ARRANGEMENT AGREEMENT
THIS
ARRANGEMENT AGREEMENT made as of the 5th day of
February, 2010.
BETWEEN:
EXETER RESOURCE CORPORATION, a
company duly incorporated under the laws of British Columbia, having its head
office at Suite 1260 – 000 Xxxx Xxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxx Xxxxxxxx X0X
0X0
(hereinafter
referred to as the “Company”)
AND:
EXTORRE GOLD MINES LIMITED, a
company duly incorporated under the federal laws of Canada, having its head
office at Suite 1260 – 000 Xxxx Xxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxx Xxxxxxxx X0X
0X0
(hereinafter
referred to as “Newco”)
WHEREAS:
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A.
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The
Company and Newco intend to enter into the Purchase Agreement (as
hereinafter defined) whereby the Company will agree to transfer to Newco
the Transferred Assets (as hereinafter defined) in consideration for the
Newco Preferred Share (as hereinafter defined) having an aggregate
redemption price equal to the fair market value of the Transferred
Assets.
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B.
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The
Company and Newco have agreed to proceed with a proposed transaction by
way of Plan of Arrangement (as hereinafter defined) whereby, among other
things, a series of share exchanges will take place with the result that
the shareholders of the Company will (other than on account of dissenting
shareholders) will become shareholders of Newco and have the same
percentage shareholding in each of the Company and Newco at the effective
time of the Arrangement (as hereinafter
defined).
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C.
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The
Company proposes to have the shareholders of the Company consider the
Arrangement on the terms set forth in the Plan of
Arrangement.
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NOW THEREFORE THIS AGREEMENT
WITNESSES that, in consideration
of the premises and the respective covenants and agreements herein contained,
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged by each of the parties hereto, the parties hereby
covenant and agree as follows:
ARTICLE
1
INTERPRETATION
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1.1
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Definitions
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In this
Agreement including the recitals hereto the words and terms set out below have
the following meanings:
“1933 Act” means the United
States Securities Act of 1933, as amended, and rules and regulations promulgated
thereunder.
“Act” means the Business Corporations Act
(British Columbia), as amended;
“Agreement” means this
arrangement agreement, including the appendices attached hereto, as supplemented
or amended from time to time;
“Arrangement” means an
arrangement to be effected under the provisions of section 288 of the Act, on
the terms and conditions set forth in the Plan of Arrangement, subject to any
amendment or supplement thereto made in accordance with this Agreement, the Plan
of Arrangement or at the direction of the Court;
“Business Day” means any day,
other than a Saturday or a Sunday, when Canadian chartered banks are open for
business in the City of Vancouver, British Columbia;
“Common Shares” means the
common shares in the capital of the Company;
“Court” means the Supreme Court of British
Columbia;
“Dissenting Shareholders”
means Shareholders who have properly exercised their rights of dissent
pursuant to Article 4 of the Plan of Arrangement.
“Effective Date” means the
date upon which the Plan of Arrangement becomes effective in accordance with the
Act;
“Effective Time” means the
time on the Effective Date the documents required to give effect to the
Arrangement pursuant to section 292 of the Act are recorded as filed with the
Registrar;
“Final Order” means the final
order of the Court approving the Arrangement;
“Information Circular” means
the management information circular of the Company to be prepared and sent to
the Shareholders in connection with the Meeting, and any supplements
thereto;
“Interim Order” means the
order of the Court made pursuant to the petition therefore contemplated by
section 2.4.1 hereof;
“Meeting” means the special
meeting of the Shareholders to be held to consider, among other matters, the
Arrangement, and any adjournment or postponement thereof;
“Newco” means Extorre Gold
Mines Limited, a company incorporated under the federal laws of
Canada;
“Newco Preferred Share” means
the preferred share of Newco having a value equal to the fair market value of
the Transferred Assets net of the fair market value of the Newco Option
Commitment at the moment of transfer which is to be issued by Newco to the
Company pursuant to the Purchase Agreement in consideration for the transfer by
the Company to Newco of the Transferred Assets;
“Option Plan” means the stock
option plan of the Company dated January 21, 2004, as amended;
“Optionholders” means the
holders of the Options;
“Options” means the stock
options granted pursuant to the Option Plan that are outstanding immediately
prior to the Effective Time, and thereafter adjusted in accordance with the
terms of the Plan of Arrangement, as the context so requires;
“Party” means a party to this
Agreement and “Parties” means all of the parties to this
Agreement;
“Plan of Arrangement” means
the plan of arrangement that is attached as Schedule “A” hereto and any
amendment or variation thereto;
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“Person” means any individual,
partnership, limited partnership, syndicate, sole proprietorship, company or
corporation, with or without share capital, unincorporated association, trust,
trustee, executor, administrator, or other legal personal representative, or
governmental entity or agency, however designated or constituted;
“Purchase Agreement” means the
purchase and sale agreement to be entered into by and between the Company and
Newco on or before the Effective Date pursuant to which the Company shall agree
to transfer to Newco the Transferred Assets;
“Registrar” means the
registrar appointed under section 400 of the Act;
“Securityholders” means,
collectively, the Shareholders, Optionholders and Warrantholders;
“Shareholders” means the
holders of the Common Shares;
“Special Resolution” means a
resolution passed by a majority of not less than two-thirds of the votes cast by
Shareholders in respect of such resolution at the Meeting;
“Transferred
Assets” means all of the shares of Cognito Limited and
Estelar Resources Limited owned by the Company, together with necessary working
capital, to be transferred by the Company to Newco at the Effective Time
pursuant to the Purchase Agreement;
“TSX” means the Toronto Stock
Exchange;
“Warrants” means the share
purchase warrants of the Company exercisable to acquire Common Shares that are
outstanding immediately prior to the Effective Time; and
“Warrantholders” means the
holders of the Warrants.
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1.2
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Interpretation
Not Affected by Headings
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The
division of this Agreement into articles, sections and other portions and the
insertion of headings are for convenience of reference only and shall not affect
the construction or interpretation of this Agreement. The terms “this
Agreement”, “hereof, and “hereunder” and similar expressions refer to this
Agreement (including any exhibits and schedules hereto) and not to any
particular article, section or other portion hereof and include any agreement or
instrument supplementary or ancillary hereto.
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1.3
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Numbers,
Et Cetera
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Unless
the context otherwise requires, words importing the singular number only shall
include the plural and vice versa, words importing the use of any gender shall
include both genders; and words importing persons shall include firms,
corporations, trusts and partnerships.
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1.4
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Dates
for Any Action
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In the
event that any date on which any action is required to be taken hereunder by any
of the parties hereto is not a Business Day in the place where the action is
required to be taken, such action shall be required to be taken on the next
succeeding day which is a Business Day at such place, unless otherwise agreed
to.
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1.5
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Entire
Agreement
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This
Agreement, together with the exhibits, schedules, agreements and other documents
herein or therein referred to, constitute the entire agreement among the parties
pertaining to the subject matter hereof and supersedes all prior agreements,
understandings, negotiations and discussions, whether oral or written, among the
parties with respect to the subject matter hereof.
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1.6
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Currency
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All sums
of money, which are referred to in this Agreement, are expressed in lawful money
of Canada unless otherwise specified.
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1.7
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Schedules
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The
following Schedules are attached hereto and form a part hereof:
Schedule
“A” - Plan of Arrangement
ARTICLE
2
THE
ARRANGEMENT
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2.1
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Arrangement
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The
Company and Newco agree to effect the Arrangement on the terms and subject to
the conditions contained in this Agreement and on the terms set forth in the
Plan of Arrangement.
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2.2
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Effective
Date of Arrangement and Closing
Matters
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The
Arrangement shall become effective at the Effective Time on the Effective Date.
On the Effective Date the directors and officers of Newco will continue to hold
the offices held immediately prior to the Effective Date.
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2.3
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Commitment
to Effect Arrangement
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Subject
to the satisfaction of the terms and conditions contained in this Agreement, the
Company and Newco shall each use all reasonable efforts and do all things
reasonably required to cause the Arrangement to become effective on the
Effective Date. Without limiting the generality of the foregoing, the Parties
shall proceed forthwith to apply for the Interim Order and, upon obtainment
thereof, the Company shall call the Meeting and mail the Information Circular to
the Shareholders.
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2.4
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Court
Approvals
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2.4.1
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As
soon as is reasonably practicable after the date of execution of this
Agreement, the Company shall:
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(a)
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file,
proceed with and diligently prosecute an application to the Court for the
Interim Order, providing for, among other things, the calling and holding
of the Meeting for the purpose of considering and, if deemed advisable,
approving the Arrangement; and
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(b)
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subject
to obtaining the approvals as contemplated by the Interim Order (including
the approval of the Special Resolution by the Shareholders) and as may be
directed by the Court in the Interim Order, file, proceed with and
diligently prosecute an application for the Final Order which application
shall be in form and substance satisfactory to the parties
hereto.
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2.4.2 The
notice to the Court and related materials for the applications referred to in
this section shall be in a form satisfactory to the Company and Newco prior to
filing, and in the case of the application to the Court for the Interim Order,
shall inform the Court that, based on the Court’s determination of the fairness
of the Plan of Arrangement, the Company will rely on section 3(a)(10) of the
1933 Act for an exemption from the 1933 Act registration requirements with
respect to the securities to be issued under the Plan of Arrangement. In order
to ensure the availability of such exemption, the Parties agree that the
Arrangement will be carried out on the following basis:
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(a)
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the
Arrangement will be subject to the approval of the
Court;
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(b)
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the
Court will be required to satisfy itself as to the fairness of the
Arrangement to the Securityholders subject to the
Arrangement;
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(c)
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the
Final Order will expressly state that the Arrangement is approved by the
Court as being fair to the Securityholders to whom securities will be
issued;
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(d)
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the
Company will ensure that each Securityholder will be given adequate and
timely notice advising them of their right to attend the hearing of the
Court to give approval of the Arrangement and providing them with
sufficient information necessary for them to exercise that
right;
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(e)
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the
Securityholders will be advised that the securities issued in the
Arrangement have not been registered under the 1933 Act and will be issued
by the Company and Newco in reliance on the exemption from the
registration requirements of the 1933 Act provided by section 3(a)(10) of
the 1933 Act and may be subject to restrictions on resale under the
securities laws of the United States, including, as applicable, Rule 144
under the 1933 Act with respect to affiliates of the Company and Newco
after the Effective Time or within 90 days prior to the Effective
Time;
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(f)
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the
Interim Order will specify that each Securityholder will have the right to
appear before the Court at the hearing of the Court to give approval of
the Arrangement so long as such Securityholder files and delivers an
appearance within a reasonable time;
and
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(g)
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the
Final Order shall include a statement substantially to the following
effect:
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“This
Order will serve as a basis of a claim to an exemption, pursuant to section
3(a)(10) of the United States Securities Act of 1933, as amended, from the
registration requirements otherwise imposed by that act, regarding the
distribution of securities of the Company and Newco, pursuant to or in
connection with the Plan of Arrangement”.
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2.5
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Filing
with Registrar
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Subject
to the rights of termination contained in Article 4 hereof, upon the
Shareholders approving the Arrangement by Special Resolution in accordance with
the provisions of the Interim Order, as applicable, and the Act, the Company
obtaining the Final Order, and the other conditions contained in Article 3
hereof being complied with or waived, the Company shall make the filings with
the Registrar pursuant to section 292 of the Act as necessary to effect the
Arrangement.
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2.6
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Supplementary
Actions
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Both the
Company and Newco shall be required to make, do and execute or cause and procure
to be made, done and executed all such further acts, deeds, agreements,
transfers, assurances, instruments or documents as may be required to further
document or evidence any of the transactions or events required in connection
with the Arrangement, including without limitation, any resolutions of directors
authorizing the issue, exchange, transfer, redemption or purchase for
cancellation of shares, any share transfer powers evidencing the transfer of
shares and any receipt therefore, any promissory notes and receipts therefore,
any necessary addition to or deletions from share registers or other registers
whether before or after the Effective Date and shall cooperate with each other
after the Effective Date as necessary to achieve the objectives of the
Arrangement. Upon the Arrangement becoming effective, the Company and Newco
shall exchange such other documents as may be necessary or desirable in
connection with the completion of the transactions contemplated by this
Agreement and the Plan of Arrangement.
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ARTICLE
3
CONDITIONS
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3.1
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Mutual
Conditions Precedent
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The
respective obligations of each party hereto to complete the transactions
contemplated by this Agreement shall be subject to the satisfaction, on or
before the Effective Date, of the following conditions, none of which may be
waived unilaterally by any Party in whole or in part:
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(a)
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the
Arrangement, with or without amendment, shall have been approved at the
Meeting in accordance with the Interim
Order;
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(b)
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the
Interim Order and the Final Order shall have been obtained in form and
substance satisfactory to the Company and
Newco;
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(c)
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the
TSX shall have received notice of the Arrangement in accordance with their
rules and policies, and shall have no objection to the Arrangement as of
the Effective Date;
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(d)
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the
TSX, or such other recognized stock exchange acceptable to Newco, shall
have conditionally approved the listing of the Newco Common Shares
issuable under the Arrangement, subject to compliance with the
requirements of the TSX or such other stock
exchange;
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(e)
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the
transactions contemplated in the Purchase Agreement shall have been
completed or deemed to be
completed;
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(f)
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there
shall not be in force any order or decree restraining or enjoining the
consummation of the transactions contemplated by this
Agreement;
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(g)
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all
material regulatory requirements shall have been complied with and all
other material consents, agreements, orders and approvals, including
regulatory and judicial approvals and orders, necessary for the completion
of the transactions provided for in this Agreement shall have been
obtained or received from the Persons, authorities or bodies having
jurisdiction in the circumstances;
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(h)
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none
of the consents, orders, regulations or approvals contemplated herein
shall contain conditions or require undertakings or security deemed
unsatisfactory or unacceptable by the Company or Newco, acting
reasonably;
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(i)
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dissent
rights shall not have been exercised prior to the Effective Date by
holders of 0.5% or more of the Common Shares;
and
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(j)
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this
Agreement shall not have been terminated under Article
4.
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3.2
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Merger
of Conditions
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The
conditions set out in section 3.1 shall be deemed conclusively to have been
satisfied, waived or released at the Effective Time.
ARTICLE
4
AMENDMENT
AND TERMINATION
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4.1
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Amendment
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This
Agreement and the Plan of Arrangement may, at any time and from time to time
before and after the holding of the Meeting but not later than the Effective
Time, be amended by written agreement of the Parties without, subject to any
restrictions under applicable law or contained in the Final Order, further
notice to or authorization on the part of the Securityholders for any reason
whatsoever.
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4.2
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Termination
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This
Agreement may, at any time before or after the holding of the Meeting but no
later than the Effective Time, be terminated by resolution of the board of
directors of the Company without further notice to, or action on the part of,
its shareholders and nothing expressed or implied herein or in the Plan of
Arrangement shall be construed as fettering the absolute discretion by the board
of directors of the Company to elect to terminate this Agreement and discontinue
efforts to effect the Arrangement for whatever reasons it may consider
appropriate.
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4.3
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Effect
of Termination
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Upon
termination of this Agreement, no Party shall have any liability or further
obligation to any other Party hereunder.
ARTICLE
5
GENERAL
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5.1
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Assignment
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No party
may assign its rights or obligations under this Agreement or the
Arrangement.
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5.2
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Expenses
of the Arrangement
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The
Company will pay the costs, fees and expenses of the Arrangement incurred up to
and including the Effective Date, and thereafter each Party will pay there
respective costs, fees and expenses.
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5.3
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Notices
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All
notices which may be or are required to be given pursuant to any provision of
this Agreement shall be given or made in writing and shall be deemed to be
validly given if served personally or by facsimile, in each case to the
attention of a senior officer at the addresses set forth on the first page
hereof or at such other addresses as shall be specified by the Parties by like
notice from time to time. Any notice so delivered shall be deemed to be
delivered on the date of delivery to such address if delivered on a Business Day
prior to 5:00 p.m. (local time at the place of receipt) or on the next Business
Day if delivered after 5:00 p.m. or on a non-Business Day.
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5.4
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Severable
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If any
provision of this Agreement is determined to be void or unenforceable in whole
or in part, such void or unenforceable provision shall not affect or impair the
validity of any other provision of the Agreement and shall be severable from
this Agreement.
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5.5
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Binding
Effect
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This
Agreement and the Arrangement shall be binding upon and shall enure to the
benefit of the Parties and their respective successors and permitted
assigns.
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5.6
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Waiver
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Any
waiver or release of any of the provisions of this Agreement, to be effective,
must be in writing executed by the party granting the same.
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5.7
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Time
of the Essence
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Time is
of the essence of this Agreement
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5.8
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Governing
Law
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This
Agreement shall be governed by and construed in accordance with the laws of the
Province of British Columbia and the laws of Canada applicable
therein.
[EXECUTION
PAGE FOLLOWS]
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5.9
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Counterparts
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This
Agreement may be executed in one or more counterparts each of which shall be
deemed an original but all of which together shall constitute one and the same
instrument.
IN WITNESS WHEREOF the parties
hereto have executed this Agreement as of the date first written.
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EXETER
RESOURCE CORPORATION
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EXTORRE
GOLD MINES LIMITED
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SCHEDULE
“A”
PLAN
OF ARRANGEMENT UNDER SECTION 288
OF
THE BUSINESS CORPORATIONS ACT (BRITISH COLUMBIA)
PURSUANT
TO THE ARRANGEMENT AGREEMENT DATED
FEBRUARY
5, 2010 BETWEEN EXETER RESOURCE CORPORATION
AND
EXTORRE GOLD MINES LIMITED
ARTICLE
1
INTERPRETATION
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1.1
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Definitions
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In this
Plan of Arrangement, unless something in the subject matter or context is
inconsistent therewith:
“Act” means the Business Corporations Act
(British Columbia), as amended;
“Adjusted Exercise Price”
means:
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(a)
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in
the case of the Options, the exercise price applicable thereto by
multiplying the exercise price of the Option immediately prior to the
Effective Time by the fraction A/B
where:
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(A)
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is
the volume weighted average trading price of the New Common Shares for the
first five trading days preceding the Adjustment Measurement Date;
and
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(B)
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is
the volume weighted average trading price of the New Common Shares plus
the volume weighted average trading price of the Newco Common Shares for
the five trading days preceding the Adjustment Measurement
Date,
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(b)
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in
the case of the Newco Options, the exercise price applicable thereto by
multiplying the exercise price of the related Option immediately prior to
the Effective Time by the
fraction A/B
where:
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(A)
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is
the volume weighted average trading price of the Newco Common Shares for
the five trading days preceding the Adjustment Measurement Date;
and
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(B)
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is
the volume weighted average trading price of the Newco Common Shares plus
the volume weighted average trading price of the New Common Shares for the
five trading days preceding the Adjustment Measurement
Date,
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(c)
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in
the case of the New Warrants, the exercise price applicable thereto by
multiplying the exercise price of the related Warrant immediately prior to
the Effective Time by the fraction A/B
where:
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(A)
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is
the volume weighted average trading price of the New Common Shares for the
first five trading days preceding the Adjustment Measurement Date;
and
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(B)
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is
the volume weighted average trading price of the New Common Shares plus
the volume weighted average trading price of the Newco Common Shares for
the five trading days preceding the Adjustment Measurement
Date,
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or such
other price as the TSX may require.
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(d)
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in
the case of the Newco Warrants, the exercise price applicable thereto by
multiplying the exercise price of the related Warrant immediately prior to
the Effective Time by the fraction A/B
where:
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(A)
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is
the volume weighted average trading price of the Newco Common Shares for
the five trading days preceding the Adjustment Measurement Date;
and
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(B)
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is
the volume weighted average trading price of the Newco Common Shares plus
the volume weighted average trading price of the New Common Shares for the
five trading days preceding the Adjustment
Measurement Date,
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or such
other price as the TSX may require.
“Adjustment Measurement Date”
means the date which is five trading days following the date on which the
Newco Common Shares commence trading on the TSX, or such other recognized stock
exchange acceptable to Newco.
“Arrangement” means an
arrangement to be effected under the provisions of section 288 of the Act, on
the terms and conditions set forth in this Plan of Arrangement, subject to any
amendment or supplement hereto made in accordance with the Arrangement
Agreement, this Plan of Arrangement or at the direction of the
Court;
“Arrangement Agreement” means
the Arrangement Agreement dated February 5, 2010 between the Company and Newco
to which this Schedule “A” is attached;
`Business Day” means any day,
other than a Saturday or a Sunday, when Canadian chartered banks are open for
business in the City of Vancouver, British Columbia;
“Class A Shares” means the common
shares in the capital of the Company which are to be redesignated as “Class A
Shares” of the Company pursuant to the terms of this Plan of
Arrangement;
“Class B Shares” means the
Class B Shares of the Company, which the Company will be authorized to issue
upon the Arrangement becoming effective and which are to be issued, along with
the New Common Shares, under the Arrangement to holders of Class A
Shares in exchange for such Class A Shares;
“Common Shares” means the
common shares in the capital of the Company immediately prior to the Effective
Time;
“Company” means Exeter
Resource Corporation, a company organized under the laws of British
Columbia;
“Company Note” means the
demand, non-interest bearing promissory note to be issued by the Company to
Newco having a principal amount and fair market value equal to the aggregate
fair market value of the Class B Shares;
“Court” means the Supreme
Court of British Columbia;
“Dissenting Shareholders”
means Shareholders who have properly exercised their rights of dissent
pursuant to Article 4 of this Plan of Arrangement.
“Effective Date” means the
date upon which the Plan of Arrangement becomes effective in accordance with the
Act;
“Effective Time” means the
time on the Effective Date the documents required to give effect to the
Arrangement pursuant to section 292 of the Act are recorded as filed with the Registrar;
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“Final Order” means the final
order of the Court approving the Arrangement;
“Information Circular” means
the management information circular of the Company to be prepared and sent to
the Shareholders in connection with the Meeting, and any supplements
thereto;
“Meeting” means the special
meeting of the Shareholders to be held to consider, among other matters, the
Arrangement, and any adjournment or postponement thereof;
“Newco” means Extorre Gold
Mines Limited, a company incorporated under the federal laws of
Canada;
“New Common Shares” means the
common shares in the capital of the Company, which the Company will be
authorized to issue upon the Arrangement becoming effective and which are to be
issued, along with the Class B Shares, under the Arrangement to holders of Class A
Shares in exchange for such Class A Shares;
“New Warrants” means the
common share purchase warrants of the Company to be issued pursuant to the
Arrangement in exchange for the Warrants entitling the holders thereof to purchase New
Common Shares;
“Newco Option Commitment”
means the covenant of Newco to issue one Newco Option to each
Optionholder for each Option held thereby on the Effective Date in accordance
with the terms hereof;
“Newco Common Shares” means
the common shares of Newco;
“Newco Note” means the demand,
non-interest bearing promissory note to be issued by Newco to the Company having
a principal amount and aggregate fair market value equal to the aggregate fair
market value of the Newco Preferred Share;
“Newco Preferred Share” means
the preferred share of Newco having a value equal to the fair market value of
the Transferred Assets net of the fair market value of the Newco Option
Commitment at the moment of transfer which is to be issued by Newco to the
Company pursuant to the Purchase Agreement in consideration for the transfer by
the Company to Newco of the Transferred
Assets;
“Newco Option Plan” means the
stock option plan of Newco;
“Newco Options” means the
stock options of Newco issuable under the Newco Option Plan entitling the
holders thereof to purchase Newco Common Shares;
“Newco Warrants” means the
common share purchase warrants of Newco to be issued pursuant to the Arrangement
entitling holders thereof to purchase Newco Common Shares;
“Option Plan” means the stock
option plan of the Company dated January 21, 2004, as amended;
“Optionholders” means the
holders of the Options;
“Options” means the stock
options granted pursuant to the Option Plan that are outstanding immediately
prior to the Effective Time, and thereafter adjusted in accordance with the
terms of the Plan of Arrangement, as the context so requires;
“Person” means any individual,
partnership, limited partnership, syndicate, sole proprietorship, company or
corporation, with or without share capital, unincorporated association, trust,
trustee, executor, administrator, or other legal personal representative, or
governmental entity or agency, however designated or constituted;
“Plan of Arrangement” means
this plan of arrangement and any amendment or variation hereto made in
accordance with section 4.1 of the Arrangement Agreement;
“Registrar” means the registrar appointed
under section 400 of the Act;
- 3
-
“Purchase Agreement” means the
purchase and sale agreement to be entered into by and between the Company and
Newco on or before the Effective Date pursuant to which the Company shall agree
to transfer to Newco the Transferred Assets;
“Securityholders” means,
collectively, the Shareholders, Optionholders and Warrantholders;
“Shareholder” or “holder of shares” means a
registered or beneficial holder of Common Shares on the Effective
Date;
“Tax Act” means the Income Tax Act (Canada), as
amended;
“Transferred
Assets” means all of the shares of Cognito Limited and
Estelar Resources Limited owned by the Company, together with necessary working
capital, to be transferred by the Company to Newco prior to the Effective Time
pursuant to the Purchase Agreement;
“TSX” means the Toronto Stock
Exchange;
“Warrantholders” means the
holders of the Warrants; and
“Warrants” means the share
purchase warrants of the Company exercisable to acquire Common Shares that are
outstanding immediately prior to the Effective Time.
|
1.2
|
Headings
|
The
division of this Plan of Arrangement into Articles and Sections and the
insertion of headings are for convenience of reference only and shall not affect
the construction or interpretation of this Plan of Arrangement. The terms “this
Plan of Arrangement”, “hereof” and “hereunder” and similar expressions refer to
this Plan of Arrangement and not to any particular Article or Section hereof and
include any agreement or instrument supplemental therewith, references herein to
Articles and Sections are to Articles and Sections of this Plan of
Arrangement.
|
1.3
|
Number
|
In this
Plan of Arrangement, unless something in the context is inconsistent therewith,
words importing the singular number only shall include the plural and vice versa, words
importing the masculine gender shall include the feminine and neuter genders and
vice versa, words importing. persons shall include individuals, partnerships,
associations, trusts, unincorporated organizations and corporations and vice
versa and words importing shareholders shall include members.
ARTICLE
2
GOVERNING
AGREEMENT
This Plan
of Arrangement is made pursuant and subject to the provisions of the Arrangement
Agreement.
|
2.2
|
Binding
Effect
|
The
Arrangement shall be binding upon the Company, Newco and the Securityholders on
and from the Effective Time.
- 4
-
ARTICLE
3
ARRANGEMENT
|
3.1
|
The
Arrangement
|
At the
Effective Time, the following will occur and will be deemed to occur in the
following order without any further act or formality:
|
|
(a)
|
the
Common Shares held by Dissenting Shareholders shall be deemed to have been
transferred to the Company and the Dissenting Shareholders shall cease to
have any rights as shareholders of the Company other than the right to be
paid the fair value of their Common Shares in accordance with Article
4;
|
|
(b)
|
the
notice of articles and articles of the Company shall be amended
to:
|
|
|
(i)
|
change
the designation of the existing “common shares” to “Class A Shares” and to
change the rights, privileges, restrictions and conditions attached
thereto, whether issued or unissued, so that the rights, privileges,
restrictions and conditions attached thereto shall be as set out in
Appendix 1 attached hereto;
|
|
|
(ii)
|
create
a new class of shares designated as “common shares” (being the New Common
Shares), in an unlimited number,
having the rights, privileges, restrictions and conditions set out in
Appendix 1 attached hereto; and
|
|
|
(iii)
|
create
a new class of shares designated as “Class B Shares”, in an unlimited number, having the rights,
privilege, restrictions and conditions set out in Appendix 1 attached
hereto;
|
|
|
(c)
|
the
Company’s central securities register for the “common shares” shall be
redesignated as the central securities register for the renamed and
redesignated “Class A Shares”;
|
|
|
(d)
|
each
Class A Share issued and outstanding on the Effective Date (other than
shares held by Dissenting Shareholders) will be deemed to be exchanged
(without any action on the part of the holder of the Class A Shares) for
one New Common Share and one Class B
Share.
|
No other
consideration will be received by any holder of the Class A Shares. The Company
will not file a joint election under subsection 85(1) of the Tax Act with any
holder of Class A Shares in respect of this share exchange.
The
aggregate stated capital of the New Common Shares and Class B Shares will not
exceed the paid-up capital of the Class A Shares immediately before the exchange
and will be determined based on the proportion that the fair market value of the
New Common Shares or the Class B Shares, as the case may be, is of the
fair market value of all New Common Shares and Class B Shares issued on the
exchange.
Each
Shareholder shall be deemed to cease to be the holder of the Class A Shares so
exchanged, shall cease to have any rights with respect to such Class A Shares
and shall be deemed to be the holder of the number of New Common Shares and
Class B Shares issued to such Shareholder.
The name of such Shareholder shall be removed from the central securities
register for Class A Shares in respect of the Class A Shares so exchanged and
shall be added to the central securities register of the New Common Shares and
the Class B Shares, respectively, so issued to
such Shareholder; each holder of the Class A Shares thereof shall be deemed to
have executed and delivered all consents, releases, assignments and waivers,
statutory or otherwise, required to exchange such shares as described
above;
- 5
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|
(e)
|
the
Class A Shares, which were exchanged for the New Common Shares and the
Class B Shares, shall be cancelled and
the appropriate entry shall be made in the Company’s central securities
registry;
|
|
(f)
|
each
Optionholder shall be granted a Newco option for every Option held thereby
in anticipation of the Newco Option Commitment contemplated in paragraph
(i) below. Each holder of a Newco Option will be entitled to receive, upon
exercise of the Newco Option, that number of Newco Common Shares that is
equal to the number of Common Shares that were issuable upon exercise of
the related Option immediately prior to the Effective Time, at the
Adjusted Exercise Price. Furthermore, each outstanding Option shall be
adjusted such that the holder will be entitled to receive, upon exercise
of the Option, that number of New Common Shares that is equal to the
number of Common Shares that were issuable upon exercise of the Option
immediately prior to the Effective Time, at the Adjusted Exercise
Price;
|
|
(g)
|
each
Warrantholder shall be granted a Newco Warrant for every Warrant held
thereby. Each holder of a Newco Warrant will be entitled to receive, upon
exercise of the Newco Warrant, that number of Newco Common Shares that is
equal to the number of Common Shares that were issuable upon exercise of
the related Warrant immediately prior to the Effective Time, at the
Adjusted Exercise Price. Furthermore, each Warrantholder shall be granted
a New Warrant in exchange for each Warrant held thereby, each New Warrant
entitling the holder to receive, upon exercise of the New Warrant, that
number of New Common Shares that is equal to the number of Common Shares
that were issuable upon exercise of the related Warrant immediately prior
to the Effective Time, at the Adjusted Exercise Price. Save and except as
otherwise agreed to by the Company and the Warrantholders, the term to
expiry, conditions to and manner of exercising, the status under
applicable laws, and all other terms and conditions of the New Warrants
and the Newco Warrants will otherwise be unchanged from those contained in
or otherwise applicable to the related
Warrant;
|
|
(h)
|
each
holder of Class B Shares will be deemed to transfer, with good and
marketable title free and clear of all encumbrances, all such shares to
Newco and shall cease to have any rights with respect to such Class B
Shares. As consideration for the Class B Shares transferred to it, Newco
will issue to each such holder, one Newco Common Share for each Class B
Share exchanged by it. Each holder of the Class B Shares thereof shall be
deemed to have executed and delivered all consents, releases, assignments
and waivers, statutory or otherwise, required to exchange such shares as
described above. Newco will not file a joint election under subsection
85(1) of the Tax Act with any holder of Class B Shares in respect of this
share transfer.
|
The
stated capital account maintained in respect of the Newco Common Shares shall be
increased by an amount equal to the paid-up capital of the transferred Class B
Shares. In connection with such sale and transfer, each holder of Class B Shares
so sold and transferred shall be deemed to cease to be the holder of the Class B
Shares so sold and transferred and shall become the holder of the number of
Newco Common Shares issued to such holder. The name of such holder shall be
removed from the central securities register of the Class B Shares in respect of
the Class B Shares so sold and transferred and shall be added to the central
securities register of Newco as the holder of the number of the Newco Common
Shares so issued to such holder, and Newco shall be and shall be deemed to be
the transferee of the Class B Shares so transferred and the name of Newco shall
be entered in the central securities register of the Class B Shares so sold and
transferred to Newco;
|
(i)
|
the
Company will be deemed to have sold and transferred the Transferred Assets
to Newco in consideration for the Newco Option Commitment and the issuance
by Newco of the Newco Preferred Share having a fair market value equal to
the fair market value of the Transferred Assets net of the fair market
value of the Newco Option Commitment at the moment of transfer. The
Company shall be added to the central securities register of Newco in
respect of the Newco Preferred Share so issued. The Company shall take all
such actions and deliver all such documents as may be required to convey
title to the Transferred Assets to
Newco.
|
- 6
-
The
Company will jointly elect with Newco, in prescribed form and within the time
referred to in subsection 85(6) of the Tax Act to have the provisions of
subsection 85(1) of the Tax Act apply to the transfer of the Transferred Assets
by the Company to Newco. The agreed amount in respect of such transfer will be
an amount that will not exceed the fair market value of the Transferred Assets
so transferred by the Company and not less than the Company’s cost of the
Transferred Assets under the Tax Act.
The
addition to the stated capital in respect of the Newco Preferred Share issued by
Newco as consideration of the transfer of the Transferred Assets will be the
aggregate of the agreed amount under subsection 85(1) in respect of such
transfer, less the fair market value of the Newco Option
Commitment;
|
(j)
|
the
Company will purchase for cancellation the Class B Shares held by Newco in
consideration for the issuance by the Company to Newco of the Company Note
having a principal amount and fair market value equal to the aggregate
fair market value of the Class B Shares purchased for cancellation. The
repurchased Class B Shares shall be cancelled and the appropriate entry
made on the central securities register for the Class B
Shares;
|
|
(k)
|
Newco
will redeem the Newco Preferred Share held by the Company in consideration
for the issuance by Newco to the Company of the Newco Note having a
principal amount and fair market value equal to the aggregate fair market
value of the Newco Preferred Share so redeemed. The redeemed Newco
Preferred Share shall be cancelled and the appropriate entry made on the
central securities register for the Newco Preferred
Share;
|
|
(1)
|
the
Company will pay the principal amount of the Company Note by transferring
to Newco the Newco Note which will be accepted by Newco as full payment,
satisfaction and discharge of Company’s obligation under the Company Note
and simultaneously, Newco will pay the principal amount of the Newco Note
by transferring to the Company the Company Note which will be accepted by
the Company as full payment, satisfaction and discharge of Newco’s
obligation under the Newco Note. The Company Note and the Newco Note will
both thereupon be cancelled;
|
|
(m)
|
Newco
shall, pursuant to the post-amble in the definition of “public
corporation” in subsection 89(1) of the Tax Act, elect in its return of
income for its first taxation year to have been a public corporation from
the beginning of such year;
|
|
(n)
|
the
Company’s notice of articles and articles shall be amended
to:
|
|
|
(i)
|
cancel
the class of shares designated as “Class A Shares”, none of which will be
issued and outstanding at such time in accordance with the Plan of
Arrangement;
|
|
|
(ii)
|
cancel
the class of shares designated as “Class B Shares”, none of which will be
issued and outstanding at such time in accordance with the Plan of
Arrangement; and
|
|
|
(iii)
|
delete
the rights, privileges, restrictions and conditions attached to the New
Common Shares as set in Appendix 1 attached to the Plan of Arrangement,
whether issued or unissued.
|
|
(o)
|
those
persons listed in Appendix 2 to the Plan of Arrangement will be added as
directors of Newco; and
|
|
(p)
|
the
By-laws of Newco will be the By-laws set out in Appendix 3 to this Plan of
Arrangement, and such By-laws are hereby deemed to have been confirmed by
the shareholders of Newco.
|
- 7
-
|
3.2
|
Deemed
Fully Paid and Non-Assessable
Shares
|
All New
Common Shares and Class B Shares issued pursuant hereto shall be deemed to be
validly issued and outstanding as fully paid and non-assessable shares for all
purposes of the Act.
|
3.3
|
Supplementary
Actions
|
Notwithstanding
that the transaction and events set out in section 3.1 shall occur and shall be
deemed to occur in the order therein set out without any act or formality, both
of the Company and Newco shall be required to make, do and execute or cause and
procure to be made, done and executed all such further acts, deeds, agreements,
transfers, assurances, instruments or documents as may be required to further
document or evidence any of the transactions or events set out in section 3.1,
including without limitation, any resolutions of directors authorizing the
issue, exchange, transfer, redemption or purchase for cancellation of shares,
any share transfer powers evidencing the transfer of shares and any receipt
therefore, any promissory notes and receipts therefore, any necessary addition
to or deletions from share registers or other registries.
ARTICLE
4
RIGHTS
OF DISSENT
|
4.1
|
Rights
of Dissent
|
|
|
(a)
|
Holders
of Common Shares may exercise rights of dissent in connection with the
Arrangement with respect to their Common Shares pursuant to and in the
manner set forth in Part 8 - Division 2 of the Act as modified by the
Interim Order and this section 4.1 (the “Dissent Rights”),
provided that, notwithstanding subsection 242 of the Act, the
written objection contemplated by subsection 242(2) of the Act must be
received by the Company not later than 4:00 p.m. (Vancouver time) on the
date which is two Business Days immediately preceding the
Meeting.
|
|
|
(b)
|
Holders
of Common Shares who duly exercise Dissent Rights and who are ultimately
entitled to be paid fair value for their Common Shares shall be deemed to
have irrevocably transferred their Common Shares to the Company, without
any further authorization, act or formality and free and clear of all
liens, charges, claims and encumbrances and immediately thereafter such
Common Shares will be, and will be deemed to be, cancelled and the former
holders of such Common Shares shall cease to have any rights as former
holders of Common Shares other than their right to be paid fair value for
their Common Shares.
|
|
|
(c)
|
Shareholders
who exercise, or purport to exercise, Dissent Rights, and who are
ultimately determined not to be entitled, for any reason, to be paid fair
value for their Common Shares, shall be deemed to have participated in the
Arrangement on the same basis as any non-Dissenting Shareholder as at and
from the Effective Time and shall receive, and be entitled to receive,
only the consideration for each Common Share on the basis set forth
in
Article 3.
|
|
4.2
|
Holders
|
In no
circumstances shall the Company, Newco or any other Person be required to
recognize a Person exercising Dissent Rights unless such Person is a registered
holder of the Common Shares in respect of which such Dissent Rights are sought
to be exercised, or is a beneficial holder of such Common Shares and complies
with the dissent procedures set forth in Division 2 - Part 8 of the Act as may
be modified by the Interim Order.
|
4.3
|
Recognition
of Dissenting Shareholders
|
Neither
the Company, Newco nor any other Person shall be required to recognize a
Dissenting Shareholder as a registered or beneficial owner of Common Shares at
or after the Effective Time, and at the Effective Time the names of such
Dissenting Shareholders shall be deleted from the register of holders of Common
Shares maintained by or on behalf of the Company.
- 8
-
|
4.4
|
Dissent
Right Availability
|
A
Shareholder is not entitled to exercise Dissent Rights with respect to Common
Shares if such holder votes (or instructs, or is deemed, by submission of any
incomplete proxy, to have instructed his, her or its proxyholder, to vote) or in
the case of a beneficial holder caused, or is deemed to have caused, the
registered shareholder to vote, in favour of the Arrangement at the
Meeting.
|
4.5
|
Reservation
of Newco Common Shares
|
If a
Shareholder exercises the Dissent Right, the Company shall on the Effective Date
set aside and not distribute that portion of Newco Common Shares, which are
attributable to the Class A Shares for which Dissent Rights have been exercised.
If a Shareholder exercises the Dissent Right, but, does not properly comply with
the dissent procedures or, subsequent to giving his or her notice of dissent,
acts inconsistently with such dissent, then the Company shall distribute to such
Shareholder his or her pro rata portion of the Newco Common Shares. If a
Shareholder duly complies with the dissent procedures, then the Company shall
retain the portion of Newco Common Shares attributable to such Shareholder (the
“Non-Distributed Shares”),
and the Non-Distributed Shares will be dealt with as determined by the
board of directors of the Company in its discretion.
ARTICLE
5
CERTIFICATES
AND DOCUMENTATION
|
5.1
|
Class
A Share Certificates
|
Recognizing
that the common shares of the Company issued and outstanding prior to the
Effective Time will be redesignated the “Class A Shares” and that they will be
cancelled upon the exchange of the Class A Shares for the New Common Shares and
Class B Shares, the Company will not issue any new share certificates
representing the Class A Shares.
|
5.2
|
Class
B Share Certificates
|
Recognizing
that all of the Class B Shares issued to the Shareholders will immediately be
transferred to Newco in exchange for Newco Common Shares, the Company will not
issue certificates representing the Class B Shares.
|
5.3
|
Newco
Preferred Share Certificates
|
Recognizing
that the Newco Preferred Share issued to the Company will immediately be
purchased for cancellation by Newco in exchange for the Newco Note, Newco will
not issue a certificate representing the Newco Preferred Share.
|
5.4
|
New
Common Share Certificates
|
From and
after the Effective Time, share certificates representing Class A Shares not
deemed to have been cancelled pursuant to Article 4 shall for all purposes be
deemed to be share certificates representing New Common Shares and no new share
certificates shall be issued with respect to the New Common Shares issued in
connection with the Arrangement. Any Class A Shares traded after the Effective
Time will represent New Common Shares as of the Effective Date and shall not
carry any rights to receive Newco Common Shares.
|
5.5
|
Newco
Common Share Certificates
|
As soon
as practicable after the Effective Time, Newco shall cause to be issued to the
registered holders of Newco Common Shares at the Effective Time on the Effective
Date, share certificates representing the number of the Newco Common Shares to
which such holders are entitled following the Effective Date and shall cause
such certificates to be delivered or mailed to such holders in accordance with
the terms hereof.
- 9
-
|
5.6
|
Newco
Options
|
A holder
of Options at the Effective Time shall be entitled to receive a certificate or
other instrument representing the Newco Options to which such holder is entitled as
soon as practical after the Effective Date upon delivery to the Company of such
documents and instruments as the Company may reasonably require. The Company
shall cause such certificate or other instrument to be delivered or mailed to such
holder to the last address of such holder, as registered in the books and
records of the Company.
|
5.7
|
Exchange
of Warrants
|
A
Warrantholder at the Effective Time shall be entitled to receive a certificate
or other instrument representing the New Warrants and Newco Warrants to which
such holder is entitled as soon as practical after the Effective Date upon
delivery to the Company of such documents and instruments as the Company may
reasonably require, and each and every certificate, document, agreement or other
instrument, if any, formerly representing the Warrants shall be and shall be
deemed to be cancelled, void and of no further force and effect without any
further authorization, act or formality. The Company shall cause such
certificate or other instrument to be delivered or mailed to such holder to the
last address of each former Warrantholder, as registered in the books and
records of the Company.
|
5.8
|
Fractional
Securities
|
Any
fractional securities issuable pursuant to the Arrangement, including on
exercise or conversion, will be rounded down to the nearest whole
number.
ARTICLE
6
AMENDMENT
|
6.1
|
Amendment
|
|
|
(a)
|
The
Company reserves the right to amend, vary and/or supplement this Plan of
Arrangement at any time from time to time, whether before or after the
Interim Order or the Final Order, provided that any amendment, variation,
or supplement must be contained in a written document which is filed with
the Court and, if made following the Meeting, approved by the Court and
communicated to any Persons in the manner required by the
Court;
|
|
|
(b)
|
Any
amendment, variation or supplement to this Plan of Arrangement may be
proposed by the Company at any time prior to or at the Meeting without any
other prior notice or communication and, if so proposed and accepted by
the Persons voting at the Meeting, will become part of this Plan of
Arrangement for all purposes;
|
|
|
(c)
|
Any
amendment, variation or supplement to this Plan of Arrangement which is
approved or directed by the Court following the Meeting will be effective
only if it is consented to by the Company and
Newco;
|
|
|
(d)
|
Any
amendment, variation or supplement to this Plan of Arrangement may
be made following the Effective Time on the
Effective Date unilaterally by the Company, provided that it concerns a
matter which, in the reasonable opinion of Company, is of an
administrative nature required to better give effect to the implementation
of this Plan of Arrangement and is not adverse to the financial or
economic interests of any holder of shares of the Company or Newco;
and
|
|
|
(e)
|
This
Plan of Arrangement may be withdrawn by the Company prior to the Effective
Time.
|
|
6.2
|
Termination
|
Notwithstanding
any prior approvals by the Court or by Shareholders, the board of directors of
the Company may decide in their sole discretion not to proceed with the
Arrangement and to revoke the Arrangement resolution adopted at the Meeting at
any time prior to the Effective Time, without further approval of the Court or
the Shareholders.
- 10
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APPENDIX 1 TO THE PLAN OF
ARRANGEMENT
PART
27
SPECIAL
RIGHTS AND RESTRICTIONS ATTACHING
TO
THE COMMON SHARES
|
27.1
|
Voting.
|
The
holders of the Common Shares shall be entitled to receive notice of and to
attend all meetings of shareholders of the Company (other than a separate
meeting of the holders of another class of shares) and shall have one vote for
each Common Share held.
|
27.2
|
Dividends.
|
|
|
(a)
|
Subject
to the prior rights of the holders of the Class B Shares with respect to
the payment of dividends, the holders of the Common Shares shall be
entitled to receive and the Company shall pay thereon, as and when
declared by the Directors of the Company out of the monies of the Company
properly available for the payment of dividends, dividends in such amount
and in such form as the Directors of the Company may from time to time
determine. The Directors shall be entitled from time to time in their
discretion to declare dividends on any class of Common shares to the
exclusion of the other class of Common shares and
vice-versa.
|
|
|
(b)
|
No
dividends shall be declared or paid on the Common Shares unless the
Directors are satisfied that after the payment thereof the Company would
be able to redeem from the net assets of the Company all of the Class B
Shares then outstanding at their Aggregate Redemption Price (hereinafter
defined).
|
|
27.3
|
Participation
on Winding up.
|
In the
event of the liquidation, dissolution or winding up of the Company or any other
distribution of the assets of the Company among its shareholders for the purpose
of winding up its affairs, the holders of the Common Shares shall be entitled,
subject to the prior rights of the holders of the Class B Shares, to receive
equally, share for share, the remaining property and assets of the
Company.
PART
28
SPECIAL
RIGHTS AND RESTRICTIONS ATTACHING
TO THE CLASS A SHARES
|
28.1
|
Voting.
|
The
holders of the Class A Shares shall be entitled to receive notice of and to
attend all meetings of shareholders of the Company (other than a separate
meeting of the holders of another class of shares) and shall have one vote for
each Class A Share held.
|
28.2
|
Dividends.
|
|
|
(a)
|
Subject
to the prior rights of the holders of the Class B Shares with respect to
the payment of dividends, the holders of the Class A Shares shall be
entitled to receive and the Company shall pay thereon, as and when
declared by the Directors of the Company out of the monies of the Company
properly available for the payment of dividends, dividends in such amount
and in such form as the Directors of the Company may from time to time
determine. The Directors shall be entitled from time to time in their
discretion to declare dividends on any class of Common shares to the
exclusion of the other class of Common shares and
vice-versa.
|
|
|
(b)
|
No
dividends shall be declared or paid on the Class A Shares unless the
Directors are satisfied that after the payment thereof the Company would
be able to redeem from the net assets of the Company all of the Class B
Shares then outstanding at their Aggregate Redemption Price (hereinafter
defined).
|
|
28.3
|
Participation
on Winding up.
|
In the
event of the liquidation, dissolution or winding up of the Company or any other
distribution of the assets of the Company among its shareholders for the purpose
of winding up its affairs, the holders of the Class A Shares shall be entitled,
subject to the prior rights of the holders of the Class B Shares, to receive
equally, share for share, the remaining property and assets of the
Company.
- 2
-
PART
29
SPECIAL
RIGHTS AND RESTRICTIONS ATTACHING
TO
THE CLASS B SHARES
|
29.1
|
Voting.
|
The
holders of the Class B Shares shall be entitled to receive notice of or to
attend all meetings of shareholders of the Company (other than a separate
meeting of the holders of another class of shares) and shall have one vote for
each Class B Share held.
|
29.2
|
Dividends.
|
The
holders of the Class B Shares shall be entitled to receive
and the Company shall pay thereon, as and when declared by the Directors of the
Company out of the monies of the Company properly available for the payment of
dividends, dividends in such amount and in such form as the Directors may from
time to time determine.
|
29.3
|
Participation
on Winding up.
|
In the
event of the liquidation, dissolution or winding up of the Company or any other
distribution of the assets of the Company among its shareholders for the purpose
of winding up its affairs, the holders of the Class B Shares shall be entitled to receive
rateably the Aggregate Redemption Price (as hereinafter defined) per share,
before any assets of the Company shall be distributed to the holders of the
Common and Class A Shares. After payment to the holders of the Class B Shares of
the amounts so payable to them, they shall not be entitled to share in any
further distribution of the property and assets of the Company.
|
29.4
|
Adjustments
to Redemption Price of the Class B
Shares.
|
|
|
(a)
|
In
this Part:
|
|
|
(i)
|
“Affected Parties” means
collectively the Company and the person or persons against whom an
Authority issues or proposes to issue an
Assessment;
|
|
|
(ii)
|
“Aggregate Redemption Price”
means the Redemption Price of a Class B Share plus all accrued and
unpaid dividends thereon;
|
|
|
(iii)
|
“Assessment” means an
assessment or reassessment by an Authority with respect to the issuance of
the Class B Shares that imposes or would impose a liability for tax on the
basis of a determination or assumption that the fair market value of the
Assets (as at the Effective Date) received as consideration for the
issuance of the Class B Shares, less the value of any other consideration
paid by the Company for such Assets, is different than the fair market
value of the Class B Shares issued
therefor,
|
|
|
(iv)
|
“Assets” means, with
respect to the Class B Shares, the asset or assets
which the Company purchased from the Vendors in consideration for the
issuance of the Class B
Shares;
|
|
|
(v)
|
“Authority” means the
Federal Minister of National Revenue, Canada Revenue Agency or other
competent taxing authority;
|
|
|
(vi)
|
“Effective Date” means,
with respect to the Class B Shares, the day on which the Company purchased
the Assets from the Vendors;
|
- 3
-
|
|
(vii)
|
“Redemption Price” means
with respect to a Class B Share, the amount per share
which is determined by the Directors to be equal to the amount obtained
when the difference between the aggregate fair market value of the assets
received by the Company as consideration for the issuance of such Class B
Shares and the value of any non-share consideration paid by the Company as
partial or total consideration for such assets is divided by the total
number of Class B Shares issued as consideration for such assets; provided
that the Redemption Price of the Class B Shares shall be subject to
adjustment in accordance with this Part;
and
|
|
|
(viii)
|
“Vendors” means the
shareholder or shareholders to whom Class B Shares were issued as partial
or total consideration for the Assets, any one of whom is a “Vendor”.
|
|
|
(b)
|
If
at any time or from time to time after the Effective
Date:
|
|
|
(i)
|
an
Authority proposes to issue or issues an Assessment and the fair market
value of the Assets or the fair market value of the Class B Shares assumed
therein is accepted as correct by the Affected Parties;
or
|
|
|
(ii)
|
the
Assessment is disputed and a final settlement is reached with the
Authority by the Affected Parties as to the fair market value of the
Assets or the fair market value of the Class B Shares;
or
|
|
|
(iii)
|
a
court of competent jurisdiction determines that the fair market value of
the Assets was different than the fair market value of the Class B Shares
as at the Effective Date and no appeal from such determination has been
filed and the relevant appeal period has expired;
or
|
|
|
(iv)
|
a
Vendor or the Company informs the other in writing that the fair market
value of the Assets was different than the fair market value of the Class
B Shares as at the Effective Date and the Vendors and the Company agree
that such different amount is
correct,
|
then the
fair market value of the Assets or of the Class B Shares, as the case may be,
shall be deemed to be the value so determined and the Redemption Price of the
Class B Shares shall be increased or decreased so that the fair market value of
the Class B Shares shall be equal to the fair market value of the Assets, less
the value of any other consideration paid by the Company for the
Assets.
|
|
(c)
|
If
some or all of the Class B Shares issued to the Vendors have been redeemed
by the Company prior to the date of a downward adjustment of the then
Redemption Price of the Class B Shares, the shareholder who held such
shares at the time of their redemption shall forthwith pay to the Company,
for each such Class B Share so redeemed, an amount equal to the difference
between the Redemption Price of the Class B Shares at the time of
redemption and the Redemption Price of the Class B Shares so adjusted.
Such shareholder and the Company may agree that the total amount so
payable to the Company may be paid by a corresponding downward adjustment
of the Redemption Price of the Class B Shares of any remaining Class B
Shares held by such shareholder or in cash or by the assumption or
issuance of debt or any combination
thereof
|
|
|
(d)
|
If
some or all of the Class B Shares issued to the Vendors have been redeemed
by the Company prior to the date of an upward adjustment of the then
Redemption Price of the Class B Shares, the Company shall forthwith pay to
the shareholder who held such shares at the time of their redemption, for
each such Class B Share so redeemed, an amount equal to the difference
between the Redemption Price of the Class B Shares at the time of
redemption and the Redemption Price of the Class B Shares so adjusted.
Such shareholder and the Company may agree that the Company may pay the
total amount so payable by a corresponding upward adjustment of the
Redemption Price of the Class B Shares of any remaining Class B Shares
held by such shareholder or in cash or by the assumption or issuance of
debt.
|
- 4
-
|
|
(e)
|
The
holders of Class B Shares from time to time on which dividends were
declared in an amount stated to have been determined in relation to the
Redemption Price of the Class B Shares shall repay to the Company an
amount in cash equal to the amount of the excess dividends declared on
such holder’s shares before the date of a downward adjustment of the
Redemption Price of the Class B Shares. The Company shall pay to the
holders of Class B Shares from time to time on which dividends were
declared in an amount stated to have been determined in relation to the
Redemption Price of the Class B Shares an amount in cash equal to the
deficiency in the amount of the dividends declared on such holder’s shares
before the date of an upward adjustment of the Redemption Price of the
Class B Shares.
|
|
|
(f)
|
Any
adjustments pursuant to the foregoing provisions shall be retroactive
nunc pro tunc to
the date of the issuance of the Class B Shares and to the date of the
first and each subsequent redemption of Class B
Shares.
|
|
29.5
|
Redeemable
by the Company.
|
|
|
(a)
|
The
Company may, upon giving notice as provided herein, redeem at any time the
whole, or from time to time, any part of the Class B Shares then
outstanding on payment of the Aggregate Redemption Price for each share to be
redeemed.
|
|
|
(b)
|
If
only part of the Class B Shares is at any time to be redeemed, the shares
to be redeemed shall be selected by the Directors in their absolute
discretion and need not be redeemed pro rata based on the shareholdings of
such class.
|
|
|
(c)
|
If
the Company desires to redeem all or any part of the Class B Shares, the
Company shall before the date specified for redemption (the “Redemption Date”), mail to each person
who, at the date of mailing, is a registered holder of the Class B Shares
to be redeemed a written notice (the “Redemption Notice”)
thereof.
|
|
|
(d)
|
The
Redemption Notice shall be forwarded by registered, certified or first
class mail, postage prepaid and addressed to each such holder at the
holder’s address as it appears on the books of the Company. If the address
of any such holder does not appear on the books of the Company, the
Redemption Notice shall be mailed to the last known address of such
holder. The accidental failure to mail the Redemption Notice to one or
more such holders shall not affect the validity of the
redemption.
|
|
|
(e)
|
The
Redemption Notice shall set out the Aggregate Redemption Price, the
Redemption Date and, if only part of the Class B Shares held by such
holder is to be redeemed, the number thereof so
to be redeemed.
|
|
|
(f)
|
On
the Redemption Date, the Company shall pay, or cause to be paid, to or to
the order of the registered holders of the Class B Shares to be redeemed,
the Aggregate Redemption Price for each such share on presentation and
surrender, at the Registered Office of the Company or any other place(s)
in British Columbia designated in the Redemption Notice, of the
certificate(s) for the Class B Shares called for redemption. Such Class B
Shares shall thereupon be deemed to be redeemed and shall be
cancelled.
|
|
|
(g)
|
If
a part only of the shares represented by any certificate are redeemed, a
new certificate for the balance shall be issued at the expense of the
Company.
|
|
|
(h)
|
Payment
of the Aggregate Redemption Price (less any amount required by law to be
withheld by the Company) for the Class B Shares to be redeemed shall be
made as determined by the Directors including by cheque payable to the
holder thereof at par at any branch of the Company’s bankers in Canada.
Such payment and cheque shall discharge all liability of the Company for
the Aggregate Redemption Price, to the extent of the amount represented
thereby, unless such cheque is not paid on due
presentation.
|
- 5
-
|
|
(i)
|
From
and after the Redemption Date the Class B Shares called for redemption
shall cease to be entitled to receive dividends (as applicable) and shall
not be entitled to exercise any of the rights of shareholders in respect
thereof unless payment of the Aggregate Redemption Price shall not be made
upon presentation of certificate(s) in accordance with the foregoing
provisions, in which case the rights of the holders shall remain
unaffected.
|
|
|
(j)
|
The
Company shall have the right, at any time on or after the date of the
mailing of the Redemption Notice, to deposit the Aggregate Redemption
Price of the Class B Shares called for redemption, or of such of the Class
B Shares which are represented by certificate(s) which have not at the
date of such deposit been surrendered by the holders in connection with
such redemption, to a special account maintained by the Company with any
chartered bank or trust Company in British Columbia designated by the
Company in the Redemption Notice (the “Trustee”) to be paid without interest to
or to the order of the respective holders of such Class B Shares called
for redemption upon presentation and surrender to the Trustee of the
certificate(s) representing such shares. Upon such deposit being made, the
Class B Shares in respect of which such deposit shall have been made shall
thereupon be deemed to be redeemed and shall be cancelled. The rights of
the holders thereof after such deposit shall be limited to receiving
without interest their proportionate part of the total amount so deposited
against presentation and surrender to the Trustee of the certificate(s)
representing the Class B Shares to be redeemed. Any interest allowed on
any such deposit shall belong to the
Company.
|
|
|
(k)
|
Notwithstanding
the foregoing, the holders of the Class B Shares to be redeemed may waive
notice of any such redemption by written
instrument(s).
|
|
|
(l)
|
Notwithstanding
anything contained in this Part, the Company shall be under no obligation
to redeem any Class B Shares to the extent that such redemption would, in
the reasonable opinion of the Directors, be in violation of the laws of
the Province of British Columbia or any other applicable
law.
|
|
|
(m)
|
Any
redemption monies that are represented by a cheque which has not been
presented to the Company’s bankers for payment or that otherwise remains
unclaimed (including monies held on deposit to a special account) for a
period of six years from the Redemption Date shall be forfeited to the
Company.
|
|
29.6
|
Retractable
by the Holder.
|
|
|
(a)
|
Any
holder of Class B Shares may, at the holder’s option, at any time after
giving notice as provided herein, require the Company to redeem at any
time the whole or from time to time any part of the Class B Shares held by
the holder by payment of the Aggregate Redemption Price for each share to
be redeemed.
|
|
|
(b)
|
If
a holder of Class B Shares desires the Company to redeem any of the
holder’s Class B Shares, the holder shall, at least 60 days before the
date specified for redemption (the “Retraction Date”), give to the Company, at its
Registered Office, written notice thereof (the “Retraction Notice”).
|
|
|
(c)
|
The
Retraction Notice shall set out the Retraction Date and, if only part of
the Class B Shares held by such shareholder is to be redeemed, the number
thereof so to be redeemed.
|
|
|
(d)
|
On
the Retraction Date, the Company shall pay or cause to be paid, to the
order of the registered holder of the Class B Shares to be redeemed, the
Aggregate Redemption Price for each such share, on presentation and
surrender at the Registered Office of the Company of the certificate(s)
for such shareholder’s Class B Shares to be
redeemed.
|
- 6
-
|
|
(e)
|
Payment
of the Aggregate Redemption Price (less any amount required by law to be
withheld by the Company) for the Class B Shares to be redeemed shall be
made as determined by the Directors including by cheque payable to the
holder thereof at par at any branch of the Company’s bankers in Canada.
Such payment and cheque shall discharge all liability of the Company for
the Aggregate Redemption Price, to the extent of the amount represented
thereby, unless such cheque is not paid on due presentation. Such Class B
Shares shall thereupon be deemed to be redeemed and shall be
cancelled.
|
|
|
(f)
|
From
and after the Retraction Date, the Class B Shares so redeemed shall cease
to be entitled to receive dividends (as applicable) and shall not be
entitled to exercise any of the rights of shareholders in respect thereof
unless payment of the Aggregate Redemption Price shall not be made upon
presentation of certificate(s) in accordance with the foregoing
provisions, in which case the rights of the holder shall remain
unaffected.
|
|
|
(g)
|
If
a part only of the shares represented by any certificate are redeemed, a
new certificate for the balance shall be issued at the expense of the
Company.
|
|
|
(h)
|
If
a holder of Class B Shares gives a Retraction Notice but fails to present
the certificate(s) for such holder’s Class B Shares to be redeemed on the
Retraction Date, the Retraction Notice given by such holder shall be null
and void and the Company shall have no obligation to make the redemption
called for in the Retraction Notice. Notwithstanding the foregoing, the
Company shall have the right to proceed with the redemption
notwithstanding such failure. If the Company elects to proceed, the
Company shall deposit the Aggregate Redemption Price for the Class B
Shares to be redeemed in a special account maintained by the Company with
a Trustee, to be paid without interest to or to the order of the holder of
such Class B Shares upon presentation and surrender to the Trustee of the
certificate(s) representing such shares. Upon such deposit being made, the
Class B Shares in respect of which such deposit shall have been made shall
thereupon be deemed to be redeemed and shall be cancelled. The rights of
the holder thereof after such deposit shall be limited to receiving
without interest the amount so deposited against presentation and
surrender to the Trustee of the certificate(s) representing the Class B
Shares to be redeemed. Any interest allowed on any such deposit shall
belong to the Company.
|
|
|
(i)
|
If
the Company shall fail to redeem any Class B Shares required to be
redeemed by it within 30 days of the Retraction Date, then until such time
as the Company shall have redeemed all such shares so called for
redemption, the dividend payable to the holders of the Class B Shares to
be redeemed shall thereafter be preferential and cumulative computed from
the Retraction Date.
|
|
|
(j)
|
Notwithstanding anything contained
in this Part, the Company shall be under no obligation to redeem any Class
B Shares to the extent that such redemption would, in the reasonable
opinion of the Directors, be in violation of the laws of the Province of
British Columbia or any other applicable
law.
|
|
|
(k)
|
Any
redemption monies that are represented by a cheque which has not been
presented to the Company’s bankers for payment or that otherwise remains
unclaimed (including monies held on deposit to a special account) for a
period of six years from the Retraction Date shall be forfeited to the
Company.
|
|
29.7
|
Specified
Amount.
|
For
purposes of subsection 191(4) of the Income Tax
Act (Canada), the specified amount in respect of the Class B Shares shall
be equal to the Redemption Price, which shall be determined by the Directors at
the time of the issuance of the Class B shares.
- 7
-
APPENDIX 2 TO THE PLAN OF
ARRANGEMENT
The Directors of Extorre
Gold Mines Limited.
Xxxxx
Xxxxxxxx
Yale
Xxxxxxx
Xxxxx
Montpellier
Xxxxxx
Xxxxxxxx
Xxxxxxx
Xxxxxxxx
Xxxx
Xxxx
- 8
-
APPENDIX 3 TO THE PLAN OF
ARRANGEMENT
BY-LAW
NO.1 OF
EXTORRE
GOLD MINES LIMITED
(the
“Corporation”)
PART
1
INTERPRETATION
|
1.01
|
Definitions
|
In this
by-law, unless the context otherwise requires:
“Act”
means the Canada Business Corporations Act RSC 1985, c. C-44 and the regulations
enacted pursuant to it and any statute and regulations that may be substituted
for them, in each case, as amended from time to time;
“articles”
means the articles, as that term is defined in the Act, of the Corporation, as
amended or restated from time to time;
“auditor”
means the auditor of the Corporation;
“board”
means the board of directors of the Corporation;
“by-law”
means a by-law of the Corporation;
“Corporation”
means Extorre Gold Mines Limited;
“director”
means a director of the Corporation;
“electronic
document” means, except in the case of a statutory declaration or affidavit
required under the Act, any form of representation of
information or of concepts fixed in any medium in or by electronic, optical or
other similar means and that can be read or perceived by a person or by any
means;
“officer”
has the meaning set forth in the Act but reference to any specific officer is to
the individual holding that office of the Corporation;
“proxyholder”
means a person holding a valid proxy for a shareholder;
“shareholder”
means a shareholder of the Corporation; and
“voting
person” means, in respect of a meeting of shareholders, a shareholder entitled
to vote at that meeting, a duly authorized representative of a shareholder
entitled to vote at the meeting or a proxyholder entitled to vote at that
meeting.
Terms
defined in the Act and used herein, unless otherwise defined herein or the
context otherwise requires, shall have the same meaning herein as in the
Act.
|
1.02
|
Number,
Gender and Headings
|
In this
by-law, unless the context otherwise requires, words in the singular include the
plural and vice-versa and words in one gender include all genders. The insertion
of headings in this by-law and its division into Parts, Sections and other
subdivisions are for convenience of reference only, and shall not affect the
interpretation of this by-law.
- 9
-
|
1.03
|
By-law
Subordinate to Other Documents
|
This
by-law is subordinate to, and should be read in conjunction with, the Act, the
articles and any unanimous shareholder agreement of the
Corporation.
|
1.04
|
Computation
of Time
|
The
computation of time and any period of days shall be determined in accordance
with the Act and the provisions of the Interpretation Act (Canada) and any
statute that may be substituted for it, as amended from time to
time.
PART
2
DIRECTORS
|
2.01
|
Notice
of Meeting
|
Any
director may call a meeting of the board by giving notice stating the time and
place of the meeting to each of the directors. Except as otherwise required by
the Act, such notice need not specify the purpose of or the business to be
transacted at the meeting. Notices of board meetings shall be given in
accordance with Section 7.01 no less than 48 hours before the time of the
meeting, except that notices sent by mail shall be sent no less than 5 days
before the day of the meeting.
The board
may appoint, by resolution, dates, times and places for regular meetings of the
board. A copy of any such resolution shall be given to each director forthwith
after being passed, but no other notice is required for any such meeting except
where the Act requires the purpose of or the business to be transacted at a
meeting to be specified.
|
2.02
|
Meetings
Without Notice
|
A meeting
of the board may be held without notice immediately following the first or any
annual meeting of shareholders.
|
2.03
|
Place
of Meeting
|
A meeting
of the board may be held at any place within or outside Canada.
|
2.04
|
Quorum
for Board Meetings
|
At any
meeting of the board, a quorum for the transaction of business shall be a
majority of the number of directors in office from time to time.
The board
shall not transact business at a meeting of directors unless the minimum number
of resident Canadian directors required by the Act is present.
|
2.05
|
Participation
by Communications Facility
|
A
director may, in accordance with the Act and if all directors consent,
participate in a meeting of the board or of a committee of the board by means of
a telephonic, electronic or other communication facility that permits all
participants to communicate adequately with each other during the meeting. A
director participating in such a meeting shall be deemed to be present at that
meeting.
|
2.06
|
Chair
of Board Meetings
|
The chair
of the board shall preside as chair of all meetings of the board. If there is no
chair of the board or if the chair is not present or is unwilling to act as
chair of a board meeting, then the president of the Corporation, if present, and
a director and willing to act, shall preside as chair of the meeting. In any
other case, the directors present at the meeting shall choose a director to
preside as chair of the meeting.
- 10
-
|
2.07
|
Votes
at Board Meetings
|
Each
director present at a meeting of the board shall have 1 vote on each motion
arising. Motions arising at meetings of the board shall be decided by a majority
of the votes cast. The chair of the meeting shall have a second or casting
vote.
|
2.08
|
Committees
|
Subject
to the provisions of the Act and unless otherwise determined by the board, each
committee of the board shall have power to fix its quorum at not less than the
majority of its members, to elect its chair and to regulate its
procedures.
|
2.09
|
Officers
|
Each
officer shall hold office at the pleasure of the board. Any officer may,
however, resign at any time by giving notice to the Corporation.
PART
3
MEETINGS
OF SHAREHOLDERS
|
3.01
|
Notice
of Shareholders’ Meetings
|
The board
may call a meeting of shareholders by causing notice of the time, place and,
when required by the Act, purposes of the meeting to be given to each
shareholder entitled to vote at the meeting, each director and the auditor.
Subject to any applicable securities law or policy, such notice shall be given
no less than 21 days and no more than 60 days before the meeting if the
Corporation is a distributing corporation (as defined in the Act) or no less
than 10 days and no more than 60 days before the meeting if the Corporation is
not a distributing corporation.
|
3.02
|
Quorum
at Meetings of Shareholders
|
A quorum
at meetings of shareholders consists of one or more voting persons present and
authorized to cast in the aggregate not less than one-twentieth of the total
votes attaching to all shares carrying the right to vote at that
meeting.
|
3.03
|
Chair
of Shareholder Meetings
|
The chair
of the board shall preside as chair of all meetings of shareholders. If there is
no chair of the board or the chair of the board is not present or is unwilling
to act as chair of a shareholder meeting, then the president of the Corporation
shall preside as chair of the meeting if present and willing to act. In any
other case, the directors present shall choose one of their number to be the
chair of the meeting.
|
3.04
|
Voting
|
Unless
the chair of a meeting of shareholders directs a ballot or a voting person
demands one, each motion shall be voted upon by a show of hands. Each voting
person has 1 vote in a vote by show of hands. A ballot may be directed or
demanded either before or after a vote by show of hands. If a ballot is taken, a
prior vote by show of hands has no effect. A ballot so directed or demanded
shall be taken in such manner as the chair of the meeting shall direct. If a
ballot is taken, each voting person shall be entitled with respect to each share
which he is entitled to vote at the meeting upon the motion, to one vote or such
other number of votes as may be provided by the articles, and the result of the
ballot so taken shall be the decision of the shareholders upon the said motion.
Subject to compliance with the Act, any vote at a meeting of shareholders may be
taken in whole or in part by means of a telephonic, electronic or other
communication facility that the Corporation has made available for that purpose.
Unless a ballot is directed or demanded, an entry in the minutes of a meeting to
the effect that the chair of the meeting declared a resolution to be carried or
defeated is, in the absence of evidence to the contrary, proof of the fact
without proof of the number or proportion of the votes recorded in favour of or
against the resolution.
- 11
-
|
3.05
|
Scrutineers
|
The chair
of a meeting of shareholders may appoint for that meeting 1 or more scrutineers,
who need not be voting persons.
|
3.06
|
Who
May Attend Shareholders’ Meeting
|
The only
persons entitled to attend a meeting of shareholders are voting persons, the
directors, the auditor and the president, if any, as well as others permitted by
the chair of the meeting.
|
3.07
|
Participation
By Communication Facility
|
Any
person entitled to attend a meeting of shareholders may participate in the
meeting in accordance with the Act by means of a telephonic, electronic or other
communication facility made available by the Corporation that permits all
participants to communicate adequately with each other during the meeting and a
person participating in a meeting by such means is deemed to be present at the
meeting. A meeting of the shareholders called by either the directors or the
shareholders may be held entirely by means of such a telephonic, electronic or
other communications facility that permits all participants to communicate
adequately which each other during the meeting if the directors or shareholders
calling the meeting so determine.
|
3.08
|
Adjournments
|
The chair
of the meeting may and shall, if so directed by the meeting, adjourn the meeting
form time to time and from place to place but no business shall be transacted at
the adjourned meeting other than the business left unfinished at the meeting from which the
adjournment took place.
PART
4
SECURITY
CERTIFICATES, PAYMENTS
|
4.01
|
Certificates
|
Security
certificates shall be in such form as the board may approve or the Corporation adopt. The president or
the board may order the cancellation of any security certificate that has become
defaced and the issuance of a replacement certificate for it when the defaced
certificate is delivered to the Corporation or to a transfer agent
or branch transfer agent of the Corporation.
|
4.02
|
Cheques
|
Any
amount payable in cash to shareholders (including dividends payable in cash) may
be paid by cheque drawn on any of the Corporation’s bankers to the order of each
registered holder of shares of the class or series in respect of which such
amount is to be paid. Cheques may be sent by ordinary mail, postage prepaid, to
each such registered holder at that holder’s address as shown in the records of
the Corporation, unless that holder otherwise directs in writing. The mailing of
a cheque as aforesaid shall satisfy and discharge all liability for the
applicable dividend or other payment to the extent of the sum represented by
such cheque plus the amount of any tax which the Corporation is required to and
does withhold, unless such cheque is not paid on due
presentation.
- 12
-
|
4.03
|
Cheques
to Joint Shareholders
|
Cheques
payable to joint shareholders shall be made payable to the order of all such
joint shareholders unless such joint shareholders direct otherwise. Such cheques
may be sent to the joint shareholders at the address appearing on the records of
the Corporation in respect of that joint holding, to the first address so
appearing if there is more than one, or to such other address as those joint
shareholders direct in writing.
|
4.04
|
Non-Receipt
of Cheques
|
The
Corporation shall issue a replacement cheque in the same amount to any person
who does not receive a cheque sent as provided in this by-law, if that person
has satisfied the conditions regarding indemnity, evidence of non-receipt and
title set by the board from time to time, either generally or for that
particular case.
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4.05
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Currency
of Dividends
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Dividends
or other distributions payable in cash may be paid to some shareholders in
Canadian currency and to other shareholders in equivalent amounts of a currency
or currencies other than Canadian currency. The board may declare dividends or
other distributions in any currency or in alternative currencies and make such
provisions as it deems advisable for the payment of such dividends or other
distributions.
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4.06
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Lien
for Indebtedness
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If the
articles provide that the Corporation shall have a lien on shares registered in
the name of a shareholder indebted to the Corporation, such lien may be
enforced, subject to any other provisions of the articles, by the sale of the
shares thereby affected or by any other action, suit, remedy or proceeding
authorized or permitted by law or by equity and, pending such enforcement, the
transfer of all or any part of such shares may be refused.
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4.07
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Interest
Fractions
|
No
dividend or other distribution shall bear interest against the Corporation.
Where the dividend or other distribution to which a shareholder is entitled
includes a fraction of a cent, such fraction shall be disregarded and such
payment shall be deemed payment in full.
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4.08
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Fractional
Security or Property
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If any
dividend or other distribution results in any shareholder being entitled to a
fractional part of a security or property, the Corporation may pay such
shareholder in place of that fractional part the cash equivalent thereof as
determined by the board or may carry out the distribution and adjust the rights
of the shareholders on any basis the board considers appropriate.
PART
5
SIGNATORIES,
INFORMATION
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5.01
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Signatories
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Except
for documents executed in the usual and ordinary course of the Corporation’s
business, which may be signed by any officer or employee of the Corporation
acting within the scope of his or her authority, the following are the only
persons authorized to sign any document on behalf of the
Corporation:
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(a)
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any
individual appointed by resolution of the board to sign the specific
document, that type of document or documents generally on behalf of the
Corporation; or
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(b)
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any
director or any officer appointed to office by the
board.
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Any
document so signed may, but need not, have the corporate seal of the Corporation
applied, if there is one.
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5.02
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Facsimile
Signatures
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The
signature of any individual authorized to sign on behalf of the Corporation may,
if specifically authorized by resolution of the board, be written, printed,
stamped, engraved, lithographed or otherwise mechanically reproduced. Anything
so signed shall be as valid as if it had been signed manually, even if that
individual has ceased to hold office when anything so signed is issued or
delivered, until revoked by resolution of the board.
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5.03
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Restriction
on Information Disclosed
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Except as
required by the Act or authorized by the board, no shareholder is entitled by
virtue of being a shareholder to disclosure of any information, document or
records respecting the Corporation or its business.
PART
6
PROTECTION
AND INDEMNITY
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6.01
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Transactions
with the Corporation
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No
director or officer shall be disqualified by reason of being a director or
officer of the Corporation from, or be required to vacate his position as a
director or officer by reason of, holding any other office, employment or other
position with or having any pecuniary interest with respect to the Corporation
or any other body corporate or contracting with or being otherwise in any way
directly or indirectly interested in or concerned with any contract, transaction
or arrangement made or proposed to be made with the Corporation or being a
director or officer or acting in a similar capacity of, or having any interest
in, another party to such contract, transaction or arrangement. No such
contract, transaction or arrangement shall be void or voidable for any such
reason and no director or officer shall be liable to account to the Corporation
or others for any profit arising from any such office, employment or other
position or pecuniary interest or realized in respect of any such contract,
transaction or arrangement, except in all cases as otherwise provided in the
Act.
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6.02
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Limitation
of Liability
|
Subject
to any applicable statutory provisions, no director or officer and no other
individual who acts at the Corporation’s request as a director or officer, or in
a similar capacity, of another entity, shall be liable for:
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(a)
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the
acts, receipts, neglects or defaults of any other
person;
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(b)
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joining
in any receipt or other act for
conformity;
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(c)
|
any
loss, damage or expense to the Corporation or other entity arising from
the insufficiency or deficiency of title to any property acquired by or on
behalf of the Corporation or other
entity;
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(d)
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the
insufficiency or deficiency of any security in or upon which any monies of
the Corporation or other entity are
invested;
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(e)
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any
loss, damage or expense arising from the bankruptcy, insolvency, act or
omission of any person with whom any monies, securities or other property
of the Corporation or other entity are lodged or
deposited;
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(f)
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any
loss, damage or expense occasioned by any error of judgment or oversight;
or
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(g)
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any
other loss, damage or expense related to the performance or
non-performance of the duties of that individual’s
office.
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6.03
|
Contracts
on Behalf of the Corporation
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Subject
to the Act, any contract entered into, or action taken or omitted, by or on
behalf of the Corporation shall, if duly approved by a resolution of the
shareholders, be deemed for all purposes to have had the prior authorization of
the shareholders.
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6.04
|
Indemnity
of Directors and Officers
|
Subject
to the limitations contained in the Act, but without limiting the right of the
Corporation to indemnify any individual under the Act or otherwise to the full
extent permitted by law, the Corporation:
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(a)
|
shall
indemnify each director or officer or former director or officer and each
other individual who acts or has acted at the Corporation’s request as a
director or officer, or in a similar capacity, of another entity (and each
such individual’s respective heirs and personal representatives), against
all costs, charges and expenses, including an amount paid to settle an
action or satisfy a judgment, reasonably incurred in respect of any civil,
criminal, administrative, investigative or other proceeding in which the
individual is involved because of that association with the Corporation or
other entity, provided:
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(i)
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the
individual acted honestly and in good faith with a view to the best
interests of the Corporation or, as the case may be, to the best interests
of the other entity for which the individual acted as a director or
officer or in a similar capacity at the Corporation’s request;
and
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(ii)
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in
the case of a criminal or administrative action or proceeding that s
enforced by a monetary penalty, the individual had reasonable grounds for
believing that the individual’s conduct was lawful;
and
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(b)
|
shall
advance monies to a director, officer or other individual for the costs,
charges and expenses of a proceeding referred to in Section 6.04(a) in
accordance with the Act.
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Notwithstanding
the foregoing, any such indemnity or advance of monies in respect of an action
referred to in Section 6.04(a) by or on behalf of the Corporation or other
entity in respect of which an individual has acted as director or officer or in
a similar capacity at the request of the Corporation to procure judgment in its
favour shall be subject to approval of a court.
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6.05
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Indemnities
Not Limiting
|
The
provisions of this Article 6 shall be in addition to and not in substitution for
or limitation of any rights, immunities and protections to which a person is
otherwise entitled.
PART
7
NOTICES
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7.01
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Procedure
for Giving Notices
|
Any
notice (which term includes any communication or document) to be given pursuant
to the Act, the articles, the by-laws or otherwise to a
shareholder or other securityholder of the Corporation, director, officer or
auditor shall be sufficiently given if delivered personally to the person to
whom it is to be given or if delivered to the person’s address as shown in the
records of the Corporation or mailed to the person at such address by ordinary
mail, postage prepaid, or, if the person consents, provided by electronic
document in accordance with the Act. Notice shall not be sent by mail if there
is any general interruption of postal services in the municipality in which or
to which it is mailed. Any notice so delivered shall be deemed to have been
received when it is delivered personally or at the address as aforesaid. Any
such notice mailed or provided by electronic document as aforesaid shall be
deemed to have been received at the time specified in the Act.
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7.02
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Notices
to Successors in Title
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Notice to
a shareholder or other securityholder as aforesaid is sufficient notice to each
successor in title to that shareholder or other
securityholder until the name and address of that successor have been entered on
the records of the
Corporation.
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7.03
|
Notice
to Joint Securityholders
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Notice to
one joint securityholder is sufficient notice to all of them. Such notice shall
be addressed to all such joint securityholders and
sent to the address for them shown in the records of the Corporation, or to the
first such address if there is more than one.
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7.04
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Facsimile
Signatures on Notices
|
The
signature on any notice or other communication or document to be sent by the
Corporation may be written, printed, stamped, engraved, lithographed or
otherwise mechanically reproduced.
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7.05
|
Omission
of Notice Does Not Invalidate
Actions
|
All
actions taken at a meeting in respect of which a notice has been given shall be
valid even if.
|
(a)
|
by
accident, notice was not given to any
person;
|
|
(b)
|
notice
was not received by any person; or
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|
(c)
|
there
was an error in a notice that did not affect the substance of the
notice.
|
|
7.06
|
Waiver
of Notice
|
Any
person entitled to notice under the Act, the articles or the by-laws may waive
that notice. Waiver, either before or after the event referred to in the notice,
shall cure any defect in giving that notice to such person.
PART
8
REPEAL
OF FORMER BY-LAWS
|
8.01
|
Former
By-laws May be Repealed
|
The board
may repeal one or more by-laws by passing a by-law that contains provisions to
that effect.
BY-LAW
NO.2
A
BY-LAW RESPECTING THE BORROWING OF MONEY
PART
1
1.01 In
addition to, and without
limiting such other powers which the Corporation may by law possess, the
Directors of the Corporation may without authorization of the
shareholders:
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(a)
|
borrow
money upon the credit of the
Corporation;
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|
(b)
|
issue,
reissue, sell, pledge or hypothecate debt obligations of the
Corporation;
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(c)
|
give
a guarantee or indemnity on behalf of the Corporation to secure
performance of an obligation of any person;
and
|
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|
(d)
|
mortgage,
hypothecate, pledge or otherwise create a security interest in all or any
property of the Corporation, owned or subsequently acquired, to secure any
obligation of the Corporation.
|
The words
“debt obligation” as used in this paragraph mean a bond, debenture, note or
other evidence of indebtedness or guarantee of the Corporation, whether secured
or unsecured.
1.02 The
Directors may from time to time by resolution delegate the powers conferred on
them by paragraph 1 of this by-law to a Director, a committee of Directors or an
officer of the Corporation.
1.03 The
powers hereby conferred shall be deemed to be in supplement of and not in
substitution for any powers to borrow money for the purposes of the Corporation
possessed by its Directors or officers independently of a borrowing
By-law.
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