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EXHIBIT 99.1
PLAN OF ARRANGEMENT
UNDER SECTION 252
OF THE COMPANY ACT (BRITISH COLUMBIA)
ARTICLE 1
INTERPRETATION
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1.1 DEFINITIONS
In this Plan of Arrangement unless there is something in the subject
matter or context inconsistent therewith, the following terms shall have the
respective meanings set out below and grammatical variations of such terms shall
have corresponding meanings:
(a) "ACQUISITION AGREEMENT" means the agreement by and among Parent,
BVI, the Company, CDN2 and Target, dated as of July 15, 1999, as
the same may be amended and restated, providing for, among other
things, the Arrangement;
(b) "AFFILIATE" means, as applied to any Person, (a) any other
Person directly or indirectly controlling, controlled by or
under common control with, that Person, (b) any other Person
that owns or controls 10% or more of any class of equity
securities (including any equity securities issuable upon the
exercise of any option or convertible security) of that Person
or any of its Affiliates, or (c) any director, partner or
officer of such Person. For the purposes of this definition,
"control" (including with correlative meanings, the terms
"controlling", "controlled by", and "under common control with")
as applied to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the
management and policies of that Person, whether through
ownership of voting securities or by contract or otherwise;
(c) "ARRANGEMENT" means the arrangement under section 252 of the BC
Company Act on the terms and subject to the conditions set out
in this Plan of Arrangement, subject to any amendments thereto
made in accordance with section 6.1 or made at the direction of
the Court in the Final Order;
(d) "AUTOMATIC REDEMPTION DATE" means August 31, 2009 unless such
date shall be accelerated at any time to a specified earlier
date by the Board of Directors upon at least 75 days prior
written notice to the registered holders of Exchangeable Shares,
in which case the Automatic Redemption Date shall be such
earlier date; provided, however, that the Board of Directors may
so accelerate the Automatic Redemption Date only at such time as
there are outstanding fewer than 100,000 Exchangeable Shares
held by holders other than Parent and its Affiliates;
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(e) "AVERAGE CLOSING PRICE" means the average closing sales price of
Class A Shares for the 30 trading days ending on the date three
trading days prior to the Effective Date, as traded on the
NASDAQ and reported by the Wall Street Journal or, if the Class
A shares are not then quoted on NASDAQ, on such other stock
exchange or automated quotation system on which the Class A
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:
(i) the public distribution or trading activity of Class A
Shares during such period does not create a market that
reflects the fair market value of a Parent Common Share;
or
(ii) the number of Class A Shares that a holder of Parent
Common Shares is entitled to receive on conversion of
such Parent Common Shares is such that one Parent Common
share is not equal in value to one Class A Share;
then the Average Closing Price of a Parent 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 to be appropriate, and provided
further that any such selection, opinion or determination by the
Board of Directors shall be conclusive and binding;
(f) "BC COMPANY ACT" means the Company Act (British Columbia), as
amended from time to time;
(g) "BOARD OF DIRECTORS" means the board of directors of the
Company;
(h) "BUSINESS DAY" means any day other than a Saturday, a Sunday or
a day when banks are not open for business in either or both of
Irvine, California and Vancouver, British Columbia;
(i) "BVI" means Broadcom (BVI) Limited, a company existing pursuant
to the laws of the British Virgin Islands.
(j) "CANADIAN DOLLAR EQUIVALENT" means in respect of an amount
expressed in a foreign currency (the "Foreign Currency Amount")
at any date the product obtained by multiplying (a) the Foreign
Currency Amount by (b) the noon spot exchange rate on such date
for such foreign currency expressed in Canadian dollars as
reported by the Bank of Canada or, in the event such spot
exchange rate is not available, such 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;
(k) "CAPITAL REORGANIZATION" has the meaning ascribed thereto in
section 5.7;
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(l) "CDN2" means HH Acquisition ULC, a company existing under the
Companies Act (Nova Scotia) or a Permitted Assign (as that term
is defined in section 7.1).
(m) "CDN2 CALL NOTICE" has the meaning ascribed thereto in
subsection 5. 1 (b);
(n) "CLASS A SHARES" means the Class A common stock of Parent;
(o) "COMPANY" means HH Acquisition Inc. a company existing under the
BC Company Act;
(p) "COURT" means the Supreme Court of British Columbia;
(q) "CURRENT MARKET PRICE" means, in respect of Parent Common Shares
on any date, the Canadian Dollar Equivalent of the closing sale
price of Class A Shares on such day (or, if no trades of Class A
Shares occurred on such day, on the last trading day prior
thereto on which such trades occurred) as traded on NASDAQ and
reported by the Wall Street Journal, or, if the Class A Shares
are not then quoted on NASDAQ, on such other stock exchange or
automated quotation system on which the Class A 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:
(i) the public distribution or trading activity of Class A
Shares during such period does not create a market that
reflects the fair market value of a Parent Common Share;
or
(ii) the number of Class A Shares that a holder of Parent
Common Shares is entitled to receive on conversion of
such Parent Common Shares is such that one Parent Common
share is not equal in value to one Class A Share,
then the Current Market Price of a Parent 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 to be appropriate, and provided
further that any such selection, opinion or determination by the
Board of Directors shall be conclusive and binding;
(r) "CURRENT PARENT COMMON SHARE EQUIVALENT" means, on any date, the
equivalent as at such date of one Parent Common Share as at the
Effective Date, expressed to four decimal places, determined by
applying on a cumulative basis the following adjustments, to the
extent applicable by reason of any transactions occurring in
respect of Parent Common Shares between the Effective Date and
such date, the Current Parent Common Share Equivalent as at the
Effective Date being 1.0000:
(i) if Parent shall (A) subdivide, redivide or change its
then outstanding Parent Common Shares into a greater
number of Parent Common Shares, unless the
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Company is permitted under applicable law without a vote
of its shareholders to make, and shall simultaneously
make, the same or an economically equivalent change to
the rights of the holders of Exchangeable Shares, (B)
reduce, combine, consolidate or change its then
outstanding Parent Common Shares into a lesser number of
Parent Common Shares, unless the Company is permitted
under applicable law without a vote of its shareholders
to make, and shall simultaneously make, the same or an
economically equivalent change to the rights of the
holders of Exchangeable Shares, or (C) issue Parent
Common Shares (or securities exchangeable or convertible
into Parent Common Shares) to the holders of all or
substantially all of its then outstanding Parent Common
Shares by way of stock dividend or other distribution
(other than to holders of Parent Common Shares who
exercise an option to receive stock dividends in lieu of
receiving cash dividends), unless the Company is
permitted under applicable law without a vote of its
shareholders to issue or distribute, and shall
simultaneously issue and distribute, equivalent numbers
of Parent Common Shares or other securities (adjusted if
necessary in accordance with the Current Parent Common
Share Equivalent), or the economic equivalent on a per
share basis, to the holders of the Exchangeable Shares
(any of such events being herein called a "Parent Common
Share Reorganization"), the Current Parent Common Share
Equivalent shall be adjusted effective immediately after
the record date at which the holders of Parent Common
Shares are determined for the purpose of the Parent
Common Share Reorganization by multiplying the Current
Parent Common Share Equivalent in effect on such record
date by the quotient obtained when:
(I) the number of Parent Common Shares
outstanding after the completion of such
Parent Common Share Reorganization (but
before giving effect to the issue of any
Parent Common Shares issued after such
record date otherwise than as part of
such Parent Common Share Reorganization)
including, in the case where securities
exchangeable or convertible into Parent
Common Shares are distributed, the
number of Parent Common Shares that
would have been outstanding had such
securities been exchanged for or
converted into Parent Common Shares on
such record date,
is divided by
(II) the number of Parent Common Shares
outstanding on such record date before
giving effect to the Parent Common Share
Reorganization;
(s) "DEPOSITARY AGENT" means U.S. Stock Transfer Corporation at its
principal offices in Glendale, California;
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(t) "EFFECTIVE DATE" means the date the certified copy of the Final
Order is accepted for filing by the Registrar to give effect to
the Arrangement;
(u) "EFFECTIVE TIME" means 12:01 a.m. on the Effective Date;
(v) "EXCHANGE RATIO" is 2,000,000 divided by the aggregate number of
Target Common Shares outstanding immediately prior to the
Effective Time (including (i) all Target Common Shares issued or
issuable upon exercise, conversion or exchange of all unvested
and vested Target Options which are not exercised, converted,
exchanged or expired as of the Effective Time; and (ii) all
options which Target has committed to grant but under which the
conditions of grant are not fulfilled as of the Effective Date);
(w) "EXCHANGEABLE SHARE PROVISIONS" means the special rights and
restrictions attaching to the Exchangeable Shares, which are set
forth in Appendix A hereto;
(x) "EXCHANGEABLE SHARES" means the Exchangeable Non-Voting Shares
of the Company having the special rights and restrictions set
forth in the Exchangeable Share Provisions;
(y) "FINAL ORDER" means the final order of the Court approving the
Arrangement as such order may be amended by the Court at any
time prior to the Effective Time;
(z) "LETTER OF TRANSMITTAL" means collectively a letter of
Transmittal and Election Form in the form accompanying the
materials to be sent to the shareholders of Target in connection
with the Meeting;
(aa) "LIEN" means any lien, pledge, adverse claim, security interest,
mortgage, claim, charge or encumbrance;
(bb) "LIQUIDATION CALL PURCHASE PRICE" has the meaning ascribed
thereto in subsection 5.2(a);
(cc) "LIQUIDATION CALL RIGHT" has the meaning ascribed thereto in
subsection 5.2(a);
(dd) "LIQUIDATION DATE" has the meaning ascribed thereto in section
4.1 of the Exchangeable Share Provisions;
(ee) "MEETING" means the Special Meeting of the shareholders of
Target (including holders of Target Options who shall vote
together with shareholders of Target as a single class) to be
held to consider the Arrangement;
(ff) "NASDAQ" means the distinct tier of the Nasdaq Stock Market
referred to as the National Market;
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(gg) "PARENT" means Broadcom Corporation, a corporation existing
under the laws of the State of California;
(hh) "PARENT COMMON SHARE REORGANIZATION" has the meaning ascribed
thereto in subsection 1.1(r);
(ii) "PARENT COMMON SHARES" means the Class B common stock, par value
US$0.0001 per share, of Parent;
(jj) "PERSON" means any natural person, corporation, general
partnership, limited partnership, limited liability company or
partnership, proprietorship, other business organization, trust,
union, association or Governmental or Regulatory Authority;
(kk) "REDEMPTION CALL PURCHASE PRICE" has the meaning ascribed
thereto in subsection 5.3(a);
(ll) "REDEMPTION CALL RIGHT" has the meaning ascribed thereto in
subsection 5.3(a);
(mm) "REGISTRAR" means the Registrar appointed under the BC Company
Act;
(nn) "RETRACTED SHARES" has the meaning ascribed thereto in section
5.1 of the Exchangeable Share Provisions;
(oo) "RETRACTION CALL PURCHASE PRICE" has the meaning ascribed
thereto in subsection 5.1(a);
(pp) "RETRACTION CALL RIGHT" has the meaning ascribed thereto in
subsection 5.1(a);
(qq) "RETRACTION DATE" has the meaning ascribed thereto in section
5.2 of the Exchangeable Share Provisions;
(rr) "RETRACTION REQUEST" has the meaning ascribed thereto in section
5.1 of the Exchangeable Share Provisions;
(ss) "REVISED EXERCISE PRICE" of a Target Option means the exercise
price of such Target Option in effect immediately prior to the
Effective Time divided by the Exchange Ratio;
(tt) "TARGET" means HotHaus Technologies Inc., a corporation existing
under the BC Company Act;
(uu) "TARGET COMMON SHARES" means the common shares in the capital of
Target, including all rights associated therewith;
(vv) "TARGET OPTIONS" means options, whether vested or unvested,
granted by Target
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prior to the Effective Date to purchase Target Common Shares
including the Target Warrants;
(ww) "TARGET WARRANTS" means all of the unexpired warrants granted by
Target to purchase Target Common Shares;
(xx) "TAX ACT" means the Income Tax Act (Canada), as amended from
time to time;
(yy) "TRANSFER AGENT" means CIBC Mellon Trust Company or such other
person as may from time to time be the Registrar and Transfer
Agent for the Exchangeable Shares; and
(zz) "VOTING AND EXCHANGE TRUST AGREEMENT" means the Voting and
Exchange Trust Agreement between the Company, Parent, BVI, CDN2
and US Trust Corporation, made as of the Effective Date.
1.2 SECTIONS AND HEADINGS
The division of this Plan of Arrangement into sections and the insertion
of headings are for reference purposes only and shall not affect the
interpretation of this Plan of Arrangement. Unless otherwise indicated, any
reference in this Plan of Arrangement to a section or an Appendix refers to the
specified section of or Appendix to this Plan of Arrangement.
1.3 NUMBER, GENDER AND PERSONS
In this Plan of Arrangement, unless the context otherwise requires,
words importing the singular number include the plural and vice versa, words
importing any gender include all genders and words importing persons include
individuals, corporations, partnerships, associations, trusts, unincorporated
organizations, governmental bodies and other legal or business entities of any
kind.
1.4 WITHHOLDING TAX
All amounts required to be paid, deposited or delivered under this Plan
of Arrangement shall be paid, deposited or delivered after deduction of any
amount required by applicable law to be deducted or withheld on account of tax
and the deduction of such amounts and remittance to the applicable tax
authorities shall, to the extent thereof, satisfy such requirement to pay,
deposit or deliver hereunder.
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ARTICLE 2
ARRANGEMENT
2.1 ARRANGEMENT
At the Effective Time on the Effective Date, the following shall occur
and shall be deemed to occur in the following order without any further act or
formality:
(a) The authorized share capital of the Company shall be amended to
authorize up to 2,000,000 Exchangeable Shares; as a result of
such amendment the Company shall have three classes of
authorized share capital, namely, 10,000,000 Common Shares,
10,000,000 preferred shares and up to 2,000,000 Exchangeable
Shares; the special rights and restrictions attaching to the
Exchangeable Shares shall be as set out in Appendix A.
(b) All of the outstanding Target Common Shares, except Target
Common Shares held by holders who have exercised their rights of
dissent in accordance with section 3.1 hereof and who are
ultimately entitled to be paid fair value for such shares
(hereinafter, "Dissenters") shall, without any action on the
part of such holders be deemed to be transferred to the Company
in exchange for that number of Exchangeable Shares (to be
delivered to the affected holder pursuant to section 4.1
hereof), or Parent Common Shares (to be delivered to the
affected holder of Target Common Shares pursuant to section 4.2
hereof), or a combination of the two, equal to the product of
such number of Target Common Shares (other than shares held by
Dissenters) being exchanged and the Exchange Ratio. Each such
former holder of Target Common Shares shall receive the whole
number of Exchangeable Shares or Parent Common Shares, or a
combination of the two, resulting from the exchange of such
holder's Target Common Shares for the consideration set out in
the foregoing sentence. In lieu of fractional Exchangeable
Shares or Parent Common Shares, or a combination of the two,
each holder of a Target Common Share who otherwise would be
entitled to receive a fraction of an Exchangeable Share or
Parent Common Shares, or a combination of the two, on the
exchange shall be paid an amount determined as set forth in
section 4.4 hereof.
(c) Upon the exchange referred to in subsection 2.1(b) above, each
holder of exchanged Target Common Shares shall cease to be such
a holder, shall have their name removed from the register of
holders of Target Common Shares and shall become a holder of the
number of fully paid Exchangeable Shares or Parent Common
Shares, or a combination of the two, to which they are entitled
as a result of such exchange and such holder's name shall be
added to the register of holders of Exchangeable Shares or
Parent Common Shares, or a combination of the two, accordingly.
(d) The Company shall add to its stated capital account in respect
of Exchangeable
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Shares issued pursuant to subsection 2.1(b) an amount equal to
the aggregate fair market value of the Target Common Shares
exchanged for Exchangeable Shares pursuant to subsection 2.1(b)
and immediately thereafter such paid-up capital shall be reduced
to an amount equal to the paid-up capital, for purposes of the
Income Tax Act (Canada), of the such Target Common Shares so
exchanged all as determined by the Board of Directors of the
Company.
(e) Except for Target Options granted to holders who have exercised
their rights of dissent in accordance with section 3.1 hereof
and who are ultimately entitled to be paid fair value for the
Target Common Shares subject to such Target Options, each
outstanding Target Option shall be assumed by Parent, together
with the Target Incentive Stock Option Plan, and converted into
an option to purchase a number of Parent Common Shares equal to
the product (rounded down to the nearest whole number) of the
Exchange Ratio times the number of Target Common Shares subject
to such Target Option and having an exercise price equal to the
Revised Exercise Price (rounded up to the nearest cent) and
having the same vesting, expiration and other terms as in effect
immediately prior to the Effective Time.
(f) For the purposes of indemnifying Parent, and its officers,
directors, employees, agents, Affiliates and Associates with
respect to any inaccuracies in Target's representations,
warranties and covenants in the Acquisition Agreement, 10% of
the Exchangeable Shares and Parent Common Shares issued pursuant
to the Plan of Arrangement (the "Escrow Amount") will be
deposited, without any act of any shareholder, with Depositary
Agent for the Escrow Period as defined in the Acquisition
Agreement. The portion of the Escrow Amount contributed on
behalf of each shareholder of Exchangeable Shares or Parent
Common Shares, or a combination of the two shall be in
proportion to the aggregate number of Exchangeable Shares or
Parent Common Shares, or the combination of the two, to which
said holder would otherwise be entitled under the Plan of
Arrangement. The provisions of section 7.2 of the Acquisition
Agreement shall apply to the Escrow Amount.
2.2 ELECTIONS
Each Person who, at or prior to 5:00 p.m. (Vancouver Time) on the
Business Day immediately preceding the Meeting, is a holder of record of Target
Common Shares, will be entitled, with respect to all or a portion of such
shares, to make an election at or prior to 5:00 p.m. on the Business Day
immediately preceding the Meeting to receive Exchangeable Shares or Parent
Common Shares, or a combination thereof, in exchange for such holder's Target
Common Shares, on the basis set forth herein and in accordance with such
arrangements and procedures as will be agreed upon in good faith by Xxxxxx,
Acquisition Sub and Target, including the form of the Letter of Transmittal
containing the elections and the procedures governing transmittal. Any Target
Common Shares for which an effective election has not been made (other than
Dissenters) will be deemed to be transferred to the Company pursuant to Section
2.1(b) in exchange for Exchangeable Shares.
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2.3 SECTION 85 ELECTION
If so requested by any holder of Target Common Shares who exchanges any
of his Target Common Shares for Exchangeable Shares, the Company will jointly
with that holder elect, in prescribed form and in accordance with subsection
85(6) of the Tax Act, pursuant to subsection 85(1) of the Tax Act at such amount
as is stipulated by that holder.
ARTICLE 3
RIGHTS OF DISSENT
3.1 RIGHTS OF DISSENT
Holders of Target Common Shares or of Target Options may exercise rights
of dissent with respect to such Target Common Shares or the Target Common Shares
subject to such Target Options, as the case may be ("Dissenters' Shares"). In
order to dissent with respect to Target Options, such Target Options shall be
deemed to have been exercised for the purpose of exercising such dissent rights
and the exercise price under each such Target Option shall be deemed to be
satisfied by set-off against the fair value paid for the Dissenters' Shares
subject thereto, provided that if the holder of any such Target Option is
ultimately not entitled to be paid fair value for the Dissenters' Shares subject
thereto, such Target Option shall be deemed not to have been exercised and shall
become an option to purchase Parent Common Shares in accordance with subsection
2.1(e). All such rights of dissent shall be exercised pursuant to and in the
manner set forth in section 207 of the BC Company Act as modified by the Interim
Order (as defined in the Acquisition Agreement) and this section 3.1 (the
"Dissent Procedures") in connection with the Arrangement and holders who duly
exercise such rights of dissent and who:
(a) are ultimately entitled to be paid fair value for their
Dissenters' Shares shall be deemed to have transferred such
Dissenters' Shares to Target for cancellation on the Effective
Date but shall not be entitled to any other payment or
consideration (including Exchangeable Shares and Parent Common
Shares) that would be payable under this Arrangement had such
holder not exercised such right of dissent, or
(b) are ultimately not entitled, for any reason, to be paid fair
value for their Dissenters' Shares shall be deemed to have
participated in the Arrangement on the same basis as any
non-dissenting holder of Target Common Shares or Target Options,
as the case may be, and shall receive Exchangeable Shares on the
basis determined in accordance with subsection 2.1(b) or options
on the basis provided in subsection 2.1(e), as the case may be.
In no case shall Target be required to recognize such holders as holders of
Target Common Shares or Target Options, as the case may be, on and after the
Effective Date, and the names of such holders of Target Common Shares or Target
Options, as the case may be, shall be deleted from the
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register of holders of Target Common Shares and all records of Target Options
maintained by the Company, respectively, on the Effective Date.
ARTICLE 4
CERTIFICATES AND FRACTIONAL SHARES
4.1 ISSUANCE OF CERTIFICATES REPRESENTING EXCHANGEABLE SHARES
At or promptly after the Effective Time, the Company shall deposit with
the Depositary, for the benefit of the holders of Target Common Shares who will
receive Exchangeable Shares in connection with the Arrangement, certificates
representing the Exchangeable Shares issued pursuant to subsection 2.1(c) in
exchange for outstanding Target Common Shares. Upon surrender to the Depositary
for cancellation of a certificate which immediately prior to the Effective Time
represented outstanding Target Common Shares that were exchanged for
Exchangeable Shares under the Arrangement, together with such other documents
and instruments as would have been required to effect the transfer of the shares
formerly represented by such certificate under the BC Company Act and the
articles of Target and such additional documents and instruments as the
Depositary may reasonably require, the holder of such surrendered certificate
shall be entitled to receive in exchange therefor, and the Depositary shall
deliver to such holder, a certificate representing that number (rounded down to
the nearest whole number) of Exchangeable Shares, which such holder has the
right to receive (together with any dividends or distributions with respect
thereto pursuant to section 4.3 and any cash in lieu of fractional Exchangeable
Shares, pursuant to section 4.4), and the certificate so surrendered shall
forthwith be cancelled. In the event of a transfer of ownership of Target Common
Shares which is not registered in the transfer records of Target, a certificate
representing the proper number of Exchangeable Shares may be issued to a
transferee if the certificate representing such Target Common Shares is
presented to the Depositary, accompanied by all documents required to evidence
and effect such transfer. Until surrendered as contemplated by this section 4.1,
each certificate which immediately prior to the Effective Time represented one
or more outstanding Target Common Shares that were exchanged for one or more
Exchangeable Shares shall be deemed at any time after the Effective Time to
represent only the right to receive upon such surrender (i) a certificate
representing Exchangeable Shares, as contemplated by this section 4.1, (ii) a
cash payment in lieu of any fractional Exchangeable Shares, as contemplated by
section 4.4, and (iii) any dividends or distributions with a record date after
the Effective Time theretofore paid or payable with respect to Exchangeable
Shares, as contemplated by section 4.3.
4.2 EXCHANGE OF CERTIFICATES FOR PARENT COMMON SHARES
At or promptly after the Effective Time, CDN2 shall deposit with the
Depositary, for the benefit of the holders of Target Common Shares who will
receive Parent Common Shares in connection with the Arrangement, certificates
representing the Parent Common Shares, issued pursuant to subsection 2.1(c) in
exchange for outstanding Target Common Shares. Upon surrender to the Depositary
for cancellation of a certificate which immediately prior to the Effective Time
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represented outstanding Target Common Shares that were exchanged for Parent
Common Shares together with such other documents and instruments as would have
been required to effect the transfer of the shares formerly represented by such
certificate under the BC Company Act and the articles of Target and such
additional documents and instruments as the Depositary may reasonably require,
the holder of such surrendered certificate shall be entitled to receive in
exchange therefor, and the Depositary shall deliver to such holder, a
certificate representing that number (rounded down to the nearest whole number)
of Parent Common Shares, which such holder has the right to receive (together
with any dividends or distributions with respect thereto pursuant to section 4.3
and any cash in lieu of fractional Parent Common Shares, pursuant to section
4.4), and the certificate so surrendered shall forthwith be cancelled. In the
event of a transfer of ownership of Target Common Shares which is not registered
in the transfer records of Target, a certificate representing the proper number
of Parent Common Shares may be issued to a transferee if the certificate
representing such Target Common Shares is presented to the Depositary,
accompanied by all documents required to evidence and effect such transfer.
Until surrendered as contemplated by this section 4.2, each certificate which
immediately prior to the Effective Time represented one or more outstanding
Target Common Shares that were exchanged for one or more Parent Common Shares
shall be deemed at any time after the Effective Time to represent only the right
to receive upon such surrender (i) a certificate representing Parent Common
Shares, as contemplated by this section 4.2, (ii) a cash payment in lieu of any
fractional Parent Common Shares, as contemplated by section 4.4, and (iii) any
dividends or distributions with a record date after the Effective Time
theretofore paid or payable with respect to Parent Common Shares, as
contemplated by section 4.3.
4.3 DISTRIBUTIONS WITH RESPECT TO UNSURRENDERED CERTIFICATES
No dividends or other distributions declared or made after the Effective
Time with respect to Exchangeable Shares or Parent Common Shares with a record
date after the Effective Time shall be paid to the holder of any unsurrendered
certificate which, immediately prior to the Effective Time, represented
outstanding Target Common Shares that were exchanged pursuant to section 2.1(b),
and no cash payment in lieu of fractional shares shall be paid to any such
holder pursuant to section 4.4, unless and until such certificate shall be
surrendered in accordance with section 4.1 or section 4.2. Subject to applicable
law and to section 4.6, at the time of such surrender of any such certificate
(or, in the case of clause (iii) below, at the appropriate payment date), there
shall be paid to the record holder of the certificate representing whole
Exchangeable Shares or Parent Common Shares, as the case may be, into which the
shares represented by the surrendered certificate were exchanged, without
interest, (i) the amount of any cash payable in lieu of a fractional
Exchangeable Share or Parent Common Share to which such holder is entitled
pursuant to section 4.4, (ii) the amount of dividends or other distributions
with a record date after the Effective Time theretofore paid with respect to
such whole Exchangeable Shares or Parent Common Shares, as the case may be, and
(iii) the amount of dividends or other distributions with a record date after
the Effective Time but prior to surrender and a payment date subsequent to
surrender payable with respect to such whole Exchangeable Shares or Parent
Common Shares, as the case may be.
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4.4 NO FRACTIONAL SHARES
No certificates or scrip representing fractional Exchangeable Shares or
Parent Common Shares shall be issued upon the surrender for exchange of
certificates pursuant to section 4.1 or section 4.2 and no dividend, stock split
or other change in the capital structure of the Company shall relate to any such
fractional security and such fractional interests shall not entitle the owner
thereof to vote or to exercise any rights as a security holder of the Company.
In lieu of any such fractional securities, each person entitled to a fractional
interest in an Exchangeable Share or Parent Common Share will receive an amount
of cash (rounded to the nearest whole cent), without interest, equal to the
Canadian Dollar Equivalent as of the Effective Date of the product of (i) such
fraction, multiplied by (ii) the Average Closing Price.
4.5 LOST CERTIFICATES
If any certificate that immediately prior to the Effective Time
represented outstanding Target Common Shares that were exchanged pursuant to
section 2.1(b) has been lost, stolen or destroyed, upon the making of an
affidavit of that fact by the person claiming such certificate to be lost,
stolen or destroyed, the Depositary will issue in exchange for such lost, stolen
or destroyed certificate, certificates representing Exchangeable Shares or
Parent Common Shares (and any dividends or distributions with respect thereto
and any cash pursuant to section 4.4) deliverable in respect thereof as
determined in accordance with section 2.1(b). When authorizing such payment in
exchange for any lost, stolen or destroyed certificate, the person to whom
certificates representing Exchangeable Shares or Parent Common Shares are to be
issued shall, as a condition precedent to the issuance thereof, give a bond
satisfactory to Target or the Company, as the case may be, in such sum as Target
or the Company may direct or otherwise indemnify Target or the Company in a
manner satisfactory to the Company and Target against any claim that may be made
against Target or the Company with respect to the certificate alleged to have
been lost, stolen or destroyed.
4.6 EXTINGUISHMENT OF RIGHTS
Any certificate that immediately prior to the Effective Time represented
outstanding Target Common Shares that were exchanged pursuant to section 2.1(b)
and not deposited, with all other instruments required by section 4.1 or section
4.2, on or prior to the sixth anniversary of the Effective Date shall cease to
represent a claim or interest of any kind or nature as a shareholder of Target.
On such date, the Exchangeable Shares or Parent Common Shares to which the
former registered holder of the certificate referred to in the preceding
sentence was ultimately entitled shall be deemed to have been surrendered to the
Company together with all entitlements to dividends, distributions and interests
thereon held for such former registered holder for no consideration.
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ARTICLE 5
CERTAIN RIGHTS OF CDN2 TO ACQUIRE EXCHANGEABLE SHARES
5.1 CDN2 RETRACTION CALL RIGHT
(a) CDN2 shall have the overriding right (the "Retraction Call
Right"), notwithstanding the proposed redemption of Retracted
Shares by the Company on a Retraction Date, to purchase from the
holder of the Retracted Shares on the Retraction Date the
Retracted Shares upon payment by CDN2 to the holder of an amount
per share equal to (a) the Current Market Price multiplied by
the Current Parent Common Share Equivalent, in each case
determined on the Retraction Date, which shall be satisfied in
full in respect of the Retracted Shares by causing to be
delivered to such holder such whole number of Parent Common
Shares as is equal to the product obtained by multiplying the
number of Retracted Shares by the Current Parent Common Share
Equivalent (together with an amount in lieu of any fractional
Parent Common Share resulting from such calculation payable in
accordance with section 5.5), plus (b) the aggregate of all
dividends declared and unpaid on such Retracted Share
(collectively the "Retraction Call Purchase Price"). In the
event of the exercise of the Retraction Call Right by CDN2, the
holder of the Retracted Shares shall be obligated to sell to
CDN2, and CDN2 shall be obligated to purchase, the Retracted
Shares on the Retraction Date upon payment by CDN2 to such
holder of the Retraction Call Purchase Price for each Retracted
Share.
(b) In order to exercise the Retraction Call Right, CDN2 must notify
the Transfer Agent in writing of its determination to do so (the
"CDN2 Call Notice") prior to the expiry of the third Business
Day after the receipt by the Transfer Agent of the Retraction
Request. If CDN2 does not so notify the Transfer Agent, the
Transfer Agent will notify the holder as soon as possible
thereafter that CDN2 will not exercise the Retraction Call
Right, in which case the holder may revoke his Retraction
Request in accordance with the Exchangeable Share Provisions. If
CDN2 delivers the CDN2 Call Notice before the end of such three
Business Day period, the Retraction Request shall thereupon be
considered only to be an offer by the holder to sell the
Retracted Shares to CDN2 in accordance with the Retraction Call
Right. In such event, the Company shall not redeem the Retracted
Shares and CDN2 shall purchase from such holder and such holder
shall sell to CDN2 on the Retraction Date the Retracted Shares
for the Retraction Call Purchase Price for each Retracted Share.
(c) For the purposes of completing a purchase of the Retracted
Shares pursuant to the Retraction Call Right, CDN2 shall deposit
with the Transfer Agent, on or before the Retraction Date,
certificates representing the Parent Common Shares to be
delivered to the holder of the Retracted Shares in payment of
the total Retraction Call Purchase Price for the Retracted
Shares (or the portion thereof payable in Parent Common Shares,
as the case may be) and a cheque in the amount of the remaining
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portion, if any, of the total Retraction Call Purchase Price
(or, if any part of the Retraction Call Purchase Price consists
of dividends payable in property, such property or property that
is the same as or economically equivalent to such property).
Provided that such total Retraction Call Purchase Price has been
so deposited with the Transfer Agent, the closing of the
purchase and sale of the Retracted Shares pursuant to the
Retraction Call Right shall be deemed to have occurred as of the
close of business on the Retraction Date and, for greater
certainty, no redemption by the Company of such Retracted Shares
shall take place on the Retraction Date. CDN2 shall cause the
Transfer Agent to deliver to the holder of the Retracted Shares,
at the address of such holder recorded in the securities
register of the Company 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 office of the Transfer
Agent to which the Retraction Request was delivered, in payment
of such total Retraction Call Purchase Price, certificates
representing the Parent Common Shares to be delivered in respect
of such payment (which shares shall be duly issued as fully paid
and non-assessable and shall be free and clear of any Liens)
registered in the name of the holder or in such other name as
the holder may request in payment of such and, if applicable, a
cheque of CDN2 payable at par and in Canadian dollars at any
branch of the bankers of CDN2 or the Company in Canada (or, if
any part of the Retraction Call Purchase Price consists of
dividends payable in property, such property or property that is
the same as or economically equivalent to such property), and
such delivery of such certificates and cheque (and property, if
any) to the holder on behalf of CDN2 by the Transfer Agent shall
be deemed to be payment of and shall satisfy and discharge all
liability for the total Retraction Call Purchase Price to the
extent that the same is represented by such share certificates
and cheque (and property, if any), unless such cheque is not
paid on due presentation. On and after the close of business on
the Retraction Date, the holder of the Retracted Shares shall
cease to be a holder of such Retracted Shares and shall not be
entitled to exercise any of the rights of a holder in respect
thereof, other than the right to receive the Retraction Call
Purchase Price, unless upon presentation and surrender of
certificates in accordance with the foregoing provisions,
payment of the total Retraction Call Purchase Price shall not be
made, in which case the rights of such holder shall remain
unaffected until the total Retraction Call Purchase Price 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 Call Purchase Price has been made in accordance
with the foregoing provisions, the holder of the Retracted
Shares so purchased by CDN2 shall thereafter be considered and
deemed for all purposes to be a holder of the Parent Common
Shares delivered to such holder.
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5.2 CDN2 LIQUIDATION CALL RIGHT
(a) CDN2 shall have the overriding right (the "Liquidation Call
Right"), in the event of and notwithstanding the proposed
liquidation, dissolution or winding-up of the Company, to
purchase from all but not less than all of the holders (other
than CDN2 and its Affiliates) of Exchangeable Shares on the
Liquidation Date all but not less than all of the Exchangeable
Shares held by each such holder on payment by CDN2 of an amount
per share equal to (a) the Current Market Price multiplied by
the Current Parent Common Share Equivalent, in each case
determined on the last business day prior to the Liquidation
Date, which shall be satisfied in full in respect of all of the
Exchangeable Shares held by such holder by CDN2 causing to be
delivered to such holder such whole number of Parent Common
Shares as is equal to the product obtained by multiplying the
number of such Exchangeable Shares by the Current Parent Common
Share Equivalent (together with an amount in lieu of any
fractional Parent Common Share resulting from such calculation
payable in accordance with section 5.5), plus (b) the aggregate
of all dividends declared and unpaid on such Exchangeable Share
up to the Liquidation Date (collectively the "Liquidation Call
Purchase Price"). In the event of the exercise of the
Liquidation Call Right by CDN2, each holder shall be obligated
to sell all the Exchangeable Shares held by the holder to CDN2
on the Liquidation Date on payment by CDN2 to the holder of the
Liquidation Call Purchase Price for each such share.
(b) To exercise the Liquidation Call Right, CDN2 must notify the
Transfer Agent and the Company of CDN2's intention to exercise
such right at least 30 days before the Liquidation Date in the
case of a voluntary liquidation, dissolution or winding up of
the Company and at least five Business Days before the
Liquidation Date in the case of an involuntary liquidation,
dissolution or winding up of the Company. The Transfer Agent
will notify the holders of Exchangeable Shares as to whether or
not CDN2 has exercised the Liquidation Call Right forthwith
after the expiry of the date by which the same may be exercised
by CDN2. If CDN2 exercises the Liquidation Call Right, on the
Liquidation Date, CDN2 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, CDN2 shall
deposit with the Transfer Agent, on or before the Liquidation
Date, certificates representing the aggregate number of Parent
Common Shares deliverable by CDN2 (which shares shall be duly
issued as fully paid and non-assessable and shall be free and
clear of any Liens) in payment of the total Liquidation Call
Purchase Price (or the portion thereof payable in Parent Common
Shares, as the case may be) and a cheque or cheques in the
amount of the remaining portion, if any, of the total
Liquidation Call Purchase Price (or, if any part of the
Liquidation Call Purchase Price consists of dividends payable in
property, such property or property that is the same as or
economically equivalent to such
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property). Provided that such total Liquidation Call Purchase
Price has been so deposited with the Transfer Agent, 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 CDN2 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
Parent Common Shares delivered to it. 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 BC Company Act and the articles of
the Company and such additional documents and instruments as the
Transfer Agent may reasonably require, the holder of such
surrendered certificate or certificates shall be entitled to
receive in exchange therefor, and the Transfer Agent on behalf
of CDN2 shall deliver to such holder, certificates representing
the Parent Common Shares to which the holder is entitled and a
cheque or cheques of CDN2 payable at par and in Canadian dollars
at any branch of the bankers of CDN2 or of the Company in Canada
in payment of the remaining portion, if any, of the total
Liquidation Call Purchase Price (or, if any part of the
Liquidation Call Purchase Price consists of dividends payable in
property, such property or property that is the same as or
economically equivalent to such property). If CDN2 does not
exercise the Liquidation Call Right in the manner described
above, on the Liquidation Date the holders of the Exchangeable
Shares will be entitled to receive in exchange therefor the
Liquidation Amount otherwise payable by the Company in
connection with the liquidation, dissolution or winding-up of
the Company pursuant to sections 4.1 to 4.3 of the Exchangeable
Share Provisions.
5.3 CDN2 REDEMPTION CALL RIGHT
(a) CDN2 shall have the overriding right (the "Redemption Call
Right"), notwithstanding the proposed redemption of the
Exchangeable Shares by the Company on the Automatic Redemption
Date, to purchase from all but not less than all of the holders
(other than Parent or its Affiliates) of Exchangeable Shares on
the Automatic Redemption Date all but not less than all of the
Exchangeable Shares held by each such holder on payment by CDN2
to the holder of an amount per share equal to (a) the Current
Market Price multiplied by the Current Parent Common Share
Equivalent, in each case determined on the Automatic Redemption
Date, which shall be satisfied in full in respect of all of the
Exchangeable Shares held by such holder by causing to be
delivered to such holder such number of Parent Common Shares as
is equal to the product obtained by multiplying the number of
such Exchangeable Shares by the Current Parent Common Share
Equivalent (together with an amount in lieu of any fractional
Parent Common Share resulting from such calculation payable in
accordance with section 5.5), plus (b) the aggregate of all
dividends declared and unpaid on such Exchangeable Shares
(collectively the "Redemption Call Purchase Price"). In the
event of the exercise of
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the Redemption Call Right by CDN2, each holder shall be
obligated to sell to CDN2, and CDN2 shall be obligated to
purchase, all the Exchangeable Shares held by the holder on the
Automatic Redemption Date on payment by CDN2 to the holder of
the Redemption Call Purchase Price for each such share.
(b) To exercise the Redemption Call Right, CDN2 must notify the
Transfer Agent, as agent for the holders of the Exchangeable
Shares, and the Company of CDN2's intention to exercise such
right at least 75 days before the Automatic Redemption Date. The
Transfer Agent will notify the holders of the Exchangeable
Shares as to whether or not Parent has exercised the Redemption
Call Right forthwith after the date by which the same may be
exercised by CDN2. If CDN2 exercises the Redemption Call Right,
on the Automatic Redemption Date CDN2 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, CDN2 shall deposit
with the Transfer Agent, on or before the Automatic Redemption
Date, certificates representing the aggregate number of Parent
Common Shares deliverable by CDN2 (which shares shall be duly
issued as fully paid and non-assessable and shall be free and
clear of any Liens) in payment of the total Redemption Call
Purchase Price (or the portion thereof payable in Parent Common
Shares, as the case may be) and a cheque or cheques in the
amount of the remaining portion, if any, of the total Redemption
Call Purchase Price (or, if any of the Redemption Call Purchase
Price consists of dividends payable in property, such property
or property the same as or economically equivalent to such
property). Provided that such total Redemption Call Purchase
Price has been so deposited with the Transfer Agent, on and
after the Automatic 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 CDN2 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 Automatic
Redemption Date be considered and deemed for all purposes to be
the holder of the Parent Common Shares delivered to such holder.
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 BC Company
Act and the articles of the Company and such additional
documents and instruments as the Transfer Agent may reasonably
require, the holder of such surrendered certificate or
certificates shall be entitled to receive in exchange therefor,
and the Transfer Agent on behalf of CDN2 shall deliver to such
holder, certificates representing the Parent Common Shares to
which the holder is entitled and a cheque or cheques of CDN2
payable at par and in Canadian dollars at any branch of the
bankers of CDN2 or of the Company in Canada in payment of the
remaining portion, if any, of the total Redemption Call Purchase
Price (or, if part of the Redemption Call Purchase Price
consists of dividends payable in property, such property or
property the same as or
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economically equivalent to such property). If CDN2 does not
exercise the Redemption Call Right in the manner described
above, on the Automatic Redemption Date the holders of the
Exchangeable Shares will be entitled to receive in exchange
therefor the redemption price otherwise payable by the Company
in connection with the redemption of the Exchangeable Shares
pursuant to Article 6 of the Exchangeable Share Provisions.
5.4 FRACTIONAL PARENT COMMON SHARES
No certificates or scrip representing fractional Parent Common Shares
shall be delivered to holders of Exchangeable Shares pursuant to the provisions
hereof. In lieu of any such fractional security, each person entitled to a
fractional interest in a Parent Common Share will receive an amount of cash
(rounded to the nearest whole cent), without interest, equal to the Canadian
Dollar Equivalent as of the third Business Day prior to the relevant date of
delivery of certificates representing Parent Common Shares (the "Fractional
Share Calculation Date") of the product of (i) such fraction, multiplied by (ii)
the closing sale price of Class A Shares as traded on NASDAQ and reported by the
The Wall Street Journal on the Fractional Share Calculation Date, or, if the
Class A Shares are not then quoted on NASDAQ, on such other stock exchange or
automated quotation system on which the Class A 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:
(a) the public distribution or trading activity of Class A Shares
during such period does not create a market that reflects the
fair market value of a Parent Common Share; or
(b) the number of Class A Shares that a holder of Parent Common
Shares is entitled to receive on conversion of such Parent
Common Shares is such that one Parent Common Share is not equal
in value to one Class A Share,
then the Current Market Price of a Parent 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 to be
appropriate, and provided further that any such selection, opinion or
determination by the Board of Directors shall be conclusive and binding.
5.5 ECONOMIC EQUIVALENCE
The Board of Directors shall determine, in good faith and in its sole
discretion (with the assistance of such reputable and qualified independent
financial advisors and/or other experts as the Board of Directors may require)
economic equivalence for the purposes of any provision herein that requires such
a determination and each such determination shall be conclusive and binding on
Parent and the holders of Exchangeable Shares, where applicable.
5.6 CAPITAL REORGANIZATION OF PARENT
If at any time there is a capital reorganization of Parent that is not
provided for in
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subsection 1.1(r) or a consolidation, merger, arrangement or amalgamation
(statutory or otherwise) of Parent with or into another entity (any such event
being called a "Capital Reorganization"), any holder of Exchangeable Shares
whose Exchangeable Shares have not been exchanged for Parent Common Shares in
accordance with the provisions hereof prior to the record date for such Capital
Reorganization shall be entitled to receive and shall accept, upon any such
exchange occurring pursuant to the provisions hereof at any time after the
record date for such Capital Reorganization, in lieu of the Parent Common Shares
that he would otherwise have been entitled to receive pursuant to the provisions
hereof, the number of shares or other securities of Parent or of the body
corporate resulting, surviving or continuing from the Capital Reorganization, or
other property, that such holder would have been entitled to receive as a result
of such Capital Reorganization if, on the record date, he had been the
registered holder of the number of Parent Common Shares to which he was then
entitled upon any exchange of his Exchangeable Shares into Parent Common Shares
in accordance with the provisions hereof, subject to adjustment thereafter in
the same manner, as nearly as may be possible, as is provided for in subsection
1.1(r); provided that no such Capital Reorganization shall be carried into
effect unless all necessary steps shall have been taken so that each holder of
Exchangeable Shares shall thereafter be entitled to receive, upon any exchange
of his Exchangeable Shares pursuant to the provisions hereof, such number of
shares or other securities of Parent or of the body corporate resulting,
surviving or continuing from the Capital Reorganization, or other property.
5.7 OTHER CHANGE IN PARENT COMMON SHARES
In the case of any reclassification of, or other change in, the
outstanding Parent Common Shares other than a Parent Common Share Reorganization
or a Capital Reorganization, such changes shall be made in the rights attaching
to the Exchangeable Shares, without any action on the part of the Company or the
holders of the Exchangeable Shares to the extent permitted by applicable law,
effective immediately following the record date for such reclassification or
other change, to the extent necessary to ensure that holders of Exchangeable
Shares shall be entitled to receive, upon the occurrence at any time after such
record date of any event whereby they would receive Parent Common Shares
pursuant to the provisions hereof, such shares, securities or rights as they
would have received if their Exchangeable Shares had been exchanged for Parent
Common Shares pursuant to the provisions hereof immediately prior to such record
date, subject to adjustment thereafter in the same manner, as nearly as may be
possible, as is provided for in subsection 1.1(r).
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ARTICLE 6
AMENDMENT
6.1 PLAN OF ARRANGEMENT AMENDMENT
(a) By instrument in writing the Company and Target may amend,
modify and/or supplement this Plan of Arrangement at any time
and from time to time provided that any such amendment,
modification, or supplement must be (i) agreed to by Parent,
(ii) filed with the Court and, if made following the Meeting,
approved by the Court and (iii) communicated to holders of
Target Common Shares and Target Options in the manner required
by the Court (if so required).
(b) Any amendment, modification or supplement to this Plan of
Arrangement that is approved by the Court following the Meeting
shall be effective only if (i) it is consented to by each of the
Company, Target and Parent and (ii) it is consented to by the
holders of the Target Common Shares and the holders of the
Target Options in each case to the extent so required by the
Court.
ARTICLE 7
GUARANTY
7.1 GUARANTY AND ASSIGNMENT
BVI, or Parent in the event BVI fails to perform, shall unconditionally
and irrevocably guarantee the full and punctual performance of all of the
obligations of the Company and CDN2 under this Plan of Arrangement. CDN2 may
assign all or a portion of its rights and obligations (including, without
limitation, CDN2's obligations pursuant to section 4.2, the Retraction Call
Right, the Liquidation Call Right and the Redemption Call Right) under this Plan
of Arrangement to Parent or to BVI (collectively, the "Permitted Assigns" and
either individually a "Permitted Assign") without the consent of the holders of
Exchangeable Shares, provided that CDN2 shall not thereby be released from such
obligations.
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APPENDIX A TO PLAN OF ARRANGEMENT
PROVISIONS ATTACHING TO THE EXCHANGEABLE SHARES
The Exchangeable Shares in the capital of the Company shall have the
following special rights and restrictions.
ARTICLE 1
INTERPRETATION
1.1 For the purposes of these share provisions:
(a) "AFFILIATE" means, as applied to any Person, (a) any other
Person directly or indirectly controlling, controlled by or
under common control with, that Person, (b) any other Person
that owns or controls 10% or more of any class of equity
securities (including any equity securities issuable upon the
exercise of any option or convertible security) of that Person
or any of its Affiliates, or (c) any director, partner or
officer of such Person. For the purposes of this definition,
"control" (including with correlative meanings, the terms
"controlling", "controlled by", and "under common control with")
as applied to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the
management and policies of that Person, whether through
ownership of voting securities or by contract or otherwise.
(b) "AUTOMATIC REDEMPTION DATE" means August 31, 2009, unless such
date shall be accelerated at any time to a specified earlier
date by the Board of Directors upon at least 75 days prior
written notice to the registered holders of Exchangeable Shares,
in which case the Automatic Redemption Date shall be such
earlier date; provided, however, that the Board of Directors may
so accelerate the Automatic Redemption Date only at such time as
there are outstanding fewer than 100,000 Exchangeable Shares
held by holders other than Parent and its Affiliates.
(c) "BOARD OF DIRECTORS" means the board of directors of the
Company.
(d) "BUSINESS DAY" means any day other than a Saturday, a Sunday or
a day when banks are not open for business in one or both of
Irvine, California and Vancouver, British Columbia.
(e) "BVI" means Broadcom (BVI) Limited, a company existing pursuant
to the laws of the British Virgin Islands.
(f) "CANADIAN DOLLAR EQUIVALENT" means in respect of an amount
expressed in a foreign currency (the "Foreign Currency Amount")
at any date the product obtained by multiplying (a) the Foreign
Currency Amount by (b) the noon spot exchange rate
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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 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.
(g) "CAPITAL REORGANIZATION" has the meaning ascribed thereto in
section 9.2 of these share provisions.
(h) "BC COMPANY ACT" means the Company Act (British Columbia) as
amended from time to time.
(i) "CDN2" means HH Acquisition ULC, a company existing under the
Companies Act (Nova Scotia) or a Permitted Assign (as that term
is defined in section 7.1 of the Plan of Arrangement).
(j) "CDN2 CALL NOTICE" has the meaning ascribed thereto in
subsection 5.1(b) of the Plan of Arrangement.
(k) "CLASS A SHARES" means the Class A shares of common stock of
Parent.
(l) "COMPANY" means HH Acquisition Inc., a company incorporated
under the BC Company Act.
(m) "CURRENT MARKET PRICE" means, in respect of Parent Common Shares
on any date, the Canadian Dollar Equivalent of the closing sale
price of Class A Shares on such day (or, if no trades of Class A
Shares occurred on such day, on the last trading day prior
thereto on which such trades occurred) as traded on NASDAQ and
reported by The Wall Street Journal, or, if the Class A Shares
are not then quoted on NASDAQ, on such other stock exchange or
automated quotation system on which the Class A 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:
(i) the public distribution or trading activity of Class A
Shares during such period does not create a market that
reflects the fair market value of a Parent Common Share;
or
(ii) the number of Class A Shares that a holder of Parent
Common Shares is entitled to receive on conversion of
such Parent Common Shares is such that one Parent Common
share is not equal in value to one Class A Share.
then the Current Market Price of a Parent 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 to be appropriate, and provided
further that any such selection, opinion or determination by the
Board of Directors shall be conclusive and binding.
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(n) "CURRENT PARENT COMMON SHARE EQUIVALENT" means, on any date, the
equivalent as at such date of one Parent Common Share as at the
Effective Date, expressed to four decimal places, determined by
applying on a cumulative basis the following adjustments, to the
extent applicable by reason of any transactions occurring in
respect of Parent Common Shares between the Effective Date and
such date, the Current Parent Common Share Equivalent as at the
Effective Date being 1.0000:
(i) if Parent shall (A) subdivide, redivide or change its
then outstanding Parent Common Shares into a greater
number of Parent Common Shares, unless the Company is
permitted under applicable law without a vote of its
shareholders to make, and shall simultaneously make, the
same or an economically equivalent change to the rights
of the holders of Exchangeable Shares, (B) reduce,
combine, consolidate or change its then outstanding
Parent Common Shares into a lesser number of Parent
Common Shares, unless the Company is permitted under
applicable law without a vote of its shareholders to
make, and shall simultaneously make, the same or an
economically equivalent change to the rights of the
holders of Exchangeable Shares, or (C) issue Parent
Common Shares (or securities exchangeable or convertible
into Parent Common Shares) to the holders of all or
substantially all of its then outstanding Parent Common
Shares by way of stock dividend or other distribution
(other than to holders of Parent Common Shares who
exercise an option to receive stock dividends in lieu of
receiving cash dividends), unless the Company is
permitted under applicable law without a vote of its
shareholders to issue or distribute, and shall
simultaneously issue and distribute, equivalent numbers
of Parent Common Shares or other securities (adjusted if
necessary in accordance with the Current Parent Common
Share Equivalent), or the economic equivalent on a per
share basis, to the holders of the Exchangeable Shares
(any of such events being herein called a "Parent Common
Share Reorganization"), the Current Parent Common Share
Equivalent shall be adjusted effective immediately after
the record date at which the holders of Parent Common
Shares are determined for the purpose of the Parent
Common Share Reorganization by multiplying the Current
Parent Common Share Equivalent in effect on such record
date by the quotient obtained when:
(I) the number of Parent Common Shares outstanding
after the completion of such Parent Common Share
Reorganization (but before giving effect to the
issue of any Parent Common Shares issued after
such record date otherwise than as part of such
Parent Common Share Reorganization) including,
in the case where securities exchangeable or
convertible into Parent Common Shares are
distributed, the number of Parent Common Shares
that would have been outstanding had such
securities been exchanged for or
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converted into Parent Common Shares on such
record date, is divided by
(II) the number of Parent Common Shares outstanding
on such record date before giving effect to the
Parent Common Share Reorganization;
(o) "EFFECTIVE DATE" has the meaning ascribed thereto in the Plan of
Arrangement.
(p) "EXCHANGEABLE SHARES" mean the Exchangeable Non-Voting Shares of
the Company having the special rights and restrictions set forth
herein.
(q) "LIEN" has the meaning ascribed thereto in the Plan of
Arrangement.
(r) "LIQUIDATION AMOUNT" has the meaning ascribed thereto in section
4.1 of these share provisions.
(s) "LIQUIDATION CALL RIGHT" has the meaning ascribed thereto in
section 5.2 of the Plan of Arrangement.
(t) "LIQUIDATION DATE" has the meaning ascribed thereto in section
4.1 of these share provisions.
(u) "NASDAQ" means the distinct tier of The Nasdaq Stock Market
referred to as the Nasdaq National Market.
(v) "PARENT" means Broadcom Corporation a corporation organised and
existing under the laws of the State of California, and any
successor corporation.
(w) "PARENT COMMON SHARE REORGANISATION" has the meaning ascribed
thereto in subsection 1.1(n) of these share provisions.
(x) "PARENT COMMON SHARES" mean the Class B shares of common stock
of Parent, with a par value of U.S.$0.001 per share and having
ten votes per share, and any other securities into which such
shares may be changed.
(y) "PARENT DIVIDEND DECLARATION DATE" means the date on which the
Board of Directors of Parent declares any dividend on the Parent
Common Shares.
(z) "PARENT SUPPORT AGREEMENT" means the Parent Support Agreement
among Parent BVI, CDN2 and the Company, made as of the Effective
Date.
(aa) "PERSON" means any natural person, corporation, general
partnership, limited partnership, limited liability company or
partnership, proprietorship, other
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business organization, trust, union, association or Governmental
or Regulatory Authority;
(bb) "PLAN OF ARRANGEMENT" means the plan of arrangement relating to
the arrangement of the Company under section 252 of the BC
Company Act, to which plan these share provisions are attached.
(cc) "REDEMPTION CALL RIGHT" has the meaning ascribed thereto in
section 5.3 of the Plan of Arrangement.
(dd) "REDEMPTION PRICE" has the meaning ascribed thereto in section
6.1 of these share provisions.
(ee) "RETRACTED SHARES" has the meaning ascribed thereto in section
5.1 of these share provisions.
(ff) "RETRACTION CALL RIGHT" has the meaning ascribed thereto in
section 5.1 of the Plan of Arrangement.
(gg) "RETRACTION DATE" has the meaning ascribed thereto in section
5.2 of these share provisions.
(hh) "RETRACTION PRICE" has the meaning ascribed thereto in section
5.1 of these share provisions.
(ii) "RETRACTION REQUEST" has the meaning ascribed thereto in section
5.1 of these share provisions.
(jj) "TAX ACT" means the Income Tax Act (Canada) as amended from time
to time.
(kk) "TRANSFER AGENT" means CIBC Mellon Trust Company or such other
person as may from time to time be the registrar and transfer
agent for the Exchangeable Shares.
(ll) "TRUSTEE" means US Trust Corporation, and any successor trustee
appointed under the Voting and Exchange Trust Agreement.
(mm) "VOTING AND EXCHANGE TRUST AGREEMENT" means the Voting and
Exchange Trust Agreement between the Company, Parent, BVI, CDN2
and the Trustee, made as of the Effective Date.
1.2 All amounts required to be paid, deposited or delivered hereunder shall be
paid, deposited or delivered after deduction of any amount required by
applicable law to be deducted or withheld on account of tax and the deduction of
such amounts and remittance to the applicable
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tax authorities shall, to the extent thereof, satisfy such requirement to pay,
deposit or deliver hereunder.
ARTICLE 2
RANKING OF EXCHANGEABLE SHARES
2.1 The Exchangeable Shares shall rank senior to the Common Shares and any other
shares ranking junior to the Exchangeable Shares, with respect to the payment of
dividends and the distribution of assets in the event of the liquidation,
dissolution or winding-up of the Company, whether voluntary or involuntary, or
any other distribution of the assets of the Company among its shareholders for
the purpose of winding up its affairs.
ARTICLE 3
DIVIDENDS
3.1 A holder of an Exchangeable Share shall be entitled to receive and the Board
of Directors shall, subject to applicable law, declare a dividend on each
Exchangeable Share (a) in the case of a cash dividend declared on the Parent
Common Shares, in an amount in cash for each Exchangeable Share equal to the
Canadian Dollar Equivalent on the Parent Dividend Declaration Date of the cash
dividend declared on such number of Parent Common Shares as is equal to the
Current Parent Common Share Equivalent on the Parent Dividend Declaration Date
or (b) in the case of a stock dividend declared on the Parent Common Shares to
be paid in Parent Common Shares, in such whole number of Exchangeable Shares for
the Exchangeable Shares held by each holder as is equal to the number of Parent
Common Shares to be paid as a dividend per Parent Common Share (if such
calculation results in a fraction of an Exchangeable Share, the holder shall
receive in lieu of such fraction an amount in cash equal to the product obtained
by multiplying the amount that would be payable in respect of an equal fraction
of a Parent Common Share as at the Parent Dividend Declaration Date, calculated
in accordance with section 9.4, by the Current Parent Common Share Equivalent as
at such date) or (c) in the case of a dividend declared on the Parent Common
Shares to be paid in property other than cash or Parent Common Shares (including
without limitation other securities of Parent), in such type and amount of
property for each Exchangeable Share as is the same as or economically
equivalent (as determined by the Board of Directors in accordance with section
9.1) to the type and amount of property to be paid as a dividend on such number
of Parent Common Shares as is equal to the Current Parent Common Share
Equivalent on the Parent Dividend Declaration Date. Such dividends shall be paid
out of money, assets or property of the Company properly applicable to the
payment of dividends, or out of authorized but unissued Exchangeable Shares.
3.2 Cheques of the Company payable at par at any branch of the bankers of the
Company shall be issued in respect of any cash dividends contemplated by
subsection 3.1(a) hereof or in respect of any cash amount payable in lieu of a
fractional Exchangeable Share in connection with any stock dividends
contemplated by subsection 3.1(b) hereof and the sending of such a cheque to
each holder of an Exchangeable Share shall satisfy the cash dividend represented
thereby
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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 subsection 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
subsection 3.1(c) hereof shall be issued, distributed or transferred by the
Company in such manner as it shall determine and the issuance, distribution or
transfer thereof by the Company 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
Company any dividend that is represented by a cheque that has not been duly
presented to the Company'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 Parent 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 Company shall have sufficient moneys, assets or property properly
applicable to the payment of such dividends.
3.5 So long as any of the Exchangeable Shares are outstanding, the Company 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 8.2 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 Company ranking
equally with the Exchangeable Shares with respect to the payment
of dividends or on any liquidation distribution;
(d) issue any Exchangeable Shares other than (i) by way of stock
dividends to the holders of such Exchangeable Shares, (ii)
otherwise pro rata to holders of Exchangeable Shares, (iii) as
contemplated by the Parent Support Agreement or (iv) pursuant to
any agreements or rights in existence at the Effective Date; or
(e) issue any other shares of the Company ranking equally with or
senior to the Exchangeable Shares;
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provided that the restrictions in subsections 3.5(a), 3.5(b) and 3.5(c) shall
not apply if all dividends on the outstanding Exchangeable Shares corresponding
to dividends declared to date on the Parent Common Shares shall have been
declared on the Exchangeable Shares and paid in full.
ARTICLE 4
DISTRIBUTION ON LIQUIDATION
4.1 In the event of the liquidation, dissolution or winding-up of the Company or
any other distribution of the assets of the Company among its shareholders for
the purpose of winding up its affairs, a holder of Exchangeable Shares shall be
entitled, subject to applicable law, to receive from the assets of the Company
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 Company among the holders of
the Common Shares or any other shares ranking junior to the Exchangeable Shares,
an amount per share equal to (a) the Current Market Price multiplied by the
Current Parent Common Share Equivalent, in each case determined on the last
Business Day prior to the Liquidation Date, which shall be satisfied in full in
respect of all of the Exchangeable Shares held by such holder by the Company
causing to be delivered to such holder such whole number of Parent Common Shares
as is equal to the product obtained by multiplying the number of such
Exchangeable Shares by the Current Parent Common Share Equivalent (together with
an amount in lieu of any fractional Parent Common Share resulting from such
calculation payable in accordance with section 9.4), plus (b) the aggregate of
all declared and unpaid dividends on each such Exchangeable Share up to the
Liquidation Date (collectively the "Liquidation Amount").
4.2 On or promptly after the Liquidation Date, and subject to the exercise by
CDN2 of the Liquidation Call Right, the Company 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 BC Company Act and the articles of the Company and such additional documents
and instruments as the Transfer Agent may reasonably require, at the registered
office of the Company or at any office of the Transfer Agent as may be specified
by the Company 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 Company for the Exchangeable Shares or by holding for pick-up by
the holder at the registered office of the Company or at any office of the
Transfer Agent as may be specified by the Company by notice to the holders of
Exchangeable Shares, on behalf of the Company of certificates representing the
Parent Common Shares to be delivered in payment thereof (which shares shall be
duly issued as fully paid and non-assessable and shall be free and clear of any
Liens) and a cheque of the Company payable at par at any branch of the bankers
of the Company in respect of any fractional Parent Common Share and all declared
and unpaid dividends comprising part of the total Liquidation Amount (or, if any
of such dividends were payable in property, such property or property that is
the same as or economically equivalent to such property).
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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 the total Liquidation Amount in respect of their Exchangeable Shares,
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 Company shall have the right at any
time on or after the Liquidation Date to deposit or cause to be deposited the
total Liquidation Amount in respect of the Exchangeable Shares represented by
certificates that have not at the Liquidation Date been surrendered by the
holders thereof in a custodial account with any chartered bank or trust company
in Canada. Upon such deposit being made, the rights of the holders of
Exchangeable Shares after such deposit shall be limited to receiving the total
Liquidation Amount (without interest) for such Exchangeable Shares so deposited,
against presentation and surrender of the said certificates held by them,
respectively, in accordance with the foregoing provisions. Upon such payment or
deposit of the total Liquidation Amount, the holders of the Exchangeable Shares
shall thereafter be considered and deemed for all purposes to be the holders of
the Parent Common Shares delivered to them.
4.3 After the Company has satisfied its obligations to pay the holders of the
Exchangeable Shares the Liquidation Amount per Exchangeable Share pursuant to
section 4.1 of these share provisions, such holders shall not be entitled to
share in any further distribution of the assets of the Company.
ARTICLE 5
RETRACTION OF EXCHANGEABLE SHARES BY XXXXXX
5.1 A holder of Exchangeable Shares shall be entitled at any time, subject to
the exercise by CDN2 of the Retraction Call Right and otherwise upon compliance
with the provisions of this Article 5, to require the Company to redeem any or
all of the Exchangeable Shares registered in the name of such holder (the
"Retracted Shares") for an amount for each Retracted Share equal to (a) the
Current Market Price multiplied by the Current Parent Common Share Equivalent,
in each case determined on the last Business Day prior to the Retraction Date,
which shall be satisfied in full in respect of the Retracted Shares by the
Company causing to be delivered to such holder such whole number of Parent
Common Shares as is equal to the product obtained by multiplying the number of
Retracted Shares by the Current Parent Common Share Equivalent (together with an
amount in lieu of any fractional Parent Common Share resulting from such
calculation payable in accordance with section 9.4), plus (b) the aggregate of
all dividends declared and unpaid on each Retracted Share up to the Retraction
Date (collectively the "Retraction Price", provided that if the record date for
any such declared and unpaid dividend occurs on or after the Retraction Date the
Retraction Price shall not include such declared and unpaid dividends). To
effect such redemption, the holder shall present and surrender at any office of
the Transfer Agent listed on Schedule A hereto the certificate or certificates
representing the Exchangeable Shares which the holder desires to have the
Company redeem, together with such other documents and instruments as may be
required to effect a transfer of Exchangeable Shares under the BC Company Act
and the articles of the Company and such additional documents and instruments as
the Transfer Agent may reasonably require, and together
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with a duly executed statement (the "Retraction Request") in the form of
Schedule A hereto or in such other form as may be acceptable to the Transfer
Agent:
(a) specifying that the holder desires to have the Retracted Shares
represented by such certificate or certificates redeemed by the
Company; and
(b) acknowledging the Retraction Call Right of CDN2 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
CDN2 in accordance with the Retraction Call Right.
5.2 Subject to the exercise by CDN2 of the Retraction Call Right, upon receipt
by the Transfer Agent in the manner specified in section 5.1 hereof of a
certificate or certificates representing the number of Exchangeable Shares which
the holder desires to have the Company redeem, together with such other
documents and instruments as may be required pursuant to section 5.1 and a
Retraction Request, and provided that the Retraction Request is not revoked by
the holders in the manner specified in Section 5.7, the Company shall redeem the
Retracted Shares effective at the close of business on the sixth Business Day
after the Retraction Request is received (the "Retraction Date") and shall cause
to be delivered to such holder the total Retraction Price with respect to such
shares. If only a part of the Exchangeable Shares represented by any certificate
are redeemed (or purchased by Parent pursuant to the Retraction Call Right), a
new certificate for the balance of such Exchangeable Shares shall be issued to
the holder at the expense of the Company.
5.3 Upon receipt by the Transfer Agent of a Retraction Request, the Transfer
Agent shall forthwith notify Parent and CDN2 thereof. In order to exercise the
Retraction Call Right, CDN2 must deliver a CDN2 Call Notice to the Transfer
Agent prior to the expiry of the third Business Day after the receipt by the
Transfer Agent of the Retraction Request. If CDN2 does not so notify the
Transfer Agent, the Transfer Agent will notify the holder as soon as possible
thereafter that CDN2 will not exercise the Retraction Call Right. If CDN2
delivers the CDN2 Call Notice before the end of such three Business Day period,
and provided that the Retraction Request is not revoked by the holder in the
manner specified in section 5.7, the Retraction Request shall thereupon be
considered only to be an offer by the holder to sell the Retracted Shares to
CDN2 in accordance with the Retraction Call Right. In such event, the Company
shall not redeem the Retracted Shares and CDN2 shall purchase from such holder
and such holder shall sell to CDN2 on the Retraction Date the Retracted Shares
pursuant to the Retraction Call Right.
5.4 If a Retraction Request is received by the Transfer Agent pursuant to
section 5.1 and CDN2 has not exercised the Retraction Call Right, and provided
the Retraction Request is not revoked by the holder in the manner specified in
section 5.7, the Company shall cause the Transfer Agent to deliver to the holder
of the Retracted Shares, at the address of the holder recorded in the securities
register of the Company 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 office of the Transfer Agent to which the Retraction Request was delivered,
certificates representing the Parent Common
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Shares to be delivered to the holder in payment of the total Retraction Price
for the Retracted Shares (or the portion thereof payable in Parent Common
Shares, as the case may be) (which shares shall be duly issued as fully paid and
non-assessable and shall be free and clear of any Liens) registered in the name
of the holder or in such other name as the holder may request and a cheque of
the Company payable at par at any branch of the bankers of the Company in
payment of the remaining portion, if any, of the total Retraction Price (or, if
any part of the Retraction Price consists of dividends payable in property, such
property or property that is the same as or economically equivalent to such
property), and such delivery of such certificates and cheque (and property, if
any) on behalf of the Company, by the Transfer Agent shall be deemed to be
payment of and shall satisfy and discharge all liability for the total
Retraction Price, to the extent that the same is represented by such share
certificates and cheque (and property, if any), unless such cheque is not paid
on due presentation.
5.5 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, unless upon presentation and surrender of certificates in accordance with
the foregoing provisions, payment of the total Retraction Price shall not be
made, in which case the rights of such holder shall remain unaffected until the
total Retraction Price 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 has been
made in accordance with the foregoing provisions, the holder of the Retracted
Shares so redeemed by the Company shall thereafter be considered and deemed for
all purposes to be a holder of the Parent Common Shares delivered to it.
5.6 Notwithstanding any other provision of this Article 5, the Company 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 Company
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 CDN2 shall not have exercised the Retraction Call Right with
respect to the Retracted Shares, the Company shall be obligated to redeem
Retracted Shares specified by a holder in a Retraction Request only 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 on a pro rata
basis 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 Company and the Company shall issue to each holder of Retracted Shares a
new certificate, at the expense of the Company, representing the Retracted
Shares not redeemed by the Company pursuant to section 5.2 hereof. The holder of
any such Retracted Shares not redeemed by the Company pursuant to section 5.2 of
these share provisions as a result of solvency requirements of applicable law
shall be deemed by giving the Retraction Request to require Parent to purchase
such Retracted Shares from such holder pursuant to the Exchange Right (as
defined in the Voting and Exchange Trust Agreement).
5.7 A holder of Retracted Shares may, by notice in writing given by the holder
to the Company and to the Transfer Agent before the close of business on the
Business Day immediately
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preceding the Retraction Date, withdraw its Retraction Request, in which event
such Retraction Request shall be null and void and, for greater certainty, the
revocable offer constituted by the Retraction Request to sell the Retracted
Shares to Parent shall be deemed to have been revoked.
ARTICLE 6
REDEMPTION OF EXCHANGEABLE SHARES
6.1 Subject to applicable law, and if CDN2 does not exercise the Redemption Call
Right, the Company shall on the Automatic Redemption Date redeem the whole of
the then outstanding Exchangeable Shares for an amount per share equal to (a)
the Current Market Price multiplied by the Current Parent Common Share
Equivalent, in each case determined on the last business day prior to the
Automatic Redemption Date, which shall be satisfied in full in respect of all of
the Exchangeable Shares held by each holder of Exchangeable Shares by the
Company causing to be delivered to such holder such whole number of Parent
Common Shares as is equal to the product obtained by multiplying the number of
such Exchangeable Shares by the Current Parent Common Share Equivalent (together
with an amount in lieu of any fractional Parent Common Share resulting from such
calculation payable in accordance with section 9.4), plus (b) the aggregate of
all declared and unpaid dividends thereon up to the Automatic Redemption Date
(collectively the "Redemption Price").
6.2 In any case of a redemption of Exchangeable Shares under this Article 6, the
Company shall, at least 75 days before the Automatic Redemption Date, send or
cause to be sent to each holder of Exchangeable Shares a notice in writing of
the redemption by the Company or the purchase by CDN2 under the Redemption Call
Right, as the case may be, of the Exchangeable Shares held by such holder. Such
notice shall set out the formula for determining the Redemption Price or the
Redemption Call Purchase Price, as the case may be, the Automatic Redemption
Date and, if applicable, particulars of the Redemption Call Right.
6.3 On or after the Automatic Redemption Date and subject to the exercise by
CDN2 of the Redemption Call Right, the Company shall cause to be delivered to
the holders of the Exchangeable Shares the Redemption Price for each such
Exchangeable Share upon presentation and surrender at any office of the Transfer
Agent 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 BC Company Act and the articles of the Company 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 Company or by holding for pick up by the
holder at the registered office of the Company or at any office of the Transfer
Agent as may be specified by the Company in such notice, on behalf of the
Company of certificates representing the Parent Common Shares to be delivered to
the holder in payment of the Redemption Price (or the portion thereof payable in
Parent Common Shares, as the case may be) (which shares shall be duly issued as
fully paid and non-assessable and shall be free and clear of any Liens) and a
cheque of the Company payable at par at any branch of the bankers of the Company
in respect of any fractional Parent Common Share and all declared and unpaid
dividends comprising part of the total Redemption Price (or, if any of such
dividends are payable in property, such property or property of the economic
equivalent thereof). On and after the Automatic
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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 the total Redemption Price for their Exchangeable Shares,
unless payment of the total Redemption Price for such Exchangeable Shares shall
not be made upon presentation and surrender of certificates in accordance with
the foregoing provisions, in which case the rights of the holders shall remain
unaffected until the total Redemption Price has been paid in the manner
hereinbefore provided. The Company shall have the right at any time to deposit
or cause to be deposited the total Redemption Price of the Exchangeable Shares
so called for redemption, or of such of the said Exchangeable Shares represented
by certificates that have not at the date of such deposit been surrendered by
the holders thereof in connection with such redemption, in a custodial account
with any chartered bank or trust company in Canada named in such notice. Upon
the later of such deposit being made and the Automatic 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
Automatic Redemption Date, as the case may be, shall be limited to receiving 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 Price, the holders of the Exchangeable Shares shall thereafter
be considered and deemed for all purposes to be holders of the Parent Common
Shares delivered to them.
ARTICLE 7
VOTING RIGHTS
7.1 Except as required by applicable law and the provisions of sections 3.5, 8.1
and 10.2, the holders of the Exchangeable Shares shall not be entitled as such
to receive notice of or to attend any meeting of the members of the Company or
to vote at any such meeting.
ARTICLE 8
AMENDMENT AND APPROVAL
8.1 The special rights and restrictions 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.
8.2 Any approval given by the holders of the Exchangeable Shares to add to,
change or remove any right, privilege, restriction or condition attaching to the
Exchangeable Shares or any other matter requiring the approval or consent of the
holders of the Exchangeable Shares shall be deemed to have been sufficiently
given if it shall have been given in accordance with applicable law subject to a
minimum requirement that such approval be evidenced by resolution passed by not
less than two-thirds of the votes cast on such resolution at a meeting of
holders of Exchangeable Shares 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. 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 10 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
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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 of the votes cast on such resolution at such meeting
shall constitute the approval or consent of the holders of the Exchangeable
Shares.
ARTICLE 9
ECONOMIC EQUIVALENCE, CHANGES RELATING TO PARENT
9.1 The Board of Directors shall determine, in good faith and in its sole
discretion (with the assistance of such reputable and qualified independent
financial advisors and/or other experts as the Board of Directors may require)
economic equivalence for the purposes of any provision herein that requires such
a determination and each such determination shall be conclusive and binding on
Parent, where applicable.
9.2 If at any time there is a capital reorganization of Parent that is not
provided for in subsection 1.1(n) or a consolidation, merger, arrangement or
amalgamation (statutory or otherwise) of Parent with or into another entity (any
such event being called a "Capital Reorganization"), any holder of Exchangeable
Shares whose Exchangeable Shares have not been exchanged for Parent Common
Shares in accordance with the provisions hereof prior to the record date for
such Capital Reorganization shall be entitled to receive and shall accept, upon
any such exchange occurring pursuant to the provisions hereof at any time after
the record date for such Capital Reorganization, in lieu of the Parent Common
Shares that he would otherwise have been entitled to receive pursuant to the
provisions hereof, the number of shares or other securities of Parent or of the
body corporate resulting, surviving or continuing from the Capital
Reorganization, or other property, that such holder would have been entitled to
receive as a result of such Capital Reorganization if, on the record date, he
had been the registered holder of the number of Parent Common Shares to which he
was then entitled upon any exchange of his Exchangeable Shares into Parent
Common Shares in accordance with the provisions hereof, subject to adjustment
thereafter in the same manner, as nearly as may be possible, as is provided for
in subsection 1.1(n); provided that no such Capital Reorganization shall be
carried into effect unless all necessary steps shall have been taken so that
each holder of Exchangeable Shares shall thereafter be entitled to receive, upon
any exchange of his Exchangeable Shares pursuant to the provisions hereof, such
number of shares or other securities of Parent or of the body corporate
resulting, surviving or continuing from the Capital Reorganization, or other
property.
9.3 In the case of any reclassification of, or other change in, the outstanding
Parent Common Shares other than a Parent Common Share Reorganization or a
Capital Reorganization, such changes shall be made in the rights attaching to
the Exchangeable Shares, without any action on the part of the Company or the
holders of the Exchangeable Shares to the extent permitted by applicable law,
effective immediately following the record date for such reclassification or
other change, to the extent necessary to ensure that holders of Exchangeable
Shares shall be entitled to receive, upon the occurrence at any time after such
record date of any event whereby they would receive Parent Common Shares
pursuant to the provisions hereof, such shares, securities or rights as they
would have received if their Exchangeable Shares had been exchanged for Parent
Common Shares pursuant to the provisions hereof immediately prior to such record
date, subject to
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adjustment thereafter in the same manner, as nearly as may be possible, as is
provided for in subsection 1.1(n).
9.4 If and whenever at any time up to and including the Liquidation Date:
(a) shares or securities of Parent of any class other than Parent
Common Shares (other than shares convertible into or
exchangeable for or carrying rights to acquire Parent Common
Shares);
(b) rights, options or warrants, other than those referred to in
subsection 1.1(n);
(c) evidences of indebtedness of Parent; or
(d) assets of Parent;
are issued or distributed to the holders of all or substantially all of the then
outstanding Parent Common Shares, the economic equivalent on a per share basis
of such rights, options, securities, shares, evidences of indebtedness or other
assets shall be issued or distributed simultaneously to holders of the
Exchangeable Shares whose Exchangeable shares have not been exchanged for Parent
Common Shares in accordance with the provisions hereof prior to the record date
for such issuance or distribution.
9.5 No certificates or scrip representing fractional Parent Common Shares shall
be delivered to holders of Exchangeable Shares pursuant to the provisions
hereof. In lieu of any such fractional security, each person entitled to a
fractional interest in a Parent Common Share will receive an amount of cash
(rounded to the nearest whole cent), without interest, equal to the Canadian
Dollar Equivalent as of the fourth Business Day prior to the relevant date of
delivery of certificates representing Parent Common Shares (the "Fractional
Share Calculation Date") of the product of (i) such fraction, multiplied by (ii)
the closing sale price of Parent Common Shares as reported on NASDAQ on the
Fractional Share Calculation Date.
ARTICLE 10
ACTIONS BY THE COMPANY UNDER PARENT SUPPORT AGREEMENT
10.1 The Company 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 Parent with all provisions of the Parent Support Agreement and the
Voting and Exchange Trust Agreement applicable to the Company and Parent,
respectively, in accordance with the terms thereof including, without
limitation, taking all such actions and doing all such things as shall be
necessary or advisable to enforce to the fullest extent possible for the direct
benefit of the Company and the holders of Exchangeable Shares all rights and
benefits in favour of the Company under or pursuant to such agreements.
10.2 The Company shall not propose, agree to or otherwise give effect to any
amendment to, or waiver or forgiveness of its rights or obligations under, the
Parent Support Agreement and the Voting and Exchange Trust Agreement without the
approval of the holders of the Exchangeable
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Shares given in accordance with section 8.2 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 party or parties to such
agreement for the protection of the Company or the holders of
Exchangeable Shares; or
(b) making such provisions or modifications not inconsistent with
such agreements as may be necessary or desirable with respect to
matters or questions arising thereunder which, in the opinion of
the Board of Directors, it may be expedient to make, provided
that the Board of Directors shall be of the 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 agreements which,
on the advice of counsel to the Company, 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 opinion, after consultation with
counsel, that such changes or corrections will not be
prejudicial to the interests of the holders of the Exchangeable
Shares.
ARTICLE 11
LEGEND
11.1 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 Parent Support Agreement, the provisions of the
Plan of Arrangement relating to the Retraction Call Right, the Liquidation Call
Right and the Redemption Call Right, and the Voting and Exchange Trust Agreement
(including the provisions with respect to the voting rights, exchange right and
automatic exchange thereunder).
ARTICLE 12
NOTICES
12.1 Any notice, request or other communication to be given to the Company by a
holder of Exchangeable Shares shall be in writing and shall be valid and
effective if given by mail (postage prepaid) or by telecopy or by delivery to
the registered office of the Company 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 Company.
12.2 Any presentation and surrender by a holder of Exchangeable Shares to the
Company or the Transfer Agent of certificates representing Exchangeable Shares
in connection with the liquidation, dissolution or winding up of the Company 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 Company or
to such office of the Transfer Agent as may be specified by the Company, in each
case addressed to the attention of the President of the Company. Any such
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presentation and surrender of certificates shall only be deemed to have been
made and to be effective upon actual receipt thereof by the Company 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.
12.3 Any notice, request or other communication to be given to a holder of
Exchangeable Shares by or on behalf of the Company 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 Company or, in
the event of the address of any such holder not being so recorded, then at the
last known address of such holder. Any such notice, request or other
communication, if given by mail, shall be deemed to have been given and received
on the fifth 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 Company
pursuant thereto.
ARTICLE 13
TAX MATTERS
13.1 While any Exchangeable Share is outstanding, the Company will at no time be
a specified financial institution (as that term is defined in subsection 248(1)
of the Tax Act) or a specified person (as that term is defined in paragraph
112(2.2)(g) of the Tax Act) in relation to any such institution.
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SCHEDULE A
NOTICE OF RETRACTION
To: HH Acquisition Inc. (the "Company") and HH Acquisition ULC ("CDN2") and
Broadcom Corporation ("Parent")
This notice is given pursuant to Article 5 of the provisions (the "Share
Provisions") attaching to the share(s) represented by this certificate and all
capitalized words and expressions used in this notice that are defined in the
Share Provisions have the meanings ascribed to such words and expressions in
such Share Provisions.
The undersigned hereby notifies the Company that, subject to the
Retraction Call Right referred to below, the undersigned desires to have the
Company redeem in accordance with Article 5 of the Share Provisions:
[ ] all share(s) represented by this certificate; or
[ ] _____________________________ share(s) only.
The undersigned acknowledges the Retraction Call Right of CDN2 (or a
Permitted Assign) to purchase all but not less than all the Retracted Shares
from the undersigned and that this notice shall be deemed to be a revocable
offer (subject as hereinafter provided) by the undersigned to sell the Retracted
Shares to CDN2 (or a Permitted Assign) in accordance with the Retraction Call
Right on the Retraction Date for the Retraction Call Purchase Price and on the
other terms and conditions set out in section 5.1 of the Plan of Arrangement. If
CDN2 (or a Permitted Assign) determines not to exercise the Retraction Call
Right, the Transfer Agent will notify the undersigned of such fact as soon as
possible. This notice of retraction, and the offer to sell the Retracted Shares
to CDN2 (or a Permitted Assign), may be withdrawn and revoked by the undersigned
only by notice in writing given to CDN2 (or a Permitted Assign), the Company and
to the Transfer Agent at any time before the close of business on the business
day immediately preceding the Retraction Date.
The undersigned acknowledges that if, as a result of solvency provisions
of applicable law or otherwise, the Company fails to redeem all Retracted
Shares, the undersigned will be deemed to have exercised the Exchange Right (as
defined in the Voting and Exchange Trust Agreement) so as to require Parent to
purchase the unredeemed Retracted Shares.
The undersigned hereby represents and warrants to the Company, CDN2 (and
the Permitted Assigns):
(i) that the undersigned has good title to, and owns, the share(s)
represented by this certificate to be acquired by the Company or
CDN2 (or a Permitted Assign), as the case may be, free and clear
of all Liens; AND
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(ii) either
[ ] the undersigned is a resident of Canada for purposes
of the Income Tax Act (Canada); OR
[ ] the undersigned is not a resident of Canada for purposes
of the Income Tax Act (Canada).
The undersigned hereby acknowledges that, if the undersigned is not a resident
of Canada, and has not submitted with this notice a certificate issued by
Revenue Canada under section 116 of the Income Tax Act (Canada) in respect of
the Retracted Shares, the amount of any securities or cash resulting from the
retraction or the purchase of the Retracted Shares will be reduced by the amount
of withholdings required under the Income Tax Act (Canada).
--------------- ----------------------------- -----------------------------
(Date) (Signature of Shareholder) (Guarantee of Signature)
[ ] Please check box if the securities and any cheque(s) resulting from the
retraction or purchase of the Retracted Shares are to be held for
pick-up by the shareholder at the principal transfer office of CIBC
Mellon Trust Company (the "Transfer Agent") at 0000 Xxxx Xxxxxxxx
Xxxxxx, Xxxxxxxxx, X.X. V6E 2K3 failing which the securities and any
cheque(s) will be mailed to the last address of the shareholder as it
appears on the register.
NOTE: This panel must be completed and this certificate, together with such
additional documents as the Transfer Agent may require, must be
deposited with the Transfer Agent at its principal transfer office in
Vancouver. 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 Company and the
securities and 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.
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-------------------------------------- ---------------------------------------
Name of Person in Whose Name Date
Securities or Cheque(s) Are To
Be Registered, Issued or
Delivered (please print)
-------------------------------------- ---------------------------------------
Street Address or P.O. Box Signature of Shareholder
-------------------------------------- ---------------------------------------
City-Province Signature of Shareholder
NOTE: If the notice of retraction is for less than all of the share(s)
represented by this certificate, a certificate representing the
remaining shares of the Company will be issued and registered in the
name of the shareholder as it appears on the register of the Company,
unless the Share Transfer Power on the share certificate is duly
completed in respect of such shares.
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