Exhibit 5
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PROPOSED VOTING POWERS, RIGHTS, DESIGNATIONS, PREFERENCES AND
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QUALIFICATIONS OF CLASS A PREFERRED STOCK
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All dollar amounts referred to in this Schedule "B" are Canadian Dollars.
The Purchaser and the Parent shall, on or before Closing, approve the following
voting powers, rights, designations, preferences and qualifications of such
Class A Preferred Stock:
1. Designation and Amount. There shall be a class of Preferred Stock
designated as "Class A Preferred Stock" and the number of shares constituting
such class of Preferred Stock shall be unlimited.
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2. Par Value. Each share of Class A Preferred Stock shall have no par
value.
3. Rank. All shares of Class A Preferred Stock shall rank prior, both as
to payment of dividends and as to distributions of assets upon liquidation,
dissolution or winding up of the Corporation, whether voluntary or involuntary,
to all of the Corporation's now or hereafter issued common stock (the "Common
Stock").
4. Dividends. The holders of Class A Preferred Stock shall be entitled to
receive, out of the net profits of the Corporation, dividends at the annual rate
of $0.045 per share per annum payable quarterly (calendar quarterly) by the 15th
day of the month following the quarterly period and accruing until paid starting
and assessed beginning the first full calendar quarter following issuance. The
amount of dividends payable shall be computed on the basis of a 360 day year of
four 90 day quarters. The Common Stock is entitled to all remaining profits
which the Board of Directors may determine to distribute to the holders of
Common Stock as dividends, subject to any future designations regarding the
remainder of the unissued Preferred Stock.
No dividends or other distributions, other than dividends payable solely in
shares of Common Stock of the Corporation ranking junior as to dividends and as
to liquidation rights to the Class A Preferred Stock shall be declared, paid or
set apart for payment on any shares of Common Stock unless and until all accrued
and unpaid dividends of Class A Preferred Stock shall have been paid and/or set
apart for payment.
Any reference to "distribution" contained in this Section 4 shall not be
deemed to include any distribution made in connection with any liquidation,
dissolution or winding up of the Corporation whether voluntary or involuntary.
5. Liquidation Preference. In the event of a liquidation, dissolution or
winding up of the Corporation, whether voluntary or involuntary, the holders of
Class A Preferred Stock shall be entitled to receive out of the assets of the
Corporation, whether such assets are stated capital or surplus of any nature, an
amount equal to the dividends accumulated thereon to the date of final
distribution to such holders which have not prior thereto been paid without
interest, and a sum equal to $1.00 per share, before any payment shall be made
or any assets distributed to the holders of Common Stock, or any other class or
series of the Corporation's capital stock. All of the remaining net assets shall
belong to and be distributed among the holders of the Common Stock, subject to
any future designations regarding the remainder of the unissued Preferred Stock.
Neither a consolidation or merger of the Corporation with another corporation
nor a sale or transfer of all or part of the Corporation's assets for cash,
securities or other property will be considered a liquidation, dissolution or
winding up of The Corporation.
6. Redemption at Option of the Corporation. The Corporation is not
entitled to redeem the Class A Preferred Stock.
7. Retraction at the Option of the Holder. Each share of Class A
Preferred Stock shall be retractable, after seven (7) years, at the option of
the holder thereof at $1.00 per share plus, in each case, an amount in cash
equal to all dividends on the Class A Preferred Stock accrued and unpaid
thereon, pro rata to the date fixed for retraction (such sum being hereinafter
referred to as the "Retraction Price").
Not less than Thirty (30) days and not more than Sixty (60) days prior to
the retraction date notice by first class mail, postage prepaid, shall be given
to the Corporation. Each such notice of retraction shall specify the date fixed
for retraction and the Retraction Price. Payment will be made upon presentation
and surrender of the shares of the Class A Preferred Stock and that on and after
the retraction date, dividends will cease to accumulate on such shares.
Any notice which is mailed as herein provided shall be conclusively
presumed to have been duly given, whether or not the holder of the Class A
Preferred Stock receives such notice; and failure to give such notice by mail,
or any defect in such notice, to the holders of any shares designated for
retraction shall not affect the validity of the proceedings for the retraction
of any other shares of the Class A Preferred Stock. On or before the date fixed
for retraction as stated in such notice, each holder of the shares called for
retraction shall surrender the certificate evidencing such shares to the
Corporation at the registered head office of the Corporation and shall thereupon
be entitled to receive payment of the Retraction Price. If less than all the
shares represented by any such surrendered certificate are retracted, a new
certificate shall be issued representing the shares not retracted. If, on the
date fixed for retraction, funds necessary for the retraction shall be available
therefor and shall have been irrevocably paid to the holder, then,
notwithstanding that the certificates evidencing any shares so called for
retraction shall not have been surrendered, the dividends with respect to the
shares so called shall cease to accrue after the date fixed for retraction, the
shares shall no longer be deemed outstanding, the holders thereof shall cease to
be stockholders, and all rights whatsoever with respect to the shares so called
for retraction (except the right of the holders to receive the Retraction Price
without interest upon surrender of their certificates therefor) shall terminate.
The shares of Class A Preferred Stock shall not be subject to the operation
of any purchase, retirement or sinking fund.
7. Conversion. The shares of Class A Preferred Stock shall not be
convertible at the option of the holder thereof.
8. Voting Rights.
a. General. The shares of Class A Preferred Stock shall not have any
voting rights regarding any corporation business except that solely and directly
affecting the existence and rights and obligations of such Class A Preferred
Stock.
b. Class Voting Rights. In addition to voting rights provided above, so
long as the Class A Preferred Stock is outstanding, the Corporation shall not,
without the affirmative vote or consent of the holders of at least one half
(1/2) of all outstanding Class A Preferred Stock voting separately as a class,
amend, alter or repeal (by merger or otherwise) any provision of the Certificate
of Incorporation or the By-Laws of the Corporation, as amended, so as adversely
to affect the relative rights, preferences, qualifications, limitations or
restrictions of the Class A Preferred Stock.
9. Outstanding Shares. All shares of the Class A Preferred Stock issued
shall be deemed outstanding except (i) from the date fixed for retraction
pursuant to Section 7 hereof, all shares of Class A Preferred Stock that have
been so called for retraction under Section 7 hereof; and (ii) from the date of
registration of transfer, all shares of the Class A Preferred Stock held of
record by the Corporation.
10. Preemptive Rights. The Class A Preferred Stock is not entitled to any
preemptive or subscription rights in respect of any securities of the
Corporation.
11. Severability of Provisions. Whenever possible, each provision hereof
shall be interpreted in a manner as to be effective and valid under applicable
law, but if any provision hereof is held to be prohibited by or invalid under
applicable law, such provision shall be ineffective only to the extent of such
prohibition or invalidity, without invalidating or otherwise adversely affecting
the remaining provisions hereof. If a court of competent jurisdiction should
determine that a provision hereof would be val1d or enforceable if a period of
time were extended or shortened or a particular percentage were increased or
decreased, then such court may make such change as shall be necessary to render
the provision in question effective and valid under applicable law.
12. Future Preferred Stock Issues. The Corporation may issue one or more
additional classes of Preferred Stock without the consent of the holders of
Class A Preferred Stock, provided, however, that the rights and preferences of
such subsequent classes of preferred stock as to liquidation, dividends, voting,
redemption, and registration rights shall not be superior to those of the Class
A Preferred Stock.