99.4
(1) The authorized capital of the Corporation is amended such that the classes
and any maximum number of shares that the Corporation is authorized to issue are
as follows:
(a) five thousand (5,000) shares of one class to be designated as Series A
preferred shares (the "SERIES A SHARES");
(b) five thousand (5,000) shares of one class to be designated as Series B
preferred shares (the "SERIES B SHARES"); and
(c) one hundred (100) shares of one class to be designated as common shares (the
"COMMON SHARES").
(2) THE RIGHTS, PRIVILEGES, RESTRICTIONS AND CONDITIONS ATTACHING TO EACH CLASS
OF SHARES ARE AS FOLLOWS:
PROVISIONS ATTACHING TO THE SERIES A SHARES
The Series A Shares, as a class, shall have attached thereto the
following rights, privileges, restrictions and conditions:
1. DIVIDENDS
1.1 The holders of the Series A Shares shall be entitled to receive and the
Corporation shall pay thereon, as and when declared by the board of directors
out of the moneys of the Corporation properly applicable to the payment of
dividends, fixed preferential cash dividends at the rate of ten per cent (10%)
per annum on the Liquidation Preference (defined hereafter) payable quarterly on
the last day of March, June, September and December in each year. Dividends on
the Series A Shares shall accrue from the date of issue of such shares. The
board of directors of the Corporation shall be entitled to declare part of such
preferential cumulative cash dividends for any fiscal year notwithstanding that
such dividend for such fiscal year may not be declared in full. If on any
dividend payment date the dividend payable on such date is not paid in full on
all of the Series A Shares then issued and outstanding, such dividends or the
unpaid part thereof shall be paid on a subsequent date or dates determined by
the board of directors of the Corporation on which the Corporation shall have
sufficient moneys properly applicable to the payment of same. The holders of the
Series A Shares shall not be entitled to any dividends other than or in excess
of the fixed preferential cumulative cash dividends hereinbefore provided for.
1.2 If all the shares of Strategy International Insurance Group, Inc. are
purchased by the Maturity Date for consideration of which at least fifty per
cent (50%) is cash, then, upon the completion of said purchase, the holders of
the Series A Shares shall be entitled to receive immediately, and the
Corporation shall pay immediately to the holders of the Series A Shares all
dividends payable to the holders of the Series A Shares up to the Maturity Date.
1.3 Except with the consent in writing of the holders of all of the Series A
Shares outstanding, no dividends shall at any time be declared or paid or set
apart for payment on the Series B Shares or on the Common Shares and the
Corporation shall not call for redemption nor purchase or otherwise acquire for
value less than all the then outstanding Series A Shares.
1.4 The Corporation shall wire to the respective accounts of the holders of the
Series A Shares the funds payable to the holders of the Series A Shares in
respect of the dividends on the Series A Shares (less any tax required to be
withheld by the Corporation) and payment thereof shall satisfy such dividends.
2. DISSOLUTION
2.1 In the event of the dissolution, liquidation or winding-up of the
Corporation, whether voluntary or involuntary, or any other distribution of
assets of the Corporation among its shareholders for the purpose of winding up
its affairs, the holders of the Series A Shares shall be entitled to receive
from the assets and property of the Corporation for each Series A Share held by
them respectively a sum equivalent to USD$9,999.99 (the "LIQUIDATION
PREFERENCE") per each Series A Share together with all accrued and unpaid
preferential cumulative cash dividends thereon (which for such purpose shall be
calculated as if such dividends were accruing from day to day for the period
from the expiration of the last period for which cumulative dividends have been
paid up to but excluding the date of distribution) before any amount shall be
paid or any assets or property of the Corporation distributed to the holders of
any Series B Shares or of any Common Shares; provided, however, that if the
aggregate amount available for distribution to the holders of the Series A
Shares is less than the amount otherwise payable to them pursuant to the
provisions hereof, then each Series A Share shall entitle the holder thereof to
participate in the amount so available for distribution, pro rata. After payment
to the holders of the Series A Shares of the amounts so payable to them as above
provided, they shall not be entitled to share in any further distribution of the
assets or property of the Corporation.
2.2 Except as herein expressly provided, the Series A Shares shall not confer
any right upon the holder thereof to participate in the profits or assets of the
Corporation.
3. RETRACTION
3.1 Retraction
Subject to and upon compliance with the provisions of clauses 3.1 and
3.2, the Corporation shall be required to redeem all of the issued and
outstanding Series A Shares on the date that is three (3) years from the date
the first Series A Shares are issued (the "MATURITY DATE") at a price equal to
the Liquidation Preference per share, plus an amount equal to all accrued and
unpaid cumulative preferential dividends thereon, whether or not declared,
calculated to but excluding the date on which such shares are redeemed (the
"RETRACTION PRICE").
3.2 Procedure on Retraction
The Corporation shall at least 30 days prior to the Maturity Date give
written notice to the Series A Share holders of the right provided for in clause
3.1. The rights of the Series A Share holders to require redemption and the
obligation of the Corporation to redeem Series A Shares on the Maturity Date
shall not be affected by the failure of the Corporation to give such notice.
On the Maturity Date, each Series A Share holder shall deposit the
certificate or certificates representing the Series A Shares registered in his
or her name at the registered office of the Corporation. On the Maturity Date,
the Corporation shall pay or cause to be paid to or to
the order of each Series A Share holder, the Retraction Price of the Series A
Shares registered in the name of such holder. The Corporation shall have the
right, at any time on or prior to the Maturity Date, to deposit the Retraction
Price of the Series A Shares then outstanding or of such of the Series A Shares
which are represented by certificates which have not on or prior to the date of
such deposit been surrendered by the holders thereof in connection with such
redemption, to a special account maintained by the Corporation with a branch of
a Canadian chartered bank or trust company designated by the Corporation in the
notice of redemption (the "TRUSTEE") which has an office in the city of Toronto,
to be paid without interest to or to the order of the respective holders of the
Series A Shares whose shares are to be redeemed, upon presentation and surrender
to the Trustee of the certificates representing such shares. From and after the
Maturity Date, the Series A Shares in respect of which such deposit shall have
been made shall be deemed to have been redeemed by the Corporation and the
rights of the holders thereof shall be limited to receiving their proportion of
the amount so deposited without interest, upon presentation and surrender to the
Trustee of the certificate or certificates representing the Series A Shares
registered in the name of such Series A Share holder outstanding. Any interest
allowed on any such deposit shall belong to the Corporation.
4. VOTING
4.1 The holders of the Series A Shares shall not be entitled as such (except as
hereinafter specifically provided or as otherwise provided by applicable law) to
receive notice of or to attend any meeting of the shareholders of the
Corporation and shall not be entitled to vote at any such meeting unless and
until the Corporation shall fail to pay in the aggregate cumulative preferential
dividends on the Series A Shares at the said rate of ten per cent (10%) per
annum on the Liquidation Preference for two (2) consecutive quarters and the
United Insurance Company Limited shall, from September 21, 2005 until the
Maturity Date, fail to pay for (2) consecutive quarters an amount equivalent to
the dividends payable by the Corporation for two (2) consecutive quarters if
said dividends have not already been paid by the Corporation. Thereafter and
only so long as any dividends remain in arrears on the Series A Shares, the
holders of the Series A Shares shall be entitled (a) to requisition the
directors to call a meeting of shareholders for the purposes stated in the
requisition in accordance with the provisions of section 105 of the Business
Corporations Act (Ontario) and (b) except for meetings at which only holders of
another specified class of shares of the Corporation are entitled to vote
separately as a class, to receive notice of and to attend and vote at all
meetings of shareholders of the Corporation and shall have one thousand (1,000)
votes for each Series A Share held thereat.
4.2 Notwithstanding the above, the holders of the Series A Shares shall be
entitled to vote separately as a class and dissent upon a proposal to amend the
articles of the Corporation to:
(a) increase or decrease any maximum number of authorized shares of such class;
(b) effect an exchange, reclassification or cancellation of the shares of such
class; or
(c) create a new class of shares equal or superior to shares of such class.
5. EVENTS OF DEFAULT
5.1 Upon the occurrence of an Event of Default (described herein below) that is
continuing and not cured within ten (10) days, the holders of the Series A
Shares shall be entitled to receive immediately, and the Corporation shall pay
immediately, for each Series A Share held by them respectively a sum equivalent
to the Liquidation Preference per each Series A Share together with
all accrued and unpaid preferential cumulative cash dividends thereon, unless
upon the occurrence of an Event of Default, the holders of the Series A Shares
voting separately as a class determine that, notwithstanding that the Event of
Default shall not be cured or has not been cured within ten (10) days, the
Corporation shall not pay for each Series A Share held by them respectively a
sum equivalent to the Liquidation Preference per each Series A Share together
with all accrued and unpaid preferential cumulative cash dividends thereon. Any
payment made under this section shall be made subject to the Corporation meeting
the requirements of Section 32(2) of the Business Corporations Act (Ontario).
5.2 For the purposes of this Section, the following shall constitute an "Event
of Default":
(a) non-payment for two (2) consecutive quarters by the Corporation of the
dividends payable on the Series A Shares and, after September 21, 2005 until the
Maturity Date, non-payment for two (2) consecutive quarters by the United
Insurance Company Limited of an amount equivalent to the dividends payable on
the Series A Shares, if such dividends have not already been paid by the
Corporation;
(b) the suspension from trading for any reason whatsoever or failure of the
common stock of Strategy International Insurance Group, Inc. (OTC: "SGYI.OB") to
be listed on the Over The Counter Bulletin Board for more than five (5)
consecutive trading days;
(c) any money judgment (including any arbitration award, but only if reduced to
a judgment), writ or warrant of attachment, or similar process in excess of
USD$5,000,000 in the aggregate, net of any applicable insurance coverage, shall
have been entered or filed against the Corporation, or any of its properties or
other assets and which remains unpaid, unvacated, unbonded and unstayed for a
period of seventy-five (75) days from the date of said money judgment;
(d) the Corporation shall have (i) become insolvent; (ii) admit in writing its
inability to pay its debts generally as they become due or mature; (iii) made an
assignment for the benefit of creditors or commenced proceedings for its
dissolution; or (iv) applied for or consented to the appointment of a trustee,
liquidator or receiver for it or for a substantial part of its property or
business;
(e) a trustee, liquidator or receiver shall have been appointed for the
Corporation or for a substantial part of its property or business without its
consent and shall not have been discharged within sixty (60) days after such
appointment;
(f) any governmental agency or any court of competent jurisdiction at the
instance of any governmental agency shall have assumed custody or control of the
whole or any substantial portion of the properties or assets of the Corporation
and such custody or control shall have not been dismissed within sixty (60) days
thereafter;
(g) the Corporation shall have failed to pay any debt for borrowed money or
other similar obligation or liability ("Indebtedness") of the Corporation, or
any interest or premium thereon, when due (whether by scheduled maturity,
required prepayment, acceleration, demand or otherwise), in an outstanding
principal amount equal to or in excess of USD$5,000,000, singly or in the
aggregate and such failure shall be continuing after the applicable grace
period, if any, specified in the agreement or instrument relating to such
Indebtedness, or any such Indebtedness of the Corporation shall have been
declared to be due and payable, or have been required to be prepaid (other than
by a regularly scheduled required prepayment), prior to the stated maturity
thereof; or
(h) bankruptcy, reorganization, insolvency or liquidation proceedings or other
similar proceedings, or relief under any bankruptcy law or any similar law for
the relief of debt shall have been instituted by or against the Corporation and,
if instituted against the Corporation, shall have not been dismissed within
sixty (60) days after such institution or the Corporation shall have, by any
action or answer, approved of, consented to, or acquiesced in any such
proceedings or admitted to any material allegations of, or default in answering
a petition filed in any such proceeding.
PROVISIONS ATTACHING TO THE SERIES B SHARES
The Series B Shares, as a class, shall have attached thereto the
following rights, privileges, restrictions and conditions:
1. DIVIDENDS
1.1 Except as described herein below, the holders of the Series B Shares shall
not be entitled to receive, and the Corporation shall not pay thereon,
dividends.
1.2 The holders of the Series B Shares shall be entitled to receive their pro
rata share of the five percent (5%) of the gross sales (the "GROSS SALES
INTEREST") from each property in which the Corporation invests, which shall
accrue and be payable by the Corporation to the holders of the Series B Shares
at any time and from time to time after the sale to a third party for monetary
consideration of any property or any portion thereof, provided that any Gross
Sales Interest accrued prior to said sale will be payable on the date of said
sale. Each share of the Series B Shares shall entitle its holder to receive a
pro rata share of the Gross Sales Interest.
1.3 The Corporation shall wire to the respective accounts of the holders of the
Series B Shares the funds payable to the holders of the Series B Shares in
respect of the Gross Sales Interest on the Series B Shares (less any tax
required to be withheld by the Corporation) and payment thereof shall satisfy
the obligation of the Corporation to make such payment. .
2. DISSOLUTION
2.1 In the event of the dissolution, liquidation or winding-up of the
Corporation, whether voluntary or involuntary, or any other distribution of
assets of the Corporation among its shareholders for the purpose of winding up
its affairs, subject to the prior rights of the holders of the Series A Shares
to receive the Liquidation Preference together with all accrued and unpaid
preferential cumulative cash dividends thereon, the holders of the Series B
Shares shall be entitled to receive their pro rata share of the Gross Sales
Interest from the remaining property and assets of the Corporation; provided,
however, that if the aggregate amount available for distribution to the holders
of the Series B Shares is less than the amount otherwise payable to them
pursuant to the provisions hereof, then each Series B Share shall entitle the
holder thereof to participate in the amount so available for distribution, pro
rata. After payment to the holders of the Series B Shares of the amounts so
payable to them as above provided, they shall not be entitled to share in any
further distribution of the assets or property of the Corporation.
2.2 Except as herein expressly provided, the Series B Shares shall not confer
any right upon the holder thereof to participate in the profits or assets of the
Corporation.
3. REDEMPTION
3.1 The Corporation shall not redeem the Series B Shares.
4. VOTING
4.1 Except as provided for herein and otherwise required by law, the holders of
the Series B Shares as a class shall not be entitled as such to receive notice
of, to attend or to vote at any meeting of the shareholders of the Corporation.
4.2 Notwithstanding the above, the holders of the Series B Shares shall be
entitled to vote separately as a class and dissent upon a proposal to amend the
articles of the Corporation to:
(a) increase or decrease any maximum number of authorized shares of such class
or increase any maximum number of authorized shares of any class having
rights or privileges equal or superior to the shares of such class;
(b) effect an exchange, reclassification or cancellation of the shares of such
class; or
(c) create a new class of shares equal or superior to shares of such class.
PROVISIONS ATTACHING TO THE COMMON SHARES
The Common Shares shall have attached thereto the following rights,
privileges, restrictions and conditions:
1. DIVIDENDS
1.1 The holders of the Common Shares shall not be entitled to receive, and the
Corporation shall not pay thereon, dividends.
2. DISSOLUTION
2.1 In the event of the dissolution, liquidation or winding-up of the
Corporation, whether voluntary or involuntary, or any other distribution of
assets of the Corporation among its shareholders for the purpose of winding up
its affairs, subject to the prior rights of the holders of the Series A Shares
and the Series B Shares with respect to priority in the distribution of assets
upon dissolution, liquidation or winding-up, the holders of the Common Shares
shall be entitled to receive the remaining property and assets of the
Corporation, which shall be distributed in equal amounts per share on all of the
Common Shares at the time outstanding.
3. REDEMPTION
3.1 The Corporation shall not redeem the Common Shares.
4. VOTING RIGHTS
4.1 The holders of the Common Shares shall be entitled to receive notice of and
to attend all meetings of the shareholders of the Corporation and shall have one
vote for each Common Share held at all meetings of the shareholders of the
Corporation, except for meetings at which only holders of another specified
class of shares of the Corporation are entitled to vote separately as a class.
4.2 The holders of the Common Shares are not entitled to vote separately as a
class, and shall note be entitled to dissent in respect of, any proposal to
amend the articles of the Corporation to:
(a) increase or decrease any maximum number of authorized shares of such
class or increase any maximum number of authorized shares of any class
having rights or privileges equal or superior to the shares of such
class;
(b) effect an exchange, reclassification or cancellation of the shares of
such class; or (c) create a new class of shares equal or superior to
shares of such class.
(3) THE RESTRICTIONS ON THE ISSUE, TRANSFER OR OWNERSHIP OF SHARES ARE AMENDED
AS FOLLOWS:
No shares shall be transferred without the consent of the directors of
the Corporation expressed by a resolution passed at a meeting of the board of
directors in accordance with the "special majority provision", provided that
such consent shall not be unreasonably withheld or delayed, and further provided
that the directors of the Corporation shall not object to the transfer of shares
between a shareholder and its "affiliate", as that term is defined in Section 1
of the Business Corporations Act (Ontario).
(4) THE FOLLOWING PROVISIONS ARE ADDED AS OTHER PROVISIONS TO THE ARTICLES:
NOTICE
Where notice is required by the provisions hereof to be sent, the
notice may be waived or the time for the notice may be waived or abridged at any
time with the consent in writing of the person(s) entitled thereto.
NUMBER OF SHAREHOLDERS
The number of shareholders of the Corporation exclusive of persons who
are in its employment and exclusive of persons who, having formerly been in the
employment of the Corporation, were, while in that employment, and have
continued after the termination of that employment to be shareholders of the
Corporation, is limited to not more than fifty (50), two or more persons who are
the joint registered owners of one or more shares being counted as one
shareholder.
FRACTIONAL SHARES
Each holder of a fractional share issued by the Corporation shall be
entitled to exercise such voting rights and to receive such dividend as herein
these Articles set forth in respect of each such fractional share but only to
the extent of such fraction.
LIENS
The Corporation has a lien on each share registered in the name of a
shareholder or his (or her) legal representative for a debt of that shareholder
to the Corporation.
INVITATION TO PUBLIC PROHIBITED
Any invitation to the public to subscribe for securities of the
Corporation is prohibited.
SPECIAL MAJORITY FOR DIRECTORS' ACTIONS
In order to be effective any resolution passed at a meeting of
directors shall require the affirmative vote of four (4) directors.