EXHIBIT 2.2
THIS SECOND AMENDED AND RESTATED AMALGAMATION AGREEMENT ("Agreement") is
made as of the 18th day of January, 1999
BETWEEN:
DISCREET LOGIC INC., a company incorporated
under the laws of Quebec
(the "Company")
--and--
9066-9854 QUEBEC INC., a company incorporated
under the laws of Quebec
("Autodesk Quebec")
--and--
9066-9771 QUEBEC INC., a company incorporated
under the laws of Quebec
("Amalgamation Sub")
--and--
AUTODESK, INC., a corporation incorporated
under the laws of Delaware
("Autodesk"), as Intervenant
RECITALS:
A. The Company was incorporated under Part 1A of the Companies Act (Quebec),
as amended (the "Quebec Act") by certificate of incorporation dated September
10, 1991;
B. Autodesk Quebec was incorporated under Part 1A of the Quebec Act by
certificate of incorporation dated August 14, 1998;
C. Amalgamation Sub was incorporated under Part 1A of the Quebec Act by
certificate of incorporation dated August 14, 1998;
D. The parties entered into an Amalgamation Agreement dated September 23,
1998 (the "Original Agreement"), which was amended and restated in its
entirety by the parties on December 18, 1998 (the "Existing Agreement").
E. The authorized share capital of the Company consists of an unlimited
number of common shares (the "Company Common Shares") and an unlimited number
of preferred shares;
F. As at December 31, 1998 there were 29,935,666 Company Common Shares
issued and outstanding as fully paid and non-assessable shares and there were
no preferred shares outstanding;
G. The authorized share capital of Autodesk Quebec consists of an unlimited
number of common shares (the "Autodesk Quebec Common Shares");
H. As at the date of this Agreement, one hundred Autodesk Quebec Common
Shares were issued and outstanding as fully paid and non-assessable shares and
are held and beneficially owned indirectly by Autodesk;
I. The authorized share capital of Amalgamation Sub consists of an unlimited
number of common shares (the "Amalgamation Sub Common Shares");
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J. As at the date of this Agreement, one hundred Amalgamation Sub Common
Shares were issued and outstanding as fully paid and non-assessable shares and
are held by Autodesk Development B.V. ("Dutchco");
K. The Company, Autodesk Quebec and Amalgamation Sub have agreed to
amalgamate pursuant to the Quebec Act upon the terms and conditions set forth
in this Agreement; and
L. It is desirable that the Original Agreement and the Existing Agreement be
terminated and the amalgamation contemplated by this Agreement be effected.
NOW THEREFORE in consideration of the mutual covenants and agreements
contained herein and other good and valuable consideration (the receipt and
sufficiency of which are hereby acknowledged) the parties agree as follows:
ARTICLE 1
Interpretation
1.1 Interpretation. In this Agreement, the following terms shall have the
following meanings:
"Affiliate" of any person means any other person directly or indirectly
controlled by, or under common control of, that person. For the purposes of
this definition, "control" (including, with correlative meanings, the terms
"controlled by" and "under common control of"), as applied to any person,
means the possession by another person, directly or indirectly, of the power
to direct or cause the direction of the management and policies of that first
mentioned person, whether through the ownership of voting securities, by
contract or otherwise; provided, however, that any former directors, executive
officers or principal shareholders of the Company who may be deemed to be an
affiliate of Parent, after the Effective Date, shall not be considered an
"Affiliate" for purposes of this Agreement.
"Agreement" means this amalgamation agreement as the same may be amended
from time to time and the expressions "hereof", "herein", "hereto",
"hereunder", "hereby" and similar expressions refer to this Agreement.
"Amalgamation" means the amalgamation of the Amalgamating Companies pursuant
to the Articles of Amalgamation.
"Amalgamating Companies" means the Company, Autodesk Quebec and Amalgamation
Sub.
"Amalgamation Sub" means 9066-9771 Quebec Inc., a company incorporated under
the Quebec Act.
"Articles of Amalgamation" means the articles of amalgamation to be filed
with the Inspector General of Financial Institutions pursuant to section
123.118 of the Quebec Act to give effect to this Agreement.
"Autodesk Quebec" means 9066-9854 Quebec Inc., a company incorporated under
the Quebec Act.
"Business Day" means any day other than a Saturday, Sunday or a day when
banks are not open for business in either of San Francisco, California and
Montreal, Quebec.
"Certificate of Amalgamation" means the certificate of amalgamation to be
issued to the Corporation by the Inspector General of Financial Institutions
under the Quebec Act in respect of the Amalgamation.
"Class A Shares" means the Class A voting common shares in the share capital
of the Corporation.
"Class B Shares" means the Class B non-voting common shares in the share
capital of the Corporation.
"Class C Shares" means the Class C non-voting preferred shares in the share
capital of the Corporation.
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"Class D Shares" means the Class D non-voting preferred shares in the share
capital of the Corporation.
"Class E Shares" means the Class E voting common shares in the share capital
of the Corporation.
"Class F Shares" means the Class F non-voting common shares in the share
capital of the Corporation.
"Combination Agreement" means the Second Amended and Restated Agreement and
Plan of Acquisition and Amalgamation by and among the Parent, Dutchco,
Autodesk Canada Inc., the Company, Autodesk Quebec and Amalgamation Sub dated
as of November 18, 1998, as amended on December 18, 1998 and January 18, 1999,
providing for, among other things, the Amalgamation and related transactions.
"Company" means Discreet Logic Inc., a company incorporated under the Quebec
Act.
"Company Common Shares" means the common shares in the share capital of the
Company.
"Company Meeting" means the special general meeting of the shareholders of
the Company to be held to consider the Amalgamation.
"Corporation" means the company resulting from the Amalgamation.
"Dutchco" means Autodesk Development B.V., a corporation subsisting under
the laws of The Netherlands, where applicable, or such other subsidiary of
Autodesk or Dutchco to which Dutchco has assigned some or all of its rights
under the Combination Agreement.
"Effective Date" means the date of the Amalgamation as set forth in the
Certificate of Amalgamation.
"Exchangeable Share Provisions" means the rights, privileges, restrictions
and conditions attaching to the Exchangeable Shares as set forth in Appendix A
hereto.
"Exchangeable Shares" means the exchangeable non-voting shares in the share
capital of the Corporation.
"Nasdaq" means the Nasdaq National Market of the Nasdaq Stock Market, Inc.
"Parent" means Autodesk, Inc., a body corporate existing under the laws of
the State of Delaware.
"Parent Common Shares" means the common shares $0.01 par value per share in
the share capital of Parent.
"Quebec Act" means the Companies Act (Quebec), including all regulations
made thereunder, all amendments to such statute or regulations from time to
time, and any statute or regulation that supplements or supersedes such
statute or regulation.
"Special By-Law 1998-1" means the special by-law providing for the
Amalgamation adopted by the directors of the Company, the directors of
Autodesk Quebec and the directors of Amalgamation Sub and to be confirmed by
the shareholders of each of the Amalgamating Companies in accordance with the
Quebec Act.
"Subsidiary" means and includes a direct or indirect subsidiary.
1.2 Sections and Headings; Interpretation. The division of this Agreement
into sections and the insertion of headings are for reference purposes only
and shall not affect the interpretation of this Agreement. Unless otherwise
indicated, any reference in this Agreement to a section or an Appendix refers
to the specified section of or Appendix to this Agreement.
1.3 Number, Gender and Persons. In this Agreement, unless the context
otherwise requires, words importing the singular number include the plural and
vice versa, words importing any gender include all genders
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and words importing persons include individuals, corporations, partnerships,
associations, trusts, unincorporated organizations, governmental bodies and
other legal or business entities of any kind.
1.4 Date for any Action. In the event that any date on or by which any
action is required or permitted to be taken hereunder is not a Business Day,
such action shall be required or permitted to be taken on or by the next
succeeding day which is a Business Day.
1.5 Time. All times expressed herein are local time Montreal, Quebec unless
otherwise stipulated herein or therein.
1.6 Currency. Unless otherwise expressly stated herein, all references to
currency in this Agreement are to Canadian dollars, being lawful money of
Canada, and the sign "$" without more shall mean Canadian dollars.
1.7 Statutory References. Any reference in this Agreement to a statute
includes all regulations made thereunder, all amendments to such statute or
regulations in force from time to time, and any statute or regulation that
supplements or supersedes such statute or regulations.
1.8 Concurrent Approval. It is acknowledged that the completion of the
Amalgamation is contingent upon its approval by the requisite majority of the
shareholders of the Company, Amalgamation Sub and Autodesk Quebec, which
approvals shall have been obtained prior to the Effective Date.
ARTICLE 2
Amalgamation
2.1 Amalgamation. The Amalgamating Companies hereby agree to amalgamate
pursuant to the provisions of Chapter XVII of Part 1A of the Quebec Act as at
the Effective Date to continue as one company, the Corporation, under the
Quebec Act on the terms set forth herein.
2.2 Name. The name of the Corporation shall be Discreet Logic Inc.
2.3 Head Office. The head office of the Corporation shall be located in the
Judicial District of Montreal, in the Province of Quebec. Unless changed by
the directors of the Corporation, the address of the head office of the
Corporation shall be 10 Duke Street, Montreal, Quebec, Canada, H3C 2L7.
2.4 Business and Powers. There shall be no restrictions on the business the
Corporation may carry on or on the powers it may exercise.
2.5 Authorized Share Capital. Upon the Amalgamation, the Corporation shall
be authorized to issue:
(a) an unlimited number of Class A Shares;
(b) an unlimited number of Class B Shares;
(c) an unlimited number of Class C Shares;
(d) 150,000 non-voting Class D Shares;
(e) an unlimited number of Class E Shares;
(f) an unlimited number of Class F Shares; and
(g) an unlimited number of Exchangeable Shares,
all of which shall be without par value, except for the Exchangeable Shares
which shall have a par value provided for in the Exchangeable Share
Provisions.
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The Class A Shares, the Class B Shares, the Class C Shares, the Class D
Shares, the Class E Shares, the Class F Shares and the Exchangeable Shares
shall have attached thereto the rights, privileges, restrictions and
conditions respectively as set out in Appendix A hereto.
2.6 Share Restrictions. There shall be no restrictions on the issue,
transfer or ownership of shares of the Corporation.
2.7 Number of Directors. The board of directors of the Corporation will,
until otherwise changed in accordance with the Quebec Act, consist of a
minimum of three and a maximum of ten directors.
2.8 Initial Directors and Officers. The three initial directors of the
Corporation shall be:
Name Occupation Office
---- ---------- ------
Eric B. Herr Executive President
Steve Cakebread Executive Chief Executive
Officer
Marcia K. Sterling Executive Secretary
These directors will hold office from the Effective Date until the close of
business of the annual meeting of shareholders of the Corporation first
following the date of this Agreement or until their successors are elected or
appointed. The business and affairs of the Corporation will be managed by the
directors, subject to the provisions of the Quebec Act.
2.9 By-laws. The by-laws of the Corporation shall be the by-laws of
Amalgamation Sub in effect immediately prior to the Amalgamation.
2.10 Fiscal Year. The fiscal year of the Corporation shall end on 31 of
each year.
2.11 Officers. Until changed by the directors or until their successors are
appointed, from the Effective Date the officers of the Corporation will be as
follows:
Name Office
---- ------
Eric B. Herr President
Steve Cakebread Vice-President
Marcia K. Sterling Secretary
2.12 Auditors. From the Effective Date until the close of business of the
annual meeting of shareholders of the Corporation first following the date of
this Agreement, the auditors of the Corporation will be Ernst & Young,
Chartered Accountants, unless such auditors resign or are removed.
ARTICLE 3
Issuance of Shares on Amalgamation
3.1 Upon the Amalgamation:
(a) each holder of Amalgamation Sub Common Shares outstanding immediately
prior to the Amalgamation will receive one fully paid and non-assessable
Class A Share for each Amalgamation Sub Common Share held and the name of
each holder thereof shall be added to the register of holders of Class A
Shares accordingly and each certificate representing such Amalgamation Sub
Common Shares shall continue to evidence ownership of Class A Shares;
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(b) each holder of Autodesk Quebec Common Shares outstanding immediately
prior to the Amalgamation will receive one fully paid and non-assessable
Class C Share for each Autodesk Quebec Common Share held and the name of
each holder thereof shall be added to the register of holders of Class C
Shares accordingly and each certificate representing such Autodesk Quebec
Common Shares shall continue to evidence ownership of Class C Shares; and
(c) each holder of Company Common Shares outstanding immediately prior to
the Amalgamation will receive one fully paid and non-assessable Class B
Share for each Company Common Share held and the name of each holder
thereof shall be added to the register of holders of Class B Shares
accordingly and each certificate representing Company Common Shares shall
continue to evidence ownership of Class B Shares.
ARTICLE 4
Share Capital
4.1 Share Capital. For purposes of the Quebec Act and the Income Tax Act
(Canada):
(a) the issued and paid-up share capital account of the Class A Shares
issued in connection with the Amalgamation will be $100.00;
(b) the issued and paid-up share capital account of the Class B Shares
issued in connection with the Amalgamation will be the aggregate sum of the
aggregate issued and paid-up capital account of all of the outstanding
shares of all classes of Amalgamation Sub, Autodesk Quebec and the Company
for purposes of the Income Tax Act (Canada) determined immediately before
the Amalgamation, minus the amount of issued and paid-up share capital
accounts of the Class A Shares and the Class C Shares; and
(c) the issued and paid up share capital account of the Class C Shares
issued on the Amalgamation will be equal to the sum of $100.00.
ARTICLE 5
Certificates and Fractional Shares
5.1 Share Certificates. No certificates will be issued in respect of the
Class B Shares upon the Amalgamation and, until certificates are issued
representing Parent Common Shares or Exchangeable Shares upon (i) the
retraction of the Class B Shares for Exchangeable Shares or (ii) the
subsequent conversion of the Class B Shares into Class E Shares and Class F
Shares, the redemption of Class E Shares and Class F Shares by the Corporation
for Parent Common Shares or the purchase by Dutchco of the Class E Shares and
the Class F Shares in accordance with their terms, as the case may be, in
exchange for certificates which immediately prior to the Effective Date
represented Company Common Shares, all Class B Shares, Class E Shares and
Class F Shares will be evidenced by certificates representing Company Common
Shares.
5.2 Failure to Deposit Certificates Representing Company Common Shares. Any
certificate representing Company Common Shares not deposited with all other
necessary documents prior to the seventh anniversary of the Effective Date
shall cease to represent a claim or interest of any kind or nature against the
Corporation or Parent, as the case may be. On such date, the Exchangeable
Shares or the Parent Common Shares, as the case may be, to which the former
registered holder of such certificate was entitled shall be deemed to have
been surrendered to the Corporation or Parent together with all dividends,
distributions and interests held for such former registered holder.
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ARTICLE 6
Amendment
6.1 Amendment
(a) The Company, Autodesk Quebec and Amalgamation Sub reserve the right
to amend, modify and/or supplement this Agreement at any time and from time
to time provided that any such amendment, modification, or supplement must
be contained in a written document which is (i) agreed to by the
Amalgamating Companies and by Parent and Dutchco pursuant to the
Combination Agreement and (ii) communicated to holders of Company Common
Shares (if so required).
(b) Any amendment, modification or supplement to this Agreement may be
proposed by the Company any time prior to or at the Company Meeting
(provided that Parent and Dutchco shall have previously consented thereto
unless otherwise permitted by the Combination Agreement) with or without
any other prior notice or communication, and if so proposed and accepted by
the persons voting at the Company Meeting, shall become part of the
Amalgamation for all purposes.
ARTICLE 7
Conditions Precedent to the Amalgamation
7.1 The respective obligations of the parties to this Agreement to
consummate the transactions contemplated hereby and, in particular, the
Amalgamation, are subject to the satisfaction of the following conditions, any
of which may be waived by the mutual consent of such parties without prejudice
to the right to rely on any other of such conditions:
(a) the holders of the Company Common Shares shall have confirmed Special
By-Law 1998-1, in accordance with the Quebec Act, and the holder of the
Autodesk Quebec Common Shares and the holder of the Amalgamation Sub Common
Shares shall have confirmed a similar special by-law providing for the
Amalgamation;
(b) there shall not be in force any order or decree restraining or
enjoining the consummation of the transactions contemplated by this
Agreement and the Combination Agreement;
(c) all necessary corporate action on the part of the Amalgamating
Companies to authorize the consummation of the transactions contemplated by
this Agreement shall be complete and effective; and
(d) all conditions set forth in the Combination Agreement shall have been
satisfied or waived.
ARTICLE 8
Implementation
8.1 Implementation.
(a) Any director of each of the Amalgamating Companies be and is hereby
authorized to execute and file articles on behalf of such director's
company giving effect to the Amalgamation and to execute and deliver all
other documents and to do all such other acts and things necessary or
desirable to give effect to the Amalgamation.
(b) The Directors of the Company are hereby authorized, if they deem
appropriate in their sole discretion, to revoke the Special By-Law 1998-1
and to not proceed with the Amalgamation without further approval of the
shareholders.
8.2 Effect of Amalgamation. From the date shown on the Certificate of
Amalgamation, each of the Amalgamating Companies shall continue their
existence as one and the same company and the Corporation shall
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possess all of the property, rights and assets of the Amalgamating Companies
and shall be liable for all of the liabilities and obligations of the
Amalgamating Companies by operation of law.
8.3 Filing of Documents. Subject to the satisfaction or waiver of all
conditions precedent set out in Section 7.1 of this Agreement, the
Amalgamation will be effected by filing, on or prior to December 31, 1998 or
such later date as may be permitted by section 7.1(b) of the Combination
Agreement as the directors of each of the Amalgamating Companies may
determine, of the Articles of Amalgamation as provided under the Quebec Act
together with any and all documents required by the Quebec Act and the
regulations thereunder.
8.4 Termination. This Agreement may, at any time prior to the issuance of a
Certificate of Amalgamation, be terminated by the parties hereto if the
conditions precedent set out in Section 7.1 cannot be met. Notwithstanding
this Agreement, this Agreement shall terminate if a Certificate of
Amalgamation has not been issued on or prior to December 31, 1998 or such
later date as may be permitted under the Combination Agreement.
8.5 Existing Agreement Terminated. This Agreement amends and restates in its
entirety the Original Agreement and Existing Agreement. Accordingly, upon the
execution and delivery hereof by the parties, the Original Agreement and
Existing Agreement shall be terminated in all respects and be of no further
force or effect.
8.6 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the Province of Quebec and the laws of Canada
applicable therein.
8.7 Entire Agreement. This Agreement constitutes the entire agreement among
the parties to this Agreement relating to the Amalgamation and supersedes all
prior agreements and understandings, oral and written, between such parties
with respect to the subject matter hereof.
8.8 English Language. The parties hereto confirm that it is their wish that
this Agreement as well as all other documents relating hereto be drawn upon in
English only. Les parties aux presentes confirment leur volonte que cette
convention de meme que tous les documents s'y rattachant soient rediges en
anglais seulement.
8.9 Guarantee. Autodesk, by its intervention hereto, hereby unconditionally
and irrevocably guarantees the full and punctual performance of the
Corporation's and Dutchco's obligations hereunder and under the Articles of
Amalgamation of the Corporation.
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IN WITNESS WHEREOF the parties have executed this Agreement.
Discreet Logic Inc.
9066-9054 Quebec Inc.
By: /s/ Francois Plamondon By: /s/ Marcia K. Sterling
------------------------------- -------------------------------
Francois Plamondon Marcia K. Sterling
Executive Vice President, Chief Secretary
Financial Officer and Secretary
I have the authority to bind the
company
Autodesk, Inc. (As Intervenant)
I have the authority to bind the company
9066-9771 Quebec Inc.
By: /s/ Marcia K. Sterling By: /s/ Carol A. Bartz
------------------------------- -------------------------------
Marcia K. Sterling Carol A. Bartz
Secretary Chairman of the Board and Chief
Executive Officer
I have the authority to bind the company
I have the authority to bind the
corporation
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APPENDIX A
SHARE PROVISIONS
Definitions.
For the purposes of these share provisions, except as otherwise indicated:
"Amalgamation" means the amalgamation of Discreet Logic Inc., 9066-9854
Quebec Inc., and 9066-9771 Quebec Inc. under the Quebec Act.
"Board of Directors" means the Board of Directors of the Corporation.
"Business Day" means any day other than a Saturday, a Sunday or a day when
banks are not open for business in either or both of San Francisco, California
and Montreal, Quebec.
"Certificate of Amalgamation" means the certificate of amalgamation to be
issued to the Corporation by the Inspector General of Financial Institutions
under the Quebec Act in respect of the Amalgamation.
"Class A Shares" means the Class A voting common shares in the share capital
of the Corporation.
"Class B Conversion Time" has the meaning ascribed thereto in Section 5.1 of
the provisions attaching to the Class B Shares.
"Class B Retraction Time" has the meaning ascribed thereto in Section 4.1 of
the provisions attaching to the Class B Shares.
"Class B Shares" means the Class B non-voting common shares in the share
capital of the Corporation.
"Class C Shares" means the Class C non-voting preferred shares in the share
capital of the Corporation.
"Class D Redemption Date" has the meaning ascribed thereto in Section 4.2 of
the provisions attaching to the Class D Shares.
"Class D Redemption Price" has the meaning ascribed thereto in Section 4.1
of the provisions attaching to the Class D Shares.
"Class D Shares" means the Class D non-voting preferred shares in the share
capital of the Corporation.
"Class E Redemption Call Purchase Price" has the meaning ascribed thereto in
Section 4.3 of the provisions attaching to the Class E Shares.
"Class E Redemption Call Right" has the meaning ascribed thereto in Section
4.3 of the provisions attaching to the Class E Shares.
"Class E Redemption Price" has the meaning ascribed thereto in Section 4.1
of the provisions attaching to the Class E Shares.
"Class E Redemption Time" has the meaning ascribed thereto in Section 4.1 of
the provisions attaching to the Class E Shares.
"Class E Shares" means the Class E voting common shares in the share capital
of the Corporation.
"Class F Redemption Call Purchase Price" has the meaning ascribed thereto in
Section 4.3 of the provisions attaching to the Class F Shares.
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"Class F Redemption Call Right" has the meaning ascribed thereto in Section
4.3 of the provisions attaching to the Class F Shares.
"Class F Redemption Price" has the meaning ascribed thereto in Section 4.1
of the provisions attaching to the Class F Shares.
"Class F Redemption Time" has the meaning ascribed thereto in Section 4.1 of
the provisions attaching to the Class F Shares.
"Class F Shares" means the Class F non-voting common shares in the share
capital of the Corporation.
"Company" means Discreet Logic Inc., a predecessor to the Corporation.
"Company Common Shares" means the common shares of the Company.
"Company Meeting" means the special general meeting of the shareholders of
the Company to be held to consider the Amalgamation.
"Corporation" means the company resulting from the Amalgamation.
"Current Market Price" means, in respect of a Parent Common Share on any
date, the Canadian Dollar Equivalent of the average of the closing prices of
Parent Common Shares on Nasdaq on each of the thirty (30) consecutive trading
days ending not more than five trading days before such date, or, if the
Parent Common Shares are not then quoted on Nasdaq, on such other stock
exchange or automated quotation system on which the Parent Common Shares are
listed or quoted, as the case may be, as may be selected by the Board of
Directors of the Corporation for such purpose; provided, however, that if
there is no public distribution or trading activity of Parent Common Shares
during such period, then the Current Market Price of a Parent Common Share
shall be determined by the Board of Directors based upon the advice of such
qualified independent financial advisors as the Board of Directors may deem to
be appropriate, and provided further that any such selection, opinion or
determination by the Board of Directors shall be conclusive and binding.
"Dutchco" means Autodesk Development B.V., a corporation subsisting under
the laws of The Netherlands or, where applicable, such other subsidiary of
Autodesk or Dutchco to which Dutchco has assigned some or all of its rights
under the Combination Agreement.
"Effective Date" means the date of the Amalgamation as set forth in the
Certificate of Amalgamation.
"Effective Time" means 4:28 p.m. (Montreal time) on the Effective Date.
"Election Deadline" has the meaning ascribed thereto in section 4.1 of the
provisions attaching to the Class B Shares.
"Exchangeable Share Provisions" means the rights, privileges, restrictions
and conditions attaching to the Exchangeable Shares as set forth herein.
"Exchangeable Shares" means the exchangeable non-voting shares in the share
capital of the Corporation.
"Maximum Number" means the number that is equal to 19.99% of the number of
Company Common Shares outstanding immediately prior to the Amalgamation
multiplied by 0.33.
"Nasdaq" means the Nasdaq National Market.
"Parent" means Autodesk, Inc., a body corporate existing under the laws of
the State of Delaware.
"Parent Common Shares" means the common shares in the share capital of
Parent.
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"Quebec Act" means the Companies Act (Quebec), as amended.
"Transfer Agent" means The Trust Company of Bank of Montreal or such other
entity as may from time to time be the registrar and transfer agent for the
Exchangeable Shares.
PROVISIONS ATTACHING TO CLASS A SHARES
The Class A voting common shares in the share capital of the Corporation
shall have attached thereto the following rights, privileges, restrictions and
conditions:
1 Dividends
1.1 Subject to the prior rights of the holders of any shares ranking senior
to the Class A Shares with respect to priority in the payment of dividends,
the holders of Class A Shares shall be entitled to receive dividends and the
Corporation shall pay dividends thereon, as and when declared by the board of
directors of the Corporation out of monies properly applicable to the payment
of dividends, in such amount and in such form as the board of directors may
from time to time determine and all dividends which the directors may declare
on the Class A Shares shall be declared and paid in equal amounts per share on
all Class A Shares at the time outstanding; and, subject as aforesaid, the
board of directors of the Corporation may in their discretion declare
dividends on the Class A Shares without declaring dividends on any of the
Class B Shares, the Class C Shares, the Class D Shares, the Class E Shares,
the Class F Shares or the Exchangeable Shares.
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 Exchangeable
Shares in the capital of the Corporation, the Class D Shares, the Class C
Shares and to any other shares ranking senior to the Class A Shares with
respect to priority in the distribution of assets upon dissolution,
liquidation or winding-up of the Corporation, the holders of the Class A
Shares shall be entitled to receive the remaining property and assets of the
Corporation rateably with the holders of the Class B Shares, the Class E
Shares and the Class F Shares.
3 Voting Rights
3.1 The holders of the Class A Shares shall be entitled to receive notice of
and to attend all meetings of the shareholders of the Corporation and,
together with the holders of Class E Shares, shall have one vote for each
share held at all meetings of the shareholders of the Corporation, except for
meetings at which only holders of another specified class or series of shares
of the Corporation are entitled to vote separately as a class or series.
4 Amendment and Approval
4.1 The rights, privileges, restrictions and conditions attaching to the
Class A Shares may be added to, changed or removed but only with the approval
of the holders of the Class A Shares given as hereinafter specified, and any
other approval required by law.
4.2 Any approval given by the holders of the Class A Shares to add to,
change or remove any right, privilege, restriction or condition attaching to
the Class A Shares or any other matter requiring the approval or consent of
the holders of the Class A Shares shall be deemed to have been sufficiently
given if it shall have been given in accordance with applicable law subject to
a minimum requirement that such approval be evidenced by written resolution
signed by all holders of Class A Shares or by resolution passed by not less
than two-thirds of the votes cast on such resolution at a meeting of holders
of Class A Shares duly called and held at which the holders of at least 50% of
the outstanding Class A Shares at that time are present or represented by
proxy; provided that if at any such meeting the holders of at least 50% of the
outstanding Class A Shares at that time
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are not present or represented by proxy within one-half hour after the time
appointed for such meeting then the meeting shall be adjourned to such date
not less than ten days thereafter and to such time and place as may be
designated by the Chairman of such meeting. At such adjourned meeting the
holders of Class A Shares present or represented by proxy thereat may transact
the business for which the meeting was originally called and a resolution
passed thereat by the affirmative vote of not less than two-thirds of the
votes cast on such resolution at such meeting shall constitute the approval or
consent of the holders of the Class A Shares.
PROVISIONS ATTACHING TO CLASS B SHARES
The Class B non-voting common shares in the share capital of the Corporation
shall have attached thereto the following rights, privileges, restrictions and
conditions:
1 Dividends
1.1 Subject to the prior rights of the holders of any shares ranking senior
to the Class B Shares with respect to priority in the payment of dividends,
the holders of Class B Shares shall be entitled to receive dividends and the
Corporation shall pay dividends thereon, as and when declared by the board of
directors of the Corporation out of monies properly applicable to the payment
of dividends, in such amount and in such form as the board of directors may
from time to time determine and all dividends which the directors may declare
on the Class B Shares shall be declared and paid in equal amounts per share on
all Class B Shares at the time outstanding; and, subject as aforesaid, the
board of directors of the Corporation may in their discretion declare
dividends on the Class B Shares without declaring dividends on any of the
Class A Shares, the Class C Shares, the Class D Shares, the Class E Shares,
the Class F Shares or the Exchangeable Shares.
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 Exchangeable
Shares in the share capital of the Corporation, the Class D Shares and the
Class C Shares and to any other shares ranking senior to the Class B Shares
with respect to priority in the distribution of assets upon dissolution,
liquidation or winding-up, the holders of the Class B Shares shall be entitled
to receive the remaining property and assets of the Corporation rateably with
the holders of the Class A Shares, the Class E Shares and the Class F Shares.
3 Voting Rights
3.1 Except where specifically provided by the Quebec Act, the holders of the
Class B Shares shall not be entitled to receive notice of or to attend
meetings of the shareholders of the Corporation and shall not be entitled to
vote at any meeting of shareholders of the Corporation, but shall be entitled
to notice of meetings of shareholders called for the purpose of authorizing
the dissolution of the Corporation or the sale, lease or exchange of all or
substantially all of the property of the Corporation.
4 Retraction
4.1 A holder of Class B Shares shall be entitled immediately following the
Effective Time (the "Class B Retraction Time"), subject to applicable law and
otherwise upon compliance with and subject to the provisions of this Section
4, to require the Corporation to redeem all or any number of the Class B
Shares registered in the name of such holder for an amount per share equal to
the Current Market Price of 0.33 of one Parent Common Share on the last
Business Day prior to the Class B Retraction Time, which shall be satisfied in
full by the Corporation causing to be delivered to such holder 0.33 of one
Exchangeable Share for each Class B Share presented and surrendered by the
holder (the "Class B Retraction Price"). To effect such redemption, the holder
shall no later than 4:29 p.m. (Montreal time) on the Effective Date (the
"Election Deadline") present and surrender at the head office of the Company
acting on behalf of the Corporation or the Corporation or at any
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office of the Transfer Agent or such other place as may be specified by the
Corporation by notice to the holders of the Company's Common Shares (on behalf
of the holders of the Class B Shares) the certificate or certificates
representing the Class B Shares which the holder desires to have the
Corporation redeem (evidenced by the certificate or certificates representing
the Company's Common Shares which, as a result of the Amalgamation, represent
such Class B Shares), together with such other documents and instruments as
may be required to effect a transfer of Class B Shares under the Quebec Act
and the by-laws of the Corporation and such additional documents and
instruments as the Transfer Agent may reasonably require, and together with a
duly executed statement (the "Class B Retraction Request") in such form as may
be acceptable to the Corporation specifying that the holder desires to have
all or any number specified therein of the Class B Shares represented by such
certificate or certificates (the "Retracted Shares") redeemed by the
Corporation.
4.2 Upon receipt by the Corporation or the Transfer Agent in the manner
specified in Section 4.1 hereof of a certificate or certificates representing
the number of Class B Shares which the holder desires to have the Corporation
redeem, together with the documents and instruments contemplated by Section
4.1 (including a Class B Retraction Request), and provided that the Class B
Retraction Request is not revoked by the holder in the manner specified in
Section 4.6 hereof, the Corporation shall redeem the Retracted Shares
effective at the Class B Retraction Time and shall cause to be delivered to
such holder the total Retraction Price with respect to such shares. If only a
part of the Class B Shares represented by any certificate are redeemed, the
balance of shares represented by such certificate shall be governed by the
provisions of Section 5.1 of these share provisions relating to the Class B
Shares.
4.3 The Corporation shall deliver or cause the Transfer Agent to deliver to
the relevant holder, at the address of the holder recorded in the securities
register of the Corporation for the Class B Shares or at the address specified
in the holder's Class B Retraction Request or by holding for pick up by the
holder at the head office of the Corporation or at any office of the Transfer
Agent as may be specified by the Corporation by notice to the holders of Class
B Shares, certificates representing the Exchangeable Shares (which shares
shall be duly issued as fully paid and non-assessable and shall be free and
clear of any lien, claim or encumbrance) registered in the name of the holder
or in such other name as the holder may request in payment of the total Class
B Retraction Price and such delivery of such certificates on behalf of the
Corporation or by the Transfer Agent shall be deemed to be payment of and
shall satisfy and discharge all liability for the total Class B Retraction
Price to the extent that the same is represented by such share certificates.
All Class B Shares which have been so retracted shall be cancelled.
4.4 As of the Class B Retraction Time, the holder of the Retracted Shares
shall cease to be a holder of such Retracted Shares and shall not be entitled
to exercise any of the rights of a holder in respect thereof, other than the
right to receive his proportionate part of the total Class B Retraction Price.
4.5 Notwithstanding any other provision of this Section 4, the Corporation
shall not be obligated to redeem Retracted Shares specified by a holder in a
Retraction Request to the extent that such redemption of Retracted Shares (i)
would be contrary to solvency requirements or other provisions of applicable
law or (ii) would cause the aggregate number of Exchangeable Shares issuable
on retraction to exceed the Maximum Number. If the Corporation believes that
at the Class B Retraction Time it would not be permitted by the foregoing to
redeem the Retracted Shares tendered for redemption on such date, the
Corporation shall only be obligated to redeem Retracted Shares specified by a
holder in a Class B Retraction Request to the extent of the maximum number of
shares that may be so redeemed (rounded down to a whole number of shares) as
would not be contrary to such provisions or the maximum number of Exchangeable
Shares as would not exceed the Maximum Number and shall notify the holder
immediately following the Retraction Date as to the number of Retracted Shares
which will not be redeemed by the Corporation. In any case in which the
redemption by the Corporation of Retracted Shares would be contrary to
solvency requirements or other provisions of applicable law or would cause the
Exchangeable Shares to be issued to exceed the Maximum Number, the Corporation
shall redeem Retracted Shares in accordance with Section 4.2 of these share
provisions on a pro rata basis.
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4.6 A holder of Retracted Shares may, by notice in writing given by the
holder to the Corporation at the head office of the Company on behalf of the
Corporation or of the Corporation, not less than two Business Days immediately
preceding the Class B Retraction Time, withdraw its Class B Retraction Request
in which event such Class B Retraction Request shall be null and void.
4.7 No certificates or scrip representing fractional Exchangeable Shares
shall be issued upon the surrender for exchange of certificates pursuant to
section 4.3 hereof and no dividend, stock split or other change in the capital
structure of Parent shall relate to any such fractional security and such
fractional interests shall not entitle the owner thereof to vote or to
exercise any rights as a security holder of Parent. In lieu of any such
fractional securities, each person entitled to a fractional interest in an
Exchangeable Share will receive from the Corporation an amount in cash
(rounded to the nearest whole cent), without interest, equal to the product of
(i) such fraction, multiplied by (ii) the average of the closing price for the
Parent Common Shares on Nasdaq as of each of the thirty (30) consecutive
trading days immediately preceding the Effective Date as quoted in The Wall
Street Journal or other reliable financial newspaper or publication. For the
purposes of the preceding sentence, a "trading day" means a day on which
trading generally takes place on Nasdaq and on which trading in Parent Common
Shares has occurred.
4.8 In the event of a transfer of ownership of Company Common Shares in
respect of which a Class B Retraction Request has been duly made prior to the
Class B Retraction Time but which is not registered in the transfer records of
the Company prior to the Effective Date, a certificate representing the proper
number of Exchangeable Shares may be issued to a transferee if the certificate
representing such Company Common Shares is presented to the Transfer Agent,
together with a Class B Retraction Request executed by the transferee
accompanied by all documents required to evidence and effect such transfer.
4.9 In the event any certificate which immediately prior to the Effective
Date represented outstanding Company Common Shares that were converted
pursuant to the Amalgamation into Class B Shares and subsequently retracted by
the holder pursuant to the Class B Share provisions shall have been lost,
stolen or destroyed, upon the making of an affidavit of that fact by the
person claiming such certificate to be lost, stolen or destroyed, the Transfer
Agent will issue in exchange for such lost, stolen or destroyed certificate,
certificates representing Exchangeable Shares deliverable in respect thereof
as determined in accordance with this Section 4. When authorizing such
issuance in exchange for any lost, stolen or destroyed certificate, the person
to whom certificates representing Exchangeable Shares are to be issued shall,
at the discretion of the Corporation, as a condition precedent to the issuance
thereof, give a bond satisfactory to the Corporation in such sum as the
Corporation may direct or otherwise indemnify the Corporation in a manner
satisfactory to the Corporation against any claim that may be made against the
Corporation with respect to the certificate alleged to have been lost, stolen
or destroyed.
4.10 A Class B Retraction Request executed by a holder of Company Common
Shares in respect of Class B Shares to be issued upon the Amalgamation shall
be deemed for all purposes to constitute a good and valid Class B Retraction
Request executed by a holder of Class B Shares. Any notice by the Company to a
holder of Company Common Shares in respect of Class B Shares to be issued upon
the Amalgamation shall be deemed for all purposes to constitute good and valid
notice by the Corporation to the holders of Class B Shares. Any notice by a
holder of Company Common Shares to the Company in respect of Class B Shares to
be issued upon the Amalgamation shall be deemed for all purposes of these
share provisions to constitute good and valid notice by a holder of Class B
Shares to the Corporation.
5 Automatic Conversion of Class B Shares
5.1 Immediately following the Class B Retraction Time (the "Class B
Conversion Time") each Class B Share then outstanding shall, automatically and
without any further action required on the part of either the Corporation or
the holder of the Class B Share, be converted into a unit consisting of one
fully paid and non- assessable Class E Share and one fully paid and non-
assessable Class F Share whereupon each such Class B
15
Share will be cancelled, and the name of each holder thereof shall be removed
from the register of holders of Class B Shares and added to the registers of
holders of Class E Shares and Class F Shares accordingly.
5.2 No certificates shall be issued by the Corporation representing the
Class E Shares and the Class F Shares. The certificates representing the Class
B Shares shall continue to represent an equal number of Class E and Class F
Shares. On and after the Class B Conversion Time, the holders of the Class B
Shares so converted shall cease to be holders of such Class B Shares and shall
not be entitled to exercise any of the rights of holders in respect thereof.
6 Amendment and Approval
6.1 The rights, privileges, restrictions and conditions attaching to the
Class B Shares may be added to, changed or removed but only with the approval
of the holders of the Class B Shares given as hereinafter specified, and any
other approval required by law.
6.2 Any approval given by the holders of the Class B Shares to add to,
change or remove any right, privilege, restriction or condition attaching to
the Class B Shares or any other matter requiring the approval or consent of
the holders of the Class B Shares shall be deemed to have been sufficiently
given if it shall have been given in accordance with applicable law subject to
a minimum requirement that such approval be evidenced by written resolution
signed by all holders of Class B Shares or by resolution passed by not less
than two-thirds of the votes cast on such resolution at a meeting of holders
of Class B Shares duly called and held at which the holders of at least 50% of
the outstanding Class B Shares at that time are present or represented by
proxy; provided that if at any such meeting the holders of at least 50% of the
outstanding Class B Shares at that time are not present or represented by
proxy within one-half hour after the time appointed for such meeting then the
meeting shall be adjourned to such date not less than ten days thereafter and
to such time and place as may be designated by the Chairman of such meeting.
At such adjourned meeting the holders of Class B Shares present or represented
by proxy thereat may transact the business for which the meeting was
originally called and a resolution passed thereat by the affirmative vote of
not less than two-thirds of the votes cast on such resolution at such meeting
shall constitute the approval or consent of the holders of the Class B Shares.
PROVISIONS ATTACHING TO CLASS C SHARES
The Class C non-voting preferred shares in the share capital of the
Corporation (the "Class C Shares") shall have attached thereto the following
rights, privileges, restrictions and conditions:
1 Dividends
1.1 The holders of Class C Shares shall be entitled to receive and the
Corporation shall pay to them, always in preference and priority to any
payment of dividends on the Class A Shares, the Class B Shares, the Class E
Shares and the Class F Shares of the Corporation and any other shares of the
Corporation ranking junior to the Class C Shares, but subject to the prior
rights of the holders of the Exchangeable Shares and Class D Shares, as and
when declared by the board of directors of the Corporation out of monies of
the Corporation properly applicable to the payment of dividends, annual fixed,
preferential, non-cumulative cash dividends in an amount per share equal to
$60,000 divided by the number of Class C Shares outstanding payable annually.
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 Exchangeable
Shares and the Class D Shares and to any other shares ranking senior to the
Class C Shares with respect to priority in the distribution of assets upon
dissolution, liquidation or winding-up, the holders of the Class C Shares
shall be entitled to receive an amount per share equal to the fair market
value of all the issued and outstanding shares of 9066-9854 Quebec
16
Inc. divided by the number of Class C Shares outstanding immediately prior to
the Amalgamation and no more, in priority to the rights of the holders of the
Class E Shares, the Class F Shares, the Class A Shares and the Class B Shares.
3 Voting Rights
3.1 Except where specifically provided by the Quebec Act, the holders of the
Class C Shares shall not be entitled to receive notice of or to attend
meetings of the shareholders of the Corporation and shall not be entitled to
vote at any meeting of shareholders of the Corporation, but shall be entitled
to notice of meetings of shareholders called for the purpose of authorizing
the dissolution of the Corporation or the sale, lease or exchange of all or
substantially all of the property of the Corporation.
4 Amendment and Approval
4.1 The rights, privileges, restrictions and conditions attaching to the
Class C Shares may be added to, changed or removed but only with the approval
of the holders of the Class C Shares given as hereinafter specified, and any
other approval required by law.
4.2 Any approval given by the holders of the Class C Shares to add to,
change or remove any right, privilege, restriction or condition attaching to
the Class C Shares or any other matter requiring the approval or consent of
the holders of the Class C Shares shall be deemed to have been sufficiently
given if it shall have been given in accordance with applicable law subject to
a minimum requirement that such approval be evidenced by written resolution
signed by all holders of Class C Shares or by resolution passed by not less
than two-thirds of the votes cast on such resolution at a meeting of holders
of Class C Shares duly called and held at which the holders of at least 50% of
the outstanding Class C Shares at that time are present or represented by
proxy; provided that if at any such meeting the holders of at least 50% of the
outstanding Class C Shares at that time are not present or represented by
proxy within one-half hour after the time appointed for such meeting then the
meeting shall be adjourned to such date not less than ten days thereafter and
to such time and place as may be designated by the Chairman of such meeting.
At such adjourned meeting the holders of Class C Shares present or represented
by proxy thereat may transact the business for which the meeting was
originally called and a resolution passed thereat by the affirmative vote of
not less than two-thirds of the votes cast on such resolution at such meeting
shall constitute the approval or consent of the holders of the Class C Shares.
PROVISIONS ATTACHING TO CLASS D SHARES
The Class D non-voting preferred shares in the share capital of the
Corporation shall have attached thereto the following rights, privileges,
restrictions and conditions:
1 Dividends
1.1 The holders of Class D Shares shall be entitled to receive and the
Corporation shall pay to them, always in preference and priority to any
payment of dividends on the Class A Shares, the Class B Shares, the Class C
Shares, the Class E Shares and the Class F Shares of the Corporation and any
other shares of the Corporation ranking junior to the Class D Shares, as and
when declared by the board of directors of the Corporation out of monies of
the Corporation properly applicable to the payment of dividends, fixed,
preferential, cumulative cash dividends at the annual rate per share of 5% of
the Class D Liquidation Amount (as defined below) payable annually, by cheque
of the Corporation. Such dividend on any particular Class D Share shall accrue
and be cumulative from the date of issue of such Class D Share.
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 Exchangeable
Shares and to any other
17
shares ranking senior to the Class D Shares with respect to priority in the
distribution of assets upon dissolution, liquidation or winding-up, the
holders of the Class D Shares shall be entitled to receive in the aggregate an
amount per share equal to $150,000 divided by the number of issued and
outstanding Class D Shares (the "Class D Liquidation Amount") and no more, in
priority to the rights of the holders of the Class C Shares, the Class A
Shares, the Class B Shares, the Class E Shares and the Class F Shares.
3 Voting Rights
3.1 Except where specifically provided by the Quebec Act, the holders of the
Class D Shares shall not be entitled to receive notice of or to attend
meetings of the shareholders of the Corporation and shall not be entitled to
vote at any meeting of shareholders of the Corporation, but shall be entitled
to notice of meetings of shareholders called for the purpose of authorizing
the dissolution of the Corporation or the sale, lease or exchange of all or
substantially all of the property of the Corporation.
4 Redemption of Class D Shares by the Corporation
4.1 Subject to applicable law and to Section 4.1 of the Exchangeable Share
Provisions, the Corporation shall be entitled at any time from and after
October 31, 2028 to redeem any or all of the Class D Shares registered in the
name of a holder for an amount per share equal to (a) $150,000 divided by the
number of issued and outstanding Class D Shares plus (b) an additional amount
equivalent to the full amount on all dividends accrued and unpaid thereon
(herein collectively called the "Class D Redemption Price").
4.2 To effect such redemption the Corporation shall, at least ten days prior
to the date fixed for redemption (the "Class D Redemption Date") send to each
holder of Class D Shares to be redeemed a notice in writing of the redemption
by the Corporation of Class D Shares held by such holder. Such notice shall
set out the Class D Redemption Price and the Class D Redemption Date. On or
after the Class D Redemption Date, the Corporation shall cause to be delivered
to the holders of the Class D Shares to be redeemed the Class D Redemption
Price (less any tax required to be deducted and withheld therefrom by the
Corporation) for each such Class D Share upon presentation and surrender at
the head office of the Corporation of the certificates representing such Class
D Shares, together with such other documents and instruments as may be
required to effect a transfer of Class D Shares under the Quebec Act and the
by-laws of the Corporation and such additional documents and instruments as
the Corporation may reasonably require. Payment of the total Class D
Redemption Price for such Class D Shares shall be made by delivery to each
holder, at the address of the holder recorded in the securities register of
the Corporation or by holding for pick up by the holder at the head office of
the Corporation of a cheque of the Corporation payable at par at any branch of
the bankers of the Corporation in respect of the Class D Redemption Price
(less any tax required to be deducted and withheld therefrom by the
Corporation). On and after the Class D Redemption Date, the holders of the
Class D Shares called for redemption shall cease to be holders of such Class D
Shares and shall not be entitled to exercise any of the rights of holders in
respect thereof, other than the right to receive their proportionate part of
the total Class D Redemption Price, unless payment of the total Class D
Redemption Price for such Class D Shares shall not be made upon presentation
and surrender of certificates in accordance with the foregoing provisions, in
which case the rights of the holders shall remain unaffected until the total
Class D Redemption Price has been paid in the manner hereinbefore provided.
The Corporation shall have the right at any time after the sending of notice
of its intention to redeem Class D Shares as aforesaid to deposit or cause to
be deposited the total Class D Redemption Price of the Class D Shares so
called for redemption, or of such of the said Class D Shares represented by
certificates that have not at the date of such deposit been surrendered by the
holders thereof in connection with such redemption, in a custodial account
with any chartered bank or trust company in Canada named in such notice. Upon
the later of such deposit being made and the Class D Redemption Date, the
Class D Shares in respect whereof such deposit shall have been made shall be
redeemed and the rights of the holders thereof after such deposit or Class D
Redemption Date, as the case may be, shall be limited to receiving their
proportionate part of the total Class D Redemption Price (less any tax
required to be deducted and withheld therefrom by the Corporation) for such
Class D Shares so deposited, against presentation and surrender of the said
certificates held by them, respectively, in accordance with the foregoing
provisions.
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5 Purchase for Cancellation
5.1 Subject to applicable law and to Section 4.1 of the Exchangeable Share
Provisions, the Corporation may at any time and from time to time purchase for
cancellation all or any part of the outstanding Class D Shares at any price by
tender to all the holders of record of Class D Shares then outstanding or
through the facilities of any stock exchange on which Class D Shares are
listed or quoted at any price per share. If in response to an invitation for
tenders under the provisions hereof, more Class D Shares are tendered at a
price or prices acceptable to the Corporation than the Corporation is prepared
to purchase, Class D Shares to be purchased by the Corporation shall be
purchased as nearly as may be pro rata according to the number of shares
tendered by each holder who submits a tender to the Corporation, provided that
when shares are tendered at different prices, the pro rating shall be effected
(disregarding fractions) only with respect to the shares tendered at the price
at which more shares were tendered than the Corporation is prepared to
purchase after the Corporation has purchased all the shares tendered at lower
prices. If part only of the Class D Shares represented by any certificate
shall be purchased, a new certificate for the balance of such shares shall be
issued at the expense of the Corporation. Subject as aforesaid, the
Corporation may effect such purchase for cancellation without purchasing for
cancellation shares of any other class of shares of the Corporation.
6 Amendment and Approval
6.1 The rights, privileges, restrictions and conditions attaching to the
Class D Shares may be added to, changed or removed but only with the approval
of the holders of the Class D Shares given as hereinafter specified, and any
other approval required by law.
6.2 Any approval given by the holders of the Class D Shares to add to,
change or remove any right, privilege, restriction or condition attaching to
the Class D Shares or any other matter requiring the approval or consent of
the holders of the Class D Shares shall be deemed to have been sufficiently
given if it shall have been given in accordance with applicable law subject to
a minimum requirement that such approval be evidenced by written resolution
signed by all holders of Class D Shares or by resolution passed by not less
than two-thirds of the votes cast on such resolution at a meeting of holders
of Class D Shares duly called and held at which the holders of at least 50% of
the outstanding Class D Shares at that time are present or represented by
proxy; provided that if at any such meeting the holders of at least 50% of the
outstanding Class D Shares at that time are not present or represented by
proxy within one-half hour after the time appointed for such meeting then the
meeting shall be adjourned to such date not less than ten days thereafter and
to such time and place as may be designated by the Chairman of such meeting.
At such adjourned meeting the holders of Class D Shares present or represented
by proxy thereat may transact the business for which the meeting was
originally called and a resolution passed thereat by the affirmative vote of
not less than two-thirds of the votes cast on such resolution at such meeting
shall constitute the approval or consent of the holders of the Class D Shares.
PROVISIONS ATTACHING TO CLASS E SHARES
The Class E voting common shares in the share capital of the Corporation
shall have attached thereto the following rights, privileges, restrictions and
conditions:
1 Dividends
1.1 Subject to the prior rights of the holders of any shares ranking senior
to the Class E Shares with respect to priority in the payment of dividends,
the holders of Class E Shares shall be entitled to receive dividends and the
Corporation shall pay dividends thereon, as and when declared by the board of
directors of the Corporation out of monies properly applicable to the payment
of dividends, in such amount and in such form as the board of directors may
from time to time determine and all dividends which the directors may declare
on the Class E Shares shall be declared and paid in equal amounts per share on
all Class E Shares at the time outstanding; and, subject as aforesaid, the
board of directors of the Corporation may in their discretion declare
dividends on the
19
Class E Shares without declaring dividends on any of the Class A Shares, Class
B Shares, Class C Shares, Class D Shares or Class F Shares.
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 Exchangeable
Shares in the share capital of the Corporation, the Class D Shares, the Class
C Shares and to any other shares ranking senior to the Class E Shares with
respect to priority in the distribution of assets upon dissolution,
liquidation or winding-up, the holders of the Class E Shares shall be entitled
to receive the remaining property and assets of the Corporation rateably with
the holders of the Class A Shares, the Class B Shares and the Class F Shares.
3 Voting Rights
3.1 The holders of the Class E Shares shall be entitled to receive notice of
and to attend all meetings of the shareholders of the Corporation and,
together with the holders of Class A Shares, shall have one vote for each
share held at all meetings of the shareholders of the Corporation, except for
meetings at which only holders of another specified class or series of shares
of the Corporation are entitled to vote separately as a class or series.
4 Redemption of Class E Shares by the Corporation
4.1 Subject to applicable law, and subject to the exercise by Dutchco of the
Class E Redemption Call Right, the Corporation shall be entitled, immediately
following the Class B Conversion Time (the "Class E Redemption Time") without
notice to the holders of the Class E Shares, but with prior notice to Dutchco,
to redeem the whole of the then outstanding Class E Shares for an amount per
share equal to the Current Market Price of 0.165 of one Parent Common Share on
the last Business Day prior to the Class E Redemption Time, which shall be
satisfied in full by the Corporation causing to be delivered to each holder of
Class E Shares 0.165 of one Parent Common Share for each Class E Share held by
such holder (the "Class E Redemption Price").
4.2 At or after the Class E Redemption Time and subject to the exercise by
Dutchco of the Class E Redemption Call Right, the Corporation shall cause to
be delivered to the holders of the Class E Shares to be redeemed the Class E
Redemption Price (less any tax required to be deducted and withheld therefrom
by the Corporation) for each such Class E Share upon presentation and
surrender (at the head office of the Corporation or at any office of the
Transfer Agent as may be specified by the Corporation) of the certificates
representing such Class E Shares, or such other certificates of securities of
any predecessor of the Corporation acceptable to the Corporation (including
those representing Company Common Shares) together with such other documents
and instruments as may be required to effect a transfer of Class E Shares
under the Quebec Act and the by-laws of the Corporation and such additional
documents and instruments as the Transfer Agent may reasonably require.
Payment of the total Class E Redemption Price for such Class E Shares shall be
made by delivery to each holder, at the address of the holder recorded in the
securities register of the Corporation or by holding for pick up by the holder
at the head office of the Corporation or at any office of the Transfer Agent
as may be specified by the Corporation, on behalf of the Corporation of
certificates representing Parent Common Shares (which shares shall be duly
issued as fully paid and non-assessable and shall be free and clear of any
lien, claim or encumbrance) (less any tax required to be deducted and withheld
therefrom by the Corporation). At and after the Class E Redemption Time, the
holders of the Class E Shares called for redemption shall cease to be holders
of such Class E Shares and shall not be entitled to exercise any of the rights
of holders in respect thereof, other than the right to receive their
proportionate part of the total Class E Redemption Price, unless payment of
the total Class E Redemption Price for such Class E Shares shall not be made
upon presentation and surrender of certificates in accordance with the
foregoing provisions, in which case the rights of the holders shall remain
unaffected until the total Class E Redemption Price has been paid in the
manner hereinbefore provided. Subject to the exercise of the Class E
Redemption Call Right, the Corporation shall have the right at any time to
deposit or cause to be deposited the total Class E Redemption Price of the
Class E Shares so called for redemption, or of such of the
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said Class E Shares represented by certificates that have not at the date of
such deposit been surrendered by the holders thereof in connection with such
redemption, in a custodial account with any chartered bank or trust company in
Canada or the United States. Upon the later of such deposit being made and the
Class E Redemption Time, the Class E Shares in respect whereof such deposit
shall have been made shall be redeemed and the rights of the holders thereof
after such deposit or Class E Redemption Time, as the case may be, shall be
limited to receiving their proportionate part of the total Class E Redemption
Price (less any tax required to be deducted and withheld therefrom by the
Corporation) for such Class E Shares so deposited, against presentation and
surrender of the said certificates held by them, respectively, in accordance
with the foregoing provisions. Upon such payment or deposit of the total Class
E Redemption Price, the holders of the Class E Shares shall thereafter be
considered and deemed for all purposes to be holders of the Parent Common
Shares delivered to them.
4.3 Dutchco shall have the overriding right (the "Class E Redemption Call
Right"), notwithstanding the proposed redemption of Class E Shares by the
Corporation, to purchase from all but not less than all of the holders of
Class E Shares to be redeemed at the Class E Redemption Time, all but not less
than all of the Class E Shares held by each such holder on payment by Dutchco
to the holder of an amount per share equal to the Current Market Price of
0.165 of one Parent Common Share on the last Business Day prior to the Class E
Redemption Time which shall be satisfied in full by causing to be delivered to
such holder 0.165 of one Parent Common Share (the "Class E Redemption Call
Purchase Price"). In the event of the exercise of the Class E Redemption Call
Right by Dutchco, each holder shall be obligated to sell all the Class E
Shares held by the holder and otherwise to be redeemed to Dutchco at the Class
E Redemption Time on payment by Dutchco to the holder of the Class E
Redemption Call Purchase Price for each such share.
4.4 To exercise the Class E Redemption Call Right, Dutchco must notify the
Corporation of Dutchco's intention to exercise such right prior to the Class E
Redemption Time (which notice may be given to the Company on behalf of the
Corporation). If Dutchco exercises the Class E Redemption Call Right, Dutchco
will, at the Class E Redemption Time, purchase and the holders will sell all
of the Class E Shares to be redeemed for a price per share equal to the Class
E Redemption Call Purchase Price. Any notice by Dutchco to the Company for and
on behalf of the Corporation shall be deemed to constitute good and valid
notice by Dutchco to the Corporation.
4.5 For the purposes of completing the purchase of Class E Shares pursuant
to the Class E Redemption Call Right, Dutchco shall deposit with the Transfer
Agent, at or before the Class E Redemption Time, certificates representing the
aggregate number of Parent Common Shares deliverable by Dutchco in payment of
the total Class E Redemption Call Purchase Price and a cheque or cheques in
the amount of the remaining portion, if any, of the total Class E Redemption
Call Purchase Price. Provided that the total Class E Redemption Call Purchase
Price has been so deposited with the Transfer Agent, at and after the Class E
Redemption Time the rights of each holder of Class E Shares so purchased will
be limited to receiving such holder's proportionate part of the total Class E
Redemption Call Purchase Price payable by Dutchco upon presentation and
surrender by the holder of certificates representing the Class E Shares
purchased by Dutchco from such holder and the holder shall at and after the
Class E Redemption Time be considered and deemed for all purposes to be the
holder of the Parent Common Shares delivered to such holder. Upon surrender to
the Transfer Agent of a certificate or certificates representing Class E
Shares, together with such other documents and instruments as may be required
to effect a transfer of Class E Shares under the Quebec Act and the by-laws of
the Corporation and such additional documents and instruments as the Transfer
Agent may reasonably require, the holder of such surrendered certificate or
certificates shall be entitled to receive in exchange therefor, and the
Transfer Agent on behalf of Dutchco shall deliver to such holder, certificates
representing the Parent Common Shares to which the holder is entitled and a
cheque or cheques of or on behalf of Dutchco payable at par and in Canadian
dollars at any branch of the bankers of Dutchco or of the Corporation in
Canada in payment of the remaining portion, if any, of the total Class E
Redemption Call Purchase Price. If Dutchco does not exercise the Class E
Redemption Call Right in the manner described herein, at the Class E
Redemption Time the holders of the Class E Shares will be entitled to receive
in exchange therefor the redemption price otherwise payable by the Corporation
in connection with the redemption of Class E Shares.
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4.6 No certificates or scrip representing fractional Parent Common Shares
shall be issued upon the surrender for exchange of certificates pursuant to
sections 4.2 or 4.5 hereof and no dividend, stock split or other change in the
capital structure of Parent shall relate to any such fractional security and
such fractional interests shall not entitle the owner thereof to vote or to
exercise any rights as a security holder of Parent. In lieu of any such
fractional securities, each person entitled to a fractional interest in a
Parent Common Share will receive from the Corporation or Dutchco, as the case
may be, an amount in cash (rounded to the nearest whole cent), without
interest, equal to the product of (i) such fraction, multiplied by (ii) the
average of the closing price for the Parent Common Shares on Nasdaq as of each
of the thirty (30) consecutive trading days immediately preceding the
Effective Date as quoted in The Wall Street Journal or other reliable
financial newspaper or publication. For the purposes of the preceding
sentence, a "trading day" means a day on which trading generally takes place
on Nasdaq and on which trading in Parent Common Shares has occurred.
4.7 No dividends or other distributions declared or made after the Class E
Redemption Time with respect to Parent Common Shares with a record date after
the Class E Redemption Time shall be paid to the holder of any unsurrendered
certificate which immediately prior to the Class E Redemption Time represented
Class E Shares that were redeemed or purchased pursuant to these Class E Share
provisions, and no cash payment in lieu of fractional shares shall be paid to
any such holder pursuant to section 4.6 hereof, unless and until the holder of
record of such certificate shall surrender such certificate in accordance with
sections 4.2 or 4.5 hereof, as the case may be. Subject to applicable law, at
the time of such surrender of any such certificate there shall be paid to the
record holder of the certificates representing whole Parent Common Shares
without interest (i) the amount of any cash payable in lieu of a fractional
Parent Common Share to which such holder is entitled pursuant to section 4.6
hereof, (ii) the amount of dividends or other distributions with a record date
after the Class E Redemption Time theretofore paid with respect to such whole
Parent Common Share and (iii) the amount of dividends or other distributions
with a record date after the Class E Redemption Time but prior to surrender
and a payment date subsequent to surrender payable with respect to such whole
Parent Common Share.
4.8 In the event of a transfer of ownership of Company Common Shares which
is not registered in the transfer records of the Company prior to the
Effective Date, a certificate representing the proper number of Parent Common
Shares may be issued to a transferee if the certificate representing such
Company Common Shares is presented to the Transfer Agent, accompanied by all
documents required to evidence and effect such transfer.
4.9 In the event any certificate which immediately prior to the Effective
Date represented outstanding Company Common Shares that were converted to
Class B Shares on the Amalgamation and subsequently converted into Class E
Shares at the Class B Conversion Time shall have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the person claiming
such certificate to be lost, stolen or destroyed, the Transfer Agent will
issue in exchange for such lost, stolen or destroyed certificate, certificates
representing Parent Common Shares (and any dividends or distributions with
respect thereto and any cash pursuant to section 4.6 hereof) deliverable in
respect thereof as determined in accordance with sections 4.2 or 4.5 hereof.
When authorizing such issuance and/or payment in exchange for any lost, stolen
or destroyed certificate, the person to whom certificates representing Parent
Common Shares are to be issued shall, at the discretion of the Corporation or
Dutchco, as the case may be, as a condition precedent to the issuance thereof,
give a bond satisfactory to the Corporation, the Affiliate or Dutchco, as the
case may be, in such sum as the Corporation or Dutchco may direct or otherwise
indemnify the Corporation or Dutchco in a manner satisfactory to the
Corporation, the Affiliate or the Dutchco, as the case may be, against any
claim that may be made against the Corporation, the Affiliate or Dutchco with
respect to the certificate alleged to have been lost, stolen or destroyed.
4.10 The Corporation and Dutchco shall be entitled to deduct and withhold
from the Class E Redemption Price, the Class E Redemption Call Price payable
pursuant to these Class E Share Provisions to any holder of Class E Shares
such amounts as Parent, the Affiliate, Dutchco or the Transfer Agent determine
is required to deduct and withhold with respect to the making of such payment
under the United States Internal Revenue Code of 1986, as amended, the Income
Tax Act (Canada) or any provision of state, local, provincial or foreign tax
law. To the extent that amounts are so withheld, such withheld amounts shall
be treated for all purposes hereof as having been paid to the holder of the
shares in respect of which such deduction and withholding was made,
22
provided that such withheld amounts are actually remitted to the appropriate
taxing authority. To the extent any amount is required to be deducted or
withheld from any payment to a holder, the Corporation or Dutchco as the case
may be, are hereby authorized to sell or otherwise dispose of at fair market
value such portion of such consideration as is necessary to provide sufficient
funds to the Corporation or Dutchco, as the case may be, in order to enable it
to comply with such deduction or withholding requirement and the Corporation
or Dutchco, as the case may be, shall give an accounting to the holder with
respect thereto and any balance of such proceeds of sale.
4.11 The Corporation shall not be entitled to redeem, nor shall Dutchco be
entitled to purchase, any Class E Shares pursuant to this Section 4 unless at
the same time the Corporation redeems or Dutchco, purchases at the same time
and in the same manner all issued and outstanding Class F Shares.
5 Purchase for Cancellation
5.1 Subject to applicable law and to Section 4.1 of the Exchangeable Share
Provisions, the Corporation may at any time and from time to time purchase for
cancellation all or any part of the outstanding Class E Shares at any price by
tender to all the holders of record of Class E Shares then outstanding or
through the facilities of any stock exchange on which Class E Shares are
listed or quoted at any price per share. If in response to an invitation for
tenders under the provisions hereof, more Class E Shares are tendered at a
price or prices acceptable to the Corporation than the Corporation is prepared
to purchase, Class E Shares to be purchased by the Corporation shall be
purchased as nearly as may be pro rata according to the number of shares
tendered by each holder who submits a tender to the Corporation, provided that
when shares are tendered at different prices, the pro rating shall be effected
(disregarding fractions) only with respect to the shares tendered at the price
at which more shares were tendered than the Corporation is prepared to
purchase after the Corporation has purchased all the shares tendered at lower
prices. If only part of the Class E Shares represented by any certificate
shall be purchased, a new certificate for the balance of such shares shall be
issued at the expense of the Corporation. Subject as aforesaid, the
Corporation may effect such purchase for cancellation without purchasing for
cancellation shares of any other class of shares of the Corporation.
6 Issued and Paid-Up Capital Account
6.1 Where Class E Shares and Class F Shares are issued on a conversion of
Class B Shares, the amount to be added to the issued and paid-up capital
account of the Class E Shares for purposes of the Quebec Act and the paid-up
capital account of the Class E Shares for purposes of the Income Tax Act
(Canada) shall be equal to the aggregate of the issued and paid-up capital of
such Class B Shares so converted, less $1.
7 Amendment and Approval
7.1 The rights, privileges, restrictions and conditions attaching to the
Class E Shares may be added to, changed or removed but only with the approval
of the holders of the Class E Shares given as hereinafter specified, and any
other approval required by law.
7.2 Any approval given by the holders of the Class E Shares to add to,
change or remove any right, privilege, restriction or condition attaching to
the Class E Shares or any other matter requiring the approval or consent of
the holders of the Class E Shares shall be deemed to have been sufficiently
given if it shall have been given in accordance with applicable law subject to
a minimum requirement that such approval be evidenced by written resolution
signed by all holders of Class E Shares or by resolution passed by not less
than two-thirds of the votes cast on such resolution at a meeting of holders
of Class E Shares duly called and held at which the holders of at least 50% of
the outstanding Class E Shares at that time are present or represented by
proxy; provided that if at any such meeting the holders of at least 50% of the
outstanding Class E Shares at that time are not present or represented by
proxy within one-half hour after the time appointed for such meeting then the
meeting shall be adjourned to such date not less than ten days thereafter and
to such time and place as may be designated by the Chairman of such meeting.
At such adjourned meeting the holders of Class E Shares present
23
or represented by proxy thereat may transact the business for which the
meeting was originally called and a resolution passed thereat by the
affirmative vote of not less than two-thirds of the votes cast on such
resolution at such meeting shall constitute the approval or consent of the
holders of the Class E Shares.
PROVISIONS ATTACHING TO CLASS F SHARES
The Class F non-voting common shares in the share capital of the Corporation
shall have attached thereto the following rights, privileges, restrictions and
conditions:
1 Dividends
1.1 Subject to the prior rights of the holders of any shares ranking senior
to the Class F Shares with respect to priority in the payment of dividends,
the holders of Class F Shares shall be entitled to receive dividends and the
Corporation shall pay dividends thereon, as and when declared by the board of
directors of the Corporation out of monies properly applicable to the payment
of dividends, in such amount and in such form as the board of directors may
from time to time determine and all dividends which the directors may declare
on the Class F Shares shall be declared and paid in equal amounts per share on
all Class F Shares at the time outstanding; and, subject as aforesaid, the
board of directors of the Corporation may in their discretion declare
dividends on the Class F Shares without declaring dividends on any of the
Class A Shares, the Class B Shares, the Class C Shares, the Class D Shares,
the Class E Shares or the Exchangeable Shares.
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 Exchangeable
Shares, the Class D Shares and the Class C Shares and to any other shares
ranking senior to the Class F Shares with respect to priority in the
distribution of assets upon dissolution, liquidation or winding-up, the
holders of the Class F Shares shall be entitled to receive the remaining
property and assets of the Corporation rateably with the holders of the Class
A Shares, the Class B Shares and the Class E Shares.
3 Voting Rights
3.1 The holders of Class F Shares shall be entitled to vote separately as a
class on any change of the head office of the Corporation. Each Class F Share
shall carry one vote at any meeting called for such purpose. Except as
aforesaid and except where specifically provided by the Quebec Act the holders
of the Class F Shares shall not otherwise be entitled to receive notice of or
to attend meetings of the shareholders of the Corporation and shall not be
entitled to vote at any meeting of shareholders of the Corporation, but shall
be entitled to notice of meetings of shareholders called for the purpose of
authorizing the dissolution of the Corporation.
4 Redemption of Class F Shares by the Corporation
4.1 Subject to applicable law, and subject to the exercise by Dutchco of the
Class F Redemption Call Right, the Corporation shall be entitled, immediately
following the Class B Conversion Time (the "Class F Redemption Time") without
notice to the holders of Class F Shares, but with prior notice to Dutchco, to
redeem the whole of the then outstanding Class F Shares for an amount per
share equal to the Current Market Price of 0.165 of one Parent Common Share on
the last Business Day prior to the Redemption Time, which shall be satisfied
in full by the Corporation causing to be delivered to each holder of Class F
Shares 0.165 of one Parent Common Share for each Class F Share held by such
holder (the "Class F Redemption Price").
4.2 At or after the Class F Redemption Time and subject to the exercise by
Dutchco of the Class F Redemption Call Right, the Corporation shall cause to
be delivered to the holders of the Class F Shares to be redeemed the Class F
Redemption Price (less any tax required to be deducted and withheld therefrom
by the
24
Corporation) for each such Class F Share upon presentation and surrender (at
the head office of the Corporation or at any office of the Transfer Agent as
may be specified by the Corporation in such notice) of the certificates
representing such Class F Shares, or such other certificates of securities or
any predecessor of the Corporation acceptable to the Corporation (including
those representing Company Common Shares) together with such other documents
and instruments as may be required to effect a transfer of Class F Shares
under the Quebec Act and the by-laws of the Corporation and such additional
documents and instruments as the Transfer Agent may reasonably require.
Payment of the total Class F Redemption Price for such Class F Shares shall be
made by delivery to each holder, at the address of the holder recorded in the
securities register of the Corporation or by holding for pick up by the holder
at the head office of the Corporation or at any office of the Transfer Agent
as may be specified by the Corporation, on behalf of the Corporation of
certificates representing Parent Common Shares (which shares shall be duly
issued as fully paid and non-assessable and shall be free and clear of any
lien, claim or encumbrance) (less any tax required to be deducted and withheld
therefrom by the Corporation). At and after the Class F Redemption Time, the
holders of the Class F Shares called for redemption shall cease to be holders
of such Class F Shares and shall not be entitled to exercise any of the rights
of holders in respect thereof, other than the right to receive their
proportionate part of the total Class F Redemption Price, unless payment of
the total Class F Redemption Price for such Class F Shares shall not be made
upon presentation and surrender of certificates in accordance with the
foregoing provisions, in which case the rights of the holders shall remain
unaffected until the total Class F Redemption Price has been paid in the
manner hereinbefore provided. Subject to the exercise of the Class F
Redemption Call Right by Dutchco, the Corporation shall have the right at any
time to deposit or cause to be deposited the total Class F Redemption Price of
the Class F Shares so called for redemption, or of such of the said Class F
Shares represented by certificates that have not at the date of such deposit
been surrendered by the holders thereof in connection with such redemption, in
a custodial account with any chartered bank or trust company in Canada or the
United States. Upon the later of such deposit being made and the Class F
Redemption Time, the Class F Shares in respect whereof such deposit shall have
been made shall be redeemed and the rights of the holders thereof after such
deposit or Class F Redemption Time, as the case may be, shall be limited to
receiving their proportionate part of the total Class F Redemption Price (less
any tax required to be deducted and withheld therefrom by the Corporation) for
such Class F Shares so deposited, against presentation and surrender of the
said certificates held by them, respectively, in accordance with the foregoing
provisions. Upon such payment or deposit of the total Class F Redemption
Price, the holders of the Class F Shares shall thereafter be considered and
deemed for all purposes to be holders of the Parent Common Shares delivered to
them.
4.3 Dutchco shall have the overriding right (the "Class F Redemption Call
Right"), notwithstanding the proposed redemption of Class F Shares by the
Corporation, to purchase from all but not less than all of the holders of
Class F Shares to be redeemed at the Class F Redemption Time, all but not less
than all of the Class F Shares held by each such holder on payment by Dutchco
to the holder of an amount per share equal to the Current Market Price of
0.165 of one Parent Common Share on the last Business Day prior to the Class F
Redemption Time which shall be satisfied in full by causing to be delivered to
such holder 0.165 of one Parent Common Share (the "Class F Redemption Call
Purchase Price"). In the event of the exercise of the Class F Redemption Call
Right by Dutchco, each holder shall be obligated to sell all the Class F
Shares held by the holder and otherwise to be redeemed to Dutchco at the Class
F Redemption Time on payment by Dutchco to the holder of the Class F
Redemption Call Purchase Price for each such share.
4.4 To exercise the Class F Redemption Call Right, Dutchco must notify the
Corporation of Dutchco's intention to exercise such right prior to the Class F
Redemption Time (which notice may be given to the Company on behalf of the
Corporation). If Dutchco exercises the Class F Redemption Call Right, Dutchco
will, at the Class F Redemption Time, purchase and the holders will sell all
of the Class F Shares to be redeemed for a price per share equal to the Class
F Redemption Call Purchase Price. Any notice by Dutchco to the Company for and
on behalf of the Corporation shall be deemed to constitute good and valid
notice by Dutchco to the Corporation.
4.5 For the purposes of completing the purchase of Class F Shares pursuant
to the Class F Redemption Call Right, Dutchco shall deposit with the Transfer
Agent, at or before the Class F Redemption Time, certificates
25
representing the aggregate number of Parent Common Shares deliverable by
Dutchco in payment of the total Class F Redemption Call Purchase Price and a
cheque or cheques in the amount of the remaining portion, if any, of the total
Class F Redemption Call Purchase Price. Provided that the total Class F
Redemption Call Purchase Price has been so deposited with the Transfer Agent,
at and after the Class F Redemption Time the rights of each holder of Class F
Shares so purchased will be limited to receiving such holder's proportionate
part of the total Class F Redemption Call Purchase Price payable by Dutchco
upon presentation and surrender by the holder of certificates representing the
Class F Shares purchased by Dutchco from such holder and the holder shall at
and after the Class F Redemption Time be considered and deemed for all
purposes to be the holder of the Parent Common Shares delivered to such
holder. Upon surrender to the Transfer Agent of a certificate or certificates
representing Class F Shares, together with such other documents and
instruments as may be required to effect a transfer of Class F Shares under
the Quebec Act and the by-laws of the Corporation and such additional
documents and instruments as the Transfer Agent may reasonably require, the
holder of such surrendered certificate or certificates shall be entitled to
receive in exchange therefor, and the Transfer Agent on behalf of Dutchco
shall deliver to such holder, certificates representing the Parent Common
Shares to which the holder is entitled and a cheque or cheques of or on behalf
of Dutchco payable at par and in Canadian dollars at any branch of the bankers
of Dutchco or of the Corporation in Canada in payment of the remaining
portion, if any, of the total Class F Redemption Call Purchase Price. If
Dutchco does not exercise the Class F Redemption Call Right in the manner
described herein, at the Class F Redemption Time the holders of the Class F
Shares will be entitled to receive in exchange therefor the redemption price
otherwise payable by the Corporation in connection with the redemption of
Class F Shares.
4.6 No certificates or scrip representing fractional Parent Common Shares
shall be issued upon the surrender for exchange of certificates pursuant to
sections 4.2 or 4.5 hereof and no dividend, stock split or other change in the
capital structure of Parent shall relate to any such fractional security and
such fractional interests shall not entitle the owner thereof to vote or to
exercise any rights as a security holder of Parent. In lieu of any such
fractional securities, each person entitled to a fractional interest in a
Parent Common Share will receive from the Corporation or Dutchco as the case
may be, an amount in cash (rounded to the nearest whole cent), without
interest, equal to the product of (i) such fraction, multiplied by (ii) the
average of the closing price for the Parent Common Shares on Nasdaq as of each
of the thirty (30) consecutive trading days immediately preceding the
Effective Date as quoted in The Wall Street Journal or other reliable
financial newspaper or publication. For the purposes of the preceding
sentence, a "trading day" means a day on which trading generally takes place
on Nasdaq and on which trading in Parent Common Shares has occurred.
4.7 No dividends or other distributions declared or made after the Class F
Redemption Time with respect to Parent Common Shares with a record date after
the Class F Redemption Time shall be paid to the holder of any unsurrendered
certificate which immediately prior to the Class F Redemption Date represented
Class F Shares that were redeemed or purchased pursuant to these Class F Share
provisions, and no cash payment in lieu of fractional shares shall be paid to
any such holder pursuant to section 4.6 hereof, unless and until the holder of
record of such certificate shall surrender such certificate in accordance with
sections 4.2 or 4.5 hereof, as the case may be. Subject to applicable law, at
the time of such surrender of any such certificate there shall be paid to the
record holder of the certificates representing whole Parent Common Shares
without interest (i) the amount of any cash payable in lieu of a fractional
Parent Common Share to which such holder is entitled pursuant to section 4.6
hereof, (ii) the amount of dividends or other distributions with a record date
after the Class F Redemption Time theretofore paid with respect to such whole
Parent Common Share and (iii) the amount of dividends or other distributions
with a record date after the Class F Redemption Time but prior to surrender
and a payment date subsequent to surrender payable with respect to such whole
Parent Common Share.
4.8 In the event of a transfer of ownership of Company Common Shares which
is not registered in the transfer records of the Company prior to the
Effective Date, a certificate representing the proper number of Parent Common
Shares may be issued to a transferee if the certificate representing such
Company Common Shares is presented to the Transfer Agent, accompanied by all
documents required to evidence and effect such transfer.
26
4.9 In the event any certificate which immediately prior to the Effective
Date represented outstanding Company Common Shares that were converted to
Class B Shares on the Amalgamation and subsequently converted into Class F
Shares at the Class B Conversion Time shall have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the person claiming
such certificate to be lost, stolen or destroyed, the Transfer Agent will
issue in exchange for such lost, stolen or destroyed certificate, certificates
representing Parent Common Shares (and any dividends or distributions with
respect thereto and any cash pursuant to section 4.6 hereof) deliverable in
respect thereof as determined in accordance with sections 4.2 or 4.5 hereof.
When authorizing such issuance and/or payment in exchange for any lost, stolen
or destroyed certificate, the person to whom certificates representing Parent
Common Shares are to be issued shall, at the discretion of the Corporation or
Dutchco, as the case may be, as a condition precedent to the issuance thereof,
give a bond satisfactory to the Corporation or Dutchco, as the case may be, in
such sum as the Corporation or Dutchco may direct or otherwise indemnify the
Corporation or Dutchco in a manner satisfactory to the Corporation or the
Dutchco, as the case may be, against any claim that may be made against the
Corporation or Dutchco with respect to the certificate alleged to have been
lost, stolen or destroyed.
4.10 The Corporation and Dutchco shall be entitled to deduct and withhold
from the Class F Redemption Price or the Class F Redemption Call Price, as the
case may be, payable pursuant to these Class F Share Provisions to any holder
of Class F Shares such amounts as Parent, Dutchco or the Transfer Agent
determine is required to deduct and withhold with respect to the making of
such payment under the United States Internal Revenue Code of 1986, as
amended, the Income Tax Act (Canada) or any provision of state, local,
provincial or foreign tax law. To the extent that amounts are so withheld,
such withheld amounts shall be treated for all purposes hereof as having been
paid to the holder of the shares in respect of which such deduction and
withholding was made, provided that such withheld amounts are actually
remitted to the appropriate taxing authority. To the extent any amount is
required to be deducted or withheld from any payment to a holder, the
Corporation, the Affiliate or Dutchco, as the case may be, are hereby
authorized to sell or otherwise dispose of at fair market value such portion
of such consideration as is necessary to provide sufficient funds to the
Corporation, the Affiliate or Dutchco, as the case may be, in order to enable
it to comply with such deduction or withholding requirement and the
Corporation, the Affiliate or Dutchco, as the case may be shall give an
accounting to the holder with respect thereto and any balance of such proceeds
of sale.
4.11 The Corporation shall not be entitled to redeem, nor shall Dutchco or
the Affiliate, as the case may be, be entitled to purchase, any Class F Shares
pursuant to this Section 4 unless at the same time the Corporation redeems or
Dutchco or the Affiliate, as the case may be, purchases at the same time and
in the same manner all issued and outstanding Class E Shares.
5 Issued and Paid-Up Capital Account
5.1 Where Class E Shares and Class F Shares are issued on a conversion of
Class B Shares, the amount to be added to the issued and paid-up capital
account of the Class F Shares for purposes of the Quebec Act and the paid-up
capital account of the Class F Shares for purposes of the Income Tax Act
(Canada) shall be $1.
6 Amendment and Approval
6.1 The rights, privileges, restrictions and conditions attaching to the
Class F Shares may be added to, changed or removed but only with the approval
of the holders of the Class F Shares given as hereinafter specified, and any
other approval required by law.
6.2 Any approval given by the holders of the Class F Shares to add to,
change or remove any right, privilege, restriction or condition attaching to
the Class F Shares or any other matter requiring the approval or consent of
the holders of the Class F Shares shall be deemed to have been sufficiently
given if it shall have been given in accordance with applicable law subject to
a minimum requirement that such approval be evidenced by written resolution
signed by all holders of Class F Shares or by resolution passed by not less
than two-thirds of the votes cast on such resolution at a meeting of holders
of Class F Shares duly called and held at which the
27
holders of at least 50% of the outstanding Class F Shares at that time are
present or represented by proxy; provided that if at any such meeting the
holders of at least 50% of the outstanding Class F Shares at that time are not
present or represented by proxy within one-half hour after the time appointed
for such meeting then the meeting shall be adjourned to such date not less
than ten days thereafter and to such time and place as may be designated by
the Chairman of such meeting. At such adjourned meeting the holders of Class F
Shares present or represented by proxy thereat may transact the business for
which the meeting was originally called and a resolution passed thereat by the
affirmative vote of not less than two-thirds of the votes cast on such
resolution at such meeting shall constitute the approval or consent of the
holders of the Class F Shares.
PROVISIONS ATTACHING TO EXCHANGEABLE SHARES
The exchangeable non-voting shares in the share capital of the Corporation
shall have the following rights, privileges, restrictions and conditions:
ARTICLE 1
Interpretation
1.1 For the purposes of these Exchangeable Share Provisions:
"Affiliate" of any person means any other person directly or indirectly
controlled by, or under common control of, that person. For the purposes of
this definition, "control" (including, with correlative meanings, the terms
"controlled by" and "under common control of"), as applied to any person,
means the possession by another person, directly or indirectly, of the power
to direct or cause the direction of the management and policies of that first
mentioned person, whether through the ownership of voting securities, by
contract or otherwise; provided, however, that any former directors, executive
officers or principal shareholders of the Company who may be deemed to be an
affiliate of Parent after the Effective Date, shall not be considered an
"Affiliate" for purposes of these share provisions.
"Amalgamation" means the amalgamation of Discreet Logic Inc., 9066-9854
Quebec Inc., and 9066-9771 Quebec Inc. under the Quebec Act.
"Automatic Redemption" has the meaning ascribed thereto in section 7.1 of
these share provisions.
"Automatic Redemption Date" means the date for the automatic redemption by
the Corporation of Exchangeable Shares pursuant to Article 7 of these share
provisions, which date shall be eleven years from the Effective Date (as
defined in the Amalgamation Agreement) unless (a) such date shall be extended
at any time or from time to time to a specified later date by the Board of
Directors provided at least 60 days' prior written notice of any such
extension is given to the registered holders of the Exchangeable Shares or (b)
such date shall be accelerated at any time to a specified earlier date by the
Board of Directors if at such time there are less than 250,000 Exchangeable
Shares outstanding (other than Exchangeable Shares held by Parent and its
Affiliates and as such number of shares may be adjusted as deemed appropriate
by the Board of Directors to give effect to any subdivision or consolidation
of or stock dividend on the Exchangeable Shares, any issue or distribution of
rights to acquire Exchangeable Shares or securities exchangeable for or
convertible into Exchangeable Shares, any issue or distribution of other
securities or rights or evidences of indebtedness or assets, or any other
capital reorganization or other transaction affecting the Exchangeable
Shares), provided at least 60 days' prior written notice of any such extension
or acceleration, as the case may be, is given to the registered holders of the
Exchangeable Shares, in which case the Automatic Redemption Date shall be such
later or earlier date; provided, however, that the accidental failure or
omission to give any such notice of extension or acceleration, as the case may
be, to less than 5% of such holders of Exchangeable Shares shall not affect
the validity of such extension or acceleration.
28
"Board of Directors" means the Board of Directors of the Corporation.
"Business Day" means any day other than a Saturday, a Sunday or a day when
banks are not open for business in either or both of San Francisco, California
and Montreal, Quebec.
"Canadian Dollar Equivalent" means in respect of an amount expressed in a
foreign currency (the "Foreign Currency Amount") at any date the product
obtained by multiplying (a) the Foreign Currency Amount by (b) the noon spot
exchange rate on such date for such foreign currency expressed in Canadian
dollars as reported by the Bank of Canada or, in the event such spot exchange
rate is not available, such exchange rate on such date for such foreign
currency expressed in Canadian dollars as may be deemed by the Board of
Directors to be appropriate for such purpose.
"Certificate of Amalgamation" means the certificate of amalgamation to be
issued to the Corporation by the Inspector General of Financial Institutions
under the Quebec Act in respect of the Amalgamation.
"Class A Shares" mean the Class A voting common shares in the share capital
of the Corporation.
"Class B Shares" means the Class B non-voting common shares in the share
capital of the Corporation.
"Class C Shares" means the Class C non-voting preferred shares in the share
capital of the Corporation.
"Class D Shares" means the Class D non-voting preferred shares in the share
capital of the Corporation.
"Class E Shares" means the Class E voting common shares in the share capital
of the Corporation.
"Class F Shares" means the Class F non-voting common shares in the share
capital of the Corporation.
"Corporation" means the company resulting from the Amalgamation.
"Current Market Price" means, in respect of a Parent Common Share on any
date, the Canadian Dollar Equivalent of the average of the closing prices of
Parent Common Shares on Nasdaq on each of the thirty (30) consecutive trading
days ending not more than five trading days before such date, or, if the
Parent Common Shares are not then quoted on Nasdaq, on such other stock
exchange or automated quotation system on which the Parent Common Shares are
listed or quoted, as the case may be, as may be selected by the Board of
Directors for such purpose; provided, however, that if there is no public
distribution or trading activity of Parent Common Shares during such period,
then the Current Market Price of a Parent Common Share shall be determined by
the Board of Directors based upon the advice of such qualified independent
financial advisors as the Board of Directors may deem to be appropriate, and
provided further that any such selection, opinion or determination by the
Board of Directors shall be conclusive and binding.
"Dutchco" means Autodesk Development B.V., a corporation subsisting under
the laws of The Netherlands or such other Affiliate of Autodesk to which
Dutchco has assigned its rights under the Voting and Exchange Trust Agreement.
"Effective Date" means the date of the Amalgamation as set forth in the
Certificate of Amalgamation.
"Exchange Act" has the meaning ascribed thereto in Section 7.1 of these
share provisions.
"Exchangeable Shares" mean the exchangeable non-voting shares of the
Corporation having the rights, privileges, restrictions and conditions set
forth herein.
"Liquidation Amount" has the meaning ascribed thereto in Section 5.1 of
these share provisions.
"Liquidation Call Purchase Price" has the meaning ascribed thereto in
Section 5.4 of these share provisions.
29
"Liquidation Call Right" has the meaning ascribed thereto in Section 5.4 of
these share provisions.
"Liquidation Date" has the meaning ascribed thereto in Section 5.1 of these
share provisions.
"Nasdaq" means the Nasdaq National Market.
"Parent" means Autodesk, Inc., a body corporate existing under the laws of
the State of Delaware.
"Parent (Dutchco) Call Notice" has the meaning ascribed thereto in Section
6.3 of these share provisions.
"Parent Common Shares" mean the common shares in the share capital of
Parent.
"Parent Dividend Declaration Date" means the date on which the Board of
Directors of Parent declares any dividend on the Parent Common Shares.
"Parent Special Share" means the one share of Series B Preferred Stock of
Parent with a par value of U.S.$0.01 and having voting rights at meetings of
holders of Parent Common Shares equal to that number of votes equal to the
number of votes that the Exchangeable Shares outstanding from time to time
(other than Exchangeable Shares held by Parent and its Affiliates) would be
entitled to if exchanged for Parent Common Shares, to be issued to and voted
by the Trustee pursuant to the Voting and Exchange Trust Agreement.
"Purchase Price" has the meaning ascribed thereto in Section 6.3 of these
share provisions.
"Quebec Act" means the Companies Act (Quebec), as amended.
"Record Holders" has the meaning ascribed thereto in Section 7.1 of these
share provisions.
"Redemption Call Right" has the meaning ascribed thereto in Section 7.3 of
these share provisions.
"Redemption Call Purchase Price" has the meaning ascribed thereto in Section
7.1 of these share provisions.
"Redemption Price" has the meaning ascribed thereto in Section 7.1 of these
share provisions.
"Retracted Shares" has the meaning ascribed thereto in Section 6.1(a) of
these share provisions.
"Retraction Call Right" has the meaning ascribed thereto in Section 6.1(c)
of these share provisions.
"Retraction Date" has the meaning ascribed thereto in Section 6.1(b) of
these share provisions.
"Retraction Price" has the meaning ascribed thereto in Section 6.1 of these
share provisions.
"Retraction Request" has the meaning ascribed thereto in Section 6.1 of
these share provisions.
"Section 12(g) Redemption" has the meaning ascribed thereto in Section 7.1.
"Support Agreement" means the Support Agreement between Parent, Dutchco and
the Corporation, made on or about the Effective Date.
"Transfer Agent" means Harris Trust and Savings Bank or such other person as
may from time to time be the registrar and transfer agent for the Exchangeable
Shares.
"Trustee" means Montreal Trust Company of Canada, a trust company existing
under the laws of Canada and any successor trustee appointed under the Voting
and Exchange Trust Agreement.
"Voting and Exchange Trust Agreement" means the Voting and Exchange Trust
Agreement between Parent, Dutchco, the Corporation and the Trustee, made on or
about the Effective Date.
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ARTICLE 2
Ranking of Exchangeable Shares
2.1 The Exchangeable Shares shall be entitled to a preference over the Class
A Shares, the Class B Shares, the Class C Shares, the Class D Shares, the
Class E Shares and the Class F Shares and any other shares ranking junior to
the Exchangeable Shares 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 any other
distribution of the assets of the Corporation among its shareholders for the
purpose of winding up its affairs.
ARTICLE 3
Dividends
3.1 A holder of an Exchangeable Share shall be entitled to receive and the
Board of Directors shall, subject to applicable law, on each Parent Dividend
Declaration Date, declare a dividend on each Exchangeable Share (a) in the
case of a cash dividend declared on the Parent Common Shares, in an amount in
cash for each Exchangeable Share equal to the Canadian Dollar Equivalent on
the Parent Dividend Declaration Date of the cash dividend declared on each
Parent Common Share or (b) in the case of a stock dividend declared on the
Parent Common Shares to be paid in Parent Common Shares, in such number of
Exchangeable Shares for each Exchangeable Share as is equal to the number of
Parent Common Shares to be paid on each Parent Common Share or (c) in the case
of a dividend declared on the Parent Common Shares in property other than cash
or Parent Common Shares, in such type and amount of property for each
Exchangeable Share as is the same as or economically equivalent to (to be
determined by the Board of Directors as contemplated by Section 2.7 of the
Support Agreement) the type and amount of property declared as a dividend on
each Parent Common Share. Such dividends shall be paid out of money, assets or
property of the Corporation properly applicable to the payment of dividends,
or out of authorized but unissued shares of the Corporation. Any dividend
which should have been declared on the Exchangeable Shares pursuant to this
Section 3.1 but was not so declared due to the provisions of applicable law
shall be declared and paid by the Corporation as soon as payment of such
dividend is permitted by such law on a subsequent date or dates determined by
the Board of Directors.
3.2 Cheques of the Corporation or any dividend paying agent appointed by the
Corporation payable at par at any branch of the bankers of the Corporation
shall be issued in respect of any cash dividends contemplated by Section
3.1(a) hereof and the sending of such a cheque to each holder of an
Exchangeable Share shall satisfy the cash dividend represented thereby unless
the cheque is not paid on presentation. Certificates registered in the name of
the registered holder of Exchangeable Shares shall be issued or transferred in
respect of any stock dividends contemplated by Section 3.1(b) hereof and the
sending of such a certificate to each holder of an Exchangeable Share shall
satisfy the stock dividend represented thereby. Such other type and amount of
property in respect of any dividends contemplated by Section 3.1(c) hereof
shall be issued, distributed or transferred by the Corporation in such manner
as it shall determine and the issuance, distribution or transfer thereof by
the Corporation to each holder of an Exchangeable Share shall satisfy the
dividend represented thereby. No holder of an Exchangeable Share shall be
entitled to recover by action or other legal process against the Corporation
any dividend that is represented by a cheque that has not been duly presented
to the Corporation's bankers for payment or that otherwise remains unclaimed
for a period of six years from the date on which such dividend was payable.
3.3 The record date for the determination of the holders of Exchangeable
Shares entitled to receive payment of, and the payment date for, any dividend
declared on the Exchangeable Shares under Section 3.1 hereof shall be the same
dates as the record date and payment date, respectively, for the corresponding
dividend declared on the Parent Common Shares.
3.4 If on any payment date for any dividends declared on the Exchangeable
Shares under Section 3.1 hereof the dividends are not paid in full on all of
the Exchangeable Shares then outstanding, any such dividends
31
that remain unpaid shall be paid on a subsequent date or dates determined by
the Board of Directors on which the Corporation shall have sufficient moneys,
assets or property properly applicable to the payment of such dividends.
ARTICLE 4
Certain Restrictions
4.1 So long as any of the Exchangeable Shares are outstanding, the
Corporation shall not at any time without, but may at any time with, the
approval of the holders of the Exchangeable Shares given as specified in
Section 10.2 of these share provisions:
(a) pay any dividends on the Class A Shares, the Class B Shares, the
Class C Shares, the Class D Shares, the Class E Shares, the Class F Shares
or any other shares ranking junior to the Exchangeable Shares, other than
stock dividends payable in Class A Shares, Class B Shares, Class C Shares,
Class D Shares, Class E Shares, Class F Shares or any such other shares
ranking junior to the Exchangeable Shares, as the case may be;
(b) redeem, retract or purchase or make any capital distribution in
respect of Class A Shares, Class B Shares, Class C Shares, Class D Shares,
Class E Shares and Class F Shares or any other shares ranking junior to the
Exchangeable Shares;
(c) redeem or purchase any other shares of the Corporation ranking
equally with or junior to the Exchangeable Shares with respect to the
payment of dividends or on any liquidation distribution; or
(d) issue any Exchangeable Shares or any other shares of the Corporation
ranking equally with respect to the payment of dividends or on any
liquidation distribution, or superior to, the Exchangeable Shares other
than by way of stock dividends to the holders of such Exchangeable Shares
or as contemplated by the Support Agreement.
The restrictions in Sections 4.1(a), 4.1(b) and 4.1(c) above shall not apply
if all dividends on the outstanding Exchangeable Shares corresponding to
dividends declared following the initial date of issue of Exchangeable Shares
on the Parent Common Shares shall have been declared on the Exchangeable
Shares and paid in full.
ARTICLE 5
Distribution on Liquidation
5.1 In the event of the liquidation, dissolution or winding-up of the
Corporation or any other distribution of the assets of the Corporation among
its shareholders for the purpose of winding up its affairs, a holder of
Exchangeable Shares shall be entitled, subject to applicable law, to receive
from the assets of the Corporation in respect of each Exchangeable Share held
by such holder on the effective date (the "Liquidation Date") of such
liquidation, dissolution or winding-up, before any distribution of any part of
the assets of the Corporation among the holders of the Class A Shares, the
Class B Shares, the Class C Shares, the Class D Shares, the Class E Shares,
the Class F Shares or any other shares ranking junior to the Exchangeable
Shares, an amount per share equal to (a) the Current Market Price of a Parent
Common Share on the last Business Day prior to the Liquidation Date, which
shall be satisfied in full by the Corporation causing to be delivered to such
holder one Parent Common Share, plus (b) an additional amount equivalent to
the full amount of all declared and unpaid dividends on each such Exchangeable
Share and all dividends declared on Parent Common Shares which have not been
declared on such Exchangeable Shares in accordance with Section 3.1 of these
share provisions (collectively the "Liquidation Amount", provided that if the
record date for any such declared and unpaid dividends occurs on or after the
Liquidation Date, the Liquidation Amount shall not include such additional
amount equivalent to such dividends).
32
5.2 On or promptly after the Liquidation Date, and subject to the exercise
by Dutchco of the Liquidation Call Right, the Corporation shall cause to be
delivered to the holders of the Exchangeable Shares the Liquidation Amount
(less any tax required to be deducted and withheld therefrom by the
Corporation) for each such Exchangeable Share upon presentation and surrender
of the certificates representing such Exchangeable Shares together with such
other documents and instruments as may be required to effect a transfer of
Exchangeable Shares under the Quebec Act and the by-laws of the Corporation
and such additional documents and instruments as the Transfer Agent may be
specified by the Corporation by notice to the holders of the Exchangeable
Shares. Payment of the total Liquidation Amount for such Exchangeable Shares
shall be made by delivery to each holder, at the address of the holder
recorded in the securities register of the Corporation for the Exchangeable
Shares or by holding for pick up by the holder at the head office of the
Corporation or at any office of the Transfer Agent as may be specified by the
Corporation by notice to the holders of Exchangeable Shares, on behalf of the
Corporation of certificates representing Parent Common Shares (which shares
shall be duly issued as fully paid and non-assessable and shall be free and
clear of any lien, claim or encumbrance) and a cheque of the Corporation
payable at par at any branch of the bankers of the Corporation in respect of
the amount equivalent to the full amount of all declared and unpaid dividends
and all dividends declared on Parent Common Shares which have not been
declared on such Exchangeable Shares in accordance with Section 3.1 of these
share provisions, comprising part of the total Liquidation Amount (less any
tax required to be deducted and withheld therefrom by the Corporation). On and
after the Liquidation Date, the holders of the Exchangeable Shares shall cease
to be holders of such Exchangeable Shares and shall not be entitled to
exercise any of the rights of holders in respect thereof, other than the right
to receive their proportionate part of the total Liquidation Amount, unless
payment of the total Liquidation Amount for such Exchangeable Shares shall not
be made upon presentation and surrender of share certificates in accordance
with the foregoing provisions, in which case the rights of the holders shall
remain unaffected until the total Liquidation Amount has been paid in the
manner hereinbefore provided. The Corporation shall have the right at any time
after the Liquidation Date to deposit or cause to be deposited the total
Liquidation Amount in respect of the Exchangeable Shares represented by
certificates that have not at the Liquidation Date been surrendered by the
holders thereof in a custodial account with any chartered bank or trust
company in Canada. Upon such deposit being made, the rights of the holders of
Exchangeable Shares after such deposit shall be limited to receiving their
proportionate part of the total Liquidation Amount (less any tax required to
be deducted and withheld therefrom) for such Exchangeable Shares so deposited,
against presentation and surrender of the said certificates held by them,
respectively, in accordance with the foregoing provisions. Upon such payment
or deposit of the total Liquidation Amount, the holders of the Exchangeable
Shares shall thereafter be considered and deemed for all purposes to be the
holders of the Parent Common Shares delivered to them. To the extent that the
amount of tax required to be deducted or withheld from any payment to a holder
of Exchangeable Shares exceeds the cash portion of such payment, the
Corporation is hereby authorized to sell or otherwise dispose of at fair
market value such portion of the property then payable to the holder as is
necessary to provide sufficient funds to the Corporation in order to enable it
to comply with such deduction or withholding requirement and the Corporation
shall give an accounting to the holder with respect thereto and any balance of
such proceeds of sale.
5.3 After the Corporation has satisfied its obligations to pay the holders
of the Exchangeable Shares, the Liquidation Amount per Exchangeable Share
pursuant to Section 5.1 of these share provisions, such holders shall not be
entitled to share in any further distribution of the assets of the
Corporation.
5.4 Dutchco shall have the overriding right (the "Liquidation Call Right"),
in the event of and notwithstanding the proposed liquidation, dissolution or
winding-up of the Corporation pursuant to Article 5 of these share provisions,
to purchase from all but not less than all of the holders of Exchangeable
Shares on the Liquidation Date all but not less than all of the Exchangeable
Shares held by each such holder on payment by Dutchco of an amount per share
equal to (a) the Current Market Price of a Parent Common Share on the last
Business Day prior to the Liquidation Date, which shall be satisfied in full
by causing to be delivered to such holder one Parent Common Share, plus (b) an
additional amount equivalent to the full amount of all dividends declared and
unpaid on such Exchangeable Share and all dividends declared on Parent Common
Shares which have not been declared on such Exchangeable Shares in accordance
with Section 3.1 of these share provisions
33
(collectively the "Liquidation Call Purchase Price", provided that if the
record date for any such declared and unpaid dividends occurs on or after the
Liquidation Date, the Liquidation Call Purchase Price shall not include such
additional amount equivalent to such dividends). In the event of the exercise
of the Liquidation Call Right by Dutchco, each holder shall be obligated to
sell all the Exchangeable Shares held by the holder to Dutchco on the
Liquidation Date on payment by Dutchco to the holder of the Liquidation Call
Purchase Price for each such share.
5.5 To exercise the Liquidation Call Right, Dutchco must notify the Transfer
Agent, as agent for the holders of Exchangeable Shares, and the Corporation of
Dutchco's intention to exercise such right at least sixty days before the
Liquidation Date in the case of a voluntary liquidation, dissolution or
winding-up of the Corporation and at least five Business Days before the
Liquidation Date in the case of an involuntary liquidation, dissolution or
winding-up of the Corporation. The Transfer Agent will notify the holders of
Exchangeable Shares as to whether or not Dutchco has exercised the Liquidation
Call Right forthwith after the expiry of the period during which the same may
be exercised by Dutchco. If Dutchco exercises the Liquidation Call Right, on
the Liquidation Date, Dutchco will purchase and the holders will sell all of
the Exchangeable Shares then outstanding for a price per share equal to the
Liquidation Call Purchase Price.
5.6 For the purposes of completing the purchase of the Exchangeable Shares
pursuant to the Liquidation Call Right, Dutchco shall deposit with the
Transfer Agent, on or before the Liquidation Date, certificates representing
the aggregate number of Parent Common Shares deliverable by Dutchco in payment
of the total Liquidation Call Purchase Price and a cheque or cheques in the
amount of the remaining portion, if any, of the total Liquidation Call
Purchase Price. Provided that the total Liquidation Call Purchase Price has
been so deposited with the Transfer Agent, on and after the Liquidation Date
the rights of each holder of Exchangeable Shares will be limited to receiving
such holder's proportionate part of the total Liquidation Call Purchase Price
payable by Dutchco upon presentation and surrender by the holder of
certificates representing the Exchangeable Shares held by such holder and the
holder shall on and after the Liquidation Date be considered and deemed for
all purposes to be the holder of the Parent Common Shares delivered to it.
Upon surrender to the Transfer Agent of a certificate or certificates
representing Exchangeable Shares, together with such other documents and
instruments as may be required to effect a transfer of Exchangeable Shares
under the Quebec Act and the by-laws of the Corporation and such additional
documents and instruments as the Transfer Agent may reasonably require, the
holder of such surrendered certificate or certificates shall be entitled to
receive in exchange therefor, and the Transfer Agent on behalf of Dutchco
shall deliver to such holder, certificates representing the Parent Common
Shares to which the holder is entitled and a cheque or cheques of Dutchco
payable at par and in Canadian dollars at any branch of the bankers of Dutchco
or of the Corporation in Canada in payment of the remaining portion, if any,
of the total Liquidation Call Purchase Price. If Dutchco does not exercise the
Liquidation Call Right in the manner described above, on the Liquidation Date
the holders of the Exchangeable Shares will be entitled to receive in exchange
therefor the liquidation price otherwise payable by the Corporation in
connection with the liquidation, dissolution or winding-up of the Corporation
pursuant to this Article 5.
ARTICLE 6
Retraction of Exchangeable Shares by Holder
6.1 A holder of Exchangeable Shares shall be entitled at any time, subject
to applicable law and the exercise by Dutchco of the Retraction Call Right (as
defined in subsection (c) below) and otherwise upon compliance with the
provisions of this Article 6, to require the Corporation to redeem any or all
of the Exchangeable Shares registered in the name of such holder for an amount
per share equal to (a) the Current Market Price of a Parent Common Share on
the last Business Day prior to the Retraction Date, which shall be satisfied
in full by the Corporation causing to be delivered to such holder one Parent
Common Share for each Exchangeable Share presented and surrendered by the
holder, plus (b) an additional amount equivalent to the full amount of all
dividends declared and unpaid thereon and all dividends declared on Parent
Common Shares which have not been declared on such Exchangeable Shares in
accordance with Section 3.1 of these share
34
provisions (collectively the "Retraction Price", provided that if the record
date for any such declared and unpaid dividends occurs on or after the
Retraction Date the Retraction Price shall not include such additional amount
equivalent to such dividends). To effect such redemption, the holder shall
present and surrender at the head office of the Corporation or at any office
of the Transfer Agent as may be specified by the Corporation by notice to the
holders of Exchangeable Shares the certificate or certificates representing
the Exchangeable Shares which the holder desires to have the Corporation
redeem, together with such other documents and instruments as may be required
to effect a transfer of Exchangeable Shares under the Quebec Act and the by-
laws of the Corporation and such additional documents and instruments as the
Transfer Agent may reasonably require, and together with a duly executed
statement (the "Retraction Request") in such form as may be acceptable to the
Corporation:
(a) specifying that the holder desires to have all or any number
specified therein of the Exchangeable Shares represented by such
certificate or certificates (the "Retracted Shares") redeemed by the
Corporation;
(b) stating the Business Day on which the holder desires to have the
Corporation redeem the Retracted Shares (the "Retraction Date"), provided
that the Retraction Date shall be not less than three Business Days nor
more than ten Business Days after the date on which the Retraction Request
is received by the Corporation and further provided that, in the event that
no such Business Day is specified by the holder in the Retraction Request,
the Retraction Date shall be deemed to be the tenth Business Day after the
date on which the Retraction Request is received by the Corporation; and
(c) acknowledging the overriding right (the "Retraction Call Right") of
Dutchco to purchase all but not less than all the Retracted Shares directly
from the holder and that the Retraction Request shall be deemed to be a
revocable offer by the holder to sell the Retracted Shares to Dutchco in
accordance with the Retraction Call Right on the terms and conditions set
out in Section 6.3 below.
6.2 Subject to the exercise by Dutchco of the Retraction Call Right, upon
receipt by the Corporation or the Transfer Agent in the manner specified in
Section 6.1 hereof of a certificate or certificates representing the number of
Exchangeable Shares which the holder desires to have the Corporation redeem,
together with a Retraction Request, and provided that the Retraction Request
is not revoked by the holder in the manner specified in Section 6.7 hereof,
the Corporation shall redeem the Retracted Shares effective at the close of
business on the Retraction Date and shall cause to be delivered to such holder
the total Retraction Price with respect to such shares. If only a part of the
Exchangeable Shares represented by any certificate are redeemed (or purchased
by Dutchco pursuant to the Retraction Call Right), a new certificate for the
balance of such Exchangeable Shares shall be issued to the holder at the
expense of the Corporation.
6.3 Upon receipt by the Corporation of a Retraction Request, the Corporation
shall immediately notify Dutchco and Parent thereof. In order to exercise the
Retraction Call Right, Parent or Dutchco must notify the Corporation in writing
of Dutchco's determination to do so (the "Parent (Dutchco) Call Notice") within
two Business Days of notification to Parent and Dutchco by the Corporation of
the receipt by the Corporation of the Retraction Request. If the Parent or
Dutchco does not so notify the Corporation within such two Business Day period,
the Corporation will notify the holder as soon as possible thereafter that
Dutchco will not exercise the Retraction Call Right. If Parent or Dutchco
delivers the Parent (Dutchco) Call Notice within such two Business Day time
period, and provided that the Retraction Request is not revoked by the holder in
the manner specified in Section 6.7, the Retraction Request shall thereupon be
considered only to be an offer by the holder to sell the Retracted Shares to
Dutchco in accordance with the Retraction Call Right. In such event, the
Corporation shall not redeem the Retracted Shares and Dutchco shall purchase
from such holder and such holder shall sell to Dutchco on the Retraction Date,
the Retracted Shares for a purchase price (the "Purchase Price") per share equal
to the Retraction Price per share. For the purposes of completing a purchase
pursuant to the Retraction Call Right, Dutchco shall deposit with the Transfer
Agent, on or before the Retraction Date, certificates representing Parent Common
Shares and a cheque in the amount of the remaining portion, if any, of the total
Purchase Price. Provided that the total Purchase Price has been so deposited
with the Transfer Agent, the closing of the purchase and sale of the Retracted
Shares pursuant to the Retraction Call Right shall be deemed to have occurred as
at the close of business on the Retraction Date and, for greater certainty, no
redemption by the Corporation of such Retracted Shares shall take place on the
Retraction Date. In the event that neither Parent nor Dutchco delivers a
35
Parent (Dutchco) Call Notice within such two Business Day period, and provided
that Retraction Request is not revoked by the holder in the manner specified
in Section 6.7, the Corporation shall redeem the Retracted Shares on the
Retraction Date and in the manner otherwise contemplated in this Article 6.
6.4 The Corporation or Dutchco, as the case may be, shall deliver or cause
the Transfer Agent to deliver to the relevant holder, at the address of the
holder recorded in the securities register of the Corporation for the
Exchangeable Shares or at the address specified in the holder's Retraction
Request or by holding for pick up by the holder at the head office of the
Corporation or at any office of the Transfer Agent as may be specified by the
Corporation by notice to the holders of Exchangeable Shares, certificates
representing the Parent Common Shares (which shares shall be duly issued as
fully paid and non-assessable and shall be free and clear of any lien, claim
or encumbrance) registered in the name of the holder or in such other name as
the holder may request in payment of the total Retraction Price or the total
Purchase Price, as the case may be, and a cheque of the Corporation payable at
par at any branch of the bankers of the Corporation in payment of the
remaining portion, if any, of the total Retraction Price (less any tax
required to be deducted and withheld therefrom by the Corporation) or a cheque
of Dutchco payable at par and in Canadian dollars at any branch of the bankers
of Dutchco or of the Corporation in Canada in payment of the remaining
portion, if any, of the total Purchase Price, as the case may be, and such
delivery of such certificates and cheque on behalf of the Corporation or by
Dutchco, as the case may be, or by the Transfer Agent shall be deemed to be
payment of and shall satisfy and discharge all liability for the total
Retraction Price or total Purchase Price, as the case may be, to the extent
that the same is represented by such share certificates and cheque (less any
tax required and in fact deducted and withheld therefrom and remitted to the
proper tax authority), unless such cheque is not paid on due presentation. To
the extent that the amount of tax required to be deducted or withheld from any
payment to a holder of Exchangeable Shares exceeds the cash portion of such
payment, the Corporation or Dutchco, as the case may be, is hereby authorized
to sell or otherwise dispose of at fair market value such portion of the
property then payable to the holder as is necessary to provide sufficient
funds to the Corporation in order to enable it to comply with such deduction
or withholding requirement and shall give an accounting to the holder with
respect thereto and any balance of such proceeds of sale.
6.5 On and after the close of business on the Retraction Date, the holder of
the Retracted Shares shall cease to be a holder of such Retracted Shares and
shall not be entitled to exercise any of the rights of a holder in respect
thereof, other than the right to receive his proportionate part of the total
Retraction Price or total Purchase Price, as the case may be, unless upon
presentation and surrender of certificates in accordance with the foregoing
provisions, payment of the total Retraction Price or the total Purchase Price,
as the case may be, shall not be made, in which case the rights of such holder
shall remain unaffected until the total Retraction Price or the total Purchase
Price, as the case may be, has been paid in the manner hereinbefore provided.
On and after the close of business on the Retraction Date, provided that
presentation and surrender of certificates and payment of the total Retraction
Price or the total Purchase Price, as the case may be, has been made in
accordance with the foregoing provisions, the holder of the Retracted Shares so
redeemed by the Corporation or purchased by Dutchco shall thereafter be
considered and deemed for all purposes to be a holder of the Parent Common
Shares delivered to it.
6.6 Notwithstanding any other provision of this Article 6, the Corporation
shall not be obligated to redeem Retracted Shares specified by a holder in a
Retraction Request to the extent that such redemption of Retracted Shares
would be contrary to solvency requirements or other provisions of applicable
law. If the Corporation believes that on any Retraction Date it would not be
permitted by any of such provisions to redeem the Retracted Shares tendered
for redemption on such date, and provided that Dutchco shall not have
exercised the Retraction Call Right with respect to the Retracted Shares, the
Corporation shall only be obligated to redeem Retracted Shares specified by a
holder in a Retraction Request to the extent of the maximum number that may be
so redeemed (rounded down to a whole number of shares) as would not be
contrary to such provisions and shall notify the holder at least two Business
Days prior to the Retraction Date as to the number of Retracted Shares which
will not be redeemed by the Corporation. In any case in which the redemption
by the Corporation of Retracted Shares would be contrary to solvency
requirements or other provisions of applicable law, the
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Corporation shall redeem Retracted Shares in accordance with Section 6.2 of
these share provisions on a pro rata basis and shall issue to each holder of
Retracted Shares a new certificate, at the expense of the Corporation,
representing the Retracted Shares not redeemed by the Corporation pursuant to
Section 6.2 hereof. Provided that the Retraction Request is not revoked by the
holder in the manner specified in Section 6.7 hereof, the holder of any such
Retracted Shares not redeemed by the Corporation pursuant to Section 6.2 of
these share provisions as a result of solvency requirements of applicable law
shall be deemed by giving the Retraction Request to require Dutchco to purchase
such Retracted Shares from such holder on the Retraction Date or as soon as
practicable thereafter on payment by Dutchco to such holder of the Purchase
Price for each such Retracted Share, all as more specifically provided in the
Voting and Exchange Trust Agreement.
6.7 A holder of Retracted Shares may, by notice in writing given by the
holder to the Corporation before the close of business on the Business Day
immediately preceding the Retraction Date, withdraw its Retraction Request in
which event such Retraction Request shall be null and void and, for greater
certainty, the revocable offer constituted by the Retraction Request to sell
the Retracted Shares to Dutchco shall be deemed to have been revoked.
ARTICLE 7
Redemption of Exchangeable Shares by the Corporation
7.1 Subject to applicable law, and subject to the exercise by Dutchco of the
Redemption Call Right, (a) the Corporation shall on the Automatic Redemption
Date redeem (the "Automatic Redemption") the whole of the then outstanding
Exchangeable Shares for an amount per share equal to (i) the Current Market
Price of a Parent Common Share on the last Business Day prior to the Automatic
Redemption Date, which shall be satisfied in full by the Corporation causing
to be delivered to each holder of Exchangeable Shares one Parent Common Share
for each Exchangeable Share held by such holder, plus (ii) an additional
amount equivalent to the full amount of all declared and unpaid dividends
thereon and all dividends declared on Parent Common Shares which have not been
declared on such Exchangeable Shares in accordance with Section 3.1 of these
share provisions (collectively the "Redemption Price", provided that if the
record date for any such declared and unpaid dividends occurs on or after the
Redemption Date, the Redemption Price shall not include such additional amount
equivalent to such dividends), and (b) the Corporation may, at any time when
the Corporation reasonably determines that Exchangeable Shares are "held of
record" (as such term is defined in Rule 12g5-1 promulgated under the United
States Securities Exchange Act of 1934, as amended (the "Exchange Act")) by
500 or more persons ("Record Holders"), redeem (a "Section 12(g) Redemption")
that portion of the then outstanding Exchangeable Shares held by that number
of Record Holders equal to the difference of (A) the total number of Record
Holders and (B) 499, or such smaller number that the Corporation reasonably
determines is necessary to take the position that it need not register the
Exchangeable Shares pursuant to Section 12(g) of the Exchange Act, the identity
of such Record Holders to be determined by the Corporation by lot or other fair
method of random determination, for an amount per share equal to the Redemption
Price.
7.2 In any case of a redemption of Exchangeable Shares under this Article 7,
the Corporation shall, at least 120 days before the Automatic Redemption Date
(in the case of the Automatic Redemption), or at least 30 days before the date
of a Section 12(g) Redemption (a "Section 12(g) Redemption Date"; the
Automatic Redemption Date or a Section 12(g) Redemption Date, as applicable,
being referred to in this Section 7.2 as a "Redemption Date"), send or cause
to be sent to each holder of Exchangeable Shares to be redeemed a notice in
writing of the redemption by the Corporation or the purchase by Dutchco under
the Redemption Call Right, as the case may be, of the Exchangeable Shares held
by such holder. Such notice shall set out the formula for determining the
Redemption Price or the Redemption Call Purchase Price, as the case may be,
the Redemption Date and, if applicable, particulars of the Redemption Call
Right. On or after the Redemption Date and subject to the exercise by Dutchco
of the Redemption Call Right, the Corporation shall cause to be delivered to
the holders of the Exchangeable Shares to be redeemed the Redemption Price
(less any tax required to be deducted and withheld therefrom by the
Corporation) for each such Exchangeable Share upon presentation and surrender
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at the head office of the Corporation or at any office of the Transfer Agent
as may be specified by the Corporation in such notice of the certificates
representing such Exchangeable Shares, together with such other documents and
instruments as may be required to effect a transfer of Exchangeable Shares
under the Quebec Act and the by-laws of the Corporation and such additional
documents and instruments as the Transfer Agent may reasonably require.
Payment of the total Redemption Price for such Exchangeable Shares shall be
made by delivery to each holder, at the address of the holder recorded in the
securities register of the Corporation or by holding for pick up by the holder
at the head office of the Corporation or at any office of the Transfer Agent
as may be specified by the Corporation in such notice, on behalf of the
Corporation of certificates representing Parent Common Shares (which shares
shall be duly issued as fully paid and non-assessable and shall be free and
clear of any lien, claim or encumbrance) and a cheque of the Corporation
payable at par at any branch of the bankers of the Corporation in respect of
the additional amount equivalent to the full amount of all declared and unpaid
dividends and all dividends declared on Parent Common Shares which have not
been declared on such Exchangeable Shares in accordance with Section 3.1 of
these share provisions comprising part of the total Redemption Price (less any
tax required to be deducted and withheld therefrom by the Corporation). On and
after the Redemption Date, the holders of the Exchangeable Shares called for
redemption shall cease to be holders of such Exchangeable Shares and shall not
be entitled to exercise any of the rights of holders in respect thereof, other
than the right to receive their proportionate part of the total Redemption
Price, unless payment of the total Redemption Price for such Exchangeable
Shares shall not be made upon presentation and surrender of certificates in
accordance with the foregoing provisions, in which case the rights of the
holders shall remain unaffected until the total Redemption Price has been paid
in the manner hereinbefore provided. The Corporation shall have the right at
any time after the sending of notice of its intention to redeem Exchangeable
Shares as aforesaid to deposit or cause to be deposited the total Redemption
Price of the Exchangeable Shares so called for redemption, or of such of the
said Exchangeable Shares represented by certificates that have not at the date
of such deposit been surrendered by the holders thereof in connection with
such redemption, in a custodial account with any chartered bank or trust
company in Canada named in such notice. Upon the later of such deposit being
made and the Redemption Date, the Exchangeable Shares in respect whereof such
deposit shall have been made shall be redeemed and the rights of the holders
thereof after such deposit or Redemption Date, as the case may be, shall be
limited to receiving their proportionate part of the total Redemption Price
(less any tax required to be deducted and withheld therefrom by the
Corporation) for such Exchangeable Shares so deposited, against presentation
and surrender of the said certificates held by them, respectively, in
accordance with the foregoing provisions. Upon such payment or deposit of the
total Redemption Price, the holders of the Exchangeable Shares shall
thereafter be considered and deemed for all purposes to be holders of the
Parent Common Shares delivered to them. To the extent that the amount of tax
required to be deducted or withheld from any payment to a holder of
Exchangeable Shares exceeds the cash portion of such payment, the Corporation
is hereby authorized to sell or otherwise dispose of at fair market value such
portion of the property then payable to the holder as is necessary to provide
sufficient funds to the Corporation in order to enable it to comply with such
deduction or withholding requirement and shall give an accounting to the
holder with respect thereto and any balance of such proceeds of sale.
7.3 Dutchco shall have the overriding right (the "Redemption Call Right"),
notwithstanding the proposed redemption of Exchangeable Shares by the
Corporation pursuant to this Article 7 of these share provisions, to purchase
from all but not less than all of the holders of Exchangeable Shares to be
redeemed on the Redemption Date, all but not less than all of the Exchangeable
Shares held by each such holder on payment by Dutchco to the holder of an
amount per share equal to (a) the Current Market Price of a Parent Common
Share on the last Business Day prior to the Redemption Date which shall be
satisfied in full by causing to be delivered to such holder one Parent Common
Share plus (b) an additional amount equivalent to the full amount of all
dividends declared and unpaid on such Exchangeable Share and all dividends
declared on Parent Common Shares that have not been declared on such
Exchangeable Share in accordance with Section 3.1 of these share provisions
(collectively the "Redemption Call Purchase Price", provided that if the
record date for any such declared and unpaid dividends occurs on or after the
Redemption Date, the Redemption Call Purchase Price shall not include such
additional amount equivalent to such dividends). In the event of the exercise
of the Redemption Call Right by Dutchco, each holder shall be obligated to
sell all the Exchangeable Shares held by the holder and otherwise
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to be redeemed to Dutchco on the Redemption Date on payment by Dutchco to the
holder of the Redemption Call Purchase Price for each such share.
7.4 To exercise the Redemption Call Right, Dutchco must notify the Transfer
Agent, as agent for the holders of Exchangeable Shares, and the Corporation of
Dutchco's intention to exercise such right at least 125 days before the
Automatic Redemption Date (in the case of the Automatic Redemption) or at
least 35 days before the Section 12(g) Redemption Date (in the case of Section
12(g) Redemption). The Transfer Agent will notify the holders of the
Exchangeable Shares as to whether or not Dutchco has exercised the Redemption
Call Right forthwith after the expiry of the period during which the same may
be exercised by Dutchco. If Dutchco exercises the Redemption Call Right, on
the Redemption Date, Dutchco will purchase and the holders will sell all of
the Exchangeable Shares to be redeemed for a price per share equal to the
Redemption Call Purchase Price.
7.5 For the purposes of completing the purchase of Exchangeable Shares
pursuant to the Redemption Call Right, Dutchco shall deposit with the Transfer
Agent, on or before the Redemption Date, certificates representing the
aggregate number of Parent Common Shares deliverable by Dutchco in payment of
the total Redemption Call Purchase Price and a cheque or cheques in the amount
of the remaining portion, if any, of the total Redemption Call Purchase Price.
Provided that the total Redemption Call Purchase Price has been so deposited
with the Transfer Agent, on and after the Redemption Date the rights of each
holder of Exchangeable Shares so purchased will be limited to receiving such
holder's proportionate part of the total Redemption Call Purchase Price
payable by Dutchco upon presentation and surrender by the holder of
certificates representing the Exchangeable Shares purchased by Dutchco from
such holder and the holder shall on and after the Redemption Date be
considered and deemed for all purposes to be the holder of the Parent Common
Shares delivered to such holder. Upon surrender to the Transfer Agent of a
certificate or certificates representing Exchangeable Shares, together with
such other documents and instruments as may be required to effect a transfer
of Exchangeable Shares under the Quebec Act and the by-laws of the Corporation
and such additional documents and instruments as the Transfer Agent may
reasonably require, the holder of such surrendered certificate or certificates
shall be entitled to receive in exchange therefor, and the Transfer Agent on
behalf of Dutchco shall deliver to such holder, certificates representing the
Parent Common Shares to which the holder is entitled and a cheque or cheques
of Dutchco payable at par and in Canadian dollars at any branch of the bankers
of Dutchco or of the Corporation in Canada in payment of the remaining
portion, if any, of the total Redemption Call Purchase Price. If Dutchco does
not exercise the Redemption Call Right in the manner described above, on the
Redemption Date the holders of the Exchangeable Shares will be entitled to
receive in exchange therefor the redemption price otherwise payable by the
Corporation in connection with the redemption of Exchangeable Shares pursuant
to this Article 7.
ARTICLE 8
Purchase for Cancellation
8.1 Subject to applicable law and the articles of the Corporation, the
Corporation may at any time and from time to time purchase for cancellation
all or any part of the outstanding Exchangeable Shares at any price by tender to
all the holders of record of Exchangeable Shares then outstanding or through the
facilities of any stock exchange on which the Exchangeable Shares are listed or
quoted at any price per share together with an amount equal to all declared and
unpaid dividends thereon. If in response to an invitation for tenders under the
provisions of this Section 8.1, more Exchangeable Shares are tendered at a price
or prices acceptable to the Corporation than the Corporation is prepared to
purchase, the Exchangeable Shares to be purchased by the Corporation shall be
purchased as nearly as may be pro rata according to the number of shares
tendered by each holder who submits a tender to the Corporation, provided that
when shares are tendered at different prices, the pro rating shall be effected
(disregarding fractions) only with respect to the shares tendered at the price
at which more shares were tendered than the Corporation is prepared to purchase
after the Corporation has purchased all the shares tendered at lower prices. If
only part of the Exchangeable Shares represented by any certificate shall be
purchased, a new certificate for the balance of such shares shall be issued at
the expense of the Corporation.
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ARTICLE 9
Voting Rights
9.1 Except as required by applicable law, the holders of the Exchangeable
Shares shall not be entitled as such to receive notice of or to attend any
meeting of the shareholders of the Corporation or to vote at any such meeting.
9.2 Pursuant to the Voting and Exchange Trust Agreement (which by this
reference is incorporated into the rights, privileges, restrictions and
conditions attaching to the Exchangeable Shares as if set forth herein in its
entirety) the holders of Exchangeable Shares (other than Parent, its
subsidiaries and Affiliates) shall be entitled to receive notice of and
instruct the Trustee under the Voting and Exchange Trust Agreement to exercise
voting rights at meetings of holders of Parent Common Shares, all as provided
for in the Voting and Exchange Trust Agreement.
ARTICLE 10
Amendment and Approval
10.1 The rights, privileges, restrictions and conditions attaching to the
Exchangeable Shares may be added to, changed or removed but only with the
approval of the holders of the Exchangeable Shares given as hereinafter
specified.
10.2 Any approval given by the holders of the Exchangeable Shares to add to,
change or remove any right, privilege, restriction or condition attaching to
the Exchangeable Shares or any other matter requiring the approval or consent
of the holders of the Exchangeable Shares shall be deemed to have been
sufficiently given if it shall have been given in accordance with applicable
law subject to a minimum requirement that such approval be evidenced by
resolution passed by not less than two-thirds of the votes cast on such
resolution at a meeting of holders of Exchangeable Shares duly called and held
at which the holders of at least 50% of the outstanding Exchangeable Shares at
that time are present or represented by proxy; provided that if at any such
meeting the holders of at least 50% of the outstanding Exchangeable Shares at
that time are not present or represented by proxy within one-half hour after
the time appointed for such meeting then the meeting shall be adjourned to
such date not less than ten days thereafter and to such time and place as may
be designated by the Chairman of such meeting. At such adjourned meeting the
holders of Exchangeable Shares present or represented by proxy thereat may
transact the business for which the meeting was originally called and a
resolution passed thereat by the affirmative vote of not less than two-thirds
of the votes cast on such resolution at such meeting shall constitute the
approval or consent of the holders of the Exchangeable Shares.
10.3 Exchangeable Shares held by Parent, Dutchco or their Affiliates shall
not be included for the purposes of determining a quorum, and shall not vote,
in connection with any approval contemplated by Section 10.2 of these share
provisions.
ARTICLE 11
Reciprocal Changes, Etc. in Respect of Parent Common Shares
11.1 (a) Pursuant to the Support Agreement, Parent will not without the
prior approval of the Corporation and the prior approval of the holders of the
Exchangeable Shares given in accordance with Section 10.2 of these share
provisions:
(i) issue or distribute Parent Common Shares (or securities exchangeable
for or convertible into or carrying rights to acquire Parent Common Shares)
to the holders of all or substantially all of the then outstanding Parent
Common Shares by way of stock dividend or other distribution, other than an
issue of
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Parent Common Shares (or securities exchangeable for or convertible into or
carrying rights to acquire Parent Common Shares) to holders of Parent Common
Shares who exercise an option to receive dividends in Parent Common Shares (or
securities exchangeable for or convertible into or carrying rights to acquire
Parent Common Shares) in lieu of receiving cash dividends; or
(ii) issue or distribute rights, options or warrants to the holders of
all or substantially all of the then outstanding Parent Common Shares
entitling them to subscribe for or to purchase Parent Common Shares (or
securities exchangeable for or convertible into or carrying rights to
acquire Parent Common Shares); or
(iii) issue or distribute to the holders of all or substantially all of
the then outstanding Parent Common Shares (A) shares or securities of
Parent of any class other than Parent Common Shares (other than shares
convertible into or exchangeable for or carrying rights to acquire Parent
Common Shares), (B) rights, options or warrants other than those referred
to in Section 11.1(a)(ii) above, (C) evidences of indebtedness of Parent or
(D) assets of Parent;
unless the economic equivalent on a per share basis of such rights, options,
securities, shares, evidences of indebtedness or other assets is issued or
distributed simultaneously to holders of the Exchangeable Shares.
(b) Pursuant to the Support Agreement, Parent will not without the prior
approval of the Corporation and the prior approval of the holders of the
Exchangeable Shares given in accordance with Section 10.2 of these share
provisions:
(i) subdivide, redivide or change the then outstanding Parent Common
Shares into a greater number of Parent Common Shares; or
(ii) reduce, combine or consolidate or change the then outstanding Parent
Common Shares into a lesser number of Parent Common Shares; or
(iii) reclassify or otherwise change the Parent Common Shares or effect
an amalgamation, merger, reorganization or other transaction affecting the
Parent Common Shares;
unless the same or an economically equivalent change shall simultaneously be
made to, or in the rights of the holders of, the Exchangeable Shares.
Except for ministerial amendments contemplated by Section 3.5 of the Support
Agreement, the Support Agreement shall not be changed without the approval of
the holders of the Exchangeable Shares given in accordance with Section 10.2
of these share provisions.
11.2 Pursuant to the Voting and Exchange Trust Agreement, the holders of
Exchangeable Shares (other than the Parent, its subsidiaries and Affiliates)
are given certain rights to exchange their Exchangeable Shares for Parent
Common Shares.
ARTICLE 12
Actions by the Corporation Under Support Agreement
and Under Voting and Exchange Trust Agreement
12.1 The Corporation will take all such actions and do all such things as
shall be necessary or advisable to perform and comply with and to ensure
performance and compliance by Parent and Dutchco with all provisions of the
Support Agreement and the Voting and Exchange Trust Agreement applicable to the
Corporation, Dutchco and Parent, respectively, in accordance with the respective
terms thereof including, without limitation, taking all such actions and doing
all such things as shall be necessary or advisable to enforce to the fullest
extent possible for the direct benefit of the Corporation and the holders of
Exchangeable Shares all rights and benefits in favor of the Corporation and such
holders under or pursuant to such agreements.
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12.2 The Corporation shall not propose, agree to or otherwise give effect to
any amendment to, or waiver or forgiveness of its rights or obligations under,
the Support Agreement and the Voting and Exchange Trust Agreement (except as
contemplated therein) without the approval of the holders or the Exchangeable
Shares given in accordance with Section 10.2 of these share provisions other
than such amendments, waivers and/or forgiveness as may be necessary or
advisable for the purposes of:
(a) adding to the covenants of the other party or parties to such
agreement for the protection of the Corporation or the holders of
Exchangeable Shares thereunder; or
(b) making such provisions or modifications not inconsistent with the
spirit and intent of such agreement as may be necessary or desirable with
respect to matters or questions arising thereunder which, in the opinion of
the Board of Directors, it may be expedient to make, provided that the
Board of Directors shall be of the opinion, after consultation with
counsel, that such provisions and modifications will not be prejudicial to
the interests of the holders of the Exchangeable Shares; or
(c) making such changes in or corrections to such agreement which, on the
advice of counsel to the Corporation, are required for the purpose of
curing or correcting any ambiguity or defect or inconsistent provision or
clerical omission or mistake or manifest error contained therein, provided
that the Board of Directors shall be of the opinion, after consultation
with counsel, that such changes or corrections will not be prejudicial to
the interests of the holders of the Exchangeable Shares.
ARTICLE 13
Legend
13.1 The certificates evidencing the Exchangeable Shares shall contain or
have affixed thereto a legend, in form and on terms approved by the Board of
Directors, with respect to the Support Agreement, the deemed delivery of a
Retraction Request as contemplated in Section 6.1 of these share provisions,
the provisions relating to the Liquidation Call Right and the Redemption Call
Right, and the Voting and Exchange Trust Agreement (including the provisions
with respect to the voting rights, exchange right and automatic exchange
thereunder).
ARTICLE 14
Notices
14.1 Any notice, request or other communication to be given to the
Corporation by a holder of Exchangeable Shares shall be in writing and shall
be valid and effective if given by mail (postage prepaid) or by telecopy or by
delivery to the head office of the Corporation and addressed to the attention
of the President. Any such notice, request or other communication, if given by
mail, telecopy or delivery, shall only be deemed to have been given and
received upon actual receipt thereof by the Corporation.
14.2 Any presentation and surrender by a holder of Exchangeable Shares to
the Corporation or the Transfer Agent of certificates representing
Exchangeable Shares in connection with the liquidation, dissolution or winding
up of the Corporation or the retraction or redemption of Exchangeable Shares
shall be made by registered mail (postage prepaid) or by delivery to the head
office of the Corporation or to such office of the Transfer Agent as may be
specified by the Corporation, in each case addressed to the attention of the
President of the Corporation. Any such presentation and surrender of
certificates shall only be deemed to have been made and to be effective upon
actual receipt thereof by the Corporation or the Transfer Agent, as the case
may be. Any such presentation and surrender of certificates made by registered
mail shall be at the sole risk of the holder mailing the same.
14.3 Any notice, request or other communication to be given to a holder of
Exchangeable Shares by or on behalf of the Corporation shall be in writing and
shall be valid and effective if given by mail (postage prepaid) or by delivery
to the address of the holder recorded in the securities register of the
Corporation or, in the event
42
of the address of any such holder not being so recorded, then at the last known
address of such holder. Any such notice, request or other communication, if
given by mail, shall be deemed to have been given and received on the third
Business Day following the date of mailing and, if given by delivery, shall be
deemed to have been given and received on the date of delivery. Accidental
failure or omission to give any notice, request or other communication to one or
more holders of Exchangeable Shares shall not invalidate or otherwise alter or
affect any action or proceeding to be taken by the Corporation pursuant thereto.
ARTICLE 15
Guaranty/Assignment
15.1 Parent Guaranty/Assignment
Parent hereby unconditionally and irrevocably guarantees the full and
punctual performance of all of Dutchco's obligations hereunder. Dutchco may
assign all or a portion of its rights and obligations hereunder to Parent
without the consent of the Corporation or holders of Exchangeable Shares
provided Parent remains bound by these provisions.
ARTICLE 16
General
16.1 Withholding Rights
The Corporation, Parent, Dutchco and Transfer Agent shall be entitled to
deduct and withhold from the consideration otherwise payable to any holder of
Exchangeable Shares such amounts as Parent, Dutchco or the Transfer Agent
determine is required to deduct and withhold with respect to the making of
such payment under the United States Internal Revenue Code of 1986, as
amended, the Income Tax Act (Canada) or any provision of state, local,
provincial or foreign tax law. To the extent that amounts are so withheld,
such withheld amounts shall be treated for all purposes hereof as having been
paid to the holder of the shares in respect of which such deduction and
withholding was made, provided that such withheld amounts are actually
remitted to the appropriate taxing authority. To the extent that the amount so
required to be deducted or withheld from any payment to a holder exceeds the
cash portion of the consideration otherwise payable to the holder, the
Corporation, Dutchco and Transfer Agent are hereby authorized to sell or
otherwise dispose of at fair market value such portion of such consideration
as is necessary to provide sufficient funds to Parent, Dutchco or Transfer
Agent, as the case may be, in order to enable it to comply with such deduction
or withholding requirement and Parent, Dutchco or Transfer Agent shall give an
accounting to the holder with respect thereto and any balance of such proceeds
of sale.
ARTICLE 17
Par Value
17.1 Par Value
The Exchangeable Shares shall have a par value of $ per share.
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