Exhibit
3.1
Form 9
Canada
Business
Corporations
Act
ARTICLES
OF AMALGAMATION
1. Name
of the amalgamated corporation
MDC
PARTNERS INC.
2. The
province or territory in Canada where the registered office is to be situated
(do not indicate the full address)
Province
of Ontario
3. The
classes and any maximum number of shares that the corporation is authorized to
issue:
The annexed Schedule I is incorporated in this form.
4. Restrictions, if any, on share transfers
None
5.
Minimum and maximum number of directors (for a fixed number of directors, please
indicate the same number in both boxes)
6.
Restrictions, if any, on business the corporation may carry on
There are
no restrictions on the business the Corporation may carry on or the powers of
the Corporation may exercise.
7. Other
provisions, if any:
The annexed Schedule II is incorporated in this form.
8. The amalgamation has been approved pursuant to that section or
subsection of the Act which is indicated as follows:
o
183 x
184(1) o 184(2)
9. Declaration: I hereby certify
that I am a director or an officer of the corporation.
Name
of amalgamating corporations
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Corporation
No.
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Signature
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424713-2
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Mitchell
Gendel
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MAXXCOM
INC.
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757323-5
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Schedule I
3. The classes and any maximum
number of shares that the Corporation is authorized to issue
Description
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Maximum
Number of Shares
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Class
A Subordinate Voting shares
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Unlimited
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Class
B shares
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Unlimited
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Preference
shares, issuable in series
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Unlimited
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Series
1 preference shares
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5,000.00
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Series
2 preference shares
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700,000.00
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Series
3 preference shares
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Unlimited
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The
preferences, rights, conditions, restrictions, limitations and prohibitions
attaching to the Preference Shares, Class A Subordinate Voting Shares and the
Class B Shares be and the same are hereby as follows:
1.00 THE
PREFERENCE SHARES
1.01 The
Preference Shares may at any time or from time to time be issued in one or more
series, each series to consist of such number of shares as may, before the
issue thereof, be determined by the board of directors of the Corporation. The
directors shall by resolution fix, from time to time, before the issue of any
series of Preference Shares, the designation, preferences, rights, restrictions,
conditions, limitations, priorities as to payment of dividends and/or
distribution on liquidation, dissolution or winding up, or prohibitions
attaching thereto including, without limiting the generality of the foregoing,
the provisions of a purchase fund, the right of the Corporation to purchase such
shares for cancellation, the rate of preferential dividends, the dates of
payment thereof, the date or dates from which any such preferential dividends
shall accrue, redemption rights including purchase or redemption price, terms
and conditions of redemption, conversion rights and any sinking fund or
other provisions, and authorize the issuance thereof.
1.02 The
directors before the issue of any Preference Shares of a series shall file with
the Director (the "Director") appointed under the Canada Business Corporations
Act or any successor statute of Canada which is from time to time in force
(the "Act"), Articles
of Amendment designating such series and specifying the number, designation,
preferences, rights, restrictions, conditions, limitations, priorities as to
payment of dividends and/or distribution on liquidation, dissolution or winding
up, and prohibitions attached thereto, and shall obtain a certificate from the
Director with respect thereto.
1.03
Notwithstanding the foregoing, the board of directors shall be authorized to
change the rights, privileges, restrictions and conditions attached to any
unissued or (if otherwise permitted by law) any issued series of Preference
Shares. In such case, the directors shall file with the Director, Articles of
Amendment giving effect to such change and shall obtain a certificate from the
Director with respect thereto.
1.04 The
Preference Shares of each series shall be entitled to preference over the Class
A Subordinate Voting Shares, the Class B Shares and any other shares ranking
junior to the Preference Shares with respect to priority in payment of dividends
and in the distribution of assets in the event of 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, and may also be given such other preferences
over the Class A Subordinate Voting Shares, the Class B Shares and any other
shares ranking junior to the Preference Shares as may be determined with respect
to the respective series authorized to be issued.
1.05 The
holders of the Preference Shares shall not be entitled as such, except as
required by law, to receive notice of or to attend any meeting of the
shareholders of the Corporation or to vote at any such meeting, but shall be
entitled to receive notice of meetings of shareholders of the Corporation called
for the purpose of authorizing the dissolution of the Corporation or the sale of
its undertaking or a substantial part thereof.
2.00
SERIES 1 PREFERENCE SHARES
The first
series of the Preference Shares of the Corporation shall consist of Five
Thousand (5,000) shares, designated as the "Series 1 Preference Shares" (the
"Series 1 Shares"), with each such share having a stated value of $1,000. In
addition to the rights, conditions, restrictions and prohibitions attaching to
the Preference Shares of the Corporation as a class, the Series 1 Shares shall
have attached thereto the rights, conditions, restrictions and prohibitions
hereinafter set forth:
2.01
Definitions
In this
Article 2.01, unless there is something in the subject matter or context
inconsistent therewith:
(a)
"Applicable Conversion Price" means the applicable conversion price per Class A
Subordinate Voting Share for which Class A Subordinate Voting Shares may be
issued upon the conversion of Series 1 Shares during each of the following
periods:
Period
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Applicable
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Conversion Price
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March 1,
1989 to February 28, 1990
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$
0.5405
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March 1,
1990 to February 28, 1991
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$
0.5405
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March 1,
1991 to February 29, 1992
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$
0.5896
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March 1,
1992 to February 28, 1993
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$
0.7142
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or such
other dollar amount per Class A Subordinate Voting Share for which Class A
Subordinate Voting Shares shall be issued upon the conversion of Series 1 Shares
in accordance with Article 2.05 hereof.
(b)
"Automatic Conversion Price" means $0.7142 per Class A Subordinate Voting Share
which is the price for which Class A Subordinate Voting Shares shall be issued
upon the conversion of Series 1 Shares in accordance with Section 2.04(b)
hereof, or such other dollar amount per Class A Subordinate Voting Share for
which Class A Subordinate Voting Shares shall be issued upon the automatic
conversion of Series 1 Shares in accordance with Article 2.05
hereof;
(c)
"business day" means a day other than a Saturday, a Sunday or any other day that
is a statutory or civic holiday in the place where the Corporation's registered
office is located, and in the event that any day on which any dividend on the
Series 1 Shares is payable or by which any other action is required or permitted
to be taken pursuant to these provisions is not a business day, then such
dividend shall be payable or such other action shall be required or permitted to
be taken on the next succeeding day that is a business day;
(d)
"Class A Subordinate Voting Shares" means the Class A Subordinate Voting Shares
in the capital of the Corporation;
(e)
"Current Market Price" of the Class A Subordinate Voting Shares at any date
means the weighted average of the closing prices per share for board lot
sales of Class A Subordinate Voting Shares for the 30 consecutive trading days
immediately prior to the Dividend Payment Date or Automatic Conversion Date
whichever is applicable, on The Toronto Stock Exchange (provided that if on any
day in such 30 day period no closing price per share for the Class A Subordinate
Voting Shares is reported on by such exchange for such day, the average of the
reported closing bid and asking prices on such exchange on such day shall
be deemed to be the closing price per share for the Class A Subordinate Voting
Shares for such day), or if the Class A Subordinate Voting Shares are not then
listed on The Toronto Stock Exchange, then, on such stock exchange on which the
Class A Subordinate Voting Shares are listed as may be selected for such purpose
by the directors or, if the Class A Subordinate Voting Shares are not listed on
any stock exchange, then on such over-the counter market as may be selected for
such purpose by the directors;
(f)
"Dividend Payment Date" means the date of issue of the Series 1 Shares and each
anniversary thereof;
(g)
"Dividend Payment Period" means the period beginning on a Dividend Payment Date
and ending on the day before the next subsequent Dividend Payment
Date;
(h)
"Redemption Amount" with respect to any Series 1 Share means the amount provided
for in Section 2.06(b).
2.02
Dividends.
(a) The
holders of the Series 1 Shares shall have the right to receive, and the
Corporation shall pay thereon as and when declared by the directors, either
cash dividends or stock dividends, at the option of the Corporation, as
follows:
(i) if
cash dividends, by the payment of fixed, cumulative, preferential, cash
dividends at the rate (subject to Section 2.02(c) below) of $60 per share
per annum payable in annual instalments on each Dividend Payment Date. Cash
dividends on the Series 1 Shares shall not accrue. Cheques of the Corporation
drawn on a Canadian chartered bank and payable at par at any branch in Canada of
such bank shall be issued in respect of such dividends to the holders of the
Series 1 Shares entitled thereto. The mailing of such cheques shall satisfy and
discharge all liability of the Corporation for such dividends to the
extent of the amount represented thereby (plus any tax required to be
withheld therefrom) unless such cheques are not paid on due presentation;
or
(ii) if
stock dividends, by the issuance of fully paid and non-assessable Class A
Subordinate Voting Shares of the Corporation valued (subject to Section 2.02(c)
below) at $60 per share per annum, payable in annual instalments on each
Dividend Payment Date. Stock dividends on the Series 1 Shares shall not accrue.
The number of Class A Subordinate Voting Shares to be issued to any holder
thereof shall be equal to the number obtained by multiplying $60 by the number
of Series 1 Shares held by each registered holder of Series 1 Shares and by
dividing the product by the greater of:
(a) the
Applicable Conversion Price on the business day immediately prior to the
Applicable Dividend Payment Date; and
(b) the
Current Market Price.
Where a
fraction of a Class A Subordinate Voting Share would otherwise be issuable, the
Corporation shall in lieu thereof adjust such fractional interest by the payment
by cheque (rounded to the nearest cent) of an amount equivalent to the value of
such fractional interest computed on the basis of the greater of the Applicable
Conversion Price on the business day immediately prior to the applicable
Dividend Payment Date or the Current Market Price.
Any
monies to be paid in cash pursuant to this Section 2.02(a) which is
represented by a cheque which has not been presented for payment within six
years after it was issued or that otherwise remains unclaimed for a period of
six years from the date on which it was declared to be payable and set apart for
payment shall be forfeited to the Corporation.
(b) The
amount of the accrued dividend for any period which is less than a full Dividend
Payment Period with respect to any Series 1 Share:
(i) which
is redeemed pursuant to Article 2.06 hereof;
(ii)
which is converted pursuant to Article 2.04 hereof; or
(iii)
where assets of the Corporation are distributed to the holders of the Series 1
Shares pursuant to Article 2.08 hereof;
shall be
equal to the amount (rounded to the nearest cent) calculated by multiplying $60
by a fraction of which the numerator is the number of days in such Dividend
Payment Period that such Series 1 Share has been outstanding (including the
Dividend Payment Date at the beginning of such Dividend Payment Period if such
share was outstanding on that date and excluding the Dividend Payment Date at
the end of such Dividend Payment Period if such share was outstanding on that
date or the date on which such dividend becomes payable, as the case may
be) and of which the denominator is 365 (or 366 days in the event of a leap
year) and shall be payable on the next Dividend Payment Date.
(c)
Notwithstanding the foregoing, on March 1, 1991 only, the cash or stock
dividends, if any, paid by the Corporation hereunder shall be satisfied in the
case of cash dividends, by the payment of fixed, cumulative, preferential, cash
dividends at the rate of $70 per share per annum, or in the case of stock
dividends, by the issuance of fully paid and non-assessable Class A Subordinate
Voting Shares of the Corporation valued at $70 per share per annum. All of the
calculations contained in this Article 2.02 shall be adjusted, mutatis mutandis,
to reflect this increased dividend rate.
2.03
Conversion at the Option of the Holder
(a) A
holder of Series 1 Shares shall have the right, at his option, to convert all or
any lesser number of his Series 1 Shares into fully paid and non-assessable
Class A Subordinate Voting Shares on the basis of one Series 1 Share for that
number of Class A Subordinate Voting Shares obtained by dividing 1,000 by the
Applicable Conversion Price.
(b) The
conversion right herein provided for may be exercised by notice in writing given
to the transfer agent for the Series 1 Shares at any office where a register of
transfers for Series 1 Shares is maintained or to the Secretary of the
Corporation at the registered office of the Corporation, if there is no
registrar and transfer agent for the Series 1 Shares, accompanied by the
certificate or certificates representing the Series 1 Shares in respect of which
the holder thereof desires to exercise such right of conversion. The notice
shall be signed by such holder and shall specify the number of Series 1 Shares
which the holder desires to have converted and the name or names in which the
shares resulting from such conversion are to be registered. If less than all of
the Series 1 Shares represented by any certificate or certificates accompanying
any such notice are to be converted, the holder shall be entitled to receive a
new certificate without charge representing the Series 1 Shares comprised in the
certificate or certificates surrendered as aforesaid which are not to be
converted. Upon the conversion of any Series 1 Shares there shall be no payment
or adjustment by the Corporation or by any holder of Series 1 Shares on account
of any dividends either on the Series 1 Shares so converted or on the Class A
Subordinate Voting Shares into which the Series 1 Shares are converted other
than as provided for in Section 2.02(b) hereof. On any conversion of Series 1
Shares the share certificates representing shares resulting therefrom shall be
issued in the name of the registered holder of the Series 1 Shares converted or,
subject to payment by the registered holder of any stock transfer or other
applicable taxes, in such name or names as such registered holder may direct in
writing (either in the notice above referred to or otherwise).
(c) The
right of a registered holder of Series 1 Shares to convert the same into Class A
Subordinate Voting Shares shall be deemed to have been exercised, and the
registered holder of the Series 1 Shares to be converted (or any person or
persons in whose name or names such registered holder of Series 1 Shares shall
have directed the shares to be issued) shall be deemed to have become a holder
of record of shares of the Class A Subordinate Voting Shares for all purposes on
the date of surrender of the certificates representing the Series 1 Shares to be
converted, together with the notice in writing referred to in Section 2.03(b),
notwithstanding any delay in the delivery of the certificates representing the
Class A Subordinate Voting Shares into which such Series 1 Shares have been
converted.
2.04
Deemed Conversion
(a) For
purposes of this Article 2.04:
(i)
"person" means any person, firm, corporation, partnership, trust, association or
any other business or legal entity whatsoever;
(ii)
"Qualified Holder" means: (i) Greyvest Canada Inc. or an Affiliate thereof; and
(ii) the Corporation, any Affiliate thereof or any employees, officers or
directors of the Corporation or such Affiliate;
(iii)
"Affiliate" means an "affiliated body corporate" as defined in the Canada
Business Corporations Act as of the date hereof.
(b) (i)
Notwithstanding anything contained in Article 2.3 hereof a holder of Series 1
Shares shall have the right to convert all, but not less than all of his
Series 1 Shares into fully paid and non-assessable Class A Subordinate Voting
Shares and such right shall be and is hereby deemed to have been exercised by
such holder, in the event that on March 1, 1991 or at the end of each successive
6 month period thereafter (an "Automatic Conversion Date") the Current Market
Price of the Class A Subordinate Voting Shares is equal to $0.70 per share
or more, on the basis of one Series 1 Share for that number of Class A
Subordinate Voting Shares obtained by dividing 1,000 by the Automatic Conversion
Price.
(ii)
Notwithstanding the foregoing, a holder of Series 1 Shares shall have the right
to convert all, but not less than all of his Series 1 Shares into fully paid and
non-assessable Class A Subordinate Voting Shares and such right shall be and is
hereby deemed to have been exercised by such holder on March 1, 1993, on
the basis of one Series 1 Share for that number of Class A Subordinate Voting
Shares obtained by dividing 1,000 by the Automatic Conversion
Price.
(c) (i)
In the event that any holder of Series 1 Shares transfers any of his Series 1
Shares to a person who is not a Qualified Holder, such person shall have the
right to convert all, but not less than all of the Series 1 Shares so
transferred into fully paid and non-assessable Class A Subordinate
Voting Shares and such right shall be and is hereby deemed to have been
exercised by such person, on the basis of one Series 1 Share for that number of
Class A Subordinate Voting Shares obtained by dividing 1,000 by the Applicable
Conversion Price.
(ii) If,
at any time, any holder of Series 1 Shares ceases to be a Qualified Holder, such
holder shall have the right to convert all, but not less than all of the Series
1 Shares so transferred into fully paid and non-assessable Class A Subordinate
Voting Shares and such right shall be and is hereby deemed to have been
exercised by such holder, on the basis of one Series 1 Share for that number of
Class A Subordinate Voting Shares obtained by dividing 1,000 by the Applicable
Conversion Price.
(d) In
the event of the conversion of the Series 1 Shares into Class A Subordinate
Voting Shares pursuant to the provisions of this Article 2.04, the certificates
representing the Series 1 Shares so converted shall forthwith be surrendered by
the holders thereof to the registrar and transfer agent for the Class A
Subordinate Voting Shares at its principal office in Toronto or to the Secretary
of the Corporation at the registered office of the Corporation, if there is no
registrar and transfer agent for the Series 1 Shares, in exchange for
certificates representing the Class A Subordinate Voting Shares into which such
Series 1 Shares were converted. If less than all the Series 1 Shares represented
by any certificate are converted, a new certificate for the balance shall be
issued at the expense of the Corporation. In the event that the certificates
representing the Series 1 Shares are not surrendered for conversion pursuant to
this Section 2.04(d), such Series 1 Shares shall, as of the date of such
conversion, not be considered to be outstanding and shall be deemed to have been
cancelled and no further right shall accrue to the holder of such Series 1
Shares, save and except for the right to receive that number of Class A
Subordinate Voting Shares properly issuable to such holder in accordance with
this Article 2.04.
2.05
Adjustment of the Applicable Conversion Price and the Automatic Conversion Price
in Certain Events
(a) In
the event that the Corporation shall:
(i)
subdivide or change its outstanding Class A Subordinate Voting Shares into a
greater number of Class A Subordinate Voting Shares, or
(ii)
reduce, combine or consolidate its outstanding Class A Subordinate Voting Shares
into a smaller number of shares, or
(iii)
declare a dividend or make a distribution of Class A Subordinate Voting Shares
or securities convertible into Class A Subordinate Voting Shares to all or
substantially all the holders of its outstanding Class A Subordinate Voting
Shares by way of a stock dividend (other than an issue of Class A Subordinate
Voting Shares or securities convertible into Class A Subordinate Voting Shares
by way of a stock dividend or dividend reinvestment plan to shareholders
pursuant to their exercise of options to receive dividends in the form of shares
in lieu of cash dividends declared payable by the Corporation on its Class A
Subordinate Voting Shares), (any of
such events being hereinafter referred to as a "Class A Subordinate Voting Share
Reorganization"), the Applicable Conversion Price and the Automatic Conversion
Price (each of which in this Article 2.05 shall hereinafter be referred to as
the "Conversion Price") in effect at the time of the record date for such Class
A Subordinate Voting Share Reorganization shall be proportionately adjusted so
that the holder of any Series 1 Share deposited for conversion after such time
shall be entitled to receive the number of Class A Subordinate Voting Shares
which he would have been entitled to receive had such Series 1 Shares been
converted immediately prior to such time.
(b) If
the Corporation shall fix a record date for the issuance of options, rights or
warrants to all or substantially all the holders of its Class A Subordinate
Voting Shares entitling them (for a period expiring within 45 days after such
record date) to subscribe for or purchase Class A Subordinate Voting Shares (or
securities convertible into or exchangeable for Class A Subordinate Voting
Shares) at a price per Class A Subordinate Voting Share (or having a conversion
or exchange price per Class A Subordinate Voting Share) less than 90% of the
Current Market Price of a Class A Subordinate Voting Share on such record date,
the Conversion Price shall be adjusted immediately thereafter so that it shall
equal the price determined by multiplying the Conversion Price in effect on such
record date by a fraction, of which the numerator shall be the total number of
Class A Subordinate Voting Shares outstanding on such record date plus a number
of Class A Subordinate Voting Shares equal to the number arrived at by dividing
the aggregate price of the total number of additional Class A Subordinate Voting
Shares so offered (or the aggregate price of the convertible or exchangeable
securities so offered) by such Current Market Price per Class A Subordinate
Voting Share and of which the denominator shall be the total number of Class A
Subordinate Voting Shares outstanding on such record date plus the total number
of additional Class A Subordinate Voting Shares offered for subscription or
purchase (or into which the convertible or exchangeable securities so offered
are convertible or exchangeable, as the case may be) . Class A Subordinate
Voting Shares owned by or held for the account of the Corporation shall be
deemed not to be outstanding for the purpose of any such computation. Such
adjustment shall be made successively whenever such a record date is fixed. To
the extent that such options, rights or warrants are not so issued or such
options, rights or warrants are not exercised prior to the expiration thereof,
the Conversion Price shall be readjusted to the Conversion Price which would
then be in effect based upon the number of Class A Subordinate Voting Shares (or
securities convertible or exchangeable into Class A Subordinate Voting Shares),
if any, actually delivered upon the exercise of such options, rights or
warrants.
(c) If
the Corporation shall fix a record date for the making of a distribution to all
or substantially all the holders of its Class A Subordinate Voting
Shares:
(i) of
any shares of any class not included in the definition of Class A Subordinate
Voting Shares as contained in the constating documents of the Corporation;
or
(ii) of
evidences of indebtedness; or
(iii) of
assets (excluding cash dividends paid in the ordinary course, distributions
referred to in paragraph (iii) of Section 2.05(a) and stock dividends to
holders of Class A Subordinate Voting Shares who exercise an option pursuant to
a stock dividend plan to receive equivalent dividends in shares or under a
dividend reinvestment plan in lieu of receiving cash dividends paid in the
ordinary course); or
(iv) of
options, rights or warrants (excluding those referred to in Section 2.05(b);
the
Conversion Price shall be adjusted immediately after such record date so that it
shall equal the price determined by multiplying the Conversion Price in effect
on such record date by a fraction, of which the numerator shall be the total
number of Class A Subordinate Voting Shares outstanding on such record date
multiplied by the Current Market Price of a Class A Subordinate Voting Share on
such record date, less the fair market value (as determined by the directors,
whose determination shall be conclusive) of said shares or evidences of
indebtedness or assets or options, rights or warrants so distributed, and of
which the denominator shall be the total number of Class A Subordinate Voting
Shares outstanding on such record date multiplied by such Current Market Price
of a Class A Subordinate Voting Share. Class A Subordinate Voting Shares owned
by or held for the account of the Corporation shall be deemed not to be
outstanding for the purpose of any such computation. Such adjustment shall be
made successively whenever such a record date is fixed. To the extent that such
distribution is not so made, the Conversion Price shall be readjusted to the
Conversion Price which would then be in effect based upon the said shares or
evidences of indebtedness or assets or options, rights or warrants actually
distributed.
(d) No
adjustments of the Conversion Price shall be made pursuant to paragraph (iii) of
Section 2.05(a) or pursuant to Section 2.05(b) or 2.05 (c) if the holders
of the Series 1 Shares are permitted to participate in such dividend or
distribution on the Class A Subordinate Voting Shares or in the issue of
such options, rights, warrants or such distribution as the case may be, as
though and to the same effect as if they had converted their Series 1 Shares
into Class A Subordinate Voting Shares prior to the record date for such
dividend or distribution or the issue of such options, rights or warrants or
such distribution, as the case may be.
(e) In
any case in which this Article 2.05 shall require that an adjustment shall
become effective immediately after a record date for an event referred to
herein, the Corporation may defer until the occurrence of such event issuing to
the holder of any Series 1 Shares converted after such record date and before
the occurrence of such event the additional Class A Subordinate Voting Shares
issuable upon such conversion by reason of the adjustment required by such event
in addition to the Class A Subordinate Voting Shares issuable upon such
conversion before giving effect to such adjustment; provided, however, that the
Corporation shall deliver to such holder an appropriate instrument evidencing
such holder's rights to receive such additional Class A Subordinate Voting
Shares upon the occurrence of the event requiring such adjustment.
(f) In
the case of any reclassification of, or other change in, the outstanding Class A
Subordinate Voting Shares not otherwise mentioned herein, the Conversion Price
shall be adjusted in such manner as the directors determine to be appropriate on
a basis consistent with this Article 2.05.
(g) If
any question shall at any time arise with respect to adjustments in the
Conversion Price or with respect to the amount of any cash payment made in lieu
of issuing a fractional Class A Subordinate Voting Share, such question shall be
determined by the Treasurer of the Corporation, whose determination shall be
confirmed by the auditors of the Corporation, and thereupon shall become
conclusive.
(h)
Forthwith after the occurrence of any adjustment in the Conversion Price
pursuant to this Article 2.05, the Corporation shall file with the registrar and
transfer agent of the Corporation for the Series 1 Shares a certificate
certifying as to the amount of such adjustment and, in reasonable detail, the
event requiring and the manner of computing such adjustment. The Corporation
shall also at such time give written notice to the holders of the Series 1
Shares of the Conversion Price following such adjustment.
(i) No
adjustment in the Conversion Price shall be required:
(i) in
respect of the issue of Class A Subordinate Voting Shares or securities
convertible into Class A Subordinate Voting Shares pursuant to any stock
option or purchase plan for officers or employees of the Corporation or any of
its subsidiaries; or
(ii)
unless such adjustment would require an increase or decrease of at least one
percent in the Conversion Price; provided, however, that any adjustments which
by reason of this paragraph (ii) of Section 2.05(i) are not required to be made
shall be carried forward and taken into account in any subsequent
adjustment.
2.06
Redemption at the Option of the Corporation
(a)
Subject to the provisions of applicable law, the Corporation may, at its option,
redeem at any time all or from time to time any lesser number of the Series 1
Shares then outstanding on payment of the Redemption Amount provided in Section
2.06(b) hereof. If less than all of the outstanding Series 1 Shares are to be
redeemed, the Series 1 Shares to be redeemed shall be selected by lot, in single
shares in such manner as the directors in their sole discretion shall
determine.
(b) The
price at which any Series 1 Share is redeemable from time to time shall be
$1,000 per Series 1 Share. Upon the redemption of any Series 1 Shares there
shall be no payment or adjustment by the Corporation on account of any dividends
on the Series 1 Shares so redeemed other than as provided for in Section 2.02(b)
hereof.
(c) (i)
Notice of redemption of Series 1 Shares shall be given by the Corporation
not less than 10 days prior to the day fixed for redemption to each
registered holder of Series 1 Shares to be redeemed. Accidental failure or
omission to give such notice to one or more of such holders shall not
affect the validity of such redemption. Such notice shall set out the
Redemption Amount, the date fixed for redemption, the place or places of
redemption and, in the case of partial redemption, the number of the
holder's shares to be redeemed.
(ii) On
and after the date fixed for redemption, the Corporation shall pay or cause
to be paid the Redemption Amount to or to the order of the holders of the Series
1 Shares redeemed on presentation and surrender at the place or one of the
places of redemption of the respective certificates representing such shares,
and the holders of the Series 1 Shares called for redemption shall cease to be
entitled to dividends or to exercise any of the rights of holders in respect
thereof unless payment of the Redemption Amount shall not be made in accordance
with the foregoing provisions, in which case the rights of the holders shall
remain unimpaired.
(iii) The
Corporation shall have the right at any time after giving notice of redemption
to deposit the Redemption Amount of the Series 1 Shares thereby called for
redemption, or such part thereof as at the time of deposit has not been claimed
by the shareholders entitled thereto, in any Canadian chartered bank or trust
company in Canada specified in the notice of redemption or in a subsequent
notice to the holders of the shares in respect of which the deposit is made, in
a special account for the holders of such shares, and upon such deposit being
made or upon the date fixed for redemption, whichever is the later, the Series 1
Shares in respect of which such deposit shall have been made shall be deemed to
be redeemed and the rights of each holder thereof shall be limited to receiving,
without interest, his proportionate part of the Redemption Amount so deposited
upon presentation and surrender of the certificates representing his shares so
redeemed. Any interest on such deposit shall belong to the
Corporation.
(iv) If
less than all the Series 1 Shares represented by any certificate shall be
redeemed, a new certificate for the balance shall be issued without charge to
the holder.
2.07
Cancellation of Series 1 Shares
Series 1
Shares purchased, redeemed or otherwise acquired by the Corporation shall
be cancelled.
2.08
Dissolution
On the
liquidation, dissolution or winding up of the Corporation, whether voluntary or
involuntary, or other distribution of assets of the Corporation among its
shareholders for the purpose of winding up its affairs, the holders of the
Series 1 Shares shall be entitled to receive in lawful money of Canada an amount
equal to the Redemption Amount per share.
2.09
Notices, etc.
(a) Any
notice or other communication from the Corporation herein provided for shall be
sufficiently given if delivered or if sent by ordinary unregistered mail,
postage prepaid, personal delivery or by telecopier, or, in the case of a notice
of redemption, by prepaid registered mail, personal delivery or by telecopier,
to the holders of the Series 1 Shares at their respective addresses
and telecopy numbers appearing on the books of the Corporation or, in the
event of the address of any such holders not so appearing, then at the last
address or telecopy number of such holder known to the Corporation. Accidental
failure to give any such notice or other communication to one or more holders of
the Series 1 Shares shall not affect the validity of the notices or other
communications properly given or any action taken pursuant to such notice or
other communication but, upon such pursuant to such notice or other
communication but, upon such failure being discovered, the notice or other
communication, as the case may be, shall be sent forthwith to such holder or
holders.
(b) If
there exists any actual or apprehended disruption of mail services in any
province in which there are holders of Series 1 Shares whose addresses appear on
the books of the Corporation to be in such province, notice shall be given to
the holders in such province by means of personal delivery or telecopier
only.
(c)
Notice given by mail, personal delivery or telecopier shall be deemed to be
given on the day upon which it is mailed, delivered or telecopied as the case
may be.
2.10
Modification
The
rights, conditions, restrictions and prohibitions attaching to the Series 1
Shares may not be deleted, varied, altered or amended without the prior approval
of at least 66 2/3% of the votes cast at a meeting of the holders of the Series
1 Shares, in addition to any other approval or authorization required by
applicable law.
2.11
Approval by Holders of Series 1 Shares
The
approval of the holders of the Series 1 Shares with respect to any and all
matters referred to herein or any other matter requiring the consent of such
holders may, subject to applicable law, be given in writing by the holders of
all of the Series 1 Shares for the time being outstanding or by resolution duly
passed and carried by not less than 2/3 of the votes cast on a ballot at a
meeting of the holders of the Series 1 Shares duly called and held for the
purpose of considering the subject matter of such resolution and at which
meeting holders of not less than 20% of the Series 1 Shares then outstanding are
present in person or represented by proxy; provided, however, that if at any
such meeting, when originally held, the holders of at least 20% of the Series 1
Shares then outstanding are not present in person or represented by proxy within
thirty minutes after the time fixed for the meeting, then the meeting shall be
adjourned to such date, being not less than 15 days later, and at such time and
place as may be fixed by the Chairman of such meeting and at such adjourned
meeting the holders of the Series 1 Shares present in person or represented by
proxy, whether or not they hold 20% of the Series 1 Shares then outstanding, may
transact the business for which the meeting was originally called, and the
resolution duly passed and carried by not less than 2/3 of the votes cast on a
ballot at such adjourned meeting shall constitute the approval of the holders of
the Series 1 Shares hereinbefore mentioned. Notice of any such original meeting
of the holders of the Series 1 Shares shall be given not less than 21 days nor
more than 50 days prior to the date fixed for such meeting and shall specify in
general terms the purpose for which the meeting is called. No notice of any such
adjourned meeting need be given unless such meeting is adjourned by one or more
adjournments for an aggregate of 30 days or more from the date of such original
meeting, in which later case notice of the adjourned meeting shall be given in a
manner prescribed for the original meeting as aforesaid. The formalities to be
observed with respect to the giving of notice of any such original or adjourned
meeting and the conduct thereof shall be those from time to time prescribed in
the constating documents of the Corporation with respect to meeting of
shareholders.
2.12
Voting Rights
The
holders of the Series 1 Shares shall not be entitled as such, except as required
by law, to receive notice of or to attend any meeting of the shareholders of the
Corporation or to vote at any such meeting but shall be entitled to receive
notice of meetings of shareholders of the Corporation called for the purpose of
authorizing the dissolution of the Corporation or the sale of its undertaking or
a substantial part thereof.
3.00
SERIES 2 PREFERENCE SHARES
The
second series of the Preference Shares of the Corporation shall consist of Seven
Hundred Thousand (700,000) shares designated as the "Series 2 Preference Shares"
(the "Series 2 Shares"), with each such share having a redemption value of One
Dollar ($1.00). In addition to the rights, conditions, restrictions and
prohibitions attaching to the Preference Shares of the Corporation as a class,
the Series 2 Shares shall have attached thereto the rights, conditions,
restrictions and prohibitions hereinafter set forth:
3.01
Definitions
(a) In
this Article 3.01, unless there is something in the subject matter or context
inconsistent therewith:
(i)
"Affiliate" means an "affiliated body corporate" as defined in the Canada
Business Corporations Act as of the date hereof.
(ii)
"Annual Limit" means an amount equal to:
(a)
300,000 Series 2 Shares on the first Retraction Date; and
(b)
100,000 Series 2 Shares on each subsequent Retraction Date.
(iii)
"Board of Directors" means the board of directors of the Corporation, as such is
constituted, from time to time;
(iv)
"business day" means a day other than a Saturday, a Sunday or any other day that
is a statutory or civic holiday in the place where the Corporation's
registered office is located, and in the event that any day on which any
dividend on the Series 2 Shares is payable or by which any other action is
required or permitted to be taken pursuant to these provisions is not a business
day, then such dividend shall be payable or such other action shall be required
or permitted to be taken on the next succeeding day that is a business
day;
(v)
"Dividend Payment Date" means May 31, 1990, 1991, 1992, 1993 and
1994;
(vi)
"Dividend Payment Period" means the period beginning on a Dividend Payment Date
and ending on the day before the next subsequent Dividend Payment
Date;
(vii)
"Redemption Price" with respect to any Series 2 Share means the price set out in
section 3.04(b) at which such share is redeemable at the option of the
Corporation pursuant to Article 3.04 hereof ;
(viii)
"Retraction Date" means May 31 of 1990, 1991, 1992, 1993, and 1994;
(ix)
"Retraction Price" with respect to any Series 2 Share means the price set out in
Section 3.03(a) at which such share is redeemable at the option of the
holder thereof pursuant to Article 3.03 hereof.
3.02
Dividends
(a) (i)
The holders of the Series 2 Shares shall have the right to receive, and the
Corporation shall pay thereon as and when declared by the directors, fixed,
cumulative, preferential, cash dividends at the rate of $0.095 per share per
annum payable in annual instalments on each Dividend Payment Date. Dividends on
the Series 2 Shares shall accrue from and including the date of issue thereof or
from and including the last Dividend Payment Date in respect of which dividends
have been paid or made available for payment, whichever is the later. Cheques of
the Corporation drawn on a Canadian chartered bank and payable at par at any
branch in Canada of such bank shall be issued in respect of such dividends to
the holders of the Series 2 Shares entitled thereto. The mailing of such cheques
shall satisfy and discharge all liability of the Corporation for such dividends
to the extent of the amount represented thereby (plus any tax required to be
withheld therefrom) unless such cheques are not paid on due
presentation.
(ii) Any
monies to be paid in cash pursuant to this Section 3.02 which is represented by
a cheque which has not been presented for payment within six years after it was
issued or that otherwise remains unclaimed for a period of six years from the
date on which it was declared to be payable and set apart for payment shall be
forfeited to the Corporation.
(b) The
amount of the accrued dividend for any period which is less than a full Dividend
Payment Period with respect to any Series 2 Share:
(i) which
is redeemed at the option of the holder pursuant to Article 3.03
hereof;
(ii)
which is redeemed at the option of the Corporation pursuant to Article 3.04
hereof; or
(iii)
where assets of the Corporation are distributed to the holders of the Series 2
Shares pursuant to Article 3.06 hereof;
shall be
equal to the amount (rounded to the nearest cent) calculated by multiplying
$0.095 by a fraction of which the numerator is the number of days in such
Dividend Payment Period that such Series 2 Share has been outstanding (including
the Dividend Payment Date at the beginning of such Dividend Payment Period if
such share was outstanding on that date and excluded the Dividend Payment Date
at the end of such Dividend Payment Period if such share was outstanding on that
date or the date on which such dividend becomes payable, as the case may be) and
of which the denominator is 365 (or 366 days in the event of a leap year)
and shall be payable in the event that such shares are redeemed pursuant to
Articles 3.03 or 3.04 hereof, on the date of such redemption, or in the event
that the assets of the Corporation are distributed to the holders of the Series
2 Shares pursuant to Article 3.06 hereof, on the date of such
distribution.
3.03
Redemption at the Option of the Holder
(a)
Subject to the provisions of, Section 3.03(e), Article 3.06 and the provisions
of applicable law, a holder of Series 2 Shares may, at his option, require the
Corporation to redeem such number of the Series 2 Shares (not to exceed the
Annual Limit) owned by that holder on the Retraction Dates at a price per share
of One Dollar ($1.00) plus all accrued and unpaid dividends thereon which
for such purpose shall be treated as accruing from day to day up to but not
including the applicable Retraction Date, the whole constituting the Retraction
Price.
(b) A
holder who elects to require the Corporation to redeem any Series 2 Shares of
that holder shall, prior to the close of business on the business day which is
30 days prior to the applicable Retraction Date, deposit the certificate or
certificates representing the Series 2 Shares which that holder requires to have
redeemed with the Secretary of the Corporation at the Corporation's registered
office and shall, at the time of such deposit, evidence his election by duly
completing and depositing concurrently with the deposit of certificates referred
to above a notice of election in the form to be provided for that purpose by the
Corporation.
(c) To
the extent permitted by applicable law and subject to the Annual Limit, the
Corporation shall redeem on each Retraction Date the number of Series 2 Shares
which have been deposited and with respect to which the holders have evidenced
their election as aforesaid by paying the Retraction Price to or to the order of
the holders of the Series 2 Shares redeemed. Such payment shall be made by
cheque of the Corporation drawn on a Canadian chartered bank and payable at par
at any branch in Canada of such bank, and the mailing of such cheque shall
satisfy and discharge all liability of the Corporation for the Retraction Price
to the extent of the amount represented thereby (plus any tax required to be and
deducted or withheld therefrom) unless such cheque is not paid on due
presentation. The Series 2 Shares in respect of which such payment is made shall
be deemed to have been redeemed on the applicable Retraction Date and the
holders thereof shall cease to be entitled to dividends or to exercise any of
the rights of holders in respect thereof unless payment of the Retraction Price
shall not be made in accordance with the foregoing provisions in which case the
rights of the holders shall remain unimpaired.
(d) In
addition to those rights of redemption conferred upon the holder of Series 2
Shares set out elsewhere in this Article 3.03, in the event that the
Corporation:
(i) sells
all or substantially all of the common shares owned in the capital of Jeffrey
Elliott Communications Inc. to a person other than an Affiliate of the
Corporation;
(ii)
sells all or substantially all of the assets and undertaking of Jeffrey Elliott
Communications Inc. to a person other than an Affiliate of the
Corporation, the holder of Series 2 Shares may, at its option but subject
to Section 3.03(f) hereof, require the Corporation to redeem such number of
the Series 2 Shares owned by that holder on the date of such event at a price
per share of One Dollar ($1.00) plus all accrued and unpaid dividends thereon
which for such purpose shall be treated as accruing from day to day up to, but
not including, the date of such event, the whole constituting the Retraction
Price.
(e) If
the redemption by the Corporation of all Series 2 Preference Shares required to
be redeemed on a Retraction Date pursuant to this Article 3.03 would, in the
sole discretion of the Board of Directors, be contrary to applicable law, the
Corporation shall redeem only the maximum number of Series 2 Shares
(rounded to the next lower multiple of 1,000 shares) which the Board of
Directors determine the Corporation is then permitted to redeem. Such
redemptions will be made pro rata (disregarding fractions or shares) according
to the number of Series 2 Shares deposited for redemption by each such holder
and the Corporation shall issue new share certificates representing the Series 2
Shares not redeemed by the Corporation. If the directors have acted in good
faith in making any such determination, neither the Corporation nor the Board of
Directors thereof shall have any liability in respect thereof in the event that
any such determination is inaccurate.
(f) If,
pursuant to Section 3.03(e), the Corporation fails to redeem on a Retraction
Date all Series 2 Shares otherwise required to be redeemed by it on such date
the holders of any Series 2 Shares which the Corporation has so failed to redeem
may elect to leave the certificates representing such shares on deposit with the
Secretary of the Corporation at the Corporation's registered office and the
Corporation shall redeem in accordance with Article 3.04 but at the Retraction
Price on each Dividend Payment Date thereafter the number of such Series 2
Shares so left on deposit (rounded, except for the final redemption of any
number of shares less than 1,000, to the next lower multiple of 1,000 shares)
which the Board of Directors determine, in their sole discretion, that the
Corporation is then permitted to redeem (subject to the Annual Limit) until all
such Series 2 Shares so left on deposit have been redeemed.
(g) The
inability of the Corporation to effect a redemption in accordance with the
provisions hereof on a Retraction Date or subsequent Dividend Payment Date shall
not affect or limit the obligation of the Corporation to pay any dividends
accrued or accruing on the Series 2 Shares from time to time not redeemed and
remaining outstanding.
(h) If
less than all the Series 2 Shares represented by any certificate shall be
redeemed, a new certificate for the balance shall be issued without charge to
the holder.
(i) The
election of any holder to require the Corporation to redeem any Series 2 Shares
shall be irrevocable upon receipt by the Secretary of the Corporation of the
certificates for the shares to be redeemed, unless payment of the Retraction
Price shall not be made in accordance with the provisions of Section 3.03(c), in
which case the rights of the holders shall remain unimpaired.
3.04
Redemption at the Option of the Corporation
(a)
Subject to the provisions of applicable law, the Corporation may, at its option,
redeem at any time all or from time to time any lesser number of the Series 2
Shares then outstanding on payment of the Redemption Price provided in Section
3.04(b) hereof. If less than all of the outstanding Series 2 Shares are to be
redeemed, the Series 2 Shares to be redeemed shall be selected by lot, in single
shares in such manner as the Board of Directors, in their sole discretion, shall
determine.
(b) The
price at which any Series 2 Share is redeemable from time to time shall be One
Dollar ($1.00) per Series 2 Share plus all accrued and unpaid dividends thereon
which, for such purpose, shall be treated as accruing from day to day up to but
not including the applicable date of redemption. Upon the redemption of any
Series 2 Shares there shall be no payment or adjustment by the Corporation on
account of any dividends on the Series 2 Shares so redeemed other than as
provided for in Section 3.02(b) hereof.
(c) (i)
Notice of redemption of Series 2 Shares shall be given by the Corporation
not less than 10 days prior to the day fixed for redemption to each
registered holder of Series 2 Shares to be redeemed. Accidental failure or
omission to give such notice to one or more of such holders shall not
affect the validity of such redemption. Such notice shall set out the
Redemption Price, the date fixed for redemption, the place or places of
redemption and, in the case of partial redemption, the number of the
holder's shares to be redeemed.
(ii) On
and after the date fixed for redemption, the Corporation shall pay or cause
to be paid the Redemption Price to or to the order of the holders of the Series
2 Shares redeemed on presentation and surrender at the place or one of the
places of redemption of the respective certificates representing such shares,
and the holders of the Series 2 Shares called for redemption shall cease to be
entitled to dividends or to exercise any of the rights of holders in respect
thereof unless payment of the Redemption Price shall not be made in accordance
with the foregoing provisions, in which case the rights of the holders shall
remain unimpaired.
(iii) The
Corporation shall have the right at any time after giving notice of redemption
to deposit the Redemption Price of the Series 2 Shares thereby called for
redemption, or such part thereof as at the time of deposit has not been claimed
by the shareholders entitled thereto, in any Canadian chartered bank or trust
company in Canada specified in the notice of redemption or in a subsequent
notice to the holders of the shares in respect of which the deposit is made, in
a special account for the holders of such shares, and upon such deposit being
made or upon the date fixed for redemption, whichever is the later, the Series 2
Shares in respect of which such deposit shall have been made shall be deemed to
be redeemed and the rights of each holder thereof shall be limited to receiving,
without interest, his proportionate part of the Redemption Price so deposited
upon presentation and surrender of the certificates representing his shares so
redeemed. Any interest on such deposit shall belong to the
Corporation.
(iv) If
less than all the Series 2 Shares represented by any certificate shall be
redeemed, a new certificate for the balance shall be issued without charge to
the holder.
3.05
Cancellation of Series 2 Shares
Series 2
Shares purchased, redeemed or otherwise acquired by the Corporation shall
be cancelled.
3.06
Dissolution
On the
liquidation, dissolution or winding up of the Corporation, whether voluntary or
involuntary, or other distribution of assets of the Corporation among its
shareholders for the purpose of winding up its affairs, the holders of the
Series 2 Shares shall be entitled to receive in lawful money of Canada an amount
equal to the Redemption Price per share.
3.07
Notices, etc.
(a) Any
notice or other communication from the Corporation herein provided for shall be
sufficiently given if delivered or if sent by ordinary mail, postage prepaid,
personal delivery or by telecopier, or, in the case of a notice of redemption or
exchange, by prepaid registered mail, personal delivery or by telecopier, to the
holders of the Series 2 Shares at their respective addresses and telecopy
numbers appearing on the books of the Corporation or, in the event of the
address of any such holders not so appearing, then at the last address or
telecopy number of such holder known to the Corporation. Accidental failure to
give any such notice or other communication to one or more holders of the Series
2 Shares shall not affect the validity of the notices or other
communications properly given or any action taken pursuant to such notice or
other communication but, upon such failure being discovered, the notice or other
communication, as the case may be, shall be sent forthwith to such holder or
holders.
(b) If
there exists any actual or apprehended disruption of mail services in any
province in which there are holders of Series 2 Shares whose addresses appear on
the books of the Corporation to be in such province, notice shall be given to
the holders in such province by means of personal delivery or telecopier
only.
(c)
Notice given by mail, personal delivery or telecopier shall be deemed to
have been received when delivered or telecopied or, if mailed, seventy-two (72)
hours after 12:01 a.m. on the day following the day of mailing
thereof.
3.08
Modification
The
rights, conditions, restrictions and prohibitions attaching to the Series 2
Shares may not be deleted, varied, altered or amended without the prior approval
of at least 66 2/3% of the votes cast at a meeting of the holders of the Series
2 Shares, in addition to any other approval or authorization required by
applicable law.
3.09
Approval by Holders of Series 2 Shares
The
approval of the holders of the Series 2 Shares with respect to any and all
matters referred to herein or any other matter requiring the consent of such
holders may, subject to applicable law, be given in writing by the holders of
all of the Series 2 Shares for the time being outstanding or by resolution duly
passed and carried by not less than 2/3 of the votes cast on a ballot at a
meeting of the holders of the Series 2 Shares duly called and held for the
purpose of considering the subject matter of such resolution and at which
meeting holders of not less than 20% of the Series 2 Shares then outstanding are
.present in person or represented by proxy; provided, however, that if at any
such meeting, when originally held, the holders of at least 20% of the Series 2
Shares then outstanding are not present in person or represented by proxy within
thirty minutes after the time fixed for the meeting, then the meeting shall be
adjourned to such date, being not less than 15 days later, and at such time and
place as may be fixed by the Chairman of such meeting and at such adjourned
meeting the holders of the Series 2 Shares present in person or represented by
proxy, whether or not they hold 20% of the Series 2 Shares then outstanding, may
transact the business for which the meeting was originally called, and the
resolution duly passed and carried by not less than 2/3 of the votes cast on a
ballot at such adjourned meeting shall constitute the approval of the holders of
the Series 2 Shares hereinbefore mentioned. Notice of any such original meeting
of the holders of the Series 2 Shares shall be given not less than 21 days nor
more than 50 days prior to the date fixed for such meeting and shall specify in
general terms the purpose for which the meeting is called. No notice of any such
adjourned meeting need be given unless such meeting is adjourned by one or more
adjournments for an aggregate of 30 days or more from the date of such original
meeting, in which later case notice of the adjourned meeting shall be given in a
manner prescribed for the original meeting as aforesaid. The formalities to be
observed with respect to the giving of notice of any such original or adjourned
meeting and the conduct thereof shall be those from time to time prescribed in
the constating documents of the Corporation with respect to meetings of
shareholders.
3.10
Voting Rights.
The
holders of the Series 2 Shares shall not be entitled as such, except as required
by law, to receive notice of or to attend any meeting of the shareholders of the
Corporation or to vote at any such meeting but shall be entitled to receive
notice of meetings of shareholders of the Corporation called for the purpose of
authorizing the dissolution of the Corporation or the sale of its undertaking or
a substantial part thereof.
4.00
CLASS A SUBORDINATE VOTING SHARES
4.01 The
holders of the Class A Subordinate Voting Shares shall be entitled to receive
notice of, to attend and speak at and to vote at, any meeting of the
shareholders of the Corporation, other than a meeting of the holders of another
class as such or the holders of series of shares of another class as such, and
at such meeting shall have one (1) vote for each Class A Subordinate Voting
Share held.
4.02
Subject to any provisions of the Act and to applicable securities laws and the
by-laws, regulations or policies of any stock exchange upon which the Class A
Subordinate Voting Shares may then be listed, all or any part of the Class A
Subordinate Voting Shares which are then outstanding shall be purchaseable for
cancellation by the Corporation at any time, in the open market, by private
contract or otherwise, at the lowest price at which, in the opinion of the
directors, such shares are obtainable.
4.03 The
Class A Subordinate Voting Shares shall not be redeemable by the
Corporation.
4.04 If
the Act would in effect require in the absence of this clause 4.04 that an
amendment to the Articles of the Corporation to delete or vary any
preference, right, condition, restriction, limitation or prohibition attaching
to any of the Class A Subordinate Voting Shares, or to create special shares
ranking in priority to or on a parity with the Class A Subordinate Voting
Shares, be confirmed in writing by the holders of 100% or any lesser percentage
of the then outstanding Class A Subordinate Voting Shares, then in lieu of such
confirmation in writing such confirmation may be given by at least two-thirds of
the votes cast at a meeting of the holders of the Class A Subordinate Voting
Shares duly called for that purpose, and at such meeting each holder of Class A
Subordinate Voting Shares shall be entitled to one vote for each Class A
Subordinate Voting Share held.
4.05 The
holders of the Class A Subordinate Voting Shares shall not have any right to
vote separately upon any proposal to amend the Articles of the Corporation
to:
(a)
increase any maximum number of authorized shares of and class or series having
rights or privileges equal or superior to the Class A Subordinate Voting Shares;
or
(b)
create a new class of shares equal or superior to the Class A Subordinate Voting
Shares; except to
such extent as may from time to time be required by the Act.
4.06 (a)
For the purposes of this clause 4.06:
(i)
"affiliate" has the meaning assigned by the Securities Act (Ontario) as amended
from time to time;
(ii)
"associate" has the meaning assigned by the Securities Act (Ontario) as amended
from time to time;
(iii)
"Conversion Period" means the period of time commencing on the eighth day after
the Offer Date and terminating on the Expiry Date;
(iv)
"Converted Shares" means Class B Shares resulting from the conversion of Class A
Subordinate Voting Shares into Class B Shares pursuant to paragraph (2) of
this clause 4.06;
(v)
"Exclusionary Offer" means an offer to purchase Class B Shares
that:
(a) must,
by reason of applicable securities legislation or the requirements of a stock
exchange on which the Class B Shares are listed, be made to all or
substantially all holders of Class B Shares who are in a province of Canada to
which the requirement applies; and
(b) is
not made concurrently with an offer to purchase Class A Subordinate Voting
Shares that is identical to the offer to purchase Class B Shares in terms of
price per share and percentage of outstanding shares to be taken up exclusive of
shares owned immediately prior to the offer by the Offeror, and in all other
material respects, and that has no condition attached other than the right not
to take up and pay for shares tendered if no shares are tendered pursuant to the
offer for Class B Shares, and for
the purposes of this definition, if an offer to purchase Class B Shares is not
an Exclusionary Offer as defined above but would be an Exclusionary Offer if it
were not for sub-clause (b), the varying of any term of such offer shall be
deemed to constitute the making of a new offer unless an identical variation
concurrently is made to the corresponding offer to purchase Class A Subordinate
Voting Shares;
(vi)
"Expiry Date" means the last date upon which holders of Class B Shares may
accept an Exclusionary Offer;
(vii)
"Offer Date" means the date on which an Exclusionary Offer is made;
(viii)
"Offeror" means a person or company that makes an offer to purchase Class B
Shares (the "bidder"), and includes any associate or affiliate of the
bidder or any person or company that is disclosed in the offering document to be
acting jointly or in concert with the bidder; and
(ix)
"transfer agent" means the transfer agent for the time being of the Class B
Shares.
(b)
Subject to subparagraph (e) of this clause 4.06, if an Exclusionary Offer is
made, each outstanding Class A Subordinate Voting Share shall be convertible
into one Class B Share at the option of the holder during the Conversion Period.
The conversion right may be exercised by notice in writing given to the transfer
agent accompanied by the share certificate or certificates representing the
Class A Subordinate Voting Shares which the holder desires to convert, and such
notice shall be executed by such holder, or by his attorney duly authorized in
writing, and shall specify the number of Class A Subordinate Voting Shares which
the holder desires to have converted. The holder shall pay any governmental or
other tax imposed on or in respect of such conversion. Upon receipt by the
transfer agent of such notice and share certificate or certificates, the
Corporation shall issue a share certificate representing fully paid Class B
Shares as above prescribed and in accordance with paragraph (d) of this clause
4.06. If less than all of the Class A Subordinate Voting Shares represented by
any share certificate are to be converted, the holder shall be entitled to
receive a new share certificate representing in the aggregate the number of
Class A Subordinate Voting Shares represented by the original share certificate
which are not to be converted.
(c) An
election by a holder of Class A Subordinate Voting Shares to exercise the
conversion right provided for in paragraph (b) of this clause 4.06 shall be
deemed to also constitute an irrevocable election by such holder to deposit the
Converted Shares pursuant to the Exclusionary Offer (subject to such holder's
right to subsequently withdraw the shares from the offer) and to exercise the
right to convert into Class A Subordinate Voting Shares all Converted Shares in
respect of which such holder exercises his right of withdrawal from the
Exclusionary Offer or which are not otherwise ultimately taken up under the
Exclusionary Offer. Any conversion into Class A Subordinate Voting Shares,
pursuant to such deemed election, of Converted Shares in respect of which the
holder exercises his right of withdrawal from the Exclusionary Offer shall
become effective at the time such right of withdrawal is exercised. If the right
of withdrawal is not exercised, any conversion into Class A Subordinate Voting
Shares pursuant to such deemed election shall become
effective,
(i) in
respect of an Exclusionary Offer which is completed, immediately following the
time by which the Offeror is required by applicable securities legislation to
take up and pay for all shares to be acquired by the Offeror under the
Exclusionary Offer; and
(ii) in
respect of an Exclusionary Offer which is abandoned or withdrawn, at the time at
which the Exclusionary Offer is abandoned or withdrawn.
(d) No
share certificates representing Converted Shares shall be delivered to the
holders of the shares before such shares are deposited pursuant to the
Exclusionary Offer; the transfer agent, on behalf of the holders of the
Converted Shares, shall deposit pursuant to the Exclusionary Offer a certificate
or certificates representing the Converted Shares. Upon completion of the offer,
the transfer agent shall deliver to the holders entitled thereto all
consideration paid by the Offeror pursuant to the offer. If Converted Shares are
converted into Class A Subordinate Voting Shares pursuant to paragraph (c) of
this clause 4.06, the transfer agent shall deliver to the holders entitled
thereto share certificates representing the Class A Subordinate Voting Shares
resulting from the conversion. The Corporation shall make all arrangements with
the transfer agent necessary or desirable to give effect to this
subparagraph.
(e)
Subject to paragraph (f) of this clause 4.06, the conversion right provided for
in sub-paragraph (b) of this clause 4.06 shall not come into effect
if:
(i) prior
to the time at which the Exclusionary Offer is made there is delivered to the
transfer agent and to the Secretary of the Corporation a certificate or
certificates signed by or on behalf of one or more shareholders of the
Corporation owning in the aggregate, as at the time the Exclusionary Offer
is made, more than 50% of the then outstanding Class B Shares, exclusive of
shares owned immediately prior to the Exclusionary Offer by the Offeror, which
certificate or certificates shall confirm, in the case of each such shareholder,
that such shareholder shall not:
(a)
accept any Exclusionary Offer without giving the transfer agent and the
Secretary of the Corporation written notice of such acceptance or intended
acceptance at least seven days prior to the Expiry Date;
(b) make
any Exclusionary Offer;
(c) act
jointly or in concert with any person or company that makes any Exclusionary
Offer; or
(d)
transfer any Class B Shares, directly or indirectly, during the time at which
any Exclusionary Offer is outstanding without giving the transfer agent and
the Secretary of the Corporation written notice of such transfer or intended
transfer at least seven days prior to the Expiry Date, which notice shall state,
if known to the transferor, the names of the transferees and the number of Class
B Shares transferred or to be transferred to each transferee; or
(ii)
within seven days after the Offer Date there is delivered to the transfer agent
and to the Secretary of the Corporation a certificate or certificates signed by
or on behalf of one or more shareholders of the Corporation owning in the
aggregate more than 50% of the then outstanding Class B Shares, exclusive of
shares owned immediately prior to the Exclusionary Offer by the Offeror, which
certificate or certificates shall confirm, in the case of each such
shareholder:
(a) the
number of Class B Shares owned by the shareholder;
(b) that
such shareholder is not making the offer and is not an associate or affiliate
of, or acting jointly or in concert with, the person or company making the
offer;
(c) that
such shareholder shall not accept the offer, including any varied form of the
offer, without giving the transfer agent and the Secretary of the Corporation
written notice of such acceptance or intended acceptance at least seven days
prior to the Expiry Date; and
(d) that
such shareholder shall not transfer any Class B Shares, directly or indirectly,
prior to the Expiry Date without giving the transfer agent and the Secretary of
the Corporation written notice of such transfer or intended transfer at least
seven days prior to the Expiry Date, which notice shall state, if known to the
transferor, the names of the transferees and the number of Class B Shares
transferred or to be transferred to each transferee if this information is known
to the transferor.
(f) If a
notice referred to in sub-clause e (i)(a), e (i)(d), (e)(ii)(c)
or e (ii)(d) of this clause 4.06 is given and the conversion right provided for
in paragraph (b) of this clause 4.06 has not come into effect, the transfer
agent shall either forthwith upon receipt of the notice or forthwith after the
seventh day following the Offer Date, whichever is later, make a determination
as to whether there are subsisting certifications that comply with either
sub-clause e (i) or e (ii) of this clause 4.06 from shareholders of the
Corporation who own in the aggregate more than 50% of the then outstanding Class
B Shares, exclusive of shares owned immediately prior to the offer by the
Offeror. For the purposes of this determination the transaction that is the
subject of such notice shall be deemed to have taken place at the time of the
determination, and the shares that are the subject of such notice shall be
deemed to have been transferred to a person or company from whom the transfer
agent had not received such a certification unless the transfer agent is
otherwise advised either by such notice or by the transferee in writing. If the
transfer agent determines that there are not such subsisting certifications,
paragraph (e) of this clause 4.06 shall cease to apply and the conversion right
provided for in paragraph (b) of this clause 4.06 shall be in effect for the
remainder of the Conversion Period.
(g) As
soon as reasonably possible after the seventh, day after the Offer Date, the
Corporation shall send to each holder of Class A Subordinate Voting Shares a
notice advising the holders as to whether they are entitled to convert their
Class A Subordinate Voting Shares into Class B Shares and the reasons therefor.
If such notice disclosed that they are not so entitled but if subsequently
determined that they are so entitled by virtue of paragraph (f) of this clause
4.06 or otherwise, the Corporation shall forthwith send another notice to them
advising them of that fact and the reasons therefor.
(h) If a
notice referred to in paragraph (g) of this clause 4.06 discloses that the
conversion right has come into effect, the notice shall:
(i)
include a description of the procedure to be followed to effect the conversion
and to have the Converted Shares tendered under the offer;
(ii)
include the information set out in paragraph (c) of this clause 4.06;
and
(iii) be
accompanied by a copy of the offer and all other material sent to holders of
Class B Shares in respect of the offer, and as soon as reasonably possible
after any additional material, including a notice of variation, is sent to the
holders of Class B Shares in respect of the offer, the Corporation shall send a
copy of such additional material to each holder of Class A Subordinate Voting
Shares.
(i) Prior
to or forthwith after sending any notice referred to in paragraph
(g) of this clause 4.06, the Corporation shall cause a press release to be
issued to a Canadian national news ticker service, describing the contents of
the notice.
5.00
CLASS B SHARES
5.01 The
holders of the Class B Shares shall be entitled to receive notice of, and
to attend and speak at and vote at, any meeting of the shareholders of the
Corporation, other than a meeting of the holders of shares of another class as
such or of the holders of a series of shares of another class as such, and at
such meeting shall have twenty (20) votes for each Class B Share
held.
5.02
Subject to any provisions of the Act and to applicable securities laws and the
by-laws, regulations or policies of the stock exchange upon which the Class B
Shares may then be listed, all or any part of the Class B Shares which are then
outstanding shall be purchaseable for cancellation by the Corporation at any
time, in the open market, by private contract or otherwise, at the lowest price
at which, in the opinion of the directors, such shares are
obtainable.
5.03 The
Class B Shares shall not be redeemable by the Corporation.
5.04 If
the Act would in effect require in the absence of this clause 5.04 that an
amendment to the Articles of the Corporation to delete or vary any
preference, right, condition, restriction, limitation or prohibition attaching
to any of the Class B Shares, or to create special shares ranking in priority to
or on a parity with the Class B Shares, be confirmed in writing by the holders
of 100% or any lesser percentage of the then outstanding Class B Shares, then in
lieu of such confirmation in writing such confirmation may be given by at least
two-thirds of the votes cast at a meeting of the holders of the Class B Shares
duly called for that purpose, and at such meeting each holder of Class B Shares
shall be entitled to one vote for each Class B Share held.
5.05 The
holders of the Class B Shares shall not have any right to vote separately upon
any proposal to amend the Articles of the Corporation to:
(a)
increase any maximum number of authorized shares of a class or series having
rights or privileges equal or superior to the Class B Shares; or
(b)
create a new class of shares equal or superior to the Class B
Shares;
except to
such extent as may from time to time be required by the Act.
5.06 Each
Class B Share shall be convertible at any time, at the option of the holder
thereof, into a Class A Subordinate Voting Share, on the basis of one Class A
Subordinate Voting Share for each Class B Share so converted. The holder of
Class B Shares desiring to convert such Class B Shares into Class A Subordinate
Voting Shares on the basis aforesaid shall deliver to the transfer agent for the
time being of the Class A Subordinate Voting Shares the share certificate or
share certificates representing the Class B Shares which the holder desires to
so convert accompanied by a written notice duly executed by such holder or his
attorney duly authorized in writing, which notice shall state that such holder
elects to convert the Class B Shares represented by such share certificate or
share certificates into Class A Subordinate Voting Shares in accordance with the
provisions hereof and which notice shall further state the name or names (with
addresses) in which the share certificate or certificates for Class A
Subordinate Voting Shares issuable on such conversion shall be issued, and if
any of the Class A Subordinate Voting Shares into which such Class B Shares are
to be converted are to be issued to a person or persons other than the holder of
such Class B Shares, there shall be paid to such transfer agent, for the account
of the Corporation, any transfer taxes which may properly be payable. If any
share certificate or share certificates representing any of the Class A
Subordinate Voting Shares issuable on conversion are directed to be issued to
any person other than the holder of such Class B Shares, the signature of such
holder shall be guaranteed by a Canadian chartered bank or such other
financial institution as such transfer agent may require. Such holder shall, in
addition, comply with such other reasonable requirements as such transfer agent
may prescribe. As promptly as practicable after the receipt of such notice of
election to convert, the payment of such transfer tax (if any), the delivery of
such share certificate or share certificates and compliance with all reasonable
requirements of the transfer agent as aforesaid, the Corporation shall cause the
transfer agent for the Class A Subordinate Voting Shares to issue and deliver in
accordance with such notice of election to convert a share certificate or share
certificates representing the number of Class A Subordinate Voting Shares
into
which such Class B Shares have been converted in accordance with the provisions
of this clause 5.06. Such conversion shall be deemed to have been made
immediately prior to the close of business on the date on which all conditions
precedent to the conversion of such Class B Shares have been fulfilled and
the person or persons in whose name or names any share certificate or share
certificates for Class A Subordinate Voting Shares shall be issuable shall be
deemed to have become on the said date the holder or holders of record of
the Class B Shares represented thereby; provided, however, that if the
transfer books of the Corporation for Class B Shares shall be closed on the said
date, the Corporation shall not be required to issue Class A Subordinate Voting
Shares upon such conversion until the date on which such transfer books
shall be re-opened and such person or persons shall not be deemed to have become
the holder or holders of record of such Class A Subordinate Voting Shares until
the said date on which such transfer books shall be re-opened. There shall be no
payment or adjustment on account of any unpaid dividends on the Class B Shares
converted or on account of any dividends on the Class A Subordinate Voting
Shares resulting from such conversion. In the event that part only of the Class
B Shares represented by any share certificate shall be converted, a share
certificate for the remainder of the Class B Shares represented by the said
share certificate shall be delivered to the holder converting without
charge.
6.00
DIVIDENDS
AND DISTRIBUTION RIGHTS OF THE CLASS A SUBORDINATE VOTING SHARES
AND CLASS B SHARES
6.01
(a)
All
dividends which are declared in any year in the discretion of the directors on
all of the Class A Subordinate Voting Shares shall be declared and paid at the
same time in an equal or, in the discretion of the directors, a greater amount
per share than those dividends declared in respect of all of the Class B Shares
at the time outstanding. All dividends which are declared in any year, in the
discretion of the directors, on all of the Class B Shares shall be declared and
paid at the same time in an equal or, in the discretion of the directors, a
lesser amount per share than those declared in respect of all of the Class A
Subordinate Voting Shares outstanding.
(b)
If
any stock dividend is declared on Class A Subordinate Voting Shares, such
dividend may be paid in Class A Subordinate Voting Shares or in Class B Shares,
or partly in one class and partly in the other, if stock dividends in equal or,
in the discretion of the directors, lesser amounts per share are declared at the
same time on the Class B Shares and are payable in either Class A Subordinate
Voting Shares or in Class B Shares, or partly in one class and partly in the
other, regardless of which class the stock dividend was paid on Class A
Subordinate Voting Shares. If any stock dividend is declared on Class B Shares,
such dividend may be paid in Class A Subordinate Voting Shares or in Class B
Shares, or partly in one class and partly in the other, if stock dividends in
equal or, in the discretion of the directors, greater amounts per share are paid
at the same time on the Class A Subordinate Voting Shares and are payable in
either Class A Subordinate Voting Shares or in Class B Shares, or partly in one
class and partly in the other, regardless of which class the stock dividend was
paid on Class B Shares.
(c)
All
distributions other than dividends (including, without limiting the generality
of the foregoing, any distribution of rights, warrants or options to purchase
securities of the Corporation), and all such distributions which may at any time
or from time to time be authorized or made:
(i)
in
respect of the Class A Subordinate Voting Shares, shall be authorized and made
at the same time in equal, or in the discretion of the directors, greater
quantities or amounts per share than on all Class B Shares then outstanding
without preference or distinction; and
(ii)
in
respect of the Class B Shares, shall be authorized and made at the same time in
equal or in the discretion of the directors, lesser quantities or amounts per
share than on all Class A Subordinate Voting Shares then outstanding without
preference or distinction.
7.00
SUBDIVISIONS,
CONSOLIDATIONS, RECLASSIFICATIONS WINDING UP AND LIQUIDATION,
ETC.
7.01
No
subdivision, consolidation, reclassification or other change of the
Class A Subordinate Voting Shares or the Class B Shares shall be made unless at
the time an equivalent or comparable subdivision, consolidation,
reclassification or change is made with respect to all of the Class A
Subordinate Voting Shares and Class B Shares which are then
outstanding.
7.02 In
any case where a fraction of a Class A Subordinate Voting Share or a Class B
Share would otherwise be issuable on a subdivision, consolidation,
reclassification or change of one or more Class A Subordinate Voting Shares or
Class B Shares, the Corporation shall in lieu thereof adjust such fractional
interest by the payment by cheque (to the nearest cent) of an amount related or
equivalent to the then current market value of such fractional interest computed
on the basis of the last board lot sale price (or the last bid price, if there
has been no board lot sale) for
the Class A Subordinate Voting Shares on The Toronto Stock Exchange (or if the
Class A Subordinate Voting Shares are not listed on The Toronto Stock Exchange,
on such stock exchange in Canada on which the Class A Subordinate Voting Shares
are listed or traded as may be selected for such purpose by the directors of the
Corporation) on the business day on which such stock exchange was open next
preceding the date of such subdivision, consolidation, reclassification or
change.
7.03 In
the event of the liquidation, dissolution or winding up of the Corporation or
other distribution of the assets of the Corporation amongst its shareholders for
the purposes of winding up its affairs, all of the property and assets of the
Corporation available for distribution to the shareholders of the Corporation
shall, after providing for preferential payment of the amounts required to be
paid under and in respect of any Preference Shares or series thereof ranking in
priority, shall be paid or distributed in equal amounts per share on all Class A
Subordinate Voting Shares and Class B Shares at the time outstanding without
preference or distinction and the holders thereof shall as such participate on a
share for share basis equally therein.
8.00
PROVISIONS
RELATING TO CLASS A SUBORDINATE VOTING SHARES AND CLASS B
SHARES
8.01
The
articles of the Corporation hereby provide that, for the purposes
of the take-over bid and issuer bid provisions of the Securities Act (Ontario)
and the regulations thereunder), both as amended from time to time,
(a) the Class A Subordinate Voting Shares and Class B Shares shall
be treated as and are hereby deemed to constitute, one class of voting
securities, and
(b) the published market for such one class of voting securities
shall be deemed to be the published market of the Class A Subordinate Voting
Shares. For greater certainty, the provisions of this Section 8.01 shall have no
application in the event of a purchase of Class B Shares at a price per
share not in excess of the aggregate of (i) the "market price" per share (at the
time of such purchase) determined in accordance with the provisions of the
Securities Act (Ontario) (and the regulations thereunder) (both as amended or
replaced from time to time) plus (ii) reasonable brokerage fees or other
commissions calculated on a per share basis. For greater certainty, "market
price" as at the date of these articles is defined in Section 163(3) of the
Regulation to the Securities Act (Ontario).
8.02 In
any case where a fraction of a Class A Subordinate voting Share or a Class B
Share would otherwise be issuable on consolidation, subdivision and change of
one or more common shares, the Corporation shall in lieu thereof adjust such
fractional interest by the payment by cheque (to the nearest cent) of any amount
equivalent to the value of such fractional interest computed on the basis of
$0.025 per common share.
PROVISIONS
ATTACHING TO THE
SERIES
3 PREFERENCE SHARES
CYBERSIGHT-
MDC EXCHANGEABLE PREFERENCE SHARES
The third
series of Preference Shares of the Corporation shall consist of an unlimited
number of Series 3 Preference Shares designated as the "Cybersight-MDC
Exchangeable Preference Shares" (the "Exchangeable Shares"). The Exchangeable
Shares shall have the following rights, privileges, restrictions and
conditions:
1.1
For the
purposes of these share provisions:
"Affiliate"
of any Person means any other Person directly or indirectly
controlling, controlled by or under common control with, that Person. For the
purposes of this definition, "control" (including, with correlative meanings,
the terms "controlled by" and "under common control with") 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.
"Board of
Directors" means the board of directors of the Corporation.
"Business
Day" means any day on which commercial banks are open for business in New York,
New York and Toronto, Ontario other than a Saturday, a Sunday or a day observed
as a holiday in Toronto, Ontario under the laws of the Province of Ontario or
the federal laws of Canada or in New York, New York under the laws of the State
of New York or the federal laws of the United States of America.
"CAC"
means CyberSight Acquisition Co., Inc., a corporation existing under the laws of
the State of Delaware, and any successor corporation thereto.
"CAC
Dividend Declaration Date" means the date on which the board of directors of CAC
declares any dividend on the CAC Shares.
"CAC
Shares" mean the shares of common stock, par value U.S. $0.01 per share, in the
capital of CAC, and any other securities into which such shares may be changed,
including shares into which CAC Shares may be changed consequent upon an
amalgamation, merger, reorganization or other transaction affecting the CAC
Shares and "CAC Share" means any of the CAC Shares.
"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 spot exchange rate on such date
to such foreign currency expressed in Canadian dollars as may be deemed by the
Board of Directors to be appropriate for such purpose.
"Common
Shares" means, collectively, the Class A Subordinate Voting Shares and the Class
B Multiple Voting Shares in the capital of the Corporation.
"Corporation"
means MDC Partners Inc., a corporation governed by the Canada Business
Corporations Act.
"Current
Market Price" means, in respect of a CAC Share on any date, the Canadian Dollar
Equivalent of the average of the closing bid and ask prices of CAC Shares during
a period of 20 consecutive trading days ending not more than three trading days
before such date on the principal stock exchange or automated quotation system
in Canada or the United States on which the CAC Shares are then listed, or, if
the CAC Shares are not then listed on any stock exchange or automated quotation
system, then the Current Market Price of a CAC Share shall be determined by a
qualified third party independent valuator as selected by the Board of Directors
in its sole discretion provided that any such selection, opinion or
determination by the Board of Directors shall be conclusive and
binding.
"Exchange
Date" means the date on which a holder of Exchangeable Shares exchanges his or
her Exchangeable Shares for CAC Shares in accordance with the requirements of
Article 6 of these share provisions.
"Exchange
Notice" has the meaning ascribed thereto in section 6.1 of these share
provisions.
"Exchange
Right" has the meaning ascribed thereto in section 6.1 of these share
provisions.
"Exchangeable
Shares" mean the Series 3 non-voting exchangeable preference shares in the
capital of the Corporation designated as the "CyberSight-MDC Exchangeable
Preference Shares" 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
Date" has the meaning ascribed thereto in section 5.1 of these share
provisions.
"Person"
includes any individual, firm, partnership, joint venture, venture capital fund,
association, trust, trustee, executor, administrator, legal personal
representative, estate, group, body corporate, corporation, unincorporated
association or organization, government body, syndicate or other entity, whether
or not having legal status.
"Preference
Shares" means the issued and outstanding preference shares in the capital of the
Corporation.
"Support
Agreement" means that certain Exchangeable Share support and voting trust
agreement between the Corporation, CAC and Griffiths McBurney & Partners to
be entered into in connection with a private placement of the Exchangeable
Shares in Canada.
"Transfer
Agent" means CIBC Mellon Trust Company or such other Person as may from time to
time be appointed by the Corporation as the registrar and transfer agent for the
Exchangeable Shares.
2.
RANKING
OF EXCHANGEABLE SHARES
2.1
Other
than the rights specifically provided for in Article 3 and Article 5 of these
share provisions and as required under applicable law, the Exchangeable
Shares shall have no rights to receive any payment of dividends which may be
declared payable by the Corporation from time to time or to participate in the
distribution of assets of the Corporation 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 Corporation, among its shareholders
for the purpose of winding up its affairs.
3.1
Subject
to section 3.2 below, a holder of an Exchangeable Share shall be entitled to
receive and the Board of Directors shall, subject to applicable
law, on each CAC Dividend Declaration Date, declare a dividend on each
Exchangeable Share:
(a) in
the case of a cash dividend declared on the CAC Shares, in an amount in cash for
each Exchangeable Share in U.S. dollars, or the Canadian Dollar Equivalent
thereof on the CAC Dividend Declaration Date, in each case, equal to the cash
dividend declared on each CAC Share;
(b) in
the case of a stock dividend declared on the CAC Shares to be paid in CAC
Shares, in such number of Exchangeable Shares for each Exchangeable Share as is
equal to the number of CAC Shares to be issued as a dividend on each CAC Share:
or
(c) in
the case of a dividend declared on the CAC Shares in property other than cash or
CAC 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 3.5 hereof) the type and amount of property
declared as a dividend on each CAC 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, as applicable.
3.2 In
the case of a stock dividend declared on the CAC Shares to be paid in CAC
Shares, in lieu of declaring the stock dividend contemplated by section 3.1(b)
on the Exchangeable Shares, the Board of Directors may, in its discretion and
subject to applicable law, subdivide, redivide or change (the "subdivision")
each issued and unissued Exchangeable Share on the basis that each Exchangeable
Share before the subdivision becomes a number of Exchangeable Shares as is equal
to the sum of (i) one (1) CAC Share and (ii) the number of CAC Shares to be paid
as a stock dividend on each CAC Share. In such instance, and notwithstanding any
other provision hereof, such subdivision shall become effective on the effective
date specified in section 3.4 hereof without any further act or formality on the
part of the Board of Directors or of the holders of Exchangeable Shares. For
greater certainty, no approval of the holders of Exchangeable Shares to an
amendment to the articles of the Corporation shall be required to
give effect to such subdivision.
3.3
Cheques of 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. Subject to applicable law, 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 or any subdivision of shares contemplated by section 3.2 hereof
and the sending of such a certificate to each holder of an Exchangeable Share
shall satisfy the stock dividend or share subdivision 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.
3.4 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 CAC Shares. The record date for the determination of the holders
of Exchangeable Shares entitled to receive Exchangeable Shares in connection
with any subdivision of Exchangeable Shares under section 3.2 hereof and the
effective date of such subdivision shall be the same dates as the record date
and payment date, respectively, for the corresponding stock dividend declared on
CAC Shares.
3.5 The
Board of Directors shall determine, in good faith, the economic equivalent for
the purposes of the share provisions, and each such determination shall be
conclusive and binding on the Corporation and its shareholders. In making each
such determination, the following factors shall, without excluding other factors
determined by the Board of Directors to be relevant, be considered by the Board
of Directors:
(a) in
the case of any stock dividend or other distribution payable in CAC Shares, the
number of such shares issued in proportion to the number of CAC Shares
previously outstanding;
(b) in
the case of the issuance or distribution of any rights, options or warrants to
subscribe for or purchase CAC Shares (or securities exchangeable for or
convertible into or carrying rights to acquire CAC Shares), the relationship
between the exercise price of each such right, option or warrant and the Current
Market Price of a CAC Share;
(c) in
the case of the issuance or distribution of any other form of property
(including without limitation any shares or securities of CAC of any class other
than CAC Shares, any rights, options or warrants other than those referred to in
section 3.5(b) above, any evidences of indebtedness of CAC or any assets of
CAC), the relationship between the fair market value (as determined by the Board
of Directors) of such property to be issued or distributed with respect to each
outstanding CAC Share and the Current Market Price of a CAC Share;
and
(d) in
all such cases, the general taxation consequences of the relevant event to
holders of Exchangeable Shares to the extent that such consequences may differ
from the taxation consequences to holders of CAC Shares as a result of
differences between taxation laws of Canada and the United States (except for
any differing consequences arising as a result of differing marginal taxation
rates and without regard to the individual circumstances of holders of
Exchangeable Shares).
4.1
Subject
to Section 4.2 below, so long as any of the Exchangeable Shares are outstanding,
the Corporation shall not at any time without 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 Common Shares or any other shares ranking junior to the
Exchangeable Shares, other than stock dividends payable in Common Shares or any
such other shares ranking junior to the Exchangeable Shares, as the case may
be;
(b)
redeem or purchase or make any capital distribution in respect of the Common
Shares or any other shares ranking junior to the Exchangeable
Shares;
(c) issue
any Exchangeable Shares other than (i) pursuant to any shareholder rights plan
adopted by the Corporation, (ii) by way of stock dividend to the holders of such
Exchangeable Shares contemplated by section 3 hereof, or (iii) by way of any
subdivision of Exchangeable Shares; or
(d) issue
any shares of the Corporation ranking superior to the Exchangeable Shares other
than by way of stock dividends to the holders of such Exchangeable
Shares.
4.2 The
restrictions in subparagraphs 4.1(a) to 4.1(c) above shall not apply if all
declared dividends on the outstanding Exchangeable Shares have been
paid.
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, each Exchangeable Share,
subject to applicable law, shall be automatically exchanged
with CAC on the effective date (the "Liquidation Date") of such liquidation,
dissolution or winding-up, but before any distribution of any part of the assets
of the Corporation among the holders of the Common Shares or any other shares
ranking junior to the Exchangeable Shares, for one CAC Share, together with any
declared and unpaid dividends on each such Exchangeable Share held by such
holder on any dividend record date which occurred prior to the Liquidation Date
(the "Liquidation Amount").
5.2 On or
promptly after the Liquidation Date, the Corporation shall cause CAC to deliver
to the holders of the Exchangeable Shares the Liquidation Amount 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 and cancellation of
Exchangeable Shares under the Canada Business Corporations Act and the by-laws
of the Corporation and such additional documents and instruments as the Transfer
Agent, CAC or the Corporation may reasonably require, at the registered 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 the Exchangeable
Shares.
5.3
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 registered 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 CAC 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 remaining portion, if any, of the total
Liquidation Amount (in each case less any amounts withheld on account of tax
required to be deducted and withheld therefrom) (without interest).
5.4 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.
5.5 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 (in each case less any amounts withheld on account of tax required to be
deducted and withheld therefrom) (without interest) 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 holders of the CAC Shares delivered to them or the custodian on
their behalf.
5.6 After
the Corporation has satisfied its obligations to pay or cause to be paid to 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.
6.1
A holder
of Exchangeable Shares shall be entitled at any time and otherwise upon
compliance with the provisions of this Article 6 (the "Exchange
Right"), to exchange all or any portion of the Exchangeable Shares registered in
the name of such holder for: (i) one CAC Share for each Exchangeable Share
presented and surrendered by the holder; together with (ii) the full amount of
all declared and unpaid dividends on any such Exchangeable Share in respect of
any dividend record date which occurred prior to the Exchange Date, which
dividends shall be paid by the Corporation. To exercise its Exchange Right, a
holder of Exchangeable Shares shall present and surrender at the registered
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 exchange for CAC Shares, together with such other documents
and instruments as may be required to effect a transfer of Exchangeable Shares
under the respective by-laws of the Corporation and CAC and the provisions of
applicable laws and such additional documents and instruments as the Transfer
Agent, CAC or the Corporation may reasonably require, together with a duly
executed statement (the "Exchange Notice") in the form of Schedule "A" hereto or
in such other form as may be acceptable to the Corporation:
(a)
specifying that the holder desires to exchange all or any number of the
Exchangeable Shares specified therein represented by such certificate or
certificates (the "Exchanged Shares"); and
(b)
stating the date on which the holder desires that the Exchange Date occur,
provided that such date shall be not less than 10 Business Days nor more than 15
Business Days after the date on which the Exchange Notice is received by the
Corporation and further provided that, in the event that no such Business Day is
specified by the holder in the Exchange Notice, the Exchange Date shall be
deemed to be the 15th Business Day after the date on which the Exchange Notice
is received by the Corporation.
6.2 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 exchange, together with an
Exchange Notice and provided that the Exchange Notice is not revoked by the
holder in the manner specified in section 6.6, the Corporation shall cause CAC
to issue and deliver to the holder the CAC Shares issuable in exchange for the
Exchanged Shares effective at the close of business on the Exchange Date,
provided that all
declared and unpaid dividends for which the record date has occurred prior to
the Exchange Date shall be paid by the Corporation to the holder on the
scheduled payment date for such dividends. If only a part of the Exchangeable
Shares represented by any certificate is exchanged by a holder thereof, a new
certificate for the balance of such Exchangeable Shares shall be issued to the
holder at the expense of the Corporation.
6.3 The
Corporation shall cause CAC to deliver or shall 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 Exchange Notice or by holding for pick-up by
the holder at the registered 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 CAC 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 and, if applicable, on or before
the payment date therefor, the Corporation shall deliver to the holder a cheque
payable at par at any branch of the bankers of the Corporation representing the
aggregate of any declared and unpaid dividend in respect of the Exchanged
Shares, less any amounts withheld on account of tax required to be deducted
and withheld therefrom (without interest), and such delivery of such certificate
and cheque by or on behalf of the Corporation, by CAC or by the Transfer Agent
(as applicable), shall be deemed to be payment of and shall satisfy and
discharge all liability in respect of the exercise of the Exchange Right, to the
extent that the same is represented by such share certificates and cheque (plus
any tax deducted and withheld therefrom and remitted to the proper tax
authority).
6.4 On
and after the close of business on the Exchange Date, the holder of the
Exchanged Shares shall cease to be a holder of such Exchanged Shares and shall
not be entitled to exercise any of the rights of a holder in respect thereof,
unless upon presentation and surrender of certificates in accordance with the
foregoing provisions, registration and delivery of the CAC Share certificate and
the Corporation's cheque (if any) shall not be made as provided in section 6.3,
in which case the rights of such holder shall remain unaffected until such
registrations and deliveries have been made in the manner hereinbefore provided.
On and after the close of business on the Exchange Date, provided that
presentation and surrender of certificates and delivery of the CAC Share
certificates and the Corporation's cheque (if any) has been made in accordance
with the foregoing provisions, the holder of the Exchanged Shares shall
thereafter be considered and deemed for all purposes to be a holder of the CAC
Shares delivered to it.
6.5
Notwithstanding any other provision of this Article 6, the Corporation shall not
be obligated to cause CAC to issue and deliver a CAC Share in exchange for any
Exchanged Shares specified by a holder in an Exchange Notice to the extent that
the issuance and delivery by CAC of such CAC Shares in exchange for Exchanged
Shares would be contrary to solvency requirements or other provisions of
applicable laws. In any such event, the Corporation shall cause CAC to issue CAC
Shares in exchange for the maximum number of Exchanged Shares which the Board of
Directors (or the board of directors of CAC, as applicable) determine that CAC
is, on the Exchange Date, permitted under applicable laws to issue, which shall
be selected as nearly as may be pro rata (disregarding fractions) in proportion
to the total number of Exchanged Shares tendered for exchange by each holder
thereof and the Corporation shall issue to each holder of Exchanged Shares a new
certificate, at the expense of the Corporation, representing the Exchanged
Shares which are not exchanged pursuant to section 6.2 hereof. The Corporation
shall notify the holder at least two Business Days prior to the Exchange Date as
to the number of Exchanged Shares which will not be exchanged.
6.6 A
holder of Exchanged Shares may, by notice in writing given to the Corporation
before the close of business on the Business Day immediately preceding the
Exchange Date, withdraw its Exchange Notice, in which event such Exchange Notice
shall be null and void.
7.
AUTOMATIC
REDEMPTION BY CORPORATION FOLLOWING EXCHANGE
7.1
Immediately
upon completion of any exchange of the Exchangeable Shares pursuant to the
provisions of Article 6 of these share provisions,
the Exchanged Shares so acquired by CAC shall be automatically redeemed by the
Corporation for an amount of cash equal to the paid-up capital
thereon.
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 a price not exceeding
the amount paid-up thereon 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 a price per
share not exceeding the amount paid up thereon, together with an amount
equal to all declared and unpaid dividends thereon for which the record date has
occurred prior to the date of purchase. 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 part only 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.
9.1
Except as
required by applicable law and by Article 10, section 11.1 and section 11.2
hereof, 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.
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 (disregarding the votes attaching to any
Exchangeable Shares held or beneficially owned by the Corporation and its
Affiliates) duly called and held at which the holders of at least 25% 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 25% 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 five (5) 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 whether or not representing at least 25% of the
outstanding Exchangeable Shares at that time 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 (disregarding the votes attaching to any Exchangeable Shares held or
beneficially owned by the Corporation and its Affiliates) at such meeting shall
constitute the approval or consent of the holders of the Exchangeable
Shares.
11.
RECIPROCAL
CHANGES, ETC. IN RESPECT OF CAC Shares.
11.1
Each
holder of an Exchangeable Share acknowledges that the Support Agreement
provides, in part, that CAC 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:
(a) issue
or distribute CAC Shares (or securities exchangeable for or convertible into or
carrying rights to acquire CAC Shares) to the holders of all or substantially
all of the then outstanding CAC Shares by way of stock dividend or other
distribution, other than an issue of CAC Shares (or securities exchangeable for
or convertible into or carrying rights to acquire CAC Shares) to holders of CAC
Shares who exercise an option to receive dividends in CAC Shares (or securities
exchangeable for or convertible into or carrying rights to acquire CAC Shares)
in lieu of receiving cash dividends;
(b) issue
or distribute rights, options or warrants to the holders of all or substantially
all of the then outstanding CAC Shares entitling them to subscribe for or to
purchase CAC Shares (or securities exchangeable for or convertible into or
carrying rights to acquire CAC Shares); or
(c)
issue or
distribute to the holders of all or substantially all of the then outstanding
CAC Shares:
(i)
shares or
securities of CAC of any class other than CAC Shares (other than shares
convertible into or exchangeable for or carrying rights to acquire
CAC Shares);
(ii)
rights,
options or warrants other than those referred to in subsection 11.1(b)
above;
(iii)
evidences
of indebtedness of CAC: or
(iv)
assets of
CAC, unless the economic equivalent on a per share basis of such rights,
options, warrants, securities, shares, evidences of indebtedness
or other assets is issued or distributed by the Corporation simultaneously to
holders of the Exchangeable Shares.
11.2 Each
holder of an Exchangeable Share acknowledges that the Support Agreement further
provides, in part, that CAC 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:
(a)
subdivide,
redivide or change the then outstanding CAC Shares into a greater number of CAC
Shares:
(b)
reduce,
combine, consolidate or change the then outstanding CAC Shares into a lesser
number of CAC Shares: or
(c)
reclassify
or otherwise change the CAC Shares or effect an amalgamation, merger,
reorganization or other transaction affecting the CAC 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. The Support
Agreement further provides, in part, that the aforesaid provisions of 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.
12.
ACTIONS
BY THE CORPORATION UNDER SUPPORT 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 CAC and the Corporation with all provisions of the
Support Agreement applicable to CAC and the Corporation, respectively, in
accordance with the 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 all
rights and benefits in favour of the Corporation under or pursuant to such
agreement.
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 without the approval of the holders of 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 parties to such agreement for the
protection of the Corporation or the holders of the Exchangeable Shares
thereunder;
(b)
making such provisions or modifications not inconsistent with such agreement as
may be necessary or desirable with respect to matters or questions arising
thereunder which, in the good faith opinion of the Board of Directors, it may be
expedient to make, provided that the Board of Directors shall be of the good
faith 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 good faith opinion, after consultation with
counsel, that such changes or corrections will not be prejudicial to the
interests of the holders of the Exchangeable Shares.
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 (including the provisions with
respect to the voting rights, exchange right and automatic redemption
thereunder).
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 registered office of the Corporation and addressed to the
attention of the Executive Vice President, Corporate Development. 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 exchange of Exchangeable Shares shall be made by ordinary mail (postage
prepaid) or by delivery to the registered 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 Executive Vice President, Corporate
Development 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
ordinary 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 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.
14.4 If
the Corporation determines that mail service is or is threatened to be
interrupted at the time when the Corporation is required or elects to give any
notice to the holders of Exchangeable Shares hereunder, the Corporation shall,
notwithstanding the provisions hereof, give such notice by means of publication
in The Globe and Mail, national edition, or any other English language daily
newspaper or newspapers of general circulation in Canada and in a French
language daily newspaper of general circulation in the Province of Quebec, once
in each of two successive weeks, and notice so published shall be deemed to have
been given on the latest date on which the first publication has taken place.
If, by
reason of any actual or threatened interruption of mail service due to strike,
lock-out or otherwise, any notice to be given to the Corporation would be
unlikely to reach its destination in a timely manner, such notice shall be valid
and effective only if delivered personally to the Corporation in accordance with
section 14.1 or 14.2, as the case may be.
SCHEDULE
"A"
EXCHANGE
NOTICE
To: MDC
Partners Inc. (the "Corporation")
This
notice is given pursuant to Article 6 of the provisions (the "Share Provisions")
attaching to the Exchangeable Shares of the Corporation represented by this
certificate and all capitalized words and expressions used in this notice that
are defined in the Share Provisions have the meanings ascribed to such words and
expressions in such Share Provisions.
The
undersigned hereby notifies the Corporation that the undersigned desires to
exchange, in accordance with Article 6 of the Share Provisions:
[ ] all
share(s) represented by this certificate; or
[ ]
____________________________share(s) only.
(Insert
Number of Exchanged Shares)
The
undersigned hereby notifies the Corporation that the Exchange Date shall be
____________________, 20__.
NOTE: The
Exchange Date must be a Business Day and must not be less than 10 Business Days
nor more than 15 Business Days after the date upon which this notice is received
by the Corporation. If no such Business Day is specified above, the Exchange
Date shall be deemed to be the 15th Business Day after the date on which this
notice is received by the Corporation.
This
exchange notice may be revoked and withdrawn by the undersigned only by notice
in writing given to the Corporation at any time before the close of business on
the Business Day immediately preceding the Exchange Date.
The
undersigned hereby represents and warrants to the Corporation that the
undersigned:
[ ]
is
(select
one)
[ ] is
not
a
non-resident of Canada for purposes of the Income Tax Act (Canada). The
undersigned acknowledges that in the absence of an indication that the
undersigned is not a non-resident of Canada, withholding on account of Canadian
tax may be made from amounts payable to the undersigned on the exchange of the
Exchanged Shares. The undersigned also agrees to complete IRS Form W-8BEN in
respect of the exchange in the form provided by the Corporation prior to the
Exchange Date
The
undersigned hereby represents and warrants to the Corporation that the
undersigned has good title to, and owns, the share(s) represented by this
certificate to be acquired by the Corporation, free and clear of all liens,
claims and encumbrances.
(Date)
(Signature of Shareholder) (Guarantee of Shareholder)
[ ]
Please check box if the securities and any cheque(s) resulting from the exchange
of the Exchanged Shares are to be held for pick-up by the shareholder from the
Transfer Agent, failing which the securities and any cheque(s) will be mailed to
the last address of the shareholder as it appears on the share
register.
NOTE:
This panel must be completed and this certificate, together with such additional
documents as the Transfer Agent may require, must be deposited with the Transfer
Agent. The securities and any cheque(s) resulting from the exchange of the
Exchanged Shares will be issued and registered in, and made payable to,
respectively, the name of the shareholder as it appears on the register of the
Corporation and the securities and any cheque(s) resulting from such exchange
will be delivered to such shareholder as indicated above, unless the form
appearing immediately below is duly completed.
Date:
_______________________
Name of
Person in Whose Name Securities or Cheque(s) Are to be Registered, Issued or
Delivered (please print): _________________________
Street
Address or P.O. Box: __________________________________________________
Signature
of Shareholder: ____________________________________________________
City,
Province and Postal Code: ______________________________________________
Signature
Guaranteed by: _____________________________________________________
NOTE: If
this exchange notice is for less than all of the shares represented by this
certificate, a certificate representing the remaining Exchangeable Share(s) of
the Corporation represented by this certificate will be issued and registered in
the name of the shareholder as it appears on the shareholders register of the
Corporation, unless the Share Transfer Power on the share certificate is duly
completed in respect of such share(s).
Schedule II
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7 –
Other provisions, if any
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Autres
dispositions, s’il ya
lieu
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1. The directors may from time to time, in such amounts and on such
terms as they deem expedient:
(a) borrow money on the credit of the Corporation;
(b) issue, sell or pledge debt obligations (including bonds, debentures,
notes or other similar obligations, secured or unsecured) of the
Corporation;
(c) charge, mortgage, hypothecate or pledge all or any of the currently
owned or subsequently acquired real or personal, movable or immovable, property
of the Corporation, including book debts, rights, powers, franchises and
undertaking, to secure any debt obligations or money borrowed, or other debt or
liability of the Corporation.
The directors may from time to time delegate to such one or more of the
directors and officers of the Corporation as may be designated by the directors
all or any of the powers conferred on the directors above to such extent and in
such manner as the directors shall determine with respect to each such
delegation.
2. The actual number of directors within the minimum and maximum number set
out in paragraph 5 may be determined from time to time by resolution of the
directors. Any vacancy among the directors as so determined may be filled by
resolution of the directors.
3. Shareholder meetings may be held at any place within Canada or the
United States with a population of not less than 500,000.
4. The directors may appoint one or more directors, who shall hold office
for a term expiring not later than the close of the next annual meeting of the
shareholders, but the total number of directors so appointed may not exceed one
third of the number of directors elected at the previous annual meeting of
Shareholders.
5. Except in the case of any class or series of shares of the Corporation
listed on a stock exchange the Corporation shall have a lien on the shares
registered in the name of a shareholder or the shareholder’s
personal representative for a debt of that shareholder to the Corporation,
including any amount unpaid on the date on which the Corporation was continued
under the Canada Business Corporations Act, in respect of a share issued by the
Corporation.