EXHIBIT 10.4
ADSERO CORP.
and
YAC CORP.
and
3091732 NOVA SCOTIA COMPANY
AS "ADSERO CALLCO"
and
3091503 NOVA SCOTIA COMPANY
AS "COMPANY" OR "TAC"
and
THE PERSONS WHO HOLD PREFERRED SHARES
OF THE COMPANY AND
ARE IDENTIFIED AS "HOLDERS" ON THE SIGNATURE
PAGE HEREOF
AS "HOLDERS"
PREFERRED SHARES
PURCHASE AND SUPPORT AGREEMENT
ARTICLE 1
DEFINITIONS AND INTERPRETATION
------------------------------
Page #
Section 1.1 Definitions 1
Section 1.2 Interpretation Not Affected by Headings, Etc. 3
Section 1.3 Number, Gender, Etc. 3
Section 1.4 Date for Any Action 3
Section 1.5 Currency 3
ARTICLE 2
SHAREHOLDER'S INFORMATION
-------------------------
Section 2.1 Copies of Shareholder Information 3
Section 2.2 Other Materials 3
ARTICLE 3
CERTAIN RIGHTS OF ADSERO CALLCO TO ACQUIRE PREFERRED SHARES
-----------------------------------------------------------
Section 3.1 Adsero Callco Retraction Call Right 4
Section 3.2 Restrictions on Transfer 4
Section 3.3 Call Rights 5
ARTICLE 4
REPRESENTATIONS, WARRANTIES AND COVENANTS
OF ADSERO, YAC, ADSERO CALLCO AND THE COMPANY
---------------------------------------------
Section 4.1 Covenants of Adsero Regarding Preferred Shares 5
Section 4.2 Notification of Certain Events 6
Section 4.3 Delivery of Shares by the Company 6
Section 4.4 Ownership of Outstanding Shares; Voting 7
Section 4.5 Adsero and Affiliates Not to Vote Preferred Shares 7
Section 4.6 Tender Offers, Etc. 7
Section 4.7 Representations and Warranties of Adsero
YAC, Adsero Callco and the Company 7
Section 4.8 Registration and Reservation of Adsero
Common Shares 8
ARTICLE 5
AMENDMENTS AND SUPPLEMENTAL AGREEMENTS
--------------------------------------
Section 5.1 Amendments, Modifications, Etc. 8
Section 5.2 Changes in Capital of Adsero and the Company 8
ARTICLE 6
TERMINATION
-----------
Section 6.1 Term 9
ARTICLE 7
GENERAL
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Section 7.1 Severability 9
Section 7.2 Enurement 9
Section 7.3 Notices to Parties 9
Section 7.4 Risk of Payments by Post 10
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Page #
Section 7.5 Counterparts 11
Section 7.6 Jurisdiction 11
Section 7.7 Language 11
ADDENDA
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Schedule "A" - Preferred Share Provisions.
ii
PREFERRED SHARES
PURCHASE AND SUPPORT AGREEMENT
THIS AGREEMENT is entered into as of January 2, 2005, by Adsero Corp.,
a corporation existing under the laws of the State of Delaware and doing
business as Adsero Corp. ("Adsero"), 3091732 Nova Scotia Company, an unlimited
company existing under the laws of the Province of Nova Scotia ("Adsero
Callco"), 3091503 Nova Scotia Company, an unlimited company existing under the
laws of the Province of Nova Scotia (the `Company"), YAC Corp. ("YAC") and the
persons who hold Preferred Shares of the Company and are Identified as the
"Holders' on the signature page hereof (collectively, the "Holders").
WHEREAS, pursuant to a Share Purchase Agreement dated as of January 2,
2005, by and among Adsero, the Company, Adsero Callco, YAC, Teckn-O-Laser
Company, Teckn-O-Laser Global Company, the Holders, and other security holders
of the Company named therein (the "Purchase Agreement"), the parties thereto
agreed that on the closing of the transactions contemplated under the Purchase
Agreement, the parties hereto would execute and deliver an Exchange and Support
Agreement containing the terms and conditions set forth as an Exhibit to the
Purchase Agreement;
AND WHEREAS pursuant to the Purchase Agreement, the Company has issued
to the Holders certain Preferred Shares of the Company (the "Preferred Shares")
having the rights, privileges, restrictions and conditions set forth in Schedule
"A" (collectively, the "Preferred Share Provisions");
AND WHEREAS Adsero Callco is to have the right, exercisable upon the
occurrence of certain events, to require the Holders to sell their Preferred
Shares to Adsero Callco pursuant to a predetermined schedule;
NOW THEREFORE, in consideration of the respective covenants and
agreements provided in this agreement and for other good and valuable
consideration (including the payment of $1.00 and other valuable consideration
by the Holders to each of Adsero, YAC, Adsero Callco and the Company in
consideration of the right granted to the Holders herein) (the receipt and
sufficiency of which are hereby acknowledged), the parties agree as follows:
ARTICLE 1
DEFINITIONS AND INTERPRETATION
------------------------------
SECTION 1.1 Definitions.
In this agreement, the following terms shall have the following meanings:
"ACT" means the Companies Act (Nova Scotia), as amended, consolidated
or reenacted from time to time.
"ADSERO COMMON SHARES" means the shares of Common Stock, par value
$0.001 per share, in the capital of Adsero.
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"AFFILIATE" shall have the meaning ascribed thereto in the Canada
Business Corporations Act, as amended, consolidated or re-enacted from
time to time.
"BOARD OF DIRECTORS" means the board of directors of the Company;
"BUSINESS DAY" has the meaning provided in the Preferred Share
Provisions.
"CONVERSION DATE" has the meaning provided in the Preferred Share
Provisions.
"CONVERSION REQUEST" has the meaning provided in the Preferred Share
Provisions.
"EFFECTIVE DATE" has the meaning provided in the Preferred Share
Provisions.
"HOLDER(S)" means a Holder who exercises any of the rights provided
hereunder, as the context requires.
"INSIDER" means (i) an officer or director of Adsero or of a subsidiary
thereof, (ii) a person beneficially owing ten percent (10%) or more of
the issued and outstanding voting securities of Adsero or (iii) a
person that directly or indirectly through one or more intermediaries,
controls or is controlled by, or is under common control with Adsero.
"INSOLVENCY EVENT" means the institution by the Company of any
proceeding to be adjudicated a bankrupt or insolvent or to be dissolved
or wound-up, or the consent of the Company to the institution of
bankruptcy, insolvency, dissolution or winding-up proceedings against
it, or the filing of a petition, answer or consent seeking dissolution
or winding-up under any bankruptcy, insolvency or analogous laws,
including without limitation the Companies Creditors' Arrangement Act
(Canada) and the Bankruptcy and Insolvency Act (Canada), and the
failure by the Company to contest in good faith any such proceedings
commenced in respect of the Company within 15 days of becoming aware
thereof, or the consent by the Company to the filing of any such
petition or to the appointment of a receiver, or the making by the
Company of a general assignment for the benefit of creditors, or the
admission in writing by the Company of its inability to pay its debts
generally as they become due or the failure by the Company to declare
and pay any dividends as set forth under Article 3 of the Series I and
Series II Exchangeable Share Provisions, or the Company not being
permitted, pursuant to liquidity or solvency requirements of applicable
law, to declare any dividend or to redeem any Retracted Shares pursuant
to Section 6.5 of the Series I and Series II Exchangeable Share
Provisions.
"OFFICER'S CERTIFICATE" means, with respect to Adsero or the Company, a
certificate signed on behalf of such entity by any one of the Chairman
of the Board, the Vice-Chairman of the Board, the Chief Executive
Officer, the President, the Chief Financial Officer or any Executive
Vice-President, Senior Vice-President or Vice-President (or the
officers with equivalent responsibilities) of Adsero or the Company.
"PERSON" includes an individual, body corporate, partnership, company,
unincorporated syndicate or organization, trust, trustee, executor,
administrator and other legal representative.
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"PREFERRED SHARE PROVISIONS" are as described in Schedule "A".
"PREFERRED SHARES" has the meaning provided in the Preferred Share
Provisions.
"SUBSIDIARY" has the meaning provided in the Preferred Share
Provisions.
SECTION 1.2 Interpretation Not Affected by Headings, Etc.
The division of this agreement into articles, Sections and paragraphs
and the insertion of headings are for convenience of reference only and shall
not affect the construction or interpretation of this agreement.
SECTION 1.3 Number, Gender, Etc.
Words importing the singular number only shall include the plural and
vice versa. Words importing the use of any gender shall include all genders.
SECTION 1.4 Date for Any Action.
If any date on which any action is required to be taken under this
agreement is not a Business Day, such action shall be required to be taken on
the next succeeding Business Day.
SECTION 1.5 Currency
All amounts in this agreement and its Schedule "A" are in Canadian
currency.
ARTICLE 2
SHAREHOLDER'S INFORMATION
-------------------------
SECTION 2.1 Copies of Shareholder Information.
Adsero shall mail or cause to be mailed (or otherwise communicate in
the same manner as Adsero uses in communications to holders of Adsero Common
Shares) to the Holders copies of all information statements, reports (including
without limitation all interim and annual financial statements) and other
written communications that are distributed from time to time to holders of
Adsero Common Shares at the same time as such materials are first sent to
holders of Adsero Common Shares.
SECTION 2.2 Other Materials.
Immediately after receipt by Adsero of any material sent or given
generally to the holders of Adsero Common Shares by or on behalf of a third
party, including without limitation information circulars (and related
information and material) and tender and exchange offer circulars (and related
information and material), Adsero shall obtain and deliver to the Holders copies
thereof as soon as possible thereafter.
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ARTICLE 3
CERTAIN RIGHTS OF ADSERO CALLCO TO ACQUIRE PREFERRED SHARES
-----------------------------------------------------------
SECTION 3.1 Adsero Callco Retraction Call Right.
(1) Adsero Callco shall have the overriding right (the "Retraction Call Right"),
notwithstanding the proposed retraction of any Preferred Shares by a Holder
pursuant to Article 6 of the Preferred Share Provisions, to purchase from such
Holder on such Retraction Date the number of Preferred Shares that such Holder
has requested to be redeemed by the Company (the "Retracted Shares") held by
such Holder on payment by Adsero Callco to such Holder of an amount per
Retracted Share (the "Retraction Call Purchase Price") equal to one dollar for
each Preferred Share and nothing more (the "Purchase Price") which shall be
satisfied in full by Adsero Callco delivering or causing to be delivered to such
Holder the Purchase Price. In the event of the exercise of the Retraction Call
Right by Adsero Callco, such Holder shall be obligated to sell all of the
Retracted Shares held by such Holder to Adsero Callco on the Retraction Date on
payment by Adsero Callco to such Holder of the Purchase Price for each such
share and the Company shall have no obligation to redeem such shares so
purchased by Adsero Callco.
(2) Upon receipt by the Company of a Retraction Request, the Company shall
immediately notify Adsero Callco thereof. To exercise the Retraction Call Right,
Adsero Callco must notify the Company and the Holders of Adsero Callco's
intention to exercise such right within ten days of such notification to Adsero
Callco by the Company of receipt of the Retraction Request. The Company will
notify such Holders as to whether or not Adsero Callco has exercised the
Retraction Call Right forthwith after the expiry of the period during which the
same may be exercised by Adsero Callco. If Adsero Callco exercises the
Retraction Call Right, and provided that the Retraction Request is not revoked
by the Holder in the manner specified in Section 6.6 of the Preferred Share
Provisions, the Retraction Request shall thereupon be considered only to be an
offer by the Holder to sell such Retracted Shares to Adsero Callco in accordance
with the Retraction Call Right, and on the Retraction Date Adsero Callco will
purchase and each Holder will sell such Retracted Shares for the Purchase Price
which price shall be paid cash.
(3) For the purposes of completing the purchase of the Retracted Shares pursuant
to the Retraction Call Right, Adsero Callco shall deliver to each Holder, on or
before the Retraction Date, the Purchase Price upon presentation and surrender
by the Holders of certificates representing such Retracted Shares, together with
such other documents and instruments as may be required to effect a transfer of
Retracted Shares under the Act and the constating documents of the Company.
SECTION 3.2 Restrictions on Transfer
No Holder shall Transfer any Preferred Shares (or any other securities
of the Company received on account of the Holder's ownership of Preferred
Shares) unless such Transfer is (i) a Transfer of Preferred Shares by such
Holder for the Purchase Price pursuant to the terms of this agreement or (ii) is
a Transfer approved by the Board of Directors, which approval may be withheld
for any reason. As used above, the term "Transfer" includes the making of any
sale, exchange, assignment, hypothecation, gift, security interest, pledge or
other encumbrance, or any contract therefor, or other agreement or arrangement
with respect to the transfer of rights or any other beneficial interest in such
securities, the creation of any other claim thereto or any
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other transfer or disposition whatsoever, whether voluntary or involuntary,
affecting the right, title, interest or possession in or to such securities.
SECTION 3.3 Call Rights.
The Holders and the Company hereby acknowledge the Adsero Callco
Retraction Call Right in favour of Adsero Callco and further agree that the
Adsero Callco Retraction Call Right (i) is granted to Adsero Callco by the
Holders in partial consideration of the obligations of Adsero under the Purchase
Agreement; and (ii) may be assigned at any time and from time to time by Adsero
Callco in whole or in part upon written notice to the Holders provided that:
(x) such assignee acknowledges in writing the Preferred
Share Provisions and agrees to be bound by the terms
of this agreement; and
(y) notwithstanding such assignment, Adsero Callco shall
remain solidarily (jointly and severally) liable with
such assignee in respect of the obligations of such
assignee in connection with the exercise of the
Adsero Callco Retraction Call Right.
ARTICLE 4
REPRESENTATIONS, WARRANTIES AND COVENANTS
OF ADSERO, YAC, ADSERO CALLCO AND THE COMPANY
---------------------------------------------
SECTION 4.1 Covenants of Adsero Regarding Preferred Shares.
So long as any Preferred Shares are outstanding, Adsero will and will
cause its Subsidiaries to:
(a) not declare or pay any dividend on the Adsero Common Shares unless
(i) the Company shall declare and pay, as the case may be, an
equivalent dividend (as provided for in the Series I and the Series II
Exchangeable Share Provisions) on any issued Series I and the Series II
Exchangeable Shares and (ii) the Company shall have sufficient money or
other assets or authorized but unissued securities available to enable
the due declaration and the due and punctual payment, in accordance
with applicable law, of any such dividend on the Series I and the
Series II Exchangeable Shares;
(b) not permit the Company to issue any further Preferred Shares, or
any other shares of the Company having an attribute which permits the
holders thereof to exchange or convert into shares of Adsero or any
Affiliate of Adsero;
(c) enable, cause and permit the Company, in accordance with and
subject to applicable law, to do all such things as are reasonably
necessary or, in Adsero's judgment's desirable, to enable and permit
the Company to cause to be delivered Series II Exchangeable Shares to
the Holders in accordance with the provisions of Article 5 of the
Preferred Share Provisions;
(d) enable, cause and permit the Company in accordance with and subject
to applicable law, to cause to be delivered Series II Exchangeable
Shares to the Holders
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upon the conversion of the Preferred Shares in accordance with the
provisions of Article 5 or Article 6 of the Preferred Share Provisions,
as the case may be;
(e) enable and permit Adsero Callco and any assignee of Adsero Callco,
in accordance with applicable law, to perform its obligations arising
upon the exercise by it of the Adsero Callco Retraction Call Request;
and
(f) not consent to nor exercise its vote as a member of the Company to
initiate or permit the voluntary liquidation, dissolution or winding-up
of the Company nor take any action or omit to take any action that is
designed to result in the liquidation, dissolution or winding-up of the
Company.
SECTION 4.2 Notification of Certain Events.
In order to assist Adsero and Adsero Callco to comply with their
respective rights and obligations hereunder, the Company will give each of
Adsero, Adsero Callco and, as the case may be, the Holders notice of each of the
following events at the time set forth below:
(a) any determination by the Board of Directors to institute voluntary
liquidation, dissolution or winding-up proceedings with respect to the
Company or to effect any other distribution of the assets of the
Company among its members for the purpose of winding-up its affairs, at
least 30 days prior to the proposed effective date of such liquidation,
dissolution, winding-up or other distribution; it being understood that
any merger, amalgamation, consolidation, or similar transaction, and
any sale of all or any or substantially all of the assets of the
Company shall not, in and of itself, constitute a liquidation,
dissolution or winding-up;
(b) promptly, upon the earlier of (i) receipt by the Company of notice
of, and (ii) the Company otherwise becoming aware of any threatened or
instituted claim, suit, petition or other proceedings with respect to
the involuntary liquidation, dissolution or winding-up of the Company
or to effect any other distribution of the assets of the Company among
its members for the purpose of winding-up its affairs or of the
occurrence of any Insolvency Event;
(c) promptly, upon receipt by the Company of a Conversion Request; and
(d) promptly in the event of any determination by the Board of
Directors to take any action which would require a vote of the holders
of Preferred Shares.
SECTION 4.3 Delivery of Shares by the Company
All Series II Exchangeable Shares issuable pursuant to this agreement
or the Preferred Share Provisions shall be duly issued as fully paid and
non-assessable free and clear of any lien, hypothec, pledge, claim, encumbrance,
security interest or adverse claim or interest, other than those arising
hereunder, or under the Preferred Share Provisions. Any Preferred Shares
delivered by the Holders to the Company, Adsero Callco, Adsero or their
Affiliates pursuant to this agreement or the Preferred Share Provisions shall be
delivered free and clear of any lien, hypothec, pledge, claim, encumbrance,
security interest or adverse claim or interest, other than those arising
hereunder, under the Preferred Share Provisions or under applicable securities
laws.
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SECTION 4.4 Ownership of Outstanding Shares; Voting.
So long as any Preferred Shares are outstanding, (i) Adsero shall
remain the sole shareholder of YAC; (ii) YAC shall remain the sole shareholder
of Adsero Callco; and (iii) Adsero Callco shall remain the sole owner of issued
and outstanding securities of the Company to which are attached the voting
interests for the election of directors of the Company unless it obtains the
prior approval of the Holders given in accordance with Section 8.2 of the
Preferred Share Provisions. Adsero and its Subsidiaries shall not vote any
Preferred Shares in respect of any resolution referred to in Section 8.2 of the
Preferred Share Provisions.
SECTION 4.5 Adsero and Affiliates Not to Vote Preferred Shares.
Each of Adsero and Adsero Callco will appoint and cause to be appointed
proxyholders with respect to all Preferred Shares held by it or them and its or
their respective Affiliates for the sole purpose of attending each meeting of
Holders in order to be counted as part of the quorum for each such meeting. Each
of Adsero and Adsero Callco further covenants and agrees that it and they will
not and will cause its and their Affiliates not to exercise any voting rights
with respect to the Preferred Shares held by it or them or its or their
Affiliates in respect of any matter considered at any meeting of holders of
Preferred Shares.
SECTION 4.6 Tender Offers, Etc.
Adsero shall provide timely notice to the Holders of any proposed share
exchange offer, issuer bid, take-over bid or similar transaction (including any
Adsero Control Transaction as defined in the Preferred Share Provisions) with
respect to Adsero Common Shares proposed by Adsero or proposed to Adsero or its
stockholders (the "Offer") and recommended by the board of directors of Adsero,
or otherwise effected or to be effected with the consent or approval of the
board of directors of Adsero. Moreover, Adsero will use its best efforts
expeditiously and in good faith to take all such actions and to do all such
things as are necessary and desirable to enable and permit the Holders to
participate in such Offer to the same extent and on an economically equivalent
basis as the holders of Adsero Common Shares, without discrimination. Without
limiting the generality of the foregoing, Adsero will use its best efforts
expeditiously and in good faith to ensure that the Holders may participate in
all such Offers.
SECTION 4.7 Representations and Warranties of Adsero, YAC, Adsero Callco
and the Company
Each of Adsero, YAC, Adsero Callco and the Company hereby represent and
warrant that:
(a) it is a corporation incorporated and existing under the laws of its
incorporating jurisdiction and has the corporate power and authority to
enter into and perform its obligations under this agreement;
(b) the execution, delivery and performance by it of this agreement
(i) has been duly authorized by all necessary corporate action
on its part;
(ii) do not (or would not with the giving of notice, the lapse
of time or the
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happening of any other event or condition) result in a breach or a
violation of, or conflict with, any of the terms or provisions of its
constating documents or articles of association or any material
contracts or instruments to which it is a party or pursuant to which
any of its assets or property may be affected; and
(iii) will not result in the violation of any law; and
(c) this agreement has been duly executed and delivered by it and
constitutes a legal, valid and binding obligation enforceable against
it in accordance with its terms.
SECTION 4.8 Registration and Reservation of Adsero Common Shares.
Adsero hereby represents, warrants and covenants that it has
and will at all times keep available, free from pre-emptive and other rights,
out of its authorized and unissued capital stock such number of Adsero Common
Shares as are now and may hereafter be required to enable and permit the Company
to meet its obligations hereunder and under the Series I and Series II
Exchangeable Share Provisions. Furthermore, Adsero represents, warrants and
covenants that it will, at all times as of the effective date of the
registration statement being accepted by the United States Securities and
Exchange Commission maintain a sufficient number of Adsero Common Shares duly
registered in accordance with the Securities Xxx 0000 and the Securities
Xxxxxxxx Xxx 0000 as are now and may hereafter be required in order to enable
the Company or, as the case may be, Adsero Callco to meet their respective
obligations hereunder or under the Series I and Series II Exchangeable Share
Provisions and the Preferred Share Provisions; Adsero shall maintain at all
times the Adsero Common Shares listed on the OTC Bulletin Board or an equivalent
recognized North American Stock Exchange.
ARTICLE 5
AMENDMENTS AND SUPPLEMENTAL AGREEMENTS
--------------------------------------
SECTION 5.1 Amendments, Modifications, Etc.
This agreement may not be amended, modified or waived except by an
agreement in writing executed by the parties hereto.
SECTION 5.2 Changes in Capital of Adsero and the Company.
At all times after the occurrence of any event effected pursuant to the
Preferred Share Provisions or this agreement as a result of which either Adsero
Common Shares, the Preferred Shares or the Series II Exchangeable Shares or all
of them are in any way changed, this agreement shall forthwith be amended and
modified as necessary in order that the Holders maintain economically equivalent
rights and, in order that, where required, this agreement will apply with full
force and effect, mutatis mutandis, to all new securities into which Adsero
Common Shares, the Preferred Shares or the Series II Exchangeable Shares or all
of them are so changed and the parties hereto shall execute and deliver a
supplemental agreement giving effect to and evidencing such necessary amendments
and modifications. So long as there are any Preferred Shares outstanding, (i)
the Company will not issue any additional Preferred Shares to any Person, (other
than the Holders), (ii) YAC will not issue any securities to any Person other
than Adsero; and (iii) Adsero Callco will not issue any securities to any
Person, other than YAC.
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ARTICLE 6
TERMINATION
-----------
SECTION 6.1 Term.
This agreement shall continue until the earlier occurrence of the
following events:
(a) no Preferred Share is outstanding; or
(b) each of the parties hereto elects in writing to terminate this
agreement
ARTICLE 7
GENERAL
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SECTION 7.1 Severability.
The provisions of this agreement shall be deemed severable and the
invalidity or unenforceability of any provision shall not affect the validity or
enforceability of the other provisions hereof. If any provision of this
agreement, or the application thereof to any Person or entity or any
circumstance, is invalid or unenforceable, the remainder of this agreement and
the application of such provision to other Persons or circumstances shall not be
affected by such invalidity or unenforceability nor shall such invalidity or
unenforceability affect the validity or enforceability of such provision, or the
application thereof, in any other jurisdiction.
SECTION 7.2 Enurement.
This agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and permitted assigns.
SECTION 7.3 Notices to Parties.
Any notice, direction or other communication given under this agreement
shall be in writing and given by mail or delivering it or sending it by telecopy
or similar form or recorded communication addressed:
(a) if to Adsero, YAC or to Adsero Callco, to:
ADSERO CORP.
00 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, XX X0X 0X0
Attention: Chief Executive Officer
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
with a copy to:
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Gottbetter & Partners LLP
000 Xxxxxxx Xxx., 00xx Xxxxx
Xxx Xxxx, XX 00000-0000
XXX
Attention: Xxxxx Xxxxxxxx
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
(b) if to the Company, to:
c/o Adsero Corp
as set forth above.
(c) if to any Holder, to:
the address of the Holder recorded in the securities register
of the Company, or, in the event of the address of any such
Holder not being so recorded, then at the last known address
of such Holder.
with a copy to:
Xxxxxxxx Xxxxx s.e.n.c
0 Xxxxx Xxxxx Xxxxx
00xx Xxxxx
Xxxxxxxx, Xxxxxx X0X 0X0
Attention Xxxxxx Xxxxxx
Any notice, request or other communication to be given to a Holder of
Preferred Shares by or on behalf of the Company shall be in writing and shall be
valid and effective if given by mail (postage prepaid) or by telecopy or
delivery to the address of the Holder of record in the securities register of
the Company or, in the event of the address of any such Holder not being so
recorded, then at the last known address of such Holder. Any such notice,
request or other communication, if given by mail or telecopy, shall only be
deemed to have been given and received on the second Business Day following the
date of mailing and, if given by delivery, shall be deemed to have been given
and received on the date of delivery. The failure to deliver a notice to an
Insider of either the Company, Adsero Callco, YAC or Adsero at the time such
notice was required to be sent shall not amount to a default under this
agreement or the Preferred Share Provisions.
SECTION 7.4 Risk of Payments by Post.
Whenever payments are to be made or documents are to be sent to the
Holders by the Company, Adsero or Adsero Callco, or by the Holders to the
Company, Adsero or Adsero Callco, the making of such payment or sending of such
document sent through the post shall be at the risk of the Company, Adsero or
Adsero Callco, in the case of payments made or documents sent by the Company,
Adsero or Adsero Callco, and the Holders, in the case of payments made or
documents sent by the Holders.
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SECTION 7.5 Counterparts.
This agreement may be executed in counterparts, each of which shall be
deemed an original, but all of which taken together shall constitute one and the
same instrument.
SECTION 7.6 Jurisdiction.
This agreement shall be construed and enforced in accordance with the
laws of the Province of Quebec and the laws of Canada applicable therein.
SECTION 7.7 Language
Parties have agreed that this Agreement and its schedules be drafted in
the English language only. Les Parties ont convenu que cette convention et ses
annexes soient redigees en anglais seulement.
IN WITNESS WHEREOF, the parties hereby have executed this agreement or
caused this agreement to be executed by their respective duly authorized
officers as of the date first above written. [Signatures to be updated]
ADSERO CORP. 3091503 NOVA SCOTIA COMPANY
Per: /s/ Xxxxxxx Xxxxx Per: /s/ Xxxxxxx Xxxxx
------------------------------- ------------------------------
Name: Xxxxxxx Xxxxx Name: Xxxxxxx Xxxxx
Title: Chief Financial Officer Title: President
3091732 NOVA SCOTIA COMPANY YAC CORP.
Per: /s/ Xxxxxxx Xxxxx Per: /s/ Xxxxxxx Xxxxx
------------------------------- ------------------------------
Name: Xxxxxxx Xxxxx Name: Xxxxxxx Xxxxx
Title: President Title: President
HOLDERS:
0000-0000 XXXXXX INC. 0000-0000 XXXXXX INC.
Per: /s/ Xxxx Xxxxxxxx Per: /s/ Xxxxx Xxxxxxxxx
------------------------------- ------------------------------
Name: Xxxx Xxxxxxxx Name: Xxxxx Xxxxxxxxx
Title: President Title: President
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SCHEDULE "A"
------------
PROVISIONS ATTACHING TO THE PREFERRED SHARES OF
3091503 NOVA SCOTIA COMPANY
The Preferred Shares with a par value of $1.00 per share in the capital
of the Company shall have the following rights, privileges, restrictions and
conditions:
ARTICLE 1
INTERPRETATION
For the purposes of these rights, privileges, restrictions and
conditions:
SECTION 1.1 Definitions.
"ACT" means the Companies Act (Nova Scotia) as amended, consolidated or
re-enacted from time to time.
"ADSERO" means Adsero Corp., a Delaware corporation doing business as Adsero and
includes any successor corporation.
"ADSERO CALLCO" means 3091732 Nova Scotia Company, an unlimited company
incorporated and existing under the laws of the Province of Nova Scotia, and
includes any successor company.
"ADSERO COMMON SHARES" means the shares of Common Stock, par value U.S. $0.001
per share, in the capital of Adsero.
"ADSERO CONTROL TRANSACTION" shall be deemed to have occurred if:
(a) except for the holders or any of them, any person, firm or
corporation acquires directly or indirectly the Beneficial Ownership
(as defined in Section 13(d) of the Securities Exchange Act of 1934, as
amended) of any voting security of Adsero and immediately after such
acquisition, the acquirer has Beneficial Ownership of voting securities
representing 50% or more of the total voting power of all the then
outstanding voting securities of Adsero;
(b) The individuals who:
(i) as of the Effective Date constitute the Board of Directors
of Adsero (the "Original Directors");
(ii) thereafter are elected to the Board of Directors of
Adsero (the "Adsero Board") and whose election, or nomination
for election, to the Adsero Board was approved by a vote of at
least 2/3 of the Original Directors then still in office (such
directors being called "Additional Original Directors"); or
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(iii) are elected to the Adsero Board and whose election, or
nomination for election, to the Adsero Board was approved by a
vote of at least 2/3 of the Original Directors and Additional
Original Directors then still in office,
cease for any reason to constitute a majority of the members of the Adsero
Board;
(c) The stockholders of Adsero shall approve a merger, consolidation,
recapitalization or reorganization of Adsero or consummation of any
such transaction if stockholder approval is not sought or obtained,
other than any such transaction which would result in at least 75% of
the total voting power represented by the voting securities of the
surviving entity outstanding immediately alter such transaction being
Beneficially Owned by holders of outstanding voting securities of
Adsero immediately prior to the transaction, with the voting power of
each such continuing holder relative to such other continuing holders
being not altered substantially in the transaction; or
(d) The stockholders of Adsero shall approve a plan of complete
liquidation of Adsero or an agreement for the sale or disposition by
Adsero of all or a substantial portion of Adsero's assets (i.e. 50% or
more in value of the total assets of Adsero).
"AFFILIATE" has the meaning ascribed thereto in the Canada Business Corporations
Act as amended, consolidated or re-enacted from time to time.
"BOARD OF DIRECTORS" means the Board of Directors of the Company and any
committee thereof acting within its authority.
"BUSINESS DAY" means any day, other than a Saturday, a Sunday or a day when
banks are not generally open for business in Montreal, Quebec or New York, New
York.
"COMMON SHARES" means the common shares in the capital of the Company.
"COMPANY" means 3091503 Nova Scotia Limited, a company existing under the Act.
"EFFECTIVE DATE" means the date of issue of the Preferred Shares.
"INSOLVENCY EVENT" has the meaning provided in the Preferred Shares Purchase and
Support Agreement.
"LIQUIDATION CONSIDERATION" has the meaning provided in Section 5.1 hereof.
"LIQUIDATION DATE" has the meaning provided in Section 5.1 hereof.
"PREFERRED SHARE VOTING EVENT" means any matter in respect of which holders of
Preferred Shares are entitled to vote as members (shareholders) of the Company
in order to approve or disapprove, as applicable, any change to, or in the
rights of the holders of the Preferred Shares.
"PREFERRED SHARES" means the preferred shares in the capital of the Company
having the rights, privileges, restrictions and conditions set forth herein.
"PREFERRED SHARES PURCHASE AND SUPPORT AGREEMENT" means that certain Purchase
and Support Agreement between Adsero, YAC, Adsero Callco, the Company, and the
holders of
13
Preferred Shares as of the Effective Date to be entered into contemporaneously
with the first issue of the Preferred Shares.
"RETRACTED SHARES" has the meaning provided in Section 6.1(a) hereof.
"RETRACTION CALL RIGHT" has the meaning provided in the Preferred Shares
Purchase and Support Agreement.
"RETRACTION DATE" has the meaning provided in Section 6.1(b) hereof.
"RETRACTION REQUEST" has the meaning provided in Section 6.1 hereof.
"SUBSIDIARY", in relation to any person, means any body corporate, partnership,
joint venture, association or other entity of which more than 50% of the total
voting power of shares or units of ownership or beneficial interest entitled to
vote in the election of directors (or members of a comparable governing body) is
owned or controlled, directly or indirectly, by such person.
"TRANSFER" has the meaning provided in Section 10.3 hereof.
"YAC" means YAC Corp., a Delaware corporation doing business as YAC and
including any successor corporation.
ARTICLE 2
RANKING OF THE PREFERRED SHARES
SECTION 2.1
The Preferred Shares shall be entitled to a preference, as provided in
Article 5, over the Common Shares, the Series I Exchangeable Shares and the
Series II Exchangeable Shares and any other shares ranking junior to the
Preferred Shares with respect to the distribution of assets in the event of the
liquidation, dissolution or winding-up of the Company, whether voluntary or
involuntary, or any other distribution of the assets of the Company among its
members for the purpose of winding-up its affairs.
ARTICLE 3
DIVIDENDS
SECTION 3.1
(1) The holders of the Preferred Shares shall not be entitled to any dividends.
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ARTICLE 4
CERTAIN RESTRICTIONS
SECTION 4.1
So long as any of the Preferred Shares are outstanding, the Company
shall not without, but may at any time with the approval of the holders of the
Preferred Shares given as specified in Section 8.2 of these share provisions:
(a) amend the constating documents of the Company in a manner which
would prejudicially affect the holders of Preferred Shares in any
material respect; or
(b) initiate the voluntary liquidation, dissolution or winding-up of
the Company or take any action or omit to take any action that is
designed to result in the liquidation, dissolution or winding-up of the
Company.
SECTION 4.2
So long as any of the Preferred Shares are outstanding the Company
shall not without, but may at any time with the approval of the holders of the
Preferred Shares given as specified in Section 8.2 of these share provisions:
(a) pay any dividends on the Common Shares:
(b) redeem or purchase or make any capital distribution in respect of
Common Shares.
ARTICLE 5
DISTRIBUTION ON LIQUIDATION
SECTION 5.1
In the event of the liquidation, dissolution or winding-up of the
Company, an Insolvency Event or any other distribution of the assets of the
Company among its members for the purpose of winding-up its affairs, a holder of
Preferred Shares shall be entitled, subject to applicable law, to receive an
amount of $1.00 for each Preferred Share (the "Liquidation Consideration") on
the effective date of such liquidation, dissolution or winding-up of the
Company, or of an Insolvency Event or any other distribution of the assets of
the Company among its members (the "Liquidation Date"), before any distribution
of any part of the assets of the Company to the holders of any other Shares of
the Company.
SECTION 5.2
On or promptly after the Liquidation Date, the Company shall cause to
be delivered to the holders of the Preferred Shares the Liquidation
Consideration for each such Preferred Share upon presentation and surrender of
the certificates representing such Preferred Shares, together with such other
documents and instruments as may be required to effect a transfer of Preferred
Shares under the Act and the constating documents of the Company and such
15
additional documents and instruments as the Company may reasonably require, at
the principal executive offices of the Company. The total Liquidation
Consideration for such Preferred Shares shall be delivered to each holder, at
the address of the holder recorded in the securities register of the Company for
the Preferred Shares or by holding for pick up by the holder at the place of
delivery.
On and after the Liquidation Date, the holders of the Preferred Shares
shall cease to be holders of such Preferred Shares and shall not be entitled to
exercise any of the rights of holders in respect thereof, other than the right
to receive their proportionate share of the total Liquidation Consideration,
unless payment of the total Liquidation Consideration for such Preferred Shares
shall not be made upon presentation and surrender of share certificates in
accordance with the foregoing provisions in which case the rights of the holders
shall remain unaffected until the total Liquidation Consideration has been paid
in the manner hereinbefore provided. The Company shall have the right at any
time on or after the Liquidation Date to deposit or cause to be deposited the
Liquidation Consideration in respect of the Preferred Shares represented by
certificates that have not at the Liquidation Date been surrendered by the
holders thereof in the custody of any chartered bank or trust company in Canada.
Upon such deposit being made, the rights of the holders of Preferred Shares
after such deposit shall be limited to receiving their proportionate share of
the total Liquidation Consideration for such Preferred Shares so deposited
against presentation and surrender of such certificates held by them,
respectively, in accordance with the foregoing provisions.
SECTION 5.3
After the Company has satisfied its obligations to pay the holders of
the Preferred Shares the Liquidation Consideration per Preferred Share, such
holders shall not be entitled to share in any further distribution of the assets
of the Company.
ARTICLE 6
RETRACTION OF PREFERRED SHARES BY HOLDER
SECTION 6.1
A holder of Preferred Shares shall be entitled, subject to the exercise
by Adsero Callco of the Retraction Call Right, and otherwise upon compliance
with the provisions of these Sections 6.1 to 6.4, to require the Company to
redeem at the times specified herein below in Section 6.4 the number, as
specified herein below in Section 6.4 of Preferred Shares registered in the name
of such Holder in exchange for the payment of an amount of $1.00 for each such
Preferred Share being tendered. To effect such a retraction, the Holder shall
present and surrender at the principal executive offices of the Company the
certificates representing the Preferred Shares which the holder desires to have
the Company redeem, together with such other documents and instruments as may be
required to effect a retraction of Preferred Shares under the Act and the
constating documents of the Company, and together with a duly executed statement
(the "Retraction Request') in the form of Exhibit "A' hereto or in such other
form as may be acceptable to the Company:
(a) specifying that the holder desires to have the number specified in
Section 6.4 of the Preferred Shares represented by such certificate or
certificates (the "Retracted Shares") redeemed by the Company;
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(b) stating the Business Day on which the holder desires to have the
Company redeem the Retracted Shares (the `Retraction Date") as
specified in Section 6.4; and
(c) acknowledging the Retraction Call Right of Adsero Callco in the
Preferred Shares Purchase and Support Agreement to purchase the number
as specified herein below of the Retracted Shares directly from the
holder and that the Retraction Request shall be deemed to be a
revocable offer by the holder to sell the Retracted Shares in
accordance with the Preferred Shares Purchase and Support Agreement.
SECTION 6.2
Subject to the exercise by Adsero Callco of the Retraction Call Right,
upon receipt by the Company in the manner specified in Section 6.1 hereof of a
certificate or certificates representing the number of Preferred Shares which
the holder desires to have the Company redeem, together with a Retraction
Request, the Company shall redeem the Retracted Shares effective at the close of
business on the Retraction Date and shall cause to be delivered to such holder
the amount of $1.00 with respect to each such share in accordance with Section
6.3 hereof. If only a part of the Preferred Shares represented by any
certificate is redeemed, a new certificate for the balance of such Preferred
Shares shall be issued to the holder at the expense of the Company.
SECTION 6.3
Subject to the provisons hereof, on and after the close of business on
the Retraction Date, the holder of the Retracted Shares shall not be entitled to
exercise any of the rights of a holder in respect thereof, other than the right
to receive the amount of $1.00 for each such redeemed Preferred Share on and
after the close of business on the Retraction Date, provided that presentation
and surrender of certificates and retraction of Retracted Shares has been made
in accordance with the foregoing provisions, the holder of the Retracted Shares
shall thereafter be considered to be no longer the holder of such Preferred
Shares of the Company.
SECTION 6.4
Holders of Preferred Shares may on the following dates issue jointly a
Retraction Request pro rata to their Preferred Shares holdings for the following
number of Preferred Shares:
September 1, 2005: 750,000 Preferred Shares;
September 30, 2005: 443,250 Preferred Shares;
December 31, 2005: 443,250 Preferred Shares; and
March 31, 2006: 295,500 Preferred Shares
SECTION 6.5
If the Company fails or neglects to pay an amount of $1.00 on the
Retraction Date for each such Preferred Share being tendered by a holder
pursuant to Sections 6.1 to 6.4 hereunder, on the day following the Retraction
Date, the Company shall redeem the Retracted Shares and issue in lieu thereof
Series II Exchangeable Shares of the Company registered in the name of such
Holder on the basis of two and a half (2.5) Series II Exchangeable Shares for
17
each Preferred Share redeemed effective at the close of business on the day
following the Retraction Date. The Company shall cause to be delivered to such
holder the Series II Exchangeable Share certificates representing the requisite
number of Series II Exchangeable Shares in accordance with Section 6.6 hereof.
If only a part of the Preferred Shares represented by any certificate are
redeemed, a new certificate for the balance of such Preferred Shares shall be
issued to the holder at the expense of the Company.
SECTION 6.6
The Company shall deliver, or cause to be delivered, the Series II
Exchangeable Share certificates representing the requisite number of Series II
Exchangeable Shares to the relevant holder, at the address of the holder
recorded in the securities register of the Company for the Preferred Shares or
at the address specified in the holder's Retraction Request or upon demand by
the Holder, by holding for pick up by the holder at the principal executive
offices of the Company.
SECTION 6.7
On and after the close of business on the Retraction Date, the holder
of the Retracted Shares shall not be entitled to exercise any of the rights of a
holder in respect thereof, other than the right to receive his proportionate
number of Series II Exchangeable Share on the close of business on the day
following the Retraction Date, provided that presentation and surrender of
certificates and redemption of Retracted Shares has been made in accordance with
the foregoing provisions, the holder of the Retracted Shares shall thereafter be
considered and deemed for all purposes to be a holder of the Series II
Exchangeable Shares.
ARTICLE 7
VOTING RIGHTS
SECTION 7.1
Except as required by applicable law and the provisions hereof, the
holders of the Preferred Shares shall not be entitled as such to receive notice
of or to attend any meeting of the members of the Company or to vote at any such
meeting or to vote by written consent on any matter.
ARTICLE 8
AMENDMENT AND APPROVAL
SECTION 8.1
Subject to the approval of the holders of the Preferred Shares to which
are attached the right to vote in the event that such change, removal or
addition would affect their respective rights, the rights, privileges,
restrictions and conditions attaching to the Preferred Shares may be added to,
changed or removed as hereinafter provided in Section 8.2.
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SECTION 8.2
Any approval given by holders of the Preferred Shares to add to, change
or remove any right, privilege, restriction or condition attaching to the
Preferred Shares or any other matter requiring the approval or consent of the
holders of the Preferred Shares shall be deemed to have been sufficiently given
if it shall have been given in accordance with applicable law, provided,
however, that such approval must be evidenced by a written resolution passed by
not less than 75% of the votes cast on such resolution by persons represented in
person or by proxy or such other authorized person at a meeting of holders of
Preferred Shares duly called and held at which the holders of at least 50% of
the outstanding Preferred Shares at that time are present or represented by
proxy or such other authorized person (excluding Preferred Shares beneficially
owned by Adsero, YAC, Adsero Callco, their Affiliates or Subsidiaries, if any),
or by a written resolution signed by the holders of the then outstanding
Preferred Shares excluding Preferred Shares beneficially owned by Adsero, YAC,
Adsero Callco, their Affiliates or Subsidiaries, if any, if at any such meeting
the holders of at least 50% of the outstanding Preferred Shares at that time are
not present or represented by proxy or such other authorized person within
one-half hour after the time appointed for such meeting, then the meeting shall
be adjourned to such date not less than ten days thereafter and to such time and
place as may be designated by the Chairperson of such meeting. At such adjourned
meeting, the holders of Preferred Shares present or represented by proxy or such
other authorized person thereat may transact the business for which the meeting
was originally called and a resolution passed thereat by the affirmative vote of
not less than 75% of the votes cast on such resolution by persons represented in
person or by proxy or such other authorized person at such meeting (excluding
Preferred Shares beneficially owned by Adsero, YAC, Adsero Callco, their
Affiliates or Subsidiaries) shall constitute the approval or consent of the
holders of the Preferred Shares.
ARTICLE 9
ACTIONS BY THE COMPANY UNDER THE
PREFERRED SHARES PURCHASE AND SUPPORT AGREEMENT
SECTION 9.1
The Company will take all reasonable efforts to perform and comply with
and to ensure performance and compliance by Adsero, YAC, Adsero Callco and the
Company with all provisions of the Preferred Shares Purchase and Support
Agreement applicable to Adsero, YAC, Adsero Callco and the Company,
respectively, in accordance with the terms thereof including, without
limitation, taking all such actions and doing all such things as shall be
necessary or advisable to enforce to the fullest extent possible for the direct
benefit of the Company and the holders of the Preferred Shares all rights and
benefits in favour of the Company and the holders of the Preferred Shares
pursuant thereto.
SECTION 9.2
The Company shall not propose, agree to or otherwise give effect to any
amendment to, or waiver or forgiveness of its obligations under the Preferred
Shares Purchase and Support Agreement without the approval of the holders of the
Preferred Shares given in accordance with Section 8.2 of these share provisions
other than such amendments, waivers and/or forgiveness as may be necessary or
advisable for the purpose of:
19
(a) adding to the covenants of the other party or parties to such
agreement for the protection of the holders of Preferred Shares; or
(b) making such provisions or modifications not inconsistent with such
agreement as may be necessary or desirable with respect to matters or
questions arising thereunder which, in the opinion of the Board of
Directors, it may be expedient to make, provided that such provisions
and modifications will not be prejudicial or adverse to the interests
of the holders of Preferred Shares; or
(c) making such changes in or corrections to such agreement which, on
the advice of counsel to the Company, are required for the purpose of
curing or correcting any defect or clerical omission or mistake or
manifest error contained therein, provided that the Board of Directors
shall be of the opinion, after consultation with counsel, that such
changes or corrections will not be prejudicial to the interests of the
holders of the Preferred Shares.
ARTICLE 10
LEGEND; CALL RIGHTS
SECTION 10.1
The certificates evidencing the Preferred Shares shall contain or have
affixed thereto a legend, in form and on terms approved by the Board of
Directors, with respect to the Retraction Call Right and the Preferred Shares
Purchase and Support Agreement.
SECTION 10.2
Each holder of a Preferred Share, whether of record or beneficial, by
virtue of becoming and being such a holder shall be deemed to acknowledge each
of the rights granted in the Preferred Shares Purchase and Support Agreement and
the overriding nature thereof in connection with the liquidation, dissolution or
winding-up of the Company or the retraction of Preferred Shares, as the case may
be, and to be bound thereby in favour of Adsero Callco or its assignee (as
provided in the Preferred Shares Purchase and Support Agreement) as therein
provided.
ARTICLE 11
MISCELLANEOUS
SECTION 11.1
Any notice, request or other communication to be given to the Company
by a holder of Preferred Shares shall be in writing and shall be valid and
effective if given by mail (postage prepaid) or by telecopy or delivery to the
principal executive offices of the Company or at such other reasonable place as
may be specified by the Board of Directors by notice to the holders of Preferred
Shares, and addressed to the attention of the President. Any such notice,
request or other communication, if given by mail, telecopy, facsimile or
delivery, shall only be deemed to have been given and received on the second
Business Day following the date of mailing and, if given by delivery, shall be
deemed to have been given and received on the date of delivery.
20
SECTION 11.2
Any presentation and surrender by a holder of Preferred Shares to the
Company of certificates representing Preferred Shares in connection with the
liquidation, dissolution or winding-up of the Company or the conversion of
Preferred Shares shall be made by registered mail (postage prepaid) or by
delivery to the principal executive offices of the Company by notice to the
holders of Preferred Shares addressed to the attention of the President of the
Company. Any such presentation and surrender of certificates shall only be
deemed to have been made and to be effective upon actual receipt thereof by the
Company, as the case may be, and the method of any such presentation and
surrender of certificates shall be at the sole risk of the holder, mailing the
same.
SECTION 11.3
Any notice, request or other communication to be given to a holder of
Preferred Shares by or on behalf of the Company shall be in writing and shall be
valid and effective if given by mail (postage prepaid) or by telecopy or
delivery to the address of the holder recorded in the securities register of the
Company or, in the event of the address of any such holder not being so
recorded, then at the last known address of such holder. Any such notice,
request or other communication, if given by mail or telecopy, shall only be
deemed to have been given and received on the second Business Day following the
date of mailing and, if given by delivery, shall be deemed to have been given
and received on the date of delivery.
SECTION 11.4
For greater certainty, the Company shall not be required for any
purpose under these share provisions to recognize or take account of persons who
are not so recorded in such securities register.
SECTION 11.5
For greater certainty, all Preferred Shares acquired by the Company
upon the retraction thereof, whether the Company pays to the Holder an amount of
$1.00 for each Preferred Share tendered or upon the issuance of 2.5 Series II
Exchangeable Shares for each Preferred Share tendered shall be cancelled.
SECTION 11.6
Immediately upon the delivery to a holder of Preferred Shares at any
time and from time to time of the Purchase Price as defined in Section 3.1(1) of
the Purchase and Support Agreement, the Preferred Shares which are the subject
of the Adsero Callco Retraction Call Right set forth in Section 3.1 of the
Purchase and Support Agreement shall be automatically converted into Common
Shares of the Company on a 1/1 ratio and the holder thereof is entitled to
receive a certificate or certificates upon demand representing the Common Shares
resulting from such conversion. All Common Shares issued by the Company in
respect of any conversion of issued and fully paid Preferred Shares shall be
deemed to be fully paid and non-assessable.
21
EXHIBIT "A"
RETRACTION REQUEST
------------------
TO: 3091503 Nova Scotia Company (the "Company")
AND TO: 3091732 Nova Scotia Company ("Adsero Callco")
This notice is given pursuant to Article 6 of the provisions (the
"Preferred Share Provisions") attaching to the Preferred Shares of the Company
represented by this certificate and all capitalized words and expressions used
in this notice which are defined in the Preferred Share Provisions have the
meaning attributed to such words and expressions in such Preferred Share
Provisions.
The undersigned hereby notifies the Company that, subject to the
Retraction Call Right referred to below, the undersigned desires to have the
Company redeem in accordance with Section 6.1 or Section 6.5, as the case may
be, of the Preferred Share Provisions:
[_] all share(s) represented by this certificate; or
[_] _________________________ share(s) only.
The undersigned hereby notifies the Company that the Retraction Date
shall be ________________________.
NOTE: The Retraction Date must be a Business Day as specified in Section 6.4
hereof.
The undersigned acknowledges the overriding Retraction Call Right of
Adsero Callco to purchase all but not less than all the Retracted Shares from
the undersigned and that this notice is and shall be deemed to be an offer by
the undersigned to sell the Retracted Shares to Adsero Callco in accordance with
the Retraction Call Right on the Retraction Date for the price and on the other
terms and conditions set out in the Preferred Shares Purchase and Support
Agreement and in these Preferred Share Provisions. If Adsero Callco determines
not to exercise the Retraction Call Right, the Company will notify the
undersigned of such fact as soon as possible.
The undersigned hereby represents and warrants to the Company and
Adsero Callco that the undersigned has good title to, and owns, the share(s)
represented by this certificate to be retracted by the Company or acquired by
Adsero Callco, as the case may be, free and clear of all liens, hypothecs,
pledges, claims, encumbrances, security interests and adverse claims or
interests except pursuant to the Preferred Shares Purchase and Support Agreement
or these Preferred Share Provisions.
_____________________ __________________________
(Date) (Signature of Shareholder)
[_] Please check box if the securities and any cheque(s) resulting from the
retraction of the Retracted Shares are to be held for pick-up by the
shareholder at the principal executive office of the Company, failing
which any cheque(s), or the securities, as the case may be, will be
delivered to the shareholder in accordance with the Preferred Share
Provisions.
22
NOTE: This panel must be completed and this certificate, together with such
additional documents as the Company may require, must be deposited with
the Company at its principal executive office. Any cheque(s) or
securities resulting from the retraction or purchase of the Retracted
Shares will be made payable to or issued and registered in the name of
the shareholder as it appears on the register of the Company and the
cheque(s) or securities resulting from such retraction will be
delivered to the shareholder in accordance with these Preferred Share
Provisions.
Name of person in whose name cheque(s) are to be delivered or securities are to
be issued and registered.
(PLEASE PRINT)
-----------------------------------------
Xxxxxx Xxxxxxx xx X.0. Xxx
Xxxx, Xxxxxxxx and Postal Code
-----------------------------------------
Signature of Shareholder
NOTE: If this notice of retraction is for less than all of the share(s)
represented by this certificate, a certificate representing the
remaining Preferred Shares of the Company will be issued and registered
in the name of the shareholder as it appears on the register of the
Company, unless the Share Transfer Power on the certificate is duly
completed in respect of such shares.
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