - 4
EXERCISE FORM
TO: SEVEN SEAS PETROLEUM INC.
(a) The undersigned hereby exercises the right to acquire __________ Common
Shares of Seven Seas Petroleum Inc. as constituted on August 7, 1997 (or such
number of other securities or property to which such Purchase Warrants entitle
the undersigned in lieu thereof or in addition thereto under the provisions of
the Indenture referred to in the accompanying Purchase Warrant Certificate) in
accordance with and subject to the provisions of such Indenture.
The undersigned understands that it shall be a condition to the exercise
of the Purchase Warrants that all applicable securities legislation be
satisfied. In this regard, it shall be a condition to the exercise of the
Purchase Warrants that the undersigned initial one of the following
certifications:
____ REGISTRATION. The undersigned has been advised by the Company or its
counsel that the Purchase Warrants and the underlying Common Shares
("Warrant Shares") have been registered under the United States Securities
Act of 1933, as amended (the "1933 Act").
____ EXERCISE BY NON-U.S. PERSON. The undersigned certifies that it (a) is not
a "U.S. Person" as defined in Rule 902(o) of Regulation S under the 1933
Act, which definition includes, but is not limited to, a resident of the
United States of America, any states thereof, or its territories or
possessions (the "United States"), (b) is not exercising the Purchase
Warrants on behalf of a U.S. Person, and (c) is not executing this
Exercise Form in the United States unless the undersigned is excluded form
the definition of U.S. Person pursuant to Rule 902(o)(2) or (o)(7).
____ EXERCISE BY U.S. PERSON. The undersigned certifies that it (a) is a U.S.
Person, or has executed this Exercise Form in the United States; (b) is
purchasing the Warrant Shares solely for the undersigned's own account and
not with a view to or for sale in connection with any distribution of the
Warrant Shares; (c) is an accredited investor, as that term is defined in
Rule 502(a) of Regulation D under the 1933 Act; and (d) is either
experienced in or knowledgeable with regard to the business of the
Company, or either alone or with the undersigned's professional advisers
(named on this Exercise Form) is capable, by reason of knowledge and
experience in financial and business matters in general, and investments
in particular, of evaluating the merits and risks of an investment in the
Warrant Shares, is able to bear the economic risk of the investment and
has the capacity to protect the undersigned's own interests in connection
with the investment in the Warrant Shares.
2.1 - 5
(b) The Common Shares (or other securities or property) are to be issued as
follows:
Name: __________________________________________________________________
(Print clearly)
Address in full: ______________________________________________________
________________________________________________________________________
Social Insurance Number: ______________________________________________
Number of Common Shares: ______________________________________________
NOTE: If further nominees intended, please attach (and initial) schedule
giving these particulars.
Such Securities (please check one):
(a) _______ should be sent by first class mail to the following address:
____________________________________________________________
____________________________________________________________
(b) _______ should be held for pick up at the office of the Trustee at
which this Purchase Warrant Certificate is deposited.
If the number of Purchase Warrants exercised are less than the
number of Purchase Warrants represented hereby, the undersigned requests that
the new Purchaser Warrant Certificate representing the balance of the Purchase
Warrants be registered in the name of ________________________________________
______________________________________________________________________________
whose address is _____________________________________________________________
______________________________________________________________________________
Such securities (please check one):
(a) ________ should be sent by first class mail to the following address:
____________________________________________________________
____________________________________________________________
OR
2.1 - 6
(b) ________ should be held for pick up at the office of the Trustee at
which this Purchase Warrant Certificate is deposited.
In the absence of instructions to the contrary, the securities or
other property will be issued in the name of or to the holder hereof and will be
sent by first class mail to the last address of the holder appearing on the
register maintained for the Purchase Warrants.
DATED this _____ day of _________, 19___.
_____________________________ __________________________________
Signature Guaranteed (Signature of Warrantholder)
__________________________________
Print Full Name
__________________________________
__________________________________
__________________________________
Print full address
2.1 - 7
SCHEDULE 2.10 - FORM OF TRANSFER FORM
TRANSFER OF PURCHASE WARRANTS
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers to
_________ Purchase Warrants of Seven Seas Petroleum Inc. registered in the name
of the undersigned on the records of Montreal Trust Company of Canada
represented by the Purchase Warrant Certificate attached and irrevocably
appoints ________________ the attorney of the undersigned to transfer the said
securities on the books or register with full power of substitution.
If less than all the Purchase Warrants represented by this Purchase Warrant
Certificate are being transferred, the Purchase Warrant Certificate representing
those Purchase Warrants not transferred will be registered in the name appearing
on the face of this Purchase Warrant Certificate and such certificates (please
check one):
(a) _______ should be sent by first class mail to the following address:
____________________________________________________________
____________________________________________________________
(b) _______ should be held for pick up at the office of the Trustee at
which this Purchase Warrant Certificate is deposited.
DATED the ______ day of _____________, 19____.
_____________________________ __________________________________
Signature Guaranteed (Signature of Warrantholder)
INSTRUCTIONS:
1. Signature of the Warrantholder must be the signature of the person
appearing on the face of this Purchase Warrant Certificate.
2. If the Transfer Form is signed by a trustee, executor, administrator,
curator, guardian, attorney, officer of a corporation or any person acting
in a judiciary or representative capacity, the certificate must be
accompanied by evidence of authority to sign satisfactory to the Trustee
and the Company.
3. The signature on the Transfer Form must be guaranteed by an authorized
officer of a chartered bank, trust company or an Investment dealer who is
a member of a recognized stock exchange.
2.10 - 1
4. Purchase Warrants shall only be transferable in accordance with applicable
laws. The transfer of Purchase Warrants to a purchase not resident in a
Qualifying Jurisdiction may result in the Common Shares obtained upon the
exercise of the Purchase Warrants (whether after or before obtaining
receipts for a final prospectus relating to the distribution of Common
Shares upon exercise of Purchase Warrants) not being freely tradeable in
the jurisdiction of residence of the purchaser.
2.10 - 2