EXHIBIT 10.2
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SHAREHOLDER RIGHTS PLAN
AGREEMENT
DATED AS OF
JULY 20, ▇▇▇▇
▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ PRODUCTS LIMITED
AND
MONTREAL TRUST COMPANY OF CANADA
AS RIGHTS AGENT
TABLE OF CONTENTS
ARTICLE 1 - INTERPRETATION........................................................................................4
1.1 CERTAIN DEFINITIONS..........................................................................................4
1.2 CURRENCY....................................................................................................17
1.3 HEADINGS....................................................................................................17
1.4 CALCULATION OF NUMBER AND PERCENTAGE OF BENEFICIAL OWNERSHIP OF OUTSTANDING VOTING SHARES...................18
1.5 ACTING JOINTLY OR IN CONCERT................................................................................18
1.6 GENERALLY ACCEPTED ACCOUNTING PRINCIPLES....................................................................18
ARTICLE 2 - THE RIGHTS...........................................................................................19
2.1 LEGEND ON COMMON SHARE CERTIFICATES.........................................................................19
2.2 INITIAL EXERCISE PRICE; EXERCISE OF RIGHTS; DETACHMENT OF RIGHTS............................................19
2.3 ADJUSTMENTS TO EXERCISE PRICE; NUMBER OF RIGHTS.............................................................22
2.4 DATE ON WHICH EXERCISE IS EFFECTIVE.........................................................................28
2.5 EXECUTION, AUTHENTICATION, DELIVERY AND DATING OF RIGHTS CERTIFICATES.......................................28
2.6 REGISTRATION, TRANSFER AND EXCHANGE.........................................................................29
2.7 MUTILATED, DESTROYED, LOST AND STOLEN RIGHTS CERTIFICATES...................................................29
2.8 PERSONS DEEMED OWNERS OF RIGHTS.............................................................................30
2.9 DELIVERY AND CANCELLATION OF CERTIFICATES...................................................................30
2.10 AGREEMENT OF RIGHTS HOLDERS.................................................................................31
2.11 RIGHTS CERTIFICATE HOLDER NOT DEEMED A SHAREHOLDER..........................................................32
ARTICLE 3 - ADJUSTMENTS TO THE RIGHTS IN THE EVENT OF CERTAIN TRANSACTIONS.......................................33
3.1 FLIP-IN EVENT................................................................................................33
ARTICLE 4 - THE RIGHTS AGENT.....................................................................................35
4.1 GENERAL......................................................................................................35
4.2 MERGER, AMALGAMATION OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT......................................36
4.3 DUTIES OF RIGHTS AGENT.......................................................................................36
4.4 CHANGE OF RIGHTS AGENT.......................................................................................38
ARTICLE 5 - MISCELLANEOUS........................................................................................39
5.1 REDEMPTION AND WAIVER........................................................................................39
5.2 EXPIRATION...................................................................................................41
5.3 ISSUANCE OF NEW RIGHTS CERTIFICATES..........................................................................41
5.4 SUPPLEMENTS AND AMENDMENTS...................................................................................41
5.5 FRACTIONAL RIGHTS AND FRACTIONAL SHARES......................................................................43
5.6 RIGHTS OF ACTION.............................................................................................43
5.7 REGULATORY APPROVALS.........................................................................................44
5.8 DECLARATION AS TO NON-CANADIAN HOLDERS.......................................................................44
5.9 NOTICES......................................................................................................44
5.10 COSTS OF ENFORCEMENT........................................................................................45
5.11 SUCCESSORS..................................................................................................45
5.12 BENEFITS OF THIS AGREEMENT..................................................................................46
5.13 GOVERNING LAW...............................................................................................46
5.14 SEVERABILITY................................................................................................46
5.15 RECORD TIME.................................................................................................46
5.16 DETERMINATIONS AND ACTIONS BY THE BOARD OF DIRECTORS........................................................47
5.17 TIME OF THE ESSENCE.........................................................................................47
5.18 EXECUTION IN COUNTERPARTS...................................................................................47
SHAREHOLDER RIGHTS PLAN AGREEMENT
THIS AGREEMENT dated as of July 20, 1999 between Riverside Forest
Products Limited ("Riverside"), a corporation incorporated under the laws of
British Columbia, and Montreal Trust Company of Canada, a trust company
incorporated under the laws of Canada (the "Rights Agent");
WITNESSES THAT WHEREAS the board of directors of Riverside has
determined that it is in the best interests of Riverside to adopt a shareholder
rights plan to ensure, to the extent possible, that all shareholders of
Riverside are treated fairly in connection with any take-over bid for Riverside;
AND WHEREAS in order to implement the adoption of a shareholder rights
plan as established by this Agreement, the board of directors of Riverside has:
(a) authorized the issuance, effective at 4:00 p.m. (Vancouver
time) on July 20, 1999 (the "Record Time"), of one Right (as
hereinafter defined) in respect of each Voting Share (as
hereinafter defined) outstanding at the Record Time; and
(b) authorized the issuance of one Right in respect of each Voting
Share issued after the Record Time and prior to the earlier of
the Separation Time and the Expiration Time.
AND WHEREAS each Right entitles the holder thereof, after the
Separation Time, to purchase securities of Riverside pursuant to the terms and
subject to the conditions set forth in this Agreement;
AND WHEREAS Riverside desires to appoint the Rights Agent to act on
behalf of Riverside and the holders of Rights, and the Rights Agent is willing
so to act, in connection with the issuance, transfer, exchange and replacement
of Rights Certificates (as hereinafter defined), the exercise of Rights and
other matters referred to in this Agreement;
AND WHEREAS the board of directors of Riverside proposes that this
Agreement be in place for a period of ten years, subject to the Agreement being
reconfirmed by Riverside's shareholders every three years;
NOW THEREFORE, in consideration of the premises and the respective
covenants and agreements set forth herein, the parties hereby agree as follows:
ARTICLE 1 - INTERPRETATION
1.1 CERTAIN DEFINITIONS
For purposes of this Agreement, the following terms have the meanings indicated:
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(a) "ACQUIRING PERSON" means any Person who is the Beneficial
owner of 20 per cent or more of the outstanding Voting Shares;
provided, however, that the term "Acquiring Person" shall not
include:
(i) Riverside or any Subsidiary of Riverside;
(ii) any Person who becomes the Beneficial owner of 20 per
cent or more of the outstanding Voting Shares as a
result of one or any combination of (A) an
acquisition or redemption by Riverside of Voting
Shares which, by reducing the number of Voting Shares
outstanding, increases the proportionate number of
Voting Shares Beneficially owned by such Person to 20
per cent or more of the Voting Shares then
outstanding, (B) Permitted Bid Acquisitions, (C) Pro
Rata Acquisitions, or (D) Exempt Acquisitions;
provided, however, that if a Person becomes the
Beneficial owner of 20 per cent or more of the
outstanding Voting Shares by reason of one or any
combination of the operation of Paragraphs (A), (B),
(C), or (D) above and such Person thereafter becomes
the Beneficial owner of more than 1% of the number of
outstanding Voting Shares (other than pursuant to one
or more of any combination of Paragraphs (A), (B),
(C) or (D) above), as the case may be, then as of the
date such Person becomes the Beneficial owner of such
additional Voting Shares, as the case may be, such
Person shall become an "Acquiring Person";
(iii) for a period of 10 calendar days after the
Disqualification Date (as defined below), any Person
who becomes the Beneficial owner of 20% or more of
the outstanding Voting Shares as a result of such
Person becoming disqualified from relying on Clause
1.1(f)(B) solely because such Person is making or has
announced a current intention to make a Take-over
Bid, either alone or by acting jointly or in concert
with any other Person. For the purposes of this
definition, "Disqualification Date" means the first
date of a public announcement of facts indicating
that any Person is making or has announced a current
intention to make a Take-over Bid;
(iv) an underwriter or member of a banking or selling
group that becomes the Beneficial owner of 20% or
more of the Voting Shares in connection with a
distribution of securities of Riverside; or
(v) a Person (a "Grandfathered Person") who is the
Beneficial owner of more than 20% of the outstanding
Voting Shares determined as at the Record Time,
provided, however, that this exception shall not be,
and shall cease to be, applicable to a Grandfathered
Person in the event that such Grandfathered Person
shall, after the Record Time: (1) cease to own more
than 20% of the outstanding Voting Shares, as the
case may be, or (2) become the Beneficial owner of
any additional Voting Shares that increases its
Beneficial ownership of Voting Shares, as the case
may be, by more than 1% of the number of Voting
Shares, as the case may be, outstanding as at the
Record Time, other than through an acquisition
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pursuant to which a Person becomes a Beneficial Owner
of additional Voting Shares by reason of one or any
combination of the operation of Paragraphs
1.1(a)(ii)(A), (B), (C) or (D).
(b) "AFFILIATE", when used to indicate a relationship with a
specified Person, shall mean a Person that directly, or
indirectly through one or more intermediaries, controls, or is
controlled by, or is under common control with, such a
specified Person.
(c) "AGREEMENT" means this shareholder rights plan agreement dated
as of July 20, 1999 between Riverside and the Rights Agent, as
may be amended and/or supplemented from time to time;
"hereof", "herein", "hereto" and similar expressions mean and
refer to this Agreement as a whole and not to any particular
part of this Agreement;
(d) "ANNUAL CASH DIVIDEND" means cash dividends paid in any fiscal
year of Riverside, to the extent that such cash dividends do
not exceed in the aggregate, the greatest of:
(i) 200 per cent of the aggregate amount of cash
dividends declared payable by Riverside on its Common
Shares in its immediately preceding fiscal year;
(ii) 300 per cent of the arithmetic mean of the aggregate
amounts of the annual cash dividends declared payable
by Riverside on its Common Shares in its three
immediately preceding fiscal years; and
(iii) 100 per cent of the aggregate consolidated net income
of Riverside, before extraordinary items, for its
immediately preceding fiscal year;
(e) "ASSOCIATE" means, when used to indicate a relationship with a
specified Person, a spouse of that Person, any Person of the
same or opposite sex with whom that Person is living in a
conjugal relationship outside marriage, a child of that
Person, or a relative of that Person who has the same
residence as that Person;
(f) A Person shall be deemed the "BENEFICIAL OWNER" of, and to
have "BENEFICIAL OWNERSHIP" of, and to "BENEFICIALLY OWN",
(i) any securities as to which such Person or any of such
Person's Affiliates or Associates is the owner at law
or in equity;
(ii) any securities as to which such Person or any of such
Person's Affiliates or Associates has the right to
become the owner at law or in equity provided that
such right is exercisable immediately or within a
period of 60 days thereafter (whether or not on
condition or the happening of any contingency or the
making of any payment) pursuant to any agreement,
arrangement, pledge or understanding, whether or not
in writing (other than customary agreements with and
between underwriters and/or banking
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group members and/or selling group members with
respect to a distribution of securities and other
than pledges of securities in the ordinary course of
business), or upon the exercise of any conversion
right, exchange right, share purchase right (other
than the Rights), warrant or option; and
(iii) any securities which are Beneficially owned within
the meaning of Clauses 1.1(f)(i) or (ii) by any other
Person with whom such Person is acting jointly or in
concert;
provided, however, that a Person shall not be deemed
the "Beneficial owner" of, or to have "Beneficial
ownership" of, or to "Beneficially own", any
security:
(A) because such security has been deposited or
tendered pursuant to any Take-over Bid made
by such Person, made by any of such Person's
Affiliates or Associates or made by any
other Person referred to in Clause
1.1(f)(iii), until the earlier of such
deposited or tendered security being taken
up or paid for;
(B) because such Person, any of such Person's
Affiliates or Associates or any other Person
referred to in Clause 1.1(f)(iii) holds such
security provided that,
(1) the ordinary business of any such Person
(the "Investment Manager") includes the
management of investment funds for others
(which others, for greater certainty, may
include or be limited to one or more
employee benefit plans or pension plans) and
such security is held by the Investment
Manager in the ordinary course of such
business in the performance of such
Investment Manager's duties for the account
of any other Person (a "Client");
(2) such Person (the "Trust Company") is
licensed to carry on the business of a trust
company under applicable laws and, as such,
acts as trustee or administrator or in a
similar capacity in relation to the estates
of deceased or incompetent Persons (each an
"Estate Account") or in relation to other
accounts (each an "Other Account") and holds
such security in the ordinary course of such
duties for such Estate Accounts or for such
Other Accounts;
(3) such Person is established by statute
for purposes that include, and the ordinary
business or activity of such Person (the
"Statutory Body") includes, the management
of investment funds for employee benefit
plans, pension plans, insurance plans or
various public bodies;
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(4) such Person (the "Administrator") is the
administrator or trustee of one or more
pension funds, plans or related trusts (a
"Plan") registered or qualified under the
laws of Canada or any Province thereof or
the laws of the United States of America or
any state thereof or is a Plan; or
(5) such Person is a Crown agent or agency;
provided, in any of the above cases, that the
Investment Manager, the Trust Company, the Statutory
Body, the Administrator, the Plan, or the Crown agent
or agency, as the case may be, is not then making a
Take-over Bid or has not then announced an intention
to make a Take-over Bid other than an Offer to
Acquire Voting Shares or other securities by means of
a distribution by Riverside or by means of ordinary
market transactions (including pre-arranged trades
entered into in the ordinary course of business of
such Person) executed through the facilities of a
stock exchange or organized over-the-counter market,
alone or by acting jointly or in concert with any
other Person;
(C) because such security has been agreed to be
deposited or tendered pursuant to a Lock-up
Agreement, or is otherwise deposited or
tendered, to any Take-over Bid made by such
Person, made by any of such Person's
Affiliates or Associates or made by any
other Person acting jointly or in concert
with such Person until such deposited or
tendered security has been taken up or paid
for, whichever shall first occur;
(D) because such Person is (1) a Client of the
same Investment Manager as another Person on
whose account the Investment Manager holds
such security, (2) an Estate Account or an
Other Account of the same Trust Company as
another Person on whose account the Trust
Company holds such security or (3) a Plan
with the same Administrator as another Plan
on whose account the Administrator holds
such security;
(E) where such Person is (1) a Client of an
Investment Manager and such security is
owned at law or in equity by the Investment
Manager, or (2) an Estate Account or an
Other Account of a Trust Company and such
security is owned at law or in equity by the
Trust Company or (3) a Plan and such
security is owned at law or in equity by the
Administrator of the Plan; or
(F) where such Person is a registered holder of
such security as a result of carrying on the
business of, or acting as a nominee of, a
securities depositary;
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(g) "BOARD OF DIRECTORS" means the board of directors of Riverside
or any duly constituted and empowered committee thereof;
(h) "BUSINESS DAY" means any day other than a Saturday, Sunday or
a day on which banking institutions in Vancouver are
authorized or obligated by law to close;
(i) "CANADIAN DOLLAR EQUIVALENT" of any amount which is expressed
in United States Dollars means, on any date, the Canadian
dollar equivalent of any such amount determined by multiplying
such amount by the U.S. - Canadian Exchange Rate in effect on
such date;
(j) "CANADIAN - U.S. EXCHANGE RATE" means, on any date, the
inverse of the U.S. - Canadian Exchange Rate in effect on such
date;
(k) "CLOSE OF BUSINESS" on any given date means the time on such
date (or, if such date is not a Business Day, the time on the
next succeeding Business Day) at which the principal transfer
office in Vancouver of the transfer agent for the Common
Shares of Riverside (or, after the Separation Time, the
principal office in Vancouver of the Rights Agent) is closed
to the public;
(l) "COMMON SHARES" means the common shares in the capital of
Riverside;
(m) "COMPANY ACT" means the COMPANY ACT (British Columbia),
R.S.B.C. 1996, c.62, as amended, and the regulations made
thereunder and any comparable or successor laws or regulations
thereto;
(n) "COMPETING PERMITTED BID" means a Take-over Bid that:
(i) is made after another Permitted Bid has been made and
prior to the expiry of that other Permitted Bid;
(ii) satisfies all components of the definition of a
Permitted Bid other than the requirements set out in
clause (ii) of the definition of a Permitted Bid; and
(iii) contains, and the take-up and payment for securities
tendered or deposited is subject to, an irrevocable
and unqualified provision that no Voting Shares will
be taken up or paid for pursuant to the Take-over Bid
prior to the close of business on a date that is no
earlier than the later of: (a) 21 days after the date
of the Take-over Bid; and (b) the sixtieth day after
the earliest date on which any other Permitted Bid
that is then in existence was made;
(o) "CONTROLLED" - a corporation is "controlled" by another Person
or two or more Persons acting jointly or in concert if:
(i) securities entitled to vote in the election of
directors carrying more than 50 per cent of the votes
for the election of directors are held, directly or
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indirectly, by or on behalf of the other Person or
two or more Persons acting jointly or in concert; and
(ii) the votes carried by such securities are entitled, if
exercised, to elect a majority of the board of
directors of such corporation;
and "controls", "controlling" and "under common control with"
shall be interpreted accordingly;
(p) "CO-RIGHTS AGENTS" has the meaning ascribed thereto in
Subsection 4.1(a);
(q) "DISPOSITION DATE" has the meaning ascribed thereto in
Subsection 5.1(a);
(r) "DIVIDEND REINVESTMENT ACQUISITION" means an acquisition of
Voting Shares of any class pursuant to a Dividend Reinvestment
Plan;
(s) "DIVIDEND REINVESTMENT PLAN" means a regular dividend
reinvestment or other program plan of Riverside made available
by Riverside to holders of its securities and/or to holders of
securities of a Subsidiary of Riverside, where such program or
plan permits the holder to direct that some or all of:
(i) dividends paid in respect of shares of any class of
Riverside or a Subsidiary;
(ii) proceeds of redemption of shares of Riverside or a
Subsidiary;
(iii) interest paid on evidences of indebtedness of
Riverside or a Subsidiary; or
(iv) optional cash payments;
be applied to the purchase of Voting Shares;
(t) "ELECTION TO EXERCISE" has the meaning ascribed thereto in
Subsection 2.2(d);
(u) "EXEMPT ACQUISITION" means a share acquisition in respect of
which the Board of Directors has waived the application of
Section 3.1 pursuant to the provisions of Subsections 5.1(a),
(b) or (e);
(v) "EXERCISE PRICE" means, as of any date, the price at which a
holder may purchase the securities issuable upon exercise of
one whole Right which, until adjustment thereof in accordance
with the terms hereof, shall be $180.00;
(w) "EXPANSION FACTOR" has the meaning ascribed thereto in
Subsection 2.3(a);
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(x) "EXPIRATION TIME" means the close of business on that date
which is the earliest date of termination of this Agreement as
provided for in Section 5.15 or, if this Agreement is
confirmed and subsequently reconfirmed pursuant to Section
5.15 at the third and sixth annual meetings following
Riverside's annual and special meeting of shareholders in
2000, the close of business on the tenth anniversary of the
Record Time;
(y) "FLIP-IN EVENT" means a transaction in or pursuant to which
any Person becomes an Acquiring Person;
(z) "HOLDER" has the meaning ascribed thereto in Section 2.8;
(aa) "INDEPENDENT SHAREHOLDERS" means holders of any Voting Shares,
other than (a) any Acquiring Person, (b) any Offeror (other
than any Person who pursuant to Clause 1.1(f) is not deemed to
Beneficially own the Voting Shares held by such Person), (c)
any Affiliate or Associate of any Acquiring Person or Offeror,
(d) any Person acting jointly or in concert with any Acquiring
Person or Offeror, and (e) any employee benefit plan, stock
purchase plan, deferred profit sharing plan and any similar
plan or trust for the benefit of employees of Riverside or a
Subsidiary of Riverside, unless the beneficiaries of the plan
or trust direct the manner in which the Voting Shares are to
be voted or withheld from voting or direct whether the Voting
Shares are to be tendered to a Take-over Bid;
(bb) "LOCK-UP AGREEMENT" means an agreement between an Offeror, any
of its Affiliates or Associates or any other Person acting
jointly or in concert with the Offeror and a Person (the
"Locked-up Person") who is not an Affiliate or Associate of
the Offeror or a Person acting jointly or in concert with the
Offeror whereby the Locked-up Person agrees to deposit or
tender the Voting Shares held by the Locked-up Person to the
Offeror's Take-over Bid or to any Take-over Bid made by any of
the Offeror's Affiliates or Associates or made by any other
Person acting jointly or in concert with the Offeror (the
"Lock-up Bid"), provided that:
(i) the agreement:
(A) permits the Locked-up Person to withdraw the
Voting Shares from the agreement in order to
tender or deposit the Voting Shares to
another Take-over Bid or to support another
transaction that contains an offering price
for each Voting Share that is higher than the
offering price contained in or proposed to be
contained in the Lock-up Bid; or
(B) (a) permits the Locked-up Person to withdraw
the Voting Shares from the agreement in order
to tender or deposit the Voting Shares to
another Take-over Bid or to support another
transaction that contains an offering price
for each Voting Share that exceeds by as much
as or more than a specified amount (the
"Specified Amount") the offering price for
each Voting Share contained in or proposed
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to be contained in the Lock-up Bid; and (b)
does not by its terms provide for a Specified
Amount that is greater than 7% of the
offering price contained in or proposed to be
contained in the Lock-up Bid;
and, for greater clarity, an agreement may contain a
right of first refusal or require a period of delay
to give an offeror an opportunity to match a higher
price in another Take-over Bid or other similar
limitation on a Locked-up Person as long as the
Locked-up Person can accept another bid or tender to
another transaction; and
(ii) no "break-up fees", "top-up fees", penalties or other
amounts that exceed in the aggregate one-half of the
cash equivalent of any amount in excess of the amount
offered under the Lock-up Bid and that the Locked-up
Person receives pursuant to another Take-over Bid or
transaction shall be payable pursuant to the
agreement in the event that the Locked-up Person
fails to tender Voting Shares pursuant thereto in
order to accept the other Take-over Bid or support
another transaction.
(cc) "MARKET PRICE" per share of any securities on any date of
determination means the average of the daily closing sale
prices per share of such class of securities (determined as
described below) on each of the 20 consecutive Trading Days
through and including the Trading Day immediately preceding
such date; provided, however, that if an event of a type
analogous to any of the events described in Section 2.3 hereof
shall have caused the closing sale prices used to determine
the Market Price on any Trading Days not to be fully
comparable with the closing sale price on such date of
determination or, if the date of determination is not a
Trading Day, on the immediately preceding Trading Day, each
such closing sale price so used shall be appropriately
adjusted in a manner analogous to the applicable adjustment
provided for in Section 2.3 hereof in order to make it fully
comparable with the closing sale price on such date of
determination or, if the date of determination is not a
Trading Day, on the immediately preceding Trading Day. The
closing sale price per share of any securities on any date
shall be:
(i) the closing board lot sale price per share or, if
such price is not available, the average of the
closing bid and asked prices, for each of such
securities as reported by the principal Canadian
securities exchange (as determined by volume of
trading) on which such securities are listed or
admitted to trading, or if for any reason neither of
such prices is available on such day or the
securities are not listed or admitted to trading on a
Canadian securities exchange, the closing board lot
sale price per share or, if such price is not
available, the average of the closing bid and asked
prices, for each security as reported by the
principal United States securities exchange (as
determined by volume of trading) on which such
securities are listed or admitted for trading;
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(ii) if for any reason none of such prices is available on
such date or the securities are not listed or
admitted to trading on a Canadian stock exchange or a
United States securities exchange, the last sale
price, or in case no sale takes place on such date,
the average of the high bid and low asked prices for
each of such securities in the over-the-counter
market, as quoted by any reporting system then in
use; or
(iii) if for any reason none of such parties is available
on such day or the securities are not listed or
admitted to trading on a Canadian stock exchange or a
United States securities exchange or quoted by any
such reporting system, the average of the closing bid
and asked prices as furnished by a professional
market maker making a market in the securities;
provided, however, that if on any such date none of such
prices is available, the closing sale price per share of such
securities on such date shall mean the fair value per share of
the securities on such date as determined by a nationally or
internationally recognized investment dealer or investment
banker and provided further that if an event of a type
analogous to any of the events described in Section 2.3 hereof
shall have caused any price used to determine the Market Place
on any Trading Day not to be fully comparable with the price
as so determined on the Trading Day immediately preceding such
date of determination, each such price so used shall be
appropriately adjusted in a manner analogous to the applicable
adjustment provided for in Section 2.3 hereof in order to make
it fully comparable with the price on the Trading Day
immediately preceding such date of determination. The Market
Price shall be expressed in Canadian dollars and, if initially
determined in respect of any day forming part of the 20
consecutive Trading Day period in question in United States
dollars, such amount shall be translated into Canadian dollars
on such date at the Canadian Dollar Equivalent thereof.
(dd) "NOMINEE" has the meaning ascribed thereto in Subsection
2.2(c);
(ee) "OFFER TO ACQUIRE" includes:
(i) an offer to purchase or a solicitation of an offer to
sell Voting Shares of any class or classes, and
(ii) an acceptance of an offer to sell Voting Shares of
any class or classes, whether or not such offer to
sell has been solicited,
or any combination thereof, and the Person accepting an offer
to sell shall be deemed to be making an Offer to Acquire to
the Person that made the offer to sell;
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(ff) "OFFEROR" means a Person who has announced, and has not
withdrawn, an intention to make or who has made, and has not
withdrawn, a Take-over Bid, other than a Person who has
completed a Permitted Bid, a Competing Permitted Bid or an
Exempt Acquisition;
(gg) "OFFEROR'S SECURITIES" means Voting Shares Beneficially owned
by an Offeror on the date of the Offer to Acquire;
(hh) "PERMITTED BID" means a Take-over Bid made by an Offeror that
is made by means of a Take-over Bid circular and which also
complies with the following additional provisions:
(i) the Take-over Bid is made to all holders of Voting
Shares as registered on the books of Riverside, other
than the Offeror;
(ii) the Take-over Bid contains, and the take-up and
payment for securities tendered or deposited is
subject to, an irrevocable and unqualified provision
that no Voting Shares will be taken up and paid for
pursuant to the Take-over Bid (A) prior to the close
of business on a date which is not less than 60 days
following the date of the Take-over Bid and (B)
unless at such date more than 50% of the Voting
Shares held by Independent Shareholders shall have
been deposited or tendered pursuant to the Take-over
Bid and not withdrawn;
(iii) unless the Take-over Bid is withdrawn, the Take-over
Bid contains an irrevocable and unqualified provision
that Voting Shares may be deposited pursuant to such
Take-over Bid at any time during the period described
in Clause 1.1(ii)(ii)(A) and that any Voting Shares
deposited pursuant to the Take-over Bid may be
withdrawn until taken up and paid for; and
(iv) unless the Take-over Bid is withdrawn, the Take-over
Bid contains an irrevocable and unqualified provision
that in the event that the deposit condition set
forth in Clause 1.1(ii)(ii)(B) is satisfied the
Offeror will make a public announcement of that fact
and the Take-over Bid will remain open for deposits
and tenders of Voting Shares for not less than 10
Business Days from the date of such public
announcement;
(ii) "PERMITTED BID ACQUISITION" means an acquisition of Voting
Shares of any class made pursuant to a Permitted Bid or a
Competing Permitted Bid;
(jj) "PERSON" includes an individual, firm, association, trustee,
executor, administrator, legal personal representative, body
corporate, corporation, trust, partnership, joint venture
syndicate or other form of unincorporated association, a
government and its agencies or instrumentalities, any entity
or group whether or not having legal personality, any
successor (by merger, statutory amalgamation or otherwise) and
any of the foregoing acting in any derivative, representative
or fiduciary capacity;
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(kk) "PRO RATA ACQUISITION" means an acquisition of Voting Shares
pursuant to: (i) a Dividend Reinvestment Acquisition; (ii) a
Dividend Reinvestment Plan; or (iii) the receipt and/or
exercise of rights issued by Riverside to all the holders of a
class of Voting Shares to subscribe for or purchase Voting
Shares, provided that such rights are acquired directly from
Riverside as part of a rights offering and not from any other
Person; or (iv) a distribution by Riverside of Voting Shares,
or securities convertible into or exchangeable for Voting
Shares (and the conversion or exchange of such convertible or
exchangeable securities) made pursuant to a prospectus or a
distribution by way of private placement by Riverside,
provided that the Person does not thereby acquire a greater
percentage of such Voting Shares, or securities convertible or
exchangeable for Voting Shares of that class, than the
Person's percentage of Voting Shares Beneficially owned
immediately prior to such acquisition;
(ll) "RECORD TIME" means 4:00 p.m. (Vancouver time) on July 20,
1999;
(mm) "REDEMPTION PRICE" has the meaning set forth in Subsection
5.1(c) of this Agreement;
(nn) "RIGHT" means a right to purchase a Common Share of Riverside,
upon the terms and subject to the conditions set forth in this
Agreement;
(oo) "RIGHTS AGENT" means Montreal Trust Company of Canada or any
successor Rights Agent appointed pursuant to Section 4.4;
(pp) "RIGHTS CERTIFICATE" means the certificates representing the
Rights after the Separation Time, which shall be substantially
in the form attached hereto as Attachment 1;
(qq) "RIGHTS HOLDERS' SPECIAL MEETING" means a meeting of the
holders of Rights called by the Board of Directors for the
purpose of approving a supplement or amendment to this
Agreement pursuant to Subsection 5.4(c);
(rr) "RIGHTS REGISTER" and "RIGHTS REGISTRAR" have the meanings
ascribed thereto in Subsection 2.7(a);
(ss) "RIVERSIDE" means Riverside Forest Products Limited together,
where the context requires, with its subsidiaries;
(tt) "SECURITIES ACT (BRITISH COLUMBIA)" means the Securities Act,
R.S.B.C. 1996, c.418, as amended, and the regulations and
rules thereunder, and any comparable or successor laws or
regulations or rules thereto;
(uu) "SECURITIES ACT (ONTARIO)" means the SECURITIES ACT, R.S.O.
1990, c.S.5, as amended, and the regulations and rules
thereunder, and any comparable or successor laws or
regulations or rules thereto;
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(vv) "SEPARATION TIME" means the close of business on the tenth
Trading Day after the earlier of:
(i) the Stock Acquisition Date;
(ii) the date of the commencement of or first public
announcement of the intent of any Person (other than
Riverside or any Subsidiary of Riverside) to commence
a Take-over Bid (other than a Permitted Bid or a
Competing Permitted Bid, as the case may be); and
(iii) the date upon which a Permitted Bid or Competing
Permitted Bid ceases to be such,
or such later date as may be determined by the Board of
Directors, provided that, if any such Take-over Bid expires,
is cancelled, terminated or otherwise withdrawn prior to the
Separation Time, such Take-over Bid shall be deemed, for the
purposes of this definition, never to have been made;
(ww) "SPECIAL MEETING" means a special meeting of the holders of
Voting Shares, called by the Board of Directors for the
purpose of approving a supplement, amendment or variation to
this Agreement pursuant to Subsection 5.4(b) or Subsection
5.4(c);
(xx) "STOCK ACQUISITION DATE" means the first date of public
announcement (which, for purposes of this definition, shall
include, without limitation, a report filed pursuant to
section 111 of the SECURITIES ACT (British Columbia) or
section 101 of the SECURITIES ACT (Ontario)) by Riverside or
an Acquiring Person that an Acquiring Person has become such;
(yy) "SUBSIDIARY" - a corporation is a Subsidiary of another
corporation if:
(i) it is controlled by:
(A) that other, or
(B) that other and one or more corporations each
of which is controlled by that other, or
(C) two or more corporations each of which is
controlled by that other, or
(ii) it is a Subsidiary of a corporation that is that
other's Subsidiary;
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(zz) "TAKE-OVER BID" means an Offer to Acquire Voting Shares of any
class, or securities convertible into Voting Shares if,
assuming that the Voting Shares or convertible securities
subject to the Offer to Acquire are acquired and are
Beneficially Owned at the date of such Offer to Acquire by the
Person making such Offer to Acquire, such Voting Shares
(including Voting Shares that may be acquired upon conversion
of securities convertible into Voting Shares) together with
the Offeror's Securities constitute in the aggregate 20 per
cent or more of either the outstanding Voting Shares of that
particular class at the date of the offer to Acquire;
(aaa) "TRADING DAY", when used with respect to any securities, means
a day on which the principal Canadian securities exchange on
which such securities are listed or admitted to trading is
open for the transaction of business or, if the securities are
not listed or admitted to trading on any Canadian securities
exchange, a day on which the principal United States
securities exchange on which such securities are listed or
admitted to trading is open for the transaction of business
or, if the securities are not listed or admitted to trading on
any Canadian or United States securities exchange, a Business
Day;
(bbb) "U.S. - Canadian Exchange Rate" means, on any date:
(i) if on such date the Bank of Canada sets an average
noon spot rate of exchange for the conversion of one
United States dollar into Canadian dollars, such
rate; and
(ii) in any other case, the rate for such date for the
conversion of one United States dollar into Canadian
dollars calculated in such manner as may be
determined by the Board of Directors from time to
time acting in good faith;
(ccc) "U.S. DOLLAR EQUIVALENT" of any amount which is expressed in
Canadian dollars means, on any date, the United States dollar
equivalent of such amount determined by multiplying such
amount by the Canadian - U.S. Exchange Rate in effect on such
date;
(ddd) "VOTING SHARES" means the Common Shares of Riverside and any
other shares in the capital of Riverside entitled to vote in
the election of directors.
1.2 CURRENCY
All sums of money which are referred to in this Agreement are expressed in
lawful money of Canada, unless otherwise specified.
1.3 HEADINGS
The division of this Agreement into articles, sections, subsections, clauses,
paragraphs, subparagraphs or other portions hereof and the insertion of
headings, subheadings and a table of
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contents are for convenience of reference only and shall not affect the
construction or interpretation of this Agreement.
1.4 CALCULATION OF NUMBER AND PERCENTAGE OF BENEFICIAL OWNERSHIP OF
OUTSTANDING VOTING SHARES
For purposes of this Agreement, the percentage of Voting Shares of any class
Beneficially owned by any Person, shall be and be deemed to be the product
(expressed as a percentage) determined by the formula:
100 x A/B
where:
A = the number of votes for the election of all directors on the
Board of Directors generally attaching to the Voting Shares of
that class Beneficially owned by such Person; and
B = the number of votes for the election of all directors on the
Board of Directors generally attaching to all outstanding
Voting Shares of such class.
Where any Person is deemed to Beneficially own unissued Voting Shares, such
Voting Shares shall be deemed to be outstanding for the purpose of calculating
the percentage of Voting Shares owned by such Person.
1.5 ACTING JOINTLY OR IN CONCERT
For purposes of this Agreement, a Person is acting jointly or in concert with
every Person who, as a result of any agreement, commitment or understanding,
whether formal or informal, with the first Person, acquires or offers to acquire
Voting Shares (other than customary agreements with and between underwriters
and/or banking group members and/or selling group members with respect to a
public offering or private placement of securities or pledges of securities in
the ordinary course of business).
1.6 GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
Wherever in this Agreement reference is made to generally accepted accounting
principles, such reference shall be deemed to be the recommendations at the
relevant time of the Canadian Institute of Chartered Accountants, or any
successor institute, applicable on a consolidated basis (unless otherwise
specifically provided herein to be applicable on an unconsolidated basis) as at
the date on which a calculation is made or required to be made in accordance
with generally accepted accounting principles. Where the character or amount of
any asset or liability or item of revenue or expense is required to be
determined, or any consolidation or other accounting computation is required to
be made for the purpose of this Agreement or any document, such determination or
calculation shall, to the extent applicable and except as otherwise specified
herein or as otherwise agreed in writing by the parties, be made in accordance
with generally accepted accounting principles applied on a consistent basis.
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ARTICLE 2 - THE RIGHTS
2.1 LEGEND ON COMMON SHARE CERTIFICATES
(a) Common Share Certificates that are issued after the Record
Time but prior to the earlier of the Separation Time and the
Expiration Time, shall also evidence one Right for each Common
Share represented thereby and shall have impressed on, printed
on, written on or otherwise affixed to them the following
legend:
Until the Separation Time (defined in the Shareholder
Rights Plan Agreement referred to below), this
certificate also evidences rights of the holder
described in a Shareholder Rights Plan Agreement,
dated as of July 20, 1999 (the "Shareholder Rights
Plan Agreement"), between Riverside Forest Products
Limited (the "Corporation") and Montreal Trust
Company of Canada, the terms of which are
incorporated herein by reference and a copy of which
is on file at the principal executive offices of the
Corporation. Under certain circumstances set out in
the Shareholder Rights Plan Agreement, the rights may
expire, may become null and void or may be evidenced
by separate certificates and no longer evidenced by
this certificate. The Corporation will mail or
arrange for the mailing of a copy of the Shareholder
Rights Plan Agreement to the holder of this
certificate without charge as soon as practicable
after the receipt of a written request therefor.
Certificates representing Common Shares that are issued and
outstanding at the Record Time shall also evidence one Right
for each Common Share evidenced thereby, notwithstanding the
absence of the foregoing legend, until the close of business
on the earlier of the Separation Time and the Expiration Time.
2.2 INITIAL EXERCISE PRICE; EXERCISE OF RIGHTS; DETACHMENT OF RIGHTS
(a) Subject to adjustment as herein set forth, each Right will
entitle the holder thereof, from and after the Separation Time
and prior to the Expiration Time, to purchase one Common Share
for the Exercise Price (with the Exercise Price and number of
Common Shares being subject to adjustment as set forth below).
Notwithstanding any other provision of this Agreement, any
Rights held by Riverside or any of its Subsidiaries shall be
void.
(b) Until the Separation Time,
(i) the Rights shall not be exercisable and no Right may
be exercised; and
(ii) each Right will be evidenced by the certificate for
the associated Common Share of Riverside registered
in the name of the holder thereof (which
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certificate shall also be deemed to represent a
Rights Certificate) and will be transferable only
together with, and will be transferred by a transfer
of, such associated Common Share of Riverside.
(c) From and after the Separation Time and prior to the Expiration
Time:
(i) the Rights shall be exercisable; and
(ii) the registration and transfer of Rights shall be
separate from and independent of Common Shares of
Riverside.
Promptly following the Separation Time, Riverside will prepare
and the Rights Agent will mail to each holder of record of
Common Shares as of the Separation Time (other than an
Acquiring Person, any other Person whose Rights are or become
void pursuant to the provisions of subsection 3.1(b) and, in
respect of any Rights Beneficially owned by such Acquiring
Person which are not held of record by such Acquiring Person,
the holder of record of such Rights (a "Nominee")), at such
holder's address as shown by the records of Riverside
(Riverside hereby agreeing to furnish copies of such records
to the Rights Agent for this purpose):
(A) a Rights Certificate in substantially the form set
out in Attachment 1 hereof appropriately completed,
representing the number of Rights held by such holder
at the Separation Time and having such marks of
identification or designation and such legends,
summaries or endorsements printed thereon as
Riverside may deem appropriate and as are not
inconsistent with the provisions of this Agreement,
or as may be required to comply with any law, rule or
regulation or judicial or administrative order or
with any rule or regulation of any self-regulatory
organization, stock exchange or quotation system on
which the Rights may from time to time be listed or
traded, or to conform to usage; and
(B) a description of the Rights,
provided that a Nominee shall be sent the materials provided
for in (A) and (B) in respect of all Common Shares of
Riverside held of record by it which are not Beneficially
owned by an Acquiring Person. In order for Riverside to
determine whether any Person is holding Common Shares which
are Beneficially owned by another Person, Riverside may
require such first mentioned Person to furnish such
information and documentation as Riverside deems necessary or
appropriate in order to make such determination.
(d) Rights may be exercised, in whole or in part, on any Business
Day after the Separation Time and prior to the Expiration Time
by submitting to the Rights Agent in the manner specified in
the Rights Certificate:
(i) the Rights Certificate evidencing such Rights;
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(ii) an election to exercise such Rights (an "Election to
Exercise") substantially in the form attached to the
Rights Certificate appropriately completed and
executed by the holder or his executors or
administrators or other personal representatives or
his or their legal attorney duly appointed by an
instrument in writing in form and executed in a
manner satisfactory to the Rights Agent; and
(iii) payment by certified cheque, banker's draft or money
order payable to the order of Riverside, of a sum
equal to the Exercise Price multiplied by the number
of Rights being exercised and a sum sufficient to
cover any transfer tax or charge which may be payable
in respect of any transfer involved in the transfer
or delivery of Rights Certificates or the issuance or
delivery of certificates for Common Shares in a name
other than that of the holder of the Rights being
exercised.
(e) Upon receipt of a Rights Certificate, together with a
completed Election to Exercise executed in accordance with
Clause 2.2(d)(ii), which does not indicate that such Right is
null and void as provided by Subsection 3.1(b), and payment as
set forth in Clause 2.2(d)(iii), the Rights Agent (unless
otherwise instructed by Riverside in the event that Riverside
is of the opinion that the Rights cannot be exercised in
accordance with this Agreement) will thereupon promptly:
(i) requisition from the transfer agent certificates
representing the number of such Common Shares to be
purchased (Riverside hereby irrevocably authorizing
its transfer agents to comply with all such
requisitions);
(ii) when appropriate, requisition from Riverside the
amount of cash to be paid in lieu of issuing
fractional Common Shares;
(iii) after receipt of the certificates referred to in
Clause 2.2(e)(i), deliver the same to or upon the
order of the registered holder of such Rights
Certificates, registered in such name or names as may
be designated by such holder;
(iv) when appropriate, after receipt, deliver the cash
referred to in Clause 2.2(e)(ii) to or to the order
of the registered holder of such Rights Certificate;
and
(v) tender to Riverside all payments received on the
exercise of the Rights.
(f) In case the holder of any Rights shall exercise less than all
the Rights evidenced by such holder's Rights Certificate, a
new Rights Certificate evidencing the Rights remaining
unexercised (subject to the provisions of Subsection 5.5(a))
will be issued by the Rights Agent to such holder or to such
holder's duly authorized assigns.
(g) Riverside covenants and agrees that it will:
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(i) take all such action as may be necessary and within
its power to ensure that all Common Shares delivered
upon exercise of Rights shall, at the time of
delivery of the certificates for such Common Shares
(subject to payment of the Exercise Price), be duly
authorized, validly issued and fully paid and
non-assessable;
(ii) take all such action as may be necessary and within
its power to comply with the requirements of the
COMPANY ACT, the SECURITIES ACT (British Columbia),
the SECURITIES ACT (Ontario) and the securities laws
or comparable legislation of each of the provinces of
Canada and any other applicable law, rule or
regulation, in connection with the issuance and
delivery of the Rights Certificates and the issuance
of any Common Shares upon exercise of Rights;
(iii) use reasonable efforts to cause all Common Shares
issued upon exercise of Rights to be listed on the
principal stock exchanges on which such Common Shares
were traded immediately prior to the Stock
Acquisition Date;
(iv) pay when due and payable, if applicable, any and all
Canadian and United States federal, provincial, state
and municipal transfer taxes and charges (not
including any income or capital taxes of the holder
or exercising holder or any liability of Riverside to
withhold tax) which may be payable in respect of the
original issuance or delivery of the Rights
Certificates, or certificates for Common Shares to be
issued upon exercise of any Rights, provided that
Riverside shall not be required to pay any transfer
tax or charge which may be payable in respect of any
transfer involved in the transfer or delivery of
Rights Certificates or the issuance or delivery of
certificates for Common Shares in a name other than
that of the holder of the Rights being transferred or
exercised; and
(v) after the Separation Time, except as permitted by
Section 5.1, not take (or permit any Subsidiary to
take) any action if at the time such action is taken
it is reasonably foreseeable that such action will
diminish substantially or otherwise eliminate the
benefits intended to be afforded by the Rights.
2.3 ADJUSTMENTS TO EXERCISE PRICE; NUMBER OF RIGHTS
The Exercise Price, the number and kind of securities subject to purchase upon
exercise of each Right and the number of Rights outstanding are subject to
adjustment from time to time as provided in this Section 2.3.
(a) In the event Riverside shall at any time after the date of the
Record Time and prior to the Expiration Time:
(i) declare or pay a dividend on Common Shares payable in
Common Shares (or other securities exchangeable for
or convertible into or giving a right to
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acquire Common Shares or other securities of
Riverside) other than pursuant to any Dividend
Reinvestment Plan;
(ii) subdivide or change the then outstanding Common
Shares into a greater number of Common Shares;
(iii) consolidate or change the then outstanding Common
Shares into a smaller number of Common Shares; or
(iv) issue any Common Shares (or other securities
exchangeable for or convertible into or giving a
right to acquire Common Shares or other securities of
Riverside) in respect of, in lieu of or in exchange
for existing Common Shares except as otherwise
provided in this Section 2.3,
the Exercise Price and the number of Rights outstanding, or,
if the payment or effective date therefor shall occur after
the Separation Time, the securities purchasable upon exercise
of Rights, shall be adjusted as of the payment or effective
date in the manner set forth below. If an event occurs which
would require an adjustment under both this Section 2.3 and
subsection 3.1(a), the adjustment provided for in this Section
2.3 shall be in addition to, and shall be made prior to, any
adjustment required under subsection 3.1(a).
If the Exercise Price and number of Rights outstanding are to
be adjusted:
(i) the Exercise Price in effect after such adjustment
will be equal to the Exercise Price in effect
immediately prior to such adjustment divided by the
number of Common Shares (or other capital stock) (the
"Expansion Factor") that a holder of one Common Share
immediately prior to such dividend, subdivision,
change, consolidation or issuance would hold
thereafter as a result thereof; and
(ii) each Right held prior to such adjustment will become
that number of Rights equal to the Expansion Factor,
and the adjusted number of Rights will be deemed to be
distributed among the Common Shares with respect to which the
original Rights were associated (if they remain outstanding)
and the shares issued in respect of such dividend,
subdivision, change, consolidation or issuance, so that each
such Common Share (or other capital stock) will have exactly
one Right associated with it.
For greater certainty, if the securities purchasable upon
exercise of Rights are to be adjusted, the securities
purchasable upon exercise of each Right after such adjustment
will be the securities that a holder of the securities
purchasable upon exercise of one Right immediately prior to
such dividend, subdivision, change, consolidation or issuance
would hold thereafter as a result of such dividend,
subdivision, change, consolidation or issuance.
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If, after the Record Time and prior to the Expiration Time,
Riverside shall issue any shares of capital stock other than
Common Shares in a transaction of a type described in Clause
2.3(a)(i) or (iv), shares of such capital stock shall be
treated herein as nearly equivalent to Common Shares as may be
practicable and appropriate under the circumstances and
Riverside and the Rights Agent agree to amend this Agreement
in order to effect such treatment.
In the event Riverside shall at any time after the Record Time
and prior to the Separation Time issue any Common Shares
otherwise than in a transaction referred to in this Subsection
2.3(a), each such Common Share so issued shall automatically
have one new Right associated with it, which Right shall be
evidenced by the certificate representing such associated
Common Share.
(b) In the event Riverside shall at any time after the Record Time
and prior to the Separation Time fix a record date for the
issuance of rights, options or warrants to all holders of
Common Shares entitling them (for a period expiring within 45
calendar days after such record date) to subscribe for or
purchase Common Shares (or securities convertible into or
exchangeable for or carrying a right to purchase Common
Shares) at a price per Common Share (or, if a security
convertible into or exchangeable for or carrying a right to
purchase or subscribe for Common Shares, having a conversion,
exchange or exercise price, including the price required to be
paid to purchase such convertible or exchangeable security or
right per share) less than the Market Price per Common Share
on such record date, the Exercise Price to be in effect after
such record date shall be determined by multiplying the
Exercise Price in effect immediately prior to such record date
by a fraction:
(i) the numerator of which shall be the number of Common
Shares outstanding on such record date, plus the
number of Common Shares that the aggregate offering
price of the total number of Common Shares so to be
offered (and/or the aggregate initial conversion,
exchange or exercise price of the convertible or
exchangeable securities or rights so to be offered,
including the price required to be paid to purchase
such convertible or exchangeable securities or
rights) would purchase at such Market Price per
Common Share; and
(ii) the denominator of which shall be the number of
Common Shares outstanding on such record date, plus
the number of additional Common Shares to be offered
for subscription or purchase (or into which the
convertible or exchangeable securities or rights so
to be offered are initially convertible, exchangeable
or exercisable).
In case such subscription price may be paid by delivery of
consideration, part or all of which may be in a form other
than cash, the value of such consideration shall be as
determined in good faith by the Board of Directors, whose
determination shall be described in a statement filed with the
Rights Agent and shall be binding on the Rights Agent and the
holders of Rights. Such adjustment
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shall be made successively whenever such a record date is
fixed, and in the event that such rights, options or warrants
are not so issued, or if issued, are not exercised prior to
the expiration thereof, the Exercise Price shall be readjusted
to the Exercise Price which would then be in effect if such
record date had not been fixed, or to the Exercise Price which
would be in effect based upon the number of Common Shares (or
securities convertible into, or exchangeable or exercisable
for Common Shares) actually issued upon the exercise of such
rights, options or warrants, as the case may be.
For purposes of this Agreement, the granting of the right to
purchase Common Shares (whether from treasury or otherwise)
pursuant to a Dividend Reinvestment Plan or any employee
benefit, stock option or similar plans shall be deemed not to
constitute an issue of rights, options or warrants by
Riverside; provided, however, that, in all such cases, the
right to purchase Common Shares is at a price per share of not
less than 95% of the current market price per share
(determined as provided in such plans) of the Common Shares.
(c) In the event Riverside shall at any time after the Record Time
and prior to the Separation Time fix a record date for the
making of a distribution to all holders of Common Shares
(including any such distribution made in connection with a
merger or amalgamation) of evidences of indebtedness, cash
(other than an annual cash dividend or a dividend referred to
in Section 2.3(a)(i), but including any dividend payable in
securities other than Common Shares), assets or rights,
options or warrants (excluding those referred to in Subsection
2.3(b) hereof), the Exercise Price to be in effect after such
record date shall be determined by multiplying the Exercise
Price in effect immediately prior to such record date by a
fraction:
(i) the numerator of which shall be the Market Price per
Common Share on such record date, less the fair
market value (as determined in good faith by the
Board of Directors, whose determination shall be
described in a statement filed with the Rights Agent
and shall be binding on the Rights Agent and the
holders of Rights), on a per share basis, of the
portion of the cash, assets, evidences of
indebtedness, rights, options or warrants so to be
distributed; and
(ii) the denominator of which shall be such Market Price
per Common Share.
Such adjustments shall be made successively whenever such a
record date is fixed, and in the event that such a
distribution is not so made, the Exercise Price shall be
adjusted to be the Exercise Price which would have been in
effect if such record date had not been fixed.
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(d) Notwithstanding anything herein to the contrary, no adjustment
in the Exercise Price shall be required unless such adjustment
would require an increase or decrease of at least 1% in the
Exercise Price; provided, however, that any adjustments which
by reason of this Subsection 2.3(d) are not required to be
made shall be carried forward and taken into account in any
subsequent adjustment. All calculations under Section 2.3
shall be made to the nearest cent or to the nearest
ten-thousandth of a share. Notwithstanding the first sentence
of this Subsection 2.3(d), any adjustment required by Section
2.3 shall be made no later than the earlier of:
(i) three years from the date of the transaction which
gives rise to such adjustment; or
(ii) the Expiration Date.
(e) In the event Riverside shall at any time after the Record Time
and prior to the Separation Time issue any shares of capital
stock (other than Common Shares), or rights, options or
warrants to subscribe for or purchase any such capital stock,
or securities convertible into or exchangeable for any such
capital stock in a transaction referred to in Clauses
2.3(a)(i) or (iv) above, if the Board of Directors acting in
good faith determines that the adjustments contemplated by
Subsections 2.3(a), (b) and (c) above in connection with such
transaction will not appropriately protect the interests of
the holders of Rights, the Board of Directors may determine
what other adjustments to the Exercise Price, number of Rights
and/or securities purchasable upon exercise of Rights would be
appropriate and, notwithstanding Subsections 2.3(a), (b) and
(c) above, such adjustments, rather than the adjustments
contemplated by Subsections 2.3(a), (b) and (c) above, shall
be made, subject to the prior consent of the holders of the
Voting Shares or the Rights as set forth in subsection 5.4(b)
or (c), and Riverside and the Rights Agent shall have
authority upon receiving such consent to amend this Agreement
as appropriate to provide for such adjustments.
(f) Each Right originally issued by Riverside subsequent to any
adjustment made to the Exercise Price hereunder shall evidence
the right to purchase, at the adjusted Exercise Price, the
number of Common Shares purchasable from time to time
hereunder upon exercise of a Right immediately prior to such
issue, all subject to further adjustment as provided for
herein.
(g) Irrespective of any adjustment or change in the Exercise Price
or the number of Common Shares issuable upon the exercise of
the Rights, the Rights Certificates theretofore and thereafter
issued may continue to express the Exercise Price per Common
Share and the number of Common Shares which were expressed in
the initial Rights Certificates issued hereunder.
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(h) In any case in which this Section 2.3 shall require that an
adjustment in the Exercise Price be made effective as of a
record date for a specified event, Riverside may elect to
defer until the occurrence of such event the issuance to the
holder of any Right exercised after such record date the
number of Common Shares and other securities of Riverside, if
any, issuable upon such exercise over and above the number of
Common Shares and other securities of Riverside, if any,
issuable upon such exercise on the basis of the Exercise Price
in effect prior to such adjustment; provided, however, that
Riverside shall deliver to such holder an appropriate
instrument evidencing such holder's right to receive such
additional shares (fractional or otherwise) or other
securities upon the occurrence of the event requiring such
adjustment.
(i) Notwithstanding anything contained in this Section 2.3 to the
contrary, Riverside shall be entitled to make such reductions
in the Exercise Price, in addition to those adjustments
expressly required by this Section 2.3, as and to the extent
that in their good faith judgment the Board of Directors shall
determine to be advisable, in order that any:
(i) consolidation or subdivision of Common Shares;
(ii) issuance (wholly or in part for cash) of Common
Shares or securities that by their terms are
convertible into or exchangeable for Common Shares;
(iii) stock dividends; or
(iv) issuance of rights, options or warrants referred to
in this Section 2.3,
hereafter made by Riverside to holders of its Common Shares,
shall not be taxable to such shareholders.
(j) If, as a result of an adjustment made pursuant to Section 3.1,
the holder of any Right thereafter exercised shall become
entitled to receive any securities other than Common Shares,
thereafter the number of such other securities so receivable
upon exercise of any Right and the applicable Exercise Price
thereof shall be subject to adjustment from time to time in a
manner and on terms as nearly equivalent as may be practicable
to the provisions with respect to the Common Shares contained
in the foregoing subsections of this Section 2.4 and the
provisions of this Agreement with respect to the Common Shares
shall apply on like terms to any such other securities.
(k) Whenever an adjustment to the Exercise Price or a change in
the securities purchasable upon the exercise of Rights is made
pursuant to this Section 2.3, the Corporation shall promptly:
(i) prepare a certificate setting forth such adjustment
and a brief statement of the facts accounting for
such adjustment;
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(ii) file with the Rights Agent and with each transfer
agent for the Common Shares, a copy of such
certificate; and
(iii) cause notice of the particulars of such adjustment or
change to be given to the holders of the Rights.
Failure to file such certificate or to cause such notice to be
given as aforesaid, or any defect therein, shall not affect
the validity of any such adjustment or change.
2.4 DATE ON WHICH EXERCISE IS EFFECTIVE
Each Person in whose name any certificate for Common Shares or other securities,
if applicable, is issued upon the exercise of Rights shall for all purposes be
deemed to have become the holder of record of the Common Shares or other
securities, if applicable, represented thereon, and such certificate shall be
dated the date upon which the Rights Certificate evidencing such Rights was duly
surrendered in accordance with Subsection 2.2(d) (together with a duly completed
Election to Exercise) and payment of the Exercise Price for such Rights (and any
applicable transfer taxes and other governmental charges payable by the
exercising holder hereunder) was made; provided, however, that if the date of
such surrender and payment is a date upon which the Common Share transfer books
of Riverside are closed, such Person shall be deemed to have become the record
holder of such shares on, and such certificate shall be dated, the next
succeeding Business Day on which the Common Share transfer books of Riverside
are open.
2.5 EXECUTION, AUTHENTICATION, DELIVERY AND DATING OF RIGHTS CERTIFICATES
(a) The Rights Certificates shall be executed on behalf of
Riverside by its Chairman of the Board, President or Chief
Operating Officer and by its Secretary or one of its Assistant
Secretaries under the corporate seal of Riverside reproduced
thereon. The signature of any of these officers on the Rights
Certificates may be manual or facsimile. Rights Certificates
bearing the manual or facsimile signatures of individuals who
were at any time the proper officers of Riverside shall bind
Riverside, notwithstanding that such individuals or any of
them have ceased to hold such offices either before or after
the countersignature and delivery of such Rights Certificates.
(b) Promptly after Riverside learns of the Separation Time,
Riverside will notify the Rights Agent of such Separation Time
and will deliver Rights Certificates executed by Riverside to
the Rights Agent for countersignature, and the Rights Agent
shall countersign (in a manner satisfactory to Riverside) and
send such Rights Certificates to the holders of the Rights
pursuant to Subsection 2.2(c) hereof. No Rights Certificate
shall be valid for any purpose until countersigned by the
Rights Agent as aforesaid.
(c) Each Rights Certificate shall be dated the date of
countersignature thereof.
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2.6 REGISTRATION, TRANSFER AND EXCHANGE
(a) Riverside will cause to be kept a register (the "Rights
Register") in which, subject to such reasonable regulations as
it may prescribe, Riverside will provide for the registration
and transfer of Rights. The Rights Agent is hereby appointed
registrar for the Rights (the "Rights Registrar") for the
purpose of maintaining the Rights Register for Riverside and
registering Rights and transfers of Rights as herein provided
and the Rights Agent hereby accepts such appointment. In the
event that the Rights Agent shall cease to be the Rights
Registrar, the Rights Agent will have the right to examine the
Rights Register at all reasonable times.
After the Separation Time and prior to the Expiration Time,
upon surrender for registration of transfer or exchange of any
Rights Certificate, and subject to the provisions of
Subsection 2.6(c), Riverside will execute, and the Rights
Agent will countersign and deliver, in the name of the holder
or the designated transferee or transferees, as required
pursuant to the holder's instructions, one or more new Rights
Certificates evidencing the same aggregate number of Rights as
did the Rights Certificates so surrendered.
(b) All Rights issued upon any registration of transfer or
exchange of Rights Certificates shall be the valid obligations
of Riverside, and such Rights shall be entitled to the same
benefits under this Agreement as the Rights surrendered upon
such registration of transfer or exchange.
(c) Every Rights Certificate surrendered for registration of
transfer or exchange shall be duly endorsed, or be accompanied
by a written instrument of transfer in form satisfactory to
Riverside or the Rights Agent, as the case may be, duly
executed by the holder thereof or such holder's attorney duly
authorized in writing. As a condition to the issuance of any
new Rights Certificate under this Section 2.6, Riverside may
require the payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in relation
thereto and any other expenses (including the reasonable fees
and expenses of the Rights Agent) connected therewith.
(d) Riverside shall not be required to register the transfer or
exchange of any Rights after the Rights have been terminated
pursuant to the provisions of this Agreement.
2.7 MUTILATED, DESTROYED, LOST AND STOLEN RIGHTS CERTIFICATES
(a) If any mutilated Rights Certificate is surrendered to the
Rights Agent prior to the Expiration Time, Riverside shall
execute and the Rights Agent shall countersign and deliver in
exchange therefor a new Rights Certificate evidencing the same
number of Rights as did the Rights Certificate so surrendered.
(b) If there shall be delivered to Riverside and the Rights Agent
prior to the Expiration Time:
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(i) evidence to their reasonable satisfaction of the
destruction, loss or theft of any Rights Certificate;
and
(ii) such security or indemnity as may be reasonably
required by them to save each of them and any of
their agents harmless,
then, in the absence of notice to Riverside or the Rights
Agent that such Rights Certificate has been acquired by a BONA
FIDE purchaser, Riverside shall execute and upon Riverside's
request the Rights Agent shall countersign and deliver, in
lieu of any such destroyed, lost or stolen Rights Certificate,
a new Rights Certificate evidencing the same number of Rights
as did the Rights Certificate so destroyed, lost or stolen.
(c) As a condition to the issuance of any new Rights Certificate
under this Section 2.7, Riverside may require the payment of a
sum sufficient to cover any tax or other governmental charge
that may be imposed in relation thereto and any other expenses
(including the reasonable fees and expenses of the Rights
Agent) connected therewith.
(d) Every new Rights Certificate issued pursuant to this Section
2.7 in lieu of any destroyed, lost or stolen Rights
Certificate shall evidence the contractual obligation of
Riverside, whether or not the destroyed, lost or stolen Rights
Certificate shall be at any time enforceable by anyone, and
shall be entitled to all the benefits of this Agreement
equally and proportionately with any and all other Rights duly
issued hereunder.
2.8 PERSONS DEEMED OWNERS OF RIGHTS
Riverside, the Rights Agent and any agent of Riverside or the Rights Agent may
deem and treat the Person in whose name a Rights Certificate (or, prior to the
Separation Time, the associated Common Share certificate) is registered as the
absolute owner thereof and of the Rights evidenced thereby for all purposes
whatsoever. As used in this Agreement, unless the context otherwise requires,
the term "holder" of any Rights shall mean the registered holder of such Rights
(or, prior to the Separation Time, of the associated Common Share).
2.9 DELIVERY AND CANCELLATION OF CERTIFICATES
All Rights Certificates surrendered upon exercise or for redemption,
registration of transfer or exchange shall, if surrendered to any Person other
than the Rights Agent, be delivered to the Rights Agent and, in any case, shall
be promptly cancelled by the Rights Agent. Riverside may at any time deliver to
the Rights Agent for cancellation any Rights Certificates previously
countersigned and delivered hereunder which Riverside may have acquired in any
manner whatsoever, and all Rights Certificates so delivered shall be promptly
cancelled by the Rights Agent. No Rights Certificate shall be countersigned in
lieu of or in exchange for any Rights Certificates cancelled as provided in this
Section 2.10, except as expressly permitted by this Agreement. The Rights Agent
shall, subject to applicable laws, destroy all cancelled Rights Certificates and
deliver a certificate of destruction to Riverside.
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2.10 AGREEMENT OF RIGHTS HOLDERS
Every holder of Rights, by accepting the same, consents and agrees with
Riverside and the Rights Agent and with every other holder of Rights:
(a) to be bound by and subject to the provisions of this
Agreement, as amended from time to time in accordance with the
terms hereof, in respect of all Rights held;
(b) that prior to the Separation Time, each Right will be
transferable only together with, and will be transferred by a
transfer of, the associated Common Share certificate
representing such Right;
(c) that after the Separation Time, the Rights Certificates will
be transferable only on the Rights Register as provided
herein;
(d) that prior to due presentment of a Rights Certificate (or,
prior to the Separation Time, the associated Common Share
certificate) for registration of transfer, Riverside, the
Rights Agent and any agent of Riverside or the Rights Agent
may deem and treat the Person in whose name the Rights
Certificate (or, prior to the Separation Time, the associated
Common Share certificate) is registered as the absolute owner
thereof and of the Rights evidenced thereby (notwithstanding
any notations of ownership or writing on such Rights
Certificate or the associated Common Share certificate made by
anyone other than Riverside or the Rights Agent) for all
purposes whatsoever, and neither Riverside nor the Rights
Agent shall be affected by any notice to the contrary;
(e) that such holder of Rights has waived his right to receive any
fractional Rights or any fractional shares or other securities
upon exercise of a Right (except as provided herein);
(f) that without the approval of any holder of Rights or Voting
Shares and upon the sole authority of the Board of Directors,
this Agreement may be supplemented or amended from time to
time pursuant to Subsection 5.4(a) and the last sentence of
the penultimate paragraph of Subsection 2.3(a); and
(g) that notwithstanding anything in this Agreement to the
contrary, neither Riverside nor the Rights Agent shall have
any liability to any holder of a Right or to any other Person
as a result of its inability to perform any of its obligations
under this Agreement by reason of any preliminary or permanent
injunction or other order, decree or ruling issued by a court
of competent jurisdiction or by a government, regulatory or
administrative agency or commission, or any statute, rule,
regulation or executive order promulgated or enacted by any
governmental authority, prohibiting or otherwise restraining
performance of such obligation.
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2.11 RIGHTS CERTIFICATE HOLDER NOT DEEMED A SHAREHOLDER
No holder, as such, of any Rights or Rights Certificate shall be entitled to
vote, receive dividends or be deemed for any purpose whatsoever the holder of
any Common Share or any other share or security of Riverside which may at any
time be issuable on the exercise of the Rights represented thereby, nor shall
anything contained herein or in any Rights Certificate be construed or deemed or
confer upon the holder of any Right or Rights Certificate, as such, any right,
title, benefit or privilege of a holder of Common Shares or any other shares or
securities of Riverside or any right to vote at any meeting of shareholders of
Riverside whether for the election of directors or otherwise or upon any matter
submitted to holders of Common Shares or any other shares of Riverside at any
meeting thereof, or to give or withhold consent to any action of Riverside, or
to receive notice of any meeting or other action affecting any holder of Common
Shares or any other shares of Riverside except as expressly provided herein, or
to receive dividends, distributions or subscription rights, or otherwise, until
the Right or Rights evidenced by Rights Certificates shall have been duly
exercised in accordance with the terms and provisions hereof.
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ARTICLE 3 - ADJUSTMENTS TO THE RIGHTS IN THE EVENT OF CERTAIN TRANSACTIONS
3.1 FLIP-IN EVENT
(a) Subject to Subsection 3.1 (b) and Section 5.1, in the event
that prior to the Expiration Time a Flip-in Event shall occur,
each Right shall constitute, effective at the close of
business on the tenth Trading Day after the Stock Acquisition
Date, the right to purchase from Riverside, upon exercise of
the Right in accordance with the terms of this Agreement, that
number of Common Shares having an aggregate Market Price on
the date of consummation or occurrence of such Flip-in Event
equal to twice the Exercise Price for an amount in cash equal
to the Exercise Price (such right to be appropriately adjusted
in a manner analogous to the applicable adjustment provided
for in Section 2.4 in the event that after the consummation or
occurrence or event, an event of a type analogous to any of
the events described in Section 2.4 shall have occurred);
(b) Notwithstanding anything in this Agreement to the contrary,
upon the occurrence of any Flip-in Event, any Rights that are
or were Beneficially owned on or after the earlier of the
Separation Time or the Stock Acquisition Date by:
(i) an Acquiring Person (or any Affiliate or Associate of
an Acquiring Person or any Person acting jointly or
in concert with an Acquiring Person or any Affiliate
or Associate of an Acquiring Person); or
(ii) a transferee of Rights, directly or indirectly, from
an Acquiring Person (or any Affiliate or Associate of
an Acquiring Person or any Person acting jointly or
in concert with an Acquiring Person or any Affiliate
or Associate of an Acquiring Person), where such
transferee becomes a transferee concurrently with or
subsequent to the Acquiring Person becoming such in a
transfer that the Board of Directors has determined
is part of a plan, arrangement or scheme of an
Acquiring Person (or any Affiliate or Associate of an
Acquiring Person or any Person acting jointly or in
concert with an Acquiring Person or any Associate or
Affiliate of an Acquiring Person), that has the
purpose or effect of avoiding Clause 3.1(b)(i),
shall become null and void without any further action, and any
holder of such Rights (including transferees) shall thereafter
have no right to exercise such Rights under any provision of
this Agreement and further shall thereafter not have any other
rights whatsoever with respect to such Rights, whether under
any provision of this Agreement or otherwise.
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(c) From and after the Separation Time, Riverside shall do all
such acts and things as shall be necessary and within its
power to ensure compliance with the provisions of Section 3.1,
including without limitation, all such acts and things as may
be required to satisfy the requirements of the COMPANY ACT,
the SECURITIES ACT (British Columbia), the SECURITIES ACT
(Ontario) and the securities laws or comparable legislation in
each of the provinces of Canada and each of the States of the
United States in respect of the issue of Common Shares upon
the exercise of Rights in accordance with this Agreement.
(d) Any Rights Certificate that would represent Rights
Beneficially owned by a Person described in either Clause
3.1(b)(i) or (ii) or transferred to any nominee of any such
Person, and any Rights Certificate that would be issued upon
transfer, exchange, replacement or adjustment of any other
Rights Certificate referred to in this sentence, shall either
not be issued upon the instruction of Riverside in writing to
the Rights Agent or contain the following legend:
The Rights represented by this Rights Certificate
were issued to a Person who was an Acquiring Person
or an Affiliate or an Associate of an Acquiring
Person (as such terms are defined in the Shareholder
Rights Plan Agreement) or a Person who was acting
jointly or in concert with an Acquiring Person or an
Affiliate or Associate of an Acquiring Person. This
Rights Certificate and the Rights represented hereby
are void or shall become void in the circumstances
specified in Subsection 3.1(b) of the Shareholder
Rights Plan Agreement.
Provided, however, that the Rights Agent shall not be under
any responsibility to ascertain the existence of facts that
would require the imposition of such legend but shall impose
such legend only if instructed to do so by Riverside in
writing or if a holder fails to certify upon transfer or
exchange in the space provided on the Rights Certificate that
such holder is not a Person described in such legend. The
issuance of a Rights Certificate without the legend referred
to in this Subsection 3.1(d) shall be of no effect on the
provisions of Subsection 3.1(b).
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ARTICLE 4 - THE RIGHTS AGENT
4.1 GENERAL
(a) Riverside hereby appoints the Rights Agent to act as agent for
Riverside and the holders of the Rights in accordance with the
terms and conditions of this Agreement, and the Rights Agent
hereby accepts such appointment. Riverside may from time to
time appoint one or more co-Rights Agents ("Co-Rights Agents")
as it may deem necessary or desirable, subject to the approval
of the Rights Agent. In the event Riverside appoints one or
more Co-Rights Agents, the respective duties of the Rights
Agent and Co-Rights Agents shall be as Riverside may determine
with the approval of the Rights Agent and the Co-Rights
Agents. Riverside also agrees to indemnify the Rights Agent,
its officers, directors and employees for, and to hold it
harmless against, any loss, liability, or expense, incurred
without negligence, bad faith or wilful misconduct on the part
of the Rights Agent, for anything done or omitted by the
Rights Agent in connection with the acceptance and
administration of this Agreement, including legal costs and
expenses, which right to indemnification will survive the
termination of this Agreement or the resignation or removal of
the Rights Agent.
(b) The Rights Agent shall be protected and shall incur no
liability for or in respect of any action taken, suffered or
omitted by it in connection with its administration of this
Agreement in reliance upon any certificate for Common Shares,
Rights Certificate, certificate for other securities of
Riverside, instrument of assignment or transfer, power of
attorney, endorsement, affidavit, letter, notice, direction,
consent, certificate, opinion, statement, or other paper or
document believed by it to be genuine and to be signed,
executed and, where necessary, verified or acknowledged, by
the proper Person or Persons.
Riverside shall inform the Rights Agent in a reasonably timely
manner of events which may materially affect the
administration of this Agreement by the Rights Agent and, at
any time upon request, shall provide to the Rights Agent an
incumbency certificate certifying the then current officers of
Riverside.
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4.2 MERGER, AMALGAMATION OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT
(a) Any corporation into which the Rights Agent may be merged or
amalgamated or with which it may be consolidated, or any
corporation resulting from any merger, amalgamation, statutory
arrangement or consolidation to which the Rights Agent is a
party, or any corporation succeeding to the securityholder
services business of the Rights Agent, will be the successor
to the Rights Agent under this Agreement without the execution
or filing of any paper or any further act on the part of any
of the parties hereto, provided that such corporation would be
eligible for appointment as a successor Rights Agent under the
provisions of Section 4.4 hereof. In case at the time such
successor Rights Agent succeeds to the agency created by this
Agreement any of the Rights Certificates have been
countersigned but not delivered, any successor Rights Agent
may adopt the countersignature of the predecessor Rights Agent
and deliver such Rights Certificates so countersigned; and in
case at that time any of the Rights have not been
countersigned, any successor Rights Agent may countersign such
Rights Certificates in the name of the predecessor Rights
Agent or in the name of the successor Rights Agent; and in all
such cases such Rights Certificates will have the full force
provided in the Rights Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent is changed
and at such time any of the Rights Certificates shall have
been countersigned but not delivered, the Rights Agent may
adopt the countersignature under its prior name and deliver
Rights Certificates so countersigned; and in case at that time
any of the Right Certificates shall not have been
countersigned, the Rights Agent may countersign such Rights
Certificates either in its prior name or in its changed name;
and in all such cases such Right Certificates shall have the
full force provided in the Right Certificates and in this
Agreement.
4.3 DUTIES OF RIGHTS AGENT
The Rights Agent undertakes the duties and obligations imposed by this Agreement
upon the following terms and conditions, all of which Riverside and the holders
of certificates for Common Shares and Rights Certificates, by their acceptance
thereof, shall be bound:
(a) the Rights Agent may retain and consult with legal counsel
(who may be legal counsel for Riverside) and the opinion of
such counsel will be full and complete authorization and
protection to the Rights Agent as to any action taken or
omitted by it in good faith and in accordance with such
opinion and the Rights Agent may also consult with such other
experts as the Rights Agent shall consider necessary or
appropriate to properly carry out the duties and obligations
imposed under this Agreement (at Riverside's expense) and the
Rights Agent shall be entitled to act and rely in good faith
on the advice of any such expert;
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(b) whenever in the performance of its duties under this
Agreement, the Rights Agent deems it necessary or desirable
that any fact or matter be proved or established by Riverside
prior to taking or suffering any action hereunder, such fact
or matter (unless other evidence in respect thereof be herein
specifically prescribed) may be deemed to be conclusively
proved and established by a certificate signed by a Person
believed by the Rights Agent to be the Chairman of the Board,
President, Chief Operating Officer, Chief Financial Officer,
Secretary, or any Assistant Secretary of Riverside and
delivered to the Rights Agent; and such certificate will be
full authorization to the Rights Agent for any action taken or
suffered in good faith by it under the provisions of this
Agreement in reliance upon such certificate;
(c) the Rights Agent will be liable hereunder for its own
negligence, bad faith or wilful misconduct;
(d) the Rights Agent will not be liable for or by reason of any of
the statements of fact or recitals contained in this Agreement
or in the certificates for Common Shares or the Rights
Certificates (except its countersignature thereof) or be
required to verify the same, but all such statements and
recitals are and will be deemed to have been made by Riverside
only;
(e) the Rights Agent will not be under any responsibility in
respect of the validity of this Agreement or the execution and
delivery hereof (except the due authorization, execution and
delivery hereof by the Rights Agent) or in respect of the
validity or execution of any certificate for a Common Share or
Rights Certificate (except its countersignature thereof); nor
will it be responsible for any breach by Riverside of any
covenant or condition contained in this Agreement or in any
Rights Certificate; nor will it be responsible for any change
in the exerciseability of the Rights (including the Rights
becoming void pursuant to Subsection 3.1(b) hereof) or any
adjustment required under the provisions of Section 2.3 hereof
or responsible for the manner, method or amount of any such
adjustment or the ascertaining of the existence of facts that
would require any such adjustment (except with respect to the
exercise of Rights after receipt of the certificate
contemplated by Section 2.3 describing any such adjustment);
nor will it by any act hereunder be deemed to make any
representation or warranty as to the authorization of any
Common Shares to be issued pursuant to this Agreement or any
Rights or as to whether any Common Shares will, when issued,
be duly and validly authorized, executed, issued and delivered
and fully paid and non-assessable;
(f) Riverside agrees that it will perform, execute, acknowledge
and deliver or cause to be performed, executed, acknowledged
and delivered all such further and other acts, instruments and
assurances as may reasonably be required by the Rights Agent
for the carrying out or performing by the Rights Agent of the
provisions of this Agreement;
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(g) the Rights Agent is hereby authorized and directed to accept
instructions in writing with respect to the performance of its
duties hereunder from any individual believed by the Rights
Agent to be the Chairman of the Board, President, Chief
Operating Officer, Chief Financial Officer, Secretary or any
Assistant Secretary of Riverside, and to apply to such
individuals for advice or instructions in connection with its
duties, and it shall not be liable for any action taken or
suffered by it in good faith in accordance with instructions
of any such individual;
(h) the Rights Agent and any shareholder or stockholder, director,
officer or employee of the Rights Agent may buy, sell or deal
in Common Shares, Rights or other securities of Riverside or
become pecuniarily interested in any transaction in which
Riverside may be interested, or contract with or lend money to
Riverside or otherwise act as fully and freely as though it
were not the Rights Agent under this Agreement. Nothing herein
shall preclude the Rights Agent from acting in any other
capacity for Riverside or for any other legal entity; and
(i) the Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder
either itself or by or through its attorneys or agents, and
the Rights Agent will not be answerable or accountable for any
act, default, neglect or misconduct of any such attorneys or
agents or for any loss to Riverside resulting from any such
act, default, neglect or misconduct, provided reasonable care
was exercised in the selection and continued employment
thereof.
4.4 CHANGE OF RIGHTS AGENT
The Rights Agent may resign and be discharged from its duties under this
Agreement upon 60 days' notice (or such lesser notice as is acceptable to
Riverside) in writing mailed to Riverside and to each transfer agent of Common
Shares by registered or certified mail. Riverside may remove the Rights Agent
upon 60 days' notice in writing, mailed to the Rights Agent and to each transfer
agent of the Common Shares by registered or certified mail. If the Rights Agent
should resign or be removed or otherwise become incapable of acting, Riverside
will appoint a successor to the Rights Agent. If Riverside fails to make such
appointment within a period of 60 days after such removal or after it has been
notified in writing of such resignation or incapacity by the resigning or
incapacitated Rights Agent, then by prior written notice to Riverside the
resigning Rights Agent (at Riverside's expense) or the holder of any Rights
(which holder shall, with such notice, submit such holder's Rights Certificate,
if any, for inspection by Riverside), may apply to any court of competent
jurisdiction for the appointment of a new Rights Agent. Any successor Rights
Agent, whether appointed by Riverside or by such a court, shall be a corporation
incorporated under the laws of Canada or a province thereof authorized to carry
on the business of a trust company in the Province of Alberta. After
appointment, the successor Rights Agent will be vested with the same powers,
rights, duties and responsibilities as if it had been originally named as Rights
Agent without further act or deed; but the predecessor Rights Agent shall
deliver and transfer to the successor Rights Agent any property at the time held
by it hereunder, and execute and deliver any further assurance, conveyance, act
or deed necessary for the purpose. Not later than the effective date of any such
appointment, Riverside will file notice thereof in
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writing with the predecessor Rights Agent and each transfer agent of the Common
Shares, and mail a notice thereof in writing to the holders of the Rights in
accordance with Section 5.9. Failure to give any notice provided for in this
Section 4.4, however, or any defect therein, shall not affect the legality or
validity of the resignation or removal of the Rights Agent or the appointment of
any successor Rights Agent, as the case may be.
ARTICLE 5 - MISCELLANEOUS
5.1 REDEMPTION AND WAIVER
(a) The Board of Directors shall waive the application of Section
3.1 in respect of the occurrence of any Flip-in Event if the
Board of Directors has determined, following a Stock
Acquisition Date and prior to the Separation Time, that a
Person became an Acquiring Person by inadvertence and without
any intention to become, or knowledge that it would become, an
Acquiring Person under this Agreement and, in the event that
such a waiver is granted by the Board of Directors, such Stock
Acquisition Date shall be deemed not to have occurred. Any
such waiver pursuant to this Subsection 5.1 (a) must be on the
condition that such Person, within 14 days after the foregoing
determination by the Board of Directors or such earlier or
later date as the Board of Directors may determine (the
"Disposition Date"), has reduced its Beneficial ownership of
Voting Shares such that the Person is no longer an Acquiring
Person. If the Person remains an Acquiring Person at the close
of business on the Disposition Date, the Disposition Date
shall be deemed to be the date of occurrence of a further
Stock Acquisition Date and Section 3.1 shall apply thereto.
(b) The Board of Directors acting in good faith may, prior to a
Flip-in Event having occurred, upon prior written notice
delivered to the Rights Agent, determine to waive the
application of Section 3.1 to a Flip-in Event that may occur
by reason of a Take-over Bid made by means of take-over bid
circular to all holders of record of Voting Shares (which for
greater certainty shall not include the circumstances
described in Subsection 5.1 (a)), provided that if the Board
of Directors waives the application of Section 3.1 to a
particular Flip-in Event pursuant to this Subsection 5.1(b),
the Board of Directors shall be deemed to have waived the
application of Section 3.1 to any other Flip-in Event
occurring by reason of any Take-Over Bid which is made by
means of a Take-Over Bid circular to all holders of Voting
Shares prior to the expiry of any Take-Over Bid (as the same
may be extended from time to time) in respect of which a
waiver is, or is deemed to have been granted under this
Subsection 5.1(b).
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(c) In the event that prior to the occurrence of a Flip-in Event a
Person acquires, pursuant to a Permitted Bid, a Competing
Permitted Bid or an Exempt Acquisition under Subsection
5.1(b), outstanding Voting Shares, then the Board of Directors
shall, immediately upon the consummation of such acquisition
without further formality be deemed to have elected to redeem
the Rights at a redemption price of $0.0001 per Right
appropriately adjusted in a manner analogous to the applicable
adjustment provided for in Section 2.3 if an event of the type
analogous to any of the events described in Section 2.3 shall
have occurred (such redemption price being herein referred to
as the "Redemption Price").
(d) The Board of Directors may, with the prior approval of the
holders of Voting Shares or Rights given in accordance with
the terms of Section 5.4, at any time prior to the occurrence
of a Flip-in Event elect to redeem all but not less than all
of the then outstanding Rights at the Redemption Price
appropriately adjusted in a manner analogous to the applicable
adjustments provided for in Section 2.3, which adjustments
shall only be made in the event that an event of the type
analogous to any of the events described in Section 2.3 shall
have occurred.
(e) The Board of Directors may, prior to the close of business on
the tenth Trading Day following a Stock Acquisition Date or
such later Business Day as they may from time to time
determine, upon prior written notice delivered to the Rights
Agent, waive the application of Section 3.1 to the related
Flip-in Event, provided that the Acquiring Person has reduced
its beneficial ownership of Voting Shares (or has entered into
a contractual arrangement with the Corporation, acceptable to
the Board of Directors, to do so within 10 calendar days of
the date on which such contractual arrangement is entered into
or such other date as the Board of Directors may have
determined) such that at the time the waiver becomes effective
pursuant to this Subsection 5.1(e) such Person is no longer an
Acquiring Person. In the event of such a waiver becoming
effective prior to the Separation Time, for the purposes of
this Agreement, such Flip-in Event shall be deemed not to have
occurred.
(f) Where a Take-over Bid that is not a Permitted Bid Acquisition
is withdrawn or otherwise terminated after the Separation Time
has occurred and prior to the occurrence of a Flip-in Event,
the Board of Directors may elect to redeem all the outstanding
Rights at the Redemption Price. Upon the Rights being redeemed
pursuant to this subsection 5.1(f), all the provisions of this
Agreement shall continue to apply as if the Separation time
had not occurred and Rights Certificates representing the
number of Rights held by each holder of record of Common
Shares as of the Separation Time had not been mailed to each
such holder and for all purposes of this agreement the
Separation Time shall be deemed not to have occurred and
Riverside shall be deemed to have issued replacement Rights to
the holders of its then outstanding Common Shares.
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(g) If the Board of Directors is deemed under Subsection 5.1(c) to
have elected or elects under Subsections 5.1(d) or (f) to
redeem the Rights, the right to exercise the Rights will
thereupon, without further action and without notice,
terminate and the only right thereafter of the holders of
Rights shall be to receive the Redemption Price.
(h) Within 10 calendar days after the Board of Directors is deemed
under Subsection 5.1(c) to have elected or elects under
Subsection 5.1(d) or (f) to redeem the Rights, Riverside shall
give notice of redemption to the holders of the then
outstanding Rights by mailing such notice to each such holder
at his last address as it appears upon the registry books of
the Rights Agent or, prior to the Separation Time, on the
registry books of the transfer agent for the Voting Shares.
Any notice which is mailed in the manner herein provided shall
be deemed given, whether or not the holder receives the
notice. Each such notice of redemption will state the method
by which the payment of the Redemption Price will be made.
(i) Riverside shall give prompt written notice to the Rights Agent
of any waiver of the application of Section 3.1 pursuant to
this subsection 5.1.
5.2 EXPIRATION
No Person shall have any rights whatsoever pursuant to this Agreement or in
respect of any Right after the Expiration Time, except the Rights Agent as
specified in Subsection 4.1(a) of this Agreement.
5.3 ISSUANCE OF NEW RIGHTS CERTIFICATES
Notwithstanding any of the provisions of this Agreement or of the Rights to the
contrary, Riverside may, at its option, issue new Rights Certificates evidencing
Rights in such form as may be approved by the Board of Directors to reflect any
adjustment or change in the number or kind or class of securities purchasable
upon exercise of Rights made in accordance with the provisions of this
Agreement.
5.4 SUPPLEMENTS AND AMENDMENTS
(a) Riverside may make any amendments to this Agreement to correct
any clerical or typographical error or which are required to
maintain the validity of the Agreement as a result of any
change in any applicable legislation, regulations or rules
thereunder. Riverside may, prior to the date of the first
Special Meeting referred to in Section 5.15, supplement or
amend this Agreement without the approval of any holders of
Rights or Common Shares in order to make any changes which the
Board of Directors acting in good faith may deem necessary or
desirable. Notwithstanding anything in this Section 5.4 to the
contrary, no amendment shall be made to the provisions of
Article 4 except with the written concurrence of the Rights
Agent to such supplement or amendment.
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(b) Subject to Section 5.4(a), Riverside may, with the prior
consent of the holders of Voting Shares obtained as set forth
below, at any time before the Separation Time, amend, vary or
rescind any of the provisions of this Agreement and the Rights
(whether or not such action would materially adversely affect
the interests of the holders of Rights generally). Such
consent shall be deemed to have been given if provided by the
holders of Voting Shares at a Special Meeting, which Special
Meeting shall be called and held in compliance with applicable
laws and regulatory requirements and the requirements in the
articles of Riverside. Subject to compliance with any
requirements imposed by the foregoing, consent shall be given
if the proposed amendment, variation or rescission is approved
by the affirmative vote of a majority of the votes cast by all
holders of Voting Shares (other than any holder who does not
qualify as an Independent Shareholder, with respect to all
Voting Shares Beneficially owned by such Person), represented
in person or by proxy at the Special Meeting.
(c) Riverside may, with the prior consent of the holders of Rights
obtained as set forth below, at any time after the Separation
Time and before the Expiration Time, amend, vary or rescind
any of the provisions of this Agreement and the Rights
(whether or not such action would materially adversely affect
the interests of the holders of Rights generally), provided
that no such amendment, variation or deletion shall be made to
the provisions of Article 4 except with the written
concurrence of the Rights Agent thereto. Such consent shall be
deemed to have been given if provided by the holders of Rights
at a Rights Holders' Special Meeting, which Rights Holders'
Special Meeting shall be called and held in compliance with
applicable laws and regulatory requirements and, to the extent
possible, with the requirements in the articles of Riverside
applicable to meetings of holders of Common Shares, applied
MUTATIS MUTANDIS. Subject to compliance with any requirements
imposed by the foregoing, consent shall be given if the
proposed amendment, variation or rescission is approved by the
affirmative vote of a majority of the votes cast by holders of
Rights (other than holders of Rights whose Rights have become
null and void pursuant to Subsection 3.1(b)), represented in
person or by proxy at the Rights Holders' Special Meeting.
(d) Any approval of the holders of Rights shall be deemed to have
been given if the action requiring such approval is authorized
by the affirmative votes of the holders of Rights present or
represented at and entitled to be voted at a meeting of the
holders of Rights and representing a majority of the votes
cast in respect thereof. For the purposes hereof, each
outstanding Right (other than Rights which are null and void
pursuant to the provisions hereof) shall be entitled to one
vote, and the procedures for the calling, holding and conduct
of the meeting shall be those, as nearly as may be, which are
provided in Riverside's Articles and the COMPANY ACT with
respect to the meetings of holders of Common Shares.
(e) Any amendments made by Riverside to this Agreement pursuant to
Subsection 5.4(a) which are required to maintain the validity
of this Agreement as a result of any change in any applicable
legislation, regulation or rule thereunder shall:
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(i) if made before the Separation Time, be submitted to
the holders of Voting Shares at the next meeting of
shareholders and the holders of Voting Shares may, by
the majority referred to in Subsection 5.4(b) confirm
or reject such amendment;
(ii) if made after the Separation Time, be submitted to
the holders of Rights at a meeting to be called for
on a date not later than immediately following the
next meeting of shareholders of Riverside and the
holders of Rights may, by resolution passed by the
majority referred to in Subsection 5.4(d) confirm or
reject such amendment.
Any such amendment shall be effective from the date of the
resolution of the Board of Directors adopting such amendment,
until it is confirmed or rejected or until it ceases to be
effective (as described in the next sentence) and, where such
amendment is confirmed, it continues in effect in the form so
confirmed. If such amendment is rejected by the shareholders
or the holders of Rights or is not submitted to the
shareholders or holders of Rights as required, then such
amendment shall cease to be effective from and after the
termination of the meeting at which it was rejected or to
which it should have been but was not submitted or from and
after the date of the meeting of holders of Rights that should
have been but was not held, and no subsequent resolution of
the Board of Directors to amend this Agreement to
substantially the same effect shall be effective until
confirmed by the shareholders or holders of Rights as the case
may be.
5.5 FRACTIONAL RIGHTS AND FRACTIONAL SHARES
(a) Riverside shall not be required to issue fractions of Rights
or to distribute Rights Certificates which evidence fractional
Rights and Riverside shall not be required to pay any amount
to a holder of record of Rights Certificates in lieu of such
fractional Rights.
(b) Riverside shall not be required to issue fractions of Common
Shares upon exercise of Rights or to distribute certificates
which evidence fractional Common Shares. In lieu of issuing
fractional Common Shares, Riverside shall be entitled to pay
to the registered holders of Rights Certificates, at the time
such Rights are exercised as herein provided, an amount in
cash equal to the fraction of the Market Price of one Common
Share that the fraction of a Common Share that would otherwise
be issuable upon the exercise of such Right is of one whole
Common Share at the date of such exercise.
5.6 RIGHTS OF ACTION
Subject to the terms of this Agreement, all rights of action in respect of this
Agreement, other than rights of action vested solely in the Rights Agent, are
vested in the respective holders of the Rights. Any holder of Rights, without
the consent of the Rights Agent or of the holder of any other Rights, may, on
such holder's own behalf and for such holder's own benefit and the benefit
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of other holders of Rights, enforce, and may institute and maintain any suit,
action or proceeding against Riverside to enforce such holder's right to
exercise such holder's Rights, or Rights to which such holder is entitled, in
the manner provided in such holder's Rights Certificate and in this Agreement.
Without limiting the foregoing or any remedies available to the holders of
Rights, it is specifically acknowledged that the holder of Rights would not have
an adequate remedy at law for any breach of this Agreement and will be entitled
to specific performance of the obligations under, and injunctive relief against
actual or threatened violations of the obligations of any Person subject to,
this Agreement.
5.7 REGULATORY APPROVALS
Any obligation of Riverside or action or event contemplated by this Agreement
shall be subject to the receipt of any requisite approval or consent from any
governmental or regulatory authority, and without limiting the generality of the
foregoing, necessary approvals of any stock exchange shall be obtained, such as
approvals relating to the issuance of Common Shares upon the exercise of Rights
under Subsection 2.2(d).
5.8 DECLARATION AS TO NON-CANADIAN HOLDERS
If in the opinion of the Board of Directors (who may rely upon the advice of
counsel) any action or event contemplated by this Agreement would require
compliance by Riverside with the securities laws or comparable legislation of a
jurisdiction outside Canada, the Board of Directors acting in good faith shall
take such actions as it may deem appropriate to ensure such compliance. In no
event shall Riverside or the Rights Agent be required to issue or deliver Rights
or securities issuable on exercise of Rights to persons who are citizens,
residents or nationals of any jurisdiction other than Canada or the United
States, in which such issue or delivery would be unlawful without registration
of the relevant Persons or securities for such purposes.
5.9 NOTICES
(a) Notices or demands authorized or required by this Agreement to
be given or made by the Rights Agent or by the holder of any
Rights to or on Riverside shall be sufficiently given or made
if delivered, sent by registered or certified mail, postage
prepaid (until another address is filed in writing with the
Rights Agent), or sent by facsimile or other form of recorded
electronic communication, charges prepaid and confirmed in
writing, as follows:
Riverside Forest Products Limited
▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇.▇.
▇▇▇ ▇▇▇
Attention: Corporate Secretary
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
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(b) Notices or demands authorized or required by this Agreement to
be given or made by Riverside or by the holder of any Rights
to or on the Rights Agent shall be sufficiently given or made
if delivered, sent by registered or certified mail, postage
prepaid (until another address is filed in writing with
Riverside), or sent by facsimile or other form of recorded
electronic communication, charges prepaid, and confirmed in
writing, as follows:
Montreal Trust Company of Canada
▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
Attention: Manager, Stock Transfer Department
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
(c) Notices or demands authorized or required by this Agreement to
be given or made by Riverside or the Rights Agent to or on the
holder of any Rights shall be sufficiently given or made if
delivered or sent by certified mail, postage prepaid,
addressed to such holder at the address of such holder as it
appears upon the register of the Rights Agent or, prior to the
Separation Time, on the register of Riverside for its Common
Shares. Any notice which is mailed or sent in the manner
herein provided shall be deemed given, whether or not the
holder receives the notice.
(d) Any notice given or made in accordance with this Section 5.9
shall be deemed to have been given and to have been received
on the day of delivery, if delivered, on the third Business
Day (excluding each day during which there exists any general
interruption of postal service due to strike, lockout or other
cause) following the mailing thereof, if mailed, and on the
day of telegraphing, telecopying or sending of the same by
other means of recorded electronic communication (provided
such sending is during the normal business hours of the
addressee on a Business Day and if not, on the first Business
Day thereafter). Each of Riverside and the Rights Agent may
from time to time change its address for notice by notice to
the other given in the manner aforesaid.
5.10 COSTS OF ENFORCEMENT
Riverside agrees that if Riverside fails to fulfil any of its obligations
pursuant to this Agreement, then Riverside will reimburse the holder of any
Rights for the costs and expenses (including legal fees) incurred by such holder
to enforce his rights pursuant to any Rights or this Agreement.
5.11 SUCCESSORS
All the covenants and provisions of this Agreement by or for the benefit of
Riverside or the Rights Agent shall bind and enure to the benefit of their
respective successors and assigns hereunder.
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5.12 BENEFITS OF THIS AGREEMENT
Nothing in this Agreement shall be construed to give to any Person other than
Riverside, the Rights Agent and the holders of the Rights any legal or equitable
right, remedy or claim under this Agreement; further, this Agreement shall be
for the sole and exclusive benefit of Riverside, the Rights Agent and the
holders of the Rights.
5.13 GOVERNING LAW
This Agreement and each Right issued hereunder shall be deemed to be a contract
made under the laws of the Province of British Columbia and for all purposes
shall be governed by and construed in accordance with the laws of such Province
applicable to contracts to be made and performed entirely within such Province.
5.14 SEVERABILITY
If any term or provision hereof or the application thereof to any circumstance
shall, in any jurisdiction and to any extent, be invalid or unenforceable, such
term or provision shall be ineffective only as to such jurisdiction and to the
extent of such invalidity or unenforceability in such jurisdiction without
invalidating or rendering unenforceable or ineffective the remaining terms and
provisions hereof in such jurisdiction or the application of such term or
provision in any other jurisdiction or to circumstances other than those as to
which it is specifically held invalid or unenforceable.
5.15 RECORD TIME
This Agreement is effective and in full force and effect in accordance with its
terms from and after the Record Time. In the event that this Agreement is not
confirmed by a majority of the votes cast by holders of Voting Shares who vote
in respect of confirmation of this agreement (other than any holder who does not
qualify as an Independent Shareholder, with respect to all Voting Shares
Beneficially owned by such Person) at Riverside's annual and special meeting of
shareholders in 2000, then this Agreement and all outstanding Rights shall
terminate and shall be void and of no further force and effect from the date
that such event occurs.
This Agreement must be reconfirmed by a resolution passed by a majority of the
votes cast by all holders of Voting Shares who vote in respect of such
reconfirmation (other than any holder who does not qualify as an Independent
Shareholder, with respect to all Voting Shares Beneficially owned by such
Person) at the third and sixth annual meeting following Riverside's annual and
special meeting of shareholders in 2000. If this agreement is not so reconfirmed
or is not presented for reconfirmation at such annual meeting, this Agreement
and all outstanding Rights shall terminate and be void and of no further force
and effect on and from the date of termination of the annual meeting; provided
that termination shall not occur if a Flip-in Event (other than a Flip-in Event
which has been waived pursuant to subsection 5.1(a) or (b) hereof) has occurred
prior to the date upon which this Agreement would otherwise terminate pursuant
to this Section 5.15.
-47-
5.16 DETERMINATIONS AND ACTIONS BY THE BOARD OF DIRECTORS
No actions, calculations and determinations (including any omissions with
respect to the foregoing) which are done or made by the Board, in good faith,
shall subject the Board or any director of Riverside to any liability to the
holders of the Rights.
5.17 TIME OF THE ESSENCE
Time shall be of the essence in this Agreement.
5.18 EXECUTION IN COUNTERPARTS
This Agreement may be executed in any number of counterparts and each of such
counterparts shall for all purposes be deemed to be an original, and all such
counterparts shall together constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
RIVERSIDE FOREST PRODUCTS LIMITED
By:
--------------------------------- c/s
MONTREAL TRUST COMPANY OF CANADA
By:
-------------------------------------
c/s
And By:
---------------------------------
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ATTACHMENT 1
RIVERSIDE FOREST PRODUCTS LIMITED
SHAREHOLDER RIGHTS PLAN AGREEMENT
[Form of Rights Certificate]
Certificate No. __________________ Rights ___________
THE RIGHTS ARE SUBJECT TO TERMINATION ON THE TERMS SET FORTH IN THE SHAREHOLDER
RIGHTS PLAN AGREEMENT. UNDER CERTAIN CIRCUMSTANCES (SPECIFIED IN SUBSECTION
3.1(B) OF THE SHAREHOLDER RIGHTS PLAN AGREEMENT), RIGHTS BENEFICIALLY OWNED BY
AN ACQUIRING PERSON OR CERTAIN RELATED PARTIES, OR TRANSFEREES OF AN ACQUIRING
PERSON OR CERTAIN RELATED PARTIES, MAY BECOME VOID.
RIGHTS CERTIFICATE
This certifies that ____________________________________, or registered assigns,
is the registered holder of the number of Rights set forth above, each of which
entitles the registered holder thereof, subject to the terms, provisions and
conditions of the Shareholder Rights Plan Agreement, dated as of July 20, 1999,
as the same may be further amended or supplemented from time to time, (the
"Shareholder Rights Plan Agreement"), between Riverside Forest Products Limited,
a corporation duly incorporated under the laws of British Columbia, and Montreal
Trust Company of Canada, a trust company incorporated under the laws of Canada
(the "Rights Agent") (which term shall include any successor Rights Agent under
the Shareholder Rights Plan Agreement), to purchase from Riverside Forest
Products Limited at any time after the Separation Time (as such term is defined
in the Shareholder Rights Plan Agreement) and prior to the Expiration Time (as
such term is defined in the Shareholder Rights Plan Agreement), one fully paid
common share of Riverside Forest Products Limited (a "Common Share") at the
Exercise Price referred to below, upon presentation and surrender of this Rights
Certificate with the Form of Election to Exercise (in the form provided
hereinafter) duly executed and submitted to the Rights Agent at its principal
office in either of the cities of Vancouver or Toronto. The Exercise Price shall
initially be $180.00 (Cdn.) per Right and shall be subject to adjustment in
certain events as provided in the Shareholder Rights Plan Agreement.
This Rights Certificate is subject to all of the terms and provisions of the
Shareholder Rights Plan Agreement, which terms and provisions are incorporated
herein by reference and made a part hereof and to which Shareholder Rights Plan
Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities thereunder of the
Rights Agent, Riverside Forest Products Limited and the holders of the Rights
Certificates. Copies of the Shareholder Rights Plan Agreement are on file at the
registered office of Riverside Forest Products Limited.
-49-
This Rights Certificate, with or without other Rights Certificates, upon
surrender at any of the offices of the Rights Agent designated for such purpose,
may be exchanged for another Rights Certificate or Rights Certificates of like
tenor and date evidencing an aggregate number of Rights equal to the aggregate
number of Rights evidenced by the Rights Certificate or Rights Certificates
surrendered. If this Rights Certificate shall be exercised in part, the
registered holder shall be entitled to receive, upon surrender hereof, another
Rights Certificate or Rights Certificates for the number of whole Rights not
exercised.
No holder of this Rights Certificate, as such, shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of Common Shares or of
any other securities which may at any time be issuable upon the exercise hereof,
nor shall anything contained in the Shareholder Rights Plan Agreement or herein
be construed to confer upon the holder hereof, as such, any of the Rights of a
shareholder of Riverside Forest Products Limited or any right to vote for the
election of directors or upon any matter submitted to shareholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting shareholders (except as
provided in the Shareholder Rights Plan Agreement), or to receive dividends or
subscription rights, or otherwise, until the Rights evidenced by this Rights
Certificate shall have been exercised as provided in the Shareholder Rights Plan
Agreement.
This Rights Certificate shall not be valid or obligatory for any purpose until
it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of Riverside
Forest Products Limited and its corporate seal.
Date:
-----------------------
RIVERSIDE FOREST PRODUCTS LIMITED
By: By:
--------------------------------- -------------------------------
President Secretary
Countersigned:
MONTREAL TRUST COMPANY OF CANADA
By:
-----------------------------------
Authorized Signatory
By:
-----------------------------------
Authorized Signatory
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FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder desires to transfer the
Rights Certificate.)
FOR VALUE RECEIVED ______________________________________________ hereby sells,
assigns and transfers unto ____________________________________________________
_______________________________________________________________________________
(Please print name and address of transferee.)
the Rights represented by this Rights Certificate, together with all right,
title and interest therein, and does hereby irrevocably constitute and appoint
_____________________________________________________________________________ ,
as attorney, to transfer the within Rights on the books of Riverside Forest
Products Limited, with full power of substitution.
Dated: ____________________________ __________________________________
Signature
Signature Guaranteed (Signature must correspond to name
as written upon the face of this
Rights Certificate in every
particular, without alteration or
enlargement or any change
whatsoever.)
Signature must be guaranteed by a member firm of a recognized stock exchange in
Canada, a registered national securities exchange in the United States, a member
of the National Association of Securities Dealers, Inc., or a commercial bank or
trust company having an office or correspondent in Canada or the United States.
-51-
CERTIFICATE
(To be completed if true.)
The undersigned party transferring Rights hereunder, hereby represents, for the
benefit of all holders of Rights and Common Shares, that the Rights evidenced by
this Rights Certificate are not, and, to the knowledge of the undersigned, have
never been, Beneficially owned by an Acquiring Person or an Affiliate or
Associate thereof or a Person acting jointly or in concert with an Acquiring
Person or an Affiliate or Associate thereof. Capitalized terms shall have the
meaning ascribed thereto in the Shareholder Rights Plan Agreement.
---------------------------------
Signature
(To be attached to each Rights Certificate.)
FORM OF ELECTION TO EXERCISE
(To be exercised by the registered holder if such holder desires to exercise the
Rights Certificate.)
TO: Riverside Forest Products Limited and Montreal Trust Company of Canada
The undersigned hereby irrevocably elects to exercise _________________________
________________________________whole Rights represented by the attached Rights
Certificate to purchase the Common Shares or other securities, if applicable,
issuable upon the exercise of such Rights and requests that certificates for
such securities be issued in the name of:
_______________________________________________________________________________
(Name)
_______________________________________________________________________________
(Address)
_______________________________________________________________________________
(City and Province)
_______________________________________________________________________________
Social Insurance, Social Security or other taxpayer identification number.
If such number of Rights shall not be all the Rights evidenced by this Rights
Certificate, a new Rights Certificate for the balance of such Rights shall be
registered in the name of and delivered to:
(Name)
_______________________________________________________________________________
(Address)
_______________________________________________________________________________
(City and Province)
_______________________________________________________________________________
Social Insurance, Social Security or other taxpayer identification number.
Dated: ____________________________ __________________________________
Signature
Signature Guaranteed (Signature must correspond to name
as written upon the face of this
Rights Certificate in every
particular, without alteration or
enlargement or any change
whatsoever.)
Signature must be guaranteed by a member firm of a recognized stock exchange in
Canada, a registered national securities exchange in the United States, a member
of the National Association of Securities Dealers, Inc., or a commercial bank or
trust company having an office or correspondent in Canada or the United States.
-52-
CERTIFICATE
(To be completed if true.)
The undersigned party transferring Rights hereunder, hereby represents, for the
benefit of all holders of Rights and Common Shares, that the Rights evidenced by
this Rights Certificate are not, and, to the knowledge of the undersigned, have
never been, Beneficially owned by an Acquiring Person or an Affiliate or
Associate thereof or a Person acting jointly or in concert with an Acquiring
Person or an Affiliate or Associate thereof. Capitalized terms shall have the
meaning ascribed thereto in the Shareholder Rights Plan Agreement.
________________________________
Signature
(To be attached to each Rights Certificate.)
NOTICE
In the event the certification set forth above in the Forms of Assignment and
Election is not completed, Riverside Forest Products Limited will deem the
Beneficial owner of the Rights evidenced by this Rights Certificate to be an
Acquiring Person or an Affiliate or Associate thereof. No Rights Certificates
shall be issued in exchange for a Rights Certificate owned or deemed to have
been owned by an Acquiring Person or an Affiliate or Associate thereof, or by a
Person acting jointly or in concert with an Acquiring Person or an Affiliate or
Associate thereof.
