EXHIBIT 99.4
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FIRST AMENDMENT
DATED AS OF MAY 7, 2007
TO THE
COMBINATION AGREEMENT AND
AGREEMENT AND PLAN OF MERGER
DATED AS OF JANUARY 29, 2007
AMONG
ABITIBIBOWATER INC. (FORMERLY ALPHA-BRAVO HOLDINGS INC.),
ABITIBI-CONSOLIDATED INC.,
BOWATER INCORPORATED,
ALPHA-BRAVO MERGER SUB INC.,
AND
BOWATER CANADA INC.
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This FIRST AMENDMENT TO THE COMBINATION AGREEMENT AND AGREEMENT AND
PLAN OF MERGER is dated as of May 7, 2007 (this "AMENDMENT") and is made among
ABITIBIBOWATER INC. (formerly Alpha-Bravo Holdings Inc.), a Delaware
corporation ("PARENT"), ABITIBI-CONSOLIDATED INC., a corporation amalgamated
under the laws of Canada ("ACI"), BOWATER INCORPORATED, a Delaware corporation
("BOWATER"), ALPHA-BRAVO MERGER SUB INC., a Delaware corporation ("MERGER
SUB"), and BOWATER CANADA INC., a corporation incorporated under the laws of
Canada ("EXCHANGECO").
WHEREAS, Parent, ACI, Bowater, Merger Sub and ExchangeCo entered into
that certain Combination Agreement and Agreement and Plan of Merger, dated as
of January 29, 2007 (the "COMBINATION AGREEMENT");
WHEREAS, all of the parties to the Combination Agreement desire to
amend the Combination Agreement as set forth below;
NOW, THEREFORE, in consideration of the representations, warranties,
covenants and agreements contained in the Combination Agreement, and subject to
the conditions set forth therein, the parties hereto agree as follows:
ARTICLE I
AMENDMENT
SECTION 1.01 Exhibit B to the Combination Agreement is hereby deleted in
its entirety and replaced with the exhibit attached hereto as Schedule A.
SECTION 1.02 In all other respects, the Combination Agreement shall remain
unamended and in full force and effect.
ARTICLE II
GENERAL PROVISIONS
SECTION 2.01 All capitalized terms used herein and not herein defined
shall of the respective meanings ascribed thereto in the Combination Agreement.
SECTION 2.02 This Amendment may be executed in one or more counterparts
(including by facsimile), all of which shall be considered one and the same
agreement and shall become effective when one or more counterparts have been
signed by each of the parties and delivered to the other parties.
SECTION 2.03 Without giving effect to any choice or conflict of law
provision or rule (whether of the State of New York or any other jurisdiction)
that would cause the application of laws of any other jurisdictions other than
those of the State of New York, this Amendment shall be deemed to be made in
and in all respects shall be interpreted, construed and governed by and in
accordance with, and any disputes or litigation arising out of or relating,
directly or indirectly, to this Amendment shall be interpreted, construed and
governed by and in accordance with, the Laws of the State of New York, except
to the extent mandatorily governed by the Laws of Canada or the Laws of the
province of Quebec or the internal laws of the State of Delaware, as
applicable.
[SIGNATURE PAGES IMMEDIATELY FOLLOW]
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be signed by their respective officers hereunto duly authorized, all as of the
date first written above.
ABITIBIBOWATER INC.
By: /s/ Xxxx X. Xxxxxx
---------------------------------------
Name: Xxxx X. Xxxxxx
Title: Chairman
By: /s/ Xxxxx X. Xxxxxxxx
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Name: Xxxxx X. Xxxxxxxx
Title: President
ABITIBI-CONSOLIDATED INC.
By: /s/ Xxxx X. Xxxxxx
---------------------------------------
Name: Xxxx X. Xxxxxx
Title: President and Chief Executive
Officer
By: /s/ Xxxxxx Xxxxxxx
---------------------------------------
Name: Xxxxxx Xxxxxxx
Title: Senior Vice-President, Corporate
Development and Chief Financial
Officer
BOWATER INCORPORATED
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: President and Chief Executive
Officer
ALPHA-BRAVO MERGER SUB INC.
By: /s/ Xxxx X. Xxxxxx
---------------------------------------
Name: Xxxx X. Xxxxxx
Title: Chairman
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: President
BOWATER CANADA INC.
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Director
SCHEDULE A
EXHIBIT B
FORM OF PLAN OF ARRANGEMENT
UNDER SECTION 192
OF THE CANADA BUSINESS CORPORATIONS ACT
ARTICLE 1
INTERPRETATION
1.1 DEFINITIONS
In addition to terms defined elsewhere in this Plan of Arrangement, the
following terms, when used in this Plan of Arrangement, shall have the meanings
set forth below and grammatical variations of such terms shall have
corresponding meanings:
"ACI" means Abitibi-Consolidated Inc., a corporation amalgamated under the
laws of Canada;
"ACI COMMON SHARES" means the common shares in the share capital of ACI;
"ACI EXCHANGECO CERTIFICATES" has the meaning ascribed thereto in Section
4.2;
"ACI EXCHANGE FUND" has the meaning ascribed thereto in Section 4.1;
"ACI EXCHANGE RATIO" means 0.06261;
"ACI MEETING" means the meeting of holders of ACI Common Shares, including
any adjournment or postponement thereof, to be called and held in
accordance with the Interim Order to consider, or at which will be
considered, the Arrangement and other matters related to the Combination
Agreement and the Arrangement;
"ACI PARENT CERTIFICATES" has the meaning ascribed thereto in Section 4.3;
"ACI SHARE-BASED AWARD" has the meaning ascribed thereto in Section
2.2(d);
"ACI STOCK PLANS" has the meaning ascribed thereto in Section 2.2(d);
"ACI STOCK OPTIONS" means the options to purchase ACI Common Shares
granted under the ACI Stock Option Plans, and being outstanding and
unexercised on the Effective Date;
"ARRANGEMENT" means an arrangement under section 192 of the CBCA on the
terms and subject to the conditions set out in this Plan of Arrangement,
subject to any amendments or variations thereto made in accordance with
section 9.04 of the Combination Agreement or Article 6 hereof or made at
the direction of the Court in the Final Order;
"ARRANGEMENT RESOLUTION" means the special resolution of the holders of
the ACI Common Shares, to be considered at the ACI Meeting, substantially
in the form and content of Exhibit A to the Combination Agreement;
"ARTICLES OF ARRANGEMENT" means the articles of arrangement of ACI in
respect of the Arrangement that are required by the CBCA to be sent to the
Director after the Final Order is made;
"BOWATER" means Bowater Incorporated, a Delaware corporation, and any
successor corporation thereto;
"BOWATER COMMON STOCK" means shares of the common stock, par value $1.00
per share, of Bowater;
"BOWATER EXCHANGE RATIO" means 0.52
"BUSINESS DAY" means any day that is not a Saturday, Sunday or other day
on which banking institutions are required or authorized by law to be
closed in New York, New York or in Montreal, Quebec;
"CALLCO" means Bowater Canadian Holdings Incorporated, a corporation
incorporated under the laws of the Province of Nova Scotia and a
Subsidiary of Bowater;
"CANADIAN TAX ACT" means the INCOME TAX ACT (Canada) and the regulations
adopted thereunder, in each case as now in effect and as the same may be
amended from time to time;
"CBCA" means the CANADA BUSINESS CORPORATIONS ACT, as amended;
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"CERTIFICATE" means the certificate of arrangement giving effect to the
Arrangement, issued pursuant to subsection 192(7) of the CBCA after the
Articles of Arrangement have been filed;
"CIRCULAR" means the notice of the ACI Meeting to be sent to holders of
ACI Common Shares as of the record date fixed in respect of the ACI
Meeting and the accompanying management information circular in connection
with the ACI Meeting, as amended, supplemented or otherwise modified,
including all appendices and schedules thereto;
"COMBINATION AGREEMENT" means the combination agreement and agreement and
plan of merger made as of January 29, 2007 among Parent, ACI, Bowater,
Merger Sub and ExchangeCo, as may be amended, supplemented and/or restated
in accordance therewith prior to the Effective Date, providing for, among
other things, the Arrangement;
"COURT" means the Superior Court, District of Montreal, Province of Quebec;
"DIRECTOR" means the Director appointed pursuant to section 260 of the
CBCA;
"DISSENT RIGHTS" has the meaning ascribed thereto in Section 3.1;
"DISSENTING SHAREHOLDER" means a holder of ACI Common Shares who dissents
in respect of the Arrangement in strict compliance with the Dissent
Rights;
"EFFECTIVE DATE" means the date shown on the Certificate, provided that
such date occurs on or prior to the Termination Date;
"EFFECTIVE TIME" means o [a.m.] [p.m.] (Montreal time) on the Effective
Date;
"ELECTION DEADLINE" means 5:00 p.m. (local time) at the place of deposit
on the date which is two Business Days prior to the date of the ACI
Meeting;
"EXCHANGE AGENT" means o at its offices set out in the Letter of
Transmittal and Election Form;
"EXCHANGEABLE SHARE ELECTED SHARE" means any ACI Common Share held by a
holder who is neither a Non-Resident of Canada nor a Tax Exempt
Shareholder and in respect of which an effective election pursuant to
Section 2.3(a) has been made, in a duly completed Letter of Transmittal
and Election Form received by the Exchange Agent on or prior to the
Election Deadline, to exchange under the Arrangement for a number of
Exchangeable Shares equal to the product of the total number of ACI Common
Shares held by that holder multiplied by the ACI Exchange Ratio;
"EXCHANGEABLE SHARE LIMIT" means (i) 20% multiplied by the aggregate of
(x) the number of ACI Common Shares that are issued and outstanding
immediately prior to the Effective Time multiplied by the ACI Exchange
Ratio, (y) the number of shares of Bowater Common Stock that are issued
and outstanding immediately prior to the Effective Time multiplied by the
Bowater Exchange Ratio and (z) the number of Exchangeable Shares that are
issued and outstanding immediately prior to the Effective Time multiplied
by the Bowater Exchange Ratio; minus (ii) the number of Exchangeable
Shares that are issued and outstanding immediately prior to the Effective
Time multiplied by the Bowater Exchange Ratio;
"EXCHANGEABLE SHARE PROVISIONS" means the rights, privileges, restrictions
and conditions attaching to the Exchangeable Shares, which rights,
privileges, restrictions and conditions shall be substantially as set out
in Appendix I hereto;
"EXCHANGEABLE SHARES" means validly issued Exchangeable Shares in the
capital of ExchangeCo, having substantially the rights, privileges,
restrictions and conditions set out in the Exchangeable Share Provisions;
"EXCHANGECO" means Bowater Canada Inc., a corporation incorporated under
the laws of Canada which will change its name to "AbitibiBowater Canada
Inc." on the Effective Date;
"EXCESS PARENT SHARES" has the meaning ascribed thereto in Section 4.6;
"EXCESS PARENT SHARES TRUST" has the meaning ascribed thereto in Section
4.6;
"EXCESS EXCHANGEABLE SHARES" has the meaning ascribed thereto in Section
4.6;
"EXCESS EXCHANGEABLE SHARES TRUST" has the meaning ascribed thereto in
Section 4.6;
"FINAL ORDER" means the final order of the Court approving the
Arrangement, as such order may be amended or varied at any time prior to
the Effective Date or, if appealed, then, unless such appeal is withdrawn
or denied, as affirmed or as amended on appeal;
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"GOVERNMENTAL AUTHORITY" means any federal, state, provincial, territorial
or local government of any relevant country or jurisdiction, any
subdivision, agency, board, court, commission or authority thereof, or any
quasi-governmental body, arbitral body with legal jurisdiction or any
organized securities exchange or taxing authority;
"HOLDERS" means, when used with reference to the ACI Common Shares, the
holders of ACI Common Shares shown from time to time in the register
maintained by or on behalf of ACI in respect of the ACI Common Shares and,
when used with reference to the Exchangeable Shares, means the holders of
Exchangeable Shares shown from time to time in the register maintained by
or on behalf of ExchangeCo in respect of the Exchangeable Shares;
"INTERIM ORDER" means the interim order of the Court, as the same may be
amended, in respect of the Arrangement, as contemplated by section 2.06 of
the Combination Agreement;
"LAW" means any statute, law, bylaw, ordinance, rule, regulation, order or
permit (of any relevant country or jurisdiction) adopted, passed, issued,
promulgated or entered into by any Governmental Authority;
"LETTER OF TRANSMITTAL AND ELECTION FORM" means the letter of transmittal
and election form for use by holders of ACI Common Shares, in the form
accompanying the Circular;
"LIQUIDATION CALL RIGHT" has the meaning ascribed thereto in Section
5.2(a);
"LIQUIDATION DATE" has the meaning ascribed thereto in the Exchangeable
Share Provisions;
"MERGER SUB" means Alpha-Bravo Merger Sub Inc., a Delaware corporation;
"NON-RESIDENT OF CANADA" means: (i) a person who is not a resident of
Canada for the purposes of the Canadian Tax Act; or (ii) a partnership
that is not a Canadian partnership for the purposes of the Canadian Tax
Act;
"NYSE" means The New York Stock Exchange, Inc.;
"PARENT" means Alpha-Bravo Holdings Inc., a Delaware corporation which has
changed its name to "AbitibiBowater Inc.", and any successor corporation
thereto;
"PARENT COMMON STOCK" means the common stock par value U.S.$.01 of Parent;
"PARENT ELECTED SHARE" means any ACI Common Share held by a holder who is
neither a Non-Resident of Canada nor a Tax Exempt Shareholder and in
respect of which an effective election pursuant to Section 2.3(a) has been
made, in a duly completed Letter of Transmittal and Election Form received
by the Exchange Agent on or prior to the Election Deadline, to exchange
under the Arrangement for a number of shares of Parent Common Stock equal
to the product of the total number of ACI Common Shares held by that
holder multiplied by the ACI Exchange Ratio or that is deemed to be a
Parent Elected Share pursuant to Section 2.3(b);
"PARENT OPTION" has the meaning ascribed thereto in Section 2.2(c);
"PARENT STOCK-BASED AWARD" has the meaning ascribed thereto in Section
2.2(d);
"PERSON" means an individual, corporation, partnership, limited liability
company, joint venture, association, trust, unincorporated organization or
other entity;
"REDEMPTION CALL PURCHASE PRICE" has the meaning ascribed thereto in
Section 5.3(a);
"REDEMPTION CALL RIGHT" has the meaning ascribed thereto in Section
5.3(a);
"REDEMPTION DATE" has the meaning ascribed thereto in the Exchangeable
Share Provisions;
"SHARE CERTIFICATE" has the meaning ascribed thereto in Section 4.3;
"SUBSIDIARY" of any person means another person, an amount of the voting
securities, other voting rights or voting partnership interests of which
is sufficient to elect at least a majority of the second person's Board of
Directors or other governing body (or, if there are no such voting
interests, 50% or more of the equity interests of which) is owned directly
or indirectly by the first person;
"TAX EXEMPT SHAREHOLDER" means a holder of ACI Common Shares that is
generally exempt from tax under Part I of the Canadian Tax Act by virtue
of subsection 149(1) of the Canadian Tax Act;
"TERMINATION DATE" means January 31, 2008, or such later date as may be
mutually agreed by the parties to the Combination Agreement;
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"TRANSFER AGENT" has the meaning ascribed thereto in Section 5.2(b); and
"TSX" means The Toronto Stock Exchange.
1.2 SECTIONS AND HEADINGS
The division of this Plan of Arrangement into sections and the insertion
of headings are for reference purposes only and shall not affect the
interpretation of this Plan of Arrangement. Unless otherwise indicated, any
reference in this Plan of Arrangement to a section or an exhibit refers to the
specified section of or exhibit to this Plan of Arrangement. 1.3 NUMBER, GENDER
AND PERSONS
In this Plan of Arrangement, unless the context otherwise requires, words
importing the singular number include the plural and vice versa and words
importing any gender include all genders. ARTICLE 2 ARRANGEMENT 2.1 BINDING
EFFECT
This Plan of Arrangement, within the meaning of section 192 of the CBCA,
will become effective at, and be binding at and after, the Effective Time on
(i) ACI, (ii) Parent, Bowater, CallCo and ExchangeCo, (iii) all holders and all
beneficial owners of ACI Common Shares, (iv) all holders and all beneficial
owners of Exchangeable Shares and Parent Options from time to time, (v) all
holders of ACI Stock Options and ACI Share-Based Awards and (vi) all holders
and beneficial owners of Parent Common Stock received in exchange for
Exchangeable Shares or on the exercise of Parent Options.
2.2 ARRANGEMENT
Commencing at the Effective Time, the following shall occur and shall be
deemed to occur in the following order without any further act or formality:
(a) each Parent Elected Share will be transferred by the holder thereof
to Parent in exchange for the number of shares of Parent Common Stock
equal to the ACI Exchange Ratio, and such transfer shall be reflected
in the register of holders of ACI Common Shares and to the register
of holders of Parent Common Stock accordingly;
(b) each Exchangeable Elected Share will be transferred by the holder
thereof to ExchangeCo in exchange for the number of Exchangeable
Shares equal to the ACI Exchange Ratio, and such transfer shall be
reflected in the register of holders of ACI Common Shares and to the
register of holders of Exchangeable Shares accordingly;
(c) each ACI Stock Option shall be exchanged with Parent for an option (a
"PARENT OPTION") to purchase a number of shares of Parent Common
Stock equal to the product of the ACI Exchange Ratio multiplied by
the number of ACI Common Shares subject to such ACI Stock Option.
Such Parent Option shall provide for an exercise price per share of
Parent Common Stock equal to the exercise price per share of such ACI
Stock Option immediately prior to the Effective Time divided by the
ACI Exchange Ratio. If the foregoing calculation results in a Parent
Option of a particular holder being exercisable for a total number of
shares of Parent Common Stock that includes a fraction of a share of
Parent Common Stock, then the total number of shares of Parent Common
Stock subject to such Parent Option shall be rounded to the nearest
whole number of Parent Common Stock and the total exercise price for
the Parent Option will be appropriately adjusted by the exercise
price of the fractional share of Parent Common Stock. The term to
expiry, conditions to and manner of exercising, and all other terms
and conditions of a Parent Option will otherwise be unchanged, and
any document or agreement previously evidencing an ACI Stock Option
shall thereafter evidence and be deemed to evidence such Parent
Option;
(d) At the Effective Time, each right of any kind, contingent or accrued,
to receive ACI Common Shares or benefits measured by the value of a
number of ACI Common Shares, and each award of any kind consisting of
ACI Common Shares, granted under the employee and director stock
plans of ACI (the "ACI STOCK PLANS") (including restricted stock,
restricted stock units, deferred stock units and dividend
equivalents), other than ACI Stock Options (each, an "ACI SHARE-BASED
AWARD"), whether vested or unvested, which is outstanding immediately
prior to the Effective Time shall cease to represent a right or award
with respect to ACI Common Shares and shall be converted, at the
Effective Time, into a right or award with respect to shares of
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Parent Common Stock (a "PARENT STOCK-BASED AWARD"), on the same terms
and conditions as were applicable under ACI Share-Based Awards (but
taking into account any changes thereto, including the acceleration
thereof, provided for in ACI Stock Plans, in any award agreement or
in such ACI Share-Based Award by reason of this Plan of Arrangement
or the transactions contemplated hereby). The number of shares of
Parent Common Stock subject to each such Parent Stock-Based Award
shall be equal to the number of ACI Common Shares subject to ACI
Share-Based Awards, multiplied by the ACI Exchange Ratio (with the
resulting product rounded to the nearest whole share). All dividend
equivalents credited to the account of each holder of a ACI
Share-Based Award as of the Effective Time shall remain credited to
such holder's account immediately following the Effective Time,
subject to adjustment in accordance with the foregoing;
(e) As soon as practicable after the Effective Time, Parent shall deliver
to the holders of ACI Stock Options and ACI Share-Based Awards
appropriate notices setting forth such holders' rights pursuant to
the respective ACI Stock Plans and agreements evidencing the grants
of such ACI Stock Options and ACI Share-Based Awards, and stating
that such ACI Stock Options and ACI Share-Based Awards and agreements
have been assumed by Parent and shall continue in effect on the same
terms and conditions (subject to the adjustments required by this
Section 2.2 after giving effect to the Arrangement and the terms of
ACI Stock Plans); and
(f) Prior to the Effective Time, ACI shall take all necessary action for
the adjustment of ACI Share-Based Awards under this Section 2.2.
Parent shall reserve for issuance a number of shares of Parent Common
Stock at least equal to the number of shares of Parent Common Stock
that will be subject to Parent Options and Parent Stock-Based Awards
as a result of the actions contemplated by this Plan of Arrangement.
2.3 ELECTIONS
(a) Each person who, at or prior to the Election Deadline, is a holder of
record of ACI Common Shares and who is neither a Non-Resident of
Canada nor a Tax Exempt Shareholder, will be entitled, with respect
to all or a portion of such shares, to make an election at or prior
to the Election Deadline to receive (i) Exchangeable Shares or (ii)
shares of Parent Common Stock, in exchange for such holder's ACI
Common Shares, on the basis set forth herein and in accordance with
such arrangements and procedures as will be agreed upon in good faith
by Parent, Bowater, Merger Sub, CallCo, ExchangeCo and ACI, including
the form of the Letter of Transmittal and Election Form containing
the elections and the procedures governing transmittal.
(b) Each ACI Common Share held by a holder who is either a Non-Resident
of Canada or a Tax Exempt Shareholder or in respect of which an
effective election pursuant to Section 2.3(a) has not been made
(other than ACI Common Shares held by Dissenting Shareholders who are
ultimately entitled to be paid the fair value of the ACI Common
Shares held by them) will be deemed to be a Parent Elected Share and
will receive the number of shares of Parent Common Stock equal to the
product of the total number of ACI Common Shares held by that holder
multiplied by the ACI Exchange Ratio on the basis set forth herein.
2.4 EXCHANGEABLE SHARE LIMIT
In the event that the aggregate number of Exchangeable Shares that would,
but for this Section 2.4, be issued to holders of ACI Common Shares pursuant to
Section 2.2 exceeds the Exchangeable Share Limit, then the number of
Exchangeable Shares to be issued to any holder, shall be determined by
multiplying the total number of Exchangeable Shares otherwise issuable to such
holder by a fraction, the numerator of which is the Exchangeable Share Limit,
and the denominator of which is the aggregate number of Exchangeable Shares
otherwise issuable to all holders; and such holder shall be deemed to have
elected to receive a number of shares of Parent Common Stock for their ACI
Common Shares equal to the number of Exchangeable Shares that, but for this
Section 2.4, such holder would have received, less the actual number of
Exchangeable Shares such holder receives pursuant to this Section 2.4. No
fractional shares shall be issued to holders of ACI Common Shares in the event
that the Exchangeable Share Limit is exceeded and any shares issued pursuant to
the procedure set forth in this Section 2.4 shall be subject to the procedure
set forth in Section 4.6.
2.5 ADJUSTMENTS TO ACI EXCHANGE RATIO
The ACI Exchange Ratio shall be adjusted to reflect fully the effect of
any stock split, reverse split, stock dividend (including any dividend or
distribution of securities convertible into Parent Common Stock or ACI Common
Shares other than stock dividends paid in lieu of ordinary course dividends),
consolidation, reorganization, recapitalization or other like change that
affects all outstanding Parent Common Stock, Bowater Common Stock or ACI Common
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Shares occurring after the date of the Combination Agreement and prior to the
Effective Time.
ARTICLE 3
RIGHTS OF DISSENT
3.1 RIGHTS OF DISSENT
Holders of ACI Common Shares may exercise rights of dissent with respect
to such shares pursuant to and in the manner set forth in section 190 of the
CBCA and this Section 3.1 (the "DISSENT RIGHTS") in connection with the
Arrangement; provided that, notwithstanding subsection 190(5) of the CBCA, the
written objection to the Arrangement Resolution referred to in subsection
190(5) of the CBCA must be received by ACI not later than 5:00 p.m. (Montreal
time) on the Business Day preceding the ACI Meeting. Holders of ACI Common
Shares who duly exercise such rights of dissent and who:
(a) are ultimately determined to be entitled to be paid fair value for
their ACI Common Shares shall be deemed to have transferred such ACI
Common Shares to ACI for cancellation on the Effective Date prior to
any of the steps described in Section 2.2 hereof; or
(b) are ultimately determined not to be entitled, for any reason, to be
paid fair value for their ACI Common Shares shall be deemed to have
participated in the Arrangement on the same basis as a non-dissenting
holder of ACI Common Shares and shall receive a number of shares of
Parent Common Stock equal to the number of ACI Common Shares held by
the holder multiplied by the ACI Exchange Ratio;
but in no case shall Parent, Bowater, ExchangeCo, CallCo, ACI or any other
person be required to recognize such holders as holders of ACI Common
Shares after the Effective Time, and the names of such holders of ACI
Common Shares shall be deleted from the register of holders of ACI Common
Shares at the Effective Time.
ARTICLE 4
CERTIFICATES AND FRACTIONAL SHARES
4.1 EXCHANGE AGENT
At the Effective Time, ExchangeCo and Parent shall deposit with the
Exchange Agent, certificates representing that number of whole Exchangeable
Shares and that number of whole shares of Parent Common Stock to be delivered
pursuant to the Arrangement upon the exchange of ACI Common Shares. In
addition, Parent and ExchangeCo shall deposit with the Exchange Agent, as
necessary from time to time after the Effective Time, any dividends or other
distributions payable pursuant to Section 4.3 hereof and cash in lieu of any
fractional shares payable pursuant to Section 4.6 hereof. All Exchangeable
Shares, shares of Parent Common Stock, dividends and distributions deposited
with the Exchange Agent pursuant to this Section 4.1 shall hereinafter be
referred to as the "ACI EXCHANGE FUND".
4.2 CERTIFICATES REPRESENTING EXCHANGEABLE SHARES
At or promptly after the Effective Time, ExchangeCo shall deposit with the
Exchange Agent, for the benefit of the holders of ACI Common Shares who will
receive Exchangeable Shares in connection with the Arrangement, certificates
representing that number of whole Exchangeable Shares to be delivered pursuant
to Section 2.2 hereof upon the exchange of ACI Common Shares (the "ACI
EXCHANGECO CERTIFICATES"). Upon surrender to the Exchange Agent for
cancellation of an ACI ExchangeCo Certificate that immediately prior to the
Effective Time represented ACI Common Shares that were exchanged for
Exchangeable Shares under the Arrangement, together with such other documents
and instruments as would have been required to effect the transfer of the
shares formerly represented by such ACI ExchangeCo Certificate under the CBCA
and the articles and by-laws of ACI, and such additional documents and
instruments as the Exchange Agent may reasonably require, the holder of such
surrendered ACI ExchangeCo Certificate shall be entitled to receive in exchange
therefor, and the Exchange Agent shall deliver to such holder, a certificate
representing that number (rounded down to the nearest whole number) of
Exchangeable Shares which such holder has the right to receive (together with
any dividends or distributions with respect thereto pursuant to Section 4.4
hereof and any cash in respect of a fractional interest in a share pursuant to
Section 4.6 hereof, in each case less any amounts withheld pursuant to Section
4.11 hereof), and the ACI ExchangeCo Certificate so surrendered shall forthwith
be cancelled. In the event of a transfer of ownership of ACI Common Shares that
is not registered in the transfer records of ACI, a certificate representing
the proper number of Exchangeable Shares may be issued to the transferee if the
certificate representing such ACI Common Shares is presented to the Exchange
Agent, accompanied by all documents required to evidence and effect such
transfer. Until surrendered as contemplated by this Section 4.2, each ACI
ExchangeCo Certificate shall be deemed at all times after the Effective Time to
represent only the right to receive upon such surrender (i) the certificate
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representing Exchangeable Shares as contemplated by this Section 4.2, (ii) a
cash payment in respect of any fractional interest in a share as contemplated
by Section 4.6 hereof and (iii) any dividends or distributions with a record
date after the Effective Time theretofore paid or payable with respect to such
shares as contemplated by Section 4.4 hereof, in each case less any amounts
withheld pursuant to Section 4.11 hereof.
4.3 CERTIFICATES REPRESENTING PARENT COMMON STOCK
At or promptly after the Effective Time, Parent shall deposit with the
Exchange Agent, for the benefit of the holders of ACI Common Shares who will
receive shares of Parent Common Stock in connection with the Arrangement,
certificates representing that number of whole shares of Parent Common Stock
issued pursuant to Section 2.2 hereof in exchange for outstanding ACI Common
Shares (the "ACI PARENT CERTIFICATES" and, together with the ACI ExchangeCo
Certificates, the "SHARE CERTIFICATES" ). Upon surrender to the Exchange Agent
for cancellation of an ACI Parent Certificate which immediately prior to the
Effective Time represented ACI Common Shares that were exchanged for shares of
Parent Common Stock under the Arrangement, together with such other documents
and instruments as would have been required to effect the transfer of the
shares formerly represented by such ACI Parent Certificate under the CBCA and
the articles and by-laws of ACI, and such additional documents and instruments
as the Exchange Agent may reasonably require, the holder of such surrendered
ACI Parent Certificate shall be entitled to receive in exchange therefor, and
the Exchange Agent shall deliver to such holder, a certificate representing
that number (rounded down to the nearest whole number) of shares of Parent
Common Stock which such holder has the right to receive (together with any
dividends or distributions with respect thereto pursuant to Section 4.4 hereof
and any cash in respect of a fractional interest in a share pursuant to Section
4.6 hereof, in each case less any amounts withheld pursuant to Section 4.11
hereof), and the certificate so surrendered shall forthwith be cancelled. In
the event of a transfer of ownership of ACI Common Shares that is not
registered in the transfer records of ACI, a certificate representing the
proper number of shares of Parent Common Stock may be issued to the transferee
if the certificate representing such ACI Common Shares is presented to the
Exchange Agent, accompanied by all documents required to evidence and effect
such transfer. Until surrendered as contemplated by this Section 4.3 hereof,
each certificate which immediately prior to the Effective Time represented ACI
Common Shares that were exchanged for shares of Parent Common Stock shall be
deemed at all times after the Effective Time to represent only the right to
receive upon such surrender (i) the certificate representing shares of Parent
Common Stock as contemplated by this Section 4.3 hereof, (ii) a cash payment in
respect of a fractional interest in a share as contemplated by Section 4.6
hereof and (iii) any dividends or distributions with a record date after the
Effective Time theretofore paid or payable with respect to such shares as
contemplated by Section 4.4 hereof, in each case less any amounts withheld
pursuant to Section 4.11 hereof.
4.4 DISTRIBUTIONS WITH RESPECT TO UNEXCHANGED SHARES
No dividends or other distributions with respect to shares of Parent
Common Stock or Exchangeable Shares with a record date on or after the
Effective Time shall be paid to the holder of any unsurrendered Share
Certificate with respect to the shares of Parent Common Stock or Exchangeable
Shares that the holder thereof has the right to receive upon the surrender
thereof, and no cash payment in lieu of fractional shares of Parent Common
Stock or Exchangeable Shares shall be paid to any such holder pursuant to
Section 4.6 hereof, in each case until the holder of such Share Certificate
shall have surrendered such Share Certificate in accordance with this Article
4. Following the surrender of any Share Certificate, there shall be paid to the
record holder of the certificate representing whole shares of Parent Common
Stock or whole Exchangeable Shares issued in exchange therefor, without
interest, (i) at the time of such surrender, the amount of dividends or other
distributions with a record date on or after the Effective Time theretofore
paid with respect to such whole shares of Parent Common Stock or whole
Exchangeable Shares and the amount of any cash payable in lieu of a fractional
share of Parent Common Stock or Exchangeable Share to which such holder is
entitled pursuant to Section 4.6 hereof and (ii) at the appropriate payment
date, the amount of dividends or other distributions with a record date on or
after the Effective Time but prior to such surrender and a payment date
subsequent to such surrender payable with respect to such whole shares of
Parent Common Stock or whole Exchangeable Shares.
4.5 NO FURTHER OWNERSHIP RIGHTS IN ACI COMMON SHARES
The shares of Parent Common Stock and Exchangeable Shares issued upon
conversion of the ACI Common Shares in accordance with the terms hereof and the
payment of such dividends or other distributions as are payable pursuant to
Section 4.3 and such cash in lieu of any fractional shares as is payable
pursuant to Section 4.6 hereof upon the surrender of Share Certificates in
accordance with the terms of this Article 4 shall be deemed to have been in
full satisfaction of all rights pertaining to the ACI Common Shares formerly
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represented by such Share Certificates, subject, however, to ACI's obligation
to pay any dividends or make any other distributions with a record date prior
to the Effective Time which may have been declared or made by ACI on the ACI
Common Shares in accordance with the terms of this Agreement prior to the
Effective Time. At the close of business on the day on which the Effective Time
occurs, the share transfer books of ACI shall be closed, and there shall be no
further registration of transfers on the share transfer books of ACI of the ACI
Common Shares that were outstanding immediately prior to the Effective Time.
If, after the Effective Time, any Share Certificate is presented to ACI for
transfer, it shall be canceled against delivery thereof and exchanged as
provided in this Article 4.
4.6 NO FRACTIONAL SHARES
No certificates or scrip representing fractional shares of Parent Common
Stock or Exchangeable Shares shall be issued upon the surrender for exchange of
Share Certificates, no dividends or other distributions of Parent or ExchangeCo
shall relate to such fractional share interests and such fractional share
interests shall not entitle the owner thereof to vote or to any rights of a
stockholder of Parent or ExchangeCo.
As promptly as practicable following the Effective Time, the Exchange
Agent shall determine the excess of (x) the number of whole shares of Parent
Common Stock delivered to the Exchange Agent by Parent pursuant to Section 4.1
hereof over (y) the aggregate number of whole shares of Parent Common Stock to
be distributed to holders of ACI Common Shares pursuant to Section 4.3 hereof
(such excess being herein called the "EXCESS PARENT SHARES"). Following the
Effective Time, the Exchange Agent, as agent for the holders of ACI Common
Shares, shall sell the Excess Parent Shares at then prevailing prices on the
NYSE, all in the manner provided in this Section 4.6 hereof.
The sale of the Excess Parent Shares by the Exchange Agent shall be
executed on the NYSE through one or more member firms of the NYSE and shall be
executed in round lots to the extent practicable. The Exchange Agent shall use
all reasonable efforts to complete the sale of the Excess Parent Shares as
promptly following the Effective Time as, in the Exchange Agent's reasonable
judgment, is practicable and consistent with obtaining the best execution of
such sales in light of prevailing market conditions. Until the proceeds of such
sale or sales have been distributed to the former holders of ACI Common Shares,
the Exchange Agent will hold such proceeds in trust for the holders of ACI
Common Shares (the "EXCESS PARENT SHARES TRUST"). Parent shall pay all
commissions, transfer taxes and other out of pocket transaction costs,
including the expenses and compensation, of the Exchange Agent incurred in
connection with such sale of the Excess Parent Shares. The Exchange Agent shall
determine the portion of the Excess Parent Shares Trust to which each holder of
ACI Common Shares shall be entitled, if any, by multiplying the amount of the
aggregate proceeds comprising the Excess Parent Shares Trust by a fraction the
numerator of which is the amount of the fractional share interest to which such
holder of ACI Common Shares is entitled (after taking into account all ACI
Common Stock held at the Effective Time by such holder which were exchanged for
shares of Parent Common Stock) and the denominator of which is the aggregate
amount of fractional share interests to which all holders of ACI Common Shares
who exchanged such shares for shares of Parent Common Stock are entitled.
As promptly as practicable following the Effective Time, the Exchange
Agent shall determine the excess of (x) the number of whole Exchangeable Shares
delivered to the Exchange Agent by ExchangeCo pursuant to Section 4.1 hereof
over (y) the aggregate number of whole Exchangeable Shares to be distributed to
holders of ACI Common Shares pursuant to Section 4.3 hereof (such excess being
herein called the "EXCESS EXCHANGEABLE SHARES"). Following the Effective Time,
the Exchange Agent, as agent for the holders of ACI Common Shares, shall sell
the Excess Exchangeable Shares all in the manner provided in this Section 4.6.
The sale of the Excess Exchangeable Shares by the Exchange Agent shall be
executed by private sale (or by way of sale through the facilities of the TSX).
The Exchange Agent shall use all reasonable efforts to complete the sale of the
Excess Exchangeable Shares as promptly following the Effective Time as, in the
Exchange Agent's reasonable judgment, is practicable and consistent with
obtaining the best execution of such sales in light of prevailing market
conditions. Until the proceeds of such sale or sales have been distributed to
the former holders of ACI Common Shares, the Exchange Agent will hold such
proceeds in trust for the holders of ACI Common Shares (the "EXCESS
EXCHANGEABLE SHARES TRUST"). ExchangeCo shall pay all commissions, transfer
taxes and other out of pocket transaction costs, including the expenses and
compensation, of the Exchange Agent incurred in connection with such sale of
the Excess Exchangeable Shares. The Exchange Agent shall determine the portion
of the Excess Exchangeable Shares Trust to which each holder of ACI Common
Shares shall be entitled, if any, by multiplying the amount of the aggregate
proceeds comprising the Excess Exchangeable Shares Trust by a fraction the
numerator of which is the amount of the fractional share interest to which such
8
holder of ACI Common Shares is entitled (after taking into account all ACI
Common Stock held at the Effective Time by such holder which were exchanged for
Exchangeable Shares) and the denominator of which is the aggregate amount of
fractional share interests to which all holders of ACI Common Shares who
exchanged such shares for Exchangeable Shares are entitled.
Notwithstanding the foregoing, ExchangeCo or Parent, respectively, shall
be entitled to deposit cash with the Exchange Agent to enable the Exchange
Agent to make cash payments provided for in this Section 4.6, in which case the
Exchangeable Shares or Parent Common Stock, as the case may be, that would
otherwise be sold by the Exchange Agent will be surrendered to ExchangeCo or
Parent or no such shares will be issued.
4.7 TERMINATION OF THE ACI EXCHANGE FUND
Any portion of the ACI Exchange Fund that remains undistributed to the
holders of the Share Certificates for six months after the Effective Time shall
be delivered to Parent and ExchangeCo, pro rata in the proportion of
undistributed Parent Elected Shares to ExchangeCo Elected Shares, upon demand,
and any holders of the Share Certificates who have not theretofore complied
with this Article 4 shall thereafter look only to Parent and ExchangeCo for,
and Parent and ExchangeCo shall remain liable for, payment of their claim for
shares of Parent Common Stock, Exchangeable Shares, any dividends or other
distributions payable pursuant to Section 4.3 hereof and cash in lieu of any
fractional shares payable pursuant to Section 4.6 hereof in accordance with
this Article 4.
4.8 NO LIABILITY
None of Parent, ExchangeCo, CallCo, ACI or Bowater, or the Exchange Agent
shall be liable to any person in respect of any shares of Parent Common Stock,
Exchangeable Shares, dividends or other distributions from the ACI Exchange
Fund properly delivered to a public official pursuant to any applicable
abandoned property, escheat or similar Law. If any Share Certificate shall not
have been surrendered prior to three years after the Effective Time (or
immediately prior to such earlier date on which any shares of Parent Common
Stock or Exchangeable Shares (and any dividends or other distributions payable
with respect thereto pursuant to Section 4.3 hereof and cash in lieu of any
fractional shares payable with respect thereto pursuant to Section 4.6 hereof)
would otherwise escheat to or become the property of any Governmental
Authority), any such shares (and any dividends or other distributions payable
with respect thereto pursuant to Section 4.3 hereof and cash in lieu of any
fractional shares payable with respect thereto pursuant to Section 4.6 hereof)
shall, to the extent permitted by applicable Law, become the property of Parent
or ExchangeCo as the case may be, free and clear of all claims, rights,
interest or liens of any person previously entitled thereto.
4.9 INVESTMENT OF ACI EXCHANGE FUND
The Exchange Agent shall invest the cash included in the ACI Exchange Fund
as directed by Parent and ExchangeCo, in proportion to the amounts represented
by the Parent Elected Shares to the ExchangeCo Elected Shares. Any interest and
other income resulting from such investments shall be paid to and be income of
Parent and ExchangeCo, respectively. If for any reason (including losses on any
investments) the cash in the ACI Exchange Fund shall be insufficient to fully
satisfy all of the payment obligations to be made in cash by the Exchange Agent
hereunder, Parent and ExchangeCo shall promptly deposit cash into the ACI
Exchange Fund in an amount which is equal to the deficiency in the amount of
cash required to fully satisfy such cash payment obligations, pro rata in the
proportion of Parent Elected Shares to ExchangeCo Elected Shares.
4.10 LOST SHARE CERTIFICATES
If any Share Certificate shall have been lost, stolen or destroyed, upon
the making of an affidavit of that fact by the person claiming such Share
Certificate to be lost, stolen or destroyed and, if required by Parent or
ExchangeCo, the posting by such person of a bond in such reasonable amount as
Parent or ExchangeCo may direct as indemnity against any claim that may be made
against it with respect to such Share Certificate, the Exchange Agent shall
deliver in exchange for such lost, stolen or destroyed Share Certificate shares
of Parent Common Stock, Exchangeable Shares any dividends or other
distributions payable pursuant to Section 4.3 hereof and cash in lieu of any
fractional shares payable pursuant to Section 4.6 hereof, in each case pursuant
to this Article 4.
4.11 WITHHOLDING RIGHTS
Parent, ACI, ExchangeCo, or the Exchange Agent shall be entitled to deduct
and withhold from the consideration otherwise payable pursuant to the
Arrangement such amounts as Parent, ACI, ExchangeCo or the Exchange Agent are
required to deduct and withhold with respect to the making of such payment
under the Code or any provision of federal, provincial or state or local or
9
other Law of any applicable country or jurisdiction. To the extent that amounts
are so deducted, withheld and paid over to the appropriate Governmental
Authority by Parent, ACI, ExchangeCo or the Exchange Agent, such withheld
amounts shall be treated for all purposes of this Plan of Arrangement as having
been paid to the holder of Share Certificates in respect of which such
deduction and withholding was made by Parent, ExchangeCo or the Exchange Agent.
ARTICLE 5
CERTAIN RIGHTS OF CALLCO TO ACQUIRE EXCHANGEABLE SHARES
5.1 CALLCO CALL RIGHTS
By virtue of this Plan of Arrangement and the Exchangeable Share
Provisions, each holder of ACI Common Shares who receives Exchangeable Shares
under this Plan of Arrangement, and the assignees from time to time of such
Exchangeable Shares, shall be subject to the Liquidation Call Right and the
Redemption Call Right of CallCo as referred to in the Exchangeable Share
Provisions and, for the purposes of this Plan of Arrangement, set out in
Sections 5.2 and 5.3 hereof. Capitalized terms used in Sections 5.2 and 5.3
hereof and not otherwise defined in this Plan of Arrangement shall have the
meaning ascribed thereto in the Exchangeable Share Provisions. In addition,
such holders and their assignees as aforesaid shall be subject to all other
rights of CallCo contained in the Exchangeable Share Provisions, including,
without limitation, the Retraction Call Right (as defined in the Exchangeable
Share Provisions).
5.2 CALLCO LIQUIDATION CALL RIGHT
(a) CallCo shall have the overriding right (the "LIQUIDATION CALL
RIGHT"), in the event of and notwithstanding the proposed
liquidation, dissolution or winding-up of ExchangeCo pursuant to
Article 5 of the Exchangeable Share Provisions, to purchase from all
but not less than all of the holders of Exchangeable Shares on the
Liquidation Date all but not less than all of the Exchangeable Shares
held by each such holder on payment by CallCo of an amount per share
equal to (i) the Current Market Price (as defined in the Exchangeable
Share Provisions) of a share of Parent Common Stock on the last
Business Day prior to the Liquidation Date, which shall be satisfied
in full by causing to be delivered to such holder one share of Parent
Common Stock, plus (ii) the right to receive the full amount when
paid of all unpaid dividends on such Exchangeable Share for which the
record date has occurred prior to the Liquidation Date (collectively,
the "LIQUIDATION CALL PURCHASE PRICE"). In the event of the exercise
of the Liquidation Call Right by CallCo, each holder shall be
obligated to sell all the Exchangeable Shares held by the holder to
CallCo on the Liquidation Date on payment by CallCo to the holder of
the Liquidation Call Purchase Price for each such share.
(b) To exercise the Liquidation Call Right, CallCo must notify ExchangeCo
and ExchangeCo's transfer agent (the "TRANSFER Agent"), as agent for
the holders of Exchangeable Shares, of CallCo's intention to exercise
such right at least 45 days before the Liquidation Date in the case
of a voluntary liquidation, dissolution or winding-up of ExchangeCo
and at least five Business Days before the Liquidation Date in the
case of an involuntary liquidation, dissolution or winding-up of
ExchangeCo. The Transfer Agent will notify the holders of
Exchangeable Shares as to whether or not CallCo has exercised the
Liquidation Call Right forthwith after the expiry of the period
during which the same may be exercised by CallCo. If CallCo exercises
the Liquidation Call Right, then on the Liquidation Date, CallCo will
purchase and the holders will sell all of the Exchangeable Shares
then outstanding for a price per share equal to the Liquidation Call
Purchase Price.
(c) For the purposes of completing the purchase of the Exchangeable
Shares pursuant to the Liquidation Call Right, CallCo shall deposit
with the Transfer Agent, on or before the Liquidation Date,
certificates representing the aggregate number of shares of Parent
Common Stock deliverable by CallCo in payment of the total
Liquidation Call Purchase Price and shall waive any rights to receive
any dividends which represent the amount of the remaining portion, if
any, of the total Liquidation Call Purchase Price, less any amounts
withheld pursuant to Section 4.11 hereof. Provided that CallCo has
complied with the immediately preceding sentence, on and after the
Liquidation Date, the rights of each holder of Exchangeable Shares
will be limited to receiving such holder's proportionate part of the
total Liquidation Call Purchase Price payable by CallCo (which, in
the case of unpaid dividends, if any, shall be satisfied by the
payment thereof by ExchangeCo on the payment date for such dividends)
upon presentation and surrender by the holder of certificates
representing the Exchangeable Shares held by such holder and the
holder shall on and after the Liquidation Date be considered and
deemed for all purposes to be the holder of the shares of Parent
10
Common Stock to which it is entitled. Upon surrender to the Transfer
Agent of a certificate or certificates representing Exchangeable
Shares, together with such other documents and instruments as may be
required to effect a transfer of Exchangeable Shares under the CBCA
and the by-laws of ExchangeCo and such additional documents and
instruments as the Transfer Agent may reasonably require, the holder
of such surrendered certificate or certificates shall be entitled to
receive in exchange therefor, and the Transfer Agent on behalf of
CallCo shall deliver to such holder, certificates representing the
shares of Parent Common Stock to which the holder is entitled and on
the applicable dividend payment date a cheque or cheques payable at
par at any branch of the bankers of ExchangeCo in Canada in payment
of the remaining portion, if any, of the total Liquidation Call
Purchase Price less any amounts withheld pursuant to Section 4.11
hereof. If CallCo does not exercise the Liquidation Call Right in the
manner described above, on the Liquidation Date the holders of the
Exchangeable Shares will be entitled to receive in exchange therefor
the liquidation price otherwise payable by ExchangeCo in connection
with the liquidation, dissolution or winding-up of ExchangeCo
pursuant to Article 5 of the Exchangeable Share Provisions.
5.3 CALLCO REDEMPTION CALL RIGHT
(a) CallCo shall have the overriding right (the "REDEMPTION CALL RIGHT"),
notwithstanding the proposed redemption of the Exchangeable Shares by
ExchangeCo pursuant to Article 7 of the Exchangeable Share
Provisions, to purchase from all but not less than all of the holders
of Exchangeable Shares on the Redemption Date all but not less than
all of the Exchangeable Shares held by each such holder on payment by
CallCo to the holder of an amount per share equal to (i) the Current
Market Price (as defined in the Exchangeable Share Provisions) of a
share of Parent Common Stock on the last Business Day prior to the
Redemption Date, which shall be satisfied in full by causing to be
delivered to such holder one share of Parent Common Stock plus (ii)
the right to receive the full amount when paid of all unpaid
dividends on such Exchangeable Share for which the record date has
occurred prior to the Redemption Date (collectively, the "REDEMPTION
CALL PURCHASE PRICE"). In the event of the exercise of the Redemption
Call Right by CallCo, each holder shall be obligated to sell all the
Exchangeable Shares held by the holder to CallCo on the Redemption
Date on payment by CallCo to the holder of the Redemption Call
Purchase Price for each such share.
(b) To exercise the Redemption Call Right, CallCo must notify the
Transfer Agent, as agent for the holders of Exchangeable Shares, and
ExchangeCo of CallCo's intention to exercise such right at least 60
days before the Redemption Date, except in the case of a redemption
occurring as a result of an acquisition of Control of Parent (as
defined in the Exchangeable Share Provisions) in which case CallCo
shall notify the Transfer Agent and ExchangeCo on or before the
Redemption Date. The Transfer Agent will notify the holders of the
Exchangeable Shares as to whether or not CallCo has exercised the
Redemption Call Right forthwith after the expiry of the period during
which the same may be exercised by CallCo. If CallCo exercises the
Redemption Call Right, on the Redemption Date CallCo will purchase
and the holders will sell all of the Exchangeable Shares then
outstanding for a price per share equal to the Redemption Call
Purchase Price.
(c) For the purposes of completing the purchase of the Exchangeable
Shares pursuant to the Redemption Call Right, CallCo shall deposit
with the Transfer Agent, on or before the Redemption Date,
certificates representing the aggregate number of shares of Parent
Common Stock deliverable by CallCo in payment of the total Redemption
Call Purchase Price and shall waive any rights to receive any
dividends which represent the amount of the remaining portion, if
any, of the total Redemption Call Purchase Price less any amounts
withheld pursuant to Section 4.11 hereof. Provided that CallCo has
complied with the immediately preceding sentence, on and after the
Redemption Date the rights of each holder of Exchangeable Shares will
be limited to receiving such holder's proportionate part of the total
Redemption Call Purchase Price payable by CallCo (which in case of
unpaid dividends, if any, shall be satisfied by the payment thereof
by ExchangeCo on the payment date for such dividends) upon
presentation and surrender by the holder of certificates representing
the Exchangeable Shares held by such holder and the holder shall on
and after the Redemption Date be considered and deemed for all
purposes to be the holder of the shares of Parent Common Stock to
which it is entitled. Upon surrender to the Transfer Agent of a
certificate or certificates representing Exchangeable Shares,
together with such other documents and instruments as may be required
to effect a transfer of Exchangeable Shares under the CBCA and the
by-laws of ExchangeCo and such additional documents and instruments
as the Transfer Agent may reasonably require, the holder of such
surrendered certificate or certificates shall be entitled to receive
11
in exchange therefor, and the Transfer Agent on behalf of CallCo
shall deliver to such holder, certificates representing the shares of
Parent Common Stock to which the holder is entitled and on the
applicable dividend payment date a cheque or cheques payable at par
at any branch of the bankers of ExchangeCo in Canada in payment of
the remaining portion, if any, of the total Redemption Call Purchase
Price less any amounts withheld pursuant to Section 4.11 hereof. If
CallCo does not exercise the Redemption Call Right in the manner
described above, on the Redemption Date the holders of the
Exchangeable Shares will be entitled to receive in exchange therefor
the redemption price otherwise payable by ExchangeCo in connection
with the redemption of the Exchangeable Shares pursuant to Article 7
of the Exchangeable Share Provisions.
ARTICLE 6
AMENDMENTS
6.1 AMENDMENTS TO PLAN OF ARRANGEMENT
(a) ACI reserves the right to amend, modify and/or supplement this Plan
of Arrangement at any time and from time to time prior to the
Effective Date, provided that each such amendment, modification
and/or supplement must be (i) set out in writing, (ii) approved by
Bowater, (iii) filed with the Court and, if made following the ACI
Meeting, approved by the Court and (iv) communicated to holders of
ACI Common Shares, if and as required by the Court.
(b) Any amendment, modification or supplement to this Plan of Arrangement
may be proposed by ACI at any time prior to the ACI Meeting (provided
that Bowater shall have consented thereto) with or without any other
prior notice or communication, and if so proposed and accepted by the
persons voting at the ACI Meeting (other than as may be required
under the Interim Order), shall become part of this Plan of
Arrangement for all purposes.
(c) Any amendment, modification or supplement to this Plan of Arrangement
that is approved by the Court following the ACI Meeting shall be
effective only if (i) it is consented to by each of ACI and Bowater
and (ii) if required by the Court, it is consented to by holders of
the ACI Common Shares, voting in the manner directed by the Court.
(d) Notwithstanding Section 6.1(a) hereof, any amendment, modification or
supplement to this Plan of Arrangement may be made at any time and
from time to time prior to the Effective Date unilaterally by written
agreement of ACI and Bowater, provided that it concerns a matter
which, in the reasonable opinion of ACI and Bowater, 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 ACI Common Shares,
ACI Stock Options and ACI Share-Based Award.
ARTICLE 7
FURTHER ASSURANCES
Notwithstanding that the transactions and events set out herein shall
occur and be deemed to occur in the order set out in this Plan of Arrangement,
within the meaning of section 192 of the CBCA and, in particular, that the
share exchanges, within the meaning of section 192(l)(f) of the CBCA, shall
become effective in accordance with section 192(8) of the CBCA, without any
further act or formality, each of the parties to the Combination Agreement
shall make, do and execute, or cause to be made, done and executed, all such
further acts, deeds, agreements, transfers, assurances, instruments or
documents as may reasonably be required by any of them in order further to
document or evidence any of the transactions or events set out herein.
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