MANAGEMENT INFORMATION CIRCULAR DATED AUGUST 20, 2000
DIGITAL ROOSTER.COM INC.
366 Bay Street
11th Floor
Toronto, Ontario
M5H 4B2
MANAGEMENT INFORMATION CIRCULAR
Solicitation of Proxies
- -------------------------
THIS MANAGEMENT INFORMATION CIRCULAR IS FURNISHED IN CONNECTION WITH THE
SOLICITATION OF PROXIES BY OR ON BEHALF OF THE MANAGEMENT OF DIGITAL ROOSTER.COM
INC. (THE "CORPORATION") FOR USE AT THE ANNUAL AND SPECIAL MEETING OF
SHAREHOLDERS TO BE HELD ON SEPTEMBER 29, 2000 AND AT ANY AND ALL ADJOURNMENTS
THEREOF (THE "MEETING"). It is expected that the solicitation will be primarily
by mail, possibly supplemented by telephone. The Corporation may also pay
brokers, investment dealers or nominees holding common shares in their names or
in the names of their principals for their reasonable expenses in sending
solicitation material to their principals.
No person is authorized to give any information or to make any representations
other than those contained in this circular and, if given or made, such
information must not be relied upon as having been authorized.
APPOINTMENT OF PROXY
- ----------------------
A SHAREHOLDER HAS THE RIGHT TO APPOINT A PERSON (WHO NEED NOT BE A SHAREHOLDER
OF THE CORPORATION) TO ATTEND, ACT AND VOTE FOR HIM AND ON HIS BEHALF AT THE
MEETING OR ANY ADJOURNMENT(S) THEREOF, OTHER THAN THE PERSONS DESIGNATED IN THE
ENCLOSED FORM OF PROXY, BY INSERTING SUCH PERSON'S NAME IN THE SPACE PROVIDED IN
THE FORM OF PROXY AND BY DELETING THE NAMES THEREIN.
All common shares (hereinafter referred to as "common shares" or "shares")
represented by properly executed proxies received by the Secretary of the
Corporation in a timely fashion will be voted or withheld from voting in
accordance with the instructions of the Shareholders on any ballot that may be
called for at the Meeting; if a choice is specified in respect of any matter to
be acted upon, the shares will be voted accordingly. IN THE ABSENCE OF SUCH
DIRECTION, THE SHARES WILL BE VOTED FOR THE ELECTION OF DIRECTORS; FOR THE
APPROVAL OF AN ORDINARY RESOLUTION AUTHORIZING THE CORPORATION TO ISSUE BY WAY
OF PRIVATE PLACEMENT UP TO 30,580,866 COMMON SHARES FOR SUCH CONSIDERATION AS
THE DIRECTORS MAY IN THEIR DISCRETION FROM TIME TO TIME APPROVE; AND FOR THE
APPOINTMENT OF AUDITORS AND THE AUTHORIZATION OF THE DIRECTORS OF THE
CORPORATION TO FIX THE AUDITORS' REMUNERATION, ALL AS MORE PARTICULARLY
DESCRIBED UNDER THOSE HEADINGS IN THIS MANAGEMENT INFORMATION CIRCULAR.
THE ENCLOSED FORM OF PROXY, WHEN PROPERLY EXECUTED, CONFERS DISCRETIONARY
AUTHORITY WITH RESPECT TO ALL AMENDMENTS OR VARIATIONS TO MATTERS IDENTIFIED IN
THE NOTICE OF MEETING OR OTHER MATTERS WHICH MAY PROPERLY COME BEFORE THE
MEETING.
The enclosed form of proxy must be dated and executed by the Shareholder or his
attorney authorized in writing, or if the Shareholder is a corporation, under
its corporate seal or by a duly authorized officer or attorney thereof. If the
form of proxy is executed by an attorney, the authority of the attorney to act
must accompany the form of proxy. The form of proxy must be received by the
Corporation's Transfer Agent, Heritage Trust Company, 4 King Street West, Suite
1320, Toronto, Ontario, M5H 1B6 on or before the close of business on the last
day preceding the day of the meeting or any adjournment thereof at which the
proxy is to be used, or delivered to the Chairman of the meeting on the day of
the meeting or any adjournment thereof prior to the commencement of the Meeting.
REVOCATION OF PROXIES
- -----------------------
Pursuant to Section 110(4) of the Business Corporations Act (Ontario), any
Shareholder giving a proxy may revoke a proxy by instrument in writing executed
by the Shareholder or by his attorney authorized in writing, or if the
Shareholder is a corporation, under the corporate seal or by a duly authorized
officer or attorney thereof and deposited at the Corporation's registrar and
transfer agent, Heritage Trust Company, 4 King Street West, Suite 1320, Toronto,
Ontario, M5H 1B6, on or before the close of business on the last day preceding
the day of the meeting or any adjournment thereof at which the proxy is to be
used, or delivered to the Chairman of the meeting on the day of the meeting or
any adjournment thereof prior to the commencement of the Meeting, to be held on
September 29, 2000 or any adjournment thereof or in any other manner permitted
by law.
All matters to be submitted to the Shareholders at the Meeting, unless otherwise
stated herein, require for approval a favourable majority of the votes cast at
the Meeting.
ACQUISITION OF WEB DREAM INC.
-----------------------------
At the Annual and Special meeting of shareholders held on December 14,
1999, the shareholders of the Corporation, among other things, approved the
acquisition of all the issued and outstanding common shares of Web Dream Inc.
("Web Dream").
WEB DREAM IS AN INTERNET E-COMMERCE ADULT ENTERTAINMENT DESTINATION THAT
PROVIDES ONLINE UPSCALE ADULT CONTENT INCLUDING NUDE AND SEMI-NUDE MODELS AS
WELL AS OPERATING ITS OWN DESTINATION WEB SITES. WEB DREAM'S GOALS ARE TO BRAND
ITS WEB SITES AS THE PREMIERE ONLINE ADULT ENTERTAINMENT DESTINATIONS AND BUILD
A SIGNIFICANT WORLDWIDE COMMUNITY OF LOYAL CLIENTS WHO ENJOY WEB DREAM'S UNIQUE
ADULT ENTERTAINMENT.
Web Dream's original content includes photographs, streaming video, audio
on demand and video conferencing.
Web Dream believes it is among the 10 largest membership sites in the world.
Web Dream foresees this market ultimately ending up with little more than a
handful of significant players.
Web Dream's content is one facet of Web Dream's activities. While the more
profitable segment of Web Dream's business is from the membership sites it
provides, the content segment provides a steady and growing income stream. The
following is the current content provided by Web Dream:
- - Hot Girls Live - Two live strip rooms including chat where the end user can
interact with the girls and ask them to perform certain tasks. This service
is sold to other webmasters for use on their members' section with the
ability for them to personalize it and give it their logo. The first room
runs from 10.00 AM to 2.00 AM and the second room runs from 6.00 PM to 6.00
AM. This means that currently the show is live 20 hours a day with 8 hours
a day with both rooms live. Many content providers charge members extra for
the content. Web Dream was the first of its kind to include it.
- - Laura's Condo - A live voyeur feed, which operates 24/6 and follows a woman
in her condo, cleaning, working out showering and "playing". The show
features "Nude Mondays" where she cleans, cooks and does other chores while
naked. The show has a loyal following and continues to appeal to many due
to the nature of the feed. The fact that a user can "spy" on someone 24 hrs
a day and that you even get to see someone do everyday tasks makes this
person really seem like the girl next door. Web Dream has a significant
number of people tuning in to watch her sleep.
- - Teen Dreams - 2 Young girls live in a house and are filmed 24/7 including
taking baths together, playing and having slumber parties with other girl
friends.
- - XXX Theater - 1,800 XXX movie clips. These are divided in various
categories as well as different transfer rates. Through its collaboration
with Adults Only Video ("AOV"), the largest chain of adult video stores in
North America, Web Dream has access to a library of hundreds of movies with
broadcast rights. Web Dream adds new content regularly. The movies are
presented in Vivo format which requires a plug-in download of about 700 Kb.
- - Full Length Movies - It is all in the name. Instead of clips people get the
whole movie, from beginning to end. Both the XXX Theaters and the Full
Length Movies are provided by AOV with which Web Dream has a contract to
supply the movies in exchange for 1/3 of the revenue generated from this
minus the expenses. This deal also includes Hot Girls Live. These movies
are streamed in a newer format called Emblaze which does not require a
plugin.
- - Thumbnail Indexed Pictures - This gallery has over 12,000 pictures in
different categories. Web Dream provides these pictures from CV
productions. They shoot all their own pictures and Web Dream purchases them
on a fixed amount per picture per month with the right to resell this
online as a service. This means webmasters pay Web Dream a certain amount
per month for which Web Dream gives their customers access to its picture
database.
- - Japanese hardcore - 200 Full length Japanese hardcore movies which number
is growing rapidly.
In all these scenarios Web Dream provides the complete setup, servers
(computers), bandwidth (internet access), customer support, updates and related
services. Wholesale customers merely have to provide a link to Web Dream's
content from a members protected area. Management believes that Web Dream
membership sites will be the source of growth in the future.
Unlike most companies which either provide content to web sites or have a
web site where they buy content, Web Dream not only specializes in both fields
but also management believes it has become a trusted name within the industry.
INTEREST OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON
- ----------------------------------------------------------------
Except as set out herein and except as insofar as they may be shareholders
of the Corporation, no director or officer of the Corporation, nor any associate
or affiliate of the foregoing persons has any material interest, direct or
indirect, by way of beneficial ownership or otherwise, in matters to be acted
upon at the Meeting.
VOTING OF COMMON SHARES AND PRINCIPAL HOLDERS THEREOF
-----------------------------------------------------
The holders of the common shares of the Corporation will be entitled to
vote at the Meeting on all matters. Pursuant to Section 100(2) of the Business
Corporations Act (Ontario) and in accordance with National Policy Statement No.
41 adopted by the Ontario Securities Commission, each holder of a common share
of the Corporation at the close of business on August 25, 2000 (the "Record
Date") is entitled to one (1) vote for each such share held, except to the
extent that such shares may have been transferred after the Record Date and the
transferee produces properly endorsed share certificates or otherwise
establishes that he owns the shares and requests, not later than ten (10) days
before the Meeting, that his name be included in the list of Shareholders. As
at August 25, 2000, 30,580,866 common shares of the Corporation were issued and
outstanding.
To the best knowledge of the Directors or Senior Officers of the Corpor-ation,
at the date hereof, the following persons beneficially own, directly or
indirectly, or exercise control or direction over securities of the Corporation
carrying more than ten (10) percent of the voting rights attached to any class
of voting securities of the Corporation.
Approximate number of Voting
Shares, Beneficially Owned, Directly Percentage of
Name of Shareholder or Indirectly, or over which Control or Outstanding Voting
Direction is Exercised Shares Represented
- ------------------- --------------------------------------- -------------------
John A. van Arem 9,600,000 31.39%
Anthony Korculanic 8,000,000 26.16%
ELECTION OF DIRECTORS
---------------------
The Board of Directors of the Corporation consists of four directors, John A.
van Arem, Hubert Mockler, Brian Usher-Jones and Sean Husvar. There is currently
one vacancy on the board of directors. The persons named in the enclosed form
of proxy intend to vote for the election of those nominees whose names are set
forth below. The nominees unless otherwise noted are now members of the Board
of Directors and have been since the dates indicated. Management does not
contemplate that any nominee will be unable to serve as a director, but, if such
an event should occur for any reason prior to the Meeting, the persons named in
the enclosed form of proxy reserve the right to vote for another nominee in
their discretion, unless authority to vote the proxy for the election of
directors has been withheld. Each Director elected will hold office until the
next Annual Meeting of Shareholders or until his successor is duly elected,
unless the office is earlier vacated in accordance with the by-laws of the
Corporation.
The Corporation does not have an Executive Committee of its Board of
Directors. Pursuant to Section 158(1) of the Business Corporations Act
(Ontario) the Corporation has an Audit Committee which is comprised of Messrs.
John A. van Arem, Brian Usher-Jones and Sean Husvar.
The following table and notes thereto state the names of all persons proposed to
be nominated for election as directors, all other major positions and offices
with the Corporation presently held by them, their principal occupation or
employment, the year in which they became directors of the Corporation, and the
approximate number of voting shares of the Corporation beneficially owned,
directly or indirectly, or over which control or direction is exercised by each
of them as at August 25, 2000: (1)
Number of Voting
Present Principal Shares Beneficially
Occupation or Owned, Directly or
Employment with the Indirectly or over
Name, Address Corporation Year Became Which Control or
Director Direction is
Exercised(1)
- ----------------- --------------------- ----------- --------------------
John A. van Arem President, Chief 1999 9,600,000
Toronto, Ontario Executive Officer and
Director
- ----------------- --------------------- ----------- --------------------
Hubert Mockler Director 1999 159,217
Toronto, Ontario
- ----------------- --------------------- ----------- --------------------
Brian Usher-Jones Businessman 1999 140,000
Toronto, Ontario
- ----------------- --------------------- ----------- --------------------
Sean Husvar Chairman and CEO, 1999 Nil
Buffalo, New York EdgeNet Inc.
- ----------------- --------------------- ----------- --------------------
(1) The information as to shares beneficially owned, directly or indirectly,
not being within the knowledge of the Corporation, has been furnished by
the respective directors individually.
Unless a proxy specifies that the shares it represents should be withheld
from voting in the election of directors, the potential proxy holders named in
the accompanying proxy intend to use it to vote for the election of the nominees
as indicated.
STATEMENT OF EXECUTIVE COMPENSATION
-----------------------------------
Remuneration of Directors
During the fiscal period ended March 31, 2000, no sum was paid to any of
the directors of the Corporation in respect of directors' fees.
Change of Control
The Corporation has no plan or arrangement pursuant to which compensation
was paid or may be paid to Executive Officers of the Corporation during the most
recently completed financial periods or the current financial year in view of
compensating such officers in the event of the termination of employment or in
the event of a change in responsibilities following a change in control.
Executive Remuneration
The number of Named Executive Officers of the Company is one. The
aggregate cash compensation paid to Mr. John A. van Arem, President, for
services rendered during the year ended March 31, 2000 (including salaries,
fees, commissions and bonuses) was $90,000.
Executive Compensation
The following table sets forth the compensation paid to John A. van Arem,
the President and Chief Executive Officer of the Corporation in respect of the
fiscal years 2000, 1999 and 1998.
SUMMARY COMPENSATION TABLE
Long Term
Annual Compensation Compensation Payou
Awards ts
Securities' Restricted
Under Shares or LTIP All Other
Year Sala Bonus Other Options Restricted Payou Compens
ry ($) Annual Granted Share Units ts ation
($) Compens (#) ($) ($) ($)
ation
- ----------- ---- ----- ----- ------- ------- ----------- ----- ---------
John A. 2000 90,0 -- -- 240,000 -- -- --
Van Arem 1999 00 -- -- -- -- -- --
President & 1998 20,0 -- -- -- -- -- --
CEO 00
20,0
00
(1) "LTIP" or "long term incentive plan" means any plan which provides
compensation intended to serve as incentive for performance to occur over a
period longer than one financial year, but does not include option or stock
appreciation right plans.
1) Stock Option Plan
The Amended and Restated Stock Option Plan of the Corporation (the "Plan")
was established to provide for the grant of stock options to directors,
officers, and employees of, and consultants to, the Corporation and its
subsidiaries, and any employee of any management company providing services to
the Corporation.
The Plan is administered by the board of directors and no more than
3,000,000 shares may be issued at any time under the Plan pursuant to options
granted at any time under the Corporation's stock option plan.
The table below sets forth share options granted under the Plan to the
Named Executive Officer of the Corporation during the fiscal year ended March
31, 2000.
a. OPTION GRANTS DURING THE MOST RECENTLY COMPLETED FINANCIAL YEAR
Market Value
Of Securities
Percentage Of Underlying
Number Of Options Exercise Or Options On
Securities Granted To Base Price The Date Of Expiration
Name Under Employees In ($/Security) Grant Date
Options Financial Year ($/Security)
Granted
- ---------- ---------- ---------------- ------------ -------------- ----------
John A. van 240,000 15.1% 0.25 N/A Feb/17/03
Arem
The table below sets forth information related to options of the named
executive officer of the Corporation.
AGGREGATE OPTION EXERCISES DURING THE MOST RECENTLY COMPLETED FINANCIAL YEAR AND
FINANCIAL YEAR-END OPTION VALUES
VALUE OF
NO. UNEXERCISED UNEXERCISED IN-
SECURITIES AGGREGATE OPTIONS AT FY-END THE-MONEY OPTIONS
B. N ACQUIRED ON VALUE (#) AT FY-END ($)
a EXERCISE REALIZED ($) EXERCISABLE/UNEXER EXERCISABLE/UNEXER
m CISABLE CISABLE
e
- ----------- ----------- ------------- ------------------- ------------------
John A. van Nil Nil 240,000/Nil Nil/Nil
Arem
Directors' and Officers' Liability Insurance
The Corporation does not maintain insurance for the benefit of its
directors and officers against certain liabilities incurred by them in their
capacity as directors or officers of the Corporation or its subsidiaries.
Compensation Committee
The Corporation does not have a compensation committee. The Board of
Directors carries out the duties of such a committee. The Board of Directors
meets on compensation matters as and when required with respect to executive
compensation.
Pension Plan
THE CORPORATION DOES NOT MAINTAIN A PENSION PLAN FOR ITS EMPLOYEES,
OFFICERS OR DIRECTORS.
INDEBTEDNESS OF DIRECTORS AND SENIOR OFFICERS
NO DIRECTOR OR SENIOR OFFICER OR EMPLOYEE OR ANY ASSOCIATE OR AFFILIATE OF
ANY SUCH DIRECTOR OR SENIOR OFFICER IS INDEBTED TO THE CORPORATION. NO DIRECTOR
OR SENIOR OFFICER OR EMPLOYEE OR ANY ASSOCIATE OR AFFILIATE OF ANY SUCH DIRECTOR
OR SENIOR OFFICER HAS BEEN INDEBTED TO THE CORPORATION AT ANY TIME SINCE THE
BEGINNING OF THE LAST COMPLETED FINANCIAL YEAR OF THE CORPORATION.
ii) ISSUE OF ADDITIONAL COMMON SHARES
The principal source of capital presently available to the Corporation is
equity financing. In order for the Corporation to raise funds to carry on its
business, the Corporation might arrange private placement subscriptions for
shares or for securities convertible into shares.
Shareholders are being asked to approve an ordinary resolution allowing the
Corporation's directors to cause the Corporation to enter into one or more
private placement financing transactions during the ensuing 12 month period
providing for the issuance of up to 30,580,866 shares or units (each unit
consisting of one common share and one warrant) at then market prices (less
allowable discounts) and upon such terms as may be approved by the directors of
the Corporation. It is not the current intention of management to issue the
entire number of shares authorized pursuant to the proposed resolution; however,
it is the policy of the Canadian Venture Exchange ("CDNX") that the shareholders
of the Corporation are required to approve a private placement (including
warrants granted as part of such placement) if the number of shares to be issued
to one placee, or to a group of placees who intend to vote their shares as a
group, is equal to or greater than 20% of the number of the Corporation's shares
outstanding after giving effect to the issuance of the private placement shares
(including the exercise of any warrants attached thereto). In addition,
shareholder approval is required if the private placement may result in or is
part of a transaction involving a change in the effective control of the
Corporation or the creation of a control block.
Management considers that it is in the best interests of the Corporation to
obtain a blanket authorization from the shareholders for additional private
placements to be entered into during the next 12 months. Blanket approval may
obviate the necessity of obtaining shareholder approval for each specific
private placement, thereby reducing the time required to obtain regulatory
approval therefore and decreasing the Corporation's administrative costs
relating to such private placements.
The private placements will only be negotiated if management believes the
subscription price is reasonable in the circumstances and if the funds are
required by the Corporation to continue or expand its activities. Each private
placement transaction authorized hereunder will be made with placees who may or
may not deal at arm's length with the Corporation; however, the subscription
prices will comply with the policies of the CDNX. The following sets out the
policy of the CDNX on pricing of private placements.
In a private placement of equity shares, the purchase price shall not be
less than the market price for those shares. The CDNX defines "market price" as
being, subject to certain exceptions, the closing price of the company's listed
shares on the trading day before the day the CDNX receives the news release or
notice letter from the company's authorized agent (which must be on the
agreement day and which, if a notice letter, must be followed as soon as
possible by a news release) and if the securities are subject to an applicable
hold period imposed under the Securities Regulation (which securities are
required to be legended if the company is an Exchange Issuer), less the
following discounts from the closing price:
Closing Price Discount
-------------- --------
Up to $0.50 25%
$0.51 to $2.00 20%
above $2.00 15%
and not be less than $0.15 per share.
The CDNX defines "agreement day" as the day on which a private placement is
agreed to by the listed company and all placees or, in the case of a brokered
private placement, the day the listed company agrees to enter into an agency
agreement with an agent with respect to the private placement.
In the event that the shareholders do not pass the resolution authorizing
the Corporation to issue such common shares by way of one or more private
placement transactions with placees wherein the placees in each private
placement may or may not deal at arm's length to the Corporation, the
Corporation may be required to seek shareholder approval for private placements
negotiated thereafter.
An "ordinary resolution" means a resolution passed by the shareholders of
the Corporation at a general meeting or by a simple majority of the votes cast
in person or by proxy.
PROXIES RECEIVED IN FAVOUR OF MANAGEMENT WILL BE VOTED FOR THE APPROVAL
AUTHORIZING THE CORPORATION TO ISSUE COMMON SHARES BY WAY OR ONE OR MORE PRIVATE
PLACEMENT TRANSACTIONS UNLESS A SHAREHOLDER HAS SPECIFIED IN THE PROXY THAT HIS
SHARES ARE TO BE VOTED AGAINST SUCH RESOLUTION.
iii) APPOINTMENT OF AUDITORS
Management proposes to nominate Silver Gold Glatt & Grosman LLP, Chartered
Accountants, Toronto, Ontario, the present auditors, for reappointment as the
auditors of the Corporation to hold office until the close of the next annual
meeting of shareholders. It is intended that on any ballot that may be called
relating to the appointment and remuneration of auditors, the Shares represented
by proxies in favour of the named management nominees will be voted for the
appointment of Silver Gold Glatt & Grosman LLP as auditors of the Corporation
with remuneration to be fixed by the directors, unless a Shareholder specifies
in his proxy that his Shares are to be withheld from voting in the appointment
of auditors.
iv) AUDITED FINANCIAL STATEMENTS
The financial statements for the fiscal year ended March 31, 2000 and the
report of the auditors thereon will be submitted to the meeting of shareholders.
Receipt at such meeting of the auditors' report and the Corporation's financial
statements for its last completed fiscal period will not constitute approval or
disapproval of any matters referred to therein.
ITEM 11. MISCELLANEOUS
The management of the Corporation knows of no amendments, variations or
other matters which are likely to be brought before the Meeting. HOWEVER, IF
ANY AMENDMENTS, VARIATIONS, OR OTHER MATTERS OF WHICH THE MANAGEMENT IS NOT NOW
AWARE ARE PROPERLY PRESENTED TO THE MEETING FOR ACTION, IT IS THE INTENTION OF
THE PERSONS NAMED IN THE ENCLOSED FORM OF PROXY TO VOTE SAID PROXIES IN
ACCORDANCE WITH THEIR JUDGMENT ON SUCH MATTERS.
The undersigned hereby certifies that the contents herein, and the sending
hereof, have been approved by the Board of Directors of the Corporation for
mailing to the shareholders, directors and auditors of the Corporation.
Non-registered shareholders that wish to be placed on the Corporation's
supplemental mailing list for interim reports are also requested to complete,
sign and return the enclosed request form to Heritage Trust Company.
BY ORDER OF THE BOARD OF DIRECTORS
August 28, 2000 (Signed) John A. van Arem,
President and Chief Executive Officer
DIGITAL ROOSTER. COM INC.
-------------------------
PROXY FOR ANNUAL AND SPECIAL MEETING OF SHAREHOLDERS
----------------------------------------------------
SOLICITED ON BEHALF OF MANAGEMENT
---------------------------------
The undersigned shareholder of Digital Rooster.com Inc. hereby appoints John A.
van Arem, President and Chief Executive Officer, whom failing, Hubert Mockler,
Director, whom failing, _________________________ as nominee of the undersigned
to attend and act for and on behalf of the undersigned at the annual and special
meeting of the shareholders of the Corporation to be held September 29, 2000 and
at any adjournment(s) thereof and without limiting the general authority and
power hereby given to such nominee, the shares represented by this proxy are
specifically directed to be voted as indicated on the reverse side of this
proxy.
This proxy will be voted and where a
choice is specified, will be voted as
directed. WHERE NO CHOICE IS SPECIFIED,
THIS PROXY WILL CONFER DISCRETIONARY
AUTHORITY AND WILL BE VOTED IN FAVOUR OF
THE MATTERS REFERRED TO ON THE REVERSE
SIDE HEREOF.
THIS PROXY ALSO CONFERS DISCRETIONARY
AUTHORITY TO VOTE IN RESPECT OF ANY
OTHER MATTER WHICH MAY PROPERLY COME
BEFORE THE MEETING AND IN SUCH MANNER AS
SUCH NOMINEE IN HIS JUDGMENT MAY
DETERMINE.
A SHAREHOLDER HAS THE RIGHT TO APPOINT A
PERSON TO ATTEND AND ACT FOR HIM AND ON
HIS BEHALF AT THE MEETING OTHER THAN THE
PERSONS DESIGNATED IN THIS FORM OF
PROXY. SUCH RIGHT MAY BE EXERCISED BY
FILLING THE NAME OF SUCH PERSON IN THE
BLANK SPACE PROVIDED AND STRIKING OUT
THE NAMES OF MANAGEMENT'S NOMINEES
ABOVE.
DATED this day of, 2000.
Signature of Shareholder
Name of Shareholder (print)
Number of Shares
NOTE:
(a) A person appointed as nominee to represent a shareholder need not be a
shareholder.
(b) Where this proxy is signed by a corporation, its corporate seal must be
affixed.
FOR [_] or WITHHOLD VOTE the election of directors nominated by management as
set forth in the Management Information Circular.
FOR [_] or AGAINST the Corporation to entering into one or more private
placement financing transactions with subscribers during the 12 month
period, providing for the issuance of up to 30,580,866, shares or
units (one unit consisting of one common share and one warrant) at
then market prices (less allowable discounts) and upon such terms as
may be approved by the directors of the Corporation, subject to
regulatory approval and in compliance with the policies of the
Canadian Venture Exchange
FOR [_] or WITHHOLD VOTE authorizing the appointment of Silver Gold Glatt &
Grosman LLP, Chartered Accountants, as auditors for the Corporation
and authorizing the directors of the Corporation to fix their
remuneration.