AMENDMENT TO ARRANGEMENT AGREEMENT dated February 26, 2007, BETWEEN:
- -
BETWEEN:
AA
ACQUISITION CORP., a corporation existing under the laws of Canada
(hereinafter referred to as “Acquireco”),
-
and
-
ALLIANCE
ATLANTIS COMMUNICATIONS INC., a corporation existing under the laws of
Canada (hereinafter referred to as the
“Corporation”),
WHEREAS
Acquireco (formerly 6681859 Canada Inc.) and the Corporation are parties to
an
Arrangement Agreement dated January 10, 2007 (the “Arrangement
Agreement”);
AND
WHEREAS the parties wish to amend the Arrangement Agreement in the
manner set out in this amendment (the “Amendment”) in
accordance with Section 7.5 of the Arrangement Agreement;
THIS
AGREEMENT WITNESSES THAT, in consideration of the respective covenants
and agreements herein contained and other good and valuable consideration (the
receipt and sufficiency of which are hereby acknowledged), and intending to
be
legally bound hereby, Acquireco and the Corporation hereby agree as
follows:
|
1.1
|
Interpretation
|
All
capitalized terms used in this Amendment that are not otherwise defined herein
shall have the meaning given to them in the Arrangement Agreement.
|
1.2
|
Amendments
to the Arrangement
Agreement
|
|
|
(a)
|
The
reference to “GS Capital Partners VI, L.P.” in the seventh recital of the
Arrangement Agreement shall be changed to “GS Capital Partners VI Fund,
L.P.”
|
|
|
(b)
|
Section
1.1 of the Arrangement Agreement is hereby amended by deleting the
existing definition of “Arrangement”, “Debt Receipt Failure”, “Disclosure
Letter”, “Effective Time” and “Outside Date” and substituting therefor the
following:
|
“Arrangement”
means the arrangement of the Corporation pursuant to the provisions of section
192 of the CBCA on the terms and subject to the conditions set out in the Plan
of Arrangement;”
“Disclosure
Letter” means that certain letter dated as of January 10, 2007 and
delivered by the Corporation to Acquireco and signed by the Corporation and
Acquireco, as amended by that certain letter dated February 26, 2007 and
delivered by the Corporation to Acquireco and signed by the Corporation and
Acquireco;”
“Debt
Receipt Failure” has the meaning ascribed thereto in section
7.1(i);”
“Effective
Time” means 4:30 p.m. (Toronto time) on the Effective Date;”
and
“Outside
Date” means June 30, 2007 or such later date as may be agreed in
writing between the parties subject to the right of: (a) either party
to postpone the Outside Date by one period of 30 days (and not more than one
period of 30 days in aggregate) if (A) the Competition Act Clearance or the
HSR
Clearance has not been obtained or waived, or (B) the condition in section
6.2(j) shall not have been satisfied; (b) either party to postpone the Outside
Date to August 7, 2007 if the Required Financial Information is provided to
Acquireco after May 28, 2007 and prior to 11:59 p.m. (Toronto time) June 29,
2007; and (c) Acquireco to postpone the Outside Date by one period of 30 days
if
the Required Financial Information has not been provided to Acquireco by June
30, 2007, in any such case by giving written notice to the other party to such
effect no later than 11:59 p.m. (Toronto time) on June 29, 2007 provided that
in
no event can the Outside Date be extended beyond August 7, 2007 unless otherwise
agreed in writing by Acquireco and the Corporation;”.
|
|
(c)
|
Section
2.1(b) of the Arrangement Agreement is hereby amended by deleting
the
existing section 2.1(b) and substituting therefor as new section
2.1(b)
the following:
|
“subject
to Court approval, call and hold the Meeting on April 5, 2007 for the purpose
of
considering the Special Resolution (and, with the consent of Acquireco, for
any
other purpose as may be set out in the notice for such meeting), provided that
if the Court does not approve April 5, 2007 as the Meeting date, the Meeting
date will be the next earliest date approved by the Court prior to April 30,
2007 and with the consent of Acquireco, the Meeting date may be changed,
adjourned or postponed, subject to Court approval if necessary;”
|
|
(d)
|
Section
2.5 of the Arrangement Agreement is hereby amended by deleting the
existing section 2.5 and substituting therefor as new section 2.5
the
following:
|
“Acquireco
shall, subject to obtaining the Final Order and the satisfaction or waiver
of
the other conditions precedent contained in this Agreement in its favour, at
or
before the time of issuance of the certificate of arrangement issued by the
Director, deposit with the Depositary sufficient cash to pay the amounts payable
to Shareholders (other than Shareholders exercising Dissent Rights and who
have
not withdrawn their notice of objection) and Qualifying Holdco
Shareholders pursuant to the Plan of Arrangement.”
|
|
(e)
|
Section
2.8(a) of the Arrangement Agreement is hereby amended by deleting
the
existing section 2.8(a) and substituting therefor as a new section
2.8(a)
the following:
|
“Subject
to receipt of all required regulatory approvals, Acquireco will permit Persons
(“Qualifying Holdco Shareholders”) who are,
(a) resident in Canada for purposes of the Tax Act (including a partnership
if
all of the members of the partnership are resident in Canada), and (b)
registered and beneficial owners of
Shares
(directly or indirectly through a Qualifying Holdco) as of the Effective Date,
and (c) shareholders of a corporation that meets the conditions described below
in this section 2.8Error! Reference source not
found. (a “Qualifying Holdco”) to elect in respect
of such Shares (or Shares held by such Qualifying Holdco), by notice in writing
provided to Acquireco (or the Depositary) not later than 5:00 p.m. (Toronto
time) on the 10th Business
Day prior
to the Effective Date (the “Holdco Election Date”), to sell
such Shares through a Qualifying Holdco (the “Holdco
Alternative”) provided that:”
|
|
(f)
|
Section
3.2(c)(ii) of the Arrangement Agreement is hereby amended by deleting
the
existing section 3.2(c)(ii) and substituting therefor as a new section
3.2(c)(ii) the following:
|
“Subject
to its terms and conditions, the Financing, when funded in accordance with
the
Funding Commitment Letter and the Debt Commitment Letter, will provide financing
sufficient to permit Acquireco to deposit with the Depositary sufficient cash
to
pay the amount payable to Shareholders and Qualifying Holdco Shareholders
pursuant to the Plan of Arrangement (assuming all Share Purchase Rights are
exercised and all Shares issuable thereunder are fully paid for prior to the
Effective Time and assuming no Shareholders exercise Dissent Rights) and to
pay
related fees and expenses.”
|
|
(g)
|
Section
5.1(a)(iv) of the Arrangement Agreement is hereby amended by deleting
the
existing section 5.1(a)(iv) and substituting therefor as new section
5.1(a)(iv) the following:
|
“allot,
reserve, set aside, issue, sell, pledge, dispose of, grant or encumber,
orauthorize or propose the allotment, reservation, setting aside, issuance,
sale,pledge, disposition, grant or encumbrance of, or purchase, redeem, or
otherwise acquire, directly or indirectly, any shares in its capital or the
capital of any subsidiary or any options, warrants, convertible securities
or
rights to subscribe for, purchase or otherwise acquire or exchange into any
shares, or any other ownership interest in the Corporation or any subsidiary
(including any phantom interest or other right linked to the price of the
Shares), except (i) for the issuance of Class B Shares pursuant to Options,
Purchase Rights, restricted stock units and deferred stock units issued pursuant
to the terms of the Compensation Plans and which are outstanding on the date
of
this Agreement in accordance with their terms as in effect on the date of this
Agreement, (ii) the settlement for cash by the Corporation of any Performance
Share Appreciation Plan Units outstanding on January 10, 2007 in accordance
with
their terms and (iii) the settlement for cash by the Corporation of Options
outstanding on January 10, 2007 in accordance with their terms;”.
|
|
(h)
|
Section
5.1(a)(xi) of the Arrangement Agreement is hereby amended by deleting
the
existing section 5.1(a)(xi) and substituting therefor as new section
5.1(a)(xi) the following:
|
“take
any
action or make any change, other than actions or changes required by Canadian
GAAP, with respect to accounting policies or procedures;”.
(i) Section
5.1(f)(ii) of the Arrangement Agreement is hereby deleted.
|
|
(j)
|
Section
5.1(l) of the Arrangement Agreement is hereby amended by deleting
the
existing section 5.1(l) and substituting therefor as new section
5.1(l)
the following:
|
“Notwithstanding
anything to the contrary herein, any obligation of the Corporation in this
Agreement with respect to causing Motion Picture Distribution Inc. to take
any
action or refrain from taking any action shall only be a requirement for the
Corporation to use its reasonable best efforts to cause Motion Picture
Distribution Inc. to take such action or refrain from taking such action;
provided that no director of Motion Picture Distribution Inc. shall be required
to take any action in breach of such person's fiduciary duties. The
Corporation shall strictly enforce its rights under any existing agreements
with
Motion Picture Distribution Inc. in furtherance of the Corporation’s obligations
hereunder, including pursuant to section 5.1(a).”.
|
|
(k)
|
The
following section 5.1(m) is hereby added to the Arrangement
Agreement:
|
“At
or before the time of issuance of
the certificate of arrangement issued by the Director, the Corporation shall,
subject to the satisfaction or waiver of the conditions precedent contained
in
this Agreement in its favour, deposit with the Depositary sufficient cash to
pay
the amounts payable to Eligible Shareholders (as hereinafter defined) pursuant
to the Plan of Arrangement. The Corporation shall also provide the
Depositary with the requisite information regarding the identity of the holders
of Options, RSUs and DSUs that are transferred to the Corporation pursuant
to
Section 2.3(a) of the Plan of Arrangement (“Eligible Holders”)
and the amounts to which such Eligible Holders have become entitled as a result
of such transfer.”.
|
|
(l)
|
Section
5.2(a)(vii)(G) of the Arrangement Agreement is hereby amended by
deleting
the existing section 5.2(a)(vii)(G) and substituting therefor as
new
section 5.2(a)(vii)(G) the
following:
|
“Acquireco
shall keep the Corporation informed on a reasonably current basis in reasonable
detail of the status of its efforts to arrange the Financing and shall not
permit any material amendment or modification to be made to, or any waiver
of
any material provision or remedy under the Debt Commitment Letter, the Financing
Agreements or any definitive agreement or documentation referred to in this
section 5.2, without the prior written consent of the Corporation (such
consent not to be unreasonably withheld or delayed).”.
|
|
(m)
|
Section
6.2(c) of the Arrangement Agreement is hereby
deleted.
|
|
|
(n)
|
Section
6.3(e) of the Arrangement Agreement is hereby amended by deleting
the
existing section 6.3(e) and substituting therefor new
section 6.3(e) as follows:
|
“Acquireco
shall, subject to obtaining the Final Order and the satisfaction or waiver
of
the other conditions precedent contained in this Agreement in its
favour,
at or before the time of issuance of the certificate of arrangement issued
by
the Director, deposit with the Depositary sufficient cash to pay the amounts
payable to Shareholders (other than Shareholders exercising Dissent Rights
and
who have not withdrawn their notice of objection) and Qualifying Holdco
Shareholders pursuant to the Plan of Arrangement.”
|
|
(o)
|
Section
7.1(g) of the Arrangement Agreement is hereby amended by deleting
the
existing section 7.1(g) and substituting therefor as new section
7.1(g)
the following:
|
“by
the
Corporation, if there has been a breach of or failure to perform any
representation, warranty, covenant or agreement on the part of Acquireco set
forth in this Agreement, which breach or failure to perform would cause the
conditions set forth in section 6.3(a), 6.3(b), 6.3(c) or 6.3(d) not to be
satisfied;”.
|
|
(p)
|
Section
7.1(i) of the Arrangement Agreement is hereby amended by deleting
the
existing section 7.1(i) and substituting therefor as new section
7.1(i)
the following:
|
“by
the
Corporation, if (a) all of the conditions set forth in sections 6.1 and 6.2
have
been satisfied and remain satisfied or waived by Acquireco (other than those
conditions that by their terms are to be satisfied at the Effective Time) and
(b) Acquireco shall not have received the proceeds of the Debt Financing or
any
Alternative Debt Financing by the Closing Date, any such event being a “Debt
Receipt Failure”; or”.
|
|
(q)
|
Exhibit
1 – Form of Plan of Arrangement is hereby amended by deleting the existing
Exhibit 1 and substituting therefor as new the Exhibit 1 attached
hereto
as Schedule A.
|
|
1.3
|
Representations
and Warranties of the
Corporation
|
The
Corporation represents and warrants to and in favour of Acquireco as follows
and
acknowledges that Acquireco is relying upon such representations and warranties
in connection with entering into this Amendment and completing the
Arrangement:
|
|
(a)
|
Authority
and No Violation.
|
|
|
(i)
|
The
Corporation has the requisite corporate power and capacity to execute
and
deliver this Amendment and to perform its obligations
hereunder. The execution, delivery and performance of this
Amendment by the Corporation has been duly authorized by its Board
of
Directors and no other corporate proceedings on its part are necessary
to
authorize the execution, delivery and performance of this
Amendment.
|
|
|
(ii)
|
This
Amendment has been duly executed and delivered by the Corporation
and
constitutes its legal, valid and binding obligation, enforceable
against
it in accordance with its terms, subject to bankruptcy, insolvency
and
other
|
|
|
Laws
affecting creditors’ rights generally and to general principles of
equity.
|
|
|
(iii)
|
The
execution and delivery of this Amendment by the Corporation does
not, and
the performance of this Amendment by the Corporation will
not:
|
|
|
A.
|
conflict
with or violate the Articles of Incorporation or Bylaws or equivalent
organizational documents of the Corporation or any of its
subsidiaries;
|
|
|
B.
|
assuming
that all consents, approvals, authorizations and other actions described
in section 3.1(d)(v) of the Arrangement Agreement have been obtained
and
all filings and obligations described in section 3.1(d)(v) have been
made,
conflict with or violate any Law applicable to the Corporation or
any of
its subsidiaries or by which any property or asset of the Corporation
or
any of its subsidiaries is bound;
or
|
|
|
C.
|
except
as set forth in section 3.1(d)(iv) of the Disclosure Letter, result
in any
breach of, or constitute a default (or an event which, with notice
or
lapse of time or both, would become a default) under, or give to
others
any right of termination, amendment, acceleration or cancellation
of, or
create, give rise to or change any rights or obligations of any Person
under, or result in the creation of a Lien on any property or asset
of the
Corporation or any of its subsidiaries pursuant to any note, bond,
mortgage, indenture, contract, agreement, lease, license, permit,
franchise or other instrument or obligation to which the Corporation
or
any of its Material Subsidiaries is a party or by which the Corporation
or
any of its Material Subsidiaries or any property or asset of the
Corporation or any of its Material Subsidiaries is
bound;
|
except,
with respect to clauses (B) and (C), for any such events or occurrences that
could not reasonably be expected to have, individually or in the aggregate,
a
Material Adverse Effect.
|
|
(iv)
|
No
consent, approval, license, permit, order or authorization of, or
registration, declaration or filing with, or permit from, any Governmental
Entity is required to be obtained or made by or with respect to the
Corporation or any of its subsidiaries in connection with the execution,
delivery and performance of this
Amendment.
|
|
1.4
|
Representations
and Warranties of
Acquireco
|
Acquireco
represents and warrants to and in favour of the Corporation as follows and
acknowledges that the Corporation is relying upon such representations and
warranties in connection with entering into this Amendment and completing the
Arrangement:
(a) Authority
and No Violation.
|
|
(i)
|
It
has the requisite power and capacity to execute, deliver and perform
its
obligations hereunder. The execution, delivery and performance of
this
Amendment by it has been duly authorized and no other proceedings
on its
part are necessary to authorize the execution, delivery and performance
of
this Amendment.
|
|
|
(ii)
|
This
Amendment has been duly executed and delivered by it and constitutes
its
legal, valid and binding obligation, enforceable against it in accordance
with its terms, subject to bankruptcy, insolvency and other similar
laws
affecting creditors’ rights generally and to general principles of
equity.
|
|
|
(iii)
|
The
execution, delivery and performance by it of this Amendment will
not:
|
|
|
A.
|
result
in a violation or breach of, require any consent to be obtained under
or
give rise to any termination rights or payment obligation under any
provision of:
|
|
|
1.
|
its
Articles or Bylaws (or other constating
documents);
|
|
|
2.
|
any
resolution of its board of directors (or any committee thereof) or
of its
shareholders;
|
|
|
3.
|
any
applicable Laws; or
|
|
|
4.
|
any
material Contract to which it or its subsidiaries is a party or by
which
any of them is bound or their respective properties or assets are
bound;
or
|
|
|
B.
|
give
rise to any right of termination or acceleration of indebtedness,
or cause
any of its third party indebtedness to come due before its stated
maturity
or cause any available credit to cease to be available where such
event
would materially impair its ability to complete or materially prevent
it
from completing the Arrangement.
|
|
|
(iv)
|
No
consent, approval, order or authorization of, or declaration or filing
with, any Governmental Entity or other Person is required to be obtained
by it in connection with the execution, delivery or performance of
this
Amendment.
|
|
|
1.5
|
Survival
|
For
greater certainty, the representations and warranties of each of the Corporation
and Acquireco contained herein shall survive the execution and delivery of
this
Amendment and shall terminate on the earlier of the termination of the
Arrangement Agreement, as amended by this Amendment, in accordance with the
provisions thereof and the Effective Time.
|
1.6
|
Governing
Law
|
This
Amendment shall be governed by and construed in accordance with the Laws of
the
Province of Ontario and the Laws of Canada applicable therein. Each
of the parties hereby irrevocably attorns and submits to the non-exclusive
jurisdiction of the courts of the Province of Ontario with respect to any matter
arising under this Amendment.
|
1.7
|
Counterparts
|
This
Amendment may be executed in two or more counterparts, each of which shall
be
deemed to be an original but all of which together shall constitute one and
the
same instrument.
|
1.8
|
Continued
Effect of Arrangement
Agreement
|
The
Arrangement Agreement, as amended by this Amendment, shall continue in full
force and effect.
|
1.9
|
Consolidated
Agreement
|
The
parties agree to prepare a consolidated version of the Arrangement Agreement
as
at the date hereof reflecting the amendments set forth in this Amendment and
any
references in the Arrangement Agreement to “the date hereof” or “the date of
this Agreement” shall be changed to “January 10, 2007”.
REMAINDER
OF THIS PAGE INTENTIONALLY LEFT BLANK
IN
WITNESS WHEREOF, Acquireco and the Corporation have caused this
Amendment to be executed as of the date first written above by their respective
officers thereunto duly authorized.
|
AA
ACQUISITION CORP.
|
|||
|
By:
|
/s/ Xxxxxxx Xxxxx | ||
|
Name:
Xxxxxxx Xxxxx
|
|||
|
Title:
|
|||
|
By:
|
/s/ Xxxxxx Xxxxx | ||
|
Name:
Xxxxxx Xxxxx
|
|||
|
Title:
|
|||
|
ALLIANCE
ATLANTIS COMMUNICATIONS INC.
|
|||
|
By:
|
/s/ Xxxxxx Xxxx | ||
|
Name:
Xxxxxx Xxxx
|
|||
|
Title:
|
|||
|
By:
|
/s/ Xxxxx Xxxxxxxxx | ||
|
Name:
Xxxxx Xxxxxxxxx
|
|||
|
Title:
|
|||
SCHEDULE
A
EXHIBIT
1
FORM
OF PLAN OF ARRANGEMENT
PLAN
OF ARRANGEMENT UNDER SECTION 192
OF
THE CANADA BUSINESS CORPORATIONS ACT
ARTICLE
1
INTERPRETATION
|
1.1
|
Definitions
|
Unless
indicated otherwise, where used in this Plan of Arrangement, the following
terms
shall have the following meanings:
“Acquireco”
means AA Acquisition Corp. (formerly 6681859 Canada Inc.), a corporation
existing under the laws of Canada;
“Arrangement”
means the arrangement of the Corporation pursuant to the provisions of section
192 of the CBCA on the terms and subject to the conditions set out in this
Plan
of Arrangement;
“Arrangement
Agreement” means the arrangement agreement dated as of January 10, 2007
between Acquireco and the Corporation (including the Schedules and Appendices
thereto) as amended, modified or supplemented from time to time;
“Business
Day” means any day on which commercial banks are open for business in
Toronto, Ontario other than a Saturday, a Sunday or a day observed as a holiday
in Toronto, Ontario under the laws of the Province of Ontario or the federal
laws of Canada;
“CBCA”
means the Canada Business Corporations Act as now in effect and as it
may be amended from time to time prior to the Effective Date;
“Circular”
means the notice of the Meeting and accompanying management information
circular, including all schedules thereto, to be sent to Shareholders in
connection with the Meeting;
“Class
A Shareholder” means a registered holder of Class A
Shares;
“Class
A Shares” means the Class A Voting Shares in the capital of the
Corporation;
“Class
B Shareholder” means a registered holder of Class B
Shares;
“Class
B Shares” means the Class B Non-Voting Shares in the capital of the
Corporation;
“Compensation
Plans” means, collectively, the Corporation’s Amended and Restated 1993
Employee Stock Option Plan, as amended, the Corporation’s 1998 Share
Compensation Plan, the RSU Plan and the DSU Plan;
“Corporation”
means Alliance Atlantis Communications Inc., a corporation existing under the
laws of Canada;
“Court”
means the Ontario Superior Court of Justice;
“Depositary”
means Computershare Investor Services Inc., as depositary, or such other
depositary as Acquireco may determine;
“Director”
means the Director appointed under section 260 of the CBCA;
“Dissent
Rights” has the meaning ascribed thereto in section 3.1
hereof;
“DSU”
means a deferred share unit being a right granted by the Corporation to a
participant to receive on the basis set out in the DSU Plan, on a deferred
payment basis, a Class B Share or the cash equivalent of a Class B
Share;
“DSU
Plan” means the Corporation’s May 31, 1999 Deferred Share Unit
Plan;
“Effective
Date” means the date upon which this Plan of Arrangement becomes
effective as established by the date of issue shown on the certificate of
arrangement issued by the Director under the CBCA;
“Effective
Time” means 4:30 p.m. (Toronto time) on the Effective
Date;
“Final
Order” means the order of the Court approving the Arrangement, as such
order may be amended at any time prior to the Effective Date or, if appealed,
then unless such appeal is withdrawn or denied, as affirmed;
“Holdco
Alternative” has the meaning ascribed to it in the Arrangement
Agreement;
“Interim
Order” means the interim order of the Court in respect of the
Arrangement contemplated by section 2.2 of the Arrangement
Agreement;
“ITA”
means the Income Tax Act (Canada) and regulations made thereunder, as
now in effect and as it may be amended from time to time prior to the Effective
Date;
“Letter
of Transmittal” means the letter of transmittal to be mailed to
Shareholders by the Corporation;
“Meeting”
means the special meeting of Shareholders (including any adjournment or
postponement thereof) to be called and held in accordance with the Interim
Order
to consider and, if deemed advisable, to approve the Special
Resolution;
“Options”
means, collectively, the options to purchase Shares under the Compensation
Plans
which are outstanding and unexercised as of the date hereof;
“Person”
includes any individual, firm, partnership, limited partnership, joint venture,
syndicate, sole proprietorship, company or corporation with or without share
capital, unincorporated association, trust, trustee, executor, administrator
or
other legal personal representative, or other entity however designated or
constituted;
“Plan
of Arrangement” means this plan of arrangement proposed under section
192 of the CBCA, as amended, modified or supplemented from time to time in
accordance with the provisions hereof or made at the direction of the Court
in
the Final Order;
“Qualifying
Holdco” has the meaning ascribed to it in the Arrangement
Agreement;
“Qualifying
Holdco Shareholder” has the meaning ascribed to it in the Arrangement
Agreement;
“RSU”
means a restricted share unit being a right granted to a participant to receive,
on the basis set out in the RSU Plan, one Class B Share or a cash payment equal
to the fair market value of one Class B Share on the terms contained
therein;
“RSU
Plan” means the Corporation’s May 14, 2006 Restricted Share Unit
Plan;
“Shareholder”
means a registered holder of Shares;
“Share
Purchase Right” has the meaning ascribed thereto in the Arrangement
Agreement;
“Shares”
means, collectively, the Class A Shares and the Class B Shares; and
“Special
Resolution” means the special resolution of the Shareholders approving
the Arrangement in accordance with the Interim Order.
|
1.2
|
Interpretation
Not Affected by Headings,
etc.
|
The
division of this Plan of Arrangement into Articles, sections, and other portions
and the insertion of headings are for convenience of reference only and shall
not affect the construction or interpretation hereof. Unless otherwise
indicated, all references to an “Article” or “section” followed by a number
and/or a letter refer to the specified Article or section of this Plan of
Arrangement. The terms “hereof”, “herein” and “hereunder” and similar
expressions refer to this Plan of Arrangement and not to any particular Article,
section or other portion hereof.
|
1.3
|
Currency
|
All
sums
of money which are referred to herein are expressed in lawful money of
Canada.
|
1.4
|
Number,
etc.
|
Unless
the subject matter or context otherwise requires, words importing the singular
shall include the plural and vice versa and words importing gender shall include
all genders.
|
1.5
|
Statutory
References
|
Any
reference herein to a statute includes all regulations made thereunder, all
amendments to such statute in force from time to time and any statute or
regulation that supplements or supersedes such statute or
regulation.
1.6 Date
for Any Action
In
the
event that any date on which any action is required or permitted to be taken
hereunder by any Person is not a Business Day, such action shall be required
or
permitted to be taken on the next succeeding day which is a Business
Day.
|
1.7
|
Time
|
Time
shall be of the essence in every matter or action contemplated hereunder. All
times expressed herein are local time (Toronto, Ontario) unless otherwise
stipulated herein.
ARTICLE
2
THE
ARRANGEMENT
|
2.1
|
Arrangement
Agreement
|
This
Plan
of Arrangement is made pursuant to, is subject to the provisions of and forms
part of, the Arrangement Agreement.
|
2.2
|
Binding
Effect
|
This
Plan
of Arrangement will become effective at, and be binding at and after, the
Effective Time, on Acquireco, the Corporation, all Qualifying Holdco
Shareholders, all Qualifying Holdcos, the Shareholders (including those
described in section 3.1), all beneficial holders of Shares and all holders
of
Options, DSUs, RSUs and Share Purchase Rights.
|
2.3
|
Effective
Time
|
At
the
Effective Time, the following shall occur and shall be deemed to occur in the
following order, without any further authorization, act or
formality:
|
|
(a)
|
first,
the following transactions shall occur
simultaneously:
|
|
|
(i)
|
each
Option outstanding immediately prior to the Effective Time shall
be deemed
to be vested and transferred by the holder thereof to the Corporation
and
cancelled in exchange for a cash amount equal to the excess, if any,
of
(i) the product of the number of Class B Shares issuable upon exercise
of
such Option and $53.00, less (ii) the aggregate exercise price payable
under such Option by the holder to acquire the Class B Shares issuable
upon exercise of such Option;
|
|
|
(ii)
|
each
DSU outstanding immediately prior to the Effective Time shall be
deemed to
be transferred by the holder thereof to the Corporation and cancelled
in
exchange for a cash amount equal to $53.00 for each such
DSU;
|
|
|
(iii)
|
each
RSU outstanding immediately prior to the Effective Time will be deemed
to
be vested and transferred by the holder thereof to the Corporation
and
cancelled in exchange for a cash amount equal to $53.00 for each
such
RSU;
|
|
|
(iv)
|
each
Share Purchase Right outstanding immediately prior to the Effective
Time
that has not been exercised and any right or entitlement of a participant
relating to a Share Purchase Right that has been exercised but in
respect
of which the purchase price for the Class B Shares issuable upon
such
exercise has not been paid in full prior to the Effective Time by
the
holder thereof shall be deemed to be cancelled;
and
|
|
|
(v)
|
the
Compensation Plans shall be terminated;
and
|
|
|
(b)
|
second,
and five minutes following the occurrence of the transactions described
in
paragraph (a), the following transactions shall occur
simultaneously:
|
|
|
(i)
|
each
Share outstanding immediately prior to the Effective Time (other
than a
Share described in section 3.1(a) or a Share held by a Qualifying
Holdco
in respect of which the Holdco Alternative has been validly elected)
shall
be transferred by the holder thereof to Acquireco in exchange for
a cash
amount equal to $53.00, and the name of each such holder will be
removed
from the register of holders of Shares and Acquireco will be recorded
as
the registered holder of such Share and will be deemed to be the
legal and
beneficial owner thereof free and clear of any liens, claims or
encumbrances;
|
|
|
(ii)
|
all
of the shares outstanding immediately prior to the Effective Time
of a
Qualifying Holdco in respect of which the Holdco Alternative has
been
validly elected shall be transferred by the holder thereof to Acquireco
in
exchange for an aggregate amount equal to the product of $53.00 and
the
total number of Shares beneficially owned by such Qualifying Holdco,
and
the name of the holder of shares of such Qualifying Holdco will be
removed
from the register of holders of shares of such Qualifying Holdco
and
Acquireco shall be recorded as the registered holder of the shares
of such
Qualifying Holdco and shall be deemed to be the legal and beneficial
owner
thereof free and clear of any liens, claims or
encumbrances.
|
ARTICLE
3
RIGHTS
OF DISSENT
|
3.1
|
Rights
of Dissent
|
Shareholders
(other than Qualifying Holdcos or Qualifying Holdco Shareholders) may exercise
rights of dissent in connection with the Arrangement with respect to their
Shares pursuant to and in the manner set forth in the Interim Order, section
190
of the CBCA and this section 3.1 (the “Dissent Rights”) as the same may be
modified by the Interim Order or the Final Order. Shareholders who duly exercise
such Dissent Rights and who:
|
|
(a)
|
are
ultimately entitled to be paid fair value for their Shares shall
be deemed
to have transferred such Shares to Acquireco on the Effective Date
simultaneously with the transactions described in section 2.3(b)
without
any further act or formality and free and clear of all liens, claims
and
encumbrances, with Acquireco being obligated to pay such Shareholders
in
consideration therefor the
|
fair
value of such Shares, which fair value, notwithstanding anything to the contrary
in the CBCA, if permitted by the Court, shall be determined as of the close
of
business on the day before the Special Resolution is adopted, and the name
of
each such Shareholder will be removed from the register of holders of Shares
and
Acquireco will be recorded as the registered holder of the Shares so transferred
and will be deemed to be the legal and beneficial owner of such Shares free
and
clear of any liens, claims or encumbrances; or
|
|
(b)
|
for
any reason are ultimately not entitled to be paid fair value for
their
Shares shall be deemed to have participated in the Arrangement on
the same
basis as any non-dissenting Shareholder who is not a Qualifying Holdco
or
Qualifying Holdco Shareholder as at and from the Effective Time,
and shall
be deemed to have transferred their Shares to Acquireco under section
2.3(b),
|
but
in no
case shall the Corporation, Acquireco or any other Person be required to
recognize such Shareholders as holders of Shares after the time set out in
Section 2.3(b), and the names of such Shareholders shall be deleted from the
register of Shareholders at the time set out in Section 2.3(b).
ARTICLE
4
CERTIFICATES
AND PAYMENTS
|
4.1
|
Exchange
of Certificates for Cash
|
|
|
(a)
|
At
or before the time of issuance of the Certificate of Arrangement,
Acquireco shall deposit sufficient cash with the Depositary for the
benefit of Shareholders and Qualifying Holdco Shareholders entitled
to
amounts under the transactions described in Section
2.3(b). Upon surrender to the Depositary for cancellation of a
certificate which immediately prior to the Effective Time represented
outstanding Shares that were exchanged for cash, together with a
duly
completed and executed Letter of Transmittal and such additional
documents
and instruments as the Depositary may reasonably require, the Shareholder
of such surrendered certificate shall be entitled to receive in exchange
therefor a cheque issued by the Depositary in Canadian currency payable
at
any branch in Canada of a Canadian chartered bank or trust company
in an
amount equal to the cash which such Shareholder has the right to
receive
under the Arrangement for such Shares, less any amounts withheld
pursuant
to section 4.3 and any certificate so surrendered shall forthwith
be
cancelled. The cash deposited with the Depositary shall be held
in an interest-bearing account, and any interest earned on such funds
shall be applied against the expenses of the Depositary and under
no
circumstances will any interest be payable to Shareholders or Qualifying
Holdco Shareholders. For the purposes of this section 4.1(a), references
to “Shareholders” shall exclude Qualifying Holdcos described in section
2.3(b) and shall include Qualifying Holdco Shareholders described
in
section 2.3(b) and such Qualifying Holdco Shareholders shall be considered
to own Shares owned by their Qualifying
Holdcos.
|
|
|
(b)
|
Until
surrendered as contemplated by this section 4.1, each certificate
which
immediately prior to the Effective Time represented Shares shall
be deemed
after the time set out in section 2.3(b), to represent only the right
to
receive upon such surrender a cash payment, out of the cash deposited
pursuant to this section 4.1, in lieu of such certificate as contemplated
in this section 4.1, less any amounts withheld pursuant to section
4.3.
For greater certainty, as of the Effective Time, a Shareholder’s right and
a Qualifying Holdco Shareholder’s right to receive cash under the
Arrangement shall be satisfied only out of the amount deposited pursuant
to this section 4.1 and such Shareholder or Qualifying Holdco Shareholder
shall have no further right or claim as against Acquireco or the
Corporation except to the extent the cash deposited by Acquireco
is
insufficient to satisfy the amounts payable to the Shareholders or
Qualifying Holdco Shareholders. Any such certificate formerly representing
Shares not duly surrendered on or before the sixth anniversary of
the
Effective Date shall cease to represent a claim by or interest of
any
former Shareholder of any kind or nature against or in the Corporation
or
Acquireco. On such date, all Acquireco cash to which such
former holder was entitled shall be deemed to have been surrendered
to
Acquireco.
|
In
the
event any certificate which immediately prior to the Effective Time represented
one or more outstanding Shares that were exchanged pursuant to section 2.3
shall
have been lost, stolen or destroyed, upon the making of an affidavit of that
fact by the Person claiming such certificate to be lost, stolen or destroyed,
the Depositary will issue in exchange for such lost, stolen or destroyed
certificate, cash deliverable in accordance with such holder’s Letter of
Transmittal. When authorizing such payment in exchange for any lost,
stolen or destroyed certificate, the Person to whom such cash is to be delivered
shall as a condition precedent to the delivery of such cash, give a bond
satisfactory to Acquireco and the Depositary in such sum as Acquireco may
direct, or otherwise indemnify Acquireco and the Corporation in a manner
satisfactory to Acquireco and the Corporation, against any claim that may be
made against Acquireco and the Corporation with respect to the certificate
alleged to have been lost, stolen or destroyed.
|
4.2
|
Transfer
of Options, RSUs and DSUs
|
At
or
before time of the issuance of the Certificate of Arrangement, the Corporation
shall deposit, for the benefit of the persons entitled to amounts under the
transactions described in Section 2.3(a)(i) through (iii), sufficient cash
to
pay the amounts outstanding as a result of such transactions. The
Corporation shall also provide the Depositary with the requisite information
regarding the identity of the holders of Options, RSUs and DSUs that are
transferred to the Corporation pursuant to Section 2.3(a) (“Eligible
Holders”) and the amounts to which such Eligible Holders have become
entitled as a result of such transactions. Each Eligible Holder shall
be entitled to receive, from the cash deposited with the Depositary pursuant
to
this Section 4.2, the amount which such Eligible Holder has the right to receive
under the Arrangement in respect of his Option, RSU or DSU, as the case may
be,
less any amounts withheld pursuant to section 4.3 and shall have no claim
against the Corporation or Acquireco except to the extent the cash deposited
by
the Corporation is insufficient to satisfy the amounts payable to the Eligible
Holders. The cash deposited with the Depositary shall be held in an
interest-bearing account, and any interest earned on such funds shall be applied
against the expenses of the Depositary and under no circumstances will any
interest be payable to Eligible Holders.
4.3 Withholding
Rights
Acquireco,
the Corporation or the Depositary shall be entitled to deduct and withhold
from
any amount payable to any Person under the Plan of Arrangement (including,
without limitation, any amounts payable pursuant to section 3.1), such amounts
as Acquireco, the Corporation or the Depositary is required or permitted to
deduct and withhold with respect to such payment under the ITA or any provision
of federal, provincial, territorial, local or foreign tax laws, in each case,
as
amended. To the extent that amounts are so withheld, such withheld
amounts shall be treated for all purposes hereof as having been paid to the
Person in respect of which such withholding was made, provided that such amounts
are actually remitted to the appropriate taxing authority.
ARTICLE
5
AMENDMENTS
|
5.1
|
Amendments
to Plan of Arrangement
|
|
|
(a)
|
The
Corporation may amend, modify and/or supplement this Plan of Arrangement
at any time and from time to time prior to the Effective Date, provided
that each such amendment, modification and/or supplement must (i)
be set
out in writing, (ii) be approved by Acquireco, (iii) filed with the
Court
and, if made following the Meeting, approved by the Court, and (iv)
communicated to Shareholders if and as required by the
Court.
|
|
|
(b)
|
Any
amendment, modification or supplement to this Plan of Arrangement
may be
proposed by the Corporation at any time prior to the Meeting (provided
that Acquireco shall have consented thereto acting reasonably) with
or
without any other prior notice or communication, and if so proposed
and
accepted by the Persons voting at the Meeting (other than as may
be
required under the Interim Order), shall become part of this Plan
of
Arrangement for all purposes.
|
|
|
(c)
|
Any
amendment, modification or supplement to this Plan of Arrangement
that is
approved or directed by the Court following the Meeting shall be
effective
only if (i) it is consented to by each of the Corporation and Acquireco
(in each case, acting reasonably) and (ii) if required by the Court,
it is
consented to by Shareholders voting in the manner directed by the
Court.
|
|
|
(d)
|
Any
amendment, modification or supplement to this Plan of Arrangement
may be
made following the Effective Date unilaterally by Acquireco, provided
that
it concerns a matter which, in the reasonable opinion of Acquireco,
is of
an administrative nature required to better give effect to the
implementation of this Plan of Arrangement and is not adverse to
the
economic interest of any former
Shareholder.
|
ARTICLE
6
FURTHER
ASSURANCES
|
6.1
|
Notwithstanding
that the transactions and events set out herein shall occur and shall
be
deemed to occur in the order set out in this Plan of Arrangement
without
any further act or formality, each of the parties to the Arrangement
Agreement shall make, do and execute, or cause to be made, done and
executed, all such further acts, deeds, agreements, transfers, assurances,
instruments or documents as may reasonably be required by any of
them in
order further to document or evidence any of the transactions or
events
set out herein.
|
