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Exhibit 3.1
Industry Canada Industrie Canada FORM 9 FORMULE 9
ARTICLES OF AMALGAMATION STATUTS DE FUSION
Canada Business Loi canadienne sur les (SECTION 185) (ARTICLE 185)
Corporations Act societes par actions
1 - Name of amalgamated corporation Denomination de la societe issue de la fusion
COTT CORPORATION
CORPORATION COTT
2 - The place in Canada where the registered office is to Lieu au Canada ou droit etre situe le siege social
be situated
District of Montreal, Province of Quebec
3 - The classes and any maximum number of shares that Categories et tout nombre maximal d'actions que la societe est
the corporation is authorized to issue autorsee a emettre
An unlimited number of First Preferred Shares, issuable in series, an unlimited number of Second Preferred Shares, issuable in
series and an unlimited number of common shares. The rights, privileges, restrictions and conditions attaching to
the First Preferred Shares, Second Preferred Shares and common shares are attached hereto as Schedule "A".
4 - Restrictions, if any, on share transfers Restrictions sur le transfert des actions, s'il y a lieu
None
5 - Number (or minimum and maximum number) of directors Nombre (ou nombre minimal et maximal) d'administrateurs
Such number not greater than fifteen nor less than three
as the board of directors may determine.
6 - Restrictions, if any, on business the corporation Limites imposees a l'activite commerciale de la societe,
may carry on s'il y a lieu
None
7 - Other provisions, if any Autres dispositions, s'il y a lieu
The annexed Schedule "B" is incorporated in this form.
8 - The amalgamation has been approved pursuant to that section 8 - La fusion a ete approuvee en accord avel l'article ou le
or subsection of the Act which is indicated as follows: paragraphe de la Loi indique ci-apres
[ ] 183
[X] 184(1)
[ ] 184(2)
9 - Name of the amalgamating corporations Corporation No. Signature Date Title
Denomination des societes fusionnantes No de la societe Titre
COTT CORPORATION Dec. 21/99 Secretary
CORPORATION COTT 3573222
3699455 CANADA INC. 3699455 Dec. 21/99 Secretary
FOR DEPARTMENTAL USE ONLY - A L'USAGE DU MINISTERE SEULEMENT Filed - Deposee
Corporation No. - No de la societe
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SCHEDULE "A"
1.0 FIRST PREFERRED SHARES
The first preferred shares shall, as a class, carry and be subject to the
following rights, privileges, restrictions and conditions:
1.1 The first preferred shares may be issued at any time and from time to time
in one or more series, each series to consist of such number of first preferred
shares as may, before the issue thereof, be determined by resolution passed by
the Board of Directors of the Corporation. The number of shares of any series
may from time to time be increased by the Board of Directors of the Corporation
upon compliance with the same conditions as are applicable to the issue of
shares of a new series.
1.2 The Board of Directors of the Corporation shall, subject as hereinafter
provided and subject to the provisions of the Canada Business Corporations Act,
fix, by resolution duly passed before the issue of the first preferred shares of
each series, the designation, rights, privileges, restrictions and conditions to
be attached to the first preferred shares of such series, including, but without
in any way limiting or restricting the generality of the foregoing:
(i) provisions, if any, with respect to the rights of the holders of the
first preferred shares of such series to receive notice of or to
attend any meeting of the shareholders of the Corporation or to vote
at any such meeting;
(ii) whether any dividends shall be payable on the first preferred shares
of such series and, if dividends are to be payable thereon, the rate,
amount or method of calculation or preferential dividends, whether
fixed or fluctuating, whether cumulative or non-cumulative, whether
such dividends are payable in money or by the issue of fully paid
shares of the Corporation, the currency or currencies of payment, the
date or dates and places of payment of preferential dividends and the
date or dates from which such preferential dividends shall accrue;
(iii) the rights of the Corporation, if any, to purchase or redeem the
first preferred shares of such series, and the purchase or redemption
price or the method of calculating the same, and the terms and
conditions of any such purchase or redemption;
(iv) provisions, if any, with respect to the rights of the holders of the
first preferred shares of such series to tender such shares to the
Corporation for purchase by the Corporation and to oblige the
Corporation to make such purchase;
(v) the conversion rights, if any;
(vi) the terms and conditions of any share purchase plan or sinking fund
with respect to the first preferred shares of such series; and
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(vii) the restrictions, if any, respecting payment of dividends on the
second preferred shares, the common shares or on any other shares of
the Corporation ranking junior to the first preferred shares;
the whole subject to articles of amendment setting forth the designation,
rights, privileges, restrictions and conditions to be attached to the first
preferred shares of such series and the issue of a certificate of amendment in
respect thereof.
1.3 The first preferred shares shall, with respect to the payment of dividends,
be entitled to preference over the second preferred shares, the common shares
and over any other shares of the Corporation ranking junior to the first
preferred shares, and no dividends (other than stock dividends payable in shares
of the Corporation ranking junior to the first preferred shares) shall at any
time be declared or paid or set apart for payment on the second preferred
shares, the common shares or on any other shares of the Corporation ranking
junior to the first preferred shares, nor shall the Corporation call for
redemption or purchase any of the first preferred shares (less than the total
number of first preferred shares then outstanding) or any shares of the
Corporation ranking junior to the first preferred shares unless at the date of
such declaration or call for redemption or purchase, as the case may be, all
cumulative dividends up to and including the dividend payment for the last
completed period for which such cumulative dividends shall be payable shall have
been declared and paid or set apart for payment in respect of each series of
cumulative first preferred shares then issued and outstanding and any declared
and unpaid non-cumulative dividends shall have been paid or set apart for
payment in respect of each series of non-cumulative first preferred shares then
issued and outstanding.
1.4 In the event of the liquidation, dissolution or winding up of the
Corporation or other distribution of assets of the Corporation among
shareholders for the purpose of winding up its affairs, the holders of the first
preferred shares shall be entitled to receive, before any amount shall be paid
to, or any property or assets of the Corporation distributed among, the holders
of the second preferred shares, the common shares or any other shares of the
Corporation ranking junior to the first preferred shares, (i) the amount paid up
on such first preferred shares together with, in the case of cumulative first
preferred shares, all unpaid cumulative dividends (which for such purpose shall
be calculated as if such cumulative 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 and including the date of distribution) and, in the case of
non-cumulative first preferred shares, all declared and unpaid non-cumulative
dividends, and (ii) if such liquidation, dissolution, winding up or distribution
shall be voluntary, an additional amount equal to the premium, if any, which
would have been payable on the redemption of said first preferred shares
respectively if they had been called for redemption by the Corporation on the
date of distribution and, if said first preferred shares could not be redeemed
on such date, then an additional amount equal to the greatest premium, if any,
which would have been payable on the redemption of said first preferred shares
respectively. After payment to the holders of the first preferred Shares of the
amounts so payable to them, they shall not be entitled to share in any further
distribution of the property or assets of the Corporation.
1.5 The first preferred shares of each series shall rank on a parity with the
first preferred shares of every other series with respect to the payment of
dividends and the distribution of assets in the event of the liquidation,
dissolution or winding up of the Corporation, whether voluntary or involuntary,
or other distribution of assets of the Corporation among shareholders
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for the purpose of winding up its affairs, provided, however, that in case such
assets are insufficient to pay in full the amount due on all the first preferred
shares, then such assets shall be applied firstly, to the payment equally and
rateably of an amount equal to the amount paid up on the first preferred shares
of each series and the premium thereon, if any, and, secondly, pro rata in the
payment of accrued and unpaid cumulative dividends and declared and unpaid
non-cumulative dividends.
1.6 The holders of the first preferred shares shall not, as such, be entitled
as of right to subscribe for, or to purchase or receive the whole or any part of
any issue of any shares, or of any bonds, debentures or other securities of the
Corporation now or hereafter authorized, otherwise than in accordance with the
exercise of the conversion rights, if any, which may from time to time attach to
any series of first preferred shares.
1.7 The provisions contained in Section 1.1 to 1.6 inclusive, and in this
Section 1.7 may be repealed or amended in whole or in part by articles of
amendment and the issue of a certificate of amendment in respect thereof, but
only with the prior approval of the holders of the first preferred shares given
as hereinafter specified in addition to any other approval required under the
Canada Business Corporations Act.
The approval of the holders of the first preferred shares as to any and all
matters hereinbefore referred to may be given in writing by a resolution signed
by all the holders of the first preferred shares or by resolution passed by not
less than two-thirds (2/3) of the votes cast at a meeting of the holders of the
first preferred shares duly called for the purpose at which meeting, when
originally held, the holders of not less than a majority of the outstanding
first preferred shares are present in person or represented by proxy in
accordance with the by-laws of the Corporation. If at any such meeting, the
holders of a majority of the outstanding first preferred shares are not present
in person or represented by proxy within thirty (30) minutes after the time
fixed for the meeting, then the meeting shall be adjourned to such date, being
no less than fifteen (15) days later, and to such time and place as may be fixed
by the chairman of the meeting and, at such adjourned meeting, the holders of
first preferred shares present in person or represented by proxy, whether or not
they hold more or less than a majority of all first preferred shares then
outstanding, may transact the business for which the meeting was originally
called, and a resolution duly passed thereat by not less than two-thirds (2/3)
of the votes cast at such adjourned meeting shall constitute the approval of the
holders of the first preferred shares hereinbefore mentioned. Notice of any such
original meeting of the holders of the first preferred shares shall be given not
less than twenty-one (21) days or more than fifty (50) days prior to the date
fixed for such meeting and shall state the nature of the business to be
transacted and the text of any resolution to be submitted to the meeting. Notice
of any such adjourned meeting shall be given: (i) not less than seven (7) days
prior to the date fixed for such adjourned meeting, if the original meeting was
adjourned by one or more adjournments for an aggregate of less than thirty (30)
days, but it shall not be necessary to state in such notice the business for
which the adjourned meeting is called or the text of any resolution to be
submitted to the adjourned meeting; and (ii) as required by the Canada Business
Corporations Act, if the original meeting was adjourned by one or more
adjournments for an aggregate of thirty (30) days or more. The formalities to be
observed with respect to the giving of notice of any such original meeting or
adjourned meeting or any other meeting of the holders of first preferred shares
and the conduct
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thereof shall be those from time to time prescribed in the by-laws of the
Corporation with respect to meetings of shareholders or in the laws governing
the Corporation.
If the repeal or amendment of the provisions hereinbefore contained affects
the rights of the holders of first preferred shares of any series in a manner
different from that in which the rights of the holders of first preferred shares
of any other series are affected, then such repeal or amendment shall, in
addition to being approved by the holders of the first preferred shares as
hereinabove set forth, be approved by the holders of the first preferred shares
of such series so affected, and the provisions of this Section 1.7 shall apply,
mutatis mutandis, with respect to the giving of such approval.
Any meeting of the holders of the outstanding first preferred shares may be
held at any time and for any purpose, without notice, if all holders of first
preferred shares entitled to vote at the meeting waive notice of the meeting in
writing. For the purpose of waiver of notice, the words "in writing" shall,
without limitation, include the sending of a telegram, telex, cable or any other
form of written communication by a shareholder. Any holder of first preferred
shares may waive notice of any meeting either before or after the meeting is
held.
Irregularities in the notice or in the giving thereof as well as the
accidental omission to give notice of any meeting to, or the non-receipt of any
notice by, any holder of first preferred shares, shall not invalidate any action
taken at any meeting.
At any meeting of the holders of first preferred shares without distinction
as to series, each holder of first preferred shares shall be entitled to 1/25 of
a vote for each $1 (with the Canadian dollar and the United States dollar being
deemed to be at par for the purposes of this Section 1.7) paid up on each first
preferred share held by him. At any meeting of the holders of first preferred
shares of any particular series, each holder shall be entitled to one (1) vote
in respect of each first preferred share of such series held by him.
2.0 SECOND PREFERRED SHARES
The second preferred shares shall, as a class, rank as to the payment of
dividends and the distribution of assets in the event of the liquidation,
dissolution or winding up of the Corporation or other distribution of assets of
the Corporation among shareholders for the purpose of winding up its affairs,
after the first preferred shares and shall carry and be subject to the following
rights, privileges, restrictions and conditions:
2.1 The second preferred shares may be issued at any time and from time to time
in one or more series, each series to consist of such number of second preferred
shares as may, before the issue thereof, be determined by resolution passed by
the Board of Directors of the Corporation. The number of shares of any series
may from time to time be increased by the Board of Directors of the Corporation
upon compliance with the same conditions as are applicable to the issue of
shares of a new series.
2.2 The Board of Directors of the Corporation shall, subject as hereinafter
provided and subject to the provisions of the Canada Business Corporations Act,
fix, by resolution duly passed before the issue of the second preferred shares
of each series, the designation, rights, privileges,
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restrictions and conditions to be attached to the second preferred shares of
such series, including, but without in any way limiting or restricting the
generality of the foregoing:
(i) provisions, if any, with respect to the rights of the holders of the
second preferred shares of such series to receive notice of or to
attend any meeting of the shareholders of the Corporation or to vote
at any such meeting;
(ii) whether any dividends shall be payable on the second preferred shares
of such series and, if dividends are to be payable thereon, the rate,
amount or method of calculation of preferential dividends, whether
fixed or fluctuating, whether cumulative or non-cumulative, whether
such dividends are payable in money or by the issue of fully paid
shares of the Corporation, the currency or currencies of payment, the
date or dates and places of payment of preferential dividends and the
date or dates from which such preferential dividends shall accrue;
(iii) the rights of the Corporation, if any, to purchase or redeem the
second preferred shares of such series, and the purchase or redemption
price or the method of calculating the same, and the terms and
conditions of any such purchase or redemption;
(iv) provisions, if any, with respect to the rights of the holders of the
second preferred shares of such series to tender such shares to the
Corporation for purchase by the Corporation and to oblige the
Corporation to make such purchases;
(v) the conversion rights, if any;
(vi) the terms and conditions of any share purchase plan or sinking fund
with respect to the second preferred shares of such series; and
(vii) the restrictions, if any, respecting payment of dividends on the
common shares or on any other shares of the Corporation ranking junior
to the second preferred shares;
the whole subject to articles of amendment setting forth the designation,
rights, privileges, restrictions and conditions to be attached to the second
preferred shares of such series and the issue of a certificate of amendment in
respect thereof, and subject to the provisions now or hereafter attaching to the
first preferred shares as a class or to any series thereof.
2.3 The second preferred shares shall, with respect to the payment of
dividends, be entitled to preference over the common shares and over any other
shares of the Corporation ranking junior to the second preferred shares, but
shall be subject to the prior rights in respect of the payment of dividends
attaching to the first preferred shares, and no dividends (other than stock
dividends payable in shares of the Corporation ranking junior to the second
preferred shares) shall at any time be declared or paid or set apart for payment
on the common shares or on any other shares of the Corporation ranking junior to
the second preferred shares, nor shall the Corporation call for redemption or
purchase any of the second preferred shares (less than the total number of
second preferred shares then outstanding) or any shares of the Corporation
ranking junior to the second
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preferred shares unless at the date of such declaration or call for redemption
or purchase, as the case may be, all cumulative dividends up to and including
the dividend payment for the last completed period for which such cumulative
dividends shall be payable shall have been declared and paid or set apart for
payment in respect of each series of cumulative second preferred shares then
issued and outstanding and any declared and unpaid non-cumulative dividends
shall have been paid or set apart for payment in respect of each series of
non-cumulative second preferred shares then issued and outstanding.
2.4 In the event of the liquidation, dissolution or winding up of the
Corporation or other distribution of assets of the Corporation among
shareholders for the purpose of winding up its affairs, the holders of the
second preferred shares shall be entitled to receive, subject to prior payment
in full to the holders of the first preferred shares of all amounts payable in
such circumstances on the first preferred shares but before any amount shall be
paid to, or any property or assets of the Corporation distributed among, the
holders of the common shares or any other shares of the Corporation ranking
junior to the second preferred shares, (i) the amount paid up on such second
preferred shares together with, in the case of cumulative second preferred
shares, all unpaid cumulative dividends (which for such purpose shall be
calculated as if such cumulative 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 and including the date of distribution) and, in the case of
non-cumulative second preferred shares, all declared and unpaid non-cumulative
dividends, and (ii) if such liquidation, dissolution, winding up or distribution
shall be voluntary, an additional amount equal to the premium, if any, which
would have been payable on the redemption of said second preferred shares
respectively if they had been called for redemption by the Corporation on the
date of distribution and, if said second preferred shares could not be redeemed
on such date, then an additional amount equal to the greatest premium, if any,
which would have been payable on the redemption of said second preferred shares
respectively. After payment to the holders of the second preferred shares of the
amounts so payable to them, they shall not be entitled to share in any further
distribution of the property or assets of the Corporation.
2.5 The second preferred shares of each series shall rank on a parity with the
second preferred shares of every other series with respect to the payment of
dividends and the distribution of assets in the event of the liquidation,
dissolution or winding up of the Corporation, whether voluntary or involuntary,
or other distribution of assets of the Corporation among shareholders for the
purpose of winding up its affairs, provided, however, that in case such assets
are insufficient to pay in full the amount due on all the second preferred
shares, then such assets shall be applied, firstly, to the payment equally and
rateably of an amount equal to the amount paid up on the second preferred shares
of each series and the premium thereon, if any, and, secondly, pro rata in the
payment of accrued and unpaid cumulative dividends and declared and unpaid
non-cumulative dividends.
2.6 The holders of the second preferred shares shall not, as such, be entitled
as of right to subscribe for, or to purchase or receive the whole or any part of
any issue of any shares, or of any bonds, debentures or other securities of the
Corporation now or hereafter authorized, otherwise than in accordance with the
exercise of the conversion rights, if any, which may from time to time attach to
any series of second preferred shares.
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2.7 The provisions contained in Sections 2.1 to 2.6 inclusive, and in this
Section 2.7 may be repealed or amended in whole or in part by articles of
amendment and the issue of a certificate of amendment in respect thereof, but
only with the prior approval of the holders of the second preferred shares given
as hereinafter specified in addition to any other approval required under the
Canada Business Corporations Act.
The approval of the holders of the second preferred shares as to any and
all matters hereinbefore referred to may be given in writing by a resolution
signed by all the holders of the second preferred shares or by resolution passed
by not less than two-thirds (2/3) of the votes cast at a meeting of the holders
of the second preferred shares duly called for the purpose at which meeting,
when originally held, the holders of not less than a majority of the outstanding
second preferred shares are present in person or represented by proxy in
accordance with the by-laws of the Corporation. If at any such meeting, the
holders of a majority of the outstanding second preferred shares are not present
in person or represented by proxy within thirty (30) minutes after the time
fixed for the meeting, then the meeting shall be adjourned to such date, being
no less than fifteen (15) days later, and to such time and place as may be fixed
by the chairman of the meeting and, at such adjourned meeting, the holders of
second preferred shares present in person or represented by proxy, whether or
not they hold more or less than a majority of all second preferred shares then
outstanding, may transact the business for which the meeting was originally
called, and a resolution duly passed thereat by not less than two-thirds (2/3)
of the votes cast at such adjourned meeting shall constitute the approval of the
holders of the second preferred shares hereinbefore mentioned. Notice of any
such original meeting of the holders of the second preferred shares shall be
given not less than twenty-one (21) days or more than fifty (50) days prior to
the date fixed for such meeting and shall state the nature of the business to be
transacted and the text of any resolution to be submitted to the meeting. Notice
of any such adjourned meeting shall be given: (i) not less than seven (7) days
prior to the date fixed for such adjourned meeting, if the original meeting was
adjourned by one or more adjournments for an aggregate of less than thirty (30)
days, but it shall not be necessary to state in such notice the business for
which the adjourned meeting is called or the text of any resolution to be
submitted to the adjourned meeting; and (ii) as required by the Canada Business
Corporations Act, if the original meeting was adjourned by one or more
adjournments for an aggregate of thirty (30) days or more. The formalities to be
observed with respect to the giving of notice of any such original meeting or
adjourned meeting or any other meeting of the holders of second preferred shares
and the conduct thereof shall be those from time to time prescribed in the
by-laws of the Corporation with respect to meetings of shareholders or in the
laws governing the Corporation.
If the repeal or amendment of the provisions hereinbefore contained affects
the rights of the holders of second preferred shares of any series in a manner
different from that in which the rights of the holders of second preferred
shares of any other series are affected, then such repeal or amendment shall, in
addition to being approved by the holders of the second preferred shares as
hereinabove set forth, be approved by the holders of the second preferred shares
of such series so affected, and the provisions of this Section 2.7 shall apply,
mutatis mutandis, with respect to the giving of such approval.
Any meeting of the holders of the outstanding second preferred shares may
be held at any time and for any purpose, without notice, if all holders of
second preferred shares entitled to vote at the meeting waive notice of the
meeting in writing. For the purpose of waiver of notice, the words "in writing"
shall, without limitation, include the sending of a telegram, telex, cable or
any
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other form of written communication by a shareholder. Any holder of second
preferred shares may waive notice of any meeting either before or after the
meeting is held.
Irregularities in the notice or in the giving thereof as well as the
accidental omission to give notice of any meeting to, or the non-receipt of any
notice by, any holder of second preferred shares, shall not invalidate any
action taken at any meeting.
At any meeting of the holders of second preferred shares without
distinction as to series, each holder of second preferred shares shall be
entitled to 1/25 of a vote for each $1 (with the Canadian dollar and the United
States dollar being deemed to be at par for the purposes of this Section 2.7)
paid up on each second preferred share held by him. At any meeting of the
holders of second preferred shares of any particular series, each holder shall
be entitled to one (1) vote in respect of each second preferred share of such
series held by him.
3.0 COMMON SHARES
The common shares shall, as a class, carry and be subject to the following
rights, privileges, restrictions and conditions:
3.1 Each common share of the Corporation shall entitle the holder thereof to
one (1) vote at all meetings of shareholders of the Corporation (except meetings
at which only holders of another specified class or series of shares are
entitled to vote).
3.2 Subject to the prior rights with respect to the payment of dividends
attaching to the first preferred shares, the second preferred shares and to any
other class of shares of the Corporation which rank prior to the common shares,
the holders of the common shares shall be entitled to receive, as and when
declared by the Board of Directors of the Corporation, dividends which may be
paid in money, property or by the issue of fully paid shares of the Corporation.
3.3 In the event of the liquidation, dissolution or winding up of the
Corporation or other distribution of assets of the Corporation among
shareholders for the purpose of winding up its affairs, subject to the rights,
privileges, restrictions and conditions attached to the first preferred shares
and the second preferred shares, either as a class or series, and to any other
class or series of shares of the Corporation which rank prior to the common
shares, the common shares shall entitle the holders thereof to receive the
remaining property of the Corporation.
3.4 Notwithstanding the provisions attaching to the common shares, the
Corporation may at any time and from time to time amend the Articles of the
Corporation to
(i) effect an exchange, reclassification or cancellation of all or part of
the common shares;
(ii) create a new class of shares equal or superior to the common shares;
or
(iii) increase any maximum number of authorized shares of any class of
shares having rights or privileges equal or superior to the common
shares,
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without in any of such cases the holders of the common shares being entitled to
vote separately thereon as a class; provided, however, that the holders of
common shares shall always be entitled to vote in any of such cases in
accordance with Section 3.1 hereof.
SECOND PREFERRED SHARES, SERIES 1
The first series of Second Preferred Shares, designated as Convertible
Participating Voting Second Preferred Shares Series 1 (the "Second Preferred
Shares Series 1"), shall consist of an unlimited number of shares. The Second
Preferred Shares Series 1 shall, in addition to the rights, privileges,
restrictions and conditions attaching to the Second Preferred Shares as a class
(collectively, the "Second Preferred Shares Class Provisions") carry and be
subject to the following rights, privileges, restrictions and conditions
(collectively, the "Second Preferred Shares Series 1 Provisions"):
1. INTERPRETATION
1.1 DEFINED TERMS
The following words and phrases whenever used in the Second Preferred
Shares Series 1 Provisions shall have the following meanings, unless there be
something in the context otherwise inconsistent therewith:
(a) "ADJUSTED CONVERSION VALUE" means $7.75 less:
(i) upon conversion occurring at the option of the Corporation;
(ii) after a Change-in-Control Transaction; or
(iii) after the exercise by the holders of their conversion privilege
provided herein following delivery by the Corporation of the
notice of redemption contemplated by section 5.1,
in each case, prior to the Fourth Anniversary Date, the Adjustment
Amount;
(b) "ADJUSTED REDEMPTION PRICE" means:
(i) until the Fourth Anniversary Date, an amount equal to the sum of
(A) $10.00 per Second Preferred Share Series 1, plus (B) the
Redemption Premium per Second Preferred Share Series 1, plus (C)
an amount equal to the Adjustment Amount multiplied by the number
of common shares into which such Second Preferred Share Series 1
would be convertible (assuming conversion at the option of the
holders); and
(ii) from and after the Fourth Anniversary Date, an amount equal to
the sum of (A) $10.00 per Second Preferred Share Series 1, plus
(B) the Redemption Premium per Second Preferred Share Series 1,
plus (C) any accrued but unpaid dividends thereon;
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(c) "ADJUSTMENT AMOUNT" in respect of each Second Preferred Share
Series 1 means, at the time of the applicable event giving rise to the
calculation of the Adjustment Amount (the "Applicable Time"), an amount
equal to (A) the U.S. Dollar Equivalent of the dividend paid per common
share in the most recently completed fiscal quarter of the Corporation
(calculated on the date of payment of the dividend) multiplied by (B) a
number which is the sum of the number of common shares into which 4,000,000
Second Preferred Shares Series 1 would be convertible (assuming conversion
prior to the Fourth Anniversary Date at the option of the Corporation) on
each successive Adjustment Date set forth in the table contained in section
6.4(b)(i) following the Applicable Time until the Fourth Anniversary Date;
divided by 5,161,290.3;
(d) "BUSINESS DAY" means a day other than a Saturday, a Sunday or any
other day on which principal commercial banks are not permitted to be open
in Toronto, Ontario;
(e) "CANADIAN DOLLAR EQUIVALENT" means, on any day, with respect to any
amount in United States dollars, the equivalent amount in Canadian dollars,
converted at the Bank of Canada's noon rate of exchange for that day;
(f) "CHANGE-IN-CONTROL TRANSACTION" means a transaction or series of
related transactions as a result of which any person other than Thomas H.
Lee Company, and its shareholders, officers, directors, affiliates, and
entities controlled or administered by any of the foregoing acquire shares
carrying, in the aggregate, more than 50% of the votes attaching to all
voting shares in the capital of the Corporation;
(g) "CLOSING PRICE" with respect to any securities on any Trading Day
shall mean the closing sale price on such day or, in case no such sale
takes place on such Trading Day, the average of the reported closing bid
and asked prices, in each case on the Recognized Exchange on which the
highest volume of trading in such securities took place on that day or, if
no trading in such securities took place on that day, on the prior Trading
Day on which trading took place;
(h) "COMMON SHARES" shall mean common shares of the Corporation as such
shares were constituted on the date of issuance of the Second Preferred
Shares Series 1 and shares of any other class resulting from any
reclassification or change of such shares;
(i) "COMMON EQUIVALENT REDEMPTION PRICE" means, as of any date, an
amount per Second Preferred Share Series 1 equal to the amount which would
have been distributable with respect to the number of common shares into
which such Second Preferred Share Series 1 would be convertible as of such
date had the Corporation been liquidated as of such date. Such Common
Equivalent Redemption Price shall be based on the value of the Corporation
on a liquidated basis and shall be as agreed upon by the Corporation and
holders of the Second Preferred Shares Series 1 or, absent such agreement,
within 15 days following the date on which the applicable event which gives
rise to the valuation occurs, as determined by an independent appraiser
selected by the Corporation, the fees and expenses of which appraiser shall
be borne by the Corporation;
(j) "CONVERSION BASIS" has the meaning ascribed to it in section 6.1(a);
(k) "CONVERSION FACTOR" has the meaning ascribed to it in section 6.4(a);
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(l) "CURRENT MARKET VALUE" means the U.S. Dollar Equivalent of the Closing
Price of the common shares on the Recognized Exchange determined on the
last Trading Day prior to the issuance of common shares (or other event in
connection with which Current Market Value is to be determined) or, if no
trading in the common shares took place on that day, on the prior Trading
Day on which trading took place;
(m) "DIVIDEND PAYMENT DATE" means the first business day following the
first day of each of the first and third fiscal quarters in each fiscal
year of the Corporation commencing on or about six months following the
Fourth Anniversary Date;
(n) "FOURTH ANNIVERSARY DATE" means July 7, 2002;
(o) "LIQUIDATION PREMIUM" means, at any time, an amount per Second
Preferred Share Series 1 equal to the Conversion Factor less $10.00;
(p) "MAXIMUM COMMON SHARE NUMBER" means 7,688,508 common shares, or
such greater number of common shares as may be permitted to be issued by
all applicable regulatory authorities;
(q) "PUBLIC OFFERING" means a sale of common shares in the capital of
the Corporation (or securities exchangeable for or convertible into such
common shares) pursuant to a prospectus filed under applicable securities
laws and underwritten by one or more independent underwriters, where the
aggregate proceeds to the Corporation are at least U.S.$25,000,000, and not
more than 25% of the shares are sold to any one purchaser or affiliated
group of purchasers, other than underwriters;
(r) "RECOGNIZED EXCHANGE" means any recognized stock exchange on which
the common shares are listed from time to time, and on which the highest
aggregate volume of trading in the common shares has taken place over the
applicable period or on the applicable day, including, without limitation,
the Nasdaq National Market, The Toronto Stock Exchange and The Montreal
Exchange;
(s) "REDEMPTION PREMIUM" means, on any date, an amount per Second
Preferred Share Series 1 equal to the Conversion Factor less $10.00;
(t) "SURVIVING PERSON" means the continuing or surviving person of a
merger, consolidation or other continuation with the Corporation;
(u) "TRADING DAY" means, if the applicable security is listed or
admitted for trading on a recognized stock exchange on which the common
shares are listed from time to time, a day on which trades may be made
thereon; and
(v) "U.S. DOLLAR EQUIVALENT" means, on any day, with respect to any
amount in Canadian dollars, the equivalent amount in United States dollars,
converted at the Bank of Canada's noon rate of exchange for that day.
1.2 CURRENCY
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All amounts payable pursuant hereto shall be payable in lawful money of the
United States of America.
1.3 NON-BUSINESS DAY
If any day on which any payment is to be made or action taken hereunder in
connection with the Second Preferred Shares Series 1 is not a business day, then
such payment shall be made or action taken on the next succeeding day that is a
business day.
1.4 HEREIN, HERETO, ETC.
The words "herein", "hereto", "hereof" and similar words refer, unless the
context clearly indicates the contrary, to the whole of the Second Preferred
Shares Class Provisions and not to any particular section, clause or paragraph
thereof.
1.5 NUMBER AND GENDER
Words importing the singular number only shall include the plural and vice
versa, words importing the use of any gender shall include all genders and words
importing persons shall include firms and corporations and vice versa.
1.6 ADJUSTMENTS
Without limiting or duplicating the effect of section 6.4(b)(iii), all
numbers of shares and dollar amounts used herein shall be adjusted appropriately
to reflect any stock split, consolidation, combination, stock dividend or other
form of recapitalization or restructuring occurring after the date hereof.
1.7 ACTIONS BY HOLDERS
Any action required or permitted to be taken hereunder by holders of Second
Preferred Shares Series 1, including, without limitation, election to choose
between or among alternative forms of payment, shall be deemed to be valid if
approved or taken by holders of in excess of 50% in number of such shares then
outstanding, and shall be binding upon all holders of Second Preferred Shares
Series 1. In connection with the exercise by the holders of the option
contemplated by Section 5.1, if no approval is obtained in the manner
contemplated by this Section 1.7 within the thirty day period provided for in
Section 5.1, the holders shall be deemed to have elected to receive the Adjusted
Redemption Price.
2. DIVIDENDS
2.1 CASH AND OTHER DIVIDENDS
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(a) If and whenever the Corporation shall at any time or from time to time
declare and pay a cash dividend on its outstanding common shares, then the
holders of Second Preferred Shares Series 1 shall be entitled to receive
from the Corporation, with respect to each Second Preferred Share Series 1
held, a preferential dividend equal in amount to one-half of the same
dividend to be received by a holder of the number of common shares into
which such Second Preferred Share Series 1 is convertible on the record
date for such dividend (assuming conversion at the option of the holder),
out of which any applicable withholding taxes will be withheld. Any such
dividend shall be paid on the Second Preferred Shares Series 1 at the same
time such dividend shall be paid on the common shares.
(b) The Corporation shall declare and pay any dividend to the holders of
the Second Preferred Shares Series 1 contemplated by Sections 6.5 and
7.2(c), out of which dividend amount applicable withholding taxes will be
withheld.
2.2 PAID-IN-KIND DIVIDENDS
In addition to the dividends provided for in Section 2.1, the holders of
Second Preferred Shares Series 1 shall, from and after the Fourth Anniversary
Date, be entitled to receive a cumulative preferential non-cash paid-in-kind
dividend, payable in additional Second Preferred Shares Series 1. Such dividend
shall be payable on each Dividend Payment Date to the holders of record at the
close of business on the third business day immediately preceding such Dividend
Payment Date, and shall be at the rate of two and one-half percent (2 1/2 %) for
each six months, compounded semi-annually, with daily accrual. With respect to
the first dividend payable after the Fourth Anniversary Date, such dividend
shall be paid on the number of Second Preferred Shares Series 1 outstanding on
such Fourth Anniversary Date, and such dividends payable thereafter shall be
paid on the number of such Second Preferred Shares Series 1 outstanding on the
immediately preceding Dividend Payment Date. Notwithstanding the foregoing:
(a) none of the dividends contemplated by this Section 2.2 shall be payable
until the holders of Second Preferred Shares Series 1 provide reasonably
satisfactory evidence to the Corporation that the holders have paid or made
provision for the payment, within the applicable statutory time periods, of
any applicable withholding taxes exigible in connection therewith; and
(b) any dividends contemplated by this Section 2.2 which are not permitted
to be paid by virtue of the maximum number of common shares into which the
Second Preferred Shares Series 1 may be converted exceeding the Maximum
Common Share Number shall be paid in cash at the rate of two and one-half
(2 1/2 %) for each six months, compounded semi-annually, with daily
accrual, based on the Adjusted Redemption Price, out of which any
applicable withholding taxes will be withheld.
2.3 NO ADDITIONAL DIVIDENDS
The holders of the Second Preferred Shares Series 1 shall not be entitled
to any dividends other than or in excess of the dividends provided for in this
Section 2.
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3. LIQUIDATION, DISSOLUTION OR WINDING-UP
3.1 LIQUIDATION, DISSOLUTION OR WINDING-UP
In the event of the liquidation, dissolution 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 (in any case, a "Liquidation Event"), each holder of the Second
Preferred Shares Series 1 in accordance with the Second Preferred Shares Class
Provisions shall be entitled to receive the greater of:
(a) an amount equal to the sum of: (i) $ 10.00 per share, plus (ii) the
Liquidation Premium per share, plus (iii) if the Liquidation Event occurs
after the Fourth Anniversary Date, any accrued but unpaid dividend, before
any amount shall be paid or any property or assets of the Corporation shall
be distributed to the holders of the common shares or to the holders of any
other shares ranking junior to the Second Preferred Shares Series 1 in any
respect, out of which aggregate amount any applicable withholding taxes
will be withheld; or
(b) pari passu and rateably with the holders of the common shares, the
Common Equivalent Redemption Price per share, out of which any applicable
withholding taxes will be withheld, and less the amount of any taxes
required to be paid by the Corporation pursuant to Part VI.1 of the Income
Tax Act (Canada) as a result of such payment to such holder.
After payment to the holders of the Second Preferred Shares Series 1 of the
amount so payable to them, they shall not be entitled to share in any further
distribution of the property or assets of the Corporation.
4. VOTING
4.1 WITH COMMON SHARES
So long as any Second Preferred Share Series 1 is outstanding, each holder
thereof shall be entitled to vote at all meetings of the shareholders of the
Corporation. With respect to any such vote, each holder of Second Preferred
Shares Series 1 shall be entitled to the number of votes equal to the number of
votes to which a holder of the number of common shares into which such Second
Preferred Shares Series 1 are convertible on the record date for such vote is
entitled (assuming conversion at the option of the holder).
5. REDEMPTION
5.1 REDEMPTION
Subject to section 5.2 and the provisions of the Canada Business
Corporations Act, the Corporation, in the manner provided in the provisions
attaching to the Second Preferred as a
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class may, upon not less than 60 days' prior written notice, redeem all, but not
less than all, of the then outstanding Second Preferred Shares Series 1 on
payment for each share to be redeemed of an amount per share equal to, at the
option of holders of the Second Preferred Shares Series 1 given within thirty
days after receipt from the Corporation of its notice of proposed redemption,
either:
(a) the Adjusted Redemption Price; or
(b) the Common Equivalent Redemption Price;
in either case out of which such payment any applicable withholding tax shall be
withheld. If the holders elect to receive the Common Equivalent Redemption
Price, the Corporation may, at its election, pay such amount either in cash or
by issuing to such holders a number of common shares having a value, based on
the average Closing Price over the fifteen consecutive Trading Days immediately
preceding the date of redemption, equal to the Common Equivalent Redemption
Price.
5.2 RESTRICTION ON REDEMPTION
The Corporation shall not be entitled to redeem any of the Second Preferred
Shares Series 1 at any time prior to the Fourth Anniversary Date unless the
common shares shall have traded, at any time since July 7, 1998, on a Recognized
Exchange at a simple average Closing Price per share of not less than $13.00
(or, if applicable, the Canadian Dollar Equivalent thereof) during any 120
consecutive Trading Days prior to the date of the notice of redemption.
6. CONVERSION PRIVILEGE
6.1 RIGHT OF CONVERSION
(a) The Second Preferred Shares Series 1 shall, subject as hereinafter
provided, be convertible into common shares on the following conversion
basis (the "Conversion Basis"), namely the number of common shares for each
Second Preferred Share Series 1 converted shall be determined by dividing
the Conversion Factor (as defined in Section 6.4) in effect at the time of
conversion by the Adjusted Conversion Value.
(b) The conversion provided for in Section 6.1(a) may be effected by:
(i) any of the holders of Second Preferred Shares Series 1 at any
time, and
(ii) the Corporation
(A) at any time prior to the Fourth Anniversary Date if the
common shares shall have traded at any time, since July 7,
1998, on a Recognized Exchange at a simple average Closing
Price per share of not less than $13.00 (or, if applicable,
the Canadian Dollar Equivalent thereof) during any 120
consecutive Trading Days, and
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(B) at any time or from time to time on or after the Fourth
Anniversary Date.
6.2 CONVERSION BY HOLDER
(a) The conversion privilege herein provided for may be exercised by a
holder of Second Preferred Shares Series 1 by notice in writing given to
the transfer agent for the Second Preferred Shares Series 1 at any office
for the transfer of the Second Preferred Shares Series 1 or to the
Corporation at its registered office accompanied by the certificate or
certificates representing Second Preferred Shares Series 1 in respect of
which the holder thereof desires to exercise such right of conversion. Such
notice shall be signed by such holder or his duly authorized attorney or
agent and shall specify the number of Second Preferred Shares Series 1
which the holder desires to have converted. The transfer form on the
certificate or certificates in question need not be endorsed, except in the
circumstances hereinafter contemplated. If less than all the Second
Preferred Shares Series 1 represented by a certificate or certificates
accompanying any such notice are to be converted, the holder shall be
entitled to receive, at the expense of the Corporation, a new certificate
representing the Second Preferred Shares Series 1 comprised in the
certificate or certificates surrendered as aforesaid which are not to be
converted.
On any conversion of Second Preferred Shares Series 1, the share
certificates for common shares of the Corporation resulting therefrom
shall be issued in the name of the registered holder of the Second
Preferred Shares Series 1 converted or in such name or names as such
registered holder may direct in writing (either in the notice referred
to above or otherwise); in any such case the transfer form on the back
of the certificate in question shall be endorsed by the registered
holder of the Second Preferred Shares Series 1 or his duly authorized
attorney, with signature guaranteed in a manner satisfactory to the
Corporation.
(b) In the case of any Second Preferred Shares Series 1 which may be called
for redemption, the right of conversion thereof shall, notwithstanding
anything herein contained, cease and terminate at the close of business on
the business day immediately preceding the date fixed for redemption,
provided, however, that if the Corporation shall fail to redeem such Second
Preferred Shares Series 1 in accordance with the notice of redemption, the
right of conversion shall thereupon be restored.
(c) Subject as hereinafter provided in this Section 6.2(c), the right of a
holder of Second Preferred Shares Series 1 to convert the same into common
shares shall be deemed to have been exercised, and the registered holder of
such Second Preferred Shares Series 1 (or any person or persons in whose
name or names any such registered holder of Second Preferred Shares Series
1 shall have directed certificates representing common shares to be issued
as provided in Section 6.2(a)) shall be deemed to have become a holder of
common shares of record of the Corporation for all purposes on the date of
surrender of certificates representing the Second Preferred Shares Series 1
to be converted accompanied by notice in writing as provided in Section
6.2(a), notwithstanding any delay in the delivery of certificates
representing the common shares into which such Second Preferred Shares
Series 1 have been converted.
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6.3 CONVERSION BY CORPORATION
(a) In case the Corporation shall desire to exercise the right to cause
conversion of the Second Preferred Shares Series 1 pursuant to Section
6.1(a), it shall fix a date for conversion and it shall deliver by hand or
mail or cause to be mailed a notice of such conversion at least 20 days
prior to the date fixed for conversion to the holders of Second Preferred
Shares Series 1 so to be converted at their last addresses as the same
appear on the books of the Corporation. Such mailing shall be by ordinary
mail. The notice, if delivered or mailed in the manner herein provided,
shall be conclusively presumed to have been duly given, whether or not the
holder receives such notice. In any case, failure to deliver or mail such
notice by mail or any defect in the notice to the holder of the Second
Preferred Shares Series 1 designated for conversion shall not affect the
validity of the proceedings for the conversion of any other shares of
Second Preferred Shares Series 1.
Each such notice shall specify the date fixed for conversion, the
number of common shares into which each Second Preferred Share Series
1 is to be converted, the place or places for surrender of
certificates representing such Second Preferred Shares Series 1 and
that such common shares will be delivered upon presentation and
surrender of certificates representing such Second Preferred Shares
Series 1. If the notice of conversion is delivered prior to the Fourth
Anniversary Date, such notice shall be accompanied by a certificate of
an officer of the Corporation certifying that the common shares have
traded at any time since July 7, 1998, on a Recognized Exchange at a
simple average Closing Price per share of not less than $13.00 (or, if
applicable, the Canadian Dollar Equivalent thereof) during any
consecutive 120 Trading Days.
(b) As promptly as practicable upon receipt of such notice of conversion,
each holder of any shares of Second Preferred Shares Series 1 shall
surrender the certificate or certificates for such shares of Second
Preferred Shares Series 1, duly endorsed, at a place designated for such
surrender along with instructions regarding the name or names (with
address) in which the certificate or certificates for common shares which
shall be issuable on such conversion. Each such share surrendered for
conversion shall, unless the shares issuable on conversion are to be issued
in the same name as the registration of such share of Second Preferred
Shares Series 1, be duly endorsed by, or be accompanied by instruments of
transfer in form satisfactory to the Corporation duly executed by, the
holder or his duly authorized attorney, with signature guaranteed in a
manner satisfactory to the Corporation.
As promptly as practicable after satisfaction of the requirements for
surrender set forth above, the Corporation shall issue and shall
deliver to such holder at the address designated in such instructions
a certificate or certificates for the number of full shares issuable
upon the conversion of such shares in accordance with the provisions
of this Section 6 and a cheque or cash in respect of any fractional
19
interest in respect of a common share arising upon such conversion, as
provided in this Section 6.
Each conversion shall be deemed to have been effected as to any such
certificate on the date on which the requirements set forth above in
this Section 6.3(b) have been satisfied as to such certificate, and
the person in whose name any certificate or certificates for common
shares shall be issuable upon such conversion shall be deemed to have
become on said date the holder of record of the shares represented
thereby; provided however, that any such surrender on any date when
the share transfer books of the Corporation shall be closed shall
constitute the person in whose name the certificates are to be issued
as the record holder thereof for all purposes on the next succeeding
day on which such share transfer books are open, but such conversion
shall be at the Conversion Factor in effect on the date upon which
such Second Preferred Shares Series 1 shall have been surrendered.
6.4 CONVERSION FACTOR
(a) The initial conversion factor shall be $10.00 (herein called the
"Conversion Factor") subject to adjustment as provided in this Section 6.4.
(b) The Conversion Factor shall be adjusted from time to time by the
Corporation as follows:
(i) Subject to Sections 6.4(b)(ii), (iii) and (iv), the Conversion
Factor shall be adjusted semi-annually at the rate of 2.5% for
each six-month period, compounded semi-annually with daily
accrual, until the Fourth Anniversary Date, as follows:
Adjustment Date Conversion Factor
--------------- -----------------
January 7, 1999 $10.25
July 7, 1999 $10.51
January 7, 2000 $10.77
July 7, 2000 $11.04
January 7, 2001 $11.31
July 7, 2001 $11.60
January 7, 2002 $11.89
Fourth Anniversary Date $12.18
For greater certainty, from and after the Fourth Anniversary
Date, the Conversion Factor shall be $12.18.
(ii) If conversion occurs prior to the Fourth Anniversary Date,
either, (A) at the option of the Corporation pursuant to Section
6.1(b)(ii), (B) within 90
20
days following a Change-in-Control Transaction, or (C) following
receipt from the Corporation of a notice of redemption pursuant
to Section 5.1, the Conversion Factor shall be $12.18, as
adjusted by Sections 6.4(b)(iii) and (iv);
(iii) If and whenever the outstanding common shares shall be
subdivided into a greater number of common shares or a stock
dividend is declared in respect of common shares, the Conversion
Factor in effect at the opening of business on the day following
the day upon which such subdivision or stock dividend becomes
effective shall be proportionately increased, and conversely, in
case the outstanding common shares shall be combined into a
smaller number of common shares, the Conversion Factor in effect
at the opening of business on the day following the day upon
which such combination becomes effective shall be proportionately
reduced, such increase or reduction, as the case may be, to
become effective immediately after the opening of business on the
day following the day upon which such subdivision, stock dividend
or combination becomes effective;
(iv) If and whenever the Corporation issues common shares (other than
(A) pursuant to the exercise of employee stock options, (B) as
consideration in connection with acquisitions approved by the
Corporation's board of directors, or (C) in a Public Offering) at
a gross sale or offering price which is less than 100% of the
Current Market Value thereof, the Conversion Factor shall be
adjusted to the result obtained by multiplying the Conversion
Basis in effect immediately prior to the date of such issuance by
a fraction:
(1) the numerator of which shall be the number of common shares
outstanding immediately after such issuance; and
(2) the denominator of which shall be the sum of:
(A) the number of common shares outstanding immediately
prior to such issuance; and
(B) the number of shares equal to the quotient obtained by
dividing
(x) the aggregate consideration received pursuant to
such issuance by
(y) the Current Market Value per common share
and by multiplying the number thereby determined by $7.75.
(c) Notwithstanding Section 6.4(b), no adjustment in the Conversion Factor
shall be required unless such adjustment would require an increase or
decrease of at least 1% in
21
such price; provided, however, that any adjustments which by reason of this
section 6.4(c) are not required to be made shall be carried forward and
taken into account in any subsequent adjustment. All calculations under
this section 6.4 shall be made by the Corporation and shall be made to the
nearest cent or to the nearest one one-hundredth of a share, as the case
may be.
No adjustment need be made for rights to purchase common shares
pursuant to a Corporation plan for reinvestment of dividends or
interest.
(d) In any case in which this section 6.4 provides that an adjustment shall
become effective immediately after a record date for an event, the
Corporation may defer until the occurrence of such event (i) issuing to the
holder of any Second Preferred Share Series 1 converted after such record
date and before the occurrence of such event the additional common shares
issuable upon such conversion by reason of the adjustment required by such
event over and above the common shares issuable upon such conversion before
giving effect to such adjustment and (ii) paying to such holder any amount
in cash in lieu of any fraction pursuant to section 6.10.
6.5 EFFECT OF RECLASSIFICATION
(a) In the event of any reclassification or change of outstanding common
shares (other than a change as a result of a subdivision or combination) (a
"Reclassification"), each Second Preferred Share Series 1 then outstanding
shall thereafter be convertible into the kind and amount of shares and
other securities or properties receivable upon such reclassification or
change by a holder of a number of common shares issuable upon conversion of
such Second Preferred Share Series 1, provided that such Second Preferred
Shares Series 1 shall not be convertible into any property that would cause
such Second Preferred Share Series 1 to be a "short term preferred share"
(as defined by the Income Tax Act (Canada)). If, pursuant hereto, any
property would otherwise be distributable which would cause such Second
Preferred Share Series 1 to be a "short term preferred share", such
property shall be paid as a dividend-in-kind on the day immediately prior
to conversion.
(b) Notwithstanding anything contained herein to the contrary, the
Corporation will not effect any Reclassification unless, prior to the
consummation hereof, (i) the Surviving Person thereof shall assume, by
written instrument mailed to each holder of Second Preferred Shares Series
1 if such shares are held by 50 or fewer holders or groups of affiliated
holders or to each transfer agent for the Second Preferred Shares Series 1
if such shares are held by a greater number of holders, the obligation to
deliver such holder such shares or other securities or properties or pay a
dividend of such other properties with respect to or in exchange for common
shares to which, in accordance with the foregoing provisions, such holder
is entitled, and (ii) proper provision is made to ensure that the holder of
Second Preferred Shares Series 1 will be entitled to receive the benefits
afforded by this section 6.5. Such written instrument should provide for
adjustments which shall be as nearly as equivalent as may be practicable to
the adjustments provided for in this section 6.5.
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The above provisions of this section shall similarly apply to
successive reclassifications and changes.
(c) If at any time or from time to time the Corporation takes any action
that would result in a Reclassification, the Corporation shall cause to be
mailed to each holder of Second Preferred Shares Series 1 at his address
appearing on the books of the Corporation, as promptly as possible but in
any event at least 15 days prior to the applicable date hereinafter
specified, a notice stating the date on which such Reclassification is
expected to become effective or occur and the date as of which it is
expected that holders of record of common shares shall be entitled to
exchange their common shares for securities or other property deliverable
upon such Reclassification. Failure to give such notice, or any defect
therein, shall not affect the legality or validity of such
Reclassification. Neither the failure to give such notice nor any defect
therein shall affect the legality or validity of such Reclassification.
(d) If this section 6.5 applies to any event or occurrence, the adjustments
provided for in section 6.4 shall not apply to such event or occurrence.
6.6 TRANSFER OR SIMILAR TAXES ON SHARES ISSUED
The issue of share certificates on conversions of Second Preferred Shares
Series 1 shall be made without charge to the converting holder of Second
Preferred Shares Series 1 for any security transfer or similar tax in respect of
the issue thereof. The Corporation shall not, however, be required to pay any
such tax which may be payable in respect of any transfer involved in the issue
and delivery of shares in any name other than that of the holder of any Second
Preferred Shares Series 1 converted, and the Corporation shall not be required
to issue or deliver any such share certificate unless and until the person or
persons requesting the issue thereof shall have paid to the Corporation the
amount of such tax or shall have established to the satisfaction of the
Corporation that such tax has been paid.
6.7 SHARES TO BE FULLY PAID
The Corporation covenants that all common shares which may be issued upon
conversion of Second Preferred Shares Series 1 will, upon issue, be fully paid
and non-assessable by the Corporation and free from all transfer or similar
taxes as described in section 6.6, liens and charges with respect to the issue
thereof.
6.8 REPORTS AS TO ADJUSTMENTS
Upon any adjustment of the Conversion Factor then in effect and any
increase or decrease in the number of common shares issuable upon the operation
of the conversion set forth in this section 6, then, and in each such case, the
Corporation shall promptly deliver to the transfer agent for the Second
Preferred Shares Series 1 and the transfer agent for the common shares, a
certificate signed by an officer of the Corporation setting forth in reasonable
detail the event requiring the adjustment and the method by which such
adjustment was calculated and specifying the Conversion Factor then in effect
following such adjustment and the increased or decreased number of shares
issuable upon the conversion set forth in this section 6. The
23
Corporation shall also promptly after the making of such adjustment cause its
independent public accountants to give written notice to the registered holders
of the Second Preferred Shares Series 1 at the address of each holder as shown
on the books of the Corporation maintained by the transfer agent thereof, which
notice shall state the Conversion Factor then in effect, as adjusted, and the
increased or decreased number of shares issuable upon the exercise of the right
of conversion granted by this section 6, and shall set forth in reasonable
detail the method of calculation of each with a brief statement of the facts
requiring such adjustment. Where appropriate, such notice to holders of the
Second Preferred Shares Series 1 may be given in advance and included as part of
the notice required under the provisions of section 6.3.
6.9 ENTITLEMENT TO DIVIDENDS
A holder of Second Preferred Shares Series 1 on the record date for any
dividend declared payable on such share will be entitled to such dividend
notwithstanding that such share is converted after such record date and before
the payment date of such dividend, and the registered holder of any common share
resulting from any conversion shall be entitled to rank equally with the
registered holders of all other common shares in respect of all dividends
declared payable to holders of common shares of record on any date after the
date of conversion. Subject as aforesaid, no payment or adjustment will be made
on account of any dividend, accrued or otherwise, on the Second Preferred Shares
Series 1 converted or the common shares resulting from any conversion.
6.10 AVOIDANCE OF FRACTIONAL SHARES
In any case where a fraction of a common share or Convertible Preferred
Share Series 1 would otherwise be issuable hereunder, whether on conversion of
one or more Second Preferred Shares Series 1, as a payment of a dividend or
otherwise, the Corporation shall adjust such fractional interest by rounding up
or down to the nearest whole share.
6.11 POSTPONEMENT OF ISSUANCE OF SHARES UPON CONVERSION
In any case where the application of the foregoing provisions results in an
increase in the Conversion Factor taking effect immediately after the record
date for a specific event, if any Second Preferred Shares Series 1 are converted
after that record date and prior to completion of the event, the Corporation may
postpone the issuance to the holder of the additional common shares to which he
is entitled by reason of the increase in the Conversion Factor but such
additional common shares shall be so issued and delivered to that holder upon
completion of the event and the Corporation shall, in the interim, deliver to
the holder an appropriate instrument evidencing his right to receive such
additional common shares.
6.12 CERTAIN COVENANTS
Any registered holder of Second Preferred Shares Series 1 may proceed to
protect and enforce its rights and the rights of such holders by any available
remedy by proceeding at law or in equity to protect and enforce any such rights,
whether for the specific enforcement of any provision herein or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy.
24
7. GENERAL
7.1 CONFLICT
In the event of any conflict or inconsistency between any of the Second
Preferred Shares Series 1 Provisions and the Second Preferred Shares Class
Provisions, such conflict or inconsistency shall be resolved in favour of the
Second Preferred Shares Class Provisions.
7.2 RESTRICTIONS
Notwithstanding anything contained in these Second Preferred Shares Series
1 Provisions:
(a) the Corporation shall not, without the consent of the holders of the
Second Preferred Shares Series 1, issue any equity security, or any
security which may be converted into or exchanged for an equity security of
the Corporation, in either case where such equity security has liquidation,
voting, dividend or redemption rights, terms or privileges which are in
priority to those attaching to the Second Preferred Shares Series 1;
(b) the Corporation shall not pay any non-cash paid-in-kind dividends to
the holders of the Second Preferred Shares Series 1 to the extent that the
maximum aggregate number of common shares into which all of the holders'
Second Preferred Shares Series 1 from time to time outstanding are
convertible (assuming the maximum conversion rate), including the Second
Preferred Shares Series 1 issuable on the payment of such dividend, would
exceed the Maximum Common Share Number;
(c) the outstanding Second Preferred Shares Series 1 shall not, at any
time, be converted into a number of common shares which exceeds the Maximum
Common Share Number, and any adjustment resulting from such prohibition
shall be satisfied by the Corporation declaring and paying, immediately
prior to conversion, a dividend in cash, out of which adjustment applicable
withholding taxes shall be withheld; and
(d) the Corporation shall not issue common shares in a transaction
requiring adjustment of the Conversion Factor as contemplated by section
6.4(b)(iv) to the extent that as a result of such adjustment the common
shares into which the outstanding Second Preferred Shares Series 1 would be
convertible (assuming the maximum conversion rate) would exceed the Maximum
Common Share Number.
7.3 AMENDMENTS
Sections 1 to 7, inclusive, of the Second Preferred Shares Series 1
Provisions may be repealed, altered, modified, amended or amplified only with
the sanction of the holders of the
25
Second Preferred Shares Series 1 given as hereinafter specified, in addition to
any other approval required by the Canada Business Corporations Act.
7.4 SANCTION BY HOLDERS OF SECOND PREFERRED SHARES SERIES 1
The sanction of holders of the Second Preferred Shares Series 1 as to any
and all matters referred to herein or as to any change adversely affecting the
rights or privileges of the Second Preferred Shares Series 1 may be given and
shall be deemed to have been sufficiently given if given by the holders of the
Second Preferred Shares Series 1 in the manner provided in the Second Preferred
Shares Series 1 Provisions with respect to the sanction of the holders of any
series of the Second Preferred Shares and the said provisions shall apply
mutatis mutandis.
26
SCHEDULE "B"
7. Other provisions, if any
Without in any way limiting the powers conferred upon the Corporation and
its directors by the Canada Business Corporations Act, the Board of Directors of
the Corporation may from time to time on behalf of the Corporation:
(a) borrow money upon the credit of the Corporation and limit or increase
the amount to be borrowed;
(b) issue, reissue, sell or pledge bonds, debentures, notes or other
evidences of indebtedness, guarantees or securities of the Corporation,
whether secured or unsecured;
(c) to the extent permitted by the Canada Business Corporations Act, give
guarantees on behalf of the Corporation to secure performance of any
obligation of any person or give, directly or indirectly, financial
assistance to any person on behalf of the Corporation by means of a loan,
guarantee or otherwise;
(d) mortgage, hypothecate, pledge or otherwise the real or personal,
movable or immovable property of the Corporation, currently owned or
subsequently acquired, including book debts, rights, powers, franchises and
undertakings, to secure any present or future debt obligations or any money
borrowed or other debt, liability or obligation of the Corporation,
including any bonds, debentures, notes, create a security interest in all
or any of debenture stock, other evidences of indebtedness, guarantees or
securities of the Corporation which it is by law entitled to issue; and
(e) delegate to one or more of the directors or officers of the Corporation
all or any of the powers conferred by the foregoing provisions to such
extent and in such manner as the Board of Directors shall determine at the
time of each such delegation.
For the purposes of the Special Corporate Powers Act of the Province of
Quebec and without in any way limiting the powers conferred upon the Corporation
and its directors by Section 183 of the Canada Business Corporations Act, the
Corporation may, for the purpose of securing any bonds, debentures or debenture
stock which it is by law entitled to issue, hypothecate, mortgage or pledge, and
cede and transfer, any property, movable or immovable, present or future, which
it may own.
27
- 2 -
The directors may appoint one or more directors, who shall hold office for
a term expiring not later than the close of the next annual meeting of
shareholders, but the total number of directors so appointed may not exceed
one-third of the number of directors elected at the previous annual meeting of
shareholders.
28
SCHEDULE "C"
IN THE MATTER OF SUBSECTION 185(2) OF THE
CANADA BUSINESS CORPORATIONS ACT
AND
IN THE MATTER OF THE AMALGAMATION (THE "AMALGAMATION")
OF COTT CORPORATION AND 3699455 CANADA INC.
STATUTORY DECLARATION
I, Catherine Brennan, of the City of Toronto, in the Province of Ontario,
do solemnly declare that:
I AM THE V.P. TREASURER, OF COTT CORPORATION, ONE OF THE AMALGAMATING
CORPORATIONS (HEREINAFTER CALLED THE "CORPORATION") AND AS SUCH HAVE PERSONAL
KNOWLEDGE OF THE MATTERS HEREIN DECLARED TO.
I HAVE CONDUCTED SUCH EXAMINATIONS OF THE BOOKS AND RECORDS OF THE CORPORATION
AND HAVE MADE SUCH ENQUIRIES AND INVESTIGATIONS AS ARE NECESSARY TO ENABLE ME TO
MAKE THIS DECLARATION.
I HAVE SATISFIED MYSELF THAT THERE ARE REASONABLE GROUNDS FOR BELIEVING THAT:
THE CORPORATION IS AND THE AMALGAMATED CORPORATION WILL BE ABLE TO PAY ITS
LIABILITIES AS THEY BECOME DUE; AND
THE REALIZABLE VALUE OF THE ASSETS OF THE AMALGAMATED CORPORATION WILL NOT BE
LESS THAN THE AGGREGATE OF ITS LIABILITIES AND STATED CAPITAL OF ALL CLASSES.
THERE ARE REASONABLE GROUNDS FOR BELIEVING THAT NO CREDITOR WILL BE PREJUDICED
BY THE AMALGAMATION.
And I make this solemn declaration conscientiously believing the same to be
true and knowing that it is of the same force and effect as if made under oath
and by virtue of the Canada Evidence Act.
DECLARED before me at the X
City of Toronto, in the X
Province of Ontario, X ___________________________________
this 21st day of X
December, 1999. X
X
X
____________________________________ X
A Commissioner for taking affidavits
29
SCHEDULE "C"
IN THE MATTER OF SUBSECTION 185(2) OF THE
CANADA BUSINESS CORPORATIONS ACT
AND
IN THE MATTER OF THE AMALGAMATION (THE "AMALGAMATION")
OF COTT CORPORATION AND 3699455 CANADA INC.
STATUTORY DECLARATION
I, Mark Halperin, of the City of Toronto, in the Province of Ontario, do
solemnly declare that:
1. I AM THE SECRETARY OF 3699455 CANADA INC., ONE OF THE AMALGAMATING
CORPORATIONS (HEREINAFTER CALLED THE "CORPORATION") AND AS SUCH HAVE
PERSONAL KNOWLEDGE OF THE MATTERS HEREIN DECLARED TO.
I HAVE CONDUCTED SUCH EXAMINATIONS OF THE BOOKS AND RECORDS OF THE CORPORATION
AND HAVE MADE SUCH ENQUIRIES AND INVESTIGATIONS AS ARE NECESSARY TO ENABLE ME TO
MAKE THIS DECLARATION.
I HAVE SATISFIED MYSELF THAT THERE ARE REASONABLE GROUNDS FOR BELIEVING THAT:
THE CORPORATION IS AND THE AMALGAMATED CORPORATION WILL BE ABLE TO PAY ITS
LIABILITIES AS THEY BECOME DUE; AND
THE REALIZABLE VALUE OF THE ASSETS OF THE AMALGAMATED CORPORATION WILL NOT BE
LESS THAN THE AGGREGATE OF ITS LIABILITIES AND STATED CAPITAL OF ALL CLASSES.
THERE ARE REASONABLE GROUNDS FOR BELIEVING THAT NO CREDITOR WILL BE PREJUDICED
BY THE AMALGAMATION.
And I make this solemn declaration conscientiously believing the same to be
true and knowing that it is of the same force and effect as if made under oath
and by virtue of the Canada Evidence Act.
DECLARED before me at the X
the City of Toronto, in the X
Province of Ontario, X
this 21st day of X
December, 1999. X __________________________________
X
X
____________________________________ X
A Commissioner for taking affidavits
30
[flag] Industry Canada Industrie Canada
Canada Business Loi canadienne sur les
Corporations Act societes par actions
FORM 3 FORMULE 3
NOTICE OF REGISTERED OFFICE OR AVIS DE DESIGNATION OU
NOTICE OF CHANGE OF ADDRESS OF REGISTERED OFFICE DE CHANGEMENT D'ADRESSE DU SIEGE SOCIAL
(SECTION 19) (ARTICLE 19)
---------------------------------------------------------------------------------------------------------------------------------
1 Name of the Corporation - Denomination sociale de la societe 2 Corporation No. - N(0)de la societe
COTT CORPORATION 370680-0
CORPORATION COTT
- -----------------------------------------------------------------------------------------------------------------------------------
3 Place in Canada where the registered office is situated. Lieu du siege social au Canada. (Indiquer le lieu
(Describe the place in terms of a broad municipal selon la definition generale de municipalite. Il doit
definition. This place must match the place listed in correspondre au lieu indique a l'article 2 des statuts.)
Item 2 of the Articles.)
DISTRICT OF MONTREAL, PROVINCE OF QUEBEC
- -----------------------------------------------------------------------------------------------------------------------------------
4 Address of Registered Office - Adresse du siege social
333 AVRO AVENUE
POINTE-CLAIRE, QUEBEC
H9R 5W3
CAUTION: Address of registered office must be within the place that is described in the Articles and Item 3; otherwise an
amendment to the Articles is required (paragraph 173(1)(b) of the Act, use Form 4) in addition to this form.
AVIS: L'adresse du siege social doit se trouver dans les limites du lieu indique dans les statuts et a la rubrique 3.
Sinon, il faut modifier les statuts (alinea 173(1)(b) de la Loi) et remplir, outre la presente formule, la
formule 4.
- -----------------------------------------------------------------------------------------------------------------------------------
5 Effective Date of Change - Date de prise d'effet
N/A
- -----------------------------------------------------------------------------------------------------------------------------------
6 Previous Address of Registered Office - Ancienne adresse du siege social
N/A
- -----------------------------------------------------------------------------------------------------------------------------------
Date Signature Title - Titre
December 21, 1999 Secretary
- -----------------------------------------------------------------------------------------------------------------------------------
For Departmental Use Only - A l'usage du ministere seulement [LOGO]
Filed
Deposee
- -------------------------------------------------------------------------
31
[Canada Flag Logo] Industry Canada Industrie Canada FORM 6 FORMULE 6
NOTICE OF DIRECTORS LISTE DES ADMINISTRATEURS
Canada Business Loi canadienne sur les OR NOTICE OF CHANGE OU AVIS DE CHANGEMENT
Corporations Act societes par actions OF DIRECTORS DES ADMINISTRATEURS
(SECTIONS 106 AND 113) (ARTICLES 106 ET 113)
- ------------------------------------------------------------------------------------------------------------------------------------
1 - Name of corporation - Denomination de la societe 2 - Corporation No. - N(0)de la societe
COTT CORPORATION
CORPORATION COTT 370680-0
- ------------------------------------------------------------------------------------------------------------------------------------
3 - The following persons became directors of this corporation Les personnes suivantes sont devenues administrateurs de
la presente societe
- ------------------------------------------------------------------------------------------------------------------------------------
Name Effective Date Resident Canadian - Y/N
Nom Date d'entree en vigueur: Residential Address - Adresse domciliaire Resident canadien - O/N
SEE SCHEDULE "A" ATTACHED
- ------------------------------------------------------------------------------------------------------------------------------------
4 - The following persons ceased to be directors of this corporation Les personnes suivantes ont casse d'etre administrateurs
de la presente societe
- ------------------------------------------------------------------------------------------------------------------------------------
Name Effective Date
Nom Date d'entree en vigueur: Residential Address - Adresse domciliaire
- ------------------------------------------------------------------------------------------------------------------------------------
N/A
- ------------------------------------------------------------------------------------------------------------------------------------
5 - The directors of this corporation now are Les administrateurs de la presente societe sont maintenant
- ------------------------------------------------------------------------------------------------------------------------------------
Name Effective Date Resident Canadian - Y/N
Nom Date d'entree en vigueur: Residential Address - Adresse domciliaire Resident canadien - O/N
- ------------------------------------------------------------------------------------------------------------------------------------
SEE SCHEDULE "A" ATTACHED
- ------------------------------------------------------------------------------------------------------------------------------------
32
- --------------------------------------------------------------------------------
Date Signature Title - Titre
December 21, 1999 SECRETARY
- --------------------------------------------------------------------------------
Filed - Deposee
----------------------------------
33
SCHEDULE "A"
COTT CORPORATION
RESIDENT
NAME EFFECTIVE DATE RESIDENTIAL ADDRESS CANADIAN
- ---- -------------- ------------------- --------
Colin J. Adair Upon Amal. 466 Mount Pleasant Yes
Westmont, QC H3Y 3G8
John Bennett Upon Amal. 36 Church Hill Avenue Yes
Westmont, QC H3Y 2Z9
C. Hunter Boll Upon Amal. 45 Fletcher Street No
Winchester, Massachusetts
01890
Serge Gouin Upon Amal. 740 Avenue Pratt Yes
Outremont, QC H2V 2T6
Thomas M. Hagerty Upon Amal. 256 Beacon Street No
Boston, Massachusetts
02116
Stephen H. Halperin Upon Amal. 11 Cheval Drive Yes
Don Mills, ON M3B 1B5
David V. Harkins Upon Amal. 8 Cornpoint Road No
Marblehead, Massachusetts
01945
True H. Knowles Upon Amal. 3831 Turtlecreek Boulevard No
Dallas, Texas 75219
Fraser D. Latta Upon Amal. 75 The Bridle Path Yes
North York, ON M3B 2B2
Donald G. Watt Upon Amal. R.R. #1 Yes
Schomberg, ON L0G 1T0
Frank E. Weise III Upon Amal. 272 Booth Lane No
Haverford, Pennsylvania
19041