Hosted Data Transaction rights offering
2007-09-12 18:46 MT - Rights Offering
TSX bulletin 2007-1303
Rights symbol: HDX.RT
Cusip No. for rights: 44109B 11 1
Shareholder entitlement: One right for each Class A voting common share held on the record date.
Terms of the rights: Six rights plus 80 cents for one unit
Expiry time: 5 p.m. (Toronto time), Oct. 11, 2007
Ex rights date: Sept. 14, 2007
Record date: Sept. 18, 2007
Designated market-maker: Dundee Securities Corp.
Holders of Class A voting common shares of Hosted Data Transaction Solutions Inc. of record as of the close on Sept. 18, 2007, will be granted the right to subscribe for one unit of the company for each six common shares held on such record date at a subscription price of 80 cents per unit. Each unit will comprise one common share and one-half of one common share purchase warrant. Each whole warrant entitles the holder to purchase one common share at a price of $1.25 per share at any time until 5 p.m. (Toronto time) on the date that is the earlier of:
1. Aug. 3, 2009;
2. The 10th day after the day on which the company gives notice to the holders of the warrants that the common shares trade at a closing market price on Toronto Stock Exchange of greater than $1.75 per common share for a period of 20 consecutive trading days at any time after four months and one day after the closing of the rights offering.
The rights are evidenced by transferable rights certificates registered in the names of holders of common shares of record on the record date on the basis of one right for each common share held, six rights and the sum of 80 cents being required to subscribe for one unit. The rights will expire at 5 p.m. (Toronto time) on Oct. 11, 2007. The common shares and warrants comprising the units will separate immediately upon issue. The common shares will commence trading on an ex distribution basis at the open on Friday, Sept. 14, 2007, at which time the rights will be posted for trading on a when-issued basis.
The warrants will not be listed on the TSX.
The offering of rights is being made to each holder of common shares of record on the record date with an address in any of the provinces in Canada. Rights certificates will not be forwarded to shareholders who are not residents of any of the provinces of Canada. The company will notify ineligible shareholders that the rights certificates to which they are entitled will be issued to and held by Equity Transfer & Trust Co. as agent for the benefit of such shareholders. Equity Transfer will use its best efforts to sell the rights evidenced by the rights certificates, and the proceeds from the sale of such rights net of any applicable costs and expenses will be paid to the ineligible shareholders on a pro rata basis by cheque.
Holders of rights certificates may subscribe for units by completing Form 1 on the certificate and delivering it together with payment of 80 cents per unit subscribed for to the principal office of Equity Transfer in Toronto so as to be received there prior to the expiry time. The company will not issue fractional common shares comprising the units upon the exercise of rights. Where the issuance of rights would appear to entitle the holder of rights to fractional common shares comprising the units, the holder's entitlement will be reduced to the next lowest whole number of common shares. The company will not issue fractional warrants upon the exercise of rights. Where the issuance of rights would appear to entitle the holder of rights to fractional warrants, the holder's entitlement will be reduced to the next lowest whole number of warrants.
A holder of a rights certificate who has fully exercised all of the rights evidenced by such certificate will be entitled to subscribe for additional units, if available, at a price of 80 cents per unit, by completing Form 2 as well as Form 1 on the rights certificate and forwarding such certificate to Equity Transfer as indicated above so as to be received there prior to the expiry time, together with payment for each unit subscribed for under the basic subscription right as well as for each unit sought under the additional subscription privilege. If the total number of units subscribed for under the additional subscription privilege exceeds the number of units available, the available units will be allotted on a pro rata basis. If a participant in the additional subscription privilege is allotted a number of units less than the number specified in Form 2 by such subscriber, Equity Transfer will refund the excess of the total subscription price paid by such participant.
It is anticipated that the rights offering circular and the rights certificates will be mailed to shareholders on or about Sept. 20, 2007. The rights offering circular discloses that, although the company has not retained a managing dealer or a soliciting dealer group for the purpose of soliciting the exercise of rights, the company will pay a subscription fee of four cents for each unit issued under this rights offering in respect of each subscription procured by a registered dealer, provided that such registered dealer procures subscriptions for at least 6,250 units, and that the registered dealer submits to Equity Transfer the participants' list prior to the expiry time of the rights offering.
Mandatory trading and settlement rules
Trade dates Settlement dates
Oct. 5, 2007 Oct. 10, 2007
Oct. 9, 2007, and Oct. 10, 2007 Cash next day
Oct. 11, 2007 Cash same day
1. All trades on Oct. 5, 2007, will be for special settlement on Oct. 10, 2007. These trades will appear on the CDS settlement report and will be recorded with a settlement date of Oct. 10, 2007.
2. All trades on Oct. 9, 2007, and Oct. 10, 2007, will trade for cash settlement the following business day. Trades on Oct. 11, 2007, from the open to noon will be for same-day cash settlement.
3. Selling participating organizations must have the rights that are being sold in their possession or owed to them through clearing prior to such sale.
4. Should fail positions exist on the expiry date, purchasing participating organizations have the option of paying for the rights purchased and demanding delivery of the securities into which the rights are exercisable. Reference should be made to Rule 5-303. Such demand shall be made before 4 p.m. on the expiry date of Oct. 11, 2007.
Investors should contact their broker for information or advice on their investment.
