Amendment No. 2 to Arrangement Agreement
Amendment
No. 2
to
This
Amendment No. 2 to Arrangement Agreement
(this
“Amendment
No. 2”)
is
entered into as of October 9, 2008, by and among Gran
Tierra Energy Inc.,
a
Nevada corporation (hereinafter referred to as “Gran
Tierra”),
Solana
Resources Limited,
an
Alberta corporation (hereinafter referred to as “Solana”),
and
Gran
Tierra Exchangeco Inc.
(“Gran
Tierra Exchangeco”),
an
Alberta corporation and a wholly-owned subsidiary of Gran Tierra Callco
ULC.
Recitals
A. Gran
Tierra, Solana and Gran Tierra Exchangeco are parties to that certain
Arrangement Agreement dated as of July 28, 2008 (the “Arrangement
Agreement”),
as it
was amended by that certain Amendment No. 1 to Arrangement Agreement dated
as of
September 5, 2008 (“Amendment
No. 1”).
Any
capitalized terms not otherwise defined in this Amendment No. 2 shall have
the
meaning given to such terms in the Arrangement Agreement, as amended to
date.
B. The
parties desire to amend the Arrangement Agreement, as amended to date, as set
forth herein.
Agreement
The
parties to this Amendment No. 2, intending to be legally bound, agree as
follows:
|
1.
|
Amendment
of Arrangement Agreement.
|
1.1 Amendment
of Exhibit A.
(a) Exhibit
A
to the Arrangement Agreement, as amended to date, is hereby amended and restated
in its entirety to read as set forth in Exhibit A to this Amendment No.
2.
1.2 No
Other Amendments. Except
as
it has been specifically amended pursuant to Section 1.1 hereof, the Arrangement
Agreement, as amended to date, shall from and after the date hereof continue
in
full force and effect.
|
2.
|
Additional
Provisions.
|
2.1 Entire
Agreement and Modification.
The
Arrangement Agreement, the Exhibits thereto, Amendment No. 1, this Amendment
No.
2 and any waiver provided by any of Gran Tierra, Solana or Gran Tierra
Exchangeco in connection with the Arrangement Agreement set forth the entire
understanding of the parties relating to the subject matter hereof and thereof
and supersede all prior agreements and understandings among or between any
of
the parties relating to the subject matter hereof and thereof. The Arrangement
Agreement, as amended by Amendment No. 1 and this Amendment No. 2, may not
be
further amended except by a written agreement executed in accordance with
Section 9.1 of the Arrangement Agreement, as amended to date.
1
2.2 Severability.
In the
event that any provision of this Amendment No. 2, or the application of any
such
provision to any person or set of circumstances, shall be determined to be
invalid, unlawful, void or unenforceable to any extent, the remainder of this
Amendment No. 2, and the application of such provision to persons or
circumstances other than those as to which it is determined to be invalid,
unlawful, void or unenforceable, shall not be impaired or otherwise affected
and
shall continue to be valid and enforceable to the fullest extent permitted
by
law.
2.3 Headings.
The
headings contained in this Amendment No. 2 are for convenience of reference
only, shall not be deemed to be a part of this Amendment No. 2 and shall not
be
referred to in connection with the construction or interpretation of this
Amendment No. 2.
2.4 Counterparts
and Exchanges by Fax.
This
Amendment No. 2 may be executed in several counterparts, each of which shall
constitute an original and all of which, when taken together, shall constitute
one agreement.
The
exchange of a fully executed Amendment No. 2 (in counterparts or otherwise)
by
fax shall be sufficient to bind the parties to the terms and conditions of
this
Amendment No. 2.
[Remainder
of page intentionally left blank]
2
The
parties to this Amendment No. 2 have caused this Amendment No. 2 to be executed
and delivered as of the date first above mentioned.
|
Gran
Tierra Energy Inc.
|
||
|
/s/
▇▇▇▇ ▇▇▇▇▇▇▇▇
|
||
|
By:
|
▇▇▇▇
▇▇▇▇▇▇▇▇
|
|
|
President
and Chief Executive Officer
|
||
|
Solana
Resources Limited
|
||
|
/s/
▇▇▇▇▇ ▇▇▇▇▇
|
||
|
By:
|
▇▇▇▇▇
▇▇▇▇▇
|
|
|
President
and Chief Executive Officer
|
||
|
/s/
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
|
||
|
By:
|
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ | |
| Chief Financial Officer | ||
|
Gran
Tierra Exchangeco Inc.
|
||
|
/s/
▇▇▇▇ ▇▇▇▇▇▇▇▇
|
||
|
By:
|
▇▇▇▇
▇▇▇▇▇▇▇▇
|
|
|
President
and Chief Executive Officer
|
||
Signature
Page to Amendment No. 2 to Arrangement Agreement
Exhibit
A to the Amendment No. 2
Exhibit
A
Plan
of Arrangement
PLAN
OF ARRANGEMENT
under
Section 193 of the
Business
Corporations Act
(Alberta)
ARTICLE 1
INTERPRETATION
|
1.1
|
In
this Plan of Arrangement, the following terms have the following
meanings:
|
|
(a)
|
"ABCA"
means the Business
Corporations Act,
R.S.A. 2000, c. B-9, as amended, including the regulations promulgated
thereunder.
|
|
(b)
|
"Acquiror"
means Gran Tierra Energy Inc., a corporation existing pursuant to
the laws
of the State of Nevada.
|
|
(c)
|
"Acquiror
Control Transaction"
has the meaning provided in the Exchangeable Share
Provisions.
|
|
(d)
|
"Acquiror
Option"
means an option to purchase Acquiror Shares granted pursuant to the
Acquiror Option Plan.
|
|
(e)
|
"Acquiror
Option Plan"
means the stock option plan of Acquiror, including all amendments
thereto.
|
|
(f)
|
"Acquiror
Share"
means a common share in the capital of Acquiror as constituted on
the date
hereof.
|
|
(g)
|
"Acquiror
Share Election Form"
means a duly completed election in writing from a Target Shareholder,
in
form satisfactory to Acquiror, acting reasonably, confirming that
such
Target Shareholder has elected to receive Acquiror Shares in exchange
for
its Target Shares in accordance with the provisions of Subsection
3.1(j).
|
|
(h)
|
"Acquiror
Share Electing Shareholder"
means a Target Shareholder who has either: (i) deposited with the
Transfer
Agent by 4:00 p.m. (Calgary time) on the Election Date, both an Acquiror
Share Election Form and a duly completed Letter of Transmittal, together
with the certificates representing such Target Shareholder's Target
Shares; or (ii) not made all of the deliveries contemplated by (i)
above
by 4:00 p.m. (Calgary time) on the Election Date and whose address
as
shown in the register of Target Shares is not in Canada as of 4:00
p.m.
(Calgary time) on
the Business Day preceding the Effective Date.
|
|
(i)
|
"Arrangement",
"herein",
"hereof",
"hereto",
"hereunder"
and similar expressions mean and refer to the arrangement pursuant
to
Section 193 of the ABCA set forth in this Plan of Arrangement as
supplemented, modified or amended, and not to any particular article,
section or other portion hereof.
|
|
(j)
|
"Arrangement
Agreement"
means the arrangement agreement dated as of July 28, 2008 among Acquiror,
ExchangeCo and Target with respect to the Arrangement and all amendments
thereto.
|
|
(k)
|
"Articles
of Arrangement"
means the articles of arrangement in respect of the Arrangement required
under subsection 193(10) of the ABCA to be filed with the Registrar
after
the Final Order has been granted giving effect to the
Arrangement.
|
|
(l)
|
"Business
Day"
means a day, other than a Saturday, Sunday or statutory holiday,
when
banks are generally open in the City of Calgary, in the Province
of
Alberta, for the transaction of banking
business.
|
|
(m)
|
"Callco"
means Gran Tierra Callco ULC, a corporation existing under the laws
of the
Province of Alberta.
|
|
(n)
|
"Certificate"
means the certificate which may be issued by the Registrar pursuant
to
subsection 193(11) of the ABCA or, if no certificate is to be issued,
the proof of filing in respect of the
Arrangement.
|
|
(o)
|
"Change
of Law"
means any amendment to the Tax Act and other applicable provincial
income
tax laws that permits holders of Exchangeable Shares who are resident
in
Canada, hold the Exchangeable Shares as capital property and deal
at arm's
length with Acquiror and ExchangeCo (all for the purposes of the
Tax Act
and other applicable provincial income tax laws) to exchange their
Exchangeable Shares for Acquiror Shares on a basis that will not
require
such holders to recognize any gain or loss or any actual or deemed
dividend in respect of such exchange for the purposes of the Tax
Act or
applicable provincial income tax
laws.
|
|
(p)
|
"Change
of Law Call Date"
has the meaning provided in Subsection 8.1(b).
|
|
(q)
|
"Change
of Law Call Purchase Price"
has the meaning provided in Subsection 8.1(a).
|
|
(r)
|
"Change
of Law Call Right"
has the meaning provided in Subsection 8.1(a).
|
|
(s)
|
"Continuing
Optionholder"
means a Target Optionholder who will, immediately subsequent to the
Effective Time, be at least one of a director, officer, employee
or
consultant of Acquiror and/or an affiliate of Acquiror, as agreed
by
Acquiror.
|
|
(t)
|
"Court"
means the Court of Queen's Bench of
Alberta.
|
|
(u)
|
"Depositary"
means Computershare Trust Company of Canada, or such other Person
as may
be designated by Acquiror and
Target.
|
|
(v)
|
"Dissenting
Securityholders"
means registered holders of Target Shares
who validly exercise the rights of dissent with respect to the Arrangement
provided to them under the Interim Order and whose dissent rights
remain
valid immediately before the Effective
Time.
|
|
(w)
|
"Effective
Date"
means the date the Arrangement is effective under the
ABCA.
|
|
(x)
|
"Effective
Time"
means the time at which the Articles of Arrangement are filed with
the
Registrar on the Effective Date.
|
|
(y)
|
"Election
Date"
means the date which is one Business Day prior to the date of the
Meeting.
|
|
(z)
|
"Eligible
Shareholder"
means a Target Shareholder who: (i) is a person resident in Canada
for
purposes of the Tax Act or a partnership that is a Canadian partnership
for the purposes of the Tax Act and, in either case, is not exempt
from
tax under Part I of the Tax Act; and
(ii) is an Exchangeable Share Electing
Shareholder.
|
-
3
-
|
(aa)
|
"Exchangeable
Share Election Form"
means a duly completed election in writing from a Target Shareholder
confirming that it is a person resident in Canada for purposes of
the Tax
Act or a partnership that is a Canadian partnership for the purposes
of
the Tax Act and, in either case, is not exempt from tax under Part
I of
the Tax Act, in form satisfactory to Acquiror, acting reasonably,
confirming that such Target Shareholder has elected to receive
Exchangeable Shares in exchange for its Target Shares in accordance
with
the provisions of Subsection 3.1(i).
|
|
(bb)
|
"Exchangeable
Share Electing Shareholder"
means a Target Shareholder who has either: (i) deposited with the
Transfer
Agent by 4:00 p.m. (Calgary time) on the Election Date, both an
Exchangeable Share Election Form and a duly completed Letter of
Transmittal, together with the certificates representing such Target
Shareholder's Target Shares; or (ii) not made all of the deliveries
contemplated by (i) above by 4:00 p.m. (Calgary time) on the Election
Date
and whose address as shown in the register of Target Shares is in
Canada
as of 4:00 p.m. (Calgary time) on
the Business Day preceding the Effective Date.
|
|
(cc)
|
"ExchangeCo"
means Gran Tierra Exchangeco Inc., a corporation incorporated under
the
ABCA.
|
|
(dd)
|
"Exchange
Ratio"
means 0.9527918.
|
|
(ee)
|
"Exchangeable
Share Consideration"
has the meaning provided in the Exchangeable Share
Provisions.
|
|
(ff)
|
"Exchangeable
Share Price"
has the meaning provided in the Exchangeable Share
Provisions.
|
|
(gg)
|
"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 forth in Schedule "A"
hereto.
|
|
(hh)
|
"Exchangeable
Shares"
means the exchangeable shares in the capital of ExchangeCo as constituted
on the date hereof.
|
|
(ii)
|
"Exchange
Options"
has the meaning provided in Subsection 3.1(d).
|
|
(jj)
|
"Exchange
Warrants"
has the meaning provided in Subsection 3.1(g).
|
|
(kk)
|
"Final
Order"
means the final order of the Court approving the Arrangement pursuant
to
subsection 193(9) of the ABCA to be applied for following the Meeting,
as
such order may be affirmed, amended or modified by any court of competent
jurisdiction.
|
|
(ll)
|
"Imputed
Transaction Value"
shall be equal to the product obtained when the five trading day
volume
weighted trading price on the TSX of an Acquiror Share ending on
the
seventh trading day prior to the Effective Date is multiplied by
the
Exchange Ratio.
|
|
(mm)
|
"Interim
Order"
means an interim order of the Court under subsection 193(4) of the
ABCA
containing declarations and directions with respect to the Arrangement,
as
such order may be affirmed, amended or modified by any court of competent
jurisdiction.
|
|
(nn)
|
"Letter
of Transmittal"
means the letter of transmittal to be sent to the holders of Target
Shares
pursuant to which holders of Target Shares are required to deliver
certificates representing their Target Shares to receive the Exchangeable
Shares, Acquiror Shares and/or Cash Consideration, as applicable,
issuable
or payable to them pursuant to the
Arrangement.
|
|
(oo)
|
"Liquidation
Amount"
has the meaning provided in the Exchangeable Share
Provisions.
|
|
(pp)
|
"Liquidation
Call Purchase Price"
has the meaning provided in Subsection 8.2(a).
|
-
4
-
|
(qq)
|
"Liquidation
Call Right"
has the meaning provided in Subsection 8.2(a).
|
|
(rr)
|
"Liquidation
Date"
has the meaning provided in the Exchangeable Share
Provisions.
|
|
(ss)
|
"Meeting"
means the special meeting of holders of Target Shareholders to be
held to
consider, among other things, the Arrangement and related matters,
and any
adjournment thereof.
|
|
(tt)
|
"Optionholder
Election Form"
means the duly completed written election of an Optionholder, in
form
satisfactory to Acquiror, irrevocably electing that: (i) in the case
of a
Continuing Optionholder, certain of the Target Options held by such
Continuing Optionholder are to be exchanged for Acquiror Options
in
accordance with the provisions of Subsection 3.1(k);
and/or (ii) certain of the Target Options held by such Optionholder
are to
be exchanged for Target Shares in accordance with the provisions
of
Subsection 3.1(d).
|
|
(uu)
|
"Person"
means an individual, partnership, association, body corporate, trust,
unincorporated organization, government, regulatory authority, or
other
entity.
|
|
(vv)
|
"Redemption
Call Purchase Price"
has the meaning provided in Subsection 8.3(a).
|
|
(ww)
|
"Redemption
Call Right"
has the meaning provided in Subsection 8.3(a).
|
|
(xx)
|
"Redemption
Date"
has the meaning provided in the Exchangeable Share
Provisions.
|
|
(yy)
|
"Redemption
Price"
has the meaning provided in the Exchangeable Share
Provisions.
|
|
(zz)
|
"Registrar"
means the Registrar appointed under section 263 of the
ABCA.
|
|
(aaa)
|
"Rollover
Options"
has the meaning provided in Subsection 3.1(k).
|
|
(bbb)
|
"Target"
means Solana Resources Limited, a corporation incorporated under
the
ABCA.
|
|
(ccc)
|
"Target
Option Differential"
means the amount by which the Imputed Transaction Value exceeds the
exercise price of a particular Target
Option.
|
|
(ddd)
|
"Target
Optionholders"
means the holders from time to time of the Target
Options.
|
|
(eee)
|
"Target
Option Plan"
means the stock option plan of
Target.
|
|
(fff)
|
"Target
Options"
means the options to purchase Target Shares granted pursuant to the
Target
Option Plan.
|
|
(ggg)
|
"Target
Securities"
means, collectively, the Target Shares, the Target Options and the
Target
Warrants.
|
|
(hhh)
|
"Target
Securityholders"
means, collectively, the Target Shareholders, the Target Optionholders
and
the Target Warrantholders.
|
|
(iii)
|
"Target
Share"
means a common share in the capital of Target as constituted on the
date
hereof.
|
|
(jjj)
|
"Target
Shareholders"
means the holders from time to time of the Target
Shares.
|
|
(kkk)
|
"Target
Warrant Differential"
means the amount by which the Imputed Transaction Value exceeds
$2.00.
|
|
(lll)
|
"Target Warrantholders"
means the holders from time to time of the Target
Warrants.
|
-
5
-
|
(mmm)
|
"Target
Warrants"
means the 7,500,000 warrants of Target issued on October 1,
2006.
|
|
(nnn)
|
"Tax
Act"
means the Income
Tax Act
(Canada), as the same may be amended, including the regulations
promulgated thereunder.
|
|
(ooo)
|
"Transfer
Agent"
means Computershare Trust Company of Canada or such other Person
as may
from time to time be appointed by ExchangeCo as the registrar and
transfer
agent for the Exchangeable Shares.
|
|
(ppp)
|
"TSX"
means the Toronto Stock Exchange.
|
|
(qqq)
|
"Voting
and Exchange Trust Agreement"
means the agreement so entitled among Acquiror, ExchangeCo and the
Trustee
named therein to be dated as of the Effective Date and provided for
in the
Arrangement Agreement.
|
|
(rrr)
|
"Warrantholder
Election Form"
means the duly completed written election of a Target Warrantholder,
in
form satisfactory to Acquiror, irrevocably electing that certain
of the
Target Warrants held by such Target Warrantholder are to be exchanged
for:
(i) Target Shares in accordance with the provisions of Subsection
3.1(f);
and/or (ii) cash in accordance with the provisions of Subsection
3.1(g).
|
|
1.2
|
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.
|
|
1.3
|
Unless
reference is specifically made to some other document or instrument,
all
references herein to articles and sections are to articles and sections
of
this Plan of Arrangement.
|
|
1.4
|
Unless
the context otherwise requires, words importing the singular number
shall
include the plural and vice
versa;
and words importing any gender shall include all
genders.
|
|
1.5
|
In
the event that the date on which any action is required to be taken
hereunder by any of the parties 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 in such
place.
|
|
1.6
|
References
in this Plan of Arrangement to any statute or sections thereof shall
include such statute as amended or substituted and any regulations
promulgated thereunder from time to time in
effect.
|
|
1.7
|
All
dollar amounts referred to in this Plan of Arrangement are in Canadian
funds, unless otherwise indicated
herein.
|
ARTICLE 2
ARRANGEMENT
AGREEMENT
|
2.1
|
This
Plan of Arrangement is made pursuant to the Arrangement
Agreement.
|
|
2.2
|
This
Plan of Arrangement, upon the filing of the Articles of Arrangement
and
the issue of the Certificate, if any, shall become effective on,
and be
binding on and after, the Effective Time on: (i) the Target
Securityholders; (ii) Target; (iii) ExchangeCo; and (iv)
Acquiror.
|
|
2.3
|
The
Articles of Arrangement and Certificate shall be filed and issued,
respectively, with respect to this Arrangement in its entirety. The
Certificate shall be conclusive evidence that the Arrangement has
become
effective and that each of the provisions of Article 3
has become effective in the sequence set out therein. If no Certificate
is
required to be issued by the Registrar pursuant to subsection 193(11)
of the ABCA, the Arrangement shall become effective on the date the
Articles of Arrangement are filed with the Registrar pursuant to
subsection 193(10) of the
ABCA.
|
-
6
-
ARTICLE 3
ARRANGEMENT
|
3.1
|
Commencing
at the Effective Time, each of the events set out below shall occur
and
shall be deemed to occur in the following order without any further
act or
formality except as otherwise provided
herein:
|
Vesting
of Target Options and Target Warrants
|
(a)
|
each
Target Option outstanding immediately prior to the Effective Time,
notwithstanding any contingent vesting provisions to which it might
otherwise have been subject, shall be deemed to be fully
vested;
|
|
(b)
|
each
Target Warrant outstanding immediately prior to the Effective Time,
notwithstanding any contingent vesting provisions to which it might
otherwise have been subject, shall be deemed to be fully
vested;
|
Dissenting
Securityholders
|
(c)
|
the
Target Shares held by Dissenting Securityholders shall be deemed
to have
been transferred to Target (free of any claims) and cancelled and
such
Dissenting Securityholders shall cease to have any rights as Target
Shareholders other than the right to be paid the fair value of their
Target Shares in accordance with Article 4;
|
Exchange
of Target Options (No Rollover Election)
|
(d)
|
if
a Target Optionholder provides to Acquiror, on or before the date
which is
three Business Days prior to the Effective Date, a duly completed
and
executed Optionholder Election Form and therein designates that certain
Target Options held by such Target Optionholder are subject to an
exchange
election ("Exchange
Options"),
each such Exchange Option will be deemed to be surrendered to Target
in
exchange for such number of Target Shares as is equal to the quotient
obtained when the Target Option Differential applicable to such Exchange
Option is divided by the Imputed Transaction Value;
|
|
(e)
|
each
Target Option held by a Target Optionholder which is not the subject
of a
properly delivered Optionholder Election Form in
accordance with Subsection 3.1(d)
or
Subsection 3.1(k)
shall be deemed to be surrendered to Target in exchange for a cash
payment
from Target equal to the product obtained when one (1) is multiplied
by
the Target Option Differential applicable to such Target
Option;
|
Exchange
or Other Treatment of Target Warrants
|
(f)
|
if
a Target Warrantholder provides to Acquiror, on or before the date
which
is three Business Days prior to the Effective Date, a duly completed
and
executed Warrantholder Election Form and therein designates that
certain
Target Warrants held by such Target Warrantholder are subject to
an
exchange election ("Exchange
Warrants"),
each such Exchange Warrant shall be deemed to be surrendered to Target
in
exchange for such number of Target Shares as is equal to the quotient
obtained when the Target Warrant Differential is divided by the Imputed
Transaction Value;
|
|
(g)
|
if
a Target Warrantholder provides to Acquiror, on or before the date
which
is three Business Days prior to the Effective Date, a duly completed
and
executed Warrantholder Election Form and therein designates that
certain
Target Warrants will be exchanged for cash, each such Target Warrant
shall
be deemed to be surrendered to Target in exchange for a cash payment
from
Target equal to the product obtained when one (1) is multiplied by
the
Target Warrant Differential;
|
-
7
-
|
(h)
|
any
Target Warrants held by a Target Warrantholder which are not the
subject
of a properly delivered Warrantholder Election Form in accordance
with
Subsections 3.1(f)
or
3.1(g)
will entitle the Target Warrantholder to purchase Acquiror Shares
in
accordance with the terms and conditions of the Target
Warrants;
|
Exchange
of Target Shares by Target Shareholders who are Exchangeable Share Electing
Shareholders
|
(i)
|
the
Target Shares held by Exchangeable Share Electing Shareholders (other
than
those previously held by Dissenting Securityholders but including
those
received in accordance with Subsections 3.1(d)
and 3.1(f))
shall be sold, assigned and transferred to ExchangeCo (free and clear
of
all liens, claims and encumbrances) in exchange for such number of
Exchangeable Shares as is equal to the number of Target Shares so
exchanged, multiplied by the Exchange Ratio;
|
Exchange
of Target Shares by Target Shareholders who are Acquiror Share Electing
Shareholders
|
(j)
|
the
Target Shares held by Acquiror Share Electing Shareholders (other
than
those previously held by Dissenting Securityholders but including
those
received in accordance with Subsections 3.1(d)
and 3.1(f))
shall be sold, assigned and transferred to ExchangeCo (free and clear
of
all liens, claims and encumbrances) in exchange for such number of
Acquiror Shares as is equal to the number of Target Shares so exchanged,
multiplied by the Exchange Ratio;
and
|
Exchange
of Target Options by Continuing Optionholders pursuant to Rollover
Elections
|
(k)
|
if
a Continuing Optionholder provides to Acquiror, on or before the
date
which is three Business Days prior to the Effective Date, a duly
completed
and executed Optionholder Election Form and therein designates that
certain Target Options held by such Continuing Optionholder are subject
to
a rollover election ("Rollover
Options"),
each such Rollover Option will be exchanged and cancelled in exchange
for
that number of Acquiror Options equal to the product obtained when
one (1)
is multiplied by the Exchange Ratio; the exercise price for each
such
Acquiror Option will be equal to the exercise price of each corresponding
Rollover Option exchanged divided by the Exchange Ratio (and shall
be
denominated in United States dollars based on a conversion rate equal
to
the noon buying rate of the Federal Reserve Bank of New York on the
Effective Date); and the expiry date of such Acquiror Option will
be the
same as for each corresponding Rollover Option.
|
| 3.2 |
(a)
|
An
Exchangeable Share Electing Shareholder who has transferred Target
Shares
to ExchangeCo as contemplated under Subsection 3.1(i)
shall be considered to have received any of the ancillary rights
and
benefits associated with the Exchangeable Shares in consideration
for the
grant by the Exchangeable Share Electing Shareholder to Acquiror,
ExchangeCo and Callco of certain rights and benefits as against
the
Exchangeable Share Electing Shareholder in respect of the Exchangeable
Shares. To the extent that the value of the ancillary rights and
benefits
received by the Exchangeable Share Electing Shareholder exceeds
the value
of the rights and benefits given up by the Exchangeable Share Electing
Shareholder to Acquiror, ExchangeCo and Callco, the Exchangeable
Share
Electing Shareholder shall be considered to have disposed of a
portion of
its Target Shares in consideration for such excess ancillary rights
and
benefits, and to have disposed of the remaining portion (the "share
portion")
of its Target Shares solely in consideration for Exchangeable Shares.
The
share portion (expressed as a number) shall be equal to the number
of
Target Shares obtained when the total number of Target Shares transferred
by the Exchangeable Share Electing Shareholder to ExchangeCo is
multiplied
by the aggregate fair market value of the Exchangeable Shares received
by
the Exchangeable Share Electing Shareholder divided by the sum
of such
aggregate fair market value and the amount, if any, by which the
aggregate
fair market value of the ancillary rights and benefits received
by the
Exchangeable Share Electing Shareholder exceeds the aggregate fair
market
value of the rights and benefits granted by the Exchangeable Share
Electing Shareholder to ExchangeCo and Callco in respect of the
Exchangeable Shares.
|
-
8
-
|
(b)
|
Eligible
Shareholders will be entitled to make an income tax election pursuant
to
section 85 of the Tax Act (and any applicable provincial legislation)
with
respect to the transfer of their Target Shares to ExchangeCo by providing
two signed copies of the necessary election forms to ExchangeCo within
90
days following the Effective Date, duly completed with the details
of the
number of Target Shares transferred and the applicable agreed amounts
for
the purposes of such elections. Thereafter, subject to the election
forms
complying with the provisions of the Tax Act (and any applicable
provincial legislation), the forms will be signed by ExchangeCo and
returned to such holders of Target Shares for filing with the Canada
Revenue Agency (and any applicable provincial taxation authority).
Notwithstanding the foregoing, ExchangeCo may, in its discretion,
agree to
alternate arrangements with an Eligible Shareholder in respect of
the
making of any such election, which may include the use of the internet
for
the completion and processing of the requisite
documents.
|
|
3.3
|
With
respect to each holder of Target Securities (other than Dissenting
Securityholders), as the case may be, at the Effective
Time:
|
|
(a)
|
upon
the exchange of Target Options for Target Shares pursuant to Subsection
3.1(d):
|
|
(i)
|
each
former Target Optionholder shall cease to be the holder of the Target
Options so exchanged and the name of each such Target Optionholder
shall
be removed from the register of holders of Target Options;
and
|
|
(ii)
|
each
such former Target Optionholder shall become a holder of the Target
Shares
so exchanged and shall be added to the register of holders of Target
Shares;
|
|
(b)
|
upon
the exchange of Target Options for cash pursuant to Subsection
3.1(e),
each former Target Optionholder shall cease to be the holder of the
Target
Options so exchanged and the name of each such Target Optionholder
shall
be removed from the register of holders of Target
Options;
|
|
(c)
|
upon
the treatment of Target Warrants pursuant to Subsection 3.1(h):
|
|
(i)
|
each
former Target Warrantholder of such Target Warrants shall, in accordance
with the terms of the Target Warrants, cease to be the holder of
warrants
to purchase Target Shares and, as a result, the name of each such
Target
Warrantholder shall be removed from the register of holders of Target
Warrants; and
|
|
(ii)
|
each
such former Target Warrantholder shall become a holder of warrants
to
acquire Acquiror Shares in accordance with the terms of such Target
Warrants and shall be added to the register of holders of warrants
to
acquire Acquiror Shares;
|
|
(d)
|
upon
the exchange of Target Warrants for Target Shares pursuant to Subsection
3.1(f):
|
|
(i)
|
each
former Target Warrantholder shall cease to be the holder of the Target
Warrants so exchanged and the name of each such Target Warrantholder
shall
be removed from the register of holders of Target Warrants;
and
|
|
(ii)
|
each
such former Target Warrantholder shall become a holder of the Target
Shares so exchanged and shall be added to the register of holders
of
Target Shares;
|
|
(e)
|
upon
the exchange of Target Warrants for cash pursuant to Subsection
3.1(g),
each former Target Warrantholder shall cease to be the holder of
the
Target Warrants so exchanged and the name of each such Target
Warrantholder shall be removed from the register of holders of Target
Warrants;
|
-
9
-
|
(f)
|
upon
the exchange of Target Shares for Exchangeable Shares pursuant to
Subsection 3.1(i):
|
|
(i)
|
each
former Target Shareholder shall cease to be the holder of the Target
Shares so exchanged and the name of each such Target Shareholder
shall be
removed from the register of holders of Target
Shares;
|
|
(ii)
|
each
such former Target Shareholder shall become a holder of the Exchangeable
Shares so exchanged and shall be added to the register of holders
of
Exchangeable Shares; and
|
|
(iii)
|
ExchangeCo
shall become the holder of the Target Shares so exchanged and shall
be
added to the register of holders of Target Shares in respect
thereof;
|
|
(g)
|
upon
the exchange of Target Shares for Acquiror Shares pursuant to Subsection
3.1(j):
|
|
(i)
|
each
former Target Shareholder shall cease to be the holder of the Target
Shares so exchanged and the name of each such Target Shareholder
shall be
removed from the register of holders of Target
Shares;
|
|
(ii)
|
each
such former Target Shareholder shall become a holder of the Acquiror
Shares so exchanged and shall be added to the register of holders
of
Acquiror Shares; and
|
|
(iii)
|
ExchangeCo
shall become the holder of the Target Shares so exchanged and shall
be
added to the register of holders of Target Shares in respect thereof;
and
|
|
(h)
|
upon
the exchange of Target Options for Acquiror Options pursuant to Subsection
3.1(k):
|
|
(i)
|
each
former Target Optionholder shall cease to be the holder of the Target
Options so exchanged and the name of each such Target Optionholder
shall
be removed from the register of holders of Target Options;
and
|
|
(ii)
|
each
such former Target Optionholder shall become a holder of the Acquiror
Options so exchanged and shall be added to the register of holders
of
Acquiror Options.
|
ARTICLE 4
DISSENTING
SHAREHOLDERS
|
4.1
|
Each
registered holder of Target Shares shall have the right to dissent
with
respect to the Arrangement in accordance with the Interim Order.
A
Dissenting Securityholder shall, at the Effective Time, cease to
have any
rights as a holder of Target Shares and shall only be entitled to
be paid
the fair value of the holder's Target Shares by Target. A Dissenting
Securityholder who is paid the fair value of the holder's Target
Shares
shall be deemed to have transferred the holder's Target Shares to
Target,
notwithstanding the provisions of Section 191 of the ABCA. A Dissenting
Securityholder who for any reason is not entitled to be paid the
fair
value of the holder's Target Shares shall be treated as if the holder
had
participated in the Arrangement on the same basis as a non-dissenting
holder of Target Shares notwithstanding the provisions of Section 191
of the ABCA. The fair value of the Target Shares shall be determined
as of
the close of business on the last Business Day before the day on
which the
Arrangement is approved by the holders of Target Shares at the Meeting;
but in no event shall Acquiror or Target be required to recognize
such
Dissenting Shareholder as a securityholder of Acquiror, Target or
ExchangeCo after the Effective Time and the name of such holder shall
be
removed from the applicable register as at the Effective Time. For
greater
certainty, in addition to any other restrictions in section 191 of
the ABCA, no Person who has voted in favour of the Arrangement shall
be
entitled to dissent with respect to the Arrangement. In addition,
a Target
Shareholder may only exercise dissent rights in respect of all, and
not
less than all, of its Target
Shares.
|
-
10
-
ARTICLE 5
OUTSTANDING
CERTIFICATES AND FRACTIONAL SECURITIES
|
5.1
|
From
and after the Effective Time, certificates formerly representing
Target
Securities that were exchanged under Section 3.1
shall represent only the right to receive the consideration to which
the
holders are entitled under the Arrangement, or as to those held by
Dissenting Securityholders, other than those Dissenting Securityholders
deemed to have participated in the Arrangement pursuant to Section
3.1,
to receive the fair value of the Target Shares represented by such
certificates.
|
|
5.2
|
Subject
to the provisions of the Letter of Transmittal, Acquiror shall, as
soon as
practicable following the later of the Effective Date and the date
of
deposit by a former Target Shareholder of a duly completed Letter
of
Transmittal and the certificates representing such Target Shares,
either:
|
|
(a)
|
forward
or cause to be forwarded by first class mail (postage prepaid) to
such
former holder at the address specified in the Letter of Transmittal;
or
|
|
(b)
|
if
requested by such holder in the Letter of Transmittal, make available
or
cause to be made available at the Depositary for pickup by such
holder,
|
certificates
representing the number of Exchangeable Shares and/or Acquiror Shares issued
to
such holder under the Arrangement.
|
5.3
|
If
any certificate which immediately prior to the Effective Time represented
an interest in outstanding Target Shares that were exchanged pursuant
to
Section 3.1
has been lost, stolen or destroyed, upon the making of an affidavit
of
that fact by the Person claiming such certificate to have been lost,
stolen or destroyed, the Depositary will issue and deliver in exchange
for
such lost stolen or destroyed certificate the consideration to which
the
holder is entitled pursuant to the Arrangement (and any dividends
or
distributions with respect thereto) as determined in accordance with
the
Arrangement. The Person who is entitled to receive such consideration
shall, as a condition precedent to the receipt thereof, give a bond
to
each of Target and Acquiror and their respective transfer agents,
which
bond is in form and substance satisfactory to each of the Target
and
Acquiror and their respective transfer agents, or shall, to the extent
agreed by Acquiror and Target, otherwise indemnify Target and Acquiror
and
their respective transfer agents against any claim that may be made
against any of them with respect to the certificate alleged to have
been
lost, stolen or destroyed.
|
|
5.4
|
All
dividends or other distributions, if any, made with respect to any
Target
Shares allotted and issued pursuant to this Arrangement but for which
a
certificate has not been issued shall be paid or delivered to the
Depositary to be held by the Depositary, in trust, for the registered
holder thereof. Subject to Section 5.5,
the Depositary shall pay and deliver to any such registered holder,
as
soon as reasonably practicable after application therefor is made
by the
registered holder to the Depositary in such form as the Depositary
may
reasonably require, such dividends and distributions to which such
holder
is entitled, net of applicable withholding and other
taxes.
|
|
5.5
|
Any
certificate formerly representing Target Shares that is not deposited
with
all other documents as required by this Plan of Arrangement on or
before
the sixth anniversary of the Effective Date shall cease to represent
a
right or claim of any kind or nature including the right of the holder
of
such shares to receive Exchangeable Shares (and any dividend and
distributions thereon), Acquiror Shares (and any dividend and
distributions thereon) and/or Cash Consideration, as applicable.
In such
case, such Exchangeable Shares (and any dividend and distributions
thereon), Acquiror Shares (together with all dividends and distributions
thereon) and Cash Consideration shall be returned to ExchangeCo or
Acquiror, as applicable, and such Exchangeable Shares and Acquiror
Shares
shall be cancelled.
|
-
11
-
|
5.6
|
No
certificates representing fractional Exchangeable Shares, Acquiror
Shares
or Target Shares shall be issued under this Arrangement. In lieu
of any
fractional shares: (a) each registered holder of Target Shares otherwise
entitled to a fractional interest in an Exchangeable Share or Acquiror
Share will receive the nearest whole number of Exchangeable Shares
or
Acquiror Shares, respectively (with fractions equal to exactly 0.5
being
rounded up); (b) each registered holder of Target Options otherwise
entitled to a fractional interest in a Target Share will receive
the
nearest whole number of Target Shares (with all fractions being rounded
down); and (c) each registered holder of Target Warrants otherwise
entitled to a fractional interest in a Target Share will receive
the
nearest whole number of Target Shares (with fractions equal to exactly
0.5
being rounded up).
|
ARTICLE 6
AMENDMENTS
|
6.1
|
Acquiror
or Target may amend this Plan of Arrangement at any time and from
time to
time prior to the Effective Time, provided that each such amendment
must
be: (i) set out in writing; (ii) approved by the other party; (iii)
filed
with the Court and, if made following the Meeting, approved by the
Court;
and (iv) communicated to holders of Target Securities, if and as
required
by the Court.
|
|
6.2
|
Any
amendment to this Plan of Arrangement may be proposed by Acquiror
or
Target at any time prior to or at the Meeting (provided that the
other
party shall have consented thereto) with or without any other prior
notice
or communication, and if so proposed and accepted by the Target
Shareholders voting at the Meeting (other than as may be required
under
the Interim Order), shall become part of this Plan of Arrangement
for all
purposes.
|
|
6.3
|
Acquiror
and Target may amend, modify and/or supplement this Plan of Arrangement
at
any time and from time to time after the Meeting and prior to the
Effective Time with the approval of the
Court.
|
|
6.4
|
Any
amendment, modification or supplement to this Plan of Arrangement
may be
made prior to or following the Effective Time by Acquiror and Target;
provided that, it concerns a matter which, in the reasonable opinion
of
Acquiror and Target, 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 former holder
of
Target Shares.
|
ARTICLE 7
WITHHOLDING
RIGHTS
|
7.1
|
Acquiror,
Target, Callco and ExchangeCo and the Depositary shall be entitled
to
deduct and withhold from any consideration otherwise payable to any
Target
Securityholders or holders of Exchangeable Shares such amounts as
Acquiror, Target, Callco and ExchangeCo or the Depositary determines,
acting reasonably, are required or permitted pursuant to the Tax
Act, the
United
States Internal Revenue Code of 1986,
or any provision of federal, provincial, territorial, state, local
or
foreign tax law, in each case, as amended. To the extent that amounts
are
so withheld, such withheld amounts shall be treated for all purposes
hereof as having been paid to the Target Securityholder in respect
of
which such deduction and withholding was made; provided that, such
withheld amounts are actually remitted to the appropriate taxing
authority.
|
ARTICLE 8
CERTAIN
RIGHTS OF ACQUIROR TO ACQUIRE EXCHANGEABLE SHARES
|
8.1
|
Change
of Law Call Right
|
|
(a)
|
Acquiror
shall have the overriding right (the "Change
of Law Call Right"),
in the event of a Change of Law, to purchase (or to cause Callco
to
purchase) from all but not less than all of the holders of Exchangeable
Shares (other than any holder of Exchangeable Shares which is an
affiliate
of Acquiror) all but not less than all of the Exchangeable Shares
held by
each such holder upon payment by Acquiror or Callco, as the case
may be,
of an amount per share (the "Change
of Law Call Purchase Price")
equal to the Exchangeable Share Price applicable on the last Business
Day
prior to the Change of Law Call Date, in accordance with Subsection
8.1(c).
In the event of the exercise of the Change of Law Call Right by Acquiror
or Callco, as the case may be, each holder of Exchangeable Shares
shall be
obligated to sell all the Exchangeable Shares held by such holder
to
Acquiror or Callco, as the case may be, on the Change of Law Call
Date
upon payment by Acquiror to such holder of the Change of Law Call
Purchase
Price for each such Exchangeable
Share.
|
-
12
-
|
(b)
|
To
exercise the Change of Law Call Right, Acquiror or Callco must notify
the
Transfer Agent of its intention to exercise such right at least 45
days
before the date on which Acquiror or Callco intends to acquire the
Exchangeable Shares (the "Change
of Law Call Date").
If Acquiror or Callco exercises the Change of Law Call Right, then,
on the
Change of Law Call Date, Acquiror or Callco, as the case may be,
will
purchase and the holders of Exchangeable Shares will sell all of
the
Exchangeable Shares then outstanding for a price per share equal
to the
Change of Law Call Purchase Price.
|
|
(c)
|
For
the purposes of completing the purchase of the Exchangeable Shares
pursuant to the exercise of the Change of Law Call Right, Acquiror
or
Callco, as the case may be, shall deposit or cause to be deposited
with
the Transfer Agent, on or before the Change of Law Call Date, the
Exchangeable Share Consideration representing the total Change of
Law Call
Purchase Price. Provided that such Exchangeable Share Consideration
has
been so deposited with the Transfer Agent, on and after the Change
of Law
Call Date the holders of the Exchangeable Shares shall cease to be
holders
of the Exchangeable Shares and shall not be entitled to exercise
any of
the rights of holders in respect thereof (including any rights under
the
Voting and Exchange Trust Agreement), other than the right to receive
their proportionate part of the total Change of Law Purchase Price
payable
by Acquiror or Callco, as the case may be, without interest, 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 Change of Law Call Date be considered and deemed for all purposes
to
be the holder of Acquiror Shares to which such holder 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 ABCA 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
Acquiror
or Callco, as the case may be, shall deliver to such holder, the
Exchangeable Share Consideration to which such holder is
entitled.
|
|
8.2
|
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 or any other distribution of the assets
of
ExchangeCo among its shareholders for the purpose of winding-up its
affairs, pursuant to Article 5 of the Exchangeable Share Provisions,
to
purchase from all but not less than all of the holders of Exchangeable
Shares (other than any holder of Exchangeable Shares which is an
affiliate
of Acquiror) on the Liquidation Date all but not less than all of
the
Exchangeable Shares held by each such holder upon payment by Callco
to
each such holder of the Exchangeable Share Price applicable on the
last
Business Day prior to the Liquidation Date (the "Liquidation
Call Purchase Price")
in accordance with Subsection 8.2(c).
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 such
holder to Callco on the Liquidation Date upon payment by Callco to
such
holder of the Liquidation Call Purchase Price for each such Exchangeable
Share, whereupon Canco shall have no obligation to pay any Liquidation
Amount to the holders of such shares so purchased by
Callco.
|
|
(b)
|
To
exercise the Liquidation Call Right, Callco must notify ExchangeCo
and the
Transfer Agent 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 or any other voluntary
distribution of the assets of ExchangeCo among its shareholders for
the
purpose of winding-up its affairs, and at least five Business Days
before
the Liquidation Date, in the case of an involuntary liquidation,
dissolution or winding-up of ExchangeCo or any other involuntary
distribution of the assets of ExchangeCo among its shareholders for
the
purpose of winding up its affairs. The Transfer Agent will notify
the
holders of Exchangeable Shares as to whether 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 of Exchangeable Shares will sell all of the Exchangeable
Shares then outstanding for a price per share equal to the Liquidation
Call Purchase Price.
|
-
13
-
|
(c)
|
For
the purposes of completing the purchase of the Exchangeable Shares
pursuant to the Liquidation Call Right, Callco shall deposit or cause
to
be deposited with the Transfer Agent, on or before the Liquidation
Date,
the Exchangeable Share Consideration representing the total Liquidation
Call Purchase Price. Provided that such Exchangeable Share Consideration
has been so deposited with the Transfer Agent, on and after the
Liquidation Date, the holders of the Exchangeable Shares shall cease
to be
holders of the Exchangeable Shares and shall not be entitled to exercise
any of the rights of holders in respect thereof (including any rights
under the Voting and Exchange Trust Agreement ), other than the right
to
receive their proportionate part of the total Liquidation Call Purchase
Price payable by Callco, without interest, 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 Acquiror
Shares
to which such holder 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 ABCA 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,
the
Exchangeable Share Consideration to which such holder is entitled.
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
Amount otherwise payable by ExchangeCo in connection with the liquidation,
dissolution or winding-up of ExchangeCo pursuant to Article 5 of
the
Exchangeable Share Provisions.
|
|
8.3
|
Callco
Redemption Call Right
|
In
addition to Callco's rights contained in the Exchangeable Share Provisions,
including the Retraction Call Right (as defined in the Exchangeable Share
Provisions), Callco shall have the following rights in respect of the
Exchangeable Shares:
|
(a)
|
Callco
shall have the overriding right (the "Redemption
Call Right"),
in the event of and 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 (other than any holder of
Exchangeable Shares which is an affiliate of Acquiror) on the Redemption
Date all but not less than all of the Exchangeable Shares held by
each
such holder upon payment by Callco to each such holder of the Exchangeable
Share Price applicable on the last Business Day prior to the Redemption
Date (the "Redemption
Call Purchase Price")
in accordance with Subsection 8.3(c).
In the event of the exercise of the Redemption Call Right by Callco,
each
holder of Exchangeable Shares shall be obligated to sell all the
Exchangeable Shares held by such holder to Callco on the Redemption
Date
upon payment by Callco to such holder of the Redemption Call Purchase
Price for each such Exchangeable Share, whereupon Canco shall have
no
obligation to redeem, or to pay the Redemption Price in respect of,
such
shares so purchased by Callco.
|
-
14
-
|
(b)
|
To
exercise the Redemption Call Right, Callco must notify the Transfer
Agent
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 Acquiror Control Transaction, an Exchangeable Share Voting
Event or
an Exempt Exchangeable Share Voting Event (each as defined in the
Exchangeable Share Provisions), in which case Callco shall so notify
the
Transfer Agent and Canco on or before the Redemption Date. The Transfer
Agent will notify the holders of the Exchangeable Shares as to whether
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, then, on the Redemption Date,
Callco
will purchase and the holders of Exchangeable Shares 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 exercise of the Redemption Call Right, Callco shall
deposit or cause to be deposited with the Transfer Agent, on or before
the
Redemption Date, the Exchangeable Share Consideration representing
the
total Redemption Call Purchase Price. Provided that such Exchangeable
Share Consideration has been so deposited with the Transfer Agent,
on and
after the Redemption Date the holders of the Exchangeable Shares
shall
cease to be holders of the Exchangeable Shares and shall not be entitled
to exercise any of the rights of holders in respect thereof (including
any
rights under the Voting and Exchange Trust Agreement), other than
the
right to receive their proportionate part of the total Redemption
Call
Purchase Price payable by Callco, without interest, 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 Acquiror Shares to which such holder 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 ABCA
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, the Exchangeable Share Consideration to which such holder
is
entitled. 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 9
FURTHER
ASSURANCES
|
9.1
|
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 without
any
further act or formality, each of the parties to the Arrangement
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.
Target and Acquiror may agree not to implement this Plan of Arrangement,
notwithstanding the passing of the resolution approving the Arrangement
by
the Target Shareholders and the receipt of the Final
Order.
|
-
15
-
SCHEDULE
"A"
EXCHANGEABLE
SHARE PROVISIONS
PROVISIONS
ATTACHING TO THE
EXCHANGEABLE
SHARES OF GRAN TIERRA EXCHANGECO INC.
The
Exchangeable Shares shall have the following rights, privileges, restrictions
and conditions:
ARTICLE
1
INTERPRETATION
|
1.1
|
For
the purposes of these share
provisions:
|
"ABCA"
means
the Business
Corporations Act,
R.S.A.
2000, c. B-9, as amended, including the regulations promulgated
thereunder;
"Acquiror"
means
Gran Tierra Energy Inc., a corporation incorporated under the laws of
Nevada;
"Acquiror
Control Transaction"
means
any merger, amalgamation, tender, offer, material sale of shares or rights
or
interests therein or thereto or similar transactions involving Acquiror, or
any
proposal to carry out the same;
"Acquiror
Dividend Declaration Date'';
means
the date on which the board of directors of Acquiror declares any dividend
on
the Acquiror Shares;
"Acquiror
Shares"
means
the shares in the common stock of Acquiror and any other securities into which
such shares may be changed, exchanged or converted;
"Affiliate"
has the
meaning ascribed thereto in the Securities Act, unless otherwise expressly
stated herein;
"Arrangement
Agreement"
means
the arrangement agreement by and among Acquiror, the Corporation and Target
dated July 28, 2008 amended and restated from time to time, providing for,
among
other things, the Arrangement;
"Arrangement"
means
an arrangement under section 193 of the ABCA on the terms and subject to the
conditions, set out in the Plan of Arrangement to which plan these share
provisions are attached as Schedule "A" and which Plan of Arrangement is
attached to the Arrangement Agreement as Exhibit A, subject to any amendments
or
variations thereto made in accordance with Article 6 of the Plan of Arrangement
or made at the direction of the Court in the Final Order;
"Automatic
Exchange Right"
has the
meaning ascribed thereto in the Voting and Exchange Trust
Agreement;
"Board
of Directors"
means
the board of directors of the Corporation;
"Business
Day"
means a
day, other than a Saturday, Sunday or statutory holiday, when banks are
generally open in the City of Calgary, in the Province of Alberta, for the
transaction of banking business;
"Callco"
means
Gran Tierra Callco ULC, a company existing under the laws of the Province of
Alberta and a direct wholly-owned subsidiary of Acquiror;
"Callco
Call Notice"
has the
meaning ascribed thereto in Section 6.3;
"Canadian
Dollar Equivalent"
means
in respect of an amount expressed in a currency other than Canadian dollars
(the
"Foreign
Currency Amount")
at any
date the product obtained by multiplying:
|
(a)
|
the
Foreign Currency Amount, by
|
|
(b)
|
the
noon spot exchange rate on such date for such foreign currency expressed
in Canadian dollars as reported by the Bank of Canada or, in the
event
such spot exchange rate is not available, such spot exchange rate
on such
date for such foreign currency expressed in Canadian dollars as may
be
deemed by the Board of Directors to be appropriate for such
purpose;
|
"Change
of Law Call Right"
has the
meaning ascribed thereto in the Plan of Arrangement;
"Common
Shares"
means
the common shares in the capital of the Corporation;
"Corporation"
means
Gran Tierra Exchangeco Inc., a corporation existing under the laws of the
Province of Alberta;
"Court"
has the
meaning ascribed thereto in the Plan of Arrangement;
"Current
Market Price"
means,
in respect of an Acquiror Share on any date, the Canadian Dollar Equivalent
of
the average of the closing prices of Acquiror Shares during a period of 20
consecutive trading days ending not more than three trading days before such
date on the American Stock Exchange; or, if the Acquiror Shares are not then
listed on the American Stock Exchange, on such other stock exchange or automated
quotation system on which the Acquiror Shares are listed or quoted, as the
case
may be, as may be selected by the Board of Directors for such purpose; provided,
however, that if in the opinion of the Board of Directors the public
distribution or trading activity of Acquiror Shares during such period does
not
create a market which reflects the fair market value of an Acquiror Share,
then
the Current Market Price of an Acquiror Share shall be determined by the Board
of Directors, in good faith and in its sole discretion, and provided further
that any such selection, opinion or determination by the Board of Directors
shall be conclusive and binding;
"Effective
Date"
means
the effective date of the Arrangement, being the date shown on the certificate
of arrangement to be issued by the Registrar under the ABCA giving effect to
the
Arrangement;
"Exchange
Right"
has the
meaning ascribed thereto in the Voting and Exchange Trust
Agreement;
"Exchangeable
Shares"
mean
the non-voting exchangeable shares in the capital of the Corporation, having
the
rights, privileges, restrictions and conditions set forth herein;
"Exchangeable
Share Consideration"
means,
with respect to each Exchangeable Share, for any acquisition of, redemption
of
or distribution of assets of the Corporation in respect of such Exchangeable
Share, or purchase of such Exchangeable Share pursuant to these share
provisions, the Plan of Arrangement, the Support Agreement or the Voting and
Exchange Trust Agreement:
|
(a)
|
the
Current Market Price of one Acquiror Share deliverable in connection
with
such action; plus
|
|
(b)
|
a
cheque or cheques payable at par at any branch of the bankers of
the payor
in the amount of all declared, payable and unpaid, and all undeclared
but
payable, cash dividends deliverable in connection with such action;
plus
|
|
(c)
|
such
stock or other property constituting any declared and unpaid non-cash
dividends deliverable in connection with such
action,
|
provided
that: (i) the part of the consideration which represent (a) above shall be
fully
paid and satisfied by the delivery of one Acquiror Share, such share to be
duly
issued, fully paid and non-assessable; (ii) the part of the consideration which
represents (c) above shall be fully paid and satisfied by delivery of such
non-cash items; (iii) any such consideration shall be delivered free and clear
of any lien, claim, encumbrance, security interest or adverse claim or interest;
and (iv) any such consideration shall be paid less any tax required to be
deducted and withheld therefrom and without interest;
"Exchangeable
Share Price"
means,
for each Exchangeable Share, an amount equal to the aggregate of:
|
(d)
|
the
Current Market Price of one Acquiror Share;
plus
|
|
(e)
|
an
additional amount equal to the full amount of all cash dividends
declared,
payable and unpaid, on such Exchangeable Share;
plus
|
-
2 -
|
(f)
|
an
additional amount equal to the full amount of all dividends declared
and
payable or paid on Acquiror Shares which have not been declared or
paid on
Exchangeable Shares in accordance herewith;
plus
|
|
(g)
|
an
additional amount representing the full amount of all non-cash dividends
declared, payable and unpaid, on such Exchangeable
Share;
|
"Exchangeable
Share Voting Event"
means
any matter in respect of which holders of Exchangeable Shares are entitled
to
vote as shareholders of the Corporation, other than an Exempt Exchangeable
Share
Voting Event, and, for greater certainty, excluding any matter in respect of
which holders of Exchangeable Shares are entitled to vote (or instruct the
Trustee to vote) in their capacity as Beneficiaries under (and as that term
is
defined in) the Voting and Exchange Trust Agreement;
"Exempt
Exchangeable Share Voting Event"
means
any matter in respect of which holders of Exchangeable Shares are entitled
to
vote as shareholders of the Corporation in order to approve or disapprove,
as
applicable, any change to, or in the rights of the holders of, the Exchangeable
Shares, where the approval or disapproval, as applicable, of such change would
be required to maintain the equivalence of the Exchangeable Shares and the
Acquiror Shares;
"Final
Order"
has the
meaning ascribed thereto in the Plan of Arrangement;
"Governmental
Entity"
means
any:
|
(h)
|
multinational,
federal, provincial, territorial, state, regional, municipal, local
or
other government, governmental or public department, central bank,
court,
tribunal, arbitral body, commission, board, bureau or agency, domestic
or
foreign;
|
|
(i)
|
subdivision,
agent, commission, board, or authority of any of the foregoing; or
|
|
(j)
|
quasi-governmental
or private body exercising any regulatory, expropriation or taxing
authority under or for the account of any of the
foregoing;
|
"Holder"
means,
when used with reference to the Exchangeable Shares, the holders of Exchangeable
Shares shown from time to time in the register maintained by or on behalf of
the
Corporation in respect of the Exchangeable Shares;
"Liquidation
Amount"
has the
meaning ascribed thereto in Section 5.1;
"Liquidation
Call Right"
has the
meaning ascribed thereto in the Plan of Arrangement;
"Liquidation
Date"
has the
meaning ascribed thereto in Section 5.1;
"Person"
includes any individual, firm, partnership, joint venture, venture capital
fund,
limited liability company, unlimited liability company, association, trust,
trustee, executor, administrator, legal personal representative, estate, group,
body corporate, corporation, unincorporated association or organization,
Governmental Entity, syndicate or other entity, whether or not having legal
status;
"Plan
of Arrangement"
means
the plan of arrangement to which these share provisions are attached as Schedule
"A";
"Purchase
Price"
has the
meaning ascribed thereto in Section 6.3;
"Redemption
Call Purchase Price"
has the
meaning ascribed thereto in the Plan of Arrangement;
"Redemption
Call Right"
has the
meaning ascribed thereto in the Plan of Arrangement;
"Redemption
Date"
means
the date, if any, established by the Board of Directors for the redemption
by
the Corporation of all but not less than all of the outstanding Exchangeable
Shares pursuant to Article
7,
which
date shall be no earlier than the fifth anniversary of the Effective Date,
unless:
|
(k)
|
there
are less than 25,285,358 Exchangeable Shares issued and outstanding
(other
than Exchangeable Shares held by Acquiror and its
Affiliates);
|
-
3 -
|
(l)
|
an
Acquiror Control Transaction occurs, in which case, provided that
the
Board of Directors determines, in good faith and in its sole discretion,
that it is not reasonably practicable to substantially replicate
the terms
and conditions of the Exchangeable Shares in connection with such
an
Acquiror Control Transaction and that the redemption of all but not
less
than all of the outstanding Exchangeable Shares is necessary to enable
the
completion of such Acquiror Control Transaction in accordance with
its
terms, the Board of Directors may accelerate such redemption date
to such
date prior to the fifth anniversary of the Effective Date as it may
determine, upon such number of days prior written notice to the registered
holders of the Exchangeable Shares and the Trustee as the Board of
Directors may determine to be reasonably practicable in such
circumstances;
|
|
(m)
|
an
Exchangeable Share Voting Event is proposed, in which case, provided
that
the Board of Directors has determined, in good faith and in its sole
discretion, that it is not reasonably practicable to accomplish the
business purpose intended by the Exchangeable Share Voting Event,
which
business purpose must be bona fide and not for the primary purpose
of
causing the occurrence of a Redemption Date, the redemption date
shall be
the Business Day prior to the record date for any meeting or vote
of the
holders of the Exchangeable Shares to consider the Exchangeable Share
Voting Event and the Board of Directors shall give such number of
days
prior written notice of such redemption to the registered holders
of the
Exchangeable Shares and the Trustee as the Board of Directors may
determine to be reasonably practicable in such circumstances;
or
|
|
(n)
|
an
Exempt Exchangeable Share Voting Event is proposed and the holders
of the
Exchangeable Shares fail to take the necessary action at a meeting
or
other vote of holders of Exchangeable Shares, to approve or disapprove,
as
applicable, the Exempt Exchangeable Share Voting Event, in which
case the
redemption date shall be the Business Day following the day on which
the
holders of the Exchangeable Shares failed to take such
action,
|
provided,
however, that the accidental failure or omission to give any notice of
redemption under clauses (a), (b) or (c) above to any of such holders of
Exchangeable Shares shall not affect the validity of any such
redemption;
"Redemption
Price"
has the
meaning ascribed thereto in Section 7.1;
"Registrar"
means
the Registrar appointed pursuant to section 263 of the ABCA;
"Retracted
Shares"
has the
meaning ascribed thereto in Subsection 6.1(a);
"Retraction
Call Right"
has the
meaning ascribed thereto in Subsection 6.1(c);
"Retraction
Date"
has the
meaning ascribed thereto in Subsection 6.1(b);
"Retraction
Price"
has the
meaning ascribed thereto in Section 6.1;
"Retraction
Request"
has the
meaning ascribed thereto in Section 6.1;
"Securities
Act"
means
the Securities
Act
(Alberta) and the rules, regulations and policies made thereunder, as now in
effect and as they may be amended from time to time prior to the Effective
Date;
"Support
Agreement"
means
the agreement made among Acquiror, Callco and the Corporation substantially
in
the form and content of Exhibit B annexed to the Arrangement Agreement, with
such changes thereto as the parties to the Arrangement Agreement; acting
reasonably, may agree;
"Target"
means
Solana Resources Limited, a
corporation existing under the laws of the Province of Alberta;
"Target
Shares"
means
the common shares in the capital of Target;
"Transfer
Agent"
means
Computershare Trust Company of Canada or such other Person as may from time
to
time be appointed by the Corporation as the registrar and transfer agent for
the
Exchangeable Shares;
"Trustee"
means
Computershare Trust Company of Canada or such other trustee as is chosen by
Acquiror and Target, acting reasonably, to act as trustee under the Voting
and
Exchange Trust Agreement, being a corporation organized and existing under
the
laws of Canada, and any successor trustee appointed under the Voting and
Exchange Trust Agreement; and
-
4 -
"Voting
and Exchange Trust Agreement"
means
the agreement made among Acquiror, the Corporation and the Trustee in connection
with the Plan of Arrangement substantially in the form and content of Exhibit
C
annexed to the Arrangement Agreement with such changes thereto as the parties
to
the Arrangement Agreement, acting reasonably, may agree.
ARTICLE
2
RANKING
OF EXCHANGEABLE SHARES
|
2.1
|
The
Exchangeable Shares shall be entitled to a preference over the Common
Shares and any other shares ranking junior to the Exchangeable Shares
with
respect to the payment of dividends and the distribution of assets
in the
event of the liquidation, dissolution or winding-up of the Corporation,
whether voluntary or involuntary, or any other distribution of the
assets
of the Corporation, among its shareholders for the purpose of winding-up
its affairs.
|
ARTICLE
3
DIVIDENDS
|
3.1
|
A
holder of an Exchangeable Share shall be entitled to receive and
the Board
of Directors shall, subject to applicable law, on each Acquiror Dividend
Declaration Date, declare a dividend on each Exchangeable
Share:
|
|
(a)
|
in
the case of a cash dividend declared on the Acquiror Shares, in an
amount
in cash for each Exchangeable Share in U.S. dollars, or the Canadian
Dollar Equivalent thereof on the Acquiror Dividend Declaration Date,
in
each case, corresponding to the cash dividend declared on each Acquiror
Share;
|
|
(b)
|
in
the case of a stock dividend declared on the Acquiror Shares, to
be paid
in Acquiror Shares, subject to Section 3.2,
by the issue or transfer by the Corporation of such number of Exchangeable
Shares for each Exchangeable Share as is equal to the number of Acquiror
Shares to be paid on each Acquiror Share;
or
|
|
(c)
|
in
the case of a dividend declared on the Acquiror Shares in property
other
than cash or Acquiror Shares, in such type and amount of property
for each
Exchangeable Share as is the same as or economically equivalent to
(to be
determined by the Board of Directors as contemplated by Section
3.6)
the type and amount of property declared as a dividend on each Acquiror
Share.
|
Such
dividends shall be paid out of money, assets or property of the Corporation
properly applicable to the payment of dividends, or out of authorized but
unissued shares of the Corporation, as applicable.
|
3.2
|
In
the case of a stock dividend declared on the Acquiror Shares to be
paid in
Acquiror Shares, in lieu of declaring the stock dividend contemplated
by
Subsection 3.1(b)
on
the Exchangeable Shares, the Board of Directors may, in good faith
and in
its discretion and subject to applicable law and to obtaining all
required
regulatory approvals, subdivide, redivide or change (the "Subdivision")
each issued and unissued Exchangeable Share on the basis that each
Exchangeable Share before the subdivision becomes a number of Exchangeable
Shares equal to the sum of: (i) one Acquiror Share; and (ii) the
number of
Acquiror Shares to be paid as a share dividend on each Acquiror Share.
In
making such Subdivision, the Board of Directors shall consider the
effect
thereof upon the then outstanding Exchangeable Shares and the general
taxation consequences of the Subdivision to the holders of the
Exchangeable Shares. In such instance, and notwithstanding any other
provision hereof, such Subdivision, shall become effective on the
effective date specified in Section 3.4
without any further act or formality on the part of the Board of
Directors
or of the holders of Exchangeable Shares. For greater certainty,
subject
to applicable law; no approval of the Holders to an amendment to
the
articles of the Corporation shall be required to give effect to such
Subdivision.
|
-
5 -
|
3.3
|
Cheques
of the Corporation payable at par at any branch of the bankers of
the
Corporation shall be issued in respect of any cash, dividends contemplated
by Subsection 3.1(a)
and the sending of such a cheque to each holder of an Exchangeable
Share
shall satisfy the cash dividend represented thereby unless the cheque
is
not paid on presentation. Subject to applicable law, certificates
registered in the name of the registered holder of Exchangeable Shares
shall be issued or transferred in respect of any stock dividends
contemplated by Subsection 3.1(b)
or
any Subdivision contemplated by Section 3.2
and the sending of such a certificate to each holder of an Exchangeable
Share shall satisfy the stock dividend represented thereby. Such
other
type and amount of property in respect of any dividends contemplated
by
Subsection 3.1(c)
shall be issued, distributed or transferred by the Corporation in
such
manner as it shall determine and the issuance, distribution or transfer
thereof by the Corporation to each holder of an Exchangeable Share
shall
satisfy the dividend represented thereby. No holder of an Exchangeable
Share shall be entitled to recover by action or other legal process
against the Corporation any dividend that is represented by a cheque
that
has not been duly presented to the Corporation's bankers for payment
or
that otherwise remains unclaimed for a period of six years from the
date
on which such dividend was first
payable.
|
|
3.4
|
The
record date for the determination of the holders of Exchangeable
Shares
entitled to receive payment of, and the payment date for, any dividend
declared on the Exchangeable Shares under Section 3.1
shall be the same dates as the record date and payment date, respectively,
for the corresponding dividend declared on the Acquiror Shares. The
record
date for the determination of the holders of Exchangeable Shares
entitled
to receive Exchangeable Shares in connection with any Subdivision
of the
Exchangeable Shares under Section 3.2
and the effective date of such Subdivision shall be the same dates
as the
record date and payment date, respectively, for the corresponding
dividend
declared on the Acquiror Shares.
|
|
3.5
|
If
on any payment date for any dividends declared on the Exchangeable
Shares
under Section 3.1
the dividends are not paid in full on all of the Exchangeable Shares
then
outstanding, any such dividends that remain unpaid shall be paid
on the
earliest subsequent date or dates determined by the Board of Directors
on
which the Corporation shall have sufficient moneys, assets or property
properly applicable to the payment of such
dividends.
|
|
3.6
|
The
Board of Directors shall determine, in good faith and in its sole
discretion, economic equivalence for the purposes of Sections 3.1
and 3.2
and Article
11,
and each such determination shall be conclusive and binding on the
Corporation and its shareholders. In making each such determination,
the
following factors shall, without excluding other factors determined
by the
Board of Directors to be relevant, be considered by the Board of
Directors:
|
|
(a)
|
in
the case of any stock dividend or other distribution payable in Acquiror
Shares, the number of such shares issued in proportion to the number
of
Acquiror Shares previously
outstanding;
|
|
(b)
|
in
the case of the issuance, or distribution of any rights, options
or
warrants to subscribe for or purchase Acquiror Shares (or securities
exchangeable for or convertible into or carrying rights to acquire
Acquiror Shares), the relationship between the exercise price of
each such
right, option or warrant and the Current Market Price, the volatility
of
the Acquiror Shares and the term of any such
instrument;
|
|
(c)
|
in
the case of the issuance or distribution of any other form of property
(including any shares or securities of Acquiror of any class other
than
Acquiror Shares, any rights, options or warrants other than those
referred
to in Subsection 3.6(b),
any evidences of indebtedness of Acquiror or any assets of Acquiror)
the
relationship between the fair market value (as determined by the
Board of
Directors in the manner above contemplated) of such property to be
issued
or distributed with respect to each outstanding Acquiror Share and
the
Current Market Price; and
|
|
(d)
|
in
all such cases, the general taxation consequences of the relevant
event to
holders of Exchangeable Shares to the extent that such consequences
may
differ from the taxation consequences to holders of Acquiror Shares
as a
result of differences between taxation laws of Canada and the United
States (except for any differing consequences arising as a result
of
differing marginal taxation rates and with regard to the individual
circumstances of holders of Exchangeable
Shares).
|
-
6 -
|
3.7
|
Except
as provided in this Article
3,
the holders of Exchangeable Shares shall not be entitled to receive
dividends in respect thereof. Notwithstanding any provision of this
Article
3
to
the contrary, if the Exchangeable Share Price is paid to a holder
of an
Exchangeable Share by Callco pursuant to the Retraction Call Right,
the
Redemption Call Right or the Liquidation Call Right or by the Acquiror
pursuant to the Exchange Right or the Automatic Exchange Right, the
holder
of the Exchangeable Share shall cease to have any right to be paid
any
amount by the Corporation in respect of any unpaid dividends on such
Exchangeable Shares.
|
ARTICLE
4
CERTAIN
RESTRICTIONS
|
4.1
|
So
long as any of the Exchangeable Shares are outstanding, the Corporation
shall not at any time without, but may at any time with, the approval
of
the holders of the Exchangeable Shares given as specified in Section
10.2
of
these share provisions:
|
|
(a)
|
pay
any dividends on the Common Shares or any other shares ranking junior
to
the Exchangeable Shares with respect to the payment of dividends,
other
than stock dividends payable in Common Shares or any such other shares
ranking junior to the Exchangeable Shares, as the case may be;
|
|
(b)
|
redeem
or purchase or make any capital distribution in respect of Common
Shares
or any other shares ranking junior to the Exchangeable Shares with
respect
to the payment of dividends or on any liquidation, dissolution or
winding-up of the Corporation or any other distribution of the assets
of
the Corporation;
|
|
(c)
|
redeem
or purchase or make any capital distribution in respect of any other
shares of the Corporation ranking equally with the Exchangeable Shares
with respect to the payment of dividends or on any liquidation,
dissolution or winding-up of the Corporation or any other distribution
of
the assets of the Corporation; or
|
|
(d)
|
issue
any Exchangeable Shares or any other shares of the Corporation ranking
equally with, or superior to, the Exchangeable Shares other than
by way of
stock dividends to the holders of such Exchangeable Shares,
|
provided
that the restrictions in Subsections 4.1(a),
4.1(b),
4.1(c)
and
4.1(d)
shall
not apply if all dividends on the outstanding Exchangeable Shares corresponding
to dividends declared and paid to date on the Acquiror Shares shall have been
declared and paid on the Exchangeable Shares.
ARTICLE
5
DISTRIBUTION
ON LIQUIDATION
|
5.1
|
In
the event of the liquidation, dissolution or winding-up of the Corporation
or any other distribution of the assets of the Corporation among
its
shareholders for the purpose of winding up its affairs, a holder
of
Exchangeable Shares shall be entitled, subject to applicable law
and to
the exercise by Callco of the Liquidation Call Right, to receive
from the
assets of the Corporation in respect of each Exchangeable Share held
by
such holder on the effective date (the "Liquidation
Date")
of such liquidation, dissolution, winding-up or distribution of assets,
before any distribution of any part of the assets of the Corporation
among
the holders of the Common Shares or any other shares ranking junior
to the
Exchangeable Shares, an amount per share equal to the Exchangeable
Share
Price applicable on the last Business Day prior to the Liquidation
Date
(the "Liquidation
Amount").
|
-
7 -
|
5.2
|
On
or promptly after the Liquidation Date, and subject to the exercise
by
Callco of the Liquidation Call Right, the Corporation shall cause
to be
delivered to the holders of the Exchangeable Shares the Liquidation
Amount
for each such Exchangeable Share upon presentation and surrender
of the
certificates representing such Exchangeable Shares, together with
such
other documents and instruments as may be required to effect a transfer
of
Exchangeable Shares under the ABCA and the articles and by-laws of
the
Corporation and such additional documents and instruments as the
Transfer
Agent and the Corporation may reasonably require at the registered
office
of the Corporation or at any office of the Transfer Agent as may
be
specified by the Corporation by notice to the holders of the Exchangeable
Shares. Payment of the total Liquidation Amount for such Exchangeable
Shares shall be made by delivery to each holder, at the address of
the
holder recorded in the register of the Corporation for the Exchangeable
Shares or by holding for pick-up by the holder at the registered
office of
the Corporation or at any office of the Transfer Agent as may be
specified
by the Corporation by notice to the holders of Exchangeable Shares,
on
behalf of the Corporation of the Exchangeable Share Consideration
representing the total Liquidation Amount. On and after the Liquidation
Date, the holders of the Exchangeable Shares shall cease to be holders
of
such Exchangeable Shares and shall not be entitled to exercise any
of the
rights of holders in respect thereof (including any rights under
the
Voting and Exchange Trust Agreement) other than the right to receive
their
proportionate part of the total Liquidation Amount, unless payment
of the
total Liquidation Amount for such Exchangeable Shares shall not be
made
upon presentation and surrender of share certificates in accordance
with
the foregoing provisions, in which case the rights of the holders
shall
remain unaffected until the total Liquidation Amount to which such
holders
are entitled shall have been paid to such holders in the manner
hereinbefore provided. The Corporation shall have the right at any
time on
or before the Liquidation Date to deposit or cause to be deposited
the
Exchangeable Share Consideration in respect of the Exchangeable Shares
represented by certificates that have not at the Liquidation Date
been
surrendered by the holders thereof in a custodial account with any
chartered bank or trust company in Canada. Upon such deposit being
made,
the rights of the holders of Exchangeable Shares, after such deposit,
shall be limited to receiving their proportionate part of the total
Liquidation Amount for such Exchangeable Shares so deposited, against
presentation and surrender of the said certificates held by them,
respectively, in accordance with the foregoing provisions. Upon such
payment or deposit of such Exchangeable Share Consideration, the
holders
of the Exchangeable Shares shall thereafter be considered and deemed
for
all purposes to be holders of the Acquiror Shares delivered to them
or the
custodian on their behalf.
|
|
5.3
|
After
the Corporation has satisfied its obligations to pay the holders
of the
Exchangeable Shares the Liquidation Amount per Exchangeable Share
pursuant
to Section 5.1,
such holders shall not be entitled to share in any further distribution
of
the assets of the Corporation.
|
ARTICLE
6
RETRACTION
OF EXCHANGEABLE SHARES BY HOLDER
|
6.1
|
A
holder of Exchangeable Shares shall be entitled at any time, subject
to
the exercise by Callco of the Retraction Call Right and otherwise
upon
compliance with the provisions of this Article
6,
to require the Corporation to redeem any or all of the Exchangeable
Shares
registered in the name of such holder, for an amount per share equal
to
the Exchangeable Share Price applicable on the last Business Day
prior to
the Retraction Date (the "Retraction
Price"),
which shall be satisfied in full by the Corporation causing to be
delivered to such holder the Exchangeable Share Consideration representing
the Retraction Price. To effect such redemption, the holder shall
present
and surrender at the registered office of the Corporation or at any
office
of the Transfer Agent as may be specified by the Corporation by notice
to
the holders of Exchangeable Shares, the certificate or certificates
representing the Exchangeable Shares which the holder desires to
have the
Corporation redeem, together with such other documents and instruments
as
may be required to effect a transfer of Exchangeable Shares under
the ABCA
and the articles and bylaws of the Corporation and such additional
documents and instruments as the Transfer Agent and the Corporation
may
reasonably require, and together with a duly executed statement (the
"Retraction
Request")
in the form of Schedule A hereto or in such other form as may be
acceptable to the Corporation:
|
|
(a)
|
specifying
that the holder desires to have all or any number specified therein
of the
Exchangeable Shares represented by such certificate or certificates
(the
"Retracted
Shares")
redeemed by the Corporation;
|
-
8 -
|
(b)
|
stating
the Business Day on which the holder desires to have the Corporation
redeem the Retracted Shares (the "Retraction
Date"),
provided that the Retraction Date shall be not less than 10 Business
Days
nor more than 15 Business Days after the date on which the Retraction
Request is received by the Corporation and further provided that
in the
event that no such Business Day is specified by the holder in the
Retraction Request, the Retraction Date shall be deemed to be the
15th
Business Day after the date on which the Retraction Request is received
by
the Corporation; and
|
|
(c)
|
acknowledging
the overriding right (the "Retraction
Call Right")
of Callco to purchase all but not less than all the Retracted Shares
directly from the holder and that the Retraction Request shall be
deemed
to be a revocable offer by the holder to sell the Retracted Shares
to
Callco in accordance with the Retraction Call Right on the terms
and
conditions set out in Section 6.3.
|
|
6.2
|
Subject
to the exercise by Callco of the Retraction Call Right, upon receipt
by
the Corporation or the Transfer Agent in the manner specified in
Section
6.1
of
a certificate or certificates representing the number of Retracted
Shares,
together with a Retraction Request and such additional documents
and
instruments as the Transfer Agent and the Corporation may reasonably
require, and provided that the Retraction Request is not revoked
by the
holder in the manner specified in Section 6.7,
the Corporation shall redeem the Retracted Shares effective at the
close
of business on the Retraction Date and shall cause to be delivered
to such
holder the total Retraction Price with respect to such shares in
accordance with Section 6.4.
If only a part of the Exchangeable Shares represented by any certificate
is redeemed (or purchased by Callco pursuant to the Retraction Call
Right), a new certificate for the balance of such Exchangeable Shares
shall be issued to the holder at the expense of the
Corporation.
|
|
6.3
|
Upon
receipt by the Corporation of a Retraction Request, the Corporation
shall
immediately notify Callco thereof and shall provide to Callco a copy
of
the Retraction Request. In order to exercise the Retraction Call
Right,
Callco must notify the Corporation of its determination to do so
(the
"Callco
Call Notice")
within five Business Days of notification to Callco by the Corporation
of
the receipt by the Corporation of the Retraction Request. If Callco
does
not so notify the Corporation within such five Business Day period,
the
Corporation will notify the holder as soon as possible thereafter
that
Callco will not exercise the Retraction Call Right. If Callco delivers
the
Callco Call Notice within such five Business Day period, and provided
that
the Retraction Request is not revoked by the holder in the manner
specified in Section 6.7,
the Retraction Request shall thereupon be considered only to be an
offer
by the holder to sell all but not less than all the Retracted Shares
to
Callco in accordance with the Retraction Call Right. In such event,
the
Corporation shall not redeem the Retracted Shares and Callco shall
purchase from such holder and such holder shall sell to Callco on
the
Retraction Date all but not less than all the Retracted Shares for
a
purchase price (the "Purchase
Price")
per share equal to the Retraction Price, which, as set forth in Section
6.4,
shall be fully paid and satisfied by the delivery by or on behalf
of
Callco, of the Exchangeable Share Consideration representing the
total
Purchase Price. For the purposes of completing a purchase pursuant
to the
Retraction Call Right, Callco shall deposit with the Transfer Agent,
on or
before the Retraction Date, the Exchangeable Share Consideration
representing the total Purchase Price. Provided that Callco has complied
with Section 6.4,
the closing of the purchase and sale of the Retracted Shares pursuant
to
the Retraction Call Right shall be deemed to have occurred as at
the close
of business on the Retraction Date and, for greater certainty, no
redemption by the Corporation of such Retracted Shares shall take
place on
the Retraction Date. In the event that Callco does not deliver a
Callco
Call Notice within such five Business Day period, and provided that
the
Retraction Request is not revoked by the holder in the manner specified
in
Section 6.7,
the Corporation shall redeem the Retracted Shares on the Retraction
Date
and in the manner otherwise contemplated in this Article
6.
|
|
6.4
|
The
Corporation or Callco, as the case may be, shall deliver or cause
the
Transfer Agent to deliver to the relevant holder, at the address
of the
holder recorded in the register of the Corporation for the Exchangeable
Shares or at the address specified in the holder's Retraction Request
or,
if specified in such Retraction Request, by holding for pick-up by
the
holder at the registered office of the Corporation or at any office
of the
Transfer Agent as may be specified by the Corporation by notice to
such
holder of Exchangeable Shares, the Exchangeable Share Consideration
representing the total Retraction Price or the total Purchase Price,
as
the case may be, and such delivery of such Exchangeable Share
Consideration to the Transfer Agent shall be deemed to be payment
of and
shall satisfy and discharge all liability for the total Retraction
Price
or total Purchase Price, as the case may be, to the extent that the
same
is represented by such Exchangeable Share
Consideration.
|
-
9 -
|
6.5
|
On
and after the close of business on the Retraction Date, the holder
of the
Retracted Shares shall cease to be a holder of such Retracted Shares
and
shall not be entitled to exercise any of the rights of a holder in
respect
thereof, other than the right to receive the total Retraction Price
or
total Purchase Price, as the case may be, unless upon presentation
and
surrender of certificates in accordance with the foregoing provisions,
payment of the total Retraction Price or the total Purchase Price,
as the
case may be, shall not be made as provided in Section 6.4,
in which case the rights of such holder shall remain unaffected until
the
total Retraction Price or the total Purchase Price, as the case may
be,
has been paid in the manner hereinbefore provided. On and after the
close
of business on the Retraction Date, provided that presentation and
surrender of certificates and payment of the total Retraction Price
or the
total Purchase Price, as the case may be, has been made in accordance
with
the foregoing provisions, the holder of the Retracted Shares so redeemed
by the Corporation or purchased by Callco shall thereafter be considered
and deemed for all purposes to be the holder of the Acquiror Shares
delivered to it.
|
|
6.6
|
Notwithstanding
any other provision of this Article
6,
the Corporation shall not be obligated to redeem Retracted Shares
specified by a holder in a Retraction Request to the extent that
such
redemption of Retracted Shares would be contrary to solvency requirements
or other provisions of applicable law. If the Corporation believes,
acting
reasonably, that on any Retraction Date it would not be permitted
by any
of such provisions to redeem the Retracted Shares tendered for redemption
on such date, and provided that Callco shall not have exercised the
Retraction Call Right with respect to the Retracted Shares, the
Corporation shall only be obligated to redeem Retracted Shares specified
by a holder in a Retraction Request to the extent of the maximum
number
that may be so redeemed (rounded down to a whole number of shares)
as
would not be contrary to such provisions and shall notify the holder
at
least two Business Days prior to the Retraction Date as to the number
of
Retracted Shares which will not be redeemed by the Corporation. In
any
case in which the redemption by the Corporation of Retracted Shares
would
be contrary to solvency requirements or other provisions of applicable
law, the Corporation shall redeem the maximum number of Exchangeable
Shares which the Board of Directors determines the Corporation is
permitted to redeem as of the Retraction Date on a pro rata basis
and
shall issue to each holder of Retracted Shares a new certificate,
at the
expense of the Corporation, representing the Retracted Shares not
redeemed
by the Corporation pursuant to Section 6.2.
Provided that the Retraction Request is not revoked by the holder
in the
manner specified in Section 6.7
and Callco does not exercise the Retraction Call Right, the holder
of any
such Retracted Shares not redeemed by the Corporation pursuant to
Section
6.2
as
a result of solvency requirements or other provisions of applicable
law
shall be deemed by giving the Retraction Request to have instructed
the
Trustee to require Acquiror to purchase such, Retracted Shares from
such
holder on the Retraction Date or as soon as practicable thereafter
on
payment by Acquiror to such holder of the Retraction Price for each
such
Retracted Share, all as more specifically provided in the Voting
and
Exchange Trust Agreement.
|
|
6.7
|
A
holder of Retracted Shares may, by notice in writing given by the
holder
to the Corporation before the close of business on the Business Day
immediately preceding the Retraction Date, withdraw its Retraction
Request, in which event such Retraction Request shall be null and
void
and, for greater certainty, the revocable offer constituted by the
Retraction Request to sell the Retracted Shares to Callco shall be
deemed
to have been revoked.
|
ARTICLE
7
REDEMPTION
OF EXCHANGEABLE SHARES BY THE CORPORATION
|
7.1
|
Subject
to applicable law, and provided Callco has not exercised the Redemption
Call Right, the Corporation shall on the Redemption Date redeem all
but
not less than all of the then outstanding Exchangeable Shares for
an
amount per share equal to the Exchangeable Share Price applicable
on the
last Business Day prior to the Redemption Date (the "Redemption
Price").
|
-
10 -
|
7.2
|
In
any case of a redemption of Exchangeable Shares under this Article
7,
the Corporation shall, at least 45 days before the Redemption Date
(other
than a Redemption Date established in connection with an Acquiror
Control
Transaction, an Exchangeable Share Voting Event or an Exempt Exchangeable
Share Voting Event), send or cause to be sent to each holder of
Exchangeable Shares a notice in writing of the redemption by the
Corporation or the purchase by Callco under the Redemption Call Right,
as
the case may be, of the Exchangeable Shares held by such holder.
In the
case of a Redemption Date established in connection with an Acquiror
Control Transaction, an Exchangeable Share Voting Event or an Exempt
Exchangeable Share Voting Event, the written notice of redemption
by the
Corporation or the purchase by Callco under the Redemption Call Right
will
be sent on or before the Redemption Date, on as many days prior written
notice as may be determined by the Board of Directors to be reasonably
practicable in the circumstances. In any such case, such notice shall
set
out the formula for determining the Redemption Price or the Redemption
Call Purchase Price, as the case may be, the Redemption Date and,
if
applicable, particulars of the Redemption Call Right. In the case
of any
notice given in connection with a possible Redemption Date, such
notice
will be given contingently and will be withdrawn if the contingency
does
not occur.
|
|
7.3
|
On
or after the Redemption Date and subject to the exercise by Callco
of the
Redemption Call Right, the Corporation shall cause to be delivered
to the
holders of the Exchangeable Shares to be redeemed the Redemption
Price for
each such Exchangeable Share upon presentation and surrender at the
registered office of the Corporation or at any office of the Transfer
Agent as may be specified by the Corporation in the notice described
in
Section 7.2
of
the certificates representing such Exchangeable Shares, together
with such
other documents and instruments as may be required to effect a transfer
of
Exchangeable Shares under the ABCA and the articles and by-laws of
the
Corporation and such additional documents and instruments as the
Transfer
Agent and the Corporation may reasonably require. Payment of the
total
Redemption Price for such Exchangeable Shares shall be made by delivery
to
each holder, at the address of the holder recorded in the securities
register of the Corporation or by holding for pick-up by the holder
at the
registered office of the Corporation or at any office of the Transfer
Agent as may be specified by the Corporation in such notice, on behalf
of
the Corporation of the Exchangeable Share Consideration representing
the
total Redemption Price. On and after the Redemption Date, the holders
of
the Exchangeable Shares called for redemption shall cease to be holders
of
such Exchangeable Shares and shall not be entitled to exercise any
of the
rights of holders in respect thereof, other than the right to receive
their proportionate part of the total Redemption Price, unless payment
of
the total Redemption Price for such Exchangeable Shares shall not
be made
upon presentation and surrender of certificates in accordance with
the
foregoing provisions, in which case the rights of the holders shall
remain
unaffected until the total Redemption Price has been paid in the
manner
hereinbefore provided. The Corporation shall have the right at any
time
after the sending of notice of its intention to redeem the Exchangeable
Shares as aforesaid to deposit or cause to be deposited the Exchangeable
Share Consideration with respect to the Exchangeable Shares so called
for
redemption, or of such of the said Exchangeable Shares represented
by
certificates that have not at the date of such deposit been surrendered
by
the holders thereof in connection with such redemption, in a custodial
account with any chartered bank or trust company in Canada named
in such
notice. Upon the later of such deposit being made and the Redemption
Date,
the Exchangeable Shares in respect whereof such deposit shall have
been
made shall be redeemed and the rights of the holders thereof after
such
deposit or Redemption Date, as the case may be, shall be limited
to
receiving their proportionate part of the total Redemption Price
for such
Exchangeable Shares so deposited, against presentation and surrender
of
the said certificates held by them, respectively, in accordance with
the
foregoing provisions. Upon such payment or deposit of such Exchangeable
Share Consideration, the holders of the Exchangeable Shares shall
thereafter be considered and deemed for all purposes to be holders
of
Acquiror Shares delivered to them or the custodian on their
behalf.
|
ARTICLE
8
PURCHASE
FOR CANCELLATION
|
8.1
|
Subject
to applicable law and the articles of the Corporation and notwithstanding
Section 8.2,
the Corporation may at any time and from time to time purchase for
cancellation all or any part of the Exchangeable Shares by private
agreement with any holder of Exchangeable
Shares.
|
-
11 -
|
8.2
|
Subject
to applicable law and the articles of the Corporation, the Corporation
may
at any time and from time to time purchase for cancellation all or
any
part of the outstanding Exchangeable Shares by tender to all the
holders
of record of Exchangeable Shares then outstanding or through the
facilities of any stock exchange on which the Exchangeable Shares
are
listed or quoted at any price per share together with an amount equal
to
all declared and unpaid dividends thereon for which the record date
has
occurred prior to the date of purchase. If in response to an invitation
for tenders under the provisions of this Section 8.2,
more Exchangeable Shares are tendered at a price or prices acceptable
to
the Corporation than the Corporation is prepared to purchase, the
Exchangeable Shares to be purchased by the Corporation shall be purchased
as nearly as may be pro rata according to the number of shares tendered
by
each holder who submits a tender to the Corporation, provided that
when
shares are tendered at different prices, the pro rating shall be
effected
(disregarding fractions) only with respect to the shares tendered
at the
price at which more shares were tendered than the Corporation is
prepared
to purchase after the Corporation has purchased all the shares tendered
at
lower prices. If only part of the Exchangeable Shares represented
by any
certificate shall be purchased, a new certificate for the balance
of such
shares shall be issued at the expense of the
Corporation.
|
ARTICLE
9
VOTING
RIGHTS
|
9.1
|
Except
as required by applicable law and by Article
10,
Section 11.1
and Section 12.2,
the holders of the Exchangeable Shares shall not be entitled as such
to
receive notice of or to attend any meeting of the shareholders of
the
Corporation or to vote at any such
meeting.
|
ARTICLE
10
AMENDMENT
AND APPROVAL
|
10.1
|
The
rights, privileges, restrictions and conditions attaching to the
Exchangeable Shares may be added to, changed or removed but only
with the
approval of the holders of the Exchangeable Shares given as hereinafter
specified.
|
|
10.2
|
Any
approval given by the holders of the Exchangeable Shares to add to,
change
or remove any right, privilege, restriction or condition attaching
to the
Exchangeable Shares or any other matter requiring the approval or
consent
of the holders of the Exchangeable Shares shall be deemed to have
been
sufficiently given if it shall have been given in accordance with
applicable law subject to a minimum requirement that such approval
be
evidenced by resolution passed by not less than 66 2/3% of the votes
cast
on such resolution by holders (other than Acquiror and its Affiliates)
represented in person or by proxy at a meeting of holders of Exchangeable
Shares duly called and held on at least 21 days written notice, provided
that if at any such meeting the holders of at least 25% of the outstanding
Exchangeable Shares at that time are not present or represented by
proxy
within one-half hour after the time appointed for such meeting, then
the
meeting shall be adjourned to such date not less than five days thereafter
and to such time and place as may be designated by the Chair of such
meeting. At such adjourned meeting, the holders of Exchangeable Shares
(other than Acquiror and its Affiliates), present or represented
by proxy
thereat may transact the business for which the meeting was originally
called and a resolution passed thereat by the affirmative vote of
not less
than 66 2/3% of the votes cast on such resolution by holders (other
than
Acquiror and its Affiliates) represented in person or by proxy at
such
meeting shall constitute the approval or consent of the holders of
the
Exchangeable Shares. For purposes of this Section 10.2,
any spoiled votes, illegible votes, defective votes and abstentions
shall
be deemed to be votes not cast.
|
ARTICLE
11
RECIPROCAL
CHANGES IN RESPECT OF ACQUIROR SHARES
|
11.1
|
Each
holder of an Exchangeable Share acknowledges that the Support Agreement
provides, in part, that Acquiror will not, without the prior approval
of
the Corporation and the prior approval of the holders of the Exchangeable
Shares given in accordance with Section 10.2:
|
-
12 -
|
(a)
|
issue
or distribute Acquiror Shares (or securities exchangeable for or
convertible into or carrying rights to acquire Acquiror Shares) to
the
holders of all or substantially all of the then outstanding Acquiror
Shares by way of stock dividend or other distribution, other than
an issue
of Acquiror Shares (or securities exchangeable for or convertible
into or
carrying rights to acquire Acquiror Shares) to holders of Acquiror
Shares:
|
|
(i)
|
who
exercise an option to receive dividends in Acquiror Shares (or securities
exchangeable for or convertible into or carrying rights to acquire
Acquiror Shares) in lieu of receiving cash dividends, or
|
|
(ii)
|
pursuant
to any dividend reinvestment plan or scrip
dividend;
|
|
(b)
|
issue
or distribute rights, options or warrants to the holders of all or
substantially all of the then outstanding Acquiror Shares entitling
them
to subscribe for or to purchase Acquiror Shares (or securities
exchangeable for or convertible into or carrying rights to acquire
Acquiror Shares); or
|
|
(c)
|
issue
or distribute to the holders of all or substantially all of the then
outstanding Acquiror Shares:
|
|
(i)
|
shares
or securities of Acquiror of any class other than Acquiror Shares
(other
than shares convertible into or exchangeable for or carrying rights
to
acquire Acquiror Shares);
|
|
(ii)
|
rights,
options or warrants other than those referred to in Subsection
11.1(b);
|
|
(iii)
|
evidences
of indebtedness of Acquiror; or
|
|
(iv)
|
assets
of Acquiror,
|
unless
the economic equivalent on a per share basis of such rights, options, warrants,
securities, shares, evidences of indebtedness or other assets is issued or
distributed simultaneously to holders of the Exchangeable Shares.
|
11.2
|
Each
holder of an Exchangeable Share acknowledges that the Support Agreement
further provides, in part, that Acquiror will not, without the prior
approval of the Corporation and the prior approval of the holders
of the
Exchangeable Shares given in accordance with Section 10.2:
|
|
(a)
|
subdivide,
redivide or change the then outstanding Acquiror Shares into a greater
number of Acquiror Shares;
|
|
(b)
|
reduce,
combine, consolidate or change the then outstanding Acquiror Shares
into a
lesser number of Acquiror Shares;
or
|
|
(c)
|
reclassify
or otherwise change the Acquiror Shares or effect an amalgamation,
merger,
reorganization or other transaction affecting the Acquiror
Shares,
|
unless
the same or an economically equivalent
change
shall simultaneously be made to or in the rights of the holders of the
Exchangeable Shares, and such change is permitted under applicable law. The
Support Agreement further provides, in part, that the provisions of the Support
Agreement described in Section 11.1
and this
Section 11.2
shall
not be changed without the approval of the holders of the Exchangeable Shares
given in accordance with Section 10.2.
|
11.3
|
Notwithstanding
the foregoing provisions of this Article
11,
in the event of an Acquiror Control
Transaction:
|
-
13 -
|
(a)
|
in
which Acquiror merges or amalgamates with, or in which all or
substantially all of the then outstanding Acquiror Shares are acquired
by
one or more other corporations to which Acquiror is, immediately
before
such merger, amalgamation or acquisition, related within the meaning
of
the Income
Tax Act
(Canada) (otherwise than virtue of a right referred to in paragraph
251(5)
(b) thereof);
|
|
(b)
|
which
does not result in an acceleration of the Redemption Date in accordance
with paragraph (b) of that definition;
and
|
|
(c)
|
in
which all or substantially all of the then outstanding Acquiror Shares
are
converted into or exchanged for shares or rights to receive such
shares
(the "Other
Shares")
of another corporation (the "Other
Corporation")
that, immediately after such Acquiror Control Transaction, owns or
controls, directly or indirectly,
Acquiror,
|
then
all
references herein to "Acquiror" shall thereafter be and be deemed to be
references to "Other Corporation" and all references herein to "Acquiror Shares"
shall thereafter be and be deemed to be references to "Other Shares" (with
appropriate adjustments, if any, as are required to result in a holder of
Exchangeable Shares on the exchange, redemption or retraction of shares pursuant
to these share provisions or Article 8 of the Plan of Arrangement or exchange
of
shares pursuant to the Voting and Exchange Trust Agreement immediately
subsequent to the Acquiror Control Transaction being entitled to receive that
number of Other Shares equal to the number of Other Shares such holder of
Exchangeable Shares would have received if the exchange, option or retraction
of
such shares pursuant to these share provisions or Article 8 of the Plan of
Arrangement, or exchange of such shares pursuant to the Voting and Exchange
Trust Agreement had occurred immediately prior to the Acquiror Control
Transaction and the Acquiror Control Transaction was completed) without any
need
to amend the terms and conditions of the Exchangeable Shares and without any
further action required.
ARTICLE
12
ACTIONS
BY THE CORPORATION UNDER OTHER AGREEMENTS
|
12.1
|
The
Corporation will take all such actions and do all such things as
shall be
necessary or advisable to perform and comply with and to ensure
performance and compliance by Acquiror, Callco and the Corporation
with
all provisions of the Support Agreement and the Voting and Exchange
Trust
Agreement applicable to Acquiror, Callco and the Corporation,
respectively, in accordance with the terms thereof including taking
all
such actions and doing all such things as shall be necessary or advisable
to enforce to the fullest extent possible for the direct benefit
of the
Corporation all rights and benefits in favour of the Corporation
under or
pursuant thereto.
|
|
12.2
|
The
Corporation shall not propose, agree to or otherwise give effect
to any
amendment to, or waiver or forgiveness of, its rights or obligations
under
the Support Agreement or the Voting and Exchange Trust Agreement
without
the approval of the holders of the Exchangeable Shares given in accordance
with Section 10.2
other than such amendments, waivers and/or forgiveness as may be
necessary
or advisable for the purposes of:
|
|
(a)
|
adding
to the covenants of the other parties to such agreement for the protection
of the Corporation or the holders of the Exchangeable Shares
thereunder,
|
|
(b)
|
making
such provisions or modifications not inconsistent with such agreement
as
may be necessary or desirable with respect to matters or questions
arising
thereunder which, in the good faith opinion of the Board of Directors,
it
may be expedient to make, provided that the Board of Directors shall
be of
the good faith opinion, after consultation with counsel, that such
provisions and modifications will not be prejudicial to the interests
of
the holders of the Exchangeable Shares;
or
|
|
(c)
|
making
such changes in or corrections to such agreement which, on the advice
of
counsel to the Corporation, are required for the purpose of curing
or
correcting any ambiguity or defect or inconsistent provision or clerical
omission or mistake or manifest error contained therein, provided
that the
Board of Directors shall be of the good faith opinion, after consultation
with counsel, that such changes or corrections will not be prejudicial
to
the interests of the holders of the Exchangeable
Shares.
|
-
14 -
ARTICLE
13
LEGEND;
CALL RIGHTS; WITHHOLDING RIGHTS
|
13.1
|
The
certificates evidencing the Exchangeable Shares shall contain or
have
affixed thereto a legend in form and on terms approved by the Board
of
Directors, with respect to the Support Agreement, the provisions
of the
Plan of Arrangement relating to the Liquidation Call Right, the Redemption
Call Right and the Change of Law Call Right, and the Voting and Exchange
Trust Agreement (including the provisions with respect to the voting,
exchange and automatic exchange rights thereunder) and the Retraction
Call
Right.
|
|
13.2
|
Each
holder of an Exchangeable Share, whether of record or beneficial,
by
virtue of becoming and being such a holder shall be deemed to acknowledge
each of the Liquidation Call Right, the Retraction Call Right and
the
Redemption Call Right, in each case, in favour of Callco, and the
Change
of Law Call Right in favour of Acquiror and Callco and the overriding
nature thereof in connection with the liquidation, dissolution or
winding-up of the Corporation or any other distribution of the assets
of
the Corporation among its shareholders for the purpose of winding-up
its
affairs, or the retraction or redemption of Exchangeable Shares,
or a
Change of Law (as defined for purposes of the Change of Law Call
Right),
as the case may be, and to be bound thereby in favour of Callco or
Acquiror, as the case may be, as therein
provided.
|
|
13.3
|
The
Corporation, Callco, Acquiror and the Transfer Agent shall be entitled
to
deduct and withhold from any dividend or consideration otherwise
payable
to any holder of Exchangeable Shares such amounts as the Corporation,
Callco, Acquiror or the Transfer Agent is required to deduct and
withhold
with respect to such payment under the
Income Tax Act
(Canada), the United
States Internal Revenue Code of 1986
or
any provision of provincial, state, territorial, local or foreign
tax law,
in each case, as amended. To the extent that amounts are so withheld,
such
withheld amounts shall be treated for all purposes hereof as having
been
paid to the holder of the Exchangeable Shares in respect of which
such
deduction and withholding was made, provided that such withheld amounts
are actually remitted to the appropriate taxing authority. To the
extent
that the amount so required or permitted to be deducted or withheld
from
any payment to a holder exceeds the cash portion of the consideration
otherwise payable to the holder, the Corporation, Callco, Acquiror
and the
Transfer Agent are hereby authorized to sell or otherwise dispose
of such
portion of the consideration as is necessary to provide sufficient
funds
to the Corporation, Callco, Acquiror or the Transfer Agent, as the
case
may be, to enable it to comply with such deduction or withholding
requirement and the Corporation, Callco, Acquiror or the Transfer
Agent
shall notify the holder thereof and remit any unapplied balance of
the net
proceeds of such sale.
|
ARTICLE
14
GENERAL
|
14.1
|
Any
notice, request or other communication to be given to the Corporation
by a
holder of Exchangeable Shares shall be in writing and shall be valid
and
effective if given by mail (postage prepaid) or by telecopy or by
delivery
to the registered office of the Corporation and addressed to the
attention
of the Secretary of the Corporation. Any such notice, request or
other
communication, if given by mail, telecopy or delivery, shall only
be
deemed to have been given and received upon actual receipt thereof
by the
Corporation.
|
|
14.2
|
Any
presentation and surrender by a holder of Exchangeable Shares to
the
Corporation or the Transfer Agent of certificates representing
Exchangeable Shares in connection with the liquidation, dissolution
or
winding-up of the Corporation or the retraction or redemption of
Exchangeable Shares shall be made by registered mail (postage prepaid)
or
by delivery to the registered office of the Corporation or to such
office
of the Transfer Agent as may be specified by the Corporation, in
each
case, addressed to the attention of the Secretary of the Corporation.
Any
such presentation and surrender of certificates shall only be deemed
to
have been made and to be effective upon actual receipt thereof by
the
Corporation or the Transfer Agent, as the case may be. Any such
presentation and surrender of certificates made by registered mail
shall
be at the sole risk of the holder mailing the
same.
|
-
15 -
|
14.3
|
Any
notice, request or other communication to be given to a holder of
Exchangeable Shares by or on behalf of the Corporation shall be in
writing
and shall be valid and effective if given by mail (postage prepaid)
or by
delivery to the address of the holder recorded in the register of
the
Corporation or, in the event of the address of any such holder not
being
so recorded, then at the last address of such holder known to the
Corporation. Any such notice, request or other communication, if
given by
mail, shall be deemed to have been given and received on the third
Business Day following the date of mailing and, if given by delivery,
shall be deemed to have been given and received on the date of delivery.
Accidental failure or omission to give any notice, request or other
communication to one or more holders of Exchangeable Shares shall
not
invalidate or otherwise alter or affect any action or proceeding
intended
to be taken by the Corporation pursuant
thereto.
|
|
14.4
|
If
the Corporation determines that mail service is or is threatened
to be
interrupted at the time when the Corporation is required or elects
to give
any notice to the holders of Exchangeable Shares hereunder, the
Corporation shall, notwithstanding the provisions hereof, give such
notice
by means of publication in The
National Post,
national edition, or any other English language daily newspaper or
newspapers of general circulation in Canada and in a French language
daily
newspaper of general circulation in the Province of Quebec in each
of two
successive weeks, and notice so published shall be deemed to have
been
given on the latest date on which the first publication has taken
place.
If, by reason of any actual or threatened interruption of mail service
due
to strike, lock-out or otherwise, any notice to be given to the
Corporation would be unlikely to reach its destination in a timely
manner,
such notice shall be valid and effective only if delivered personally
to
the Corporation in accordance with Sections 14.1
or
14.2,
as the case may be.
|
-
16 -
SCHEDULE
A to
Exchangeable Share Provisions
RETRACTION
REQUEST
[TO
BE PRINTED ON EXCHANGEABLE SHARE CERTIFICATES]
|
To:
|
Gran
Tierra Exchangeco Inc. ("Exchangeco")
and Gran Tierra Callco ULC ("Callco")
|
This
notice is given pursuant to Article 6 of the rights, privileges, restrictions
and conditions (the "Share
Provisions")
attaching to the Exchangeable Shares of Exchangeco represented by this
certificate and all capitalized words and expressions, used in this notice
that
are defined in the Share Provisions have the meanings ascribed to such words
and
expressions in such Share Provisions.
The
undersigned hereby notifies Exchangeco that, subject to the Retraction Call
Right referred to below, the undersigned desires to have Exchangeco redeem
in
accordance with Article 6 of the Share Provisions:
|
¨
|
all
share(s) represented by this certificate; or
|
|
|
¨
|
______________________
share(s) only represented by this
certificate.
|
The
undersigned hereby notifies Exchangeco that the Retraction Date shall be
NOTE:
The
Retraction Date must be a Business Day and must not be less than 10 Business
Days nor more than 15 Business Days after the date upon which this notice is
received by Exchangeco. 1f no such Business Day is specified above, the
Retraction Date shall be deemed to be the 15th Business Day after the date
on
which this notice is received by Exchangeco.
The
undersigned acknowledges the overriding Retraction Call Right of Callco to
purchase all but not less than all the Retracted Shares from the undersigned
and
that this notice is and shall be deemed to be a revocable offer by the
undersigned to sell the Retracted Shares to Callco in accordance with the
Retraction Call Right on the Retraction Date for the Purchase Price and on
the
other terms and conditions set out in Section 6.3 of the Share Provisions.
This
Retraction Request, and this offer to sell the Retracted Shares to Callco,
may
be revoked and withdrawn by the undersigned only by notice in writing given
to
Exchangeco at any time before the close of business on the Business Day
immediately preceding the Retraction Date.
The
undersigned acknowledges that if, as a result of solvency provisions of
applicable law, Exchangeco is unable to redeem all Retracted Shares, the
undersigned will be deemed to have exercised the Exchange Right (as defined
in
the Voting and Exchange Trust Agreement) so as to require Acquiror to purchase
the unredeemed Retracted Shares.
The
undersigned hereby represents and warrants to Callco and Exchangeco that the
undersigned:
|
¨
|
is
|
|
|
(select
one)
|
||
|
¨
|
is
not
|
a
resident in Canada for purposes of the Income
Tax Act (Canada).
THE UNDERSIGNED ACKNOWLEDGES THAT IN THE ABSENCE OF AN INDICATION THAT THE
UNDERSIGNED IS A RESIDENT IN CANADA, WITHHOLDING ON ACCOUNT OF CANADIAN TAX
MAY
BE MADE FROM AMOUNTS PAYABLE TO THE UNDERSIGNED ON THE REDEMPTION OR PURCHASE
OF
THE RETRACTED SHARES.
The
undersigned hereby represents and warrants to Callco and Exchangeco that the
undersigned has good title to, and owns, the share(s) represented by this
certificate to be acquired by Callco or Exchangeco, as the case may be, free
and
clear of all liens, claims and encumbrances.
-
17
-
|
|
|
|
||
|
(Date)
|
(Signature of Shareholder)
|
(Guarantee of Signature)
|
|
¨
|
Please
check box if the securities and any cheque(s) resulting from the
retraction or purchase of the Retracted Shares are to be held for
pick-up
by the shareholder from the Transfer Agent, failing which the securities
and any cheque(s) will be mailed to the last address of the shareholder
as
it appears on the register.
|
NOTE:
This
panel must be completed and this certificate, together with such additional
documents as the Transfer Agent may require, must be deposited with the Transfer
Agent. The securities and any cheque(s) resulting from the retraction or
purchase of the Retracted Shares will be issued and registered in, and made
payable to, respectively, the name of the shareholder as it appears on the
register of Exchangeco and the securities and any cheque(s) resulting from
such
retraction or purchase will be delivered to such shareholder as indicated above,
unless the form appearing immediately below is duly completed.
Date:
Name
of
Person in Whose Name Securities or Cheque(s) Are to be Registered, Issued or
Delivered
(please
print):
;
Street
Address or P.O. Box:
Signature
of Shareholder:
City, Province and Postal Code:
0;
Signature
Guaranteed by:
NOTE:
If
this
Retraction Request is for less than all of the shares represented by this
certificate, a certificate representing the remaining share(s) of Exchangeco
represented by this certificate will be issued and registered in the name of
the
shareholder as it appears on the register of Exchangeco, unless the share
transfer power on the share certificate is duly completed in respect of such
share(s).
-
18 -