SUPPORT AGREEMENT
THIS AGREEMENT is made the 22nd day of November, 2002,
BETWEEN:
APTA HOLDINGS, INC., A CORPORATION INCORPORATED UNDER
THE LAWS OF THE STATE OF DELAWARE, HAVING ITS PRINCIPAL
OFFICE AT 000 XXXX XXXX XXXXXX, XXXXX XXXXX, XXX
XXXXXX, 00000,
("APTA")
- and -
XXXXX XXXXXXXXXXX IN TRUST FOR INTELISYS ACQUISITION
INC., a company to be incorporated pursuant to the laws
of the Province of New Brunswick with its principal
office at 000 Xxxxxxxxxx Xxxxxx, Xxxxxxx, Xxx
Xxxxxxxxx, X0X 0X0,
("Exchangeco")
- and -
XXXXX XXXXXXXXXXX IN TRUST FOR INTELISYS (NOVA
SCOTIA) COMPANY, an unlimited liability company to
be formed pursuant to the laws of the Province of
Nova Scotia with its principal office at 000
Xxxxxxxxxx Xxxxxx, Xxxxxxx, Xxx Xxxxxxxxx, X0X
0X0,
("Novascotiaco")
WHEREAS pursuant to a share exchange agreement dated as of the
date hereof (the "Share Exchange Agreement"), entered into
between Apta, Exchangeco, NovaScotiaco, Convergix Inc. (the
"Company"), Xxxxx X. Xxxxxxx, Xxxxxxx X. Xxxxxxxx and Xxxxx
Xxxxxxxxxxx (collectively the "Parties"), the Parties have agreed
to the acquisition of control of Company by Apta through
Exchangeco and NovaScotiaco;
AND WHEREAS pursuant to the Share Exchange Agreement,
shareholders of the Company will exchange their common shares in
the capital of the Company ("Common Shares"), for an equal number
of, either (i) common shares in the capital of Apta ("Apta Common
Shares") or (ii) exchangeable shares in the capital of Exchangeco
(the "Exchangeable Shares"), in accordance with the Share
Exchange Agreement;
AND WHEREAS in accordance with the Share Exchange Agreement,
Apta, Exchangeco and Novascotiaco are hereby entering into this
support agreement (the "Agreement");
AND WHEREAS the Xxxxxxxxx Sugar Szweras LLP (the "Agent") has
been appointed as trustee and its duties and powers and ancillary
matters have been set out in a voting and exchange trust
agreement between Apta, Exchangeco and the Agent (the "Voting and
Exchange Agency Agreement") dated the date hereof;
NOW THEREFORE in consideration of the respective covenants and
agreements provided in this Agreement and for other good and
valuable consideration (the receipt and sufficiency of which are
hereby acknowledged), the parties hereto covenant and agree as
follows:
ARTICLE 1
DEFINITIONS AND INTERPRETATION
1.1 Defined Terms
Each term denoted herein by initial capital letters and not
otherwise defined herein shall have the meaning ascribed thereto
in the rights, privileges, restrictions and conditions
(collectively, the "Share Provisions") attaching to the
Exchangeable Shares, a copy of which is attached hereto as
Schedule "A".
1.2 Interpretation Not Affected by Headings
The division of this Agreement into Articles, sections and
other portions and the insertion of headings are for convenience
of reference only and shall not affect the construction or
interpretation of this Agreement. Unless otherwise indicated, all
references to an "Article" or "section" followed by a number
and/or a letter refer to the specified Article or section of this
Agreement. The terms "this Agreement", "hereof", "herein" and
"hereunder" and similar expressions refer to this agreement and
not to any particular Article, section or other portion hereof
and include any agreement or instrument supplementary or
ancillary hereto.
1.3 Number, Gender
Words in the singular number only shall include the plural
and vice versa. Words in one gender shall include all genders.
1.4 Date for any Action
If any date on which any action is required to be taken
under this Agreement is not a Business Day, such action shall be
required to be taken on the next succeeding Business Day.
ARTICLE 2
COVENANTS OF APTA AND EXCHANGECO
2.1 Covenants Regarding Exchangeable Shares
So long as any Exchangeable Shares not owned by Apta or its
Affiliates are outstanding, Apta shall:
(a) not declare or pay any dividend on Apta Common Shares unless
(i) Exchangeco shall simultaneously declare or pay, as the case
may be, an equivalent dividend (as provided for in the Share
Provisions) on the Exchangeable Shares and (ii) Exchangeco shall
have sufficient money or other assets or authorized but unissued
securities available to enable the due declaration and the due
and punctual payment, in accordance with applicable law, of any
such dividend on the Exchangeable Shares;
(b) advise Exchangeco sufficiently in advance of the declaration
by Apta of any dividend on Apta Common Shares and take all such
other actions as are reasonably necessary, in cooperation with
Exchangeco, to ensure that the respective declaration date,
record date and payment date for a dividend on the Exchangeable
Shares shall be the same as the declaration date, record date and
payment date for the corresponding dividend on Apta Common
Shares;
(c) ensure that the record date for any dividend declared on
Apta Common Shares is not less than ten (10) Business Days after
the declaration date of such dividend;
(d) take all such actions and do all such things as are
reasonably necessary or desirable to enable and permit
Exchangeco, in accordance with applicable law, to pay and
otherwise perform its obligations with respect to the
satisfaction of the Liquidation Amount, the Retraction Price or
the Redemption Price in respect of each issued and outstanding
Exchangeable Share upon the liquidation, dissolution or winding-
up of Exchangeco, the delivery of a Retraction Request by a
holder of Exchangeable Shares or a redemption of Exchangeable
Shares by Exchangeco, as the case may be, including without
limitation all such actions and all such things as are necessary
or desirable to enable and permit Exchangeco to cause to be
delivered Apta Common Shares to the holders of Exchangeable
Shares in accordance with the provisions of Section 5, 6 or 7, as
the case may be, of the Share Provisions;
(e) take all such actions and do all such things as are
reasonably necessary or desirable to enable and permit
NovaScotiaco, in accordance with applicable law, to perform its
obligations arising upon the exercise by it of the Liquidation
Call Right, the Retraction Call Right or the Redemption Call
Right including without limitation all such actions and all such
things as are necessary or desirable to enable and permit
NovaScotiaco to cause to be delivered Apta Common Shares to the
holders of Exchangeable Shares in accordance with the provisions
of Section 8, as the case may be, of the Share Provisions; and
(f) not exercise its vote as a direct or indirect shareholder to
initiate the voluntary liquidation, dissolution or winding-up of
Exchangeco or NovaScotiaco nor take any action or omit to take
any action that is designed to result in the liquidation,
dissolution or winding-up of Exchangeco or NovaScotiaco.
2.2 Segregation of Funds
Apta will cause Exchangeco to deposit a sufficient amount of
funds in a separate account of Exchangeco and segregate a
sufficient amount of such other assets and property as is
necessary to enable Exchangeco to pay dividends when due and to
pay or otherwise satisfy its respective obligations under Section
5, 6 or 7 of the Share Provisions, as applicable and Exchangeco
will use such funds or other assets exclusively to pay such
dividends or satisfy its obligations under Section 5, 6 or 7 of
the Share Provisions.
2.3 Reservation of Apta Common Shares
Apta hereby represents, warrants and covenants in favour of
Exchangeco and NovaScotiaco that Apta has reserved for issuance
and will, at all times while any Exchangeable Shares (other than
Exchangeable Shares held by Apta or its Affiliates) are
outstanding, keep available, free from pre-emptive and other
rights, out of its authorized and unissued capital stock such
number of Apta Common Shares (or other shares or securities into
which Apta Common Shares may be reclassified or changed as
contemplated by section 2.7 hereof) (a) as is equal to the sum of
(i) the number of Exchangeable Shares issued and outstanding from
time to time and (ii) the number of Exchangeable Shares issuable
upon the exercise of all rights to acquire Exchangeable Shares
outstanding from time to time and (b) as are now and may
hereafter be required to enable and permit Apta to meet its
obligations under the Voting and Exchange Trust Agreement and
under any other security or commitment pursuant to which Apta may
now or hereafter be required to issue Apta Common Shares, and to
enable and permit Exchangeco and NovaScotiaco to meet their
obligations hereunder and under the Share Provisions.
2.4 Notification of Certain Events
In order to assist and permit Apta to exercise the
Liquidation Call Right, Retraction Call Right and Redemption Call
Right, Exchangeco will notify Apta, NovaScotiaco and the Agent of
each of the following events at the time set forth below:
(a) in the event of any determination by the Board of Directors
to institute voluntary liquidation, dissolution or winding-up
proceedings with respect to Exchangeco or to effect any other
distribution of the assets of Exchangeco among its shareholders
for the purpose of winding up its affairs, at least sixty (60)
days prior to the proposed effective date of such liquidation,
dissolution, winding-up or other distribution;
(b) promptly, upon the earlier of receipt by Exchangeco of
notice of and Exchangeco otherwise becoming aware of any
threatened or instituted claim, suit, petition or other
proceedings with respect to the involuntary liquidation,
dissolution or winding-up of Exchangeco or to effect any other
distribution of the assets of Exchangeco among its shareholders
for the purpose of winding up its affairs;
(c) immediately, upon receipt by Exchangeco of a Retraction
Request;
(d) on the same date on which notice of redemption is given to
holders of Exchangeable Shares, upon the determination of a
Redemption Date in accordance with the Share Provisions; and
(e) as soon as practicable upon the issuance by Exchangeco of
any Exchangeable Shares or rights to acquire Exchangeable Shares.
2.5 Delivery of Common Shares to Exchangeco and NovaScotiaco
Upon notice from Exchangeco of any event that requires
Exchangeco or NovaScotiaco to cause to be delivered Apta Common
Shares to any holder of Exchangeable Shares, Apta shall forthwith
issue and deliver or cause to be delivered to Exchangeco or
NovaScotiaco the requisite number of Apta Common Shares to be
received by, and issued to or to the order of, the former holder
of the surrendered Exchangeable Shares, as Exchangeco or
NovaScotiaco shall direct. All such Apta Common Shares shall be
duly authorized and validly issued as fully paid and non-
assessable and shall be free and clear of any lien, claim or
encumbrance. In consideration of the issuance and delivery of
each such Apta Common Share, Exchangeco or NovaScotiaco, as the
case may be, shall issue to Apta, or as Apta shall direct, common
shares in the capital of Exchangeco or NovaScotiaco having
equivalent value.
2.6 Qualification of Apta Common Shares
If any Apta Common Shares (or other shares or securities
into which Apta Common Shares may be reclassified or changed as
contemplated by section 2.7 hereof) to be issued and delivered
hereunder require registration or qualification with or approval
of or the filing of any document, including any prospectus or
similar document or the taking of any proceeding with or the
obtaining of any order, ruling or consent from any governmental
or regulatory authority under any Canadian or United States
federal, provincial or state securities or other law or
regulation or pursuant to the rules and regulations of any
securities or other regulatory authority or the fulfillment of
any other United States or Canadian legal requirement before such
shares (or such other shares or securities) may be issued by Apta
and delivered by Apta at the direction of Exchangeco or
NovaScotiaco, if applicable, to the holder of surrendered
Exchangeable Shares or in order that such shares (or such other
shares or securities) may be freely traded thereafter in Canada
and the United States (other than any restrictions of general
application on transfer by reason of a holder being a "control
person" for purposes of Canadian provincial securities law or an
"affiliate" of Apta for purposes of United States federal or
state securities law), Apta will in good faith expeditiously take
all such actions and do all such things as are necessary or
desirable to cause such Apta Common Shares (or such other shares
or securities) to be and remain duly registered, qualified or
approved under United States and/or Canadian law, as the case may
be. Apta will in good faith expeditiously take all such actions
and do all such things as are reasonably necessary or desirable
to cause all Apta Common Shares (or such other shares or
securities) to be delivered hereunder to be listed, quoted or
posted for trading on all stock exchanges and quotation systems
on which outstanding Apta Common Shares (or such other shares or
securities) have been listed by Apta and remain listed and are
quoted or posted for trading at such time.
2.7 Economic Equivalence
(a) Apta will not without prior approval of Exchangeco and the
prior approval of the holders of the Exchangeable Shares given in
accordance with Section 11 of the Share Provisions:
(i) issue or distribute Apta Common Shares (or securities
exchangeable for or convertible into or carrying rights to
acquire Apta Common Shares) to the holders of all or
substantially all of the then outstanding Apta Common Shares by
way of stock dividend or other distribution, other than an issue
of Apta Common Shares (or securities exchangeable for or
convertible into or carrying rights to acquire Apta Common
Shares) to holders of Apta Common Shares who exercise an option
to receive dividends in Apta Common Shares (or securities
exchangeable for or convertible into or carrying rights to
acquire Apta Common Shares) in lieu of receiving cash dividends;
or
(ii) issue or distribute rights, options or warrants to the
holders of all or substantially all of the then outstanding Apta
Common Shares entitling them to subscribe for or to purchase Apta
Common Shares (or securities exchangeable for or convertible into
or carrying rights to acquire Apta Common Shares); or
(iii) issue or distribute to the holders of all or
substantially all of the then outstanding Apta Common Shares (A)
shares or securities of Apta of any class other than Apta Common
Shares (other than shares convertible into or exchangeable for or
carrying rights to acquire Apta Common Shares), (B) rights,
options or warrants other than those referred to in section
2.7(a)(ii) above, (C) evidences of indebtedness of Apta or (D)
assets of Apta,
unless the economic equivalent on a per share basis of
such rights, options, securities, shares, evidences of
indebtedness or other assets is issued or distributed
simultaneously to holders of the Exchangeable Shares;
provided that, for greater certainty, the above
restrictions shall not apply to any securities issued
or distributed by Apta in order to give effect to and
to consummate the transactions contemplated by, and in
accordance with, the Share Exchange Agreement, or as
otherwise permitted by the parties to the Share
Exchange Agreement.
(b) Apta will not without the prior approval of Exchangeco and
the prior approval of the holders of the Exchangeable Shares
given in accordance with Section 11 of the Share Provisions:
(i) subdivide, redivide or change the then outstanding Apta
Common Shares into a greater number of Apta Common Shares; or
(ii) reduce, combine, consolidate or change the then outstanding
Apta Common Shares into a lesser number of Apta Common Shares; or
(iii) reclassify or otherwise change Apta Common Shares or
effect an amalgamation, merger, reorganization or other
transaction affecting Apta Common 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.
(c) Apta will ensure that the record date for any event referred
to in section 2.7(a) or 2.7(b) above, or (if no record date is
applicable for such event) the effective date for any such event,
is not less than ten (10) Business Days after the date on which
such event is declared or announced by Apta (with contemporaneous
notification thereof by Apta to Exchangeco).
(d) The Board of Directors shall determine, in good faith and in
its sole discretion acting reasonably, economic equivalence for
the purposes of any event referred to in section 2.7(a) or 2.7(b)
above and each such determination shall be conclusive and binding
on Apta. 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:
(i) in the case of any stock dividend or other distribution
payable in Apta Common Shares, the number of such shares issued
in proportion to the number of Apta Common Shares previously
outstanding;
(ii) in the case of the issuance or distribution of any rights,
options or warrants to subscribe for or purchase Apta Common
Shares (or securities exchangeable for or convertible into or
carrying rights to acquire Apta Common Shares), the relationship
between the exercise price of each such right, option or warrant
and the current market value (as determined by the Board of
Directors in the manner above contemplated) of an Apta Common
Share;
(iii) in the case of the issuance or distribution of any
other form of property (including without limitation any shares
or securities of Apta of any class other than Apta Common Shares,
any rights, options or warrants other than those referred to in
section 2.7(d)(ii) above, any evidences of indebtedness of Apta
or any assets of Apta), 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 Apta Common Share and the
current market value (as determined by the Board of Directors in
the manner above contemplated) of an Apta Common Share;
(iv) in the case of any subdivision, redivision or change of the
then outstanding Apta Common Shares into a greater number of Apta
Common Shares or the reduction, combination, consolidation or
change of the then outstanding Apta Common Shares into a lesser
number of Apta Common Shares or any amalgamation, merger,
reorganization or other transaction affecting Apta Common Shares,
the effect thereof upon the then outstanding Apta Common Shares;
and
(v) 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 Apta Common Shares as a result of differences
between taxation laws of Canada and the United States (except for
any differing consequences arising as a result of differing
marginal taxation rates and without regard to the individual
circumstances of holders of Exchangeable Shares).
For purposes of the foregoing determinations, the
current market value of any security listed and traded
or quoted on a securities exchange shall be the
weighted average of the closing bid and ask prices of
such security during a period of not less than twenty
(20) consecutive trading days ending not more than
three (3) trading days before the date of determination
on the principal securities exchange on which such
securities are listed and traded or quoted; provided,
however, that if in the opinion of the Board of
Directors the public distribution or trading activity
of such securities during such period does not create a
market which reflects the fair market value of such
securities, then the current market value thereof shall
be determined by the Board of Directors, in good faith,
based upon the advice of such qualified independent
financial advisors as the Board of Directors may deem
appropriate, in its sole discretion, and provided
further that any such determination by the Board of
Directors shall be conclusive and binding on Apta.
(e) Exchangeco agrees that, to the extent required, upon due
notice from Apta, Exchangeco will use its best efforts to take or
cause to be taken such steps as may be necessary for the purposes
of ensuring that appropriate dividends are paid or other
distributions are made by Exchangeco, or subdivisions,
redivisions or changes are made to the Exchangeable Shares, in
order to implement the required economic equivalent with respect
to Apta Common Shares and the Exchangeable Shares as provided for
in this section 2.7.
2.8 Tender Offers
In the event that a tender offer, share exchange offer,
issuer bid, take-over bid or similar transaction with respect to
Apta Common Shares (an "Offer") is proposed by Apta or is
proposed to Apta or its shareholders and is recommended by the
Board of Directors of Apta, or is otherwise effected or to be
effected with the consent or approval of the Board of Directors
of Apta, and the Exchangeable Shares are not redeemed by
Exchangeco or purchased by NovaScotiaco as contemplated by and in
compliance with the Share Provisions, Apta will use its
reasonable efforts expeditiously and in good faith to take all
such actions and do all such things as are necessary or desirable
to enable and permit holders of the Exchangeable Shares to
participate in such Offer to the same extent and on an
economically equivalent basis as the holders of Apta Common
Shares, without discrimination. Without limiting the generality
of the foregoing, Apta will use its reasonable efforts
expeditiously and in good faith (and shall, in the case of a
transaction by Apta or where Apta is a participant in the
negotiation thereof) to ensure that holders of the Exchangeable
Shares may participate in all such Offers without being required
to retract the Exchangeable Shares as against Exchangeco (or, if
so required, to ensure that any such retraction, shall be
effective only upon, and shall be conditional upon, the closing
of the Offer and only to the extent necessary to tender or
deposit to the Offer). Nothing herein shall affect the rights of
Exchangeco under the Share Provisions to redeem (or NovaScotiaco
to purchase pursuant to the Redemption Right) the Exchangeable
Shares, as applicable, in the event of a Apta Control
Transaction.
2.9 Ownership of Outstanding Shares
Without the prior approval of Exchangeco and the prior
approval of the holders of the Exchangeable Shares given in
accordance with Section 11 of the Share Provisions, Apta
covenants and agrees in favour of Exchangeco and the Agent on
behalf of holders of the Exchangeable Shares that, as long as any
of the Exchangeable Shares outstanding are owned by any person or
entity other than Apta or any of its Affiliates, Apta will be and
shall remain the direct or indirect beneficial owner of all
issued and outstanding voting shares in the capital of Exchangeco
and Novascotiaco.
2.10 Apta and Affiliates Not to Vote Exchangeable Shares
Apta covenants and agrees that it will appoint and cause to
be appointed proxyholders with respect to all of the Exchangeable
Shares held by it and its Affiliates for the sole purpose of
attending each meeting of holders of the Exchangeable Shares in
order to be counted as part of the quorum for each such meeting.
Apta further covenants and agrees that it will not, and will
cause its Affiliates not to, exercise any voting rights which may
be exercisable by holders of the Exchangeable Shares from time to
time pursuant to the Share Provisions or pursuant to the
provisions of the Act (or any successor or other corporate
statute by which Exchangeco may in the future be governed) with
respect to any of the Exchangeable Shares held by it or by its
Affiliates in respect of any matter considered at any meeting of
holders of the Exchangeable Shares.
2.11 Rule 10b-18 Purchases
For certainty, nothing contained in this Agreement,
including without limitation the obligations of Apta contained in
section 2.8 hereof, shall limit the ability of Apta or Exchangeco
to make a "Rule 10b-18 Purchase" of Apta Common Shares pursuant
to Rule 10b-18 of the U.S. Securities Exchange Act of 1934, as
amended, or any successor provisions thereof.
2.12 Special Voting Share
During the term of this Agreement, Apta will not issue any
additional Special Voting Shares beyond the Special Voting Share
to be issued to the Agent pursuant to the Share Exchange
Agreement and the Voting and Exchange Agency Agreement, and will
not amend, alter, change or repeal the terms of the Special
Voting Share without the prior approval of the holders of the
Exchangeable Shares in accordance with Section 11 of the Share
Provisions.
ARTICLE 3
APTA SUCCESSORS
3.1 Certain Requirements in Respect of Combination, etc.
Except as contemplated in the Share Exchange Agreement, Apta
shall not consummate any transaction (whether by way of
reconstruction, reorganization, consolidation, merger, transfer,
sale, lease or otherwise) whereby all or substantially all of its
undertaking, property and assets would become the property of any
other person or, in the case of a merger, of the continuing
corporation resulting therefrom, but may do so if:
(a) such other person or continuing corporation (the "Apta
Successor") by operation of law, becomes, without more, bound by
the terms and provisions of this Agreement or, if not so bound,
executes, prior to or contemporaneously with the consummation of
such transaction, an agreement supplemental hereto and such other
instruments (if any) as are reasonably necessary or advisable to
evidence the assumption by the Apta Successor of liability for
all moneys payable and property deliverable hereunder and the
covenant of such Apta Successor to pay and deliver or cause to be
delivered the same and its agreement to observe and perform all
the covenants and obligations of Apta under this Agreement; and
(b) such transaction shall be upon such terms and conditions as
substantially to preserve and not to impair in any material
respect any of the rights, duties, powers and authorities of the
other Parties hereunder.
3.2 Vesting of Powers in Successor
Whenever the conditions of section 3.1 have been duly
observed and performed, the Parties, if required by section 3.1,
shall execute and deliver a supplemental agreement hereto and
thereupon Apta Successor shall possess and from time to time may
exercise each and every right and power of Apta under this
Agreement in the name of Apta or otherwise and any act or
proceeding by any provision of this Agreement required to be done
or performed by the Board of Directors of Apta or any officers of
Apta may be done and performed with like force and effect by the
directors or officers of such Apta Successor.
3.3 Wholly-Owned Subsidiaries
Nothing herein shall be construed as preventing the
amalgamation or merger of any direct or indirect subsidiary of
Apta, except for Exchangeco, with or into Apta or the winding-up,
liquidation or dissolution of any direct or indirect subsidiary
of Apta, except for Exchangeco, provided that all of the assets
of such subsidiary are transferred to Apta or another wholly-
owned direct or indirect subsidiary of Apta and any such
transactions are expressly permitted by this Article 3. Nothing
herein shall be construed as preventing the sale of any direct or
indirect subsidiary of Apta contemplated in the Share Exchange
Agreement.
ARTICLE 4
GENERAL
4.1 Term
This Agreement shall come into force and be effective as of
the date hereof and shall terminate and be of no further force
and effect at such time as no Exchangeable Shares (or securities
or rights convertible into or exchangeable for or carrying rights
to acquire Exchangeable Shares) are held by any person or entity
other than Apta and any of its Affiliates.
4.2 Changes in Capital of Apta and Exchangeco
At all times after the occurrence of any event contemplated
pursuant to sections 2.7 and 2.8 hereof or otherwise, as a result
of which either Apta Common Shares or the Exchangeable Shares or
both are in any way changed, this Agreement shall forthwith be
amended and modified as necessary in order that it shall apply
with full force and effect, with the appropriate changes, to all
new securities into which Apta Common Shares or the Exchangeable
Shares or both are so changed and the Parties hereto shall
execute and deliver an agreement in writing giving effect to and
evidencing such necessary amendments and modifications.
4.3 Severability
If any provision of this Agreement is held to be invalid,
illegal or unenforceable, the validity, legality or
enforceability of the remainder of this Agreement shall not in
any way be affected or impaired thereby and this Agreement shall
be carried out as nearly as possible in accordance with its
original terms and conditions.
4.4 Amendments and Modifications
This Agreement may not be amended or modified except by an
agreement in writing executed by Apta, Exchangeco and
NovaScotiaco, and, subject to section 4.5, with the approval of
the holders of Exchangeable Shares (or their duly appointed
attorney or agent) obtained in accordance with section 11 of the
Share Provisions.
4.5 Ministerial Amendments
Notwithstanding the provisions of section 4.4, the parties
to this Agreement may in writing at any time and from time to
time, without the approval of the holders of the Exchangeable
Shares, amend or modify this Agreement for the purposes of:
(a) adding to the covenants of Apta, Exchangeco and NovaScotiaco
provided that the Board of Directors of each of Apta, Exchangeco
and NovaScotiaco shall be of the good faith opinion that such
additions will not be prejudicial to the rights or interests of
the holders of the Exchangeable Shares or the Agent;
(b) making such amendments or modifications not inconsistent
with this Agreement as may be necessary or desirable with respect
to matters or questions which, in the good faith opinion of the
Board of Directors of each of Apta, Exchangeco and NovaScotiaco,
it may be expedient to make, provided that each such Board of
Directors shall be of the good faith opinion that such amendments
or modifications will not be prejudicial to the rights or
interests of the holders of the Exchangeable Shares or the Agent;
or
(c) making such changes or corrections which, on the advice of
counsel to Apta, Exchangeco and NovaScotiaco are required for the
purpose of curing or correcting any ambiguity or defect or
inconsistent provision or clerical omission or mistake or
manifest error, provided that the Board of Directors of each of
Apta, Exchangeco and NovaScotiaco shall be of the good faith
opinion that such changes or corrections will not be prejudicial
to the rights or interests of the holders of the Exchangeable
Shares or the Agent.
4.6 Meeting to Consider Amendments
Exchangeco, at the request of Apta, shall call a meeting or
meetings of the holders of the Exchangeable Shares for the
purpose of considering any proposed amendment or modification
requiring approval pursuant to section 4.4 hereof. Any such
meeting or meetings shall be called and held in accordance with
the bylaws of Exchangeco, the Share Provisions and all applicable
laws.
4.7 Enurement
This Agreement shall be binding upon and enure to the
benefit of the Parties hereto and their respective successors and
assigns. Upon the incorporation of Exchangeco and the formation
of Novascotiaco, all rights and obligations of Xxxxx Xxxxxxxxxxx
acting in trust for Exchangeco and Novascotiaco shall be
automatically assigned to Exchangeco and Novascotiaco
respectively, and Xxxxx Xxxxxxxxxxx shall be automatically
released from all obligations undertaken in trust for Exchangeco
and Novascotiaco under this Agreement.
4.8 Notices to Parties
All notices, requests, demands and other communications
hereunder must be made in writing and will be deemed to have been
duly given if delivered by courier, sent by prepaid registered
mail addressed to the addressee at the address appearing on the
first page hereof or to such other address as may be given in
writing by the Party, or sent by facsimile transmission to the
fax number of the addressee given below or to such other fax
number as may be given in writing by the Party:
(a) to Apta, Exchangeco or NovaScotiaco: (000) 000-0000
with a copy to:
Xxxxxxx X. Xxxxxxxx, Esq.
Xxxxxxx X. Xxxxxxxx, P.A.
000 Xxxxxxx Xxxxx
Xxxxxxx, Xxx Xxxxxx, 00000
Tel.: (000) 000-0000
Direct Tel.: (000) 000-0000
Fax: (000) 000-0000
Direct Fax: (000) 000-0000
Any notice given by personal delivery shall be deemed to be
received on the date of delivery. Any notice sent by courier
shall be deemed to be received on the next Business Day following
the deposit of the communication with the courier service. Any
notice sent by prepaid registered mail shall be deemed to be
received on the fifth (5th) day other than a Saturday, Sunday or
statutory holiday in New Brunswick, following the deposit of the
communication in the mail. If the party giving any Communication
knows or ought reasonably to know of any difficulties with the
postal system which might affect the delivery of mail, any such
Communication may not be mailed but must be given by personal
delivery or by electronic communication. Any notice sent by
facsimile or similar method of recorded communication shall be
deemed to have been received on the date of its transmission if
transmitted before 4:30 p.m. (Toronto time), and on the next
Business Day following the date of its transmission if
transmitted after that time.
4.9 Counterparts
This Agreement may be executed in counterparts, each of
which shall be deemed an original, and all of which taken
together shall constitute one and the same instrument.
4.10 Jurisdiction
This Agreement shall be construed and enforced in accordance
with the laws of the State of Delaware and the federal laws of
the United States of America applicable therein.
4.11 Attornment
Each of Apta, Exchangeco and NovaScotiaco agrees that any
action or proceeding arising out of or relating to this Agreement
may be instituted in the courts of Delaware, waives any objection
which it may have now or hereafter to the venue of any such
action or proceeding, irrevocably submits to the jurisdiction of
the said courts in any such action or proceeding, agrees to be
bound by any judgment of the said courts and not to seek, and
hereby waives, any review of the merits of any such judgment by
the courts of any other jurisdiction. Exchangeco and
NovaScotiaco hereby appoint Apta at its registered office in the
State of Delaware as attorney for service of process.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed as of the date first above written.
APTA HOLDINGS, INC.
Per:______________________________
Authorized Signing Officer
I have authority to bind the
corporation
_________________________________
XXXXX XXXXXXXXXXX IN TRUST FOR
INTELISYS ACQUISITION INC.,
A COMPANY TO BE INCORPORATED
_________________________________
XXXXX XXXXXXXXXXX IN TRUST FOR
INTELISYS (NOVA SCOTIA) COMPANY,
AN UNLIMITED LIABILITY COMPANY TO
BE FORMED
SCHEDULE "A"
The Exchangeable Shares shall have attached thereto, as a class,
the following rights, privileges, restrictions, and conditions:
SECTION 1
INTERPRETATION
1.1 For the purposes of these Share Provisions:
(a) "Act" means the Business Corporations Act (New Brunswick),
as amended.
(b) "Affiliate" of any Person means any other Person directly or
indirectly controlling, controlled by, or under common control of
that Person. For the purposes of this definition, "control"
(including, with correlative meanings, the terms "controlled by"
and "under common control of"), as applied to any Person, means
the possession by another Person, directly or indirectly, of the
power to direct or cause the direction of the management and
policies of that first mentioned Person, whether through the
ownership of voting securities, by contract or otherwise.
(c) "Agent" means the agent under the Voting and Exchange Agency
Agreement, and any successor agent appointed under and subject to
the provisions of the Voting and Exchange Agency Agreement.
(d) "Apta" means Apta Holdings, Inc., a corporation existing
under the laws of the State of Delaware, and any successor
corporation thereto.
(e) "Board of Directors" means the board of directors of the
Corporation.
(f) "Business Day" means any day on which commercial banks are
open for business in the Province of New Brunswick other than a
Saturday, a Sunday or a day observed as a holiday under the laws
of the Province of New Brunswick or the federal laws of Canada.
(g) "Canadian Dollar Equivalent" means in respect of an amount
expressed in a foreign currency (the "Foreign Currency Amount")
at any date the product obtained by multiplying:
(i) the Foreign Currency Amount by,
(ii) 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.
(h) "Common Shares" means the common shares in the capital of
the Corporation.
(i) "Corporation" means InteliSys Acquisition Inc., a
corporation incorporated under the Act.
(j) "Current Market Price" means, in respect of a Apta Common
Share on any date, the Canadian Dollar Equivalent of the average
of the closing bid and ask prices of a Apta Common Share during a
period of twenty (20) consecutive trading days ending not more
than three (3) trading days before such date on such stock
exchange or automated quotation system on which the Apta Common
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 Apta Common Shares
during such period does not create a market which reflects the
fair market value of a Apta Common Share, then the Current Market
Price of a Apta Common Share shall be determined by the Board of
Directors, in good faith, based upon the advice of such qualified
independent financial advisors as the Board of Directors may deem
appropriate, 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.
(k) "Exchangeable Shares" means the Class B Special Shares in
the capital of the Corporation, being non-voting exchangeable
shares having the rights, privileges, restrictions, and
conditions set forth herein.
(l) "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 Agent to vote) in
their capacity as Beneficiaries under (and as that term is
defined in) the Voting and Exchange Agency Agreement.
(m) "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 Apta
Common Shares.
(n) "Liquidation Amount" has the meaning ascribed thereto in
section 5.1 of these Share Provisions.
(o) "Liquidation Call Purchase Price" has the meaning ascribed
thereto in section 8. 1 (a) of these Share Provisions.
(p) "Liquidation Call Right" has the meaning ascribed thereto in
section 8. 1 (a) of these Share Provisions.
(q) "Liquidation Date" has the meaning ascribed thereto in
section 5.1 of these Share Provisions.
(r) "Liquidation Distribution" means a distribution of assets of
the Corporation among its shareholders arising on 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.
(s) "NovaScotiaco" means InteliSys (Nova Scotia), an unlimited
liability company formed under the laws of the Province of Nova
Scotia, and any successor company thereto.
(t) "NovaScotiaco Call Notice" has the meaning ascribed thereto
in section 6.3 of these Share Provisions.
(u) "Apta Common Shares" means the shares of common stock, par
value $0.001 U.S. per share, in the capital of Apta, and any
other securities into which such shares may be changed.
(v) "Apta Control Transaction" means any merger, amalgamation,
tender offer, material sale of shares or rights or interests
therein or thereto or similar transactions involving Apta, or any
proposal to do so.
(w) "Apta Dividend Declaration Date" means the date on which the
Board of Directors of Apta declares any dividend on the Apta
Common Shares.
(x) "Person" includes any individual, firm, partnership, joint
venture, venture capital fund, association, trust, agent,
executor, administrator, legal personal representative, estate,
group, body corporate, corporation, unincorporated association or
organization, government body, syndicate or other entity, whether
or not having legal status.
(y) "Purchase Price" has the meaning ascribed thereto in section
6.3 of these Share Provisions.
(z) "Redemption Call Purchase Price" has the meaning ascribed
thereto in section 8.2 of these Share Provisions.
(aa) "Redemption Call Right" has the meaning ascribed thereto by
section 8.2 of these Share Provisions.
(bb) "Redemption Date" means the date, 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
section 7 of these Share Provisions, which date shall be the
tenth (10th) anniversary of the date of issuance of the
Exchangeable Shares, unless:
(i) the number of Exchangeable Shares outstanding (other than
Exchangeable Shares held by Apta and its Affiliate, and as such
number of shares may be adjusted as deemed appropriate by the
Board of Directors to give effect to any subdivision or
consolidation of or stock dividend on the Exchangeable Shares,
any issue or distribution of rights to acquire Exchangeable
Shares or securities exchangeable for or convertible into
Exchangeable Shares, any issue or distribution of other
securities or rights or evidences of indebtedness or assets, or
any other capital reorganization or other transaction affecting
the Exchangeable Shares) is less than 10% of the number of
Exchangeable Shares issued upon the first issuance of
Exchangeable Shares, in which case the Board of Directors may
accelerate such redemption date to such earlier date as they may
determine, upon at least sixty (60) days' prior written notice to
the registered holders of the Exchangeable Shares;
(ii) an Apta 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 Apta 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 Apta Control Transaction in accordance with
its terms, the Board of Directors may accelerate such redemption
date to such earlier date as they may determine, upon such number
of days prior written notice to the registered holders of the
Exchangeable Shares as the Board of Directors may determine to be
reasonably practicable in such circumstances;
(iii) an Exchangeable Share Voting Event is proposed, in
which case, 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 as the Board of Directors may
determine to be reasonably practicable in such circumstances
(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, in any other commercially
reasonable manner that does not result in an Exchangeable Share
Voting Event);
(iv) 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 and
the Board of Directors shall be deemed to have given such prior
written notice of such redemption to the registered holders of
the Exchangeable Shares or the Board of Directors may establish
another Business Day as it may determine to be reasonably
practicable in such circumstances,
provided, however, that the accidental failure or omission
to give any notice of redemption under clauses (a), (b), (c)
or (d) above to less than 10% of such holders of
Exchangeable Shares shall not affect the validity of any
such redemption.
(cc) "Redemption Price" has the meaning ascribed thereto in
section 7.1 of these Share Provisions.
(dd) "Retracted Shares" has the meaning ascribed thereto in
section 6.1 (a) of these Share Provisions.
(ee) "Retraction Call Right" has the meaning ascribed thereto in
section 6.1 (c) of these Share Provisions.
(ff) "Retraction Date" has the meaning ascribed thereto in
section 6.1(b) of these Share Provisions.
(gg) "Retraction Price" has the meaning ascribed thereto in
section 6.1 of these Share Provisions.
(hh) "Retraction Request" has the meaning ascribed thereto in
section 6.1 of these Share Provisions.
(ii) "Share Provisions" means the rights, privileges restrictions
and conditions attaching to the Exchangeable Shares set forth in
the articles of incorporation of Exchangeco and as set forth in
this Schedule "A".
(jj) "Support Agreement" means the exchangeable share support
agreement between Apta, NovaScotiaco and the Corporation, to be
entered into in support of the holders of Exchangeable Shares, a
copy of which shall be maintained at the registered office of the
Corporation and which will be provided to a shareholder during
normal business hours, on demand and without charge.
(kk) "Transfer Agent" means or such Person as may from time to
time be appointed by the Corporation as the registrar and
transfer agent for the Exchangeable Shares, and if no such Person
has been appointed, shall mean the Corporation.
(ll) "Unpaid Dividend Amount" means the full amount of any and
all declared and unpaid dividends on the Exchangeable Shares.
(mm) "Voting and Exchange Agency Agreement" means the voting and
exchange agency agreement between Apta, the Corporation and the
Agent to be entered into for the benefit of the registered
holders from time to time of the Exchangeable Shares, a copy of
which shall be maintained at the registered office of the
Corporation and which will be provided to a shareholder during
normal business hours, on demand and without charge.
SECTION 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
on a Liquidation Distribution to the extent provided for in
section 5.
SECTION 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 Apta Dividend Declaration Date, declare a dividend
on each Exchangeable Share:
(a) in the case of a cash dividend declared on the Apta Common
Shares, in an amount in cash for each Exchangeable Share in U.S.
dollars, or the Canadian Dollar Equivalent thereof, on the Apta
Dividend Declaration Date, in each case, equal to the cash
dividend declared on each Apta Common Share;
(b) in the case of a stock dividend or other distribution
declared on the Apta Common Shares to be paid in Apta Common
Shares, in such number of Exchangeable Shares for each
Exchangeable Share as is equal to the number of Apta Common
Shares to be paid on each Apta Common Share; or
(c) in the case of a dividend declared on the Apta Common Shares
in property other than cash or Apta Common Shares, in such type
and amount of property for each Exchangeable Share as is the same
as or economically equivalent to the type and amount of property
declared as a dividend on each Apta Common Share (to be
determined by the Board of Directors as contemplated by section
3.5 hereof).
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 Exchangeable Shares of the
Corporation, as applicable.
3.2 Cheques of the Corporation payable at par at any branch of
the bankers of the Corporation shall be issued in respect of any
cash dividends contemplated by section 3.1(a) hereof and the
sending of such a cheque to each holder of an Exchangeable Share
shall satisfy the cash dividend represented thereby unless the
cheque is not paid on presentation. Certificates registered in
the name of the registered holder of Exchangeable Shares shall be
issued or transferred in respect of any stock dividends
contemplated by section 3.1 (b) hereof 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
section 3.1(c) hereof shall be issued, distributed or transferred
by the Corporation in such manner as it shall determine and the
issuance, distribution or transfer thereof by the Corporation to
each holder of an Exchangeable Share shall satisfy the dividend
represented thereby. No holder of an Exchangeable Share shall be
entitled to recover by action or other legal process against the
Corporation any dividend that is represented by a cheque that has
not been duly presented to the Corporation's bankers for payment
or that otherwise remains unclaimed for a period of six years
from the date on which such dividend was payable.
3.3 The record date for the determination of the holders of
Exchangeable Shares entitled to receive payment of, and the
payment date for, any dividend declared on the Exchangeable
Shares under section 3.1 hereof shall be the same dates as the
record date and payment date, respectively, for the corresponding
dividend declared on the Apta Common Shares.
3.4 If on any payment date for any dividends declared on the
Exchangeable Shares under section 3.1 hereof 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 a 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.
3.5 The Board of Directors shall determine, in good faith and in
its sole discretion, economic equivalence for the purposes of
section 3.1 hereof, and each such determination shall be
conclusive and binding on the Corporation and its shareholders
absent manifest error. 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 the issuance or distribution of any rights,
options or warrants to subscribe for or purchase Apta Common
Shares (or securities exchangeable for or convertible into or
carrying rights to acquire Apta Common Shares), the relationship
between the exercise price of each such right, option or warrant
and the current market value (as determined by the Board of
Directors in the manner above contemplated) of a Apta Common
Share;
(b) in the case of the issuance or distribution of any other
form of property (including without limitation any shares or
securities of Apta of any class other than Apta Common Shares,
any rights, options or warrants other than those referred to in
section 3.5(b) above, any evidences of indebtedness of Apta or
any assets of Apta), the relationship between the fair market
value (as determined by the Board of Directors in the manner
below contemplated) of such property to be issued or distributed
with respect to each outstanding Apta Common Share and the
current market value (as determined by the Board of Directors in
the manner below contemplated) of a Apta Common Share; and
(c) 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 Apta Common Shares as a result of differences
between taxation laws of Canada and the United States of America
(except for any differing consequences arising as a result of
differing marginal taxation rates and without regard to the
individual circumstances of holders of Exchangeable Shares).
For purposes of the foregoing determinations, the current market
value of any security listed and traded or quoted on a securities
exchange shall be the weighted average of the closing bid and ask
prices of such security during a period of not less than twenty
(20) consecutive trading days ending not more than three (3)
trading days before the date of determination on the principal
securities exchange on which such securities are listed and
traded or quoted; provided, however, that if in the opinion of
the Board of Directors the public distribution or trading
activity of such securities during such period does not create a
market which reflects the fair market value of such securities,
then the current market value thereof shall be determined by the
Board of Directors, in good faith, based upon the advice of such
qualified independent financial advisors as the Board of
Directors may deem appropriate, and in its sole discretion, and
provided further that any such determination by the Board of
Directors shall be conclusive and binding on the Corporation and
its shareholders.
SECTION 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 11.2 of these Share Provisions:
(a) pay any dividends on the Common Shares or any other shares
ranking junior to the Exchangeable Shares, other than stock
dividends payable in Common Shares or any such other shares
ranking junior to the Exchangeable Shares, as the case may be;
(b) redeem or purchase or make any capital distribution in
respect of Common Shares or any other shares ranking junior to
the Exchangeable Shares;
(c) redeem or purchase any other shares of the Corporation
ranking equally with the Exchangeable Shares with respect to the
payment of dividends or on any Liquidation Distribution; 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.
The restrictions in subsections (a), (b), (c) and (d) above shall
not apply if all dividends on the outstanding Exchangeable Shares
corresponding to dividends declared and paid to date on the Apta
Common Shares shall have been declared and paid on the
Exchangeable Shares.
SECTION 5
DISTRIBUTION ON LIQUIDATION
5.1 In the event of a Liquidation Distribution, a holder of
Exchangeable Shares shall be entitled, subject to applicable law,
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 or winding-
up, 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
Exchangeable Share (the "Liquidation Amount") equal to (i) the
Current Market Price of a Apta Common Share on the last Business
Day prior to the Liquidation Date (which shall be satisfied in
full by the Corporation causing to be delivered to such holder
one Apta Common Share), plus (ii) the Unpaid Dividend Amount, if
any, on any Exchangeable Share held by such holder on any
dividend record date which occurred prior to the Liquidation
Date.
5.2 On or promptly after the Liquidation Date, and subject to
the exercise by NovaScotiaco 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 Act and the articles
and by-laws of the Corporation and such additional documents and
instruments as the Transfer Agent 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 securities register of the Corporation for the Exchangeable
Shares or by holding for pick-up by the holder at the registered
office of the Corporation or at any office of the Transfer Agent
as may be specified by the Corporation by notice to the holders
of Exchangeable Shares, on behalf of the Corporation of
certificates representing Apta Common Shares (which shares shall
be duly issued as fully paid and non- assessable and shall be
free and clear of any lien, claim or encumbrance) and a cheque of
the Corporation payable at par at any branch of the bankers of
the Corporation in respect of the remaining portion, if any, of
the total Liquidation Amount (in each case less any amounts
withheld on account of tax required to be deducted and withheld
therefrom). On and after the Liquidation Date, the holders of the
Exchangeable Shares shall cease to be holders of such
Exchangeable Shares and shall not be entitled to exercise any of
the rights of holders in respect thereof, other than the right to
receive their proportionate part of the total Liquidation Amount,
unless payment of the total Liquidation Amount for such
Exchangeable Shares shall not be made upon presentation and
surrender of share certificates in accordance with the foregoing
provisions, in which case the rights of the holders shall remain
unaffected until the total Liquidation Amount has been paid in
the manner hereinbefore provided. The Corporation shall have the
right at any time after the Liquidation Date to deposit or cause
to be deposited the total Liquidation Amount in respect of the
Exchangeable Shares represented by certificates that have not at
the Liquidation Date been surrendered by the holders thereof in a
custodial account with any chartered bank or trust company in
Canada less any amounts withheld on account of tax required to be
deducted and withheld therefrom. Upon such deposit being made,
the rights of the holders of Exchangeable Shares after such
deposit shall be limited to receiving their proportionate part of
the total Liquidation Amount (in each case less such amounts
withheld on account of tax required to be deducted and withheld
therefrom) for such Exchangeable Shares so deposited, against
presentation and surrender of the said certificates held by them,
respectively, in accordance with the foregoing provisions. Upon
such payment or deposit of the total Liquidation Amount, the
holders of the Exchangeable Shares shall thereafter be considered
and deemed for all purposes to be holders of the Apta Common
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 of these Share
Provisions, such holders shall not be entitled to share in any
further distribution of the assets of the Corporation.
SECTION 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 NovaScotiaco of the Retraction
Call Right and otherwise upon compliance with the provisions of
this section 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 Exchangeable Share (the "Retraction Price")
equal to (i) the Current Market Price of an Apta Common Share on
the last Business Day prior to the Retraction Date (which shall
be satisfied in full by the Corporation causing to be delivered
to such holder one Apta Common Share for each Exchangeable Share
presented and surrendered by the holder), plus (ii) the Unpaid
Dividend Amount, if any, on any such Exchangeable Share held by
such holder on any dividend record date which occurred prior to
the Retraction Date,. 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 Act and the
articles and by-laws of the Corporation and such additional
documents and instruments as the Transfer Agent may reasonably
require, and together with a duly executed statement (the
"Retraction Request") in the form attached hereto as Appendix 1,
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;
(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
ten (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 NovaScotiaco 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 Apta in accordance with the
Retraction Call Right on the terms and conditions set out in
section 6.3 below.
6.2 Upon receipt by the Corporation or the Transfer Agent in the
manner specified in section 6.1 hereof of a certificate or
certificates representing the number of Exchangeable Shares which
the holder desires to have the Corporation redeem, together with
a Retraction Request, 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 (Toronto time) on the Retraction Date and
shall cause to be delivered to such holder the total Retraction
Price with respect to such shares, provided that all declared and
unpaid dividends for which the record date has occurred prior to
the Retraction Date shall be paid on the payment date for such
dividends, less any amounts withheld on account of tax required
to be deducted and withheld therefrom. If only a part of the
Exchangeable Shares represented by any certificate is redeemed, 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 NovaScotiaco thereof. In
order to exercise the Retraction Call Right, NovaScotiaco must
notify the Corporation of its determination to do so (the
"NovaScotiaco Call Notice") within five (5) Business Days of
notification to NovaScotiaco by the Corporation of the receipt by
the Corporation of the Retraction Request. If NovaScotiaco does
not so notify the Corporation within such five Business Day
period, the Corporation will notify the holder as soon as
possible thereafter that NovaScotiaco will not exercise the
Retraction Call Right. If NovaScotiaco delivers the NovaScotiaco
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
the Retracted Shares to NovaScotiaco in accordance with the
Retraction Call Right. In such event, the Corporation shall not
redeem the Retracted Shares and NovaScotiaco shall purchase from
such holder and such holder shall sell to NovaScotiaco on the
Retraction Date the Retracted Shares for an amount per Retracted
Share (the "Purchase Price") equal to (i) the Current Market
Price of a Apta Common Share on the last Business Day prior to
the Retraction Date (which shall be satisfied in full by
NovaScotiaco causing to be delivered to such holder one Apta
Common Share for each Exchangeable Share presented and
surrendered by the holder), plus (ii) the Unpaid Dividend Amount,
if any, on those Retracted Shares held by such holder on any
dividend record date which occurred prior to the Retraction Date.
For the purposes of completing a purchase pursuant to the
Retraction Call Right, NovaScotiaco shall deposit with the
Transfer Agent, on or before the Retraction Date, certificates
representing Apta Common Shares and a cheque or cheques of
NovaScotiaco payable at par at any branch of the bankers of
NovaScotiaco representing the Unpaid Dividend Amount, if any,
less any amounts withheld on account of tax required to be
deducted and withheld therefrom. Provided that NovaScotiaco has
complied with the immediately preceding sentence, 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 NovaScotiaco does not deliver a NovaScotiaco 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 the Corporation shall redeem the Retracted
Shares on the Retraction Date and in the manner otherwise
contemplated in this section 6.
6.4 The Corporation or NovaScotiaco, 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 securities
register of the Corporation for the Exchangeable Shares or at the
address specified in the holder's Retraction Request or by
holding for pick-up by the holder at the registered office of the
Corporation or at any office of the Transfer Agent as may be
specified by the Corporation by notice to the holders of
Exchangeable Shares, certificates representing the Apta Common
Shares (which shares shall be duly issued as fully paid and non-
assessable and shall be free and clear of any lien, claim or
encumbrance) registered in the name of the holder or in such
other name as the holder may request, and, if applicable and on
or before the payment date therefore, a cheque payable at par at
any branch of the bankers of the Corporation or NovaScotiaco, as
applicable, representing the aggregate Unpaid Dividend Amount, if
any, in payment of the total Retraction Price or the total
Purchase Price, as the case may be, in each case, less any
amounts withheld on account of tax required to be deducted and
withheld therefrom, and such delivery of such certificates and
cheques on behalf of the Corporation or by NovaScotiaco, as the
case may be, or by the Transfer Agent shall be deemed to be
payment of and shall satisfy and discharge all liability for the
total Retraction Price or the total Purchase Price, as the case
may be, to the extent that the same is represented by such share
certificates and cheques (plus any tax deducted and withheld
therefrom).
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 his proportionate part of the total Retraction
Price or the 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 shall
thereafter be considered and deemed for all purposes to be a
holder of the Apta Common Shares so delivered.
6.6 Notwithstanding any other provision of this section 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 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
NovaScotiaco 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 Retracted Shares in accordance with
section 6.2 of these Share Provisions 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
hereof. Provided that the Retraction Request is not revoked by
the holder in the manner specified in section 6.7, the holder of
any such Retracted Shares not redeemed by the Corporation
pursuant to section 6.2 of these Share Provisions as a result of
solvency requirements or other provisions of applicable law shall
be deemed by giving the Retraction Request to require Apta to
purchase such Retracted Shares from such holder on the Retraction
Date or as soon as practicable thereafter on payment by Apta to
such holder of the Purchase Price for such Retracted Share, all
as more specifically provided in the Voting and Exchange Agency
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 the 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 NovaScotiaco shall be deemed to have been
revoked.
SECTION 7
REDEMPTION OF EXCHANGEABLE SHARES BY THE CORPORATION
7.1 Subject to applicable law, and provided NovaScotiaco 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 Exchangeable
Share (the "Redemption Price") equal to (i) the Current Market
Price of a Apta Common Share on the last Business Day prior to
the Redemption Date (which shall be satisfied in full by the
Corporation causing to be delivered to each holder of
Exchangeable Shares one Apta Common Share for each Exchangeable
Share held by such holder), plus, (ii) the Unpaid Dividend
Amount, if any, on each such Exchangeable Share held by such
holder on any dividend record date which occurred prior to the
Redemption Date.
7.2 In any case of a redemption of Exchangeable Shares under
this section 7, the Corporation shall, at least sixty (60) days
before the Redemption Date (other than a Redemption Date
established in connection with a Apta 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 NovaScotiaco 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 a Apta Control Transaction, an Exchangeable Share
Voting Event and an Exempt Exchangeable Share Voting Event, the
written notice of redemption by the Corporation or the purchase
by NovaScotiaco 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 of the
Corporation 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.
7.3 On or after the Redemption Date and subject to the exercise
by NovaScotiaco 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 such
notice 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
Act and the articles and by-laws of the Corporation and such
additional documents and instruments as the Transfer Agent 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
certificates representing Apta Common Shares (which shares shall
be duly issued as fully paid and non-assessable and shall be free
and clear of any lien, claim or encumbrance) and, if applicable,
a cheque of the Corporation payable at par at any branch of the
bankers of the Corporation in payment of any such Unpaid Dividend
Amount, in each case, less any amounts withheld on account of tax
required to be deducted and withheld therefrom. 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 have 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 total
Redemption Price for 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 agent named in such notice, less any amounts withheld on
account of tax required to be deducted and withheld therefrom.
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 the total
Redemption, less any amounts withheld on account of tax required
to be deducted and withheld therefrom, the holders of the
Exchangeable Shares shall thereafter be considered and deemed for
all purposes to be holders of the Apta Common Shares delivered to
them or the custodian on their behalf.
SECTION 8
CERTAIN RIGHTS OF PARENT TO
ACQUIRE EXCHANGEABLE SHARES
8.1 NovaScotiaco Liquidation Call Right.
(a) NovaScotiaco shall have the overriding right (the
"Liquidation Call Right"), in the event of and notwithstanding
the proposed liquidation, dissolution or winding-up of the
Corporation pursuant to section 5 of these 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 Apta) on the Liquidation Date all but
not less than all of the Exchangeable Shares held by each such
holder on payment by NovaScotiaco of an amount per Exchangeable
Share (the "Liquidation Call Purchase Price") equal to (i) the
Current Market Price of a Apta Common Share on the last Business
Day prior to the Liquidation Date (which shall be satisfied in
full by NovaScotiaco causing to be delivered to such holder one
Apta Common Share), plus (ii) the Unpaid Dividend Amount, if any,
on each such Exchangeable Share held by such holder on any
dividend record date which occurred prior to the date of purchase
by NovaScotiaco. In the event of the exercise of the Liquidation
Call Right by NovaScotiaco on the Liquidation Date on payment by
NovaScotiaco to the holder of the Liquidation Call Purchase Price
for each such share, the Corporation shall have no obligation to
redeem such shares so purchased by NovaScotiaco.
(b) To exercise the Liquidation Call Right, NovaScotiaco must
notify the Transfer Agent, as agent for the holders of
Exchangeable Shares, and the Corporation, of NovaScotiaco'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 the Corporation and at least five
Business Days before the Liquidation Date in the case of an
involuntary liquidation, dissolution or winding-up of the
Corporation. The Transfer Agent will notify the holders of
Exchangeable Shares as to whether or not NovaScotiaco has
exercised the Liquidation Call Right forthwith after the expiry
of the period during which the same may be exercised by
NovaScotiaco. If NovaScotiaco exercises the Liquidation Call
Right, then on the Liquidation Date NovaScotiaco will purchase
and the holders will sell all of the Exchangeable Shares then
outstanding for a price per share equal to the Liquidation Call
Purchase Price.
(c) For the purposes of completing the purchase of the
Exchangeable Shares pursuant to the Liquidation Call Right,
NovaScotiaco shall deposit with the Transfer Agent, on or before
the Liquidation Date, certificates representing the aggregate
number of Apta Common Shares deliverable by NovaScotiaco and a
cheque or cheques of NovaScotiaco payable at par at any branch of
the bankers of NovaScotiaco representing the aggregate Unpaid
Dividend Amount in payment of the total Liquidation Call Purchase
Price, in each case, less any amounts withheld on account of tax
required to be deducted and withheld therefrom. Provided that
NovaScotiaco has complied with the immediately preceding
sentence, on and after the Liquidation Date the rights of each
holder of Exchangeable Shares will be limited to receiving such
holder's proportionate part of the total Liquidation Call
Purchase Price payable by NovaScotiaco upon presentation and
surrender by the holder of certificates representing the
Exchangeable Shares held by such holder and the holder shall on
and after the Liquidation Date be considered and deemed for all
purposes to be the holder of the Apta Common Shares to which it
is entitled. Upon surrender to the Transfer Agent of a
certificate or certificates representing Exchangeable Shares,
together with such other documents and instruments as may be
required to effect a transfer of Exchangeable Shares under the
Act and the articles and by-laws of the Corporation 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 therefore,
and the Transfer Agent on behalf of NovaScotiaco shall deliver to
such holder, certificates representing the Apta Common Shares to
which the holder is entitled and a cheque or cheques of
NovaScotiaco payable at par at any branch of the bankers of
NovaScotiaco in payment of the remaining portion, if any, of the
total Liquidation Call Purchase Price, in each case, less any
amounts withheld on account of tax required to be deducted and
withheld therefrom. If NovaScotiaco 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 therefore the liquidation price
otherwise payable by the Corporation in connection with the
liquidation, dissolution or winding up of the Corporation
pursuant to section 5 of these Share Provisions.
8.2 NovaScotiaco Redemption Call Right.
(a) NovaScotiaco shall have the overriding right (the
"Redemption Call Right"), notwithstanding the proposed redemption
of the Exchangeable Shares by the Corporation pursuant to section
7 of these 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 Apta) on
the Redemption Date all but not less than all of the Exchangeable
Shares held by each such holder on payment by the Corporation to
each holder of an amount per Exchangeable Share (the "Redemption
Call Purchase Price") equal to (i) the Current Market Price of a
Apta Common Share on the last Business Day prior to the
Redemption Date (which shall be satisfied in full by NovaScotiaco
causing to be delivered to such holder one Apta Common Share),
plus (ii) the Unpaid Dividend Amount, if any, on each
Exchangeable Share held by such holder on any dividend record
date which occurred prior to the Redemption Date. In the event of
the exercise of the Redemption Call Right by NovaScotiaco, each
holder shall be obligated to sell all the Exchangeable Shares
held by the holder to NovaScotiaco on the Redemption Date on
payment by NovaScotiaco to the holder of the Redemption Call
Purchase Price for each such share, and the Corporation shall
have no obligation to redeem such shares so purchased by
NovaScotiaco.
(b) To exercise the Redemption Call Right, NovaScotiaco must
notify the Transfer Agent, as agent for the holders of
Exchangeable Shares, and the Corporation, of NovaScotiaco'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 a Apta Control Transaction, an Exchangeable Share
Voting Event or an Exempt Exchangeable Share Voting Event or such
shorter period as may be agreed, in writing, by the Corporation,
NovaScotiaco and the holders of the Exchangeable Shares, in which
case NovaScotiaco shall so notify the Transfer Agent and the
Corporation on or before the Redemption Date. The Transfer Agent
will notify the holders of Exchangeable Shares as to whether or
not NovaScotiaco has exercised the Redemption Call Right
forthwith after the expiry of the period during which the same
may be exercised by NovaScotiaco. If NovaScotiaco exercises the
Redemption Call Right, on the Redemption Date NovaScotiaco will
purchase and the holders will sell all of the Exchangeable Shares
then outstanding for a price per share equal to the Redemption
Call Purchase Price.
(c) For the purposes of completing the purchase of the
Exchangeable Shares pursuant to the Redemption Call Right,
NovaScotiaco shall deposit with the Transfer Agent, on or before
the Redemption Date, certificates representing the aggregate
number of Apta Common Shares deliverable by NovaScotiaco and a
cheque or cheques of NovaScotiaco payable at par at any branch of
the bankers of NovaScotiaco representing the aggregate Unpaid
Dividend Amount in payment of the total Redemption Call Purchase
Price, in each case, less any amounts withheld on account of tax
required to be deducted and withheld therefrom. Provided that
NovaScotiaco has complied with the immediately preceding
sentence, on and after the Redemption Date the rights of each
holder of Exchangeable Shares will be limited to receiving such
holder's proportionate part of the total Redemption Call Purchase
Price payable by NovaScotiaco upon presentation and surrender by
the holder of certificates representing the Exchangeable Shares
held by such holder and the holder shall on and after the
Redemption Date be considered and deemed for all purposes to be
the holder of the Apta Common Shares to which it is entitled.
Upon surrender to the Transfer Agent of a certificate or
certificates representing Exchangeable Shares, together with such
other documents and instruments as may be required to effect a
transfer of Exchangeable Shares under the Act and the articles
and by-laws of the Corporation 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 therefore, and the Transfer Agent
on behalf of NovaScotiaco shall deliver to such holder,
certificates representing the Apta Common Shares to which the
holder is entitled and a cheque or cheques of NovaScotiaco
payable at par at any branch of the bankers of NovaScotiaco in
payment of the remaining portion, if any, of the total Redemption
Call Purchase Price, in each case, less any amounts withheld on
account of tax required to be deducted and withheld therefrom.
If NovaScotiaco 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
therefore the redemption price otherwise payable by the
Corporation in connection with the redemption of the Exchangeable
Shares pursuant to section 7 of these Share Provisions.
SECTION 9
PURCHASE FOR CANCELLATION
9.1 Subject to applicable law and the articles of the
Corporation, the Corporation may at any time and from time to
time purchase for cancellation all or any part of the outstanding
Exchangeable Shares at any price 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 the Unpaid Dividend Amount. If in response to an
invitation for tenders under the provisions of this section 9,
more Exchangeable Shares are tendered at a price or prices
acceptable to the Corporation than the Corporation is prepared to
purchase, the Exchangeable Shares to be purchased by the
Corporation shall be purchased as nearly as may be pro rata
according to the number of shares tendered by each holder who
submits a tender to the Corporation, provided that when shares
are tendered at different prices, the pro rating shall be
effected (disregarding fractions) only with respect to the shares
tendered at the price at which more shares were tendered than the
Corporation is prepared to purchase after the Corporation has
purchased all the shares tendered at lower prices. If part only
of the Exchangeable Shares represented by any certificate shall
be purchased, a new certificate for the balance of such shares
shall be issued at the expense of the Corporation.
SECTION 10
VOTING RIGHTS
10.1 Except as required by applicable law and by section 11
hereof, the holders of the Exchangeable Shares shall not be
entitled as such to receive notice of or to attend any meeting of
the shareholders of the Corporation or to vote at any such
meeting.
SECTION 11
AMENDMENT AND APPROVAL
11.1 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.
11.2 Any approval given by the holders of the Exchangeable Shares
to add to, change or remove any right, privilege, restriction or
condition attaching to the Exchangeable Shares or any other
matter requiring the approval or consent of the holders of the
Exchangeable Shares shall be deemed to have been sufficiently
given if it shall have been given in accordance with applicable
law subject to a minimum requirement that such approval be
evidenced by resolution passed by not less than two-thirds
(2/3)of the votes cast on such resolution at a meeting of holders
of Exchangeable Shares duly called and held at which the holders
of at least 50% of the outstanding Exchangeable Shares at that
time are present or represented by proxy; provided that, if at
any such meeting the holders of at least 50% of the outstanding
Exchangeable Shares at that time are not present or represented
by proxy within one-half hour after the time appointed for such
meeting, then the meeting shall be adjourned to such date not
less than five (5) days thereafter and to such time and place as
may be designated by the Chairman of such meeting. At such
adjourned meeting the holders of Exchangeable Shares present or
represented by proxy thereat may transact the business for which
the meeting was originally called and a resolution passed thereat
by the affirmative vote of not less than two-thirds (2/3) of the
votes cast on such resolution at such meeting shall constitute
the approval or consent of the holders of the Exchangeable
Shares.
SECTION 12
RECIPROCAL CHANGES, ETC. IN RESPECT
OF PARENT COMMON SHARES
12.1 Each holder of an Exchangeable Share acknowledges that the
Support Agreement provides, in part, that Apta 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 11.2 of these Share Provisions:
(a) issue or distribute Apta Common Shares (or securities
exchangeable for or convertible into or carrying rights to
acquire Apta Common Shares) to the holders of all or
substantially all of the then outstanding Apta Common Shares by
way of stock dividend or other distribution, other than an issue
of Apta Common Shares (or securities exchangeable for or
convertible into or carrying rights to acquire Apta Common
Shares) to holders of Apta Common Shares who exercise an option
to receive dividends in Apta Common Shares (or securities
exchangeable for or convertible into or carrying rights to
acquire Apta Common Shares) in lieu of receiving cash dividends;
(b) issue or distribute rights, options or warrants to the
holders of all or substantially all of the then outstanding Apta
Common Shares entitling them to subscribe for or to purchase Apta
Common Shares (or securities exchangeable for or convertible into
or carrying rights to acquire Apta Common Shares); or
(c) issue or distribute to the holders of all or substantially
all of the then outstanding Apta Common Shares:
(i) shares or securities of Apta of any class other than Apta
Common Shares (other than shares convertible into or exchangeable
for or carrying rights to acquire Apta Common Shares);
(ii) rights, options or warrants other than those referred to in
section 12.1 (b) above;
(iii) evidences of indebtedness of Apta; or
(iv) assets of Apta,
unless the economic equivalent on a per share basis of such
rights, options, securities, shares, evidences of
indebtedness or other assets is issued or distributed
simultaneously to holders of the Exchangeable Shares.
12.2 Each holder of an Exchangeable Share acknowledges that the
Support Agreement further provides, in part, that Apta 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 11.2 of these Share Provisions:
(a) subdivide, redivide or change the then outstanding Apta
Common Shares into a greater number of Apta Common Shares;
(b) reduce, combine, consolidate or change the then outstanding
Apta Common Shares into a lesser number of Apta Common Shares; or
(c) reclassify or otherwise change the Apta Common Shares or
effect an amalgamation, merger, reorganization or other
transaction affecting the Apta Common 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.
12.3 Each holder of an Exchangeable Share acknowledges that the
Support Agreement further provides, in part, that the aforesaid
provisions of the Support Agreement shall not be changed without
the approval of the holders of the Exchangeable Shares given in
accordance with section 11.2 of these Share Provisions.
SECTION 13
ACTIONS BY THE CORPORATION UNDER SUPPORT AGREEMENT
AND VOTING AND EXCHANGE AGENCY AGREEMENT
13.1 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 Apta,
NovaScotiaco and the Corporation with all provisions of the
Support Agreement and Voting and Exchange Agency Agreement
applicable to Apta and the Corporation, in accordance with the
terms thereof including, without limitation, taking all such
actions and doing all such things as shall be necessary or
advisable to enforce to the fullest extent possible for the
direct benefit of the Corporation all rights and benefits in
favour of the Corporation under or pursuant to such agreement.
13.2 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 and Voting and
Exchange Agency Agreement without the approval of the holders of
the Exchangeable Shares given in accordance with section 11.2 of
these Share Provisions other than such amendments, waivers and/or
forgiveness as may be necessary or advisable for the purposes of:
(a) adding to the covenants of the other parties to such
agreement for the protection of the Corporation or the holders of
the Exchangeable Shares thereunder;
(b) making such provisions or modifications not inconsistent
with such agreement as may be necessary or desirable with respect
to matters or questions arising thereunder which, in the good
faith opinion of the Board of Directors, it may be expedient to
make, provided that the Board of Directors shall be of the good
faith opinion, after consultation with counsel, that such
provisions and modifications will not be prejudicial to the
interests of the holders of the Exchangeable Shares; or
(c) making such changes in or corrections to such agreement
which, on the advice of counsel to the Corporation, are required
for the purpose of curing or correcting any ambiguity or defect
or inconsistent provision or clerical omission or mistake or
manifest error contained therein, provided that the Board of
Directors shall be of the good faith opinion, that such changes
or corrections will not be prejudicial to the interests of the
holders of the Exchangeable Shares.
SECTION 14
LEGEND; CALL RIGHTS
14.1 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 herein relating to the Liquidation Call
Right, the Retraction Call Right and the Redemption Call Right
and the Voting and Exchange Agency Agreement (including the
provisions with respect to the voting rights, exchange right and
automatic exchange thereunder).
14.2 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 Apta, and the overriding nature thereof in
connection with the liquidation, dissolution or winding-up of the
Corporation or the retraction or redemption of Exchangeable
Shares, as the case may be, and to be bound thereby in favour of
Apta as therein provided.
SECTION 15
NOTICES
15.1 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 telephonic or electronic means (defined
as telephone calls or messages, facsimile messages, electronic
mail, transmission through computer networks or any other similar
means) or by delivery to the registered office of the Corporation
and addressed to the attention of the President. 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.
15.2 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 President 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.
15.3 Any notice, request or other communication to be given to a
holder of Exchangeable Shares by or on behalf of the Corporation
shall be in writing and shall be valid and effective if given by
mail (postage prepaid) or by delivery to the address of the
holder recorded in the securities register of the Corporation or,
in the event of the address of any such holder not being so
recorded, then at the last known address of such holder, in all
cases with a copy to the Agent. Any such notice, request or
other communication, if given by mail, shall be deemed to have
been given and received on the third Business Day following the
date of mailing and, if given by delivery, shall be deemed to
have been given and received on the date of delivery. Accidental
failure or omission to give any notice, request or other
communication to one or more holders of Exchangeable Shares shall
not invalidate or otherwise alter or affect any action or
proceeding to be taken by the Corporation pursuant thereto.
APPENDIX 1
NOTICE OF RETRACTION
To: InteliSys Acquisition Inc. (the "Corporation") and
InteliSys (Nova Scotia) Company ("NovaScotiaco")
This notice is given pursuant to section 6 of the
provisions (the "Share Provisions") attaching to the non-
voting exchangeable shares of the Corporation represented by
the certificate (the "Certificate") which accompanies this
notice and all capitalized words and expressions used in
this notice that are defined in the Share Provisions have
the meanings ascribed to such words and expressions in such
Share Provisions.
The undersigned hereby notifies the Corporation that,
subject to the Retraction Call Right referred to below, the
undersigned desires to have the Corporation redeem in
accordance with section 6 of the Share Provisions:
all share(s) represented by the Certificate; or
____________ share(s) only.
The undersigned hereby notifies the Corporation 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 the Corporation. If 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 the
Corporation.
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 the Corporation. If 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 the
Corporation.
The undersigned acknowledges the overriding Retraction
Call Right of NovaScotiaco 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 such shares to Apta 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 notice of
retraction, and this offer to sell the Retracted Shares to
Apta, may be revoked and withdrawn by the undersigned only
by notice in writing given to the Corporation at any time
before the close of business on the Business Day immediately
preceding the Retraction Date as provided in section 6.7 of
the Share Provisions.
The undersigned acknowledges that if, as a result of
solvency provisions of applicable law, the Corporation 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 Agency Agreement) so as to
require the Corporation's Apta to purchase the unredeemed
Retracted Shares.
The undersigned hereby represents and warrants to the
Corporation and NovaScotiaco that the undersigned:
is
(select one)
is not
a non-resident of Canada for purposes of the Income Tax
Act (Canada). The undersigned acknowledges that, in the
absence of an indication that the undersigned is not a non-
resident of Canada, withholding on account of Canadian tax
may be made from amounts payable to the undersigned on the
redemption or purchase of the Retracted Shares.
The undersigned hereby represents and warrants to the
Corporation and NovaScotiaco that the undersigned has good
title to, and owns, the share(s) represented by the
Certificate to be acquired by the Corporation or Apta, as
the case may be, free and clear of all liens, claims and
encumbrances.
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.
Date:
Name of Person in Whose Name Securities or Cheque(s)
are to be Registered, Issued or Delivered (please
print)
Street Address or P.O. Box
Signature of Shareholder
City, Province and Postal Code
Signature Guaranteed by
NOTE: (1) This panel must be completed and the
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 the Corporation 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.
(2) If this notice of retraction is for less
than all of the shares represented by the
Certificate, a certificate representing the
remaining share(s) of the Corporation
represented by the Certificate will be issued
and registered in the name of the shareholder
as it appears on the register of the
Corporation, unless the share transfer power
on the reverse side of the Certificate is duly
completed in respect of such share(s).
