<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 5)
Secure Computing Corporation
----------------------------
(Name of Issuer)
Common Stock, $.01 par value
----------------------------
(Title of Class of Securities)
813705-10-0
------------
(CUSIP Number)
Kristine L. Gabel, Esq.
Oppenheimer Wolff & Donnelly LLP
45 South Seventh Street, Suite 3400
Minneapolis, Minnesota 55402
(612) 607-7000
--------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
January 22, 1998
----------------
(Date of Event Which Requires Filing of This Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box: [ ]
<PAGE>
SCHEDULE 13D
------------
CUSIP No. 813705-10-0
- ------------------------------------------------------------------------------
1) NAME OF REPORTING PERSON AND S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE
PERSON
1158585 Ontario Inc. (No I.R.S. Identification Number)
- ------------------------------------------------------------------------------
2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [ ]
(b) [X]
- ------------------------------------------------------------------------------
3) SEC USE ONLY
- ------------------------------------------------------------------------------
4) SOURCE OF FUNDS
OO
- ------------------------------------------------------------------------------
5) CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(D) OR 2(E) [ ]
- ------------------------------------------------------------------------------
6) CITIZENSHIP OR PLACE OF ORGANIZATION
Canada
- ------------------------------------------------------------------------------
7) SOLE VOTING POWER
-0-
-------------------------------------------------------------
NUMBER OF 8) SHARED VOTING POWER
SHARES -0-
BENEFICIALLY -------------------------------------------------------------
OWNED BY EACH 9) SOLE DISPOSITIVE POWER
REPORTING -0-
PERSON -------------------------------------------------------------
WITH: 10) SHARED DISPOSITIVE POWER
-0-
- ------------------------------------------------------------------------------
11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
0
- ------------------------------------------------------------------------------
12) CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
[ ]
- ------------------------------------------------------------------------------
13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0%
- ------------------------------------------------------------------------------
14) TYPE OF REPORTING PERSON
CO
- ------------------------------------------------------------------------------
2
<PAGE>
SCHEDULE 13D
------------
CUSIP No. 813705-10-0
- ------------------------------------------------------------------------------
1) NAME OF REPORTING PERSON AND S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE
PERSON
Glenn G. Mackintosh (No Social Security Number)
- ------------------------------------------------------------------------------
2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [ ]
(b) [X]
- ------------------------------------------------------------------------------
3) SEC USE ONLY
- ------------------------------------------------------------------------------
4) SOURCE OF FUNDS
OO
- ------------------------------------------------------------------------------
5) CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(D) OR 2(E) [ ]
- ------------------------------------------------------------------------------
6) CITIZENSHIP OR PLACE OF ORGANIZATION
Canada
- ------------------------------------------------------------------------------
7) SOLE VOTING POWER
200,383 (1)
-------------------------------------------------------------
NUMBER OF 8) SHARED VOTING POWER
SHARES 0
BENEFICIALLY -------------------------------------------------------------
OWNED BY EACH 9) SOLE DISPOSITIVE POWER
REPORTING 200,383
PERSON -------------------------------------------------------------
WITH: 10) SHARED DISPOSITIVE POWER
0
- ------------------------------------------------------------------------------
11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
200,383
- ------------------------------------------------------------------------------
12) CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
[ ]
- ------------------------------------------------------------------------------
13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
Less than 5%
- ------------------------------------------------------------------------------
14) TYPE OF REPORTING PERSON
IN
- ------------------------------------------------------------------------------
(1) Includes 1,405 shares of Common Stock held for Mr. Mackintosh's account
through the Issuer's Employee Stock Purchase Plan.
3
<PAGE>
SCHEDULE 13D
------------
CUSIP No. 813705-10-0
- ------------------------------------------------------------------------------
1) NAME OF REPORTING PERSON AND S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE
PERSON
Steven Lamb (No Social Security Number)
- ------------------------------------------------------------------------------
2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [ ]
(b) [X]
- ------------------------------------------------------------------------------
3) SEC USE ONLY
- ------------------------------------------------------------------------------
4) SOURCE OF FUNDS
OO
- ------------------------------------------------------------------------------
5) CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(D) OR 2(E) [ ]
- ------------------------------------------------------------------------------
6) CITIZENSHIP OR PLACE OF ORGANIZATION
Canada
- ------------------------------------------------------------------------------
7) SOLE VOTING POWER
168,790
-------------------------------------------------------------
NUMBER OF 8) SHARED VOTING POWER
SHARES 0
BENEFICIALLY -------------------------------------------------------------
OWNED BY EACH 9) SOLE DISPOSITIVE POWER
REPORTING 168,790
PERSON -------------------------------------------------------------
WITH 10) SHARED DISPOSITIVE POWER
0
- ------------------------------------------------------------------------------
11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
168,790
- ------------------------------------------------------------------------------
12) CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
[ ]
- ------------------------------------------------------------------------------
13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
Less than 5%
- ------------------------------------------------------------------------------
14) TYPE OF REPORTING PERSON
IN
- ------------------------------------------------------------------------------
4
<PAGE>
SCHEDULE 13D/A
Pursuant to Rule 13d-2(c), this Amendment No. 5 amends the Schedule 13D
dated August 29, 1996, Amendment No. 1 thereto dated July 14, 1997, Amendment
No. 2 thereto dated October 8, 1997, Amendment No. 3 thereto dated November
12, 1997 and Amendment No. 4 dated January 9, 1998 on behalf of 1158585
Ontario Inc., Glenn G. Mackintosh and Steven Lamb (collectively, the
"Reporting Persons").
ITEM 2. IDENTITY AND BACKGROUND.
(a) and (b) The names and business addresses of the persons filing
this statement are as follows:
1158585 Ontario Inc.
15 Ballacaine Drive
Etobicoke, Ontario
CANADA M8Y 4A7
Glenn G. Mackintosh
95 Prince Arthur Avenue, Suite 701
Toronto, Ontario
CANADA M5R 3P6
Steven Lamb
15 Ballacaine Drive
Etobicoke, Ontario
CANADA M8Y 4A7
(c) Glenn Mackintosh was a director of Secure Computing Corporation
(the "Company" or the "Issuer") from August 1996 to October 1997 and was the
Vice President and General Manager of the Firewall Division of the Company
from August 1996 to April 1997. Mr. Mackintosh's address is listed in (b)
above. Steven Lamb was employed by the Company from August 29, 1996 to
October 31, 1996. Mr. Lamb's address is listed in (b) above.
(d) The response to this item is negative for all persons listed above.
(e) The response to this item is negative for all persons listed above.
(f) 1158585 Ontario Inc. was a corporation incorporated under the laws
of Ontario, Canada until its amalgamation on January 22, 1998 with Secure
Computing Canada Ltd. ("Secure Canada"). Glenn Mackintosh and Steven Lamb
are both citizens of Canada.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
See discussion under Item 4.
5
<PAGE>
ITEM 4. PURPOSE OF TRANSACTION.
Secure Canada and 1158585 Ontario Inc., a corporation incorporated under
the laws of the Province of Ontario ("1158585") amalgamated pursuant to the
Ontario Business Corporation Act, on January 22, 1998 into Secure Computing
Canada Ltd. (the "Amalgamated Corporation") (the "Amalgamation"). As a
result of the Amalgamation, 1,296,000 Exchangeable Non-Voting Shares of
Secure Canada held by 1158585 and beneficially owned by Glenn G. Mackintosh
and Steven Lamb were canceled without any repayment of capital. An aggregate
of 367,768 shares of Exchangeable Non-Voting Shares of the Amalgamated
Corporation were issued to Glenn G. Mackintosh and Steven Lamb. The
Exchangeable Non-Voting Shares represent the right to receive Common Stock of
the Company.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
(a) Glenn G. Mackintosh is the beneficial owner of 200,383 shares of
Common Stock (1,405 shares of Common Stock are held for Mr. Mackintosh's
account through the Company's Employee Stock Purchase Plan), which represents
less than 5% of the outstanding Common Stock of the Company.
Steven Lamb is the beneficial owner of 168,790 shares of Common Stock,
which represents less than 5% of the outstanding Common Stock of the Company.
(b) Glenn G. Mackintosh has the sole power to vote and the sole
dispositive power over 200,383 shares of Common Stock of the Company.
Steven Lamb has the sole power to vote and the sole dispositive power
over 168,790 shares of Common Stock of the Company.
(c) On February 6, 9 and 10, 1998, Mr. Mackintosh sold 5,200 shares,
4,800 shares and 11,272 shares of Common Stock of the Company at a price of
$9.25, $9.25 and $8.313, respectively, in the open market. Except as
otherwise stated herein, the only transactions in the Common Stock of the
Company that were effected by the Reporting Persons since the most recent
filing of Schedule 13D within the past sixty days are the transactions
described in Item 4 above.
(d) No other person is known to have the right to receive or the power
to direct the receipt of dividends from, or the proceeds from the sale of,
the subject securities.
(e) Not applicable.
ITEM 6 CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO SECURITIES OF THE ISSUER.
See Item 4 above.
6
<PAGE>
ITEM 7 MATERIAL TO BE FILED AS EXHIBITS.
Exhibit 1 Amalgamation Agreement dated January 21, 1998 executed by
1158585 Ontario Inc. and Secure Computing Canada Ltd.
7
<PAGE>
SIGNATURES
----------
After reasonable inquiry and to the best knowledge and belief, we
certify that the information set forth in this statement is true, complete
and correct.
March 5, 1998
1158585 ONTARIO INC.
By: /s/ Laurence Gutcher
------------------------------------
Laurence Gutcher
Its: Secretary
/s/ Glenn G. Mackintosh
---------------------------------------
Glenn G. Mackintosh
/s/ Steven Lamb
---------------------------------------
Steven Lamb
8
<PAGE>
EXHIBIT INDEX
Exhibit No. Description Method of Filing
----------- ----------- ----------------
1 Amalgamation Agreement dated January 21, 1998
executed by 1158585 Ontario Inc. and Secure
Computing Canada Ltd.......................... Electronically
9
<PAGE>
Exhibit 1
AMALGAMATION AGREEMENT
THIS AGREEMENT made the 21st day of January, 1998
B E T W E E N:
SECURE COMPUTING CANADA LTD., a
corporation amalgamated under the laws of the
Province of Ontario
(hereinafter called "Secure Canada")
- and -
1158585 ONTARIO INC., a corporation incorporated
under the laws of the Province of Ontario
(hereinafter called "1158585")
WHEREAS the authorized capital of Secure Canada is an unlimited number
of Class A voting shares and an unlimited number of Exchangeable Non-Voting
Shares of which 100 of the Class A voting shares and, as of January 5, 1998,
2,251,697 of the Exchangeable Non-Voting Shares are issued and outstanding as
fully paid and non-assessable;
AND WHEREAS the authorized capital of 1158585 is an unlimited number of
Class A shares and an unlimited number of common shares of which 2,274,309 of
the Class A shares and 200,000 of the said common shares are issued and
outstanding as fully paid and non-assessable.
AND WHEREAS 1,296,000 Exchangeable Non-Voting Shares of Secure Canada
are held by 1158585;
AND WHEREAS Secure Canada and 1158585 acting under the authority
contained in the Business Corporations Act (the "Act") propose to amalgamate
upon the terms and conditions hereafter set out;
<PAGE>
AMALGAMATION AGREEMENT
PAGE 2 OF 8
AND WHEREAS each party hereto has made full and complete disclosure to
the other party hereto of its assets and liabilities;
NOW THEREFORE THIS AGREEMENT WITNESSES as follows:
1. In this Agreement unless there is something in the subject matter
or context inconsistent therewith, the following terms shall have the
respective meanings set out below and grammatical variations of such terms
shall have corresponding meanings:
(a) "1158585" means 1158585 Ontario Inc., a corporation incorporated
under the laws of the Province of Ontario;
(b) "Act" means the Business Corporations Act (Ontario) R.S.O. 1990, c.
B. 16, as amended;
(c) "Amalgamation" means the amalgamation of Secure Canada and 1158585;
(d) "Amalgamated Corporation" shall mean the corporation continuing
from the amalgamation of Secure Canada and 1158585;
(e) "Canadian Dollar Equivalent" means in respect of an amount
expressed in a foreign currency (the "Foreign Currency Amount") at any date
the product obtained by multiplying (i) the Foreign Currency Amount by (ii)
the noon spot exchange rate on such date for such foreign currency expressed
in Canadian dollars as reported by the Bank of Canada.
(f) "Effective Date" means the date shown on the certificate of
amalgamation issued by the Director under the Act giving effect to the
Amalgamation;
(g) "NASDAQ" means the Nasdaq National Market;
<PAGE>
AMALGAMATION AGREEMENT
PAGE 3 OF 8
(h) "Secure Canada" means Secure Computing Canada Ltd., a corporation
amalgamated under the laws of the Province of Ontario;
(i) "Secure U.S." means Secure Computing Corporation, a corporation
existing under the laws of the State of Delaware; and
(j) "Secure U.S. Common Shares" means the shares of common stock of
Secure U.S. with a par value of U.S. $.01 per share, having voting rights of
one vote per share, and any other securities into which such shares may be
changed.
(k) "Trading Value" means the Canadian Dollar Equivalent on the
Effective Date of the average price of a Secure U.S. Common Share at the
close of trading on NASDAQ over the last 10 trading days prior to the
Effective Date.
2. Secure Canada and 1158585 hereby agree to amalgamate under the
provisions of the Act and to continue as one corporation under the terms and
conditions hereinafter set out.
3. The name of the Amalgamated Corporation shall be:
SECURE COMPUTING CANADA LTD.
4. The place in Ontario where the registered office of the Amalgamated
Corporation is to be situated is in the City of Toronto at 100 University
Avenue, Suite 700, Ontario, M5J 1V6 until changed in accordance with the Act.
5. The Amalgamated Corporation shall be authorized to issue an
unlimited number of Class A voting shares and an unlimited number of
Exchangeable Non-Voting Shares.
6. The rights, privileges, restrictions and conditions attaching to
the Class A voting shares and the Exchangeable Non-Voting Shares are set out
in Appendix A hereto.
<PAGE>
AMALGAMATION AGREEMENT
PAGE 4 OF 8
7. There shall be no restrictions on the issue, transfer or ownership
of shares of the Amalgamated Corporation.
8. The number of directors of the Amalgamated Corporation shall be
such number not less than one and not more than ten as the shareholders of
the Amalgamated Corporation may from time to time determine by special
resolution or, if empowered to do so by special resolution, as the directors
of the Amalgamated Corporation may from time to time determine. The name,
address and resident Canadian status of the first directors and officers of
the Amalgamated Corporation are as follows:
Resident
Name Title Residence Address Canadian
- ---- ----- ----------------- --------
David R. McCarthy Director 45 Blyth Hill Road Yes
Toronto, Ontario
M4N 3L6
Jeffrey Harry Waxman Director and 4985 Heuga Court No
President Park City, Utah
U.S.A. 84097-8513
Timothy P. McGurran Treasurer 11240 218th Street No
North
Scandia, Minnesota
U.S.A. 55073
Steven M. Maurer Secretary 6092 Scenic Road No
Minnetonka, Minnesota
U.S.A. 55345
The said first directors shall hold office until the first meeting of the
shareholders of the Amalgamated Corporation or until their successors are
elected or appointed in accordance with the Act. No such first director shall
be permitted to resign unless at the time the resignation is to become
effective a successor is elected or appointed.
<PAGE>
AMALGAMATION AGREEMENT
PAGE 5 OF 8
9. The number of directors of the Amalgamated Corporation within the
minimum and maximum numbers of directors provided for in the Articles of the
Amalgamated Corporation shall be 2 and the directors of the Amalgamated
Corporation shall be empowered to determine from time to time the number of
directors of the Amalgamated Corporation within the minimum and maximum
numbers provided for in the Articles of the Amalgamated Corporation, as the
same may be amended from time to time.
10. There shall be no restrictions on the business that the Amalgamated
Corporation may carry on or on the powers that the Amalgamated Corporation
may exercise.
11. Upon the Amalgamation, the issued shares of Secure Canada and
1158585 shall be converted into issued shares of the Amalgamated Corporation
as follows:
(a) the 100 issued Class A voting shares of Secure Canada shall be
converted, share for share, into 100 Class A voting shares of the
Amalgamated Corporation;
(b) the 1,296,000 Exchangeable Non-Voting Shares of Secure Canada held by
1158585 shall be cancelled without any repayment of capital in respect
thereof and shall not be converted into shares of the Amalgamated
Corporation;
(c) all remaining issued Exchangeable Non-Voting Shares of Secure Canada
shall be converted, share for share, into Exchangeable Non-Voting
Shares of the Amalgamated Corporation;
(d) each Class A shareholder of 1158585 shall receive that number of
Exchangeable Non-Voting Shares in the capital of the Amalgamated
Corporation per Class A share of 1158585 as determined by the
following formula: $2.50 (Cdn.) divided by the Trading Value of a
Secure U.S. Common Share; and
(e) each common shareholder of 1158585 shall receive that number of
Exchangeable Non-Voting Shares of the Amalgamated Corporation per
common share of 1158585 as determined by the following formula:
(A - B)/C
<PAGE>
AMALGAMATION AGREEMENT
PAGE 6 OF 8
where:
A is 1,296,000;
B is the number of Exchangeable Non-Voting Shares of the Amalgamated
Corporation issued to the Class A shareholders of 1158585; and
C is the number of outstanding common shares of 1158585.
12. The stated capital accounts of the Amalgamated Corporation
immediately after the Amalgamation becomes effective shall be equal to the
following amounts determined immediately before the Amalgamation becomes
effective:
(a) in the case of the account maintained for the Class A voting shares of
the Amalgamated Corporation, the stated capital account for the issued
and outstanding Class A voting shares of Secure Canada; and
(b) in the case of the account maintained for the Exchangeable Non-Voting
Shares of the Amalgamated Corporation, the aggregate of:
(i) the stated capital account for the issued and outstanding
Exchangeable Non-Voting Shares of Secure Canada multiplied by
the number equal to A divided by B, where A is equal to the
total number of Exchangeable Non-Voting Shares of Secure Canada
immediately prior to the Amalgamation less 1,296,000, and B is
equal to the total number of Exchangeable Non-Voting Shares of
Secure Canada immediately prior to the Amalgamation;
(ii) the stated capital account for the issued and outstanding
Class A shares of 1158585; and
(iii) the stated capital account for the issued and outstanding
common shares of 1158585.
13. After the Amalgamation, the shareholders of Secure Canada and
1158585, when requested by the Amalgamated Corporation to do so, shall
surrender certificates representing the
<PAGE>
AMALGAMATION AGREEMENT
PAGE 7 OF 8
shares of Secure Canada and 1158585 held by them for cancellation and shall
be entitled to receive, without charge, certificates for shares of the
Amalgamated Corporation on the basis aforesaid.
14. The by-laws of the Amalgamated Corporation shall be the by-laws of
Secure Canada in effect immediately prior to the Amalgamation.
15. Each of the parties shall contribute to the Amalgamated Corporation
all of its assets, subject to its liabilities.
16. All of the share certificates representing Class A voting shares of
Secure Canada and Exchangeable Non-Voting Shares of Secure Canada, except for
the share certificate or certificates representing the 1,296,000 Exchangeable
Non-Voting Shares of Secure Canada registered in the name of 1158585, shall
continue to be valid following the Amalgamation and shall represent issued
and outstanding shares of the Amalgamated Corporation.
17. Montreal Trust Company of Canada, having been duly appointed to act
as transfer agent, registrar and dividend disbursing agent of Secure Canada
for the Exchangeable Non-Voting Shares, shall continue to act in such
capacity with respect to the Exchangeable Non-Voting Shares of the
Amalgamated Corporation following the Amalgamation.
18. Upon and subject to the shareholders of Secure Canada and 1158585
respectively approving the Amalgamation and adopting this Agreement and
subject to paragraph 17 hereof, articles of amalgamation in prescribed
[form shall be sent to the Director under the Act together with the documents
required by Section 178 of the Act.
19. At any time before the endorsement of a certificate of amalgamation
effecting the Amalgamation, this Agreement may be terminated by the directors
of either Secure Canada or
<PAGE>
AMALGAMATION AGREEMENT
PAGE 8 OF 8
1158585, notwithstanding the approval of this Agreement by the shareholders
of Secure Canada and 1158585.
IN WITNESS WHEREOF this Agreement has been duly executed by the parties
hereto.
SECURE COMPUTING CANADA LIMITED
By: /s/ David R. McCarthy
----------------------------------------
Name: David R. McCarthy
Title: Director
1158585 ONTARIO INC.
By: /s/ Steven Lamb
----------------------------------------
Name: Steven Lamb
Title: Director
<PAGE>
APPENDIX A
PROVISIONS ATTACHING TO EXCHANGEABLE SHARES
The Exchangeable Non-Voting Shares in the capital of the
Corporation shall have the following rights, privileges, restrictions and
conditions:
ARTICLE 1
INTERPRETATION
1.1 For the purposes of these share provisions:
"ACQUISITION AND PRE-AMALGAMATION AGREEMENT" means the acquisition
and preamalgamation agreement entered into among Secure, the Corporation and
Border Network Technologies Inc. dated as of May 28, 1996 as amended by
Amendment No. 1 to the Acquisition and Pre-Amalgamation Agreement dated as of
July 31, 1996 between such parties.
"AFFILIATE" of any person means any other person directly or
indirectly controlled by, or under common control of, that person, for the
purposes of this definition, "control" (including, with correlative meanings,
the terms "controlled by" and "under common control of"), as applied to any
person, means the possession by another person, directly or indirectly, of
the power to direct or cause the direction of the management and policies of
that first mentioned person, whether through the ownership of voting
securities, by contract or otherwise.
"AMALGAMATION AGREEMENT" means the amalgamation agreement
relating to the amalgamation of the Corporation under section 175 of the
Business Corporations Act (Ontario), to which agreement these share
provisions are attached.
"AUTOMATIC REDEMPTION DATE" means the date for the automatic
redemption by the Corporation of Exchangeable Shares pursuant to Article 7 of
these share provisions, which date shall be August 30, 2006, unless (a) such
date shall be extended at anytime or from time to time to a specified later
date by the Board of Directors or (b) such date shall be accelerated at any
time to a specified earlier date by the Board of Directors if at such time
there are less than 500,000 Exchangeable Shares outstanding (other than
Exchangeable Shares held by Secure and its Affiliates and as such number of
shares may be adjusted as deemed appropriate by the Board of Directors to
give effect to any subdivision or consolidation of or stock dividend on the
Exchangeable Shares, any issue or distribution of rights to acquire
Exchangeable Shares or securities exchangeable for or convertible into
Exchangeable Shares, any issue or distribution of other securities or rights
or evidences of indebtedness or assets, or any other capital reorganization
or other transaction affecting the Exchangeable Shares), in each case upon at
least 60 days' prior written notice of any such extension or acceleration, as
the case may be, to the registered holders of the Exchangeable Shares, in
which case the Automatic Redemption Date shall be such later or earlier date;
provided, however, that the accidental failure or omission to
<PAGE>
APPENDIX A TO AMALGAMATION AGREEMENT
PAGE 2 OF 18
give any such notice of extension or acceleration, as the case may be, to
less than 10% of such holders of Exchangeable Shares shall not affect the
validity of such extension or acceleration.
"BOARD OF DIRECTORS" means the Board of Directors of the
Corporation.
"BUSINESS DAY" means any day other than a Saturday, a Sunday or a
day when banks are not open for business in either or both of Minneapolis,
Minnesota and Toronto, Ontario.
"CANADIAN DOLLAR EQUIVALENT" means in respect of an amount
expressed in a foreign currency (the "Foreign Currency Amount") at any date
the product obtained by multiplying (a) the Foreign Currency Amount by (b)
the noon spot exchange rate on such date for such foreign currency expressed
in Canadian dollars as reported by the Bank of Canada or, in the event such
spot exchange rate is not available, such exchange rate on such date for such
foreign currency expressed in Canadian dollars as may be deemed by the Board
of Directors to be appropriate for such purpose.
"CLASS A SHARES" mean the Class A voting shares of the Corporation.
"CORPORATION" means Secure Computing Canada Ltd., a corporation
amalgamated tinder the laws of the Province of Ontario pursuant to articles
of amalgamation dated August 29, 1996 and articles of amalgamation dated as
of the date hereof.
"CURRENT MARKET PRICE" means, in respect of a Secure Common Share
on any date, the Canadian Dollar Equivalent of the average of the closing
prices of Secure Common Shares on the Nasdaq National Market on each of the
thirty (30) consecutive trading days ending not more than five trading days
before such date, or, if the Secure Common Shares are not then quoted on the
Nasdaq National Market, on such other stock exchange or automated quotation
system on which the Secure Common Shares are listed or quoted, as the case
may be, as may be selected by the Board of Directors for such purpose;
provided, however, that if there is no public distribution or trading
activity of Secure Common Shares during such period, then the Current Market
price of a Secure Common Share shall be determined by the Board of Directors
based upon the advice of such qualified independent financial advisors as the
Board of Directors may deem to be appropriate, and provided, further that any
such selection, opinion or determination by the Board of Directors shall be
conclusive and binding.
"EXCHANGEABLE SHARES" mean the Exchangeable Non-Voting Shares of
the Corporation having the rights, privileges, restrictions and conditions
set forth herein.
"LIQUIDATION AMOUNT" has the meaning ascribed thereto in Section
5.1 of these share provisions.
"LIQUIDATION CALL RIGHT" has the meaning ascribed thereto in the
Acquisition and Pre-Amalgamation Agreement.
<PAGE>
APPENDIX A TO AMALGAMATION AGREEMENT
PAGE 3 OF 18
"LIQUIDATION DATE" has the meaning ascribed thereto in Section 5.1
of these share provisions.
"PURCHASE PRICE" has the meaning ascribed thereto in Section 6.3 of
these share provisions.
"REDEMPTION CALL RIGHT" has the meaning ascribed thereto in the
Acquisition and Pre-Amalgamation Agreement.
"REDEMPTION PRICE" has the meaning ascribed thereto in Section 7.1
of these share provisions.
"RETRACTED SHARES" has the meaning ascribed thereto in Section 6.1
of these share provisions.
"RETRACTION CALL RIGHT" has the meaning ascribed thereto in Section
6.1 of these share provisions.
"RETRACTION DATE" has the meaning ascribed thereto in Section 6.1(b)
of these share provisions.
"RETRACTION PRICE" has the meaning ascribed thereto in Section 6.1
of these share provisions.
"RETRACTION REQUEST" has the meaning ascribed thereto in Section
6.1 of these share provisions.
"SECURE" means Secure Computing Corporation, a corporation
organized and existing under the laws of the State of Delaware, and any
successor corporation.
"SECURE CALL NOTICE" has the meaning ascribed thereto in Section
6.3 of these share provisions.
"SECURE COMMON SHARES" means the shares of common stock of Secure
with a par value of U.S. $.01 per share, having voting rights of one vote per
share, and any other securities into which such shares may be changed.
"SECURE DIVIDEND DECLARATION DATE" means the date on which the
Board of Directors of Secure declares any dividend on the Secure Common
Shares.
"SUPPORT AGREEMENT" means the Support Agreement between Secure and
the Corporation, made as of August 29, 1996.
<PAGE>
APPENDIX A TO AMALGAMATION AGREEMENT
PAGE 4 OF 18
"TRANSFER AGENT" means such suitable trust company or similar
financial institution to be selected by the Corporation from time to time to
be the register and transfer agent for the Exchangeable Shares.
"TRUSTEE" means Montreal Trust Company of Canada, a corporation
organized and existing under the laws of Canada and any successor trustee
appointed under the Voting and Exchange Trust Agreement.
"VOTING AND EXCHANGE TRUST AGREEMENT" means the Voting and Exchange
Trust Agreement between the Corporation, Secure and the Trustee, made as of
August 29, 1996.
ARTICLE 2
RANKING OF EXCHANGEABLE SHARES
2.1 The Exchangeable Shares shall be entitled to a preference over the
Class A Shares and any other shares ranking junior to the Exchangeable Shares
with respect to the payment of dividends and the distribution of assets in
the event of the liquidation, dissolution or winding-up of the Corporation,
whether voluntary or involuntary, or any other distribution of the assets of
the Corporation among its shareholders for the purpose of winding-up its
affairs.
ARTICLE 3
DIVIDENDS
3.1 A holder of an Exchangeable Share shall be entitled to receive and
the Board of Directors shall, subject to applicable law, on each Secure
Dividend Declaration Date, declare a dividend on each Exchangeable Share (a)
in the case of a cash dividend declared on the Secure Common Shares, in an
amount in cash for each Exchangeable Share equal to the Canadian Dollar
Equivalent on the Secure Dividend Declaration Date of the cash dividend
declared on each Secure Common Share or (b) in the case of a stock dividend
declared on the Secure Common Shares to be paid in Secure Common Shares, in
such number of Exchangeable Shares for each Exchangeable Share as is equal to
the number of Secure Common Shares to be paid on each Secure Common Share or
(c) in the case of a dividend declared on the Secure Common Shares in
property other than cash or Secure Common Shares, in such type and amount of
property for each Exchangeable Share as is the same as or economically
equivalent to (to be determined by the Board of Directors as contemplated by
Section 2.7 of the Support Agreement) the type and amount of property
declared as a dividend on each Secure Common Share. Such dividends shall be
paid out of money, assets or property of the Corporation properly applicable
to the payment of dividends, or out of authorized but unissued shares of the
Corporation. Any dividend which should have been declared on the Exchangeable
Shares pursuant to this section 3.1 but was not so declared due to the
provisions of applicable law shall be declared and paid by the Corporation on
a subsequent date or dates determined by the Board of Directors.
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3.2 Cheques of the Corporation payable at par at any branch of the
bankers of the Corporation shall be issued in respect of any cash dividends
contemplated by Section 3.1(a) hereof and the sending of such a cheque to
each holder of an Exchangeable Share shall satisfy the cash dividend
represented thereby unless the cheque is not paid on presentation.
Certificates registered in the name of the registered holder of Exchangeable
Shares shall be issued or transferred in respect of any stock dividends
contemplated by Section 3.1(b) hereof and the sending of such a certificate
to each holder of an Exchangeable Share shall satisfy the stock dividend
represented thereby. Such other type and amount of property in respect of any
dividends contemplated by Section 3.1(c) hereof shall be issued, distributed
or transferred by the Corporation in such manner as it shall determine and
the issuance, distribution or transfer thereof by the Corporation to each
holder of an Exchangeable Share shall satisfy the dividend represented
thereby. No holder of an Exchangeable Share shall be entitled to recover by
action or other legal process against the Corporation any dividend that is
represented by a cheque that has not been duly presented to the Corporation's
bankers for payment or that otherwise remains unclaimed for a period of six
years from the date on which such dividend was payable.
3.3 The record date for the determination of the holders of
Exchangeable Shares entitled to receive payment of, and the payment date for,
any dividend declared on the Exchangeable Shares under Section 3.1 hereof
shall be the same dates as the record date and payment date, respectively,
for the corresponding dividend declared on the Secure Common Shares.
3.4 If on any payment date for any dividends declared on the
Exchangeable Shares under Section 3.1 hereof the dividends are not paid in
full on all of the Exchangeable Shares then outstanding, any such dividends
that remain unpaid shall be paid on a subsequent date or dates determined by
the Board of Directors on which the Corporation shall have sufficient moneys,
assets or property properly applicable to the payment of such dividends.
ARTICLE 4
CERTAIN RESTRICTIONS
4.1 So long as any of the Exchangeable Shares are outstanding, the
Corporation shall not at any time without, but may at any time with, the
approval of the holders of the Exchangeable Shares given as specified in
Section 10.2 of these share provisions:
(a) pay any dividends on the Class A Shares or any other shares ranking
junior to the Exchangeable Shares, other than stock dividends payable in
Class A Shares or any such other shares ranking junior to the Exchangeable
Shares, as the case may be;
(b) redeem or purchase or make any capital distribution in respect of
Class A Shares or any other shares ranking junior to the Exchangeable Shares;
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(c) redeem or purchase any other shares of the Corporation ranking
equally with the Exchangeable Shares with respect to the payment of dividends
or on any liquidation distribution; or
(d) issue any Exchangeable Shares or any other shares of the
Corporation ranking equally with, or superior to, the Exchangeable Shares
with respect to the payment of dividends or on any liquidation distribution,
other than by way of stock dividends to the holders of such Exchangeable
Shares or as contemplated by the Support Agreement.
The restrictions in Sections 4. 1(a), 4.1(b) and 4.1(c) above
shall not apply if all dividends on the outstanding Exchangeable Shares
corresponding to dividends declared following the initial date of issue of
Exchangeable Shares on the Secure Common Shares shall have been declared on
the Exchangeable Shares and paid in full.
ARTICLE 5
DISTRIBUTION ON LIQUIDATION
5.1 In the event of the liquidation, dissolution or winding-up of the
Corporation or any other distribution of the assets of the Corporation among
its shareholders for the purpose of winding up its affairs, a holder of
Exchangeable Shares shall be entitled, subject to applicable law, to receive
from the assets of the Corporation in respect of each Exchangeable Share held
by such holder on the effective date (the "Liquidation Date") of such
liquidation, dissolution or winding-up, before any distribution of any part
of the assets of the Corporation among the holders of the Class A Shares or
any other shares ranking junior to the Exchangeable Shares, an amount per
share equal to the Current Market Price of a Secure Common Share on the last
Business Day prior to the Liquidation Date, which shall be satisfied in full
by the Corporation causing to be delivered to such holder (a) one Secure
Common Share, plus (b) an additional amount equivalent to the full amount of
all declared and unpaid dividends on each such Exchangeable Share and all
dividends declared on Secure Common Shares which have not been declared on
such Exchangeable Shares in accordance with section 3.1 of the Exchangeable
Share Provisions (collectively the "Liquidation Amount"), provided that if
the record date for any such declared and unpaid dividends occurs on or after
the Liquidation Date the Liquidation Amount shall not include such additional
amount equivalent to such dividends.
5.2 On or promptly after the Liquidation Date, and subject to the
exercise Secure of the Liquidation Call Right, the Corporation shall cause to
be delivered to the holders of the Exchangeable Shares the Liquidation Amount
(less any tax required to be deducted and withheld therefrom by the
Corporation) for each such Exchangeable Share upon presentation and surrender
of the certificates representing such Exchangeable Shares together with such
other documents and instruments as may be required to effect a transfer of
Exchangeable Shares under the OBCA and the by-laws of the Corporation and
such additional documents and instruments as the Transfer Agent may
reasonably require, at the registered office of the Corporation or at any
office of the Transfer Agent as may be specified by the Corporation by notice
to the holders of
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the Exchangeable Shares. Payment of the total Liquidation Amount for such
Exchangeable Shares shall be made by delivery to each holder, at the address
of the holder recorded in the securities register of the Corporation for the
Exchangeable Shares or by holding for pick up by the holder at the registered
office of the Corporation or at any office of the Transfer Agent as may be
specified by the Corporation by notice to the holders of Exchangeable Shares,
on behalf of the Corporation of certificates representing Secure Common
Shares (which shares shall be duly issued as fully paid and non-assessable
and shall be free and clear of any lien, claim, encumbrance, security
interest or adverse claim) and a cheque of the Corporation payable at par at
any branch of the bankers of the Corporation in respect of the amount
equivalent to the full amount of all declared and unpaid dividends comprising
part of the total Liquidation Amount (less any tax required to be deducted
and withheld therefrom by the Corporation). On and after the Liquidation
Date, the holders of the Exchangeable Shares shall cease to be holders of
such Exchangeable Shares and shall not be entitled to exercise any of the
rights of holders in respect thereof, other than the right to receive their
proportionate part of the total Liquidation Amount, unless payment of the
total Liquidation Amount for such Exchangeable Shares shall not be made upon
presentation and surrender of share certificates in accordance with the
foregoing provisions, in which case the rights of the holders shall remain
unaffected until the total Liquidation Amount has been paid in the manner
hereinbefore provided. The Corporation shall have the right at any time on or
after the Liquidation Date to deposit or cause to be deposited the total
Liquidation Amount in respect of the Exchangeable Shares represented by
certificates that have not at the Liquidation Date been surrendered by the
holders thereof in a custodial account with any chartered bank or trust
company in Canada. Upon such deposit being made, the rights of the holders of
Exchangeable Shares after such deposit shall be limited to receiving their
proportionate part of the total Liquidation Amount so deposited (less any tax
required to be deducted and withheld therefrom) without interest for such
Exchangeable Shares, against presentation and surrender of the said
certificates held by them, respectively, in accordance with the foregoing
provisions. Upon such payment or deposit of the total Liquidation Amount, the
holders of the Exchangeable Shares shall thereafter be considered and deemed
for all purposes to be the holders of the Secure Common Shares delivered to
them. To the extent that the amount of tax required to be deducted or
withheld from any payment to a holder of Exchangeable Shares exceeds the cash
portion of such payment, the Corporation is hereby authorized to sell or
otherwise dispose of at fair market value such portion of the property then
payable to the holder as is necessary to provide sufficient funds to the
Corporation in order to enable it to comply with such deduction or
withholding requirement and the Corporation shall give an accounting to the
holder with respect thereto and any balance of such proceeds of sale.
5.3 After the Corporation has satisfied its obligations to pay the
holders of the Exchangeable Shares the Liquidation Amount per Exchangeable
Share pursuant to Section 5.1 of these share provisions, such holders shall
not be entitled to share in any further distribution of the assets of the
Corporation.
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APPENDIX A TO AMALGAMATION AGREEMENT
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ARTICLE 6
RETRACTION OF EXCHANGEABLE SHARES BY HOLDER
6.1 A holder of Exchangeable Shares shall be entitled at any time,
subject to applicable law and otherwise upon compliance with the provisions
of this Article 6, to require the Corporation to redeem any or all of the
Exchangeable Shares registered in the name of such holder for an amount per
share equal to the Current Market Price of a Secure Common Share on the last
Business Day prior to the Retraction Date, which shall be satisfied in full
by the Corporation causing to be delivered to such holder (a) one Secure
Common Share for each Exchangeable Share presented and surrendered by the
holder, plus (b) an additional amount equivalent to the full amount of all
dividends declared and unpaid thereon and all dividends declared on Secure
Common Shares which have not been declared on such Exchangeable Shares in
accordance with section 3.1 of the Exchangeable Share Provisions
(collectively the "Retraction Price"), provided that if the record date for
any such declared and unpaid dividends occurs on or after the Retraction Date
the Retraction Price shall not include such additional amount equivalent to
such dividends. To effect such redemption, the holder shall present and
surrender at the registered office of the Corporation or any office of the
Transfer Agent as may be specified by the Corporation by notice to the
holders of Exchangeable Shares the certificate or certificates representing
the Exchangeable Shares which the holder desires to have the Corporation
redeem, together with such other documents and instruments as may be required
to effect a transfer of Exchangeable Shares under the OBCA and the by-laws of
the Corporation and such additional documents and instruments as the Transfer
Agent may reasonably require, and together with a duly executed statement
(the "Retraction Request") in the form of Schedule A hereto or in such other
form as may be acceptable to the Corporation.
(a) specifying that the holder desires to have all or any number
specified therein of the Exchangeable Shares represented by such certificate
or certificates (the "Retracted Shares") redeemed by the Corporation;
(b) stating the Business Day on which the holder desires to have the
Corporation redeem the Retracted Shares (the "Retraction Date"), provided
that the Retraction Date shall be not less than five Business Days nor more
than 10 Business Days after the date on which the Retraction Request is
received by the Corporation and further provided that, in the event that no
such Business Day is specified by the holder in the Retraction Request, the
Retraction Date shall be deemed to be the tenth Business Day after the date
on which the Retraction Request is received by the Corporation; and
(c) acknowledging the overriding right (the "Retraction Call Right") of
Secure to purchase all but not less than all the Retracted Shares directly
from the holder and that the Retraction Request shall be deemed to be a
revocable offer by the holder to sell the Retracted Shares to Secure in
accordance with the Retraction Call Right on the terms and conditions set out
in Section 6.3 below.
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APPENDIX A TO AMALGAMATION AGREEMENT
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6.2 Subject to the exercise by Secure of the Retraction Call Right,
upon receipt by the Corporation or the Transfer Agent in the manner specified
in Section 6.1 hereof of a certificate or certificate representing the number
of Exchangeable Shares which the holder desires to have the Corporation
redeem, together with a Retraction Request, and provided that the Retraction
Request is not revoked by the holder in the manner specified in Section 6.7,
the Corporation shall redeem the Retracted Shares effective at the close of
business on the Retraction Date and shall cause to be delivered to such
holder the total Retraction Price with respect to such shares. If only a part
of the Exchangeable Shares represented by any certificate are redeemed (or
purchased by Secure pursuant to the Retraction Call Right), a new certificate
for the balance of such Exchangeable Shares shall be issued to the holder at
the expense of the Corporation.
6.3 Upon receipt by the Corporation of a Retraction Request, the
Corporation shall immediately notify Secure thereof. In order to exercise the
Retraction Call Right, Secure must notify the Corporation in writing of
Secure's determination to do so (the "Secure Call Notice") within two
Business Days of notification to Secure by the Corporation of the receipt by
the Corporation of the Retraction Request. If Secure does not so notify the
Corporation within such two business Day period, the Corporation will notify
the holder as soon as possible thereafter that Secure will not exercise the
Retraction Call Right. If Secure delivers the Secure Call Notice within such
two Business Day time period, and provided that the Retraction Request is not
revoked by the holder in the manner specified in Section 6.7, the Retraction
Request shall thereupon be considered only to be an offer by the holder to
sell the Retracted Shares to Secure in accordance with the Retraction Call
Right. In such event, the Corporation shall not redeem the Retracted Shares
and Secure shall purchase from such holder and such holder shall sell to
Secure on the Retraction Date the Retracted Shares for a purchase price (the
"Purchase Price") per share equal to the Retraction Price. For the purposes
of completing a purchase pursuant to the Retraction Call Right, Secure shall
deposit with the Transfer Agent, on or before the Retraction Date,
certificates representing Secure Common Shares and a cheque in the amount of
the remaining portion, if any, of the total Purchase Price. Provided that the
total Purchase Price has been so deposited with the Transfer Agent, the
closing of the purchase and sale of the Retracted Shares pursuant to the
Retraction Call Right shall be deemed to have occurred as at the close of
business on the Retraction Date and, for greater certainty, no redemption by
the Corporation of such Retracted Shares shall take place on the Retraction
Date. In the event that Secure does not deliver a Secure Call Notice within
such two Business Day period, and provided that Retraction Request is not
revoked by the holder in the manner specified in Section 6.7, the Corporation
shall redeem the Retracted Shares on the Retraction Date and in the manner
otherwise contemplated in this Article 6.
6.4 The Corporation or Secure, as the case may be, shall deliver or
cause the Transfer Agent to deliver to the relevant holder, at the address of
the holder recorded in the securities register of the Corporation for the
Exchangeable Shares or at the address specified in the holder's Retraction
Request or by holding for pick up by the holder at the registered office of
the Corporation or at any office of the Transfer Agent as may be specified by
the Corporation by notice to the holders of Exchangeable Shares, certificates
representing the Secure Common Shares (which shares shall be duly issued as
fully paid and non-assessable and shall be free and
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APPENDIX A TO AMALGAMATION AGREEMENT
PAGE 10 OF 18
clear of any lien, claim, encumbrance, security interest or adverse claim)
registered in the name of the holder or in such other name as the holder may
request in payment of the total Retraction Price or the total Purchase Price,
as the case may be, and a cheque of the Corporation payable at par at any
branch of the bankers of the Corporation in payment of the remaining portion,
if any, of the total Retraction Price (less any tax required to be deducted
and withheld therefrom by the Corporation) or a cheque of Secure payable at
par and in Canadian dollars at any branch of the bankers of Secure or of the
Corporation in Canada in payment of the remaining portion, if any, of the
total Purchase Price, as the case may be, and such delivery of such
certificates and cheque on behalf of the Corporation or Secure, as the case
may be, by the Transfer Agent shall be deemed to be payment of and shall
satisfy and discharge all liability for the total Retraction Price or total
Purchase Price, as the case may be, to the extent that the same is
represented by such share certificates and cheque (less any tax required and
in fact deducted and withhold therefrom and remitted to the proper tax
authority), unless such cheque is not paid on due presentation. To the extent
that the amount of tax required to be deducted or withheld from any payment
to a holder of Exchangeable Shares exceeds the cash portion of such payment,
the Corporation or Secure, as the case may be, is hereby authorized to sell
or otherwise dispose of a fair market value such portion of the property then
payable to the holder as is necessary to provide sufficient funds to the
Corporation or Secure in order to enable it to comply with such deduction or
withholding requirement and shall give an accounting to the holder with
respect thereto and any balance of such proceeds of sale.
6.5 On and after the close of business on the Retraction Date, the
holder of the Retracted Shares shall cease to be a holder of such Retracted
Shares and shall not be entitled to exercise any of the rights of a holder in
respect thereof, other than the right to receive his proportionate part of
the total Retraction Price or total Purchase Price, as the case may be,
unless upon presentation and surrender of certificates in accordance with the
foregoing provisions, payment of the total Retraction Price or the total
Purchase Price, as the case may be, shall not be made, in which case the
rights of such holder shall remain unaffected until the total Retraction
Price or the total Purchase Price, as the case may be, has been paid in the
manner hereinbefore provided. On and after the close of business on the
Retraction Date, provided that presentation and surrender of certificates and
payment of the total Retraction Price or the total Purchase Price, as the
case may be, has been made in accordance with the foregoing provisions, the
holder of the Retracted Shares so redeemed by the Corporation or purchased by
Secure shall thereafter be considered and deemed for all purposes to be a
holder of the Secure Common Shares delivered to it.
6.6 Notwithstanding any other provision of this Article 6, the
Corporation shall not be obligated to redeem Retracted Shares specified by a
holder in a Retraction Request to the extent that such redemption of
Retracted Shares would be contrary to solvency requirements or other
provisions of applicable law. If the Corporation believes that on any
Retraction Date it would not be permitted by any of such provisions to redeem
the Retracted Shares tendered for redemption on such date, and provided that
Secure shall not have exercised the Retraction Call Right with respect to the
Retracted Shares, the Corporation shall only be obligated to redeem Retracted
Shares specified by a holder in a Retraction Request to the extent of the
maximum number that
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APPENDIX A TO AMALGAMATION AGREEMENT
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may be so redeemed (rounded down to a whole number of shares) as would not be
contrary to such provisions and shall notify the holder at least two Business
Days prior to the Retraction Date as to the number of Retracted Shares which
will not be redeemed by the Corporation. In any case in which the redemption
by the Corporation of Retracted Shares would be contrary to solvency
requirements or other provisions of applicable law, the Corporation shall
redeem Retracted Shares in accordance with Section 6.2 of these share
provisions on a pro rata basis and shall issue to each holder of Retracted
Shares of a new certificate, as the expense of the Corporation, representing
the Retracted Shares nor redeemed by the Corporation pursuant to Section 6.2
hereof. Provided that the Retraction Request is not revoked by the holder in
the manner specified in Section 6.7, the holder of any such Retracted Shares
not redeemed by the Corporation pursuant to Section 6.2 of these share
provisions as a result of solvency requirements of applicable law shall be
deemed by giving the Retraction Request to require Secure to purchase such
Retracted Shares from such holder on the Retraction Date or as soon as
practicable thereafter on payment by Secure to such holder of the Purchase
Price for each such Retracted Share, all as more specifically provided in the
Voting and Exchange Trust Agreement.
6.7 A holder of Retracted Shares may, by notice in writing given by the
holder to the Corporation before the close of business on the Business Day
immediately preceding the Retraction Date, withdraw its Retraction Request in
which event such Retraction Request shall be null and void and, for greater
certainty, the revocable offer constituted by the Retraction Request to sell
the Retracted Shares to Secure shall be deemed to have been revoked.
ARTICLE 7
REDEMPTION OF EXCHANGEABLE SHARES BY THE CORPORATION
7.1 Subject to applicable law, and subject to the exercise by Secure of
the Redemption Call Right, (a) the Corporation shall on the Automatic
Redemption Date redeem (the "Automatic Redemption") the whole of the then
outstanding Exchangeable Shares for an amount per share equal to the Current
Market Price of a Secure Common Share on the last Business Day prior to the
Automatic Redemption Date, which shall be satisfied in full by the
Corporation causing to be delivered to each holder of Exchangeable Shares (i)
one Secure Common Share for each Exchangeable Share held by such holder, plus
(ii) an additional amount equivalent to the full amount for all declared and
unpaid dividends thereon and all dividends declared on Secure Common Shares
which have not been declared on such Exchangeable Shares in accordance with
section 3.1 of the Exchangeable Share Provisions (collectively the
"Redemption Price"), provided that if the record date for any such declared
and unpaid dividends occurs on or after the Redemption Date the Redemption
Price shall not include such additional amount equivalent to such dividends,
and (b) the Corporation may, at any time when the Corporation reasonably
determines that Exchangeable Shares are "held of record" (as such term is
defined in Rule 125-1 promulgated under the United States Securities Exchange
Act of 1934, as amended (the "Exchange Act")) by 500 or more persons ("Record
Holders"), redeem (a "Section 12(g) Redemption") that portion of the then
outstanding Exchangeable Shares held by that number of Record Holders equal
to the difference of (A) the total number of Record Holders and (B) 499, or
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APPENDIX A TO AMALGAMATION AGREEMENT
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such smaller number that the Corporation reasonably determines is necessary
to take the position that it need not register the Exchangeable Share
pursuant to Section 12(g) of the Exchange Act, the identity of such Record
Holders to be determined by the Corporation by lot or other fair method of
random determination, for an amount per share equal to the Redemption Price.
7.2 In any case of any of any redemption of Exchangeable Shares under
this Article 7, the Corporation shall, at least 120 days before the Automatic
Redemption Date (in the case of the Automatic Redemption), or at least 30
days before the date of a Section 12(g) Redemption (a "Section 12(g)
Redemption Date"; the Automatic Redemption Date or a Section 12(g) Redemption
Date, as applicable, being referred to as a "Redemption Date"), send or cause
to be sent to each holder of Exchangeable Shares to be redeemed a notice in
writing for the redemption by the Corporation or the purchase by Secure under
the Redemption Call Right, as the case may be, of the Exchangeable Shares
held by such holder. Such notice shall set out the formula for determining
the Redemption Price or the Redemption Call Purchase Price, as the case may
be, the Redemption Date and, if applicable, particulars of the Redemption
Call Right. On or after the Redemption Date and subject to the exercise by
Secure of the Redemption Call Right, the Corporation shall cause to be
delivered to the holders of the Exchangeable Shares to be redeemed the
Redemption Price (less any tax required to be deducted and withhold therefrom
by the Corporation) for each such Exchangeable Share upon presentation and
surrender at the registered office of the Corporation or at any office of the
Transfer Agent as may be specified by the Corporation in such notice of the
certificates representing such Exchangeable Shares, together with such other
documents and instruments as may be required to effect a transfer of
Exchangeable Shares under the OBCA and the by-laws of the Corporation and
such additional documents and instruments as the Transfer Agent may
reasonably require. Payment of the total Redemption Price for such
Exchangeable Shares shall be made by delivery to each holder, at the address
of the holder recorded in the securities register of the Corporation or by
holding for pick up by the holder at the registered office of the Corporation
or at any office of the Transfer Agent as may be specified by the Corporation
in such notice, on behalf of the Corporation of certificates representing
Secure Common Shares (which shares shall be duly issued as fully paid and
nonassessable and shall be free and clear of any lien, claim, encumbrance,
security interest or adverse claim) and a cheque of the Corporation payable
at par at any branch of the bankers of the Corporation in respect of the
additional amount equivalent to the full amount of all declared and unpaid
dividends and all dividends declared on Secure Common Shares which have not
been declared on such Exchangeable Shares in accordance with Section 3.1 of
the Exchangeable Share Provisions comprising part of the total Redemption
Price (less any tax required to be deducted and withhold therefrom by the
Corporation without interest). On and after the Redemption Date, the holders
of the Exchangeable Shares called for redemption shall cease to be holders of
such Exchangeable Shares and shall not be entitled to exercise any of the
rights of holders in respect thereof, other than the right to receive their
proportionate part of the total Redemption Price, unless payment of the total
Redemption Price for such Exchangeable Shares shall not be made upon
presentation and surrender of certificates in accordance with the foregoing
provisions, in which case the rights of the holders shall remain unaffected
until the total Redemption Price has been paid in the manner hereinbefore
provided. The Corporation shall have the right at any time after the sending
of notice of its intention to redeem Exchangeable Shares as aforesaid to
deposit
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APPENDIX A TO AMALGAMATION AGREEMENT
PAGE 13 OF 18
or cause to be deposited the total Redemption Price of the Exchangeable
Shares so called for redemption, or of such of the said Exchangeable Shares
represented by certificates that have not at the date of such deposit been
surrendered by the holders thereof in connection with such redemption, in a
custodial account with any chartered bank or trust company in Canada named in
such notice. Upon the later of such deposit being made and the Redemption
Date, the Exchangeable Shares in respect whereof such deposit shall have been
made shall be redeemed and the rights of the holders thereof after such
deposit or Redemption Date, as the case may be, shall be limited to receiving
their proportionate part of the total Redemption Price so deposited (less any
tax required to be deducted and withhold therefrom by the Corporation)
without interest for such Exchangeable Shares against presentation and
surrender of the said certificates held by them, respectively, in accordance
with the foregoing provisions. Upon such payment or deposit of the total
Redemption Price, the holders of the Exchangeable Shares shall thereafter be
considered and deemed for all purposes to be holders of the Secure Common
Shares delivered to them. To the extent that the amount of tax required to be
deducted or withhold from any payment to a holder of Exchangeable Shares
exceeds the case portion of such payment, the Corporation is hereby
authorized to sell or otherwise dispose of at a fair market value such
portion of the property then payable to the holder as is necessary to provide
sufficient funds to the Corporation in order to enable it to comply with such
deduction or withholding requirement and shall given an accounting to the
holder with respect thereto and any balance of such proceeds of sale.
ARTICLE 8
PURCHASE FOR CANCELLATION
8.1 Subject to applicable law and the articles of the Corporation, the
Corporation may at any time and from time to time purchase for cancellation
all or any part of the outstanding Exchangeable Shares at any price by tender
to all the holders of record of Exchangeable Shares then outstanding or
through the facilities of any stock exchange on which the Exchangeable Shares
are listed or quoted at any price per share together with an amount equal to
all declared and unpaid dividends thereon. If in response to an invitation
for tenders under the provisions of this Section 8.1, more Exchangeable
Shares are tendered at a price or prices acceptable to the Corporation that
the Corporation is prepared to purchase, the Exchangeable Shares to be
purchased by the Corporation shall be purchased as nearly as may be pro rata
according to the number of shares tendered by each holder who submits a
tender to the Corporation, provided that when shares are tendered at
different prices, the pro rating shall be effected (disregarding fractions)
only with respect to the shares tendered at the price at which more shares
were tendered than the Corporation is prepared to purchase after the
corporation has purchased all the share tendered at lower prices. If part
only of the Exchangeable Shares represented by any certificate shall be
purchased, a new certificate for the balance of such shares shall be issued
at the expense of the Corporation.
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APPENDIX A TO AMALGAMATION AGREEMENT
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ARTICLE 9
VOTING RIGHTS
9.1 Except as required by applicable law and the provisions of Sections
10.1, 11.1 and 12.2, the holders of the Exchangeable Shares shall not be
entitled as such to receive notice of or to attend any meeting of the
shareholders of the Corporation or to vote at any such meeting.
9.2 Pursuant to the Voting and Exchange Trust Agreement (which be this
reference is incorporated into the rights, privileges, restrictions and
conditions attaching to the Exchangeable Shares as if set forth herein in its
entirety) the holders of Exchangeable Shares (other than the Secure, its
subsidiaries and Affiliates) shall be entitled to receive notice of and
instruct the Trustee under the Voting and Exchange Trust Agreement to
exercise voting rights at meetings of holders of Secure Common Shares, all as
provided for in the Voting and Exchange Trust Agreement.
ARTICLE 10
AMENDMENT AND APPROVAL
10.1 The rights, privileges, restrictions and conditions attaching to
the Exchangeable Shares may be added to, changed or removed but only with the
approval of the holders of the Exchangeable Shares given as hereinafter
specified.
10.2 Any approval given by the holders of the Exchangeable Shares to add
to, change or remove any right, privilege, restriction or condition attaching
to the Exchangeable Shares or any other matter requiring the approval or
consent of the holders of the Exchangeable Shares shall be deemed to have
been sufficiently given if it shall have been given in accordance with
applicable law subject to a minimum requirement that such approval be
evidenced by resolution passed by not less than two-thirds of the votes cast
on such resolution at a meeting of holders of Exchangeable Shares duly called
and held at which the holders of at least 50% of the outstanding Exchangeable
Shares at that time are present or represented by proxy; provided that if at
any such meeting the holders of at least 50% of the outstanding Exchangeable
Shares at that time are not present or represented by proxy within one-half
hour after the time appointed for such meeting then the meeting shall be
adjourned to such date not less than 10 days thereafter and to such time and
place as may be designated by the Chairman of such meeting. At such adjourned
meeting the holders of Exchangeable Shares present or represented by proxy
thereat may transact the business for which the meeting was originally called
and a resolution passed thereat by the affirmative vote of not less than
two-thirds of the votes cast on such resolution at such meeting shall
constitute the approval or consent of the holders of the Exchangeable Shares.
10.3 Exchangeable Shares beneficially owned by Secure shall not be
included for the purposes of determining a quorum, and shall not vote, in
connection with any approval contemplated by Section 10.2 of these share
provisions.
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APPENDIX A TO AMALGAMATION AGREEMENT
PAGE 15 OF 18
ARTICLE 11
RECIPROCAL CHANGES, ETC. IN RESPECT OF
SECURE COMMON SHARES
11.1 (a) Each holder of an Exchangeable Share acknowledges that the
Support Agreement provides, in part, that Secure will not without the prior
approval of the Corporation and the prior approval of the holders of the
Exchangeable Shares given in accordance with Section 10.2 of these share
provisions:
(i) issue or distribute Secure Common Shares (or securities
exchangeable for or convertible into or carrying rights to
acquire Secure Common Shares) to the holders of all or
substantially all of the then outstanding Secure Common Shares by
way of stock dividend or other distribution, other than an issue
of Secure Common Shares (or securities exchangeable for or
convertible into or carrying rights to acquire Secure Common
Shares) to holder of Secure Common Shares who exercise an option
to receive dividends in Secure Common Shares (or securities
exchangeable for or convertible into or carrying rights to
acquire Secure Common Shares) in lieu of receiving cash
dividends; or
(ii) issue or distribute rights, options or warrants to the holders of
all or substantially all of the then outstanding Secure Common
Shares entitling them to subscribe for or to purchase Secure
Common Shares (or securities exchangeable for or convertible into
or carrying rights to acquire Secure Common Shares); or
(iii) issue or distribute to the holders of all or substantially
all of the then outstanding Secure Common Shares (A) shares or
securities of Secure of any class other than Secure Common
Shares (other than shares convertible into or exchangeable for
or carrying rights or acquire Secure Common Shares), (B) rights,
options or warrants other than those referred to in Section
11.1(a)(ii) above, (C) evidences of indebtedness of Secure or
(D) assets of Secure;
unless the economic equivalent on a per share basis of such rights, options,
securities, shares, evidences of indebtedness or other assets is issued or
distributed simultaneously to holders of the Exchangeable Shares.
(b) Each holder of an Exchangeable Share acknowledges that the Support
Agreement further provides, in part, that Secure will not without the prior
approval of the Corporation and the prior approval of the holders of the
Exchangeable Shares given in accordance with Section 10.2 of these share
provisions:
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APPENDIX A TO AMALGAMATION AGREEMENT
PAGE 16 OF 18
(i) subdivide, redivide or change the then outstanding Secure Common
Shares into a greater number of Secure Common Shares; or
(ii) reduce, combine or consolidate or change the then outstanding
Secure Common Shares into a lesser number of Secure Common
Shares; or
(iii) reclassify or otherwise change the Secure Common Shares or
effect an amalgamation, merger, reorganization or other
transaction affecting the Secure Common Shares;
unless the same or an economically equivalent change shall simultaneously be
made to, or in the rights of the holders of, the Exchangeable Shares. The
Support Agreement further provides, in part, that the foregoing provisions of
the Support Agreement shall not be changed without the approval of the
holders of the Exchangeable Shares given in accordance with Section 10.2 of
these share provisions.
11.2 Pursuant to the Voting and Exchange Trust Agreement, the holders of
Exchangeable Shares (other than the Secure, its subsidiaries and Affiliates)
are given certain rights to exchange their Exchangeable Shares for Secure
Common Shares.
ARTICLE 12
ACTIONS BY THE CORPORATION UNDER SUPPORT AGREEMENT
AND UNDER VOTING AND EXCHANGE TRUST AGREEMENT
12.1 The Corporation will take all such actions and do all such things
as shall be necessary or advisable to perform and comply with and to ensure
performance and compliance by Secure with all provisions of the Support
Agreement and the Voting and Exchange Trust Agreement applicable to the
Corporation and Secure, respectively, in accordance with the respective terms
thereof including, without limitation, taking all such actions and doing all
such things as shall be necessary or advisable to enforce to the fullest
extent possible for the direct benefit of the Corporation and the holders of
Exchangeable Shares all rights and benefits in favour of the Corporation and
such holders under or pursuant to such agreements.
12.2 The Corporation shall not propose, agree to or otherwise give
effect to any amendment to, or waiver or forgiveness of its rights or
obligations under, the Support Agreement and the Voting and Exchange Trust
Agreement without the approval of the holders of the Exchangeable Shares
given in accordance wiffi Section 10.2 of these share provisions other than
such amendments, waivers and/or forgiveness as may be necessary or advisable
for the purposes of:
(a) adding to the covenants of the other party or parties to such
agreement of the protection of the Corporation or the holders of Exchangeable
Shares thereunder; or
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APPENDIX A TO AMALGAMATION AGREEMENT
PAGE 17 OF 18
(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 the Board of Directors shall be of
the opinion, after consultation with counsel, that such provisions and
modifications will not be prejudicial to the interests of the holders of the
Exchangeable Shares; or
(c) making such changes in or correction to such agreement which, on
the advice of counsel to the Corporation, are required for the purpose of
curing or correcting any ambiguity or defect or inconsistent provisions or
clerical omission or mistake or manifest error contained therein, provided
that the Board of Directors shall be of the opinion, after consultation with
counsel, that such changes or corrections will not be prejudicial to the
interests of the holders of the Exchangeable Shares.
ARTICLE 13
LEGEND
13.1 The certificates evidencing the Exchangeable Shares shall contain
or have affixed thereto a legend, in form and on terms approved by the Board
of Directors, with respect to the Support Agreement, the provisions of the
Acquisition and Pre-Amalgamation Agreement relating to the Liquidation Call
Right and the Redemption Call Right, and the Voting and Exchange Trust
Agreement (including the previousness with respect to the voting rights,
exchange right and automatic exchange thereunder).
ARTICLE 14
NOTICES
14.1 Any notice, request or other communication to be given to the
Corporation by a holder of Exchangeable Shares shall be in writing and shall
be valid and effective if given by mail (postage prepaid) or by telecopy or
by delivery to the registered office of the Corporation and addressed to the
attention of the President. Any such notice, request or other communication,
if given by mail, telecopy or delivery, shall only be deemed to have been
given and received upon actual receipt thereof by the Corporation.
14.2 Any presentation and surrender by a holder of Exchangeable Shares
to the Corporation or the Transfer Agent of certificates representing
Exchangeable Shares in connection with the liquidation, dissolution or
winding up of the Corporation or the retraction or redemption of Exchangeable
Shares shall be made by registered mail (postage prepaid) or by delivery to
the registered office of the Corporation or to such office of the Transfer
Agent as may be specified by the Corporation, in each case addressed to the
attention of the President of the Corporation. Any such presentation and
surrender of certificates shall only be deemed to have been made - and
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APPENDIX A TO AMALGAMATION AGREEMENT
PAGE 18 OF 18
to be effective upon actual receipt thereof by the Corporation or the
Transfer Agent, as the case may be. Any such presentation and surrender of
certificates made by registered mail shall be at the sole risk of the holder
mailing the same.
14.3 Any notice, request or other communication to be given to a holder
of Exchangeable Shares by or on behalf of the Corporation shall be in writing
and shall be valid and effective if given by mail (postage prepaid) or by
delivery to the address of the holder recorded in the securities register of
the Corporation or, in the event of the address of any such holder not being
so recorded, then at the last known address of such holder. Any such notice,
request or other communication, if given by mail, shall be deemed to have
been given and received on the third Business Day following the date of
mailing and, if given by delivery, shall be deemed to have been given and
received on the date of delivery. Accidental failure or omission to give any
notice, request or other communication to one or more holder of Exchangeable
Shares shall not invalidate or otherwise alter or affect any action or
proceeding to be taken by the Corporation pursuant thereto.
PROVISIONS ATTACHING TO CLASS A VOTING SHARES
The Class A voting shares in the capital of the Corporation shall
have attached thereto the following rights, privileges, restrictions and
conditions:
DIVIDENDS
Subject to the prior rights of the holders of any shares ranking
senior to the Class A Shares with respect to priority in the payment of
dividends, the holders of Class A Shares shall be entitled to receive
dividends and the Corporation shall pay dividends thereon, as and when
declared by the board of directors of the Corporation out of moneys properly
applicable to the payment of dividends, in such amount and in such form as
the board of directors may from time to time determine and all dividends
which the directors may declare on the Class A Shares shall be declared and
paid in equal amounts per share on all Class A Shares at the time
outstanding; and, subject as aforesaid, the board of directors of the
Corporation may in their discretion declare dividends on the Class A Shares
without declaring dividends on any other class of shares.
DISSOLUTION
In the event of the dissolution, liquidation or winding up of the
Corporation, whether voluntary or involuntary, or any other distribution of
assets of the Corporation among its shareholders for the purpose of winding
up its affairs, subject to the prior rights of the holders of any other
shares ranking senior to the Class A Shares with respect to priority in the
distribution of assets upon dissolution, liquidation or winding up, the
holders of the Class A Shares shall be entitled to receive the remaining
property and assets of the Corporation.
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APPENDIX A TO AMALGAMATION AGREEMENT
PAGE 19 OF 18
VOTING RIGHTS
The holders of the Class A Shares shall be entitled to receive
notice of and to attend all meetings of the shareholders of the Corporation
and shall have one vote for each share held at all meetings of the
shareholders of the Corporation, except for meetings at which only holders of
another specified class or series of shares of the Corporation are entitled
to vote separately as a class or series.
