EXHIBIT 4.11 FORM OF WARRANT DECEMBER 31, 2002
SHARE PURCHASE WARRANT CERTIFICATE
(NON-TRANSFERABLE)
No. [Seq.]
----------
WARRANTS FOR UP TO [NUMBER] COMMON SHARES
STOCKGROUP INFORMATION SYSTEMS INC.
-----------------------------------
(Incorporated under the laws of the State of Colorado)
WITHOUT PRIOR WRITTEN APPROVAL OF THE EXCHANGE AND COMPLIANCE WITH ALL
APPLICABLE SECURITIES LEGISLATION, THE SECURITIES REPRESENTED BY THIS WARRANT
CERTIFICATE MAY NOT BE SOLD, TRANSFERRED, HYPOTHECATED OR OTHERWISE TRADED ON OR
THROUGH THE FACILITIES OF THE TSX VENTURE EXCHANGE OR OTHERWISE IN CANADA OR TO
OR FOR THE BENEFIT OF A CANADIAN RESIDENT UNTIL MAY 1, 2003. UNLESS OTHERWISE
PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THE SECURITIES SHALL NOT
TRADE THE SECURITIES BEFORE MAY 1, 2003.
THE WARANTS REPRESENTED HEREBY HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER
THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "U.S. SECURITIES ACT")
------------------------------------
OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE EXERCISED BY OR ON BEHALF OF
ANY U.S. PERSON UNLESS REGISTERED UNDER THE U.S. SECURITIES ACT OR PURSUANT TO
AN APPLICABLE EXEMPTION FROM REGISTRATION UNDER THE U.S. SECURITIES ACT.
IN ADDITION, THE SECURITIES ACQUIRED UPON EXERCISE OF SUCH WARRANTS HAVE NOT
BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OR THE SECURITIES LAWS OF ANY
STATE AND TRANSFER OF SUCH IS PROHIBITED EXCEPT IN ACCORDANCE WITH THE
PROVISIONS OF REGULATION S PROMULGATED UNDER THE U.S. SECURITIES ACT, PURSUANT
TO REGISTRATION UNDER THE U.S. SECURITIES ACT, OR PURSUANT TO AN AVAILABLE
EXEMPTION FROM REISTRATION. IN ADDITION, HEDGING TRANSACTIONS INVOLVING SUCH
SECURITIES MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE U.S. SECURITIES
ACT.
THE WARRANTS REPRESENTED HEREBY ARE NON-TRANSFERABLE AND WILL BE VOID AND OF NO
VALUE UNLESS EXERCISED ON OR BEFORE 4:30 P.M. (PACIFIC STANDARD TIME) ON
DECEMBER 31, 2003.
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THIS IS TO CERTIFY THAT, for value received, [FULL NAME OF HOLDER] (the
"Holder"), of [full address], is entitled to purchase up to a total of [NUMBER]
--------
fully paid and non-assessable common shares of no par value (each a "Share") of
STOCKGROUP INFORMATION SYSTEMS INC. (the "Company") at a purchase price of U.S.
- ------------------------------------
$0.22 per Share if subscribed for at any time prior to 4:30 p.m. (Pacific
Standard Time), on DECEMBER 31, 2003 (the "Time of Expiry").
1. The aforesaid right to purchase Shares may be exercised by the
Holder at any time and from time to time prior to the Time of Expiry by (i) duly
completing in the manner indicated and executing the subscription form attached
hereto, (ii) surrendering this Warrant to the Company at its principal office in
Vancouver, British Columbia, and (iii) paying the appropriate purchase price for
the Shares subscribed for either in cash or by certified cheque or money order
payable at par to the order of the Company. Upon said surrender and payment,
the Company will issue to the Holder of the subscription form the number of
Shares subscribed for and said Holder will become a shareholder or shareholders
of the Company in respect of the Shares as of the date of such surrender and
payment. Subject to the terms and conditions of this Warrant, the Company will,
as soon as practicable after said surrender and payment, mail to the person or
persons at the address or addresses specified in the subscription form a
certificate or certificates evidencing the Shares subscribed for. If the Holder
of this Warrant subscribes for a lesser number of Shares than the number of
Shares referred to in this Warrant, the Holder shall be entitled to receive a
further Warrant, without charge, in respect of Shares not subscribed for.
2. The Holder of this Warrant may surrender this Warrant to the Company
at its principal office in Vancouver, British Columbia, in exchange for new
certificates representing this Warrant entitling the bearer to purchase in the
aggregate the same number of Shares referred to in this Warrant.
3. The Holder hereof and the Company, by acceptance and issuance of
this Warrant, agree that this Warrant and all rights hereunder may not be
transferred or assigned.
4. Nothing contained herein shall confer any right upon the Holder
hereof or any other person to subscribe for or purchase any Shares at any time
subsequent to the Time of Expiry, and from and after such time this Warrant and
all rights hereunder shall be void and of no value.
5. This Warrant shall not constitute the Holder a member of the
Company.
6. This Warrant is also subject to the terms and conditions which are
attached to this Warrant as Schedule "A".
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7. Time shall be of the essence hereof.
IN WITNESS WHEREOF STOCKGROUP INFORMATION SYSTEMS INC. has caused its common
seal to be affixed and this Warrant to be signed by its authorized
representative effective this 31st day of December, 2002.
Signed by:
STOCKGROUP INFORMATION SYSTEMS INC.
--------------------------------------
(c/s)
Per:
-----------------------------------
Authorized Signatory
106
FORM OF SUBSCRIPTION
--------------------
To: STOCKGROUP INFORMATION SYSTEMS INC.
The undersigned holder of the attached Warrant hereby subscribes for
_______________ Shares of STOCKGROUP INFORMATION SYSTEMS INC. (the "Company")
pursuant to the attached Warrant at a purchase price of U.S. $0.22 per Share if
subscribed for on or before 4:30 p.m. (Pacific Standard Time) on DECEMBER 31,
2003, (or such number of other Shares or securities to which such subscription
entitles it in lieu thereof or in addition thereto under the terms and
conditions mentioned in the within Warrant) on the terms specified in the said
Warrant. This subscription is accompanied by cash or a certified cheque or
money order payable to or to the order of the Company for the whole amount of
the purchase price of the said Shares.
The undersigned hereby directs that the said Shares be registered as follows:
Name in Full Address Number of Shares
-------------- ------- ------------------
- --------------------------- --------------------------- --------------------
- --------------------------- --------------------------- --------------------
- --------------------------- --------------------------- --------------------
- --------------------------- --------------------------- --------------------
Total:
------------------ ------
DATED this _____ day of _____________, _________.
In the presence of:
- ----------------------------- ----------------------------------------------
Signature of Witness Signature of Warrant Holder
(Authorized Signatory if not an individual)
- ----------------------------- ----------------------------------------------
Name and address of Witness If Warrant Holder is not an individual,
name and title of Authorized Signatory
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Please print below your name and address in full:
Name: --------------------------------------
Address: --------------------------------------
--------------------------------------
--------------------------------------
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SCHEDULE "A"
------------
TERMS AND CONDITIONS
--------------------
OF
--
WARRANTS
--------
These are the Terms and Conditions which are attached to the Warrants issued by
STOCKGROUP INFORMATION SYSTEMS INC.
ARTICLE ONE - INTERPRETATION
----------------------------
Section 1.01 - Definitions
-----------
In these Terms and Conditions, unless there is something in the subject matter
or context inconsistent:
(a) "Company" means Stockgroup Information Systems Inc. or any successor
company referred to in Article 7;
(b) "Company's Auditors" means an independent firm of accountants duly
appointed as auditors of the Company;
(c) "Current Market Price" of the shares at any date means the closing
price for such shares for the trading day immediately prior to such
date on the TSX Venture Exchange (or if there is not a closing price
on such date, the average of the bid and ask prices) or, if on such
date the shares are not listed on the TSX Venture Exchange, on such
stock exchange or over-the-counter market upon which the shares are
listed or quoted;
(d) "Director" means a director of the Company for the time being, and
reference, without more, to action by the directors of the Company
shall mean action taken by the directors of the Company as a board, or
whenever duly empowered, action by an executive committee of the
board;
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(e) "herein", "hereby" and similar expressions refer to these Terms and
Conditions as the same may be amended or modified from time to time;
and the expressions "Article" or "Section" followed by a number refer
to the specified Article or Section of these Terms and Conditions;
(f) "Issuance Date" means that date on which the Company issued the
attached Warrants;
(g) "person" means an individual, company, partnership, trustee or any
unincorporated organization, and any words importing persons have a
similar meaning;
(h) "shares" means the no par value common shares in the capital of the
Company as constituted at the Issuance Date and any shares resulting
from any subdivision or consolidation of the shares;
(i) "Time of Expiry" means 4:30 p.m. (Pacific Standard Time) on December
31, 2003;
(j) "Warrants" means the Warrants of the Company issued and presently
authorized, as set out in Section 2.01 and for the time being
outstanding, and any other warrants made subject to these Terms and
Conditions;
(k) "Warrant Holders" or "Holders" means the bearers of the Warrants for
the time being; and
(l) "Warrant Holders' Request" means an instrument signed in one or more
counterparts by Warrant Holders entitled to purchase in the aggregate
not less than 25% of the aggregate number of shares which could be
purchased pursuant to all the Warrants outstanding for the time being,
requesting the Company to take some action or proceeding.
Section 1.02 - Gender and Number
-------------------
Unless herein otherwise expressly provided or unless the context otherwise
requires, words importing the singular include the plural and vice versa and
words importing the masculine gender include the feminine and neuter genders.
Section 1.03 - Interpretation Not Affected by Headings
-------------------------------------------
The division of these Terms and Conditions into Articles and Sections and the
insertion of headings are for convenience of reference only and will not affect
their construction of interpretation.
Section 1.04 - Currency
--------
Except as otherwise stated, all dollar amounts herein are expressed in United
States dollars.
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Section 1.05 - Applicable Law
---------------
The Warrants will be construed in accordance with the laws of British Columbia
and will be treated in all respects as British Columbia contracts.
ARTICLE TWO - ISSUE OF WARRANTS
-------------------------------
Section 2.01 - Issue of Warrants
-------------------
Warrants entitling the Holders thereof to purchase an aggregate of up to 25,000
shares are authorized to be issued by the Company on the basis of an issue of
25,000 Warrants where one Warrant is required to purchase one share of the
Company.
Section 2.02 - Additional Warrants
--------------------
Nothing contained herein shall preclude the Company from time to time to make
further equity or debt offerings and sell additional shares, warrants or grant
options or similar rights to purchase shares of its capital stock.
Section 2.03 - Issue in Substitution for Lost Warrants
--------------------------------------------
(a) Subject to Section 2.03(b), if a Warrant is mutilated, lost, destroyed
or stolen, the Company shall issue and deliver a new Warrant of like
date and tenor as the one mutilated, lost, destroyed or stolen, in
exchange for and in place of and upon cancellation of such mutilated
Warrant, or in lieu of, and in substitution for such lost, destroyed
or stolen Warrant, and the substituted Warrant will be entitled to the
benefit of these Terms and Conditions and rank equally in accordance
with its terms with all other Warrants issued or to be issued by the
Company.
(b) The applicant for the issue of a new Warrant will bear the cost of its
issue and in case of loss, destruction or theft, furnish to the
Company such evidence of ownership and of loss, destruction or theft
of the Warrant so lost, destroyed or stolen, as will be satisfactory
to the Company in its discretion, and such applicant may also be
required to furnish indemnity in amount and form satisfactory to the
Company in its discretion, and will pay the reasonable charges of the
Company in connection with such issuance of a new Warrant.
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Section 2.04 - Warrant Holder Not a Shareholder
------------------------------------
The holding of a Warrant will not constitute the Holder a member of the Company,
nor entitle him to any right or interest except as expressly provided in the
Warrant and herein.
ARTICLE THREE - OWNERSHIP AND TRANSFER
--------------------------------------
Section 3.01 - Exchange of Warrants
----------------------
(a) Warrants in any authorized denomination may, upon compliance with the
reasonable requirements of the Company, be exchanged for Warrants in
any other authorized denomination, of the same class and date of
expiry, entitling the Holder to purchase an equal aggregate number of
shares at the same subscription price and on the same terms as the
Warrants so exchanged.
(b) Warrants may be exchanged only at the office of the Company and any
Warrants tendered for exchange will be surrendered to the Company and
cancelled.
(c) On exchange of Warrants, the Company, except as otherwise herein
provided, may charge a sum not exceeding $10.00 for each new Warrant
issued, and payment of such charges and of any transfer taxes or
governmental or other charges required to be paid will be made by the
party requesting such exchange.
Section 3.02 - Ownership of Warrants
-----------------------
(a) The Company may deem and treat the registered holder of any Warrant as
the absolute owner of such Warrant, for all purposes, and will not be
affected by any notice or knowledge to the contrary.
(b) The registered holder of any Warrant will be entitled to the rights
evidenced by such Warrant free from all equities or rights of set-off
or counterclaim between the Company and the original or any
intermediate Holder and all persons may act accordingly, and the
receipt of any such bearer for the shares will be a good discharge to
the Company for the same and the Company will be bound to enquire into
the title of any such bearer.
112
Section 3.03 - Transfer of Warrants
----------------------
The Warrants are non-transferable.
ARTICLE FOUR - EXERCISE OF WARRANTS
-----------------------------------
Section 4.01 - Method of Exercise of Warrants
----------------------------------
The right to purchase shares conferred by the Warrants may be exercised, before
the Time of Expiry, by the Holder of such Warrant surrendering it, with a duly
completed and executed subscription in the form attached thereto and cash or a
certified cheque or money order payable to or to the order of the Company, in
Vancouver, British Columbia, for the purchase price applicable at the time of
surrender in respect of the shares subscribed for in lawful money of the United
States, to the Company at its principal office in the City of Vancouver.
Section 4.02 - Effect of Exercise of Warrants
----------------------------------
As soon as practicable after surrender and payment, and subject to the terms and
conditions set forth herein, the Company will cause to be delivered to the
person or persons in whose name or names the shares subscribed for are to be
issued as specified in such subscription or mailed to him or them at his or
their respective addresses specified in such subscription, a certificate or
certificates for the appropriate number of shares not exceeding those which the
Warrant Holder is entitled to purchase pursuant to the Warrant surrendered.
Upon issuance, such person or persons shall be deemed to have become the holder
or holders of record of such shares on the date of surrender and payment.
Section 4.03 - Subscription for Less than Entitlement
------------------------------------------
The Holder of any Warrant may subscribe for and purchase a number of shares less
than the number which he is entitled to purchase pursuant to the surrendered
Warrant. In the event of any purchase of a number of shares less than the
number which can be purchased pursuant to a Warrant, the Company will issue,
without charge, a new Warrant in respect of the balance of the shares which the
Holder was entitled to purchase pursuant to the surrendered Warrant and which
were not then purchased.
113
Section 4.04 - Warrants for Fractions of Shares
------------------------------------
No fractional shares shall be issued upon exercise of the Warrants. If any
fractional interest in a share would, except for the provisions of the first
sentence of this Section 4.04, be deliverable upon the exercise of a Warrant,
the number of shares to be issued to the Warrant Holder upon exercise of the
Warrant shall be rounded up to the next whole number.
Section 4.05 - Expiration of Warrants
------------------------
After the Time of Expiry all rights attaching to the Warrants will wholly cease
and terminate and the Warrants will be void and of no effect.
Section 4.06 - Exercise Price
---------------
The price per share which must be paid to exercise a Warrant (the "Exercise
Price") is as set forth on the face of the Warrant certificate, subject to
adjustment as provided for herein.
Section 4.07 - Adjustment of Number of Shares
----------------------------------
(1) The number of shares deliverable upon the exercise of the Warrants
will be subject to adjustment from time to time as follows:
(a) if and whenever, at any time from the Issuance Date until the
Time of Expiry, the Company shall:
(i) subdivide, redivide or change its outstanding shares into a
greater number of shares;
(ii) reduce, combine or consolidate its outstanding shares into a
smaller number of shares; or
(iii) issue shares to all or substantially all of the holders of
shares by way of a stock distribution (other than the issue
of shares to holders of shares as dividends by way of stock
dividend in lieu of a cash dividend paid in the ordinary
course or pursuant to any dividend reinvestment plan of the
Company in force from time to time);
the number of shares obtainable under each Warrant shall be
adjusted immediately after the effective date of such
subdivision, redivision, change, reduction, combination,
consolidation or stock dividend by multiplying the number of
shares theretofore obtainable on the exercise of the Warrants by
a fraction of which the numerator shall be the total number of
114
shares outstanding immediately after such date and the
denominator shall be the total number of shares outstanding
immediately prior to such date. Such adjustment shall be made
successively whenever any event referred to in this subsection
shall occur;
(b) if and whenever, at any time from the Issuance Date and prior to
the Time of Expiry, there is a reclassification of the shares or
a capital reorganization of the Company other than as described
in subsection 4.07(1)(a) or a consolidation, amalgamation,
merger, arrangement or other form of business combination of the
Company with or into any other body corporate, trust, partnership
or other entity, or a sale, lease, exchange 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 Warrant Holder who has not
exercised its right of acquisition, as at the effective date of
such reclassification, capital 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 shares such Warrant Holder would
otherwise be entitled to acquire, the number of shares or other
securities or property of the Company or of the body corporate,
trust, partnership or other entity resulting from such merger,
amalgamation or consolidation, or to which such sale or
conveyance may be made, as the case may be, that such Warrant
Holder would have been entitled to receive on such
reclassification, capital reorganization, consolidation,
amalgamation, merger, sale or conveyance, if, on the record date
or the effective date thereof, as the case may be, the Warrant
Holder had been the registered holder of the number of shares to
which such Warrant Holder was theretofore entitled upon such
exercise;
(c) if and whenever, at any time from the Issuance Date until the
Time of Expiry, the Company shall fix a record date for the
issuance of rights, options or warrants to all or substantially
all of the holders of shares entitling the holders thereof,
within a period expiring not more than 45 days after the date of
issue thereof, to subscribe for or purchase shares (or securities
convertible into or exchangeable for shares) at a price per share
(or having a conversion or exchange price per share) less than
95% of the Current Market Price on the earlier of such record
date and the date on which the Company announces its intention to
make such issuance, then, in each such case, the number of shares
obtainable under a Warrant will be adjusted immediately after
such record date so that it will equal the rate determined by
multiplying the number of shares theretofore obtainable on the
115
exercise of a Warrant in effect on such record date by a
fraction, of which the denominator shall be the total number of
shares outstanding on such record date plus a number of shares
equal to the number arrived at by dividing the aggregate price of
the total number of additional shares so offered for subscription
or purchase (or the aggregate conversion or exchange price of the
convertible or exchangeable securities so offered) by such
Current Market Price, and of which the numerator shall be the
total number of shares outstanding on such record date plus the
total number of additional shares so offered for subscription or
purchase (or into or for which the convertible or exchangeable
securities so offered are convertible or exchangeable). To the
extent that any such rights, options or warrants are not so
issued or any such rights, options or warrants are not exercised
prior to the expiration thereof, the number of shares obtainable
upon exercise of the Warrants will then be readjusted to the
number of shares obtainable upon exercise of the Warrants which
would then be in effect if such record date had not been fixed or
to the number of shares obtainable upon exercise of the Warrants
which would then be in effect based upon the number of shares (or
securities convertible into or exchangeable for shares) actually
issued upon the exercise of such rights, options or warrants, as
the case may be;
(d) if and whenever, at any time from the Issuance Date until the
Time of Expiry, the Company shall fix a record date for the
making of a distribution to all or substantially all of the
holders of shares of:
(i) shares of any class other than common shares whether of the
Company or any other corporation (other than shares
distributed to holders of shares as dividends paid in the
ordinary course as stock dividends);
(ii) rights, options or warrants (other than rights, options or
warrants exercisable by the holders thereof within a period
expiring not more than 45 days after the date of issue
thereof);
(iii) evidences of indebtedness; or
(iv) cash, securities or other property or assets (other than
cash dividends paid in the ordinary course);
then, in each such case, the number of shares obtainable on the
exercise of a Warrant will be adjusted immediately after such
record date so that it will equal the rate determined by
multiplying the number of shares theretofore obtainable on the
116
exercise of the Warrants in effect on such record date by a
fraction, of which the denominator shall be the total number of
shares outstanding on such record date multiplied by the Current
Market Price on the earlier of such record date and the date on
which the Company announces its intention to make such
distribution, less the aggregate fair market value (as determined
by the directors at the time such distribution is authorized) of
such shares or rights, options or warrants or evidences of
indebtedness or cash, securities or other property or assets so
distributed, and of which the numerator shall be the total number
of shares outstanding on such record date multiplied by such
Current Market Price. To the extent that such distribution is not
so made or to the extent that any such rights, options or
warrants so distributed are not exercised prior to the expiration
thereof, the number of shares obtainable upon the exercise of a
Warrant will then be readjusted to the number of shares
obtainable upon the exercise of a Warrant which would then be in
effect if such record date had not been fixed or to the number of
shares obtainable upon the exercise of a Warrant which would then
be in effect based upon such shares or rights, options or
warrants or evidences of indebtedness or cash, securities or
other property or assets actually distributed or based upon the
number or amount of securities or the property or assets actually
issued or distributed upon the exercise of such rights, options
or warrants, as the case may be; and
(e) the adjustments provided for in this Article 4 in the
subscription rights pursuant to any Warrants are cumulative.
(2) Any adjustment to the number of shares or other classes of shares in
the capital of the Company or securities or property which a Warrant
Holder is entitled to receive upon the exercise of the Warrants (the
"Exchange Basis") shall also include a corresponding adjustment to the
Exercise Price which shall be calculated by multiplying the Exercise
Price by a fraction the numerator of which shall be the Exchange Basis
prior to the adjustment and the denominator of which shall be the
Exchange Basis after the adjustment.
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Section 4.08 - Determination of Adjustments
------------------------------
If any questions arise with respect to the adjustments provided for in this
Article 4, such question will be conclusively determined by the Company's
Auditors, or, if they decline to act any other firm of nationally recognized
Chartered Accountants, in Vancouver, British Columbia, that the Company may
designate and who will have access to all appropriate records, and such
determination will be binding upon the Company and the Holders of the Warrants.
Section 4.09 - Postponement of Subscription
------------------------------
In any case in which this Article 4 shall require that an adjustment shall be
effective immediately after a record date for an event referred to herein, the
Company may defer, until the occurrence of such an event:
(a) Issuing to the Holder of any Warrant exercised after such record date
and before the occurrence of such event, the additional shares
issuable upon such exercise by reason of the adjustment required by
such event, and
(b) Delivering to such Holder any distributions declared with respect to
such additional shares after such Exercise Date and before such event;
provided, however, that the Company shall deliver to such Holder an appropriate
instrument evidencing such Holder's right, upon the occurrence of the event
requiring the adjustment, to an adjustment in the Exercise Price or the number
of shares purchasable on the exercise of any Warrant to such distributions
declared with respect to any additional shares issuable on the exercise of any
Warrant.
Section 4.10 - Notice of Adjustment
----------------------
(a) At least 14 days prior to the effective date or record date, as the
case may be, of any event which requires or might require adjustment
in any of the subscription rights pursuant to any of the Warrants,
including the Exercise Price and the number of shares which are
purchasable upon the exercise thereof, or such longer period of notice
as the Company shall be required to provide holders of shares in
respect of any such event, the Company shall give notice to the
Warrant Holders by way of a certificate of the Company specifying the
particulars of such event and, if determinable, the required
adjustment and the computation of such adjustment.
(b) In case any adjustment for which a notice in subsection 4.10(a) of
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this Section 4.10 has been given is not then determinable the Company
shall promptly after such adjustment is determinable, give notice to
the Warrant Holders of the adjustment and the computation of such
adjustment.
Section 4.11 - Securities Restrictions; Legends
----------------------------------
Notwithstanding any provision to the contrary contained in this Share Purchase
Warrant Certificate, no Shares will be issued pursuant to the exercise of any
Warrant if the issuance of such securities would constitute a violation of the
securities laws of any applicable jurisdiction, and the certificates
representing the Shares thereby issued will bear such legends as may, in the
opinion of counsel to the Company, acting reasonably, be necessary in order to
avoid a violation of any securities laws of any applicable jurisdiction or to
comply with the requirements of any stock exchange on which the 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 any such
laws, or the holder of any such legended certificate, at his or her expense,
provides the Company with evidence satisfactory in form and substance to the
Company (which may include an opinion of counsel of recognized standing
satisfactory to the Company to the effect that such holder is entitled to sell
or otherwise transfer such securities in a transaction in which such legends are
not required), such legended certificates may thereafter be surrendered to the
Company in exchange for a certificate which does not bear such legends.
ARTICLE FIVE - COVENANTS BY THE COMPANY
---------------------------------------
Section 5.01 - General Covenants
------------------
The Company covenants to the Holders that so long as any Warrants remain
outstanding:
(a) it will allot, reserve and keep available a sufficient number of
shares for the purpose of enabling it to satisfy its obligations to
issue common shares upon the exercise of the Warrants;
(b) it will cause the shares and the certificates representing the shares
from time to time acquired pursuant to the exercise of the Warrants to
be duly issued and delivered in accordance with the certificates
representing the Warrants and the respective terms hereof;
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(c) all shares which shall be issued upon exercise of the right to acquire
provided for herein and in the certificates representing the Warrants
shall be fully paid and non-assessable;
(d) it will maintain its corporate existence, carry on and conduct its
business in a prudent manner in accordance with industry standards and
good business practice, keep or cause to be kept proper books of
account in accordance with applicable law;
(e) it will ensure that all shares outstanding or issuable from time to
time (including without limitation the shares issuable on the exercise
of the Warrants) continue to be or are listed and posted for trading
on the TSX Venture Exchange and/or the NASD Over-the-Counter Bulletin
Board; and
(f) it will maintain its status as a reporting issuer in British Columbia
(and such other provinces in which the Company may become a reporting
issuer).
ARTICLE SIX - MEETING OF WARRANT HOLDERS
----------------------------------------
Section 6.01 - Right to Convene Meeting
---------------------------
(a) The Company may at any time and from time to time, and will on receipt
of a Warrant Holder's Request convene a meeting of the Warrant
Holders.
(b) If the Company fails within 15 days after receipt of such Warrant
Holder's request and indemnity to give notice convening a meeting,
such Warrant Holders may convene such meeting.
(c) Every such meeting will be held in the City of Vancouver, Province of
British Columbia, unless required by law to be held elsewhere.
Section 6.02 - Notice
------
At least 30 days' notice of any meeting will be given by the Company to the
Warrant Holders. Such notice will state the time when and the place where the
meeting is to be held and will state briefly the general nature of the business
to be transacted, but it will not be necessary for any such notice to set out
the terms of any resolution to be proposed or any of the provisions of this
Article.
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Section 6.03 - Chairman
--------
Some person nominated in writing by the Company will be Chairman of the meeting
and if no person is so nominated, or if the person so nominated is not present
within fifteen minutes from the time fixed for the holding of the meeting, the
Warrant Holders present in person or by proxy will choose some person present to
be Chairman.
Section 6.04 - Quorum
------
Subject to the provisions of Section 6.12, at any meeting of the Warrant Holders
a quorum will consist of Warrant Holders present in person or by proxy and
entitled to purchase at least 25% of the aggregate number of shares which could
be purchased pursuant to all the then outstanding Warrants of the class,
provided that at least two persons entitled to vote are personally present. If
a quorum of the Warrant Holders is not present within half-an-hour from the time
fixed for holding any meeting, the meeting, if summoned by the Warrant Holders,
or on a Warrant Holder's request, will be dissolved; but in any other case the
meeting will be adjourned to the same day in the next week (unless such day is a
non-business day, in which case it will be adjourned to the next following
business day) at the same time and place. At the adjourned meeting the Warrant
Holders present in person or by proxy will form a quorum and may transact the
business for which the meeting was originally convened notwithstanding that they
may not be entitled to purchase at least 25% of the aggregate number of shares
which can be purchased pursuant to all of the then outstanding Warrants.
Section 6.05 - Power to Adjourn
------------------
The Chairman of any meeting at which a quorum of the Warrant Holders is present
may with the consent of the meeting adjourn any such meeting and no notice of
such adjournment need be given except such notice, if any, as the meeting may
prescribe.
Section 6.06 - Show of Hands
---------------
Every question submitted to a meeting will be decided in the first place by a
majority of the votes given on a show of hands. At any such meeting, unless a
poll is demanded, a declaration by the Chairman that a resolution has been
carried or carried unanimously or by a particular majority will be conclusive
evidence of the fact.
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Section 6.07 - Poll
----
On any question submitted to a meeting and after a vote by show of hands, when
demanded by the Chairman or by one or more of the Warrant Holders acting in
person or by proxy and entitled to purchase in the aggregate at least 5% of the
aggregate number of shares which could be purchased pursuant to all the Warrants
for the time being outstanding, a poll will be taken in such manner as the
Chairman will direct. Questions other than extraordinary resolutions will be
decided by a majority of the votes cast on the poll.
Section 6.08 - Voting
------
On a show of hands every person who is present and entitled to vote, whether as
a Warrant Holder or as proxy for one or more absent Warrant Holders or both,
will have one vote. On a poll each Warrant Holder present in person or
represented by proxy duly appointed by instrument in writing will be entitled to
one vote in respect of each share which he is entitled to purchase pursuant to
the Warrant or Warrants then held by him. A proxy need not be a Warrant Holder.
Section 6.09 - Regulations
-----------
The Company may from time to time make or vary such regulations as it will think
fit:
(a) for the issue of voting certificates by any bank, trust company or
other depository, certifying that specified Warrants have been
deposited with it by a named Holder and will remain on deposit until
after the meeting, which voting certificate will entitle the Holders
to be present and vote at any such meeting and at any adjournment
thereof in the same manner and with the same effect as though the
holders so named in such voting certificates were the actual bearers
of the Warrants specified therein;
(b) for the deposit of voting certificates or instruments appointing
proxies at such place and time as the Company or the Warrant Holders
convening the meeting, as the case may be, may in the notice convening
the meeting direct;
(c) for the deposit of voting certificates or instruments appointing
proxies at some approved place or places other than the place at which
the meeting is to be held, and enabling particulars of such voting
certificates or instruments appointing proxies to be mailed, cabled or
telegraphed before the meeting to the Company at the place where the
same is to be held, and for the voting of proxies so deposited as
though the instruments themselves were produced at the meeting; and
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(d) for the form of the instrument of proxy.
Any regulations so made will be binding and effective and the votes given in
accordance therewith will be valid and will be counted. Save as such
regulations may provide, the only persons who will be recognized at any meeting
as the Holder of any Warrants, or as entitled to vote or be present at the
meeting in respect thereof, will be the registered holders of such Warrants.
Section 6.10 - Company May Be Represented
-----------------------------
The Company, by its officers and Directors and the legal advisors of the
Company, may attend any meeting of the Warrant Holders, but will have no vote as
such.
Section 6.11 - Powers Exercisable by Extraordinary Resolution
--------------------------------------------------
In addition to all other powers conferred upon them by any other provisions
hereof or by law, the Warrant Holders at a meeting will have the following
powers, exercisable from time to time by extraordinary resolution:
(a) to enforce any of the covenants on the part of the Company contained
in the Warrants, or to enforce any of the rights of the Warrant
Holders in any manner specified in such extraordinary resolution, or
to refrain from enforcing any such covenant or right;
(b) to waive any default on the part of the Company in complying with any
provision hereof either conditionally or upon any conditions specified
in such extraordinary resolution; and
(c) to consent to any amendment of the provisions of these Terms and
Conditions.
Section 6.12 - Meaning of "Extraordinary Resolution"
----------------------------------------
(a) The Expression "extraordinary resolution" when used herein means,
subject as hereinafter in this Section and in Section 6.15 provided, a
resolution proposed at a meeting of Warrant Holders duly convened for
that purpose, and held in accordance with the provisions in this
Article contained at which there are present, in person or by proxy,
Warrant Holders entitled to purchase at least 25% of the aggregate
number of shares which can be purchased pursuant to all the then
outstanding Warrants, and passed by the affirmative votes of Warrant
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Holders entitled to purchase not less than 66 2/3% of the aggregate
number of shares which can be purchased pursuant to all the then
outstanding Warrants represented at the meeting and voted upon such
resolution.
(b) If, at any such meeting called for the purpose of passing an
extraordinary resolution, Warrant Holders entitled to purchase 25% of
the aggregate number of shares which can be purchased pursuant to all
the then outstanding Warrants are not present in person or by proxy
within half-an-hour after the time appointed for the meeting, then the
meeting, if convened by Warrant Holders or on a Warrant Holder's
Request, will be dissolved, but in any other case it will stand
adjourned and the provisions of Section 6.04 will mutatis mutandis
apply.
Section 6.13 - Powers Cumulative
------------------
Any one or more of the powers or any combination of the powers to be exercisable
by the Warrant Holders by extraordinary resolution or otherwise may be exercised
from time to time and the exercise of any one or more of such powers or any
combination of powers from time to time will not be deemed to exhaust the right
of the Warrant Holders to exercise such power or powers or combination of powers
then or any power or powers or combination of powers thereafter from time to
time.
Section 6.14 - Minutes
-------
Minutes of all resolutions and proceedings at every such meeting will be made
and duly entered in books to be from time to time provided for that purpose by
the Company, and any such minutes, if signed by the Chairman of the meeting at
which such resolutions were passed or proceedings had, or by the Chairman of the
next succeeding meeting of the Warrant Holders, will be prima facie evidence of
the matters stated and until the contrary is proved, every such meeting, in
respect of the proceedings of which minutes will have been made, will be deemed
to have been duly convened and held, and all resolutions passed or proceedings
taken, to have been duly passed and taken.
Section 6.15 - Binding Effect of Resolutions
--------------------------------
Every resolution and every extraordinary resolution passed in accordance with
the provisions of this Article at a meeting of Warrant Holders will be binding
upon all Warrant Holders.
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Section 6.16 - Status of Warrant Holders
----------------------------
The Holders of Warrants of a particular class will not be entitled as such to
attend or vote at a meeting of the Holders of Warrants of another class, and any
action taken at a meeting of the Holders of Warrants of a particular class will
in no way affect the rights of the Holders of the Warrants of another class.
Section 6.17 - Instruments in Writing
------------------------
All actions which may be taken and all powers that may be exercised by the
Warrant Holders at a meeting held as provided in this Article may also be taken
and exercised by Warrant Holders holding at least two-thirds of the aggregate
number of Warrants then outstanding by an instrument in writing signed in one or
more counterparts by such Warrant Holders in person or by attorney duly
appointed in writing, and the expression "extraordinary resolution" when used in
these Terms and Conditions shall include an instrument so signed.
Section 6.18 - Binding Effect of Resolutions
--------------------------------
Except as otherwise provided herein, every resolution and every extraordinary
resolution passed in accordance with the provisions of this Article at a meeting
of Warrant Holders shall be binding upon all the Warrant Holders, whether
present at or absent from such meeting, and every instrument in writing signed
by Warrant Holders in accordance with Section 6.17 shall be binding upon all the
Warrant Holders, whether signatories thereto or not, and each and every Warrant
Holder shall be bound to give effect accordingly to every such resolution and
instrument in writing.
ARTICLE SEVEN - MODIFICATION OF TERMS, MERGER, SUCCESSORS
---------------------------------------------------------
Section 7.01 - Modification of Terms for Certain Purposes
-----------------------------------------------
From time to time the Company may, and it will, when so directed by these
presents, modify these Terms and Conditions, for any one or more or all of the
following purposes:
(a) giving effect to any extraordinary resolution passed as provided in
Article 6;
(b) adding to or altering these provisions in respect of the registration
and transfer of Warrants making provision for the exchange of Warrants
of different denominations, and making any modification in the form of
the Warrants which does not affect their substance;
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(c) for any other purpose not inconsistent with the terms hereof,
including the correction or rectification of any ambiguous, defective
provisions, errors or omissions herein if the Company has received an
opinion of its legal counsel that the rights of the Warrant Holders
will not be prejudiced thereby; and
(d) to evidence any succession of any Company and the assumption by any
successor of the covenants of the Company and in the Warrants
contained as provided in this Article.
Section 7.02 - No Extension of Expiry Date
-------------------------------
Notwithstanding Section 7.01, no modification will be made to the Time of Expiry
without the prior consent of each of the TSX Venture Exchange and the British
Columbia Securities Commission.
Section 7.03 - Company May Consolidate, etc. on Certain Terms
----------------------------------------------------
Nothing will prevent any consolidation, amalgamation or merger of the Company
with or into any other company or companies, but the company formed by such
consolidation or into which such merger will have been made will be a company
organized and existing under the laws of Canada or of the United States of
America, or any Province, State, District or Territory thereof, and will,
simultaneously with such consolidation, amalgamation or merger assume the due
and punctual performance and observance of all the covenants and conditions
hereof to be performed or observed by the Company.
Section 7.04 - Successor Company Substituted
-------------------------------
In case the Company is consolidated, amalgamated or merged with or into any
other company or companies, the successor company formed by such consolidation
or amalgamation, or into which the Company will have been merged, will succeed
to and be substituted for the Company hereunder. Such changes in phraseology
and form (but not in substance) may be made in the Warrants as may be
appropriate in view of such consolidation, amalgamation or merger.
Section 7.05 - Notice to the Company
------------------------
(a) Unless herein otherwise expressly provided, any notice to be given
hereunder to the Company shall be deemed to be validly given if
delivered, sent by registered letter, postage prepaid or telecopied:
126
To the Company: Stockgroup Information Systems Inc.
#500 - 750 W. Pender Street
Vancouver, British Columbia V6C 2T7
Fax: (604) 331-1194
Attention: Mr. Marcus New
-----------------------------
With a copy to: Devlin Jensen
Suite 2550, 555 West Hastings Street
Vancouver, BC V6B 4N5
Fax: (604) 684-0916
Attention: Mr. Peter Jensen
-------------------------------
and any such notice delivered in accordance with the foregoing shall be deemed
to have been received on the date of delivery or, if mailed, on the fifth
business day following the date of the postmark on such notice or, if
telecopied, on the next business day following the date of transmission provided
that its contents are transmitted and received completely and accurately.
(b) The Company may from time to time notify the Warrant Holders of a
change of address which, from the effective date of such notice and
until changed by like notice, shall be the address of the Company for
all purposes of these Warrant terms.
Section 7.06 - Notice to Warrant Holders
----------------------------
(a) Any notice to the Warrant Holders under the provisions of these Terms
and Conditions shall be valid and effective if delivered or sent by
telecopy or by ordinary post addressed to such holders at their post
office addresses appearing on the register hereinbefore mentioned and
shall be deemed to have been effectively given on the date of delivery
or, if mailed, on the fifth business day following the date of the
posting of such notice or, if telecopied, on the next business day
following the date of transmission provided that its contents are
transmitted and received completely and accurately.
(b) If, by reason of a strike, lockout or other work stoppage, actual or
threatened, involving postal employees, any notice to be given to the
Warrant 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 Warrant Holders or if delivered
127
to the address for such Warrant Holders contained in the register of
Warrants maintained by the Company, by cable, telegram, telex or other
means of prepaid transmitted and recorded communication.
128