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"The securities represented by this certificate are subject to a hold period
and may not be traded in British Columbia until 12:00 a.m. (midnight) on
January 5, 2001 except as permitted by the SECURITIES ACT (British Columbia),
the regulations made thereunder and BOR #98/7 issued by the B.C. Securities
Commission."
THE SPECIAL WARRANTS REPRESENTED BY THIS CERTIFICATE WILL BE VOID AFTER THE
EXPIRY TIME (AS DEFINED BELOW).
FEDORA INDUSTRIES INC.
(Incorporated under the laws of British Columbia)
No. SW99-01-20 _____________________SPECIAL WARRANTS each
entitling the holder to acquire one Share
and one Warrant for each Special Warrant
subject to adjustment as set out below.
SPECIAL WARRANTS FOR THE ACQUISITION OF
COMMON SHARES AND SHARE PURCHASE WARRANTS
THIS IS TO CERTIFY that, for value received,_______________________ of__________
___________________ (the "Special Warrantholder") is the registered holder of
the number of special warrants (the "Special Warrants") stated above and is
entitled to acquire, in the manner and at the time set forth hereafter, the
number of units ("Units") of FEDORA INDUSTRIES INC. (the "Company") as is equal
to the number of Special Warrants represented hereby, subject to adjustment as
set forth hereafter, all without payment of any consideration in addition to
that paid for the Special Warrants represented hereby. Each Unit is comprised of
one common share in the capital of the Company ("Share") and one share purchase
warrant ("Warrant") each whole Warrant entitling the holder to purchase one
common share ("Warrant Share") at a price of $0.50 per Warrant Share at any time
on or before 4:00 p.m. (Vancouver time) on January 5, 2001, and thereafter at a
price of $0.75 per Warrant Share at any time on or before 4:00 p.m. (Vancouver
time) on January 5, 2002.
The rights to acquire Shares and Warrants of the Company granted by this Special
Warrant Certificate may be exercised by the Special Warrantholder at any time
prior to 4:00 p.m. (Vancouver time) on the earlier of:
(i) the fifth business day following the date on which the British
Columbia Securities Commission issues written confirmation
that the Company has filed with the Commission an Annual
Information Form as contemplated by BOR #97/12 issued by the
Commission; and
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2
(ii) 330 days from the date of this Certificate,
in whole or in part, by surrender of this Special Warrant Certificate at the
offices of the Company together with the duly completed and executed exercise
form attached hereto as Appendix 1 in accordance with the terms and
conditions of this Special Warrant Certificate (such earlier date being
herein called the "Exchange Date").
If the Special Warrants have not been voluntarily exercised by the holders
thereof, prior to the Exchange Date, then such Special Warrants will be
deemed to have been exercised by the holder thereof immediately prior to the
Expiry Time, without any further action on the part of the holder.
The Shares in respect of which the Special Warrants are exercised will be
deemed to have been issued on the date of such exercise at which time each
Special Warrantholder will be deemed to have become the holder of record of
such Shares.
After the exercise of Special Warrants, the Company shall forthwith cause to
be mailed or delivered to each Special Warrantholder at its address specified
in the register for the Special Warrants maintained by the Company,
certificates for the appropriate number of Shares and Warrants issuable in
respect of such Special Warrants, not exceeding those which such Special
Warrantholder is entitled to acquire pursuant to the Special Warrants so
exercised.
The holder of this Special Warrant Certificate may at any time up to the
Exchange Date, upon written instructions delivered to the Company and payment
of applicable charges, if any, exchange this Special Warrant Certificate for
other Special Warrant Certificates evidencing Special Warrants entitling the
holder to acquire in aggregate the same number of Shares and Warrants as may
be acquired under this Special Warrant Certificate.
The Company covenants and agrees that all Shares which may be issued upon the
exercise of the Special Warrants and all Warrant Shares will, upon issuance,
be fully paid and non-assessable and free of all liens, charges and
encumbrances. The Company further covenants and agrees that during the period
within which the Special Warrants may be exchanged and the Warrants may be
exercised, the Company will at all times have authorized and reserved a
sufficient number of Common Shares to provide for issuance of the Shares on
exercise of the Special Warrants and issuance of Warrant Shares on exercise
of the Warrants.
The Special Warrants represented by this Special Warrant Certificate will be
void after 4:00 p.m. (Vancouver time) on the Exchange Date (the "Expiry
Time").
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3
THE FOLLOWING ARE THE ADDITIONAL TERMS AND CONDITIONS OF THE SPECIAL WARRANTS:
1. The exercise of the Special Warrants and issue of Shares
and Warrants herein provided for is subject to adjustment in accordance with
the following provisions:
(a) if and when at any time hereafter while the Special Warrants
are outstanding, the outstanding Common Shares of the Company
are subdivided or changed into a greater or consolidated into
a lesser number of shares, or the outstanding Common Shares of
the Company are reclassified, if the Special Warrantholder has
not fully exercised its rights hereunder prior to the record
date or effective date of such subdivision, change,
consolidation, or re-classification, then upon the exercise or
deemed exercise of any such rights thereafter it shall be
entitled to receive on the date of exercise the aggregate
number of securities of the Company of the appropriate classes
that the Special Warrantholder would have been entitled to
receive as a result of such subdivision, change, consolidation
or re-classification if it had so exercised its rights in
advance of such subdivision, change, consolidation or
re-classification;
(b) the adjustments provided for in the preceding paragraph are
cumulative. After any adjustment pursuant to this section, the
term "Common Share" where used in the preceding paragraph of
this section will be interpreted to mean the shares of any
class or classes which, as a result of all prior adjustments
pursuant to this section, the Special Warrantholder would have
been entitled to receive upon the exercise of the Special
Warrants;
(c) as a condition precedent to the taking of any action which
would require an adjustment in respect of the Special
Warrantholder's rights pursuant to the Special Warrants,
including the exercise price and the number and classes of
securities which are to be received upon the exercise thereof,
the Company shall take any corporate action which may, in the
opinion of its counsel, be necessary in order that the Company
may validly and legally issue a sufficient number of shares,
as fully paid and non-assessable shares, for the Special
Warrantholder to receive all of the shares to which it is
entitled in accordance with the provisions hereof; and
(d) immediately after the occurrence of any event which requires
an adjustment in any of the Special Warrantholder's rights
pursuant to the Special Warrants, including the exercise price
and the number and classes of securities which are to be
received upon the exercise thereof,
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4
the Company shall forthwith give written notice to the Special
Warrantholder of the particulars of such event and the
required adjustment.
2. The exercise terms of the Warrants issuable hereunder are
subject to adjustment in accordance with the same provisions as apply to
Shares issuable upon exercise of the Special Warrants.
3. In case at any time:
(a) the Company pays any dividend payable in stock upon its Common
Shares or makes any distribution to the holders of its Common
Shares;
(b) the Company offers for subscription PRO RATA to the holders of
its Common Shares any additional shares or stock of any class
or other rights;
(c) there is any capital reorganization, or reclassification of
capital stock of the Company, or consolidation or merger or
amalgamation of the Company with, or sale of all or
substantially all of its assets to, another corporation; or
(d) there shall be a voluntary or involuntary dissolution,
liquidation or winding-up of the Company;
then, and in any one or more of such cases, the Company shall give to the
Special Warrantholder, at least 20 days' prior written notice of the date on
which the books of the Company will close or a record is to be taken for such
dividend, distribution or PRO RATA offer, or for determining rights to vote
with respect to such reorganization, reclassification, consolidation, merger,
amalgamation, sale, dissolution, liquidation or winding-up and in the case of
any such reorganization, reclassification, consolidation, merger,
amalgamation, sale, dissolution, liquidation or winding-up, at least 20 days'
written notice of the date when the same is to take place. Such notice will
also specify, in the case of any such dividend, distribution or PRO RATA
offer, the date on which the holders of Common Shares are entitled thereto,
and each such notice must also specify the date on which the holders of
Common Shares shall be entitled to exchange their Common Shares for
securities or other property deliverable upon such reorganization,
reclassification, consolidation, merger, amalgamation, sale, dissolution,
liquidation or winding-up as the case may be.
4. Any notice, direction or other instrument required or
permitted to be given hereunder to the Company or the Special Warrantholder
must be in writing and may be given by sending the same by facsimile
transmission, or delivering the same to such party at the following address:
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5
(a) if to the Company:
FEDORA INDUSTRIES INC.
505 - 1155 Robson Street
Vancouver, B.C.
V6E 1B5
Fax Number: 689-1722
(b) if to the Special Warrantholder:
At the address shown on the subscription agreement entered
into between the Special Warrantholder and the Company.
Any notice, direction or instrument aforesaid shall:
(a) if by facsimile transmission, be deemed to have been given or
made upon completion of the facsimile transmission; or
(b) if delivered, be deemed to have been given or made at the time
of delivery.
Any party may give written notice of change of address in the same manner, in
which event such notice will thereafter be given to it as above provided at such
changed address.
5. In the event of any question arising with respect to the
calculation of the adjustments herein provided with respect to the Special
Warrants, such question will be conclusively determined by the Company's
auditors or if it has no auditors, its accountants, who shall have access to
all necessary records of the Company, and such determination will be binding
upon the Company and the Special Warrantholder.
6. As used herein and except as otherwise specifically
indicated herein, the term "Common Shares" means the Company's presently
authorized common voting shares without par value.
7. In case this Special Warrant Certificate shall become
mutilated or be lost, destroyed or stolen, the Company, subject to applicable
law, shall issue a new Special Warrant Certificate representing the Special
Warrants of like date and tenor as the one mutilated, lost, destroyed or
stolen upon surrender of and in place of and upon cancellation of the
mutilated Special Warrant Certificate or in lieu of and in substitution for
the lost, destroyed or stolen Special Warrant Certificate. The applicant for
the issue of a new Special Warrant Certificate representing the Special
Warrants pursuant to this section shall bear the cost of the issue thereof
and in case of loss, destruction or theft shall, as a condition precedent to
the issue thereof, furnish to the Company such
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6
evidence of ownership and of the loss, destruction or theft of the Special
Warrant Certificate so lost, destroyed or stolen as shall be satisfactory to
the Company in its discretion, and the applicant may also be required to
furnish an indemnity in amount and form satisfactory to it in its discretion,
and shall pay the reasonable charges of the Company in connection therewith.
8. Nothing in this Special Warrant Certificate or in the
holding of Special Warrants evidenced by this Special Warrant Certificate, or
otherwise, shall be construed as conferring upon a Special Warrantholder any
right or interest whatsoever as a shareholder, 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
any dividend or other distribution except as otherwise provided herein.
9. The Special Warrants evidenced by this Special Warrant
Certificate and the securities issuable upon the exercise of the rights
represented hereby have not been registered under the UNITED STATES
SECURITIES ACT OF 1933 (the "1933 Act"), as amended, nor under the securities
laws of any state in the United States. These Special Warrants may not be
exercised in the United States or by or on behalf of a person in the United
States or a U.S. person and the securities issuable upon exercise hereof may
not be delivered within the United States, and this Special Warrant and the
securities to be issued on the exercise of the rights represented hereby may
not be offered for sale, sold or otherwise transferred or assigned, directly
or indirectly, in the United States or to a U.S. person unless (a) such
securities are registered under the 1933 Act and the applicable laws of any
such state or (b) such exercise or transfer is effected in accordance with an
exemption from, or is otherwise not subject to, such registration
requirements of the 1933 Act. "United States" and "U.S. person" are defined
by Rule 902 of Regulation S under the 1933 Act. The Special Warrantholder
acknowledges that a legend to that effect may be placed upon all certificates
representing any securities issued to any U.S. Person or Persons within the
U.S. on the exercise of the rights represented by this Special Warrant
Certificate.
10. Notwithstanding anything contained in this Special Warrant
Certificate or in any subscription agreement under which these Special
Warrants were issued and sold, the Company:
(a) shall not issue or register a Special Warrant Certificate or
the Special Warrants represented thereby to or in the name of
a U.S. Person or the agent of any such U.S. Person or in the
name of a person who the Company has reasonable grounds to
believe is in the United States or is a U.S. Person or the
agent of a U.S. Person, unless the Company has received
evidence satisfactory to it that the acquisition of Special
Warrants by such person is in compliance with applicable
United States federal and state securities laws; and
(b) shall not register any transfer of a Special Warrant if it has
reasonable
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7
grounds to believe that such transfer is otherwise not in
accordance with applicable laws.
11. The Special Warrantholder may, at any time before the
Exchange Date, exercise all or any number of the Special Warrants represented
hereby, by surrendering to the Company a certificate or certificates
representing the number of Special Warrants to be exercised, together with
the duly completed and executed exercise form attached. Any such exercise is
subject to compliance with, and may be restricted by, the securities laws of
the Qualifying Jurisdiction and is further subject to the Special
Warrantholder providing such assurances and executing such documents as may,
in the reasonable opinion of the Company, be required to ensure compliance
with applicable securities legislation. If, at the time of the exercise of
the Special Warrants, there remain restrictions on resale under applicable
securities legislation on the Common Shares and Warrants acquired, the
Company may, if required on the advice of counsel, endorse the certificates
representing the Shares, Warrants and any Warrant Shares acquired with a
legend setting forth such resale restrictions, including the following legend:
The securities represented by this certificate are subject to
a hold period and may not be traded in British Columbia until
12:00 a.m. (midnight) on (HOLD PERIOD EXPIRY DATE INSERTED
HERE), except as permitted by the SECURITIES ACT (British
Columbia) and Regulations made thereunder.
12. In the event of any exercise of the Special Warrants in
accordance with the foregoing paragraph, the effective date of exercise will
be the date of delivery of this Special Warrant Certificate to the Company.
13. In the event of any exercise of the Special Warrants in
accordance with the foregoing paragraphs, certificates for the Shares ("Share
Certificates") and the Warrants ("Warrant Certificates") so acquired will be
delivered to the Special Warrantholder within a reasonable time, not
exceeding 10 days after the Special Warrants have been so exercised, and,
unless the Special Warrants have expired, if less than the full number of
Special Warrants are exercised, the Company will endorse this Special Warrant
Certificate to show the number of Shares and Warrants acquired upon exercise
and the number of Shares and Warrants remaining to be acquired hereunder and
will return this Special Warrant Certificate to the Special Warrantholder.
14. Unless earlier exercised by the Special Warrantholder, the
Special Warrants will be deemed to be exercised immediately prior to the
Expiry Time. In the case of a deemed exercise of the Special Warrants
pursuant to this paragraph, certificates representing the Shares and Warrants
issued on such deemed exercise will be delivered to the Special Warrantholder
within five days of the Exchange Date and this Special Warrant Certificate
will be deemed to be cancelled.
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8
15. The Company will use its best efforts to ensure that all
Common Shares outstanding or issuable from time to time are listed and posted
for trading on a stock exchange.
16. Upon the exercise or deemed exercise of any of the Special
Warrants represented by this Special Warrant Certificate, the Special
Warrantholder shall no longer have any rights under this Special Warrant
Certificate with respect to such Special Warrants, other than the right to
receive certificates representing its Shares and Warrants issuable on the
exercise of such Special Warrants, and such Special Warrants shall thereafter
be void and of no further value or effect.
17. Time shall be of the essence hereof.
18. The Special Warrants as represented by this Certificate
(and all amendments hereto and instruments supplemental thereto) shall be
governed by, performed, construed and enforced in accordance with the laws of
the Province of British Columbia and the laws of Canada applicable therein
and shall be treated in all respects as British Columbia contracts.
IN WITNESS WHEREOF the Company has caused this Special Warrant Certificate to be
executed this 5th day of January, 2000.
FEDORA INDUSTRIES INC.
Per:
Dennis Higgs, Director
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APPENDIX 1
EXERCISE FORM
TO: FEDORA INDUSTRIES INC.
The undersigned hereby exercises the right to acquire______________________
Units consisting of one common share and one non-transferable share purchase
warrant of FEDORA INDUSTRIES INC. as constituted on January 5, 2000 (or such
number of other securities or property to which such Special Warrants entitle
the undersigned in lieu thereof or in addition thereto).
The undersigned hereby represents and warrants to the Company as follows (check
one):
________ (i) the undersigned is not a U.S. person and the Special
Warrant is not being exercised within the United States or on
behalf of a U.S. person; or
________ (ii) the undersigned is a U.S. person or the Special
Warrant is being exercised within the United States or on
behalf or for the account or benefit of a U.S. person; or
________ (iii) the undersigned has delivered herewith to the Company
a written opinion of counsel to the effect that the exercise
of the Special Warrant by the undersigned is not subject to
registration under the SECURITIES ACT OF 1933, as amended, or
the securities laws of any state of the United States.
"United States" and "U.S. person" are as defined by Regulation S under the
UNITED STATES SECURITIES ACT OF 1933.
DATED at__________________________, this_____________day of____________, 200 .
--------
_________________________________
Signature Witnessed (Signature of Special
Warrantholder, to be the same as
appears on the face of this
Special Warrant Certificate)
(see Appendix 2 - Instructions
to Special Warrantholders)
Name of Special Warrantholder:
Address (please print):
__________________________________
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APPENDIX 2
INSTRUCTIONS TO SPECIAL WARRANTHOLDERS
TO EXERCISE
If the Special Warrantholder voluntarily exercises Special Warrants prior to the
Exchange Date, it must complete, sign and deliver:
(a) the Exercise Form, attached as Appendix 1; and
(b) the Special Warrant Certificates,
to the Company indicating the number of Units to be acquired. In such case, the
signature of such registered holder on the Exercise Form must be witnessed.
For the protection of the holder, it would be prudent to use registered mail if
forwarding by mail.
GENERAL
If the Exercise Form or the Transfer Form is signed by a trustee, executor,
administrator, curator, guardian, attorney, officer of a corporation or any
person acting in a fiduciary capacity, the Special Warrant Certificate must also
be accompanied by evidence of authority to sign satisfactory to the Company.
