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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 16, 1999
------------------------------
Autodesk, Inc.
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(Exact name of registrant as specified in its charter)
Delaware 0-14338 94-2819853
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
111 McInnis Parkway, San Rafael, California 94903
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (415) 507-5000
----------------------------
________________________________________________________________________________
(Former name or former address, if changed since last report)
<PAGE>
Item 2. Acquisition or Disposition of Assets.
On March 16, 1999 (the "Closing Date"), pursuant to the terms of that
certain Second Amended and Restated Agreement and Plan of Acquisition and
Amalgamation dated as of November 18, 1998, as amended on December 18, 1998
and on January 18, 1999 (the "Acquisition Agreement"), by and among Autodesk,
Inc. ("Autodesk") certain indirect wholly owned subsidiaries of Autodesk and
Discreet Logic Inc., a Quebec company ("Discreet"), Autodesk's indirect wholly
owned subsidiary, Autodesk Development B.V., acquired all voting shares of the
successor company to Discreet resulting from the Amalgamation (as defined
below) ("New Discreet") by way of an amalgamation under the Companies Act of
Quebec by and among Discreet and certain indirect wholly owned subsidiaries of
Autodesk (the "Amalgamation") and certain related transactions described below
(together with the Amalgamation, the "Acquisition"). As a result of the
Acquisition, New Discreet became an indirect subsidiary of Autodesk.
Pursuant to the Acquisition Agreement, an aggregate of approximately 10
million shares of Autodesk common stock, par value $0.01 per share (the
"Autodesk Common Stock"), and New Discreet shares exchangeable for Autodesk
Common Stock ("New Discreet Exchangeable Shares"), were issued in exchange for
all common shares of Discreet, no par value per share (the "Discreet Common
Shares"), issued and outstanding immediately prior to the Amalgamation. Each
Discreet Common Share outstanding immediately prior to the Amalgamation was
converted, through a series of steps, at the election of its holder, into
either (i) 0.33 shares of Autodesk Common Stock, or (ii) 0.33 New Discreet
Exchangeable Shares. Each New Discreet Exchangeable Share may be exchanged at
the election of the holder for one share of Autodesk Common Stock. In
addition, Autodesk assumed all Discreet stock options outstanding immediately
prior to the Amalgamation granted under Discreet's Amended and Restated 1994
Restricted Stock and Stock Option Plan, Non-Employee Director Stock Option
Plan, and 1997 Special Limited Non-Employee Director Stock Plan as well as all
outstanding purchase rights under the Discreet Employee Stock Purchase Plan,
and these options and rights were converted into options and rights to acquire
Autodesk Common Stock with appropriate adjustments to the number of shares and
exercise price thereof based on the 0.33 exchange ratio.
The Acquisition is valued at approximately $410 million based on the
closing price of the Autodesk Common Stock on the Nasdaq National Market on the
Closing Date and will be accounted for as a pooling-of-interests.
The consideration paid by Autodesk for the Discreet Common Shares and
Discreet options and rights outstanding immediately prior to the Amalgamation
pursuant to the Acquisition Agreement was determined pursuant to arms' length
negotiations and took into account various factors concerning the valuation of
the business of Discreet, including public market valuations of comparable
companies, multiples paid in recent acquisitions of comparable companies,
premiums paid in recent acquisitions of comparable companies, a pro forma
earnings analysis of Autodesk upon its acquisition of Discreet and discounted
cash flows for Discreet on a stand-alone basis. Autodesk received an opinion
from its financial advisor, Piper Jaffray Inc., dated as of January 18, 1999,
to the effect that, as of such date, the 0.33 exchange ratio was fair from a
financial point of view to Autodesk.
-2-
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Autodesk plans to combine the businesses of Discreet and its Kinetix
division. The new organization, the Discreet business unit of Autodesk,
will be headquartered in Montreal, Quebec. Autodesk's Discreet business
unit will focus on developing and marketing tools for the creation of digital
content in the entertainment and creative design industries. The combined
organization will continue to develop and deliver the existing Discreet and
Kinetix product lines to professionals in such industries as entertainment,
design and visualization.
-3-
<PAGE>
Item 7. Financial Statements and Exhibits.
(a) Financial Statements of Discreet
--------------------------------
To the extent not previously reported in Autodesk's
Registration Statement on Form S-4 (file no. 333-65075), the Financial
Statements of Discreet required to be filed pursuant to Item 7(a) of Form 8-K
will be filed on a Form 8-K/A as soon as practicable, but in no event later
than 60 days after the date this Form 8-K is required to be filed.
(b) Pro forma financial information.
-------------------------------
To the extent not previously reported on Autodesk's
Registration Statement on Form S-4 (file no. 333-65075), the Pro Forma
Financial Information required to be filed pursuant to Item 7(b) of Form 8-K
will be filed on a Form 8-K/A as soon as practicable, but in no event later
than 60 days after the date this Form 8-K is required to be filed.
(c) Exhibits.
--------
2.1 Second Amended and Restated Agreement and Plan of
Acquisition and Amalgamation by and among the Registrant,
Autodesk Development B.V., 9066-9771 Quebec Inc., Autodesk
Canada Inc., 9066-9854 Quebec Inc. and Discreet Logic Inc.,
dated as of November 18, 1998, as amended on December 18,
1998 and January 18, 1999.
2.2 Second Amended and Restated Amalgamation Agreement by and
among Discreet Logic Inc., 9066-9854 Quebec Inc., 9066-9771
Quebec Inc. and the Registrant dated as of January 18, 1999.
2.3 Articles of Amalgamation filed with the Inspector General of
Financial Institutions of the Province of Quebec pursuant to
Section 123.118 of the Companies Act of Quebec.
99.1 Press release of the Registrant dated March 16, 1999.
-4-
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: March 31, 1999 AUTODESK, INC.
/s/ Steve Cakebread
-----------------------------------------
Steve Cakebread
Vice President and Chief Financial
Officer (Principal Financial Officer)
-5-
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INDEX TO EXHIBITS
Exhibit
Number Description of Document
- ------ -----------------------
2.1 Second Amended and Restated Agreement and Plan of Acquisition and
Amalgamation by and among the Registrant, Autodesk Development
B.V., 9066-9771 Quebec Inc., Autodesk Canada Inc., 9066-9854
Quebec Inc. and Discreet Logic Inc., dated as of November 18,
1998, as amended on December 18, 1998 and January 18, 1999.
2.2 Second Amended and Restated Amalgamation Agreement by and among
Discreet Logic Inc., 9066-9854 Quebec Inc., 9066-9771 Quebec Inc.
and the Registrant dated as of January 18, 1999.
2.3 Articles of Amalgamation filed with the Inspector General of
Financial Institutions of the Province of Quebec pursuant to
Section 123.118 of the Companies Act of Quebec.
99.1 Press release of the Registrant dated March 16, 1999.
<PAGE>
EXHIBIT 2.1
SECOND AMENDED AND RESTATED
AGREEMENT AND PLAN OF ACQUISITION AND AMALGAMATION
BY AND AMONG
AUTODESK, INC.,
AUTODESK DEVELOPMENT B.V.,
9066-9771 QUEBEC INC.,
AUTODESK CANADA INC.,
9066-9854 QUEBEC INC.
and
DISCREET LOGIC INC.
Dated as of November 18, 1998
<PAGE>
TABLE OF CONTENTS
<TABLE>
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Page
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ARTICLE I The Transactions................................................. A-2
1.1 The Transactions.................................................... A-2
1.2 Effective Time...................................................... A-2
1.3 Share Conversions, Etc.............................................. A-2
1.4 Accounting Consequences............................................. A-2
1.5 Material Adverse Effect............................................. A-2
1.6 Adjustments to Exchange Ratio....................................... A-3
1.7 Cancellation........................................................ A-3
1.8 Share Certificates of Amalgamation Sub and Giants Quebec............ A-3
1.9 Execution of Amalgamation Agreement................................. A-3
1.10 Tax Treatment....................................................... A-3
1.11 Existing Agreement Terminated....................................... A-3
ARTICLE II Representations And Warranties Of The Company................... A-4
2.1 Organization and Qualification; Subsidiaries........................ A-4
2.2 Articles of Incorporation and By-Laws............................... A-4
2.3 Capitalization...................................................... A-4
2.4 Authority........................................................... A-5
2.5 No Conflict; Required Filings and Consents.......................... A-5
2.6 Compliance; Permits................................................. A-6
2.7 SEC Filings; Financial Statements................................... A-6
2.8 Absence of Certain Changes or Events................................ A-7
2.9 Absence of Litigation............................................... A-7
2.10 Employee Benefit Plans; Employment Agreements....................... A-8
2.11 Labor Matters....................................................... A-9
2.12 Registration Statement; Joint Proxy Statement....................... A-9
2.13 Restrictions on Business Activities................................. A-10
2.14 Title to Property................................................... A-10
2.15 Taxes............................................................... A-10
2.16 Environmental Matters............................................... A-12
2.17 Brokers............................................................. A-12
2.18 Intellectual Property............................................... A-12
2.19 Interested Party Transactions....................................... A-14
2.20 Insurance........................................................... A-14
2.21 Vote Required....................................................... A-14
2.22 Pooling Matters..................................................... A-14
2.23 Opinion of Financial Advisor........................................ A-14
ARTICLE III Representations And Warranties Of The Parent Group............. A-14
3.1 Organization and Qualification...................................... A-14
3.2 Authority .......................................................... A-15
3.3 No Conflict; Required Filings and Consents.......................... A-15
3.4 Certificate of Incorporation and By-Laws............................ A-16
3.5 Capitalization...................................................... A-16
3.6 Compliance; Permits................................................. A-16
3.7 SEC Filings; Financial Statements................................... A-16
3.8 Absence of Certain Changes or Events................................ A-17
3.9 Board Approval...................................................... A-17
3.10 Registration Statement; Joint Proxy Statement/Prospectus............ A-17
3.11 Brokers............................................................. A-18
</TABLE>
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3.12 Opinion of Financial Advisor........................................ A-18
3.13 Pooling Matters..................................................... A-18
3.14 Absence of Litigation............................................... A-18
3.15 Restrictions on Business Activities................................. A-18
3.16 Taxes............................................................... A-18
3.17 Intellectual Property............................................... A-19
3.18 Insurance........................................................... A-20
3.19 Vote Required....................................................... A-20
ARTICLE IV Conduct Of Business Pending The Amalgamation.................... A-20
4.1 Conduct of Business by the Company Pending the Amalgamation......... A-20
4.2 No Solicitation..................................................... A-22
4.3 Covenants of Parent................................................. A-23
ARTICLE V Additional Agreements............................................ A-23
5.1 Joint Proxy Statement/Prospectus; Registration Statement............ A-23
5.2 Shareholders' Meetings.............................................. A-24
5.3 Access to Information; Confidentiality.............................. A-24
5.4 Consents; Approvals................................................. A-24
5.5 Stock Options; Employee Benefits; Retention of Employees............ A-24
5.6 Company Employee Stock Purchase Plan................................ A-26
5.7 Agreements of Affiliates............................................ A-26
5.8 Voting Agreements................................................... A-26
5.9 Indemnification and Insurance....................................... A-26
5.10 Notification of Certain Matters..................................... A-27
5.11 Further Action...................................................... A-27
5.12 Public Announcements................................................ A-28
5.13 Listing of Parent Common Shares..................................... A-28
5.14 Conveyance Taxes.................................................... A-28
5.15 Pooling Letters..................................................... A-28
5.16 Pooling Accounting Treatment........................................ A-28
5.17 Ancillary Documents/Reservation of Shares........................... A-28
5.18 Listing of Class B Shares, Class E Shares and Class F Shares........ A-29
5.19 Tax Elections....................................................... A-29
5.20 Board Candidate..................................................... A-29
5.21 Issuance of Class D Shares.......................................... A-29
ARTICLE VI Conditions To The Transactions.................................. A-30
6.1 Conditions to Obligation of Each Party to Effect the Transactions... A-30
6.2 Additional Conditions to Obligations of Parent Group Members........ A-31
6.3 Additional Conditions to Obligation of the Company.................. A-31
ARTICLE VII Termination.................................................... A-32
7.1 Termination......................................................... A-32
7.2 Effect of Termination............................................... A-33
7.3 Fees and Expenses................................................... A-33
ARTICLE VIII General Provisions............................................ A-34
8.1 Effectiveness of Representations, Warranties and Agreements......... A-34
8.2 Notices............................................................. A-35
8.3 Certain Definitions................................................. A-36
8.4 Amendment........................................................... A-36
</TABLE>
ii
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8.5 Waiver.............................................................. A-36
8.6 Headings............................................................ A-36
8.7 Severability........................................................ A-36
8.8 Entire Agreement.................................................... A-36
8.9 Assignment; Amalgamation Sub/Dutchco................................ A-36
8.10 Parties in Interest................................................. A-37
8.11 Failure or Indulgence Not Waiver; Remedies Cumulative............... A-37
8.12 Governing Law....................................................... A-37
8.13 Choice of Language.................................................. A-37
8.14 Counterparts........................................................ A-37
8.15 Guarantee........................................................... A-37
</TABLE>
Exhibits:
Exhibit A:Form of Amalgamation Agreement
Exhibit B-1:Form of Parent Affiliate Agreement
Exhibit B-2:Form of Company Affiliate Agreement
Exhibit C-1:Form of Parent Voting Agreement
Exhibit C-2:Form of Company Voting Agreement
Exhibit D:Form of Support Agreement
Exhibit E:Form of Voting and Exchange Trust Agreement
Exhibit F:Form of Certificate of Designation
iii
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SECOND AMENDED AND RESTATED AGREEMENT AND PLAN OF ACQUISITION AND AMALGAMATION
This Second Amended and Restated Agreement and Plan of Acquisition and
Amalgamation, dated as of November 18, 1998 (the "Agreement"), is entered into
by and among Autodesk, Inc., a Delaware corporation ("Parent"), Autodesk
Development B.V., a Netherlands corporation and indirect wholly owned
subsidiary of Parent ("Dutchco"), 9066-9771 Quebec Inc., a Quebec company and
a wholly owned subsidiary of Dutchco ("Amalgamation Sub"), Autodesk Canada
Inc., an Ontario company and wholly owned subsidiary of Parent ("ACI"), 9066-
9854 Quebec Inc., a Quebec company and indirect wholly owned subsidiary of
Parent ("Giants Quebec"), and Discreet Logic Inc., a Quebec company (the
"Company").
Witnesseth:
Whereas, the Boards of Directors of Parent, Dutchco and the Company have
each determined that it is advisable and in the best interests of their
respective stockholders for Dutchco to acquire shares in the share capital of
the Company upon the terms and subject to the conditions set forth herein;
Whereas, in furtherance of such acquisition, Parent, Dutchco, Amalgamation
Sub, Giants Quebec, ACI and the Company entered into an Agreement and Plan of
Acquisition and Arrangement dated as of August 20, 1998 (the "Original
Agreement"), which was subsequently amended and restated in its entirety by
the parties in the Amended and Restated Agreement and Plan of Acquisition and
Amalgamation dated as of September 23, 1998 (the "Exisiting Agreement");
Whereas, the Boards of Directors of Parent, Dutchco, Amalgamation Sub,
Giants Quebec, ACI and the Company now desire to amend and restate the
Existing Agreement and have each approved the execution and delivery of this
Agreement in order to provide for a business combination involving the
amalgamation (the "Amalgamation") of Amalgamation Sub, Giants Quebec (to which
ACI will assign, prior to the Amalgamation, substantially all its assets) and
the Company whereupon each outstanding common share in the Company's share
capital (the "Company Common Shares") shall be converted into one Class B
Share of the continuing corporation resulting from the Amalgamation (the
"Continuing Corporation");
Whereas, Articles of Amalgamation (the "Articles") will be filed pursuant to
Section 123.118 of the Companies Act (Quebec) (the "Quebec Act"), pursuant to
the terms hereof and the Amended and Restated Amalgamation Agreement (the
"Amalgamation Agreement") in the form annexed hereto as Exhibit A;
Whereas, immediately following the Amalgamation, the Class B Shares of the
Continuing Corporation automatically will be, based on the prior election of
the holder, either (i) redeemed by the Continuing Corporation for 0.48 (the
"Exchange Ratio") exchangeable shares in the share capital of the Continuing
Corporation (the "Exchangeable Shares"), subject to proration in certain
instances, or (ii) converted into units comprised of one Class E Share and one
Class F Share of the Continuing Corporation ("Units"), which units will be
acquired by Dutchco in exchange for 0.48 shares of common stock, par value
$0.01 per share, of Parent ("Parent Common Shares"), in either case without
further action on the part of the holder;
Whereas, the Exchangeable Shares are exchangeable by the holders for Parent
Common Shares on a one-for-one basis at any time on or before a date eleven
(11) years after the Effective Time (as defined herein), and
Whereas, for accounting purposes, it is intended that the Transactions (as
defined in Section 1.1 hereof) shall be accounted for as a taxable pooling of
interests under United States generally accepted accounting principles ("US
GAAP");
Now, Therefore, in consideration of the foregoing and the mutual covenants
and agreements herein contained, and intending to be legally bound hereby,
Parent, Dutchco, ACI, Giants Quebec, Amalgamation Sub (collectively, the
"Parent Group") and the Company hereby agree as follows:
1
<PAGE>
ARTICLE I
The Transactions
1.1 The Transactions.
(a) Effective Time. Subject to and upon the terms and conditions of the
Ancillary Documents (as defined in Section 5.17), this Agreement, the Articles
and the Quebec Act, (i) at the Effective Time (as defined in Section 1.2
hereof), Amalgamation Sub and Giants Quebec shall be amalgamated with the
Company (provided, however, that the Company shall not be required to
amalgamate with Amalgamation Sub unless Giants Quebec simultaneously
amalgamates with Amalgamation Sub, and Giants Quebec shall not be required to
amalgamate with Amalgamation Sub unless the Company simultaneously amalgamates
with Amalgamation Sub) and (ii) immediately following the Effective Time, the
Class B Shares of the Continuing Corporation automatically shall, based on the
prior election of the holder, either (x) be redeemed by the Continuing
Corporation for Exchangeable Shares of the Continuing Corporation or (y) be
converted into Units which Units shall be acquired by Dutchco in exchange for
shares of Parent Common Stock, in either case without further action on the
part of the holder (such redemptions, conversions and share acquisitions set
forth in clause (ii), together with the Amalgamation, are collectively
referred to herein as the "Transactions"). Prior to the Effective Time, ACI
will assign and transfer all of its assets and liabilities to Giants Quebec.
(b) Closing. Unless this Agreement shall have been terminated and the
transactions herein contemplated shall have been abandoned pursuant to Section
7.1 hereof, and subject to the satisfaction or waiver of the conditions set
forth in Article VI hereof, the consummation of the Transactions will take
place as promptly as practicable after satisfaction or waiver of the
conditions set forth in Article VI hereof, at the offices of Wilson Sonsini
Goodrich & Rosati, 650 Page Mill Road, Palo Alto, California, unless another
date, time or place is agreed to in writing by the parties hereto. At the
closing, the parties hereto shall deliver the documents contemplated hereby
together with such other customary documents as may be reasonably requested by
the parties.
1.2 Effective Time. As promptly as practicable after the satisfaction or
waiver of the conditions set forth in Article VI, the parties hereto shall
cause the Amalgamation to be consummated by filing the Articles together with
the documents contemplated by Section 123.14 of the Quebec Act, with the
Inspector General of Financial Institutions of the Province of Quebec (the
"Inspector General"), in such form as required by, and executed in accordance
with the relevant provisions of, the Quebec Act. The Amalgamation will become
effective at such time and on such date shown on the Certificate of
Amalgamation issued by the Inspector General (the "Effective Time").
1.3 Share Conversions, Etc. Immediately following the Class B Conversion
Time (as defined in Appendix A to the Amalgamation Agreement), Dutchco and
Parent shall cause the Continuing Corporation to provide notice of its
intention to exercise its right to redeem the Class E Shares and Class F
Shares of the Continuing Corporation (as specified in Appendix A to the
Amalgamation Agreement). At or prior to the Class E Redemption Time and the
Class F Redemption Time, Dutchco shall, and Parent shall cause Dutchco to,
exercise the Class E Redemption Call Right and the Class F Redemption Call
Right (as each is defined in Appendix A to the Amalgamation Agreement).
1.4 Accounting Consequences. It is intended by the parties hereto that the
Transactions shall qualify for accounting treatment as a pooling of interests
under US GAAP.
1.5 Material Adverse Effect. When used in connection with the Company, or
Parent, as the case may be, the term "Material Adverse Effect" means any
change or effect that, individually or when taken together with all other such
changes or effects that have occurred prior to the date of determination of
the occurrence of the Material Adverse Effect, is or is reasonably likely to
be materially adverse to the business, assets (including intangible assets),
financial condition or results of operations of the Company and its
subsidiaries or Parent and its subsidiaries, as the case may be, in each case
taken as a whole; provided, however, that none of the following
2
<PAGE>
shall be deemed to constitute a Material Adverse Effect with respect to either
party: (a) any change in the market price or trading volume of the Company
Common Shares or Parent Common Shares, as appropriate; (b) any adverse effect
on the bookings, revenues or earnings of such party, or any delay in or
reduction or cancellation of such party's product orders, following the
execution of the Original Agreement, the Existing Agreement or this Agreement
which is reasonably attributable to the announcement of the execution of the
Original Agreement, the Existing Agreement or this Agreement and the
transactions contemplated hereby; (c) any change arising out of conditions
affecting the economy or industry of such party in general; (d) the failure,
in and of itself, to meet analysts' expectations (it being understood that the
underlying causes of such failure shall not be excluded from the definition of
Material Adverse Effect except as otherwise provided in this definition); or
(e) employee attrition which is (i) reasonably attributable to the
announcement of the execution of the Original Agreement, the Existing
Agreement or this Agreement and the transactions contemplated hereby, or (ii)
directly attributable to any action directly required of the Company by Parent
under Section 4.1, or any omission of the Company directly resulting from
Parent's failure to consent to actions requested to be taken by the Company
under Section 4.1.
1.6 Adjustments to Exchange Ratio. The Exchange Ratio shall be adjusted to
reflect fully the effect of any stock split, reverse split, stock dividend
(including any dividend or distribution of securities convertible into Parent
Common Shares or Company Common Shares), reorganization, recapitalization or
other like change with respect to Parent Common Shares or Company Common
Shares occurring after the date hereof and prior to the Effective Time.
1.7 Cancellation. Immediately prior to the Effective Time, each Company
Common Share owned by Parent, Dutchco, Amalgamation Sub or any direct or
indirect wholly owned subsidiary of the Company or Parent shall be purchased
for cancellation by the Company for nominal consideration.
1.8 Share Certificates of Amalgamation Sub and Giants Quebec. Each share
certificate of Amalgamation Sub evidencing ownership of any common shares of
Amalgamation Sub shall continue to evidence ownership of Class A Shares in the
share capital of the Continuing Corporation, and each share certificate of
Giants Quebec evidencing ownership of any common shares of Giants Quebec shall
continue to evidence ownership of Class C Shares in the share capital of the
Continuing Corporation. Any reference herein to classes of shares in the share
capital of the Continuing Corporation shall mean the classes of shares set out
in Appendix A to the Amalgamation Agreement.
1.9 Execution of Amalgamation Agreement. Concurrently herewith, Amalgamation
Sub, Autodesk Quebec and the Company shall execute and deliver the
Amalgamation Agreement.
1.10 Tax Treatment. It is intended that the Transactions shall generally
constitute (i) a taxable exchange for United States federal income tax
purposes (not qualifying under Sections 368 or 351 of the United States
Internal Revenue Code of 1986, as amended (the "Code")) to holders of Company
Common Shares who are otherwise subject to taxation in the United States on
the sale or exchange of Company Common Shares, and (ii) a non-taxable exchange
for Canadian federal income tax purposes for owners of Company Common Shares
who are residents of Canada for Canadian federal income tax purposes who elect
to receive Exchangeable Shares (but only to the extent they actually receive
Exchangeable Shares and only to the extent that they file appropriate
elections with the relevant tax authorities), which election the parties
hereto intend shall be permitted only to the extent that the aggregate
percentage of Company Common Shares exchanged for Exchangeable Shares pursuant
to all such elections shall not exceed 19.99 percent of the Company Common
Shares outstanding immediately prior to the Effective Time.
1.11 Existing Agreement and Original Agreement Terminated. This Agreement
amends and restates in its entirety the Existing Agreement and the Original
Agreement. Accordingly, upon the execution and delivery hereof by the parties,
the Existing Agreement and the Original Agreement shall be terminated in all
respects and be of no further force or effect.
3
<PAGE>
ARTICLE II
Representations And Warranties Of The Company
The term "knowledge" as used in connection with the Company shall mean the
Company's actual knowledge after reasonable inquiry of officers, directors and
other employees of the Company charged with senior administrative or
operational responsibility of such matters. The Company hereby represents and
warrants to each member of the Parent Group as of the date of the Original
Agreement (except for the representations and warranties contained in Sections
2.4, 2.5(b), 2.5(c), 2.7(a), 2.7(b) and 2.23, which are made as of the date of
this Agreement), subject to the written disclosure schedule supplied by the
Company to Parent dated as of the date of the Original Agreement and certified
by a duly authorized officer of the Company (the "Company Disclosure
Schedule"), that:
2.1 Organization and Qualification; Subsidiaries. The Company and, except as
set forth on Schedule 2.1 of the Company Disclosure Schedule, each of its
subsidiaries is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation or
organization and has the requisite corporate power and authority and is in
possession of all material franchises, grants, authorizations, licenses,
permits, easements, consents, certificates, approvals and orders
(collectively, "Approvals") necessary to own, lease and operate the properties
it purports to own, operate or lease and to carry on its business as it is now
being conducted, except where the failure to be so organized, existing and in
good standing or to have such power, authority and Approvals would not have a
Material Adverse Effect. The Company and each of its subsidiaries is duly
qualified or licensed as a foreign corporation to do business, and is in good
standing, in each jurisdiction where the character of its properties owned,
leased or operated by it or the nature of its activities makes such
qualification or licensing necessary, except for such failures to be so duly
qualified or licensed and in good standing that would not have a Material
Adverse Effect. A true and complete list of all of the Company's subsidiaries,
together with the jurisdiction of incorporation or organization of each
subsidiary and the percentage of each subsidiary's outstanding capital stock
owned by the Company or another subsidiary, is set forth in Schedule 2.1 of
the Company Disclosure Schedule. Except as set forth in Schedule 2.1 of the
Company Disclosure Schedule, the Company does not directly or indirectly own
any equity or similar interest in, or any interest convertible into or
exchangeable or exercisable for, any equity or similar interest in, any
corporation, partnership, joint venture or other business association or
entity.
2.2 Articles of Incorporation and By-Laws. The Company has heretofore
furnished to Parent a complete and correct copy of its Articles of
Incorporation and By-Laws, as amended through August 20, 1998, and has made
available to Parent the equivalent organizational documents of each of its
subsidiaries. Such Articles of Incorporation, By-Laws and equivalent
organizational documents of each of its subsidiaries are in full force and
effect. Except as set forth on Schedule 2.2 of the Company Disclosure
Schedule, neither the Company nor any of its subsidiaries is in violation of
any of the provisions of its Articles of Incorporation or By-Laws or
equivalent organizational documents.
2.3 Capitalization. The authorized share capital of the Company consists of
an unlimited number of Company Common Shares and an unlimited number of
preferred shares, no par value (the "Company Preferred Shares"). As of August
10, 1998, (i) 29,653,313 Company Common Shares were issued and outstanding,
all of which are validly issued, fully paid and nonassessable, (ii) no Company
Common Shares were held by subsidiaries of the Company, (iii) 5,012,924
Company Common Shares were reserved for future issuance pursuant to option
grants under the Company's Amended and Restated 1994 Restricted Stock and
Stock Option Plan, of which options to purchase 3,505,716 Company Common
Shares are outstanding, (iv) 111,779 Company Common Shares were reserved for
future issuance under the Company's 1995 Employee Stock Purchase Plan, (v)
200,000 Company Common Shares were reserved for future issuance pursuant to
option grants under the Company's 1995 Non-Employee Director Stock Option
Plan, of which options to purchase 140,000 Company Common Shares are
outstanding, (vi) 20,000 Company Common Shares were reserved for future
issuance pursuant to option grants under the Company's 1997 Special Limited
Non-Employee Director Stock Plan, of
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which options to purchase 20,000 Company Common Shares are outstanding, and
(vii) no Company Preferred Shares were issued or outstanding. Except as set
forth in Schedule 2.3 of the Company Disclosure Schedule, no material change
in such capitalization has occurred between August 10, 1998 and August 20,
1998, except for the issuance of shares under the exercise of options,
warrants or other rights outstanding prior to August 10, 1998. Except as set
forth in this Section 2.3 or Section 2.10 hereof or in Schedule 2.3 or
Schedule 2.10 of the Company Disclosure Schedule, there are no options,
warrants or other rights, agreements, arrangements or commitments of any
character relating to the issued or unissued capital stock of the Company or
any of its subsidiaries obligating the Company or any of its subsidiaries to
issue or sell any shares of share capital of, or other equity interests in,
the Company or any of its subsidiaries. All Company Common Shares subject to
issuance as aforesaid, upon issuance on the terms and conditions specified in
the instruments pursuant to which they are issuable, shall be duly authorized,
validly issued, fully paid and nonassessable. Except as set forth in
Schedule 2.3 of the Company Disclosure Schedule, there are no obligations,
contingent or otherwise, of the Company or any of its subsidiaries (A) to
repurchase, redeem or otherwise acquire any shares of the share capital of the
Company or the capital stock of any subsidiary or (B) except for the provision
of operational expenses to subsidiaries in the ordinary course of business
consistent with past practice, to provide funds or to make any investment (in
the form of a loan, capital contribution or otherwise) in any such subsidiary
or any other entity other than guarantees of bank and capital or other lease
obligations of subsidiaries entered into in the ordinary course of business.
All of the outstanding shares of capital stock of each of the Company's
subsidiaries are duly authorized, validly issued, fully paid and
nonassessable, and all such shares are owned by the Company or another
subsidiary free and clear of all security interests, liens, claims, pledges,
agreements, limitations in the Company's voting rights, charges or other
encumbrances of any nature whatsoever which would have a Material Adverse
Effect.
2.4 Authority. The Company has all necessary corporate power and authority
to execute and deliver this Agreement and the Amalgamation Agreement and to
perform its obligations hereunder and thereunder and to consummate the
transactions contemplated hereby and thereby. The execution and delivery of
this Agreement and the Amalgamation Agreement by the Company and the
consummation by the Company of the transactions contemplated hereby and
thereby have been duly and validly authorized by all necessary corporate
action and no other corporate proceedings on the part of the Company are
necessary to authorize this Agreement or the Amalgamation Agreement or to
consummate the Transactions, other than the approval and adoption of this
Agreement and confirmation of by-law No. 1998-1 approving the Amalgamation by
the holders of at least sixty-six and two-thirds percent (66 2/3%) of the
outstanding Company Common Shares who are permitted to, and who, vote at the
Company Shareholders' Meeting (as defined in Section 2.12 hereof) in
accordance with the Quebec Act. The Board of Directors of the Company has
determined that it is advisable and in the best interests of the Company's
shareholders for the Company to enter into a business combination with Parent
upon the terms and subject to the conditions of this Agreement and to
recommend that the shareholders of the Company approve same. This Agreement
and the Amalgamation Agreement have each been duly and validly executed and
delivered by the Company and, assuming the due authorization, execution and
delivery of each such agreement by each member of the Parent Group, as
applicable, each such agreement constitutes a legal, valid and binding
obligation of the Company.
2.5 No Conflict; Required Filings and Consents.
(a) Schedule 2.5(a) of the Company Disclosure Schedule sets forth all
agreements necessary to the current operation of the business of the Company,
excluding (i) employment agreements, standard end user license agreements and
standard distribution agreements; (ii) purchase orders, procurement contracts
and other similar agreements entered into in the ordinary course of business;
(iii) agreements which call for the payment or receipt of less than $200,000
over a three-year period; (iv) agreements disclosed in Schedule 2.18 of the
Company Disclosure Schedule; or (v) agreements filed with the United States
Securities and Exchange Commission ("SEC") pursuant to the requirements under
Item 601(b) of Regulation S-K.
(b) The execution and delivery of this Agreement and the Amalgamation
Agreement by the Company do not, and the performance of this Agreement and the
Amalgamation Agreement by the Company will not, (i) conflict with or violate
the Articles of Incorporation or By-Laws or equivalent organizational
documents of the Company or any of its subsidiaries, (ii) conflict with or
violate any law, rule, regulation, order, judgment or
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decree applicable to the Company or any of its subsidiaries or by which its or
any of their respective properties is bound or affected, or (iii) result in
any breach of or constitute a default (or an event that with notice or lapse
of time or both would become a default), or impair the Company's or any of its
subsidiaries' rights or, to the Company's knowledge, alter the rights or
obligations of any third party under, or give to others any rights of
termination, amendment, acceleration or cancellation of any agreement (each, a
"Covered Agreement") disclosed in Schedule 2.5(a) and Schedule 2.18 of the
Company Disclosure Schedule or filed as a "material contract" with the SEC
pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, and the SEC's rules thereunder (collectively, the "Exchange Act"), or
result in the creation of a lien or encumbrance on any of the properties or
assets of the Company or any of its subsidiaries pursuant to any note, bond,
mortgage, indenture, contract, agreement, lease, license, permit, franchise or
other instrument or obligation to which the Company or any of its subsidiaries
is a party or by which the Company or any of its subsidiaries or its or any of
their respective properties is bound or affected, except in the case of (ii)
and (iii) for any such conflicts, violations, breaches, defaults,
terminations, cancellations or accelerations which would not have a Material
Adverse Effect.
(c) The execution and delivery of this Agreement and the Amalgamation
Agreement by the Company do not, and the performance of the transactions
contemplated hereby and thereby will not, require any consent, approval,
authorization or permit of, or filing with or notification to, any
governmental or regulatory authority, domestic or foreign, to be made or
obtained by the Company, except (i) for applicable requirements, if any, of
the Securities Act of 1933, as amended, and the SEC's rules thereunder (the
"Securities Act"), the Exchange Act, state securities laws ("Blue Sky Laws"),
the pre-merger notification requirements of the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended (the "HSR Act"), the Securities Act
(Quebec) (the "QSA") and other relevant Canadian securities statutes, filing
with Industry Canada under the Investment Canada Act (Canada), filing under
the Competition Act (Canada) and the filing and recordation of appropriate
documents as required by the Quebec Act in connection with the Transactions
and (ii) where the failure to obtain such consents, approvals, authorizations
or permits, or to make such filings or notifications, would not prevent or
materially delay consummation of the Transactions, or otherwise prevent or
materially delay the Company from performing its obligations under this
Agreement and the Amalgamation Agreement, or would not otherwise have a
Material Adverse Effect.
2.6 Compliance; Permits.
(a) Neither the Company nor any of its subsidiaries is in conflict with, or in
default or violation of, (i) any law, rule, regulation, order, judgment or
decree applicable to the Company or any of its subsidiaries or by which its or
any of their respective properties is bound or affected or (ii) any note,
bond, mortgage, indenture, contract, agreement, lease, license, permit,
franchise or other instrument or obligation to which the Company or any of its
subsidiaries is a party or by which the Company or any of its subsidiaries or
its or any of their respective properties is bound or affected, except for any
such conflicts, defaults or violations which would not have a Material Adverse
Effect.
(b) Except as disclosed in Schedule 2.6(b) of the Company Disclosure Schedule,
the Company and its subsidiaries, but only to the extent material to the
operation of the business of the Company and the subsidiaries, as a whole,
hold all permits, licenses, easements, variances, exemptions, consents,
certificates, orders and approvals from governmental authorities that are
material to the operation of the business of the Company as operated on August
20, 1998 (collectively, the "Company Permits"). The Company and its
subsidiaries, but only to the extent material to the operation of the business
of the Company and the subsidiaries, as a whole, are in compliance with the
terms of the Company Permits, except where the failure to so comply would not
have a Material Adverse Effect.
2.7 SEC Filings; Financial Statements.
(a) The Company has filed all forms, reports and documents required to be
filed by the Company with the SEC since July 6, 1995 and has made available to
Parent (i) its Transition Report on Form 10-K for the eleven-month period
ended June 30, 1997, (ii) its Quarterly Reports on Form 10-Q for the three-
month periods ended September 30, 1997, December 31, 1997, March 31, 1998 and
September 30, 1998, respectively, (iii) all proxy
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statements relating to the Company's meetings of stockholders (whether annual
or special) held since July 6, 1995, (iv) all other reports or Registration
Statements (other than Reports on Form 10-Q not referred to in clause (ii)
above and Reports on Form 3, 4 or 5 or registration statements on Form S-8)
filed by the Company with the SEC since July 6, 1995, and (v) all amendments
and supplements to all such reports and registration statements filed by the
Company with the SEC (collectively, the "Company SEC Reports"). The Company
SEC Reports (i) were prepared in accordance with the requirements of the
Securities Act or the Exchange Act, as the case may be, in all material
respects, and (ii) did not at the time they were filed (or if amended or
superseded by a filing prior to the date of this Agreement, then on the date
of such amending or superseding filing) contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein
or necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. As of the date
hereof, none of the Company's subsidiaries is required to file any forms,
reports or other documents with the SEC.
(b) Each of the consolidated financial statements (including, in each case,
any related notes thereto) contained in the Company SEC Reports was prepared
in accordance with US GAAP applied on a consistent basis throughout the
periods involved (except as may be indicated therein or in the notes thereto
or, in the case of unaudited financial statements, as permitted by Form 10-Q
of the SEC) and each fairly presented in all material respects the
consolidated financial position of the Company and its subsidiaries as at the
respective dates thereof and the consolidated results of its operations and
cash flows for the periods indicated, except that the unaudited interim
financial statements were or are subject to normal and recurring year-end
adjustments which were not or are not expected to be material in amount.
(c) The unaudited financial statements of the Company for its fiscal year
ended June 30, 1998 included in Schedule 2.7(b) of the Company Disclosure
Schedule (the "Company Financial Statements") reflect in all material respects
the financial position of the Company as of June 30, 1998 and were prepared in
accordance with US GAAP, except for the absence of a statement of
shareholders' equity, a statement of cash flow, and in each case, the absence
of notes thereto and of any subsequent events or similar such notations that
may require a change in the financial statements.
(d) The Company has hereto furnished to Parent a complete and correct copy of
any amendments or modifications which have not yet been filed with the SEC but
which are required to be filed, to agreements, documents or other instruments
which previously had been filed by the Company with the SEC pursuant to the
Securities Act or the Exchange Act.
(e) The Company is not a "reporting issuer" or its equivalent for the purposes
of the QSA or any other Canadian provincial securities legislation.
2.8 Absence of Certain Changes or Events. Except as set forth in Schedule
2.8 of the Company Disclosure Schedule and in the Company SEC Reports, since
June 30, 1998, the Company has conducted its business in the ordinary course
and since such date and through August 20, 1998, there has not occurred any
Material Adverse Effect. In addition, since such date there has not been (i)
any amendment or change in the Articles of Incorporation or By-Laws of the
Company, (ii) any damage to, destruction or loss of any assets of the Company
(whether or not covered by insurance) that could have a Material Adverse
Effect, (iii) any revaluation by the Company of any of its assets resulting in
or reasonably likely to have a Material Adverse Effect, including, without
limitation, writing down the value of capitalized software or inventory or
writing off notes or accounts receivable other than in the ordinary course of
business, (iii) except as disclosed in Schedule 2.8 of the Company Disclosure
Schedule, any other action or event that would have required the consent of
Parent pursuant to Section 4.1 hereof had such action or event occurred after
the date of this Agreement and that would be reasonably likely to have a
Material Adverse Effect.
2.9 Absence of Litigation. Except as set forth in Schedule 2.9 of the
Company Disclosure Schedule or the Company SEC Reports, there are no claims,
actions, suits, proceedings or investigations pending or, to the knowledge of
the Company, threatened against the Company or any of its subsidiaries, or any
properties of the Company or any of its subsidiaries or the Company
Intellectual Property Rights (as defined in Section 2.18), before any court,
tribunal, arbitrator or administrative, governmental or regulatory authority
or body, domestic or foreign, that is reasonably likely to have a Material
Adverse Effect.
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2.10 Employee Benefit Plans; Employment Agreements.
(a) The Company has made available to Parent all employee benefit plans (as
defined in Section 3(3) of the United States Employee Retirement Income
Security Act of 1974, as amended ("ERISA")), regardless of whether ERISA is
applicable thereto, all other bonus, stock option, stock purchase, incentive,
deferred compensation, supplemental retirement, severance or termination pay,
or medical, life or other insurance, supplemental unemployment benefits,
profit-sharing, pension or retirement plans, agreements or arrangements and
other similar material fringe or employee benefit plans, programs or
arrangements (including those sponsored by the federal or any provincial
government of Canada, collectively "Government Sponsored or Mandated Plans")
and any current or former employment or executive compensation or severance
agreements, written or otherwise, for the benefit of, or relating to, any
employee of the Company, any trade or business (whether or not incorporated)
which is a member of a controlled group including the Company or which is
under common control with the Company (an "ERISA Affiliate") within the
meaning of Section 414 of the Code, or any subsidiary of the Company, as well
as each plan with respect to which the Company or an ERISA Affiliate could
incur liability if such plan has been or were terminated (together, the
"Employee Plans"), and a copy of each such written Employee Plan has been made
available to Parent.
(b) (i) Except as set forth in Schedule 2.10(b) of the Company Disclosure
Schedule, none of the Employee Plans promises or provides retiree medical or
other retiree welfare benefits to any person and none of the Employee Plans is
a "multiemployer plan" as such term is defined in Section 3(37) of ERISA; (ii)
there has been no transaction or failure to act with respect to any Employee
Plan, which could result in any material liability of the Company or any of
its subsidiaries; (iii) all Employee Plans are in compliance in all material
respects with the requirements prescribed by any and all statutes, orders, or
governmental rules and regulations currently in effect with respect thereto,
and the Company and each of its subsidiaries have performed all material
obligations required to be performed by them under, are not in any material
respect in default under or in violation of, and have no knowledge of any
material default or violation by any other party to, any of the Employee
Plans; (iv) each Employee Plan intended to qualify under Section 401(a) of the
Code and each trust intended to qualify under Section 501(a) of the Code is
the subject of a favorable determination letter from the United States
Internal Revenue Service (the "IRS"), and so far as the Company is aware
nothing has occurred which may reasonably be expected to impair such
determination; (v) all contributions required to be made to any Employee Plan,
under the terms of the Employee Plan or any collective bargaining agreement,
have been made on or before their due dates and a reasonable amount has been
accrued for contributions to each Employee Plan for the current plan years;
(vi) with respect to each Employee Plan subject to Title IV of ERISA, no
"reportable event" within the meaning of Section 4043 of ERISA (excluding any
such event for which the thirty (30) day notice requirement has been waived
under the regulations to Section 4043 of ERISA) nor any event described in
Section 4062, 4063 or 4041 of ERISA has occurred; and (vii) neither the
Company nor any ERISA Affiliate has incurred, nor reasonably expects to incur,
any liability under Title IV of ERISA (other than liability for premium
payments to the United States Pension Benefit Guaranty Corporation arising in
the ordinary course).
(c) Each Employee Plan that is required or intended to be qualified under
applicable law or registered or approved by a governmental agency or authority
has been so qualified, registered or approved by the appropriate governmental
agency or authority if required to obtain such qualification, registration or
approval, and, to the Company's knowledge, nothing has occurred since the date
of the last qualification, registration or approval to adversely affect, or
cause, the appropriate governmental agency or authority to revoke such
qualification, registration or approval.
(d) All contributions (including premiums) required by law or contract to have
been made or approved by the Company under or with respect to the Employee
Plans have been paid or accrued by the Company, except as would not have a
Material Adverse Effect. Without limiting the foregoing, there are no material
unfunded liabilities under any Employee Plan.
(e) There are no pending or, to the Company's knowledge, threatened
investigations, litigation or other enforcement actions against the Company
with respect to any of the Employee Plans.
(f) There are no actions, suits or claims pending or, to the knowledge of the
Company, threatened by former or present employees of the Company (or their
beneficiaries) with respect to the Employee Plans or the assets or fiduciaries
thereof (other than routine claims for benefits).
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(g) Except as set forth in Schedule 2.10(g) of the Company Disclosure
Schedule, neither the Company nor any of its subsidiaries maintains any 401(k)
or other type of pension plan subject to Section 401(a) of the Code in the
United States.
(h) No condition or event has occurred with respect to the Employee Plans
which has or could reasonably be expected to result in a material liability to
the Company.
(i) Schedule 2.10(i) of the Company Disclosure Schedule sets forth, as of
August 10, 1998, a true and complete list of each current or former employee,
officer or director of the Company or any of its subsidiaries who holds any
option to purchase Company Common Shares as of August 20, 1998, together with
the number of Company Common Shares subject to such option, the date of grant
of such option, the extent to which such option is vested, the option price of
such option (to the extent determined as of the date hereof), whether such
option is intended to qualify as an incentive stock option within the meaning
of Section 422(b) of the Code (an "ISO"), and the expiration date of such
option. Schedule 2.10(i) of the Company Disclosure Schedule also sets forth
the total number of such ISOs and such nonqualified options.
(j) The Company has made available to Parent and Dutchco (i) copies of all
employment agreements with executive officers of the Company; (ii) copies of
all agreements with consultants who are individuals obligating the Company to
make annual cash payments in an amount exceeding US $100,000; (iii) a schedule
listing all officers of the Company who have executed a non-competition
agreement with the Company; (iv) copies of all severance agreements, programs
and policies of the Company, if any, with or relating to its employees; (v)
copies of all plans, programs, agreements and other arrangements of the
Company with or relating to its employees which contain change in control
provisions; and (vi) the form of standard employment agreement of the Company
for its non-executive employees.
2.11 Labor Matters. (i) There are no actions or proceedings pending or, to
the knowledge of the Company, threatened between the Company or any of its
subsidiaries and any of their respective employees, which have or may have a
Material Adverse Effect; (ii) neither the Company nor any of its subsidiaries
is a party to any collective bargaining agreement or other labor union
contract applicable to persons employed by the Company or any of its
subsidiaries nor does the Company or any of its subsidiaries know of any
activities or proceedings of any labor union to organize any such employees;
and (iii) neither the Company nor any of its subsidiaries has any knowledge of
any strikes, slowdowns, work stoppages, lockouts, or threats thereof, by or
with respect to any employees of the Company or any of its subsidiaries.
2.12 Registration Statement; Joint Proxy Statement. None of the information
to be supplied by the Company in writing for inclusion or incorporation by
reference in (i) the registration statement on Form S-4 (the "Form S-4") to be
filed with the SEC by Parent in connection with the (A) sale of Parent Common
Shares by Dutchco to holders of Units in exchange for such Units, and (B)
issuance of Exchangeable Shares by the Continuing Corporation, (ii) the proxy
statement relating to the general special meeting of the Company's
shareholders (the "Company Shareholders' Meeting") and the proxy statement
relating to the special meeting of Parent's stockholders (the "Parent
Stockholders' Meeting") to be held in connection with the Transactions
(collectively, the "Joint Proxy Statement" and, together with the Form S-4,
the "Joint Proxy Statement/Prospectus"), and (iii) any other document to be
filed with the SEC or any regulatory agency by any member of the Parent Group
or the Company in connection with the transactions contemplated by this
Agreement (the "Other Filings") will, (A) at the respective times such
documents are filed with the SEC or other regulatory agency, (B) in the case
of the Joint Proxy Statement/Prospectus, at the date it or any amendments or
supplements thereto are mailed to stockholders, at the time of the Company
Shareholders' Meeting and at the Effective Time and (C) in the case of the
Form S-4, when it becomes effective under the Securities Act, at the Effective
Time and on the date of any post-effective amendment thereto, contain any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are made, not
misleading. The Joint Proxy Statement (as it relates to the Company
Shareholders' Meeting) will comply as to form in all material respects with
the applicable provisions of the Quebec Act and the Exchange Act. If at any
time prior to the Effective Time any event relating to the Company or any of
its respective affiliates, officers or directors should be discovered by the
Company which should be set forth in an amendment to the Form S-4 or a
supplement to the
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Joint Proxy Statement, the Company shall promptly inform Parent.
Notwithstanding the foregoing, the Company makes no representation or warranty
with respect to any information supplied by any member of the Parent Group
which is contained in any of the foregoing documents. No requirements of any
Canadian provincial securities legislation govern the contents or mailing of
the Joint Proxy Statement nor the holding of the Company Shareholders'
Meeting.
2.13 Restrictions on Business Activities. Except for this Agreement, there
is no material agreement, judgment, injunction, order or decree binding upon
the Company or any of its subsidiaries which has or could reasonably be
expected to have the effect of prohibiting or impairing any material business
practice of the Company or any of its subsidiaries, the acquisition of
property by the Company or any of its subsidiaries or the conduct of business
by the Company or any of its subsidiaries as currently conducted.
2.14 Title to Property. Schedule 2.14 of the Company Disclosure Schedule
sets forth a true and complete list of all real property (i) owned by the
Company or any of its subsidiaries or (ii) leased by the Company or any of its
subsidiaries requiring annual lease payments of more than US $100,000
("Material Leases"), and the aggregate monthly rental or other fee payable
under such Material Lease. The Company and each of its subsidiaries have good
and valid title to all of their properties and assets free and clear of all
liens, charges and encumbrances except (i) liens for Taxes not yet due and
payable, (ii) such liens or other imperfections of title, if any, as do not
materially detract from the value of or interfere with the present use of the
property affected thereby, (iii) liens securing debt which is reflected on the
balance sheet of the Company at June 30, 1998 included in the Company
Financial Statements, or (iv) liens which would not have a Material Adverse
Effect; and all Material Leases are in good standing, valid and effective in
accordance with their respective terms, and there is not, under any of such
leases, any existing material default or event of default as to the Company or
its subsidiaries (or event which with notice or lapse of time, or both, would
constitute a material default and in respect of which the Company or such
subsidiary has not taken adequate steps to prevent such a default from
occurring) except where the lack of such good standing, validity and
effectiveness or the existence of such default or event of default would not
have a Material Adverse Effect. All the facilities of the Company and its
subsidiaries used in the operation of their businesses, except such as may be
under construction, are in good operating condition and repair, except where
the failure of such plants, structures and equipment to be in such good
operating condition and repair would not, individually or in the aggregate,
have a Material Adverse Effect.
2.15 Taxes.
(a) For purposes of this Agreement, "Tax" or "Taxes" shall mean taxes, fees,
levies, duties, tariffs, imposts, premiums and governmental impositions or
charges of any kind in the nature of (or similar to) taxes, payable to any
federal, state, provincial, local or foreign taxing authority, including
(without limitation) (i) income, capital, business, franchise, profits, gross
receipts, ad valorem, goods and services, customs, net worth, value added,
sales, use, service, real or personal property, special assessments, capital
stock, license, payroll, withholding, employment, social security, workers'
compensation, unemployment insurance or compensation, utility, severance,
production, excise, stamp, occupation, premiums, environmental, recapture,
windfall profits, transfer and gains taxes, fees, levies, duties, tariffs,
imposts, premiums and governmental impositions and (ii) interest, penalties,
additional taxes and additions to tax imposed with respect thereto; and "Tax
Returns" shall mean returns, reports, declarations, and information statements
with respect to Taxes required to be filed with Revenue Canada, Ministere du
Revenu du Quebec ("Revenue Quebec"), the Internal Revenue Service ("IRS") or
any other taxing authority, domestic or foreign, including, without
limitation, consolidated, combined and unitary tax returns.
(b) Except as disclosed in Schedule 2.15(b) of the Company Disclosure
Schedule, the Company and its subsidiaries have filed or caused to be filed
all Tax Returns required to be filed by them, except to the extent the failure
to file such Tax Returns would not have a Material Adverse Effect, and the
Company and its subsidiaries have paid and discharged or caused to be paid and
discharged all Taxes due in connection with or with respect to the filing of
all Tax Returns and have paid all other Taxes as are due, and there are no
other Taxes that would be due if asserted by a taxing authority, except such
Taxes as are being contested in good faith by appropriate proceedings (to the
extent that any such proceedings are required) and with respect to which the
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Company is maintaining reserves to the extent currently required in all
material respects adequate for their payment except to the extent the failure
to maintain such reserves or pay such Taxes would not have a Material Adverse
Effect. Except as disclosed in Schedule 2.15(b) of the Company Disclosure
Schedule, none of Revenue Canada, Revenue Quebec, the IRS or any other taxing
authority or agency is now asserting or, to the Company's knowledge,
threatening to assert against the Company or any of its subsidiaries any
deficiency or claim for additional Taxes other than additional Taxes with
respect to which the Company is maintaining reserves in all material respects
adequate for their payment, and, to the Company's knowledge, there are no
requests for information currently outstanding that could affect the Taxes of
the Company or any of its subsidiaries. Except as disclosed in Schedule
2.15(b) of the Company Disclosure Schedule, neither the Company nor any of its
subsidiaries is currently being audited or examined by any taxing authority,
nor has the Company received any written notice that any Tax Return will
undergo any audit or examination or that such an audit or examination is
threatened. Except as disclosed in Schedule 2.15(b) of the Company Disclosure
Schedule, neither the Company nor any of its subsidiaries has, except as would
not have a Material Adverse Effect, granted any waiver of any statute of
limitations with respect to, or any extension of a period for the assessment
of, any Tax. The accruals and reserves for Taxes reflected in the Company
Financial Statements are in all material respects adequate to cover all Taxes
accruable through the date thereof (including interest and penalties, if any,
thereon and Taxes being contested) in accordance with generally accepted
accounting principles. No liability for Taxes has been incurred (or prior to
the Effective Time will be incurred) since such date other than in the
ordinary course of business except (i) as would not have a Material Adverse
Effect or (ii) attributable to the transactions contemplated hereby. Except as
disclosed in Schedule 2.15(b) of the Company Disclosure Schedule, neither the
Company nor any of its subsidiaries is required to include in income (i) items
in respect of any change in accounting principles or (ii) any installment sale
gain, where the inclusion in income would result in a tax liability materially
in excess of the reserves therefor.
(c) The Company on behalf of itself and all its subsidiaries hereby represents
that, other than as disclosed on Schedule 2.15(c) of the Company Disclosure
Schedule, and other than with respect to items the inaccuracy of which would
not have a Material Adverse Effect: (i) neither the Company nor any of its
subsidiaries is a party to any agreement, contract or arrangement that may
result, separately or in the aggregate, in the payment of any "excess
parachute payment" within the meaning of Section 280G of the Code, determined
without regard to Section 280G(b)(4) of the Code and (ii) neither the Company
nor any of its subsidiaries has participated in or cooperated with a boycott
under Section 999 of the Code.
(d) Except as disclosed in Schedule 2.15(d) of the Company Disclosure
Schedule, no power of attorney has been granted by the Company or any of its
subsidiaries with respect to any matter relating to Taxes which is currently
in force.
(e) Except as disclosed in Schedule 2.15(e) of the Company Disclosure
Schedule, neither the Company nor any of its subsidiaries is a party to any
agreement or arrangement (written or oral) providing for the allocation or
sharing of Taxes.
(f) Except as disclosed in Schedule 2.15(f) of the Company Disclosure
Schedule, the Company and each of its subsidiaries have reported and withheld
from each payment made to any of their respective past or present employees,
officers, directors or non-residents of Canada the amount of all Taxes and
other material deductions required to be withheld therefrom and have paid the
same to the proper tax or other receiving officers within the time required
under any applicable legislation except where failure to do so would not have
a Material Adverse Effect.
(g) Except as disclosed in Schedule 2.15(g) of the Company Disclosure
Schedule, the Company has remitted to the appropriate tax authority when
required by law to do so all amounts collected by it on account of all Taxes
under Part IX of the Excise Tax Act and retail sales tax except where failure
to do so would not have a Material Adverse Effect.
(h) Except as would not have a Material Adverse Effect on the Company, the
Company has not deducted any material amounts in computing its income in a
taxation year which may be included in a subsequent taxation year under
Section 78 of the Income Tax Act (Canada).
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(i) Except as disclosed in Schedule 2.15(i) of the Company Disclosure
Schedule, the Company has not requested or received a ruling from any taxing
authority or signed a closing or other agreement with any taxable authority
which could have a Material Adverse Effect.
(j) Except as would not have a Material Adverse Effect on the Company, to the
Company's knowledge, no circumstances exist which would make the Company or
any subsidiary subject to the application of any of sections 79 to 80.04 of
the Income Tax Act (Canada). Neither the Company nor any of its subsidiaries
have acquired property or services from, or disposed of property or provided
services to, a person with whom it does not deal at arm's length (within the
meaning of the Income Tax Act (Canada)) for an amount that is other than the
fair market value of such property or services, or has been deemed to have
done so for purposes of the Income Tax Act (Canada).
2.16 Environmental Matters. Except in all cases as have not had and could
not reasonably be expected to have a Material Adverse Effect, to the knowledge
of the Company, the Company and each of its subsidiaries: (i) have obtained
all applicable permits, licenses and other authorization which are required
under federal, state, provincial or local laws relating to pollution or
protection of the environment, including laws relating to emissions,
discharges, releases or threatened releases of pollutants, contaminants or
hazardous or toxic materials or wastes into ambient air, surface water, ground
water or land or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
pollutants, contaminants or hazardous or toxic materials or wastes by the
Company or its subsidiaries (or their respective agents); (ii) are in
compliance with all terms and conditions of such required permits, licenses
and authorization, and also are in compliance with all other limitations,
restrictions, conditions, standards, prohibitions, requirements, obligations,
schedules and timetables contained in such laws or contained in any
regulation, code, plan, order, decree, judgment, notice or demand letter
issued, entered, promulgated or approved thereunder; and (iii) are not aware
of nor have received notice of any event, condition, circumstance, activity,
practice, incident, action or plan which is reasonably likely to interfere
with or prevent continued compliance with or which would give rise to any
common law or statutory liability, or otherwise form the basis of any claim,
action, suit or proceeding, based on or resulting from the Company's or any of
its subsidiary's (or any of their respective agent's) manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling, or the
emission, discharge or release into the environment, of any pollutant,
contaminant or hazardous or toxic material or waste.
2.17 Brokers. No broker, finder or investment banker (other than Volpe Brown
Whelan & Company, LLC) is entitled to any brokerage, finder's or other fee or
commission in connection with the transactions contemplated by this Agreement
based upon arrangements made by or on behalf of the Company. The Company has
heretofore furnished to Parent a complete and correct copy of all agreements
between the Company and Volpe Brown Whelan & Company, LLC pursuant to which
such firm would be entitled to any payment relating to the transactions
contemplated hereunder.
2.18 Intellectual Property.
(a) Except as set forth in Schedule 2.18 of the Company Disclosure Schedule,
the Company owns, or is licensed or otherwise possesses legally enforceable
rights to use sell (except as to Third Party Intellectual Property Rights, as
defined below) and license all trademarks, trade names, service marks,
copyrights and any applications therefor, technology, trade secrets, know-how,
computer software programs or applications (in both source code and object
code form), tangible or intangible proprietary information or material, and,
to the knowledge of the Company, all patents, that are necessary to, required
for or used in the business of the Company as currently conducted (the
"Company Intellectual Property Rights") the absence of which would be
reasonably likely to have a Material Adverse Effect. Schedule 2.18 of the
Company Disclosure Schedule lists all current patents, registered and material
unregistered trademarks and service marks, registered copyrights, material
trade names and any applications therefor owned by the Company, and specifies
the jurisdictions in which each such Company Intellectual Property Right has
been issued or registered or in which an application for such issuance and
registration has been filed, including the respective registration or
application numbers and the names of all registered owners, together with a
list of all of the Company's currently marketed software products and an
indication as to which, if any, of such software products have been registered
for copyright
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protection with the United States or Canadian Copyright Office and any other
foreign offices and by whom such items have been registered. Schedule 2.18 of
the Company Disclosure Schedule also includes and specifically identifies all
third-party patents, trademarks or copyrights (including software) (the "Third
Party Intellectual Property Rights"), that are incorporated in, are, or form a
part of, any Company product and which are material to the Company's business.
The listing of Third Party Intellectual Property Rights shall include the
following information: the type of the agreement by which such Third Party
Intellectual Property Rights have been
procured by the Company, the names of the parties and the material terms of
such agreement(s). Schedule 2.18 of the Company Disclosure Schedule lists (i)
any requests the Company has received to make any registration of a copyright,
patent or trademark, including the identity of the requester and the item
requested to be so registered, and the jurisdiction for which such request has
been made; and (ii) except for object code license agreements for the
Company's products executed in the ordinary course of business that are not
material to the Company's business, all material licenses, sublicenses and
other agreements as to which the Company is a party and pursuant to which any
person is authorized to use, or which otherwise relate to, any Company
Intellectual Property Right.
(b) The Company is not, nor will it be as a result of the execution and
delivery of this Agreement or the performance of its obligations hereunder, in
violation in any material respect of any license, sublicense or agreement
described in Schedule 2.18 of the Company Disclosure Schedule. Neither the
execution and delivery of this Agreement by the Company, nor the performance
by the Company of its obligations hereunder will cause the forfeiture or
termination or give rise to a right of forfeiture or termination of any
Company Intellectual Property Right or Third Party Intellectual Property Right
set forth in Schedule 2.18 of the Company Disclosure Schedule, nor impair the
ability of the Company, its subsidiaries, the Continuing Corporation or Parent
to use, sell or license any Company Intellectual Property Right or Third Party
Intellectual Property Right set forth in Schedule 2.18 of the Company
Disclosure Schedule. Except as set forth in Schedule 2.18 of the Company
Disclosure Schedule, no claims with respect to the Company Intellectual
Property Rights (or Third Party Intellectual Property Rights to the extent
arising out of any use, reproduction or distribution of such Third Party
Intellectual Property Rights by or through the Company) are currently pending,
or, to the knowledge of the Company, are threatened by any person, nor, to the
knowledge of the Company, are there any valid grounds for any such claims (i)
to the effect that the manufacture, sale, licensing or use of any product as
now used, sold or licensed or proposed for use, sale or license by the Company
infringes on any copyright, patent, trademark, service mark or trade secret;
(ii) against the use by the Company of any trademarks, trade names, trade
secrets, copyrights used in the Company's business as currently conducted by
the Company; (iii) challenging the ownership, validity or effectiveness of any
of the Company Intellectual Property Rights or (iv) challenging the Company's
license or legally enforceable right to use of the Third Party Intellectual
Property Rights. All registered trademarks, maskworks, and copyrights held by
the Company, are valid and subsisting. Except as set forth in Schedule 2.18 of
the Company Disclosure Schedule, to the knowledge of the Company, all patents
held by the Company are valid and subsisting. Except as set forth in Schedule
2.18 of the Company Disclosure Schedule, to the Company's knowledge, there is
no material unauthorized use, infringement or misappropriation of any of the
Company Intellectual Property by any third party, including any employee or
former employee of the Company or any of its subsidiaries. Except as set forth
in Schedule 2.18 of the Company Disclosure Schedule, neither the Company nor
any of its subsidiaries (i) has been sued or charged in writing as a defendant
in any claim, suit, action or proceeding which involves a claim or
infringement of trade secrets, any patents, trademarks, service marks,
maskworks or copyrights and which has not been finally terminated prior to
August 20, 1998, or been informed or notified by any third party that the
Company may be engaged in such infringement, or (ii) has knowledge of any
infringement liability with respect to, or infringement by, the Company or any
of its subsidiaries of any trade secret, patent, trademark, service mark,
maskwork or copyright of another.
(c) The Company has taken reasonable and practicable steps designed to
safeguard and maintain the secrecy and confidentiality of, and its proprietary
rights in, all Company Intellectual Property Rights (other than those which,
by operation of law, have been disclosed or made public). Except as set forth
in Schedule 2.18 of the Company Disclosure Schedule, each employee and
consultant of the Company has executed a confidentiality and invention
agreement substantially in the respective forms previously delivered to
Parent.
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2.19 Interested Party Transactions. Except as set forth in the Company SEC
Reports or as set forth in Schedule 2.19 of the Company Disclosure Schedule,
since the date of the Company's proxy statement dated October 24, 1997, no
event has occurred that would be required to be reported as a Certain
Relationship or Related Transaction pursuant to Item 404 of Regulation S-K
promulgated by the SEC or that is a related party transaction for the purposes
of Quebec Securities Commission Policy Statement Q-27. The Transactions will
not constitute a "going private transaction" for the purposes of such Policy.
2.20 Insurance. To the Company's knowledge, except as set forth in Schedule
2.20 of the Company Disclosure Schedule, there is no material claim by the
Company or any of its subsidiaries pending under any of such policies or bonds
as to which coverage has been questioned, denied or disputed by the
underwriters of such policies or bonds. All premiums payable on or prior to
August 20, 1998 under all such policies and bonds have been paid and the
Company and its subsidiaries are otherwise in compliance in all material
respects with the terms of such policies and bonds (or other policies and
bonds providing substantially similar insurance coverage). The Company has no
knowledge of any threatened termination of, or material premium increase with
respect to, any of such policies.
2.21 Vote Required. The affirmative vote of the holders of at least sixty-
six and two-thirds percent (66 2/3%) of the Company Common Shares voting on
such matter is the only vote of the holders of any class or series of the
Company's share capital necessary to approve the Amalgamation and confirm By-
law No. 1998-1 in accordance with the Quebec Act.
2.22 Pooling Matters. Neither the Company nor, to the Company's knowledge,
any of its affiliates has, based upon consultation with its independent
auditors, taken or agreed to take any action that (without giving effect to
any action taken or agreed to be taken by Parent or any of its affiliates)
would affect the ability of Parent to account for the business combination to
be effected by the Transactions as a pooling-of-interests.
2.23 Opinion of Financial Advisor. The Company has received an oral opinion
from its financial advisor, Volpe Brown Whelan & Company, LLC (subsequently
confirmed in writing), to the effect that, as of November 18, 1998, the
consideration to be received by the shareholders of the Company pursuant to
the Transactions is fair to such shareholders from a financial point of view.
ARTICLE III
Representations And Warranties Of The Parent Group
The term "knowledge" as used in connection with Parent, shall mean Parent's
actual knowledge after reasonable inquiry of officers, directors and other
employees of Parent charged with senior administrative or operational
responsibility of such matters. Each member of the Parent Group hereby
represents and warrants to the Company as of the date of the Original
Agreement (except for the representations and warranties made in Sections 3.2,
3.3, 3.7(a), 3.7(b) and 3.9, which are made as of the date of this Agreement),
subject to the written disclosure schedule supplied by the Parent Group to the
Company dated as of the date of the Original Agreement and certified by a duly
authorized officer of Parent (the "Parent Disclosure Schedule"), that:
3.1 Organization and Qualification. Parent and each of its subsidiaries is a
corporation duly organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation or organization and has the
requisite corporate power and authority and is in possession of all Approvals
necessary to own, lease and operate the properties it purports to own, operate
or lease and to carry on its business as it is now being conducted, except
where the failure to be so organized, existing and in good standing or to have
such power, authority and Approvals would not have a Material Adverse Effect.
Parent and each of its subsidiaries is duly qualified or licensed as a foreign
corporation to do business, and is in good standing, in each jurisdiction
where the character of its properties owned, leased or operated by it or the
nature of its activities makes such qualification or licensing necessary,
except for such failures to be so duly qualified or licensed and in good
standing that would not have a Material Adverse Effect.
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3.2 Authority. Each member of the Parent Group has all necessary corporate
power and authority to execute and deliver this Agreement and the Ancillary
Documents (as defined in Section 5.17) (to the extent they are parties
thereto) and to perform its obligations hereunder and thereunder and to
consummate the transactions contemplated hereby. The execution and delivery of
this Agreement and the Ancillary Documents by each member of the Parent Group
(to the extent they are parties thereto) and the consummation by each member
of the Parent Group of the transactions contemplated hereby and thereby have
been duly and validly authorized by all necessary corporate action on the part
of each member of the Parent Group, and no other corporate proceedings on the
part of any such member are necessary to authorize this Agreement or the
Ancillary Documents or to consummate the transactions so contemplated (other
than the approval of the Parent Stock Issuance (as defined in Section 3.9
hereof) by the requisite vote of the stockholders of Parent, to the extent
necessary). The Boards of Directors of Parent and Dutchco have determined that
it is advisable and in the best interest of Parent's stockholders and
Dutchco's stockholder for Parent and Dutchco to enter into a business
combination with the Company upon the terms and subject to the conditions of
this Agreement and the Amalgamation Agreement and to recommend that the
stockholders of Parent approve the Parent Stock Issuance. This Agreement and
the Amalgamation Agreement have each been duly and validly executed and
delivered by each member of the Parent Group (to the extent they are parties
thereto) and, assuming the due authorization, execution and delivery by the
Company, each such agreement constitutes a legal, valid and binding obligation
of each member of the Parent Group. Each of the Ancillary Documents not yet
executed and delivered as of the date hereof shall constitute a legal, valid
and binding obligation of each member of the Parent Group (to the extent they
are parties thereto) upon execution and delivery of each such document.
3.3 No Conflict; Required Filings and Consents.
(a) Except as set forth in Schedule 3.3(a) of the Parent Disclosure Schedule,
the execution and delivery of this Agreement and the Ancillary Documents by
each member of the Parent Group (to the extent they are parties thereto) do
not (or in the case of Ancillary Documents not yet executed and delivered,
will not), and the performance of this Agreement and the Ancillary Documents
by each member of the Parent Group will not, (i) conflict with or violate the
Certificate of Incorporation or By-Laws (or similar charter documents, as the
case may be) of any member of the Parent Group, (ii) conflict with or violate
any law, rule, regulation, order, judgment or decree applicable to Parent or
any of its subsidiaries or by which its or their respective properties are
bound or affected, or (iii) result in any breach of or constitute a default
(or an event which with notice or lapse of time or both would become a
default) under, or impair Parent's or any of its subsidiaries' rights or alter
the rights or obligations of any third party under, or to the knowledge of
Parent, give to others any rights of termination, amendment, acceleration or
cancellation of, any material contract or result in the creation of a lien or
encumbrance on any of the properties or assets of Parent or any of its
subsidiaries pursuant to any material note, bond, mortgage, indenture,
contract, agreement, lease, license, permit, franchise or other instrument or
obligation to which Parent or any of its subsidiaries is a party or by which
Parent or any of its subsidiaries or its or any of their respective properties
are bound or affected, except in the case of (ii) and (iii) any such case for
any such breaches, defaults or other occurrences that would not have a
Material Adverse Effect.
(b) The execution and delivery of this Agreement and the Ancillary Documents
by each member of the Parent Group (to the extent they are parties thereto)
does not (or in the case of Ancillary Documents not yet executed and
delivered, will not), and the performance of the transactions contemplated
hereby and thereby will not, require any material consent, approval,
authorization or permit of, or filing with or notification to, any
governmental or regulatory authority, domestic or foreign, except (i) for
applicable requirements, if any, of the Securities Act, the Exchange Act, the
Blue Sky Laws, the pre-merger notification requirements of the HSR Act,
relevant Canadian securities statutes, filing with Industry Canada under the
Investment Canada Act (Canada), filing under the Competition Act (Canada) and
the filing and recordation of appropriate merger or other documents as
required by the Quebec Act and (ii) where the failure to obtain such consents,
approvals, authorizations or permits, or to make such filings or
notifications, would not prevent or materially delay consummation of the
Transactions, or otherwise prevent or materially delay any member of the
Parent Group from performing its respective obligations under this Agreement
and the Ancillary Documents, and would not otherwise have a Material Adverse
Effect.
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3.4 Certificate of Incorporation and By-Laws. Parent has heretofore
furnished to the Company a complete and correct copy of its Certificate of
Incorporation and the By-Laws, as amended through August 20, 1998. Such
Certificate of Incorporation and By-Laws are in full force and effect. Neither
Parent, Dutchco nor Amalgamation Sub is in violation of any of the provisions
of its respective Certificate of Incorporation or By-Laws (or similar charter
documents, as the case may be).
3.5 Capitalization. As of July 31, 1998, the authorized capital stock of
Parent consisted of (i) 250,000,000 shares of Parent Common Stock of which:
46,347,747 shares were issued and outstanding, no shares were held in
treasury, 12,832,135 shares were reserved for issuance pursuant to outstanding
options under Parent's stock option plans, 2,000,000 shares were reserved for
future issuance under Parent's employee purchase plan; and 2,000,000 shares of
Preferred Stock, US $0.01 par value ("Parent Preferred Stock"), none of which
were issued and outstanding. No material change in such capitalization has
occurred between July 31, 1998 and August 20, 1998. The authorized capital
stock of Amalgamation Sub consists of an unlimited number of common shares, no
par value, one share of which, as of August 20, 1998, is issued and
outstanding. All of the outstanding shares of Parent's, Dutchco's, Giants
Quebec's and Amalgamation Sub's respective capital stock have been duly
authorized and validly issued and are fully paid and nonassessable. All of the
Parent Common Shares, Exchangeable Shares, Class B Shares (as each is defined
in the Amalgamation Agreement) and Units to be issued in connection with the
transactions contemplated hereby have been authorized by all necessary
corporate action and, when issued in accordance with the terms of this
Agreement and the provisions of such shares (as set out in Appendix A to the
Amalgamation Agreement), will be validly issued, fully paid and nonassessable.
3.6 Compliance; Permits.
(a) Neither Parent nor any of its subsidiaries is in conflict with, or in
default or violation of, (i) any law, rule, regulation, order, judgment or
decree applicable to Parent or any of its subsidiaries or by which its or any
of their respective properties is bound or affected or (ii) any note, bond,
mortgage, indenture, contract, agreement, lease, license, permit, franchise or
other instrument or obligation to which Parent or any of its subsidiaries is a
party or by which Parent or any of its subsidiaries or is or any of their
respective properties is bound or affected, except for any such conflicts,
defaults or violations which would not have a Material Adverse Effect.
(b) Parent and its subsidiaries hold all permits, licenses, easements,
variances, exemptions, consents, certificates, orders and approvals from
governmental or other regulatory authorities which are material to the
operation of the business of the Company and its subsidiaries taken as a whole
as operated on August 20, 1998 (collectively, the "Parent Permits"). Parent
and its subsidiaries are in compliance with the terms of the Parent Permits,
except where the failure to so comply would not have a Material Adverse
Effect.
3.7 SEC Filings; Financial Statements.
(a) Parent has filed all forms, reports and documents required to be filed
with the SEC since February 1, 1995, and has heretofore delivered to the
Company, in the form filed with the SEC, (i) its Annual Reports on Form 10-K
for the fiscal years ended January 31, 1998, 1997 and 1996, and its quarterly
report on Form 10-Q for the fiscal quarters ended April 30, 1998 and July 31,
1998, (ii) all proxy statements relating to Parent's meetings of stockholders
(whether annual or special) held since January 31, 1996, (iii) all other
reports or registration statements (other than Reports on Form 10-Q not
referred to in clause (ii) above, Reports on Form 3, 4 or 5 filed on behalf of
affiliates of the Parent and Registration Statements on Form S-8) filed by
Parent with the SEC since January 31, 1996 and (iv) all amendments and
supplements to all such reports and registration statements filed by Parent
with the SEC (collectively, the "Parent SEC Reports"). The Parent SEC Reports
(i) were prepared in accordance with the requirements of the Securities Act or
the Exchange Act, as the case may be, and (ii) did not at the time they were
filed (or if amended or superseded by a filing prior to the date of this
Agreement, then on the date of such filing) contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein
or necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. None of Parent's
subsidiaries is required to file any forms, reports or other documents with
the SEC.
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(b) Each of the consolidated financial statements (including, in each case,
any related notes thereto) contained in the Parent SEC Reports has been
prepared in accordance with US GAAP applied on a consistent basis throughout
the periods involved (except as may be indicated in the notes thereto) and
each fairly presents the consolidated financial position of Parent and its
subsidiaries as at the respective dates thereof and the consolidated results
of its operations and cash flows for the periods indicated, except that the
unaudited interim financial statements were or are subject to normal and
recurring year-end adjustments which were not or are not expected to be
material in amount.
(c) Parent has heretofore furnished to the Company a complete and correct copy
of any amendments or modifications, which have not yet been filed with the SEC
but which are required to be filed, to agreements, documents or other
instruments which previously had been filed by Parent with the SEC pursuant to
the Securities Act or the Exchange Act.
3.8 Absence of Certain Changes or Events. Except as set forth in Schedule
3.8 of the Parent Disclosure Schedule and in the Parent SEC Reports, since
January 31, 1998, Parent has conducted its business in the ordinary course and
since such date and through August 20, 1998, there has not occurred any
Material Adverse Effect with respect to Parent. In addition, since such date
there has not been (i) any damage to, destruction or loss of any assets of
Parent (whether or not covered by insurance) that could have a Material
Adverse Effect with respect to Parent, (ii) any revaluation by Parent of any
of its assets reasonably likely to have a Material Adverse Effect with respect
to Parent, including, without limitation, writing down the value of
capitalized software or inventory or writing off notes or accounts receivable
other than in the ordinary course of business or (iii) other events outside of
the ordinary course of business and inconsistent with past practices that
would be reasonably likely to have a Material Adverse Effect with respect to
Parent.
3.9 Board Approval. The Board of Directors of Parent has, as of November 18,
1998, determined to recommend that the stockholders of Parent approve the
issuance of Parent Common Stock in connection with the Transactions (including
any subsequent issuance of Parent Common Stock in connection with the exchange
of Exchangeable Shares) (the "Parent Stock Issuance").
3.10 Registration Statement; Joint Proxy Statement/Prospectus.
(a) Subject to the accuracy of the representations of the Company in Section
2.12 hereof, (i) the Form S-4 pursuant to which the Parent Common Shares,
Exchangeable Shares, Units and Class B Shares to be issued in connection with
the Transactions will be registered with the SEC, (ii) the Joint Proxy
Statement, and (iii) the Other Filings will (A) at the respective times such
documents are filed with the SEC or other regulatory agency, (B) in the case
of the Joint Proxy Statement, at the date it or any amendments or supplements
thereto are mailed to stockholders, at the time of the Parent Stockholders'
Meeting and at the Effective Time and (C) in the case of the Form S-4, if any,
when it becomes effective under the Securities Act, at the Effective Time and
on the date of any post-effective amendment thereto, contain any untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements therein, in light of the circumstances under
which they were made, not misleading. The Joint Proxy Statement will comply as
to form in all material respects with the applicable provisions of the
Delaware General Corporation Law and the Exchange Act as it relates to the
Parent Stockholders' Meeting, and the Form S-4, as it relates the issuance of
the Parent Common Shares, Exchangeable Shares, Units and Class B Shares to be
issued in connection with the Transactions, will comply as to form in all
material respects with the requirements of the Securities Act. If at any time
prior to the Effective Date any event relating to Parent, Dutchco,
Amalgamation Sub or any of their respective affiliates, officers or directors
should be discovered by Parent, Dutchco or Amalgamation Sub which should be
set forth in an amendment to the Form S-4 or a supplement to the Joint Proxy
Statement, Parent, Dutchco or Amalgamation Sub will promptly inform the
Company. Notwithstanding the foregoing, Parent makes no representation or
warranty with respect to any information supplied by the Company which is
contained in, or furnished in connection with the preparation of, any of the
foregoing.
(b) As of August 20, 1998 and at the Effective Time, except for obligations or
liabilities incurred in connection with its incorporation or organization and
the transactions contemplated by this Agreement and the
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Amalgamation Agreement and except for this Agreement and the Amalgamation
Agreement and any other agreements or arrangements contemplated by this
Agreement, Amalgamation Sub has not and will not have incurred, directly or
indirectly, through any subsidiary or affiliate, any obligations or
liabilities or engaged in any business activities of any type or kind
whatsoever or entered into any agreements or arrangements with any person.
3.11 Brokers. No broker, finder or investment banker (other than Piper
Jaffray, Inc. and Goldman, Sachs & Co.) is entitled to any brokerage, finder's
or other fee or commission in connection with the transactions contemplated by
this Agreement and the Amalgamation Agreement based upon arrangements made by
or on behalf of Parent, Dutchco or Amalgamation Sub. Parent has heretofore
furnished to Company a complete and correct copy of all agreements between any
member of the Parent Group and Piper Jaffray, Inc. and Goldman, Sachs & Co.
pursuant to which such firms would be entitled to any payment relating to the
transactions contemplated hereunder.
3.12 Opinion of Financial Advisor. Parent has received an oral opinion from
its financial advisor, Piper Jaffray, Inc. (subsequently confirmed in
writing), to the effect that, as of November 18, 1998, the Exchange Ratio is
fair from a financial point of view to Parent.
3.13 Pooling Matters. Neither Parent nor any of its affiliates has, to its
knowledge and based upon consultation with its independent auditors, taken or
agreed to take any action that (without giving effect to any action taken or
agreed to be taken by the Company or any of its affiliates) would affect the
ability of Parent to account for the business combination to be effected by
the Transactions as a pooling-of-interests.
3.14 Absence of Litigation. Except as set forth in Schedule 3.14 of the
Parent Disclosure Schedule or the Parent SEC Reports, there are no claims,
actions, suits, proceedings or investigations pending or, to the knowledge of
the Parent, threatened against the Parent or any of its subsidiaries, or any
properties or rights of the Parent or any of its subsidiaries, before any
court, arbitrator or administrative, governmental or regulatory authority or
body, domestic or foreign, that could have a Material Adverse Effect.
3.15 Restrictions on Business Activities. Except for this Agreement and the
Ancillary Documents or as otherwise set forth in the Parent Disclosure
Schedule or the Parent SEC Reports, there is no material agreement, judgment,
injunction, order or decree binding upon the Company or any of its
subsidiaries which has or could reasonably be expected to have the effect of
prohibiting or impairing any material business practice of Parent or any of
its subsidiaries, the acquisition of property by Parent or any of its
subsidiaries or the conduct of business by Parent or any of its subsidiaries
as currently conducted by Parent.
3.16 Taxes.
(a) Except as disclosed in Schedule 3.16 of the Parent Disclosure Schedule,
Parent and its subsidiaries have filed or caused to be filed all Tax Returns
required to be filed by them, except to the extent that the failure to file
such Tax Returns would not have a Material Adverse Effect, and Parent and its
subsidiaries have paid and discharged or caused or to be paid and discharged
all Taxes due in connection with or with respect to the filing of all Tax
Returns and have paid all other Taxes as are due, and there are no other Taxes
that would be due if asserted by a taxing authority, except such as are being
contested in good faith by appropriate proceedings (to the extent that any
such proceedings are required) and with respect to which Parent is maintaining
reserves to the extent currently required in all material respects adequate
for their payment except to the extent the failure to do so would not have a
Material Adverse Effect. Except as disclosed in Schedule 3.16 of the Parent
Disclosure Schedule, none of Revenue Canada, Revenue Quebec, the IRS or any
other taxation authority or agency is now asserting or, to the best of
Parent's knowledge, threatening to assert against Parent or any of its
subsidiaries any deficiency or claim for additional Taxes other than
additional Taxes with respect to which Parent is maintaining reserves in all
material respects adequate for their payment, and there are no requests for
information currently outstanding that could affect the Taxes of Parent or any
of its subsidiaries. Except as disclosed in Schedule 3.16 of the Parent
Disclosure Schedule, neither Parent nor any of its subsidiaries is currently
being audited or examined by any taxation authority, nor has Parent received
any written notice that
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any Tax Return will undergo any audit or examination or that such an audit or
examination is threatened. Except as disclosed in Schedule 3.16 of the Parent
Disclosure Schedule, neither Parent nor any of its subsidiaries has, except as
would not have a Material Adverse Effect, granted any waiver of any statute of
limitations with respect to, or any extension of a period for the assessment
of, any Tax. The accruals and reserves for Taxes reflected in the consolidated
financial statements (including, in each case, any related notes thereto)
contained in the Parent SEC Reports are in all material respects adequate to
cover all Taxes accruable through the date thereof (including interest and
penalties, if any, thereon and Taxes being contested) in accordance with
generally accepted accounting principles. No liability for taxes has been
incurred (or prior to the Effective Time will be incurred) since such date
other than in the ordinary course of business except as (i) would not have a
Material Adverse Effect, or (ii) is attributable to the transactions
contemplated herein.
(b) Except as disclosed in Schedule 3.16 of the Parent Disclosure Schedule,
Parent and each of its subsidiaries have reported and withheld from each
payment made to any of their respective past or present employees, officers,
directors or non-residents of the United States the amount of all Taxes and
other material deductions required to be withheld therefrom and have paid the
same to the proper tax or other receiving officers within the time required
under any applicable legislation except where failure to do so would not have
a Material Adverse Effect.
(c) Except as disclosed in Schedule 3.16 of the Parent Disclosure Schedule,
Parent has not requested or received a ruling from any taxation authority or
signed a closing or other agreement with any taxation authority which could
have a Material Adverse Effect.
3.17 Intellectual Property.
(a) Parent and its subsidiaries own, or are licensed or otherwise possess
legally enforceable rights to use, sell and license all trademarks,
tradenames, service marks, copyrights and any applications therefor necessary
to, used in or required for their respective businesses as currently conducted
(the "Parent Intellectual Property Rights"), the absence of which would be
reasonably likely to have a Material Adverse Effect on Parent.
(b) Parent is not, nor will it be as a result of the execution and delivery of
this Agreement or the Ancillary Documents or the performance of its
obligations hereunder or thereunder, in violation in any material respect of
any license, sublicense or agreement of which Parent or any of Parent's
subsidiaries is a party. The execution and delivery of this Agreement and the
Ancillary Documents or the performance of its obligations hereunder or
thereunder will not cause the forfeiture or termination or give rise to a
right of forfeiture or termination of any material Parent Intellectual
Property Right, or impair the ability of Parent or its subsidiaries to use,
sell or license any Parent Intellectual Property Right or portion thereof.
Except as set forth in Schedule 3.17 of the Parent Disclosure Schedule, no
claims with respect to Parent Intellectual Property Rights are currently
pending, or, to the knowledge of Parent, are threatened by any person, nor, to
the knowledge of the Parent, are there any valid grounds for any such claims
(i) to the effect that the manufacture, sale, licensing or use of any product
as now used, sold or licensed or proposed for use, sale or license by Parent
infringes on any copyright, patent, trademark, service mark or trade secret;
(ii) against the use by Parent of any trademarks, trade names, trade secrets,
copyrights used in Parent's business as currently conducted by Parent; (iii)
challenging the ownership, validity or effectiveness of any of Parent
Intellectual Property Rights or (iv) to the knowledge of Parent, against the
use by Parent of any patents. All registered trademarks, maskworks and
copyrights are valid and subsisting. Except as set forth in Schedule 3.17 of
the Parent Disclosure Schedule, to the knowledge of Parent, all patents held
by Parent are valid and subsisting. Except as set forth in Schedule 3.17 of
the Parent Disclosure Schedule, to Parent's knowledge, there is no material
unauthorized use, infringement or misappropriation of any of Parent
Intellectual Property Right by any third party, including any employee or
former employee of Parent or any of its subsidiaries. Except as set forth in
Schedule 3.17 of the Parent Disclosure Schedule, neither Parent nor any of its
subsidiaries (i) has been sued or charged in writing as a defendant in any
claim, suit, action or proceeding which involves a claim or infringement of
trade secrets, any patents, trademarks, service marks, maskworks or copyrights
and which has not been finally terminated prior to August 20, 1998, or been
informed or notified by any third party that Parent may be engaged in such
infringement, or (ii) has knowledge of any infringement liability with respect
to, or infringement by, Parent or any of its subsidiaries of any trade secret,
patent, trademark, service mark, maskwork or copyright of another.
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(c) Each employee and consultant of Parent has executed a confidentiality and
invention agreement substantially in the respective forms previously delivered
to the Company.
(d) Parent has taken reasonable and practicable steps designed to safeguard
and maintain the secrecy and confidentiality of, and its proprietary rights
in, all Parent Intellectual Property Rights (other than those which, by
operation of law, have been disclosed or made public).
3.18 Insurance. To Parent's knowledge, except as is set forth in Schedule
3.18 of the Parent Disclosure Schedule, there is no material claim by Parent
or any of its subsidiaries pending under any of such policies or bonds as to
which coverage has been questioned, denied or disputed by the underwriters of
such policies or bonds. All premiums payable on or prior to the date hereof
under all such policies and bonds have been paid and Parent and its
subsidiaries are otherwise in compliance in all material respects with the
terms of such policies and bonds (or other policies and bonds providing
substantially similar insurance coverage). Parent has no knowledge of any
threatened termination of, or material premium increase with respect to, any
of such policies.
3.19 Vote Required. The affirmative vote of the holders of a majority of the
shares present and entitled to vote at a stockholder meeting duly convened for
the purpose of considering the Parent Stock Issuance is the only vote of the
holders of any class or series of Parent's capital stock necessary to approve
the Transactions in accordance with the Delaware General Corporation Law, the
Certificate of Incorporation of Parent and the By-Laws of Parent.
ARTICLE IV
Conduct of Business Pending the Amalgamation
4.1 Conduct of Business by the Company Pending the Amalgamation. During the
period from the date of the Original Agreement and continuing until the
earlier of the termination of this Agreement or the Effective Time, and except
as set forth in Schedule 4.1 of the Company Disclosure Schedule, the Company
covenants and agrees, unless Dutchco shall otherwise agree in writing, to
conduct its business and cause the businesses of its subsidiaries to be
conducted only in, and the Company and its subsidiaries shall not take any
action except in, the ordinary course of business or in accordance with the
provisions of this Agreement and in a manner consistent with past practice;
and the Company shall use commercially reasonable efforts to preserve
substantially intact the business organization of the Company and its
subsidiaries, to keep available the services of the present officers,
employees and consultants of the Company and its subsidiaries, to take all
commercially reasonable action necessary to prevent the loss, cancellation,
abandonment, forfeiture or expiration of any Company Intellectual Property and
to preserve the present relationships of the Company and its subsidiaries with
customers, suppliers and other persons with which the Company or any of its
subsidiaries has significant business relations, except in each case where the
failure to do so could not reasonably be expected to have a Material Adverse
Effect; provided, however, that the provisions of this Section 4.1 shall not
prevent the Company from taking action to cause the Exchangeable Shares, the
Class B Shares, Class E Shares and Class F Shares to be listed, posted or
quoted for trading on the Nasdaq National Market and/or a prescribed Canadian
stock exchange. By way of amplification and not limitation, except as
contemplated by this Agreement, neither the Company nor any of its
subsidiaries shall, during the period from the date of the Original Agreement
and continuing until the earlier of the termination of this Agreement or the
Effective Time, directly or indirectly do, or agree to do, any of the
following without the prior written consent of Dutchco, which shall not be
unreasonably withheld:
(a) amend or otherwise change the Company's Articles of Incorporation or By-
Laws;
(b) except as disclosed in Schedule 4.1(b) of the Company Disclosure Schedule,
issue, sell, pledge, dispose of or encumber, or authorize the issuance, sale,
pledge, disposition or encumbrance of, any shares of any class of the
Company's share capital, or any options, warrants, convertible securities or
other rights of any kind to acquire any shares of the Company's share capital,
or any other ownership interest (including, without limitation, any phantom
interest) of the Company, any of its subsidiaries or affiliates (except for
the issuance of Company Common Shares issuable pursuant to employee stock
options under the Company Stock Option Plans
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(as defined in Section 5.5), pursuant to rights to purchase such shares under
the Company Stock Purchase Plan (as defined in Section 5.6), which options or
rights, as the case may be, are outstanding on the date hereof) or as
permitted under Section 4.2;
(c) except as set forth in Schedule 4.1(c) of the Company Disclosure Schedule,
sell, pledge, dispose of or encumber any material assets of the Company or any
of its subsidiaries (except for (i) sales of assets in the ordinary course of
business and in a manner consistent with past practice and (ii) dispositions
of obsolete or worthless assets);
(d) amend or change the period (or permit any acceleration, amendment or
change) of exercisability of options or restricted stock granted under the
Employee Plans (including the Company Stock Option Plans) or authorize cash
payments in exchange for any options granted under any of such plans except
with regard to options set forth in Schedule 4.1(d) of the Company Disclosure
Schedule;
(e) (i) declare, set aside, make or pay any dividend or other distribution
(whether in cash, stock or property or any combination thereof) in respect of
any of its capital stock, except that a wholly owned subsidiary of the Company
may declare and pay a dividend to its parent, (ii) split, combine or
reclassify any of its capital stock or issue or authorize or propose the
issuance of any other securities in respect of, in lieu of or in substitution
for shares of its capital stock or (iii) amend the terms of, repurchase,
redeem or otherwise acquire, or permit any subsidiary to repurchase, redeem or
otherwise acquire, any of its securities or any securities of its
subsidiaries, or propose to do any of the foregoing;
(f) except as set forth in Schedule 4.1(f) of the Company Disclosure Schedule,
sell, transfer, license, sublicense or otherwise dispose of any Company
Intellectual Property, or amend or modify any existing agreements with respect
to any Company Intellectual Property or Third Party Intellectual Property
Rights, other than nonexclusive object and source code licenses in the
ordinary course of business consistent with past practice or industry
standards for such licensing or distribution;
(g) (i) acquire (by merger, consolidation, or acquisition of stock or assets)
any corporation, partnership or other business organization or division
thereof or otherwise acquire any material amount of assets; (ii) incur any
material indebtedness for borrowed money or issue any debt securities or
assume, guarantee (other than guarantees of bank debt of the Company's
subsidiaries entered into in the ordinary course of business), endorse or
otherwise as an accommodation become responsible for, the obligations of any
person, or make any loans or advances, except in the ordinary course of
business consistent with past practice; (iii) authorize any capital
expenditures or purchase of fixed assets which are, in the aggregate, in
excess of US $6,000,000 for the Company and its subsidiaries taken as a whole;
or (iv) enter into or amend any contract, agreement, commitment or arrangement
to effect any of the matters prohibited by this Section 4.1(g);
(h) except as set forth in Schedule 4.1(h) of the Company Disclosure Schedule,
increase the compensation payable or to become payable to its officers or
employees, except for increases in salary or wages of officers or employees of
the Company or its subsidiaries in accordance with past practices, or grant
any severance or termination pay to, or enter into any employment or severance
agreement with, any director, officer or other employee of the Company or any
of its subsidiaries, or establish, adopt, enter into or amend any Employee
Plan, except as may be required by applicable law;
(i) take any action to change material Tax or accounting policies or
procedures (including, without limitation, procedures with respect to revenue
recognition, capitalization of software development costs, payments of
accounts payable and collection of accounts receivable) other than as may be
required by law or US GAAP;
(j) make any material Tax election inconsistent with past practices or settle
or compromise any material federal, state, local or foreign Tax liability or
agree to an extension of a statute of limitations except to the extent the
amount of any such settlement has been reserved for on the Company Balance
Sheet;
(k) pay, discharge or satisfy any material claims, liabilities or obligations
(absolute, accrued, asserted or unasserted, contingent or otherwise), other
than the payment, discharge or satisfaction of liabilities reflected or
reserved against in the Company Financial Statements or incurred in the
ordinary course of business and consistent with past practice;
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(l) except as may be required by law and except as disclosed on Schedule
4.1(l) of the Company Disclosure Schedule, take any action to terminate or
amend any of its Employee Plans;
(m) modify, amend or terminate any Covered Agreement (as defined in Section
2.5(b)), other than in the ordinary course of business consistent with past
practice;
(n) take or allow to be taken or fail to take any act or omission which would
jeopardize the treatment of the Transactions as a pooling-of-interests for
accounting purposes under US GAAP; or
(o) take, or agree in writing or otherwise to take, any of the actions
described in Sections 4.1(a) through (n) above, or any action which would make
any of the representations or warranties of the Company contained in this
Agreement untrue or incorrect in any material respect or prevent the Company
from performing or cause the Company not to perform its covenants hereunder or
result in any of the conditions to the Transactions set forth herein not being
satisfied.
4.2 No Solicitation.
(a) From and after the date of the Original Agreement until the earlier of the
Effective Time or the termination of this Agreement in accordance with Article
VII hereof, the Company shall not, directly or indirectly, through any
officer, director, employee, representative or agent of the Company or any of
its subsidiaries, take any action to initiate, solicit or encourage (including
by way of furnishing any person any non-public information, except as
permitted in Section 4.2(e)) or, subject to the terms of the immediately
following sentence, participate in any discussions or negotiations with any
persons who are considering or who have made any inquiries or proposals
regarding any merger, amalgamation, take-over bid, sale of substantial assets,
sale of shares of capital stock (including without limitation by way of a
tender offer) or similar transactions involving the Company or any
subsidiaries of the Company (any of the foregoing inquiries or proposals being
referred to herein as an "Acquisition Proposal"). Notwithstanding anything to
the contrary contained in this Section 4.2(a) or in any other provision of
this Agreement, the Company may, to the extent the Board of Directors of the
Company determines, in good faith, after consultation with outside legal
counsel, that the Board's fiduciary duties under applicable law require it to
do so, participate in discussions or negotiations with, and, subject to the
requirements of paragraph (d), below, furnish information to any person,
entity or group after such person, entity or group has delivered to the
Company, an unsolicited bona fide Acquisition Proposal which the Board of
Directors of the Company in its good faith reasonable judgment determines,
after consultation with its independent financial advisors, would result in a
transaction more favorable to the shareholders of the Company than the
transactions contemplated by this Agreement (a "Superior Proposal"). In
addition, notwithstanding any other provision of this Agreement, in connection
with a possible Acquisition Proposal, the Company may refer any third party to
this Section 4.2 or make a copy of this Section 4.2 available to a third
party. In the event the Company receives a Superior Proposal, nothing
contained in this Agreement (but subject to the terms of this Section 4.2)
will prevent the Board of Directors of the Company from accepting, approving
or recommending such Superior Proposal to its shareholders, if the Board
determines, in good faith, after consultation with outside legal counsel, that
such action is required by its fiduciary duties under applicable law; in such
case, the Board of Directors of the Company may withdraw, modify or refrain
from making its recommendation set forth in Section 5.1(a), and, to the extent
it does so, the Company may refrain from soliciting proxies and taking such
other action necessary to secure the vote of its shareholders as may be
required by Section 5.2; provided, however, that the Company shall not accept,
approve or recommend to its shareholders, or enter into any agreement
concerning, a Superior Proposal for a period of not less than three business
days after Parent's receipt of a copy of the Superior Proposal (or a
reasonably detailed written description of the significant terms and
conditions thereof, if such proposal is not in writing).
(b) Notwithstanding Section 4.2(a) above, nothing contained in this Agreement
shall prohibit the Company from complying with Rules 14d-9 and 14e-2 under the
Exchange Act; provided, however, that, in complying with Rules 14d-9 and 14e-
2, the Company will not make or authorize any recommendation of any
Acquisition Proposal unless such proposal constitutes a Superior Proposal.
(c) The Company shall immediately (and no later than 24 hours) notify Parent
and Dutchco after receipt of any written Acquisition Proposal or any request
for non-public information relating to the Company or
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any of its subsidiaries in connection with an Acquisition Proposal or for
access to the properties, books or records of the Company or any subsidiary by
any person or entity that informs the Board of Directors of the Company or
such subsidiary that it is considering making, or has made, an Acquisition
Proposal. Such notice to Parent and Dutchco shall be made orally and in
writing and shall indicate in reasonable detail the terms and conditions of
such proposal, inquiry or contact.
(d) If the Board of Directors of the Company receives a request for material
nonpublic information by a party who makes a bona fide Acquisition Proposal
and the Board of Directors of the Company determines that such proposal is a
Superior Proposal, then, and only in such case, the Company may, subject to
the execution of a confidentiality agreement substantially similar to that
then in effect between the Company and Parent, provide such party with access
to information regarding the Company, which access shall be no more extensive
than that provided to Parent.
(e) The Company shall immediately cease and cause to be terminated any
existing discussions or negotiations with any parties (other than Parent,
Dutchco and Amalgamation Sub) conducted heretofore with respect to any of the
foregoing. The Company agrees not to release any third party from any
confidentiality or standstill agreement with respect to any of the foregoing
to which the Company is a party.
(f) The Company shall ensure that the officers, directors, employees and
agents of the Company and its subsidiaries and any investment bankers or other
agents, advisors or representatives retained by the Company are aware of the
restrictions described in this Section, and shall be responsible for any
breach of this Section 4.2 by such bankers, officers, directors, employees,
agents, advisors or representatives.
4.3 Covenants of Parent. During the period from the date of the Original
Agreement and continuing until the earlier of the termination of this
Agreement or the Effective Time, Parent agrees as to itself and its material
subsidiaries (except to the extent that the Company shall otherwise consent in
writing, which consent shall not unreasonably be withheld), to carry on its
and such subsidiaries' business in the ordinary course, to pay its debts and
Taxes when due subject to good faith disputes over such debts or Taxes and to
pay or perform other obligations when due, except to the extent failure to do
any of the foregoing would not have a Material Adverse Effect.
ARTICLE V
Additional Agreements
5.1 Joint Proxy Statement/Prospectus; Registration Statement. As promptly as
practicable after the execution of this Agreement, Parent and Company shall
prepare and file with the SEC a preliminary proxy statement which shall
constitute the Joint Proxy Statement/Prospectus, together with any other
documents required by the Securities Act or the Exchange Act, in connection
with the Transactions. The Joint Proxy Statement/Prospectus shall constitute
(i) the proxy statement of the Company with respect to the Company
Shareholders' Meeting, (ii) the proxy statement of Parent with respect to the
Parent Stockholders' Meeting and, (iii) the prospectus to be contained in the
Form S-4 with respect to the issuance by (A) Dutchco of the Parent Common
Shares and (B) the Continuing Corporation of the Exchangeable Shares, Units
and Class B Shares in connection with the Transactions. As promptly as
practicable after comments (if any) are received from the SEC thereon and
after the furnishing by Parent and the Company of all information required to
be contained therein, Parent and Company shall cause the Joint Proxy
Statement/Prospectus to be mailed to each of the Company's Shareholders and
each of Parent's Stockholders. The Joint Proxy Statement/Prospectus shall (i)
include the unanimous recommendation of the non-interested Board of Directors
of the Company in favor of the Transactions, except that the Board of
Directors of the Company may withdraw, modify or refrain from making such
recommendation to the extent that the Board determines, in good faith, after
consultation with outside legal counsel, that compliance with the Board's
fiduciary duties under applicable law would require it to do so, and (ii) the
unanimous recommendation of the Board of Directors of Parent in favor of the
Parent Stock Issuance, except that the Board of Directors of Parent may
withdraw, modify or refrain from making such recommendation to the extent that
the Board determines, in good faith, after consultation with outside legal
counsel, that compliance with the Board's fiduciary duties under applicable
law would require it to do so. Parent shall file a
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registration statement on Form S-3 (the "Form S-3") in order to register the
Parent Common Shares to be issued from time to time after the Effective Time
upon exchange of the Exchangeable Shares and shall use its reasonable best
efforts to maintain the effectiveness of such registration for such period as
such Exchangeable Shares remain outstanding, and Parent and the Company shall
use all reasonable efforts to cause the Form S-3 to become effective prior to
the Effective Time. Notwithstanding anything herein to the contrary, Parent
shall be under no obligation to file the Form S-3 if it shall have determined
on the advice of its counsel that the shares of Parent Common Stock to be
issued upon exchange of the Exchangeable Shares after the Effective Time will
be exempt from the registration requirements of Section 5 of the Securities
Act by virtue of Section 3(a)(9) thereof.
5.2 Shareholders' Meetings. The Company shall take all commercially
reasonable action necessary in accordance with applicable law, its Articles of
Incorporation and By-Laws to hold the Company Shareholders' Meeting as soon as
practicable (but in no event more than 40 days) after the date on which the
Form S-4 becomes effective. Parent will take all commercially reasonable
action necessary in accordance with the Delaware General Corporation Law and
its Certificate of Incorporation and By-Laws to convene the Parent
Stockholders' Meeting to be held as soon as practicable (but in no event more
than 40 days) after the date on which the Form S-4 becomes effective. Parent
will consult with Company and will use its commercially reasonable efforts to
hold the Parent Shareholders' Meeting on the same day as the Company
Stockholders' Meeting. Subject to the terms of this Agreement, each of Parent
and the Company will use its commercially reasonable efforts to solicit from
its stockholders proxies in favor of the approval of this Agreement and the
transactions contemplated hereby and the approval of the Parent Stock
Issuance, as the case may be, and will take all other action necessary or
advisable to secure the vote or consent of their respective stockholders
required by the rules of the National Association of Securities Dealers, Inc.
and applicable law to obtain such approvals.
5.3 Access to Information; Confidentiality. Upon reasonable notice and
subject to restrictions contained in confidentiality agreements to which such
party is subject, the Company, Parent and Dutchco shall each (and shall cause
each of their subsidiaries to) afford to the officers, employees, accountants,
counsel and other representatives of the other, reasonable access during
normal business hours, during the period prior to the Effective Time, to all
its properties, books, contracts, commitments and records and, during such
period, the Company and Parent each shall (and shall cause each of their
subsidiaries to) furnish promptly to the other all information concerning its
business, properties and personnel as such other party may reasonably request,
and each shall make available to the other the appropriate individuals
(including attorneys, accountants and other professionals) for discussion of
the other's business, properties and personnel as either party may reasonably
request. Each party shall keep such information confidential in accordance
with the terms of the existing confidentiality agreement dated July 10, 1998
(the "Confidentiality Agreement") between Parent and the Company.
5.4 Consents; Approvals. The Company, Parent and Dutchco shall each use best
efforts to obtain all consents, waivers, approvals, authorizations or orders
(including, without limitation, all United States, Canadian federal and
provincial and foreign governmental and regulatory rulings and approvals), and
the Company and Parent shall promptly make all filings (including, without
limitation, all filings with United States, Canadian federal and provincial
and foreign governmental or regulatory agencies) required in connection with
the authorization, execution and delivery of this Agreement and the Ancillary
Documents by the Company and each member of the Parent Group (to the extent
they are parties thereto) and the consummation by them of the transactions
contemplated hereby and thereby. The Company and Parent (with respect to
themselves and their respective subsidiaries) shall furnish all information
required to be included in the Joint Proxy Statement and the Form S-4, or for
any application or other filing to be made pursuant to the rules and
regulations of any United States, Canadian federal or provincial or foreign
governmental body in connection with the Transactions.
5.5 Stock Options; Employee Benefits; Retention of Employees.
(a) At the Effective Time, the Company's obligations with respect to each
outstanding option to purchase Company Common Shares (each a "Company Option")
under the Company's Amended and Restated 1994 Restricted Stock and Stock
Option Plan, 1995 Non-Employee Director Stock Option Plan, 1995 Employee Stock
Purchase Plan and 1997 Special Limited Non-Employee Director Stock Plan and
outside of any such
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formal plan (individually, a "Company Stock Option Plan," and, collectively,
the "Company Stock Option Plans"), whether vested or unvested, will be assumed
by Parent and, on such assumption, the rights to acquire Company Common Shares
under the Company Stock Option Plans shall be exchanged for rights to acquire
Parent Common Shares under such plans. Each Company Option so assumed by
Parent under this Agreement shall continue to have, and be subject to, the
same terms and conditions set forth in the applicable Company Stock Option
Plan and agreement pursuant to which such Company Option was issued as in
effect immediately prior to the Effective Time, except that (i) such Company
Option will be deemed to constitute an option to purchase that number of
Parent Common Shares equal to the product of the number of Company Common
Shares that the holder of such option would have been entitled to receive had
such holder exercised such options immediately prior to the Effective Time
(not taking into account whether such option was in fact exercisable)
multiplied by the Exchange Ratio, rounded down to the nearest whole number of
Parent Common Shares, and (ii) the per share exercise price for the Parent
Common Shares issuable upon exercise of such assumed Company Option will be
equal to the quotient determined by dividing the exercise price per Company
Common Shares at which such Company Option was exercisable immediately prior
to the Effective Time by the Exchange Ratio, and rounding the resulting
exercise price up to the nearest whole cent.
(b) It is the intention of the parties that the Company Options assumed by
Parent qualify following the Effective Time as incentive stock options as
defined in the Code ("ISOs"), to the extent the Company Options qualified as
ISOs prior to the Effective Time.
(c) The Company shall ensure that any required consents of holders of such
options or rights to such assumptions are obtained prior to the Effective
Time.
(d) As soon as practicable after the Effective Time, Parent shall deliver to
each holder of an outstanding Company Option, an appropriate notice setting
forth such holder's rights pursuant thereto and such Company Option shall
continue in effect on the same terms and conditions (including further anti-
dilution provisions, and subject to the adjustments required by this Section
5.5 after giving effect to the Transactions). Parent shall comply with the
terms of all such Company Options. Parent shall take all corporate action
necessary to reserve for issuance a sufficient number of Parent Common Shares
for delivery pursuant to the terms set forth in this Section 5.5.
(e) As of the Effective Time, the employees of the Company (the "Company
Employees") shall be entitled (to the extent permitted by applicable law and
subject to the provisions of this Agreement) to participate in each of
Parent's employee benefit and incentive compensation and perquisite plans and
arrangements (the "Parent Employee Plans") in which similarly situated
employees of Parent participate, to the same extent as similarly situated
employees of Parent. For purposes of determining eligibility to participate in
the Parent Employee Plans, eligibility to participate in the Parent Employee
Plans, eligibility for benefit forms and subsidies and the vesting of benefits
under such plans (including, but not limited to, any severance, 401(k),
vacation and sick pay plan) and for purposes of accrual of benefits under any
severance, sick leave, vacation and other similar Parent Employee Benefit
Plans (except with respect to Parent's sabbatical program), Parent shall give
effect to years of service (and for purposes of qualified and nonqualified
pension plans, prior earnings) with the Company or its subsidiaries, as the
case may be, as if they were employees of the Parent. Such service shall also
be given effect for purposes of satisfying any waiting period, evidence of
insurability requirements, or the application of any preexisting condition
limitation. The Company Employees shall be given credit for amounts paid under
a corresponding Company Employee Plan during the same period for purposes of
applying deductibles, copayments and out-of-pocket maximums as though such
amounts had been paid in accordance with the terms and conditions of the
Parent Employee Plan. With regard to any employees who are redeployed as a
result of the transactions contemplated hereby, such redeployment shall be
made in accordance with the Redeployment Schedule attached at Schedule 5.6(f)
of the Parent Disclosure Schedule, subject to any general changes in the
policies of Parent.
(f) Parent shall assume and honor the obligations of the Company and its
subsidiaries under all employment, severance, consulting and other
compensation contracts, commitments or agreements disclosed in the Company
Disclosure Schedule, each as amended to the date hereof or as contemplated
hereby. Parent hereby acknowledges that the Transactions will constitute a
"Change in Control" for purposes of all of the Company Employee Plans.
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(g) The Company will use its best efforts to assist Parent in identifying and
ensuring the retention by Parent and/or the Continuing Corporation of those
technical and non-technical employees who are necessary to carrying out the
operations of the Company as presently conducted and proposed to be conducted.
The parties acknowledge and agree, consistent with the provisions of this
Agreement, that the failure of Parent and/or the Continuing Corporation to
retain such employees despite the Company's best efforts shall not entitle
Parent to terminate this Agreement.
5.6 Company Employee Stock Purchase Plan.
(a) At the Effective Time, each outstanding purchase right (each an "Assumed
Purchase Right" and, collectively, the "Assumed Purchase Rights") under the
Company's 1995 Employee Stock Purchase Plan (the
"Company Stock Purchase Plan") shall be deemed to constitute a purchase right
to acquire, on the same terms and conditions as were applicable under the
Company Stock Purchase Plan immediately prior to the Effective Time, a number
of Parent Common Shares determined as provided in the Company Stock Purchase
Plan, except that the per share purchase price of such Parent Common Shares
under each such Assumed Purchase Right will be the lower of (i) the quotient
determined by dividing (x) 85% of the closing price of a Discreet Common Share
as reported on the Nasdaq National Market on the first day of the offering
period in effect as of the Effective Time (the "Current Offering Period") by
(y) the Exchange Ratio and (ii) 85% of the closing price of a share of
Autodesk Common Stock as reported on the Nasdaq National Market on the last
day of the Current Offering Period. As soon as practicable after consummation
of the Transactions, Autodesk shall deliver to the participants in the Company
Stock Purchase Plan appropriate notice setting forth such participants' rights
pursuant thereto and that the Assumed Purchase Rights shall continue in effect
on the terms and conditions provided in this Section 5.6.
(b) Parent shall file and cause to become effective not later than the
Effective Time a registration statement under the Securities Act with respect
to the assumption by Parent of the Company Options referred to in Section 5.5
and the Assumed Purchase Rights referred to in this Section 5.6 and with
respect to the issuance of Parent Common Shares upon exercise of those Company
Options and Assumed Purchase Rights and to keep such registration statement
effective throughout the term of such Company Options and Assumed Purchase
Rights.
(c) Employees of the Company as of the Effective Time shall be permitted to
participate in Parent's Employee Stock Purchase Plan commencing on the first
enrollment date following the Effective Time, subject to compliance with the
eligibility provisions of such plan (with employees receiving credit, for
purposes of such eligibility provisions, for service with the Company).
5.7 Agreements of Affiliates. The Company shall promptly deliver to Parent a
letter (the "Affiliate Letter") identifying all persons who are, or may be
deemed to be, at the time of the Company Stockholders' Meeting, "affiliates"
of the Company for purposes of Rule 145 under the Securities Act. The Company
shall use its best efforts to cause each person who is identified as an
"affiliate" in the Affiliate Letter to deliver to Parent, and Parent shall use
its best efforts to receive from its own affiliates, as promptly as
practicable, but in no event later than the date on which the Joint Proxy
Statement/Prospectus is mailed to stockholders, a written agreement (an
"Affiliate Agreement") in substantially the form of Exhibit B-1 hereto (in the
case of affiliates of Parent) and Exhibit B-2 hereto (in the case of
affiliates of the Company).
5.8 Voting Agreements. Concurrently with the date upon which the Joint Proxy
Statement/Prospectus is mailed to the holders of Company Common Shares and
Parent Common Shares, all executive officers and certain directors of both the
Company and Parent shall each execute and deliver a Voting Agreement in
substantially the form of Exhibit C-1 hereto (in the case of officers and
directors of Parent) and Exhibit C-2 hereto (in the case of officers and
directors of the Company), and all such agreements shall be in full force and
effect.
5.9 Indemnification and Insurance.
(a) From and after the Effective Time, (i) the Continuing Corporation and
Parent will fulfill and honor in all respects the obligations of the Company
and its subsidiaries pursuant to the indemnification provisions in the
Company's Articles of Incorporation and By-Laws existing as in effect on the
date hereof with respect to the
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Company's directors and officers (including without limitation advancement of
legal and other expenses to the extent provided for in such Articles of
Incorporation and By-Laws), and (ii) in the event any of the Company's
directors or officers is or becomes involved in any capacity in any action,
proceeding or investigation in connection with any matter relating to this
Agreement or the Amalgamation Agreement or the transactions contemplated
hereby or thereby occurring on or prior to the Effective Time, Parent shall,
or shall cause the Continuing Corporation to, pay as incurred such reasonable
legal and other expenses (including the cost of any investigation and
preparation) incurred in connection therewith, subject to an undertaking to
repay such amounts as required by applicable law.
(b) From and after the Effective Time, the Continuing Corporation and Parent
shall, to the fullest extent permitted under applicable law or under the
Continuing Corporation's and Parent's, as the case may be, By-Laws, indemnify
and hold harmless, each present director, officer, employee, fiduciary and
agent of the Company or any of its subsidiaries (collectively, the
"Indemnified Parties") against any costs or expenses (including attorneys'
fees), judgments, fines, losses, claims, damages, liabilities and amounts paid
in settlement in connection with any claim, action, suit, proceeding or
investigation, whether civil, criminal, administrative or investigative,
arising out of or pertaining to any action or omission occurring at or prior
to the Effective Time (including, without limitation, the transactions
contemplated by this Agreement and the Amalgamation Agreement), and to pay as
incurred such legal and other expenses (including the cost of any
investigation and preparation) incurred in connection therewith, subject to an
undertaking to repay such amounts as required by applicable law. The
Indemnified Parties as a group may retain only one law firm to represent them
with respect to any single action unless there is, under applicable standards
of professional conduct, a conflict of interest between the positions of any
two or more Indemnified Parties. Any counsel retained by the Indemnified
Parties shall be reasonably satisfactory to Parent and Parent shall not be
liable for any settlement effected without its written consent (which consent
shall not be unreasonably withheld).
(c) The provisions of this Section 5.9 are intended to be for the benefit of,
and shall be enforceable by, each Indemnified Party, his or her heirs and
representatives and may not be amended, altered or repealed without the prior
written consent of the affected Indemnified Party.
(d) For a period of five years after the Effective Time, Parent and Dutchco
will, or will cause the Continuing Corporation to, provide officers' and
directors' liability insurance in respect of acts or omissions occurring on or
prior to the Effective Time covering each such person currently covered by the
Company's officers' and directors' liability insurance policy on terms
substantially similar to those of such policy in effect on the date hereof.
5.10 Notification of Certain Matters. The Company shall give prompt notice
to Parent and Dutchco, and Parent and Dutchco shall give prompt notice to the
Company, of (i) the occurrence, or non-occurrence, of any event the
occurrence, or non-occurrence, of which would be likely to cause, or does
cause, any representation or warranty contained in this Agreement to be untrue
or inaccurate or (ii) any failure of the Company, or any member of the Parent
Group as the case may be, materially to comply with or satisfy any covenant,
condition or agreement to be complied with or satisfied by it hereunder;
provided, however, that no such notification shall affect the representations,
warranties, covenants or agreements of the parties or the conditions to the
obligations of the parties under this Agreement; provided further that failure
to provide such notice shall not be treated as a breach for purposes of
Section 7.1(g) unless failure to give such notice results in material
prejudice to Parent.
5.11 Further Action. Upon the terms and subject to the conditions hereof,
each of the parties hereto shall use all reasonable efforts to take, or cause
to be taken, all actions and to do, or cause to be done, all other things
necessary, proper or advisable to consummate and make effective as promptly as
practicable the transactions contemplated by this Agreement and the
Amalgamation Agreement, to obtain in a timely manner all necessary waivers,
consents and approvals and to effect all necessary registrations and filings,
and to otherwise satisfy or cause to be satisfied all conditions precedent to
its obligations under this Agreement. Each member of the Parent Group and the
Company shall use its best efforts to cause the Transactions to fail to
qualify, will take any actions (that do not materially adversely affect such
party) to cause the Transactions to fail to qualify, and will not (both before
and after consummation of the Transactions) take any actions which cause such
Transactions to qualify,
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as a reorganization under the provisions of Section 368 of the Code or a
transaction described in Section 351 of the Code.
5.12 Public Announcements. Parent (on behalf of each member of the Parent
Group) and the Company shall consult with each other before issuing any press
release or otherwise making any public statements with respect to the
Transactions or this Agreement and shall not issue any such press release or
make any such public statement without the prior consent of the other party,
which shall not be unreasonably withheld; provided, however, that a party may,
without the prior consent of the other party, issue such press release or make
such public statement as may upon the advice of counsel be required by law,
the National Association of Securities Dealers, Inc. or the Nasdaq National
Market or any other regulatory body to which such party is subject if it has
used all reasonable efforts to consult with the other party as to the timing
and content of such release or statement.
5.13 Listing of Parent Common Shares. Parent shall cause the shares of
Parent Common Stock to be issued in connection with the Transactions
(including shares of Parent Common Stock delivered by Dutchco as a result of
rights attaching to the Exchangeable Shares) to be approved for listing on the
Nasdaq National Market, subject to official notice of issuance, prior to the
Effective Time.
5.14 Conveyance Taxes. Parent, Dutchco and the Company shall cooperate in
the preparation, execution and filing of all returns, questionnaires,
applications or other documents regarding any real property transfer or gains,
sales, use, transfer, value added, stock transfer and stamp Taxes, any
transfer, recording, registration and other fees, and any similar Taxes which
become payable in connection with the transactions contemplated hereby that
are required or permitted to be filed on or before the Effective Time.
5.15 Pooling Letters.
(a) The Company shall use its best efforts to cause to be delivered to Parent
a letter of Arthur Andersen & Cie, addressed to the Company, dated as of a
date within two business days prior to the Effective Time, setting forth that
the Company will qualify as a combining company in a pooling-of-interests
transaction under Opinion 16 of the Accounting Principles Board and applicable
SEC rules and regulations (the "Arthur Andersen Pooling Letter").
(b) Parent shall use its best efforts to cause to be delivered to the Company
a letter of Ernst & Young LLP, addressed to Parent, dated as of a date within
two business days prior to the Effective Time, setting forth the concurrence
of Ernst & Young LLP with the conclusion of Parent's management that the
Transactions will qualify as a pooling-of-interests transaction under Opinion
16 of the Accounting Principles Board and applicable SEC rules and regulations
if consummated in accordance with the terms of this Agreement and the
Ancillary Documents (the "Ernst & Young Pooling Letter").
5.16 Pooling Accounting Treatment. Each of Parent and the Company agrees not
to take any action that would adversely affect the ability of Parent to treat
the Transactions as a pooling of interests under US GAAP.
5.17 Ancillary Documents/Reservation of Shares.
(a) Provided all other conditions of this Agreement have been satisfied or
waived, the Company, Giants Quebec and Amalgamation Sub shall, as promptly as
practicable thereafter, jointly file Articles to give effect to the
Amalgamation, such Articles to contain share conditions for the Continuing
Corporation substantially in the form of those contained in Appendix A to the
Amalgamation Agreement.
(b) Immediately after the Effective Time:
(i) Parent, Dutchco and the Continuing Corporation shall execute and
deliver a Support Agreement between Parent, Dutchco and the Continuing
Corporation containing the terms and conditions set forth in Exhibit D
hereto (the "Support Agreement"), together with such other terms and
conditions as may be agreed to by the parties hereto acting reasonably;
(ii) Parent, Dutchco, the Continuing Corporation and a Canadian trust
company to be selected by Parent shall execute and deliver a Voting and
Exchange Trust Agreement containing the terms and
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conditions set forth in Exhibit E hereto (the "Voting and Exchange
Trust Agreement"), together with such other terms and conditions as may
be agreed to by the parties hereto acting reasonably; and
(iii) Parent shall file with the Secretary of State of the State of
Delaware a Certificate of Designation which shall be in substantially
the form set forth in Exhibit F hereto.
On and after the Effective Time, Parent and Dutchco shall duly and timely
perform all of their respective obligations expressed in this Agreement, the
Support Agreement and the Voting and Exchange Trust Agreement and the
Amalgamation Agreement, subject to the respective terms thereof. The
Amalgamation Agreement and the other documents referred to in this Section
5.17(b) are referred to herein as the "Ancillary Documents."
(c) On or prior to the Effective Time, Parent will reserve for issuance such
number of Parent Common Shares as shall be necessary to give effect to the
exchanges, conversions and assumptions of options contemplated hereby. On or
prior to the Effective Time, Parent and Dutchco shall enter into a stock
purchase agreement pursuant to which Dutchco will purchase from Parent the
Parent Common Shares to be delivered pursuant hereto and in connection with
the Transactions to holders of Company Common Shares at the Effective Time or
immediately thereafter and from time to time thereafter upon exercise of the
Exchangeable Shares.
5.18 Listing of Class B Shares, Class E Shares and Class F Shares. Unless
otherwise agreed to by the parties, the Company, Dutchco and Parent shall
cause the Class B Shares, Class E Shares and Class F Shares to be approved for
listing on The Winnipeg Stock Exchange or any other prescribed stock exchange
for the purposes of Section 115 of the Income Tax Act (Canada), effective as
of the time such Class B Shares, Class E Shares, Class F Shares are issued
pursuant to the Transactions.
5.19 Tax Elections.
(a) The Company understands that there may be elections under Sections 338(a)
and (g) of the Code for the Company and/or the Continuing Corporation.
(b) Eligible holders of Class B Shares who receive Exchangeable Shares on the
redemption of their Class B Shares shall be entitled to make an income tax
election pursuant to section 85 of the Income Tax Act (Canada) (and the
analogous provision of provincial income tax law) with respect to the transfer
of their Class B Shares to the Continuing Corporation by providing two signed
copies of the necessary election forms to the Continuing Corporation within
ninety (90) days following the Effective Time, duly completed with the details
of the number of shares transferred and the applicable agreed amounts for the
purposes of such elections. Thereafter, subject to the election forms
complying with the provisions of the Income Tax Act (Canada) (or applicable
provincial income tax law), the Parent and/or Dutchco will cause the forms to
be signed by the Continuing Corporation and returned to such holders of Class
B Shares (within 60 days after the receipt thereof) for filing with Revenue
Canada, Customs, Excise and Taxation (or the applicable provincial taxing
authority). With the exception of execution or causing execution of the
election by the Continuing Corporation, compliance with the requirements for a
valid election shall be the sole responsibility of the holder making the
election. For purposes of this provision an eligible holder is a holder who is
a Canadian resident for purposes of the Income Tax Act (Canada) other than a
person who is exempt from tax under the Income Tax Act (Canada) or which is a
partnership that owns such shares if one or more of its members would be
entitled to make such election if such member held such shares directly.
5.20 Board Candidate. Provided that a qualified person having relevant
expertise in the area of the Company's core business groups is identified by
Parent, Parent shall recommend such person to the Nominating Committee of
Parent's Board of Directors.
5.21 Issuance of Class D Shares. Immediately following the Transactions,
Parent and Dutchco shall cause the Continuing Corporation to issue the Class D
Shares (as defined in the Amalgamation Agreement) solely in exchange for
services.
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ARTICLE VI
Conditions To The Transactions
6.1 Conditions to Obligation of Each Party to Effect the Transactions. The
respective obligations of each party to effect the Transactions shall be
subject to the satisfaction at or prior to the Effective Time of the following
conditions:
(a) Effectiveness of the Registration Statements. The Form S-4 shall have been
declared effective by the SEC under the Securities Act and shall cover the
Parent Common Shares, Exchangeable Shares, Units and Class B Shares issued at
or immediately after the Effective Time. The Form S-3 shall have been declared
effective by the SEC under the Securities Act and shall cover the Parent
Common Shares to be issued upon the exchange of Exchangeable Shares, if no
exemption from registration under the Securities Act is available for such
shares. No stop order suspending the effectiveness of the Form S-4 or Form S-
3, if any, shall have been issued by the SEC and no proceedings for that
purpose and no similar proceeding in respect of the Joint Proxy
Statement/Prospectus shall have been initiated or threatened by the SEC or any
provincial securities regulatory authority in Canada;
(b) Shareholder Approval. This Agreement and the Amalgamation shall have been
approved and adopted by the affirmative requisite vote of the shareholders of
the Company, and the Parent Stock Issuance shall have been approved and
adopted by the affirmative requisite vote of the stockholders of Parent;
(c) HSR Act. The waiting period applicable to the consummation of the
Transactions under the HSR Act shall have expired or been terminated;
(d) QSC, Etc. The Company, Parent and Dutchco each shall have filed all
notices and information (if any) required under (i) the Investment Canada Act
(Canada) and shall have received a notice (if required) from the responsible
Minister under the Investment Canada Act (Canada) that he is satisfied or
deemed to be satisfied that the transactions contemplated by this Agreement
and the Ancillary Documents are likely to be of net benefit to Canada, and
(ii) Part IX of the Competition Act (Canada) and the applicable waiting period
shall have expired. Parent and Company shall have obtained from the Quebec
Securities Commission and other relevant securities commissions and
authorities such orders or exemptions as may be required in order to permit
the resale at any time by holders of Parent Common Shares received from time
to time pursuant hereto on the Nasdaq National Market;
(e) No Injunctions or Restraints; Illegality. No temporary restraining order,
preliminary or permanent injunction or other order issued by any court of
competent jurisdiction or other legal restraint or prohibition (an
"Injunction") preventing the consummation of the Transactions shall be in
effect, nor shall any proceeding brought by any administrative agency or
commission or other governmental authority or instrumentality, domestic or
foreign, seeking any of the foregoing be pending; and there shall not be any
action taken, or any statute, rule, regulation or order enacted, entered,
enforced or deemed applicable to the Transactions, which makes the
consummation of the Transactions illegal. If an injunction shall have been
issued, each party agrees to use its reasonable diligent efforts to have such
Injunction lifted;
(f) Nasdaq Listing. The Parent Common Shares issued or issuable in the
Transactions and any additional Parent Common Shares issued as a result of the
exercise of rights attaching to the Exchangeable Shares, Class B Shares and
Units shall have been approved for listing, subject to notice of issuance, on
the Nasdaq National Market;
(g) Tax Opinions. Parent and Dutchco and the Company shall each have received
substantially identical written opinions from their counsel, Aird & Berlis and
Stikeman, Elliott, respectively, in form and substance reasonably satisfactory
to them, to the effect that, provided that (i) the adjusted cost base to a
holder of Class B Shares that are redeemed by the Continuing Corporation for
Exchangeable Shares in connection with the Transactions exceeds the aggregate
of (A) the fair market value of the rights to be received by such holder under
the Voting and Exchange Trust Agreement in respect of such holder's
Exchangeable Shares and (B) any cash received by such holder in lieu of a
fraction of an Exchangeable Share, and (ii) the holder files the appropriate
elections with the relevant tax authorities within the required time such that
the holder's proceeds of disposition do not exceed the adjusted cost base to
the holder of such Class B Shares, such holder will not realize
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a capital gain or a capital loss for purposes of the Income Tax Act (Canada)
on the Amalgamation or the redemption of the Class B Shares;
(h) Public Corporation. Upon the Amalgamation, the Continuing Corporation will
be a "public corporation" under the Income Tax Act (Canada);
(i) Affiliate Agreements. Parent and Dutchco shall have received from each
person who is identified in the Affiliate Letter as an "affiliate" of the
Company an Affiliate Agreement as set forth in Section 5.7, and each such
Affiliate Agreement shall be in full force and effect. The Company shall have
received from each person who Parent in good faith determines is an affiliate
of Parent, an Affiliate Agreement as set forth in Section 5.7, and each such
Affiliate Agreement shall be in full force and effect; and
(j) Pooling Letters. Each of the Company and Parent shall have received the
Arthur Andersen Pooling Letter and the Ernst & Young Pooling Letter,
respectively.
6.2 Additional Conditions to Obligations of Parent Group Members. The
obligations of each member of the Parent Group to effect the Transactions are
also subject to the following conditions:
(a) Representations and Warranties. The representations and warranties of the
Company contained in this Agreement shall be true and correct in all respects
on and as of the Effective Time, except (i) for changes contemplated by this
Agreement, (ii) for those representations and warranties which address matters
only as of a particular date (which shall remain true and correct as of such
date) or (iii) where the failure to be true and correct would not have and
could not reasonably be expected to have a Material Adverse Effect on the
Company, with the same force and effect as if made on and as of the Effective
Time, and Parent and Dutchco shall have received a certificate to such effect
signed on behalf of the Company by the President and Chief Financial Officer
of the Company;
(b) Agreements and Covenants. The Company shall have performed or complied in
all material respects with all agreements and covenants required by this
Agreement to be performed or complied with by it on or prior to the Effective
Time, and Parent and Dutchco shall have received a certificate to such effect
signed on behalf of the Company by the President and Chief Financial Officer
of the Company;
(c) Consents Obtained. All material consents, waivers, approvals,
authorizations or orders required to be obtained, and all material filings
required to be made, by the Company for the authorization, execution and
delivery of this Agreement and the Amalgamation Agreement and the consummation
by it of the transactions contemplated hereby and thereby shall have been
obtained and made by the Company; and
(d) Governmental Actions. No temporary restraining order, preliminary or
permanent injunction or other order issued by any court of competent
jurisdiction or other legal or regulatory restraint provision, materially
limiting or restricting Parent's conduct or operation of the business of the
Company and its subsidiaries following the consummation of the Transactions
shall be in effect, nor shall any investigation or other inquiry that is
reasonably likely to result in any of the foregoing, nor shall any proceeding
brought by an administrative agency or commission or other governmental
entity, domestic or foreign, seeking the foregoing be pending or threatened.
6.3 Additional Conditions to Obligation of the Company. The obligation of
the Company to effect the Transactions is also subject to the following
conditions:
(a) Representations and Warranties. The representations and warranties of the
Parent Group contained in this Agreement shall be true and correct in all
respects on and as of the Effective Time, except (i) for changes contemplated
by this Agreement, (ii) for those representations and warranties which address
matters only as of a particular date (which shall remain true and correct as
of such date) or (iii) where the failure to be true and correct would not have
and could not reasonably be expected to have a Material Adverse Effect on the
Company, with the same force and effect as if made on and as of the Effective
Time, and the Company shall have received a certificate to such effect signed
by the President and Chief Executive Officer of Parent and of Dutchco;
(b) Agreements and Covenants. Each member of the Parent Group shall have
performed or complied in all material respects with all agreements and
covenants required by this Agreement and the Ancillary
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Documents (to the extent they are parties thereto) to be performed or complied
with by it on or prior to the Effective Time, and the Company shall have
received a certificate to such effect signed by the President and Chief
Financial Officer of Parent and of Dutchco; and
(c) Consents Obtained. All material consents, waivers, approvals,
authorizations or orders required to be obtained, and all filings required to
be made, by any member of the Parent Group for the authorization, execution
and delivery of this Agreement and the Ancillary Documents and the
consummation by them of the transactions contemplated hereby and thereby shall
have been obtained and made by such Parent Group member.
ARTICLE VII
Termination
7.1 Termination. This Agreement may be terminated at any time prior to the
Effective Time, notwithstanding approval thereof by the shareholders of the
Company:
(a) by mutual written consent duly authorized by the Boards of Directors of
Parent, Dutchco and the Company; or
(b) by either Parent, Dutchco or the Company if the Transactions shall not
have been consummated by December 31, 1998 or such later date as may be agreed
upon in writing by the parties hereto (the "Final Date"); provided, however,
that the Final Date shall be extended on a day-for-day basis (i) for each day
that the SEC fails to indicate that it has no further comments with regard to
the Joint Proxy Statement beginning 40 days after the filing of such document
with the SEC, and (ii) for each day that any necessary waiting period under or
compliance with the HSR Act is not completed beginning 45 days after the
original filing of the required notice under the HSR Act by the last party to
make such filing; and provided, further, that, the right to terminate this
Agreement and the Amalgamation Agreement under this Section 7.1(b) shall not
be available to any party whose failure to fulfill any obligation under this
Agreement has been the cause of or resulted in the failure of the Transactions
to be consummated on or before such date); or
(c) by either Parent, Dutchco or the Company if a court of competent
jurisdiction or governmental, regulatory or administrative agency or
commission shall have issued a non-appealable final order, decree or ruling or
taken any other action, in each case having the effect of permanently
restraining, enjoining or otherwise prohibiting the Transactions (provided,
however, that no party which has not complied with its obligations under
Section 5.4 may terminate this Agreement pursuant to this Section 7.1(c)); or
(d) by either Parent, Dutchco or the Company, if, at either the Company
Shareholders' Meeting or the Parent Stockholders' Meeting (including any
adjournment or postponement thereof), the requisite affirmative vote of
stockholders shall not have been obtained (provided, however, that no party
which has not complied with its obligations under Section 5.1 or 5.2 may
terminate this Agreement pursuant to this Section 7.1(d)); or
(e) by Parent or Dutchco, if (i) the Board of Directors of the Company shall
withdraw, modify or change its recommendation of the Transactions referred to
in Section 5.1 in a manner adverse to Parent or Dutchco or shall have resolved
to do so; or (ii) the Board of Directors of the Company shall have recommended
to its stockholders, or publicly announced a "neutral" position with respect
to, an Acquisition Proposal (as defined in Section 4.2(a)), or shall have
failed to reject as inadequate, or shall have failed to reaffirm its
recommendation of this Agreement and the Transactions within ten business days
after the public announcement or commencement of such Acquisition Proposal; or
(f) by the Company, if the Board of Directors of the Parent or Dutchco shall
withdraw, modify or change its recommendation in favor of the Parent Stock
Issuance, or shall have resolved to do so; or
(g) by (i) the Company, upon a breach of any representation, warranty,
covenant or agreement on the part of any member of the Parent Group set forth
in this Agreement or the Amalgamation Agreement or if any representation or
warranty of the Parent Group shall have become untrue, such that the
conditions set forth in Section 6.3(a) or 6.3(b) would not be satisfied, or
(ii) Parent or Dutchco, upon a breach of any representation, warranty,
covenant or agreement on the part of the Company set forth in this Agreement
or if any representation
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or warranty of the Company shall have become untrue, such that the conditions
set forth in Section 6.2(a) or 6.2(b) would not be satisfied (in either case,
a "Terminating Breach"), provided, however, that if such Terminating Breach is
curable prior to the expiration of 30 days from its occurrence (but in no
event later than December 31, 1998) by a Parent Group member or the Company,
as the case may be, through the exercise of its reasonable best efforts and
for so long as Parent, Dutchco and/or Amalgamation Sub or the Company, as the
case may be, continues to exercise such reasonable best efforts, neither the
Company nor Parent and/or Amalgamation Sub, respectively, may terminate this
Agreement under this Section 7.1(g) until the earlier of December 31, 1998 or
the expiration of such 30-day period without such Terminating Breach having
been cured; or
(h) by either Parent, Dutchco or the Company, if the Board of Directors of the
Company shall have recommended, resolved to accept, or accepted, a Superior
Proposal.
7.2 Effect of Termination. In the event of the termination of this Agreement
pursuant to Section 7.1, this Agreement shall forthwith become void and there
shall be no liability on the part of any party hereto or any of its
affiliates, directors, officers or stockholders except (i) as set forth in
Section 7.3 and the last sentence of Section 8.1 hereof, and (ii) nothing
herein shall relieve any party from liability for any willful breach hereof.
7.3 Fees and Expenses.
(a) Except as set forth in this Section 7.3, all fees and expenses incurred in
connection with this Agreement and the Transactions shall be paid by the party
incurring such expenses, whether or not the Transactions are consummated.
(b) Payments by Company to Dutchco.
(i) If there shall have occurred any of the following events:
(A) The Board of Directors of the Company shall have withheld,
withdrawn or modified in a manner adverse to Parent its
recommendation in favor of adoption and approval of this Agreement
and approval of the Transactions as permitted by Section 5.1, and at
or prior to the time of such action by the Company there shall not
have occurred a Material Adverse Effect on Parent, and there shall
have occurred a Superior Proposal which shall have been publicly
disclosed and not withdrawn;
(B) The Board of Directors of the Company shall have recommended a
Superior Proposal (other than Dutchco's) to the shareholders of the
Company;
(C) The Company shall have failed to convene the Company
Shareholder's Meeting by December 24, 1998 and there is an
Acquisition Proposal outstanding at such time; or
(D) The vote of the shareholders of Company approving and adopting
this Agreement and approving the consummation of the Amalgamation
shall not have been obtained by reason of the failure to obtain the
required vote upon a vote taken at a meeting of shareholders duly
convened therefor or any adjournment thereof (a "Company Negative
Vote"), and prior to such Company Negative Vote there shall have
occurred an Acquisition Proposal with respect to the Company which
shall have been publicly disclosed and not withdrawn;
then the Company shall pay to Dutchco (1) an amount equal to US $5,000,000
within one business day following the earlier to occur of (x) termination of
this Agreement pursuant to Section 7.1(b), Section 7.1(e) or Section 7.1(h),
and (y) a Company Negative Vote, plus (2) if any Acquisition Proposal is
consummated within 9 months after the time for such payment under clause (1),
an amount equal to US $15,000,000 less any amounts paid under the preceding
clause (1) within one business day following demand therefor after such
consummation.
(ii) If no payment shall have been required pursuant to Section
7.3(b)(i) and the Board of Directors of the Company shall have
withheld, withdrawn or modified in a manner adverse to Parent its
recommendation in favor of adoption and approval of this Agreement and
approval of the
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Transactions as permitted by Section 5.1, and at or prior to the time
of such action by the Company there shall not have occurred a Material
Adverse Effect on Parent and there shall not be a Superior Proposal at
that time outstanding, then the Company shall pay to Dutchco US
$15,000,000 following the earlier to occur of (x) termination of this
Agreement pursuant to Section 7.1(e) or (y) a Company Negative Vote.
(iii) If no payment shall have been required pursuant to clauses
7.3(b)(i) or 7.3(b)(ii) and (A) there shall be a Company Negative Vote
and at or prior to the time of such Company Negative Vote, there shall
not have occurred a Material Adverse Effect with respect to Parent, or
(B) this Agreement is terminated by Dutchco pursuant to Section 7.1(g),
then Company shall pay to Dutchco an amount equal to US $5,000,000
within one business day following the earlier to occur of (A)
termination of this Agreement pursuant to Section 7.1(g), or (B) a
Company Negative Vote.
(c) Payments by Dutchco to the Company.
(i) If the Board of Directors of Parent shall have withheld,
withdrawn or adversely modified its recommendation in favor of the
Parent Stock Issuance as permitted by Section 5.1, and at or prior to
the time of such action by Parent there shall not have occurred a
Material Adverse Effect on the Company, then Dutchco shall pay US
$15,000,000 within one business day following the earlier of (A)
termination of this Agreement pursuant to Section 7.1(f) or (B) a
Parent Negative Vote (as defined below).
(ii) If (A) the vote of the stockholders of Parent approving the
Parent Stock Issuance shall not have been obtained by reason of the
failure to obtain the required vote upon a vote taken at a meeting of
stockholders duly convened therefor or any adjournment thereof (a
"Parent Negative Vote") and at or prior to the time of such Parent
Negative Vote, there shall not have occurred a Material Adverse Effect
with respect to the Company, (B) this Agreement is terminated by the
Company pursuant to Section 7.1(g), or (C) Parent shall have failed to
convene the Parent Stockholder's Meeting by December 24, 1998, then
Dutchco shall pay to the Company an amount equal to US $5,000,000
within one business day following the earlier to occur of (A)
termination of this Agreement pursuant to Section 7.1(d) or Section
7.1(g), or (B) a Parent Negative Vote.
(d) Payment of the amounts described in Section 7.3(b) and (c) above shall not
be in lieu of damages incurred by a party for breach of this Agreement.
(e) Any fees or expenses incurred by Parent shall be borne by Dutchco to the
extent agreed by Parent and Dutchco.
ARTICLE VIII
General Provisions
8.1 Effectiveness of Representations, Warranties and Agreements. Except as
otherwise provided in this Section 8.1, the representations, warranties and
agreements of each party hereto shall remain operative and in full force and
effect regardless of any investigation made by or on behalf of any other party
hereto, any person controlling any such party or any of their officers or
directors, whether prior to or after the execution of this Agreement. The
representations, warranties and agreements in this Agreement shall terminate
upon consummation of the Transactions or upon the termination of this
Agreement pursuant to Section 7.1, as the case may be, except that any
agreement contemplated by this Agreement which, by its terms, does not
terminate until a later date and the agreements set forth in Sections 5.5,
5.6, 5.9, the ultimate paragraph of Section 5.17(b) and Sections 5.17(c), 5.18
and 5.19 shall survive the consummation of the Transactions indefinitely and
those set forth in Section 7.3 and the final sentence of Section 5.3 shall
survive termination indefinitely. The Confidentiality Agreement(s) shall
survive termination of this Agreement as provided therein.
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8.2 Notices. All notices and other communications given or made pursuant
hereto shall be in writing and shall be deemed to have been duly given or made
as of the date delivered, if delivered personally, three days after being sent
by registered or certified mail (postage prepaid, return receipt requested),
one day after dispatch by recognized overnight courier (provided delivery is
confirmed by the courier), and upon transmission by telecopy, confirmed
received, to the parties at the following addresses (or at such other address
for a party as shall be specified by like changes of address shall be
effective upon receipt) or sent by electronic transmission, with confirmation
received, to the telecopy number specified below:
(a) If to Parent, Dutchco, Giants Quebec, ACI or Amalgamation Sub:
Autodesk, Inc.
20400 Stevens Creek Boulevard
Cupertino, CA 95401-2217
Fax No.: (408) 517-1886
Attention: Marcia K. Sterling
Vice President Business Development, General Counsel and
Secretary
With a copy to:
Wilson Sonsini Goodrich & Rosati
650 Page Mill Road
Palo Alto, CA 94304
Fax No.: (650) 493-6811
Attention: Mark A. Bertelsen
and
Aird & Berlis
BCE Place
Suite 1800, Box 754
181 Bay Street
Toronto, Ontario M5J 2T9
Fax No.: (416) 863-1515
Attention: Jay A. Lefton
(b) If to the Company:
Discreet Logic Inc.
10 Duke Street
Montreal, Quebec Canada H3C 2L7
Fax No.: (514) 393-3996
Attention: Francois Plamondon
Executive Vice President, Chief Financial Officer, Treasurer
and Secretary
With a copy to:
Testa, Hurwitz & Thibeault, LLP
High Street Tower
125 High Street
Boston, MA 02110
Fax No.: (617) 248-7100
Attention: Mark J. Macenka
and to:
Stikeman, Elliott
1155 Rene Levesque Boulevard West
Suite 4000
Montreal, Quebec H3B 3V2
Fax No.: (514) 397-3222
Attention: Christine Desaulniers
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8.3 Certain Definitions. For purposes of this Agreement, the term:
(a) "affiliates" means a person that directly or indirectly, through one
or more intermediaries, controls, is controlled by, or is under common
control with, the first-mentioned person; including, without limitation,
any partnership or joint venture in which the Company (either alone, or
through or together with any other subsidiary) has, directly or indirectly,
an interest of 10 percent or more;
(b) "business day" means any day other than a Saturday, Sunday or a day
when banks are not open for business in either of San Francisco, California
and Montreal, Quebec;
(c) "control" (including the terms "controlled by" and "under common
control with") means the possession, directly or indirectly or as trustee
or executor, of the power to direct or cause the direction of the
management or policies of a person, whether through the ownership of stock,
as trustee or executor, by contract or credit arrangement or otherwise;
(d) "person" means an individual, corporation, partnership, association,
trust, unincorporated organization, other entity or group (as defined in
Section 13(d)(3) of the Exchange Act); and
(e) "subsidiary" or "subsidiaries" of the Company, the Continuing
Corporation, Parent or any other person means any corporation, partnership,
joint venture or other legal entity of which the Company, the Continuing
Corporation, Parent or such other person, as the case may be (either alone
or through or together with any other subsidiary), owns, directly or
indirectly, more than 50% of the stock or other equity interests the
holders of which are generally entitled to vote for the election of the
board of directors or other governing body of such corporation or other
legal entity.
8.4 Amendment. This Agreement may be amended by the parties hereto by action
taken by or on behalf of their respective Boards of Directors at any time
prior to the Effective Time; provided, however, that, after approval of the
Transactions by the shareholders of the Company, no amendment may be made
which by law requires further approval by such shareholders without such
further approval. This Agreement may not be amended except by an instrument in
writing signed by the parties hereto.
8.5 Waiver. At any time prior to the Effective Time, any party hereto may
with respect to any other party hereto (a) extend the time for the performance
of any of the obligations or other acts, (b) waive any inaccuracies in the
representations and warranties contained herein or in any document delivered
pursuant hereto and (c) waive compliance with any of the agreements or
conditions contained herein. Any such extension or waiver shall be valid if
set forth in an instrument in writing signed by the party or parties to be
bound thereby.
8.6 Headings. The headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement.
8.7 Severability. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any rule of law, or public
policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any
manner adverse to any party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties
hereto shall negotiate in good faith to modify this Agreement so as to effect
the original intent of the parties as closely as possible in an acceptable
manner to the end that transactions contemplated hereby are fulfilled to the
extent possible.
8.8 Entire Agreement. This Agreement, together with the Amalgamation
Agreement and the Confidentiality Agreement, constitutes the entire agreement
and supersedes all prior agreements and undertakings (other than the
Amalgamation Agreement and the Confidentiality Agreement), both written and
oral, among the parties, or any of them, with respect to the subject matter
hereof and, except as otherwise expressly provided herein, are not intended to
confer upon any other person any rights or remedies hereunder.
8.9 Assignment; Amalgamation Sub/Dutchco.
(a) This Agreement shall not be assigned by operation of law or otherwise,
except that any member of the Parent Group may assign all or any of its
respective rights hereunder to any subsidiary of Parent provided
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that no such assignment shall relieve the assigning party of its obligations
hereunder. The Company agrees that prior to the Effective Time, it may amend
the Amalgamation Agreement to provide for the amalgamation of one or more of
Parent's Canadian subsidiaries with the Company; provided, however, that, such
amalgamation does not, in any respect adversely affect the ability of the
parties to complete the transaction contemplated hereby or, affect the
economic terms of the transactions contemplated hereby to the holders of the
Company Common Shares, including, without limitation, the tax treatment to
holders who elect to receive Exchangeable Shares.
(b) Parent undertakes to the Company that Parent shall cause Dutchco to
perform in a due and timely manner all of its obligations hereunder and to be
performed by it under the Ancillary Documents and in connection with the
implementation of the Transactions and that Parent shall cause Dutchco to
refrain from taking or omitting to take any action which would have an adverse
economic effect on the implementation of the Transactions as contemplated
herein.
8.10 Parties in Interest. This Agreement shall be binding upon and inure
solely to the benefit of each party hereto, and nothing in this Agreement,
express or implied, is intended to or shall confer upon any other person any
right, benefit or remedy of any nature whatsoever under or by reason of this
Agreement, other than Section 5.8 (which is intended to be for the benefit of
the Indemnified Parties and may be enforced by such Indemnified Parties).
8.11 Failure or Indulgence Not Waiver; Remedies Cumulative. No failure or
delay on the part of any party hereto in the exercise of any right hereunder
shall impair such right or be construed to be a waiver of, or acquiescence in,
any breach of any representation, warranty or agreement herein, nor shall any
single or partial exercise of any such right preclude other or further
exercise thereof or of any other right. All rights and remedies existing under
this Agreement are cumulative to, and not exclusive of, any rights or remedies
otherwise available.
8.12 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF CALIFORNIA APPLICABLE TO
CONTRACTS EXECUTED AND FULLY PERFORMED WITHIN THE STATE OF CALIFORNIA, EXCEPT
TO THE EXTENT MANDATORILY GOVERNED BY QUEBEC LAW.
8.13 Choice of Language. The parties hereto confirm that it is their wish
that this Agreement, as well as all other documents related hereto, including
legal notices, have been and shall be drawn up in the English language only.
Les parties si-dessous confirment leur desir que cet accord ainsi que tous les
documents, y compris tous avis qui s'y rattachent, soient rediges en langue
Anglaise.
8.14 Counterparts. This Agreement may be executed in one or more
counterparts, and by the different parties hereto in separate counterparts,
each of which when executed shall be deemed to be an original but all of which
taken together shall constitute one and the same agreement.
8.15 Guarantee. Parent and Dutchco hereby unconditionally and irrevocably
guarantee the full and punctual performance of the Continuing Corporation's
obligations hereunder and pursuant to the Amalgamation Agreement.
[Remainder of Page Intentionally Left Blank]
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<PAGE>
In Witness Whereof, Parent, Dutchco, Amalgamation Sub, Giants Quebec, ACI and
the Company have caused this Agreement to be executed as of the date first
written above by their respective officers thereunto duly authorized.
"Parent"
Autodesk, Inc.
/s/ Carol A. Bartz
By:__________________________________
Carol A. Bartz
Chief Executive Officer
"Dutchco"
Autodesk Development B.V.
/s/ Michael E. Sutton
By:__________________________________
Michael E. Sutton
Directeur
"Amalgamation Sub"
9066-9771 Quebec Inc.
/s/ Marcia K. Sterling
By:__________________________________
Marcia K. Sterling
Secretary
"ACI"
Autodesk Canada Inc.
/s/ Carol A. Bartz
By:__________________________________
Carol A. Bartz
President
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"Giants Quebec"
9066-9854 Quebec Inc.
/s/ Marcia K. Sterling
By:__________________________________
Marcia K. Sterling
Secretary
"Company"
Discreet Logic Inc.
/s/ Francois Plamondon
By:__________________________________
Francois Plamondon
Executive Vice President and
Chief Financial Officer
39
<PAGE>
AMENDMENT TO SECOND AMENDED AND RESTATED AGREEMENT AND PLAN OF ACQUISITION AND
AMALGAMATION
This Amendment (the "Amendment") to the Second Amended and Restated
Agreement and Plan of Acquisition and Amalgamation by and among Autodesk, Inc.
("Parent"), Autodesk Development B.V. ("Dutchco"), 9066-9771 Quebec Inc.
("Amalgamation Sub"), Autodesk Canada Inc. ("ACI"), 9066-9854 Quebec Inc.
("Giants Quebec") and Discreet Logic Inc. (the "Company") dated as of November
18, 1998 (the "Second Amended and Restated Agreement"), is entered into by and
among each of the parties to the Second Amended and Restated Agreement
effective as of December 18, 1998.
RECITALS
Whereas, Parent, Dutchco, Amalgamation Sub, ACI, Giants Quebec and the
Company entered into an Agreement and Plan of Acquisition and Arrangement
dated as of August 20, 1998, which was subsequently amended and restated in
its entirety by the parties in the Amended and Restated Agreement and Plan of
Acquisition and Amalgamation dated as of September 23, 1998, and again amended
and restated in its entirety in the Second Amended and Restated Agreement;
Whereas, the Second Amended and Restated Agreement provides, among other
things, that upon the terms and subject to the conditions thereof, immediately
following the amalgamation (the "Amalgamation") of Amalgamation Sub, Giants
Quebec (to which ACI will assign, prior to the Amalgamation, substantially all
its assets) and the Company, whereupon each outstanding Company Common Share
shall be converted into one Class B Share of the Continuing Corporation
resulting from the Amalgamation, the Class B Shares of the Continuing
Corporation automatically will be, based on the prior election of their
holder, either (i) redeemed by the Continuing Corporation for 0.48
exchangeable shares in the share capital of the Continuing Corporation,
subject to proration in certain instances, or (ii) converted into units
comprised of one Class E Share and one Class F Share of the Continuing
Corporation, which units will be acquired by Dutchco in exchange for 0.48
shares of Parent Common Stock; and
Whereas, the parties now desire to amend Article VII of the Second Amended
and Restated Agreement to effect certain changes to the termination provisions
thereof;
AGREEMENT
Now, therefore, in consideration of the foregoing and of the mutual
covenants and agreements set forth herein and for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the
parties hereto agree as follows:
1. Termination. Article VII of the Second Amended and Restated Agreement is
hereby amended as follows:
(a) Section 7.1(g) shall be amended such that each reference to "December 31,
1998" shall be replaced with a reference to "the Final Date".
(b) Section 7.3(b)(i)(C) shall be amended such that the reference to "December
24, 1998" shall be replaced with a reference to "February 23, 1999".
(c) Section 7.3(c)(ii) shall be amended such that the reference to "December
24, 1998" shall be replaced with a reference to "February 23, 1999".
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<PAGE>
2. General.
(a) All other terms and conditions of the Second Amended and Restated
Agreement, including without limitation the representations, warranties,
covenants and agreements of the respective parties, shall remain in full force
and effect without other or further amendment or modification, fully applying
to the Second Amended and Restated Agreement as amended by this Amendment.
(b) Each capitalized term used in this Amendment but not defined herein shall
have the meaning ascribed to it in the Second Amended and Restated Agreement.
All section references in this Agreement are to the Second Amended and
Restated Agreement.
(c)This Amendment may be executed in one or more counterparts, each of which
shall be deemed an original, but all of which, when taken together, shall
constitute one and the same instrument.
[Remainder of Page Intentionally Left Blank]
41
<PAGE>
In witness whereof, the parties hereto have caused this Amendment to be
executed by their respective duly authorized officers as of the date first
above written.
"Parent"
Autodesk, Inc.
/s/ Carol A. Bartz
By:__________________________________
Carol A. Bartz
Chief Executive Officer
"Dutchco"
Autodesk Development B.V.
/s/ Michael E. Sutton
By:__________________________________
Michael E. Sutton
Directeur
"Amalgamation Sub"
9066-9771 Quebec Inc.
/s/ Marcia K. Sterling
By:__________________________________
Marcia K. Sterling
Secretary
"ACI"
Autodesk Canada Inc.
/s/ Carol A. Bartz
By:__________________________________
Carol A. Bartz
President
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<PAGE>
"Giants Quebec"
9066-9854 Quebec Inc.
/s/ Marcia K. Sterling
By:__________________________________
Marcia K. Sterling
Secretary
"Company"
Discreet Logic Inc.
/s/ Francois Plamondon
By:__________________________________
Francois Plamondon
Executive Vice President and
Chief Financial Officer
43
<PAGE>
AMENDMENT NO. 2 TO SECOND AMENDED AND RESTATED AGREEMENT AND PLAN OF
ACQUISITION AND AMALGAMATION
This Amendment No. 2 (the "Second Amendment") to the Second Amended and
Restated Agreement and Plan of Acquisition and Amalgamation by and among
Autodesk, Inc. ("Parent"), Autodesk Development B.V. ("Dutchco"), 9066-9771
Quebec Inc. ("Amalgamation Sub"), Autodesk Canada Inc. ("ACI"), 9066-9854
Quebec Inc ("Giants Quebec") and Discreet Logic Inc (the "Company") dated as
of November 18, 1998 (the "Second Amended and Restated Agreement"), as amended
by the Amendment dated December 18, 1998 (the "First Amendment"), is entered
into by and among each of the parties to the Second Amended and Restated
Agreement effective as of January 18, 1999.
RECITALS
Whereas, Parent, Dutchco, Amalgamation Sub, ACI, Giants Quebec and the
Company entered into an Agreement and Plan of Acquisition and Arrangement
dated as of August 20, 1998, which was subsequently amended and restated in
its entirety by the parties in the Amended and Restated Agreement and Plan of
Acquisition and Amalgamation dated as of September 23, 1998, and again amended
and restated in its entirety in the Second Amended and Restated Agreement;
Whereas, the Second Amended and Restated Agreement provides, among other
things, that upon the terms and subject to the conditions thereof, immediately
following the amalgamation (the "Amalgamation") of Amalgamation Sub, Giants
Quebec (to which ACI will assign, prior to the Amalgamation, substantially all
its assets) and the Company, whereupon each outstanding Company Common Share
shall be converted into one Class B Share of the Continuing Corporation
resulting from the Amalgamation, the Class B Shares of the Continuing
Corporation automatically will be, based on the prior election of their
holder, either (i) redeemed by the Continuing Corporation for 0.48
exchangeable shares in the share capital of the Continuing Corporation,
subject to proration in certain instances, or (ii) converted into units
comprised of one Class E Share and one Class F Share of the Continuing
Corporation, which units will be acquired by Dutchco in exchange for 0.48
shares of Parent Common Stock; and
Whereas, the parties now desire to amend the Exchange Ratio set forth in the
Second Amended and Restated Agreement, and to make certain representations and
warranties to each other as of the date hereof;
AGREEMENT
Now, Therefore, in consideration of the foregoing and of the mutual
covenants and agreements set forth herein and for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the
parties hereto agree as follows:
1. Exchange Ratio. The recitals to the Second Amended and Restated Agreement
are hereby amended such that all occurrences in the recitals of the term
"0.48" shall be replaced in each case with "0.33" and the term "Exchange
Ratio" shall be defined as 0.33.
2. Representations and Warranties of the Company. The Company hereby
represents to each member of the Parent Group as of the date hereof, subject
to the Company Disclosure Schedule dated as of the date of the Original
Agreement:
(a) Authority. The Company has all necessary corporate power and authority
to execute and deliver this Second Amendment and to perform its obligations
hereunder and to consummate the transactions contemplated hereby. The
execution and delivery of this Second Amendment by the Company and the
consummation by the Company of the transactions contemplated thereby have been
duly and validly authorized
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by all necessary corporate action and no other corporate proceedings on the
part of the Company are necessary to authorize this Second Amendment or to
consummate the Transactions, other than the approval and adoption of the
Second Amended and Restated Agreement, as amended, and confirmation of by-law
No. 1998-1 approving the Amalgamation by the holders of at least sixty-six and
two-thirds percent (66 2/3%) of the outstanding Company Shares who are
permitted to, and who, vote at the Company Shareholders' Meeting in accordance
with the Quebec Act. The Board of Directors of the Company has determined that
it is advisable and in the best interests of the Company's shareholders for
the Company to enter into a business combination with Parent upon the terms
and subject to the conditions of the Second Amended and Restated Agreement, as
amended, and to recommend that the shareholders of the Company approve same.
This Second Amendment has been duly and validly executed and delivered by the
Company, and assuming the due authorization, execution and delivery hereof by
each member of the Parent Group, constitutes a legal, valid and binding
obligation of the Company.
(b) No Conflict. The execution and delivery of this Second Amendment by
the Company does not, and the performance of the Company's obligations under
this Second Amendment will not, (i) conflict with or violate the Articles of
Incorporation or By-Laws or equivalent organizational documents of the Company
or any of its subsidiaries, (ii) conflict with or violate any law, rule,
regulation, order, judgment or decree applicable to the Company or any of its
subsidiaries or by which its or any of their respective properties is bound or
affected, or (iii) result in any breach of or constitute a default (or an
event that with notice or lapse of time or both would become a default), or
impair the Company's or any of its subsidiaries' rights or, to the Company's
knowledge, alter the rights or obligations of any third party under, or give
to others any rights of termination, amendment, acceleration or cancellation
of any Covered Agreement, or result in the creation of a lien or encumbrance
on any of the properties or assets of the Company or any of its subsidiaries
pursuant to any note, bond, mortgage, indenture, contract, agreement, lease,
license, permit, franchise or other instrument or obligation to which the
Company or any of its subsidiaries is a party or by which the Company or any
of its subsidiaries or its or any of their respective properties is bound or
affected, except in the case of (ii) and (iii) for any such conflicts,
violations, breaches, defaults, terminations, cancellations or accelerations
which would not have a Material Adverse Effect.
(c) Required Filings. The execution and delivery of this Second Amendment
by the Company does not, and the performance of the transactions contemplated
hereby and by the Second Amended and Restated Agreement, as amended, will not,
require any consent, approval, authorization or permit of, or filing with or
notification to, any governmental or regulatory authority, domestic or
foreign, to be made or obtained by the Company, except (i) for applicable
requirements, if any, of the Securities Act, the Exchange Act, Blue Sky Laws,
the pre-merger notification requirements of the HSR Act, the QSA and other
relevant Canadian securities statutes, filing with Industry Canada under the
Investment Canada Act (Canada), filing under the Competition Act (Canada) and
the filing and recordation of appropriate documents as required by the Quebec
Act in connection with the Amalgamation and (ii) where the failure to obtain
such consents, approvals, authorizations or permits, or to make such filings
or notifications, would not prevent or materially delay consummation of the
Amalgamation, or otherwise prevent or materially delay the Company from
performing its obligations under this Second Amendment or the Second Amended
and Restated Agreement, as amended, or would not otherwise have a Material
Adverse Effect.
(d) Opinion of Financial Advisor. The Company has received an oral opinion
from its financial advisor, Volpe Brown Whelan & Company (to be subsequently
confirmed in writing), to the effect that, as of the date hereof, the
consideration to be received by the shareholders of the Company pursuant to
the Second Amendment and the Second Amended and Restated Agreement, as
amended, is fair to such shareholders from a financial point of view.
3. Representations and Warranties of the Parent Group. Each member of the
Parent Group hereby represents to the Company as of the date hereof, subject
to the Parent Disclosure Schedule dated as of the date of the Original
Agreement:
(a) Authority. Each member of the Parent Group has all necessary corporate
power and authority to execute and deliver this Second Amendment and to
perform its obligations hereunder and to consummate
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the transactions contemplated hereby. The execution and delivery of this
Second Amendment by each member of the Parent Group and the consummation by
each member of the Parent Group of the transactions contemplated hereby have
been duly and validly authorized by all necessary corporate action on the part
of each member of the Parent Group, and no other corporate proceedings on the
part of any such member are necessary to authorize this Agreement or to
consummate the Transactions (other than the approval of the Parent Stock
Issuance and/or the adoption of the Second Amendment and Restated Agreement,
as amended, and the transactions contemplated thereby by the requisite vote of
the stockholders of Parent, to the extent necessary). The Boards of Directors
of Parent and Dutchco have determined that it is advisable and in the best
interest of Parent's stockholders and Dutchco's stockholder for Parent and
Dutchco to enter into a business combination with the Company upon the terms
and subject to the conditions of the Second Amended and Restated Agreement, as
amended (including by this Second Amendment) and to recommend that the
stockholders of Parent approve same. This Second Amendment has been duly and
validly executed and delivered by each member of the Parent Group and,
assuming the due authorization, execution and delivery by the Company,
constitutes a legal, valid and binding obligation of each member of the Parent
Group.
(b) No Conflict. The execution and delivery of this Second Amendment by
each member of the Parent Group do not, and the performance of the Company's
obligations under this Second Amendment by each member of the Parent Group
will not, (i) conflict with or violate the Certificate of Incorporation or By-
Laws (or similar charter documents, as the case may be) of any member of the
Parent Group, (ii) conflict with or violate any law, rule, regulation, order,
judgment or decree applicable to Parent or any of its subsidiaries or by which
its or their respective properties are bound or affected, or (iii) result in
any breach of or constitute a default (or an event which with notice or lapse
of time or both would become a default) under, or impair Parent's or any of
its subsidiaries' rights or alter the rights or obligations of any third party
under, or to the knowledge of Parent, give to others any rights of
termination, amendment, acceleration or cancellation of, any material contract
or result in the creation of a lien or encumbrance on any of the properties or
assets of Parent or any of its subsidiaries pursuant to any material note,
bond, mortgage, indenture, contract, agreement, lease, license, permit,
franchise or other instrument or obligation to which Parent or any of its
subsidiaries is a party or by which Parent or any of its subsidiaries or its
or any of their respective properties are bound or affected, except in the
case of (ii) and (iii) for any such breaches, defaults or other occurrences
that would not have a Material Adverse Effect.
(c) Required Filings. The execution and delivery of this Second Amendment
by each member of the Parent Group does not, and the performance of the
transactions contemplated hereby and by the Second Amended and Restated
Agreement, as amended will not, require any material consent, approval,
authorization or permit of, or filing with or notification to, any
governmental or regulatory authority, domestic or foreign, except (i) for
applicable requirements, if any, of the Securities Act, the Exchange Act, the
Blue Sky Laws, the pre-merger notification requirements of the HSR Act,
relevant Canadian securities statutes, filing with Industry Canada under the
Investment Canada Act (Canada), filing under the Competition Act (Canada) and
the filing and recordation of appropriate merger or other documents as
required by the Quebec Act and (ii) where the failure to obtain such consents,
approvals, authorizations or permits, or to make such filings or
notifications, would not prevent or materially delay consummation of the
Amalgamation, or otherwise prevent any member of the Parent Group from
performing its respective obligations under this Second Amendment, or the
Second Amended and Restated Agreement, as amended, and would not have a
Material Adverse Effect.
(d) Board Approval. The Board of Directors of Parent has, as of the date
of this Second Amendment, determined to recommend that the stockholders of
Parent approve the Parent Stock Issuance.
4. Termination. Article VII of the Second Amended and Restated Agreement is
hereby amended as follows:
(a) Section 7.3(b)(i)(C) shall be amended such that the reference to
"February 23, 1999" shall be replaced with a reference to "March 23, 1999".
(b) Section 7.3(c)(ii) shall be amended such that the reference to
"February 23, 1999" shall be replaced with a reference to "March 23, 1999".
46
<PAGE>
5. General.
(a) All other terms and conditions of the Second Amended and Restated
Agreement, as amended by the First Amendment, including without limitation the
representations, warranties, covenants and agreements of the respective
parties, shall remain in full force and effect without other or further
amendment or modification, fully applying to the Second Amended and Restated
Agreement as amended by the First Amendment and this Second Amendment.
(b) Each capitalized term used in this Second Amendment but not defined
herein shall have the meaning ascribed to it in the Second Amended and
Restated Agreement. All section references in this Agreement are to the Second
Amended and Restated Agreement.
(c) This Second Amendment may be executed in one or more counterparts, each
of which shall be deemed an original, but all of which, when taken together,
shall constitute one and the same instrument.
[Remainder of Page Intentionally Left Blank]
47
<PAGE>
In witness whereof, the parties hereto have caused this Amendment to be
executed by their respective duly authorized officers as of the date first
above written.
"Parent"
Autodesk, Inc.
/s/ Carol A. Bartz
By:__________________________________
Carol A. Bartz
Chief Executive Officer
"Dutchco"
Autodesk Development B.V.
/s/ Michael E. Sutton
By:__________________________________
Michael E. Sutton
Directeur
"Amalgamation Sub"
9066-9771 Quebec Inc.
/s/ Marcia K. Sterling
By:__________________________________
Marcia K. Sterling
Secretary
"ACI"
Autodesk Canada Inc.
/s/ Carol A. Bartz
By:__________________________________
Carol A. Bartz
President
48
<PAGE>
"Giants Quebec"
9066-9854 Quebec Inc.
/s/ Marcia K. Sterling
By:__________________________________
Marcia K. Sterling
Secretary
"Company"
Discreet Logic Inc.
/s/ Francois Plamondon
By:__________________________________
Francois Plamondon
Executive Vice President and
Chief Financial Officer
49
<PAGE>
EXHIBIT 2.2
THIS SECOND AMENDED AND RESTATED AMALGAMATION AGREEMENT ("Agreement") is
made as of the 18th day of January, 1999
BETWEEN:
DISCREET LOGIC INC., a company incorporated
under the laws of Quebec
(the "Company")
--and--
9066-9854 QUEBEC INC., a company incorporated
under the laws of Quebec
("Autodesk Quebec")
--and--
9066-9771 QUEBEC INC., a company incorporated
under the laws of Quebec
("Amalgamation Sub")
--and--
AUTODESK, INC., a corporation incorporated
under the laws of Delaware
("Autodesk"), as Intervenant
RECITALS:
A. The Company was incorporated under Part 1A of the Companies Act (Quebec),
as amended (the "Quebec Act") by certificate of incorporation dated September
10, 1991;
B. Autodesk Quebec was incorporated under Part 1A of the Quebec Act by
certificate of incorporation dated August 14, 1998;
C. Amalgamation Sub was incorporated under Part 1A of the Quebec Act by
certificate of incorporation dated August 14, 1998;
D. The parties entered into an Amalgamation Agreement dated September 23,
1998 (the "Original Agreement"), which was amended and restated in its
entirety by the parties on December 18, 1998 (the "Existing Agreement").
E. The authorized share capital of the Company consists of an unlimited
number of common shares (the "Company Common Shares") and an unlimited number
of preferred shares;
F. As at December 31, 1998 there were 29,935,666 Company Common Shares
issued and outstanding as fully paid and non-assessable shares and there were
no preferred shares outstanding;
G. The authorized share capital of Autodesk Quebec consists of an unlimited
number of common shares (the "Autodesk Quebec Common Shares");
H. As at the date of this Agreement, one hundred Autodesk Quebec Common
Shares were issued and outstanding as fully paid and non-assessable shares and
are held and beneficially owned indirectly by Autodesk;
I. The authorized share capital of Amalgamation Sub consists of an unlimited
number of common shares (the "Amalgamation Sub Common Shares");
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<PAGE>
J. As at the date of this Agreement, one hundred Amalgamation Sub Common
Shares were issued and outstanding as fully paid and non-assessable shares and
are held by Autodesk Development B.V. ("Dutchco");
K. The Company, Autodesk Quebec and Amalgamation Sub have agreed to
amalgamate pursuant to the Quebec Act upon the terms and conditions set forth
in this Agreement; and
L. It is desirable that the Original Agreement and the Existing Agreement be
terminated and the amalgamation contemplated by this Agreement be effected.
NOW THEREFORE in consideration of the mutual covenants and agreements
contained herein and other good and valuable consideration (the receipt and
sufficiency of which are hereby acknowledged) the parties agree as follows:
ARTICLE 1
Interpretation
1.1 Interpretation. In this Agreement, the following terms shall have the
following meanings:
"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; provided, however, that any former directors, executive
officers or principal shareholders of the Company who may be deemed to be an
affiliate of Parent, after the Effective Date, shall not be considered an
"Affiliate" for purposes of this Agreement.
"Agreement" means this amalgamation agreement as the same may be amended
from time to time and the expressions "hereof", "herein", "hereto",
"hereunder", "hereby" and similar expressions refer to this Agreement.
"Amalgamation" means the amalgamation of the Amalgamating Companies pursuant
to the Articles of Amalgamation.
"Amalgamating Companies" means the Company, Autodesk Quebec and Amalgamation
Sub.
"Amalgamation Sub" means 9066-9771 Quebec Inc., a company incorporated under
the Quebec Act.
"Articles of Amalgamation" means the articles of amalgamation to be filed
with the Inspector General of Financial Institutions pursuant to section
123.118 of the Quebec Act to give effect to this Agreement.
"Autodesk Quebec" means 9066-9854 Quebec Inc., a company incorporated under
the Quebec Act.
"Business Day" means any day other than a Saturday, Sunday or a day when
banks are not open for business in either of San Francisco, California and
Montreal, Quebec.
"Certificate of Amalgamation" means the certificate of amalgamation to be
issued to the Corporation by the Inspector General of Financial Institutions
under the Quebec Act in respect of the Amalgamation.
"Class A Shares" means the Class A voting common shares in the share capital
of the Corporation.
"Class B Shares" means the Class B non-voting common shares in the share
capital of the Corporation.
"Class C Shares" means the Class C non-voting preferred shares in the share
capital of the Corporation.
2
<PAGE>
"Class D Shares" means the Class D non-voting preferred shares in the share
capital of the Corporation.
"Class E Shares" means the Class E voting common shares in the share capital
of the Corporation.
"Class F Shares" means the Class F non-voting common shares in the share
capital of the Corporation.
"Combination Agreement" means the Second Amended and Restated Agreement and
Plan of Acquisition and Amalgamation by and among the Parent, Dutchco,
Autodesk Canada Inc., the Company, Autodesk Quebec and Amalgamation Sub dated
as of November 18, 1998, as amended on December 18, 1998 and January 18, 1999,
providing for, among other things, the Amalgamation and related transactions.
"Company" means Discreet Logic Inc., a company incorporated under the Quebec
Act.
"Company Common Shares" means the common shares in the share capital of the
Company.
"Company Meeting" means the special general meeting of the shareholders of
the Company to be held to consider the Amalgamation.
"Corporation" means the company resulting from the Amalgamation.
"Dutchco" means Autodesk Development B.V., a corporation subsisting under
the laws of The Netherlands, where applicable, or such other subsidiary of
Autodesk or Dutchco to which Dutchco has assigned some or all of its rights
under the Combination Agreement.
"Effective Date" means the date of the Amalgamation as set forth in the
Certificate of Amalgamation.
"Exchangeable Share Provisions" means the rights, privileges, restrictions
and conditions attaching to the Exchangeable Shares as set forth in Appendix A
hereto.
"Exchangeable Shares" means the exchangeable non-voting shares in the share
capital of the Corporation.
"Nasdaq" means the Nasdaq National Market of the Nasdaq Stock Market, Inc.
"Parent" means Autodesk, Inc., a body corporate existing under the laws of
the State of Delaware.
"Parent Common Shares" means the common shares $0.01 par value per share in
the share capital of Parent.
"Quebec Act" means the Companies Act (Quebec), including all regulations
made thereunder, all amendments to such statute or regulations from time to
time, and any statute or regulation that supplements or supersedes such
statute or regulation.
"Special By-Law 1998-1" means the special by-law providing for the
Amalgamation adopted by the directors of the Company, the directors of
Autodesk Quebec and the directors of Amalgamation Sub and to be confirmed by
the shareholders of each of the Amalgamating Companies in accordance with the
Quebec Act.
"Subsidiary" means and includes a direct or indirect subsidiary.
1.2 Sections and Headings; Interpretation. The division of this Agreement
into sections and the insertion of headings are for reference purposes only
and shall not affect the interpretation of this Agreement. Unless otherwise
indicated, any reference in this Agreement to a section or an Appendix refers
to the specified section of or Appendix to this Agreement.
1.3 Number, Gender and Persons. In this Agreement, unless the context
otherwise requires, words importing the singular number include the plural and
vice versa, words importing any gender include all genders
3
<PAGE>
and words importing persons include individuals, corporations, partnerships,
associations, trusts, unincorporated organizations, governmental bodies and
other legal or business entities of any kind.
1.4 Date for any Action. In the event that any date on or by which any
action is required or permitted to be taken hereunder is not a Business Day,
such action shall be required or permitted to be taken on or by the next
succeeding day which is a Business Day.
1.5 Time. All times expressed herein are local time Montreal, Quebec unless
otherwise stipulated herein or therein.
1.6 Currency. Unless otherwise expressly stated herein, all references to
currency in this Agreement are to Canadian dollars, being lawful money of
Canada, and the sign "$" without more shall mean Canadian dollars.
1.7 Statutory References. Any reference in this Agreement to a statute
includes all regulations made thereunder, all amendments to such statute or
regulations in force from time to time, and any statute or regulation that
supplements or supersedes such statute or regulations.
1.8 Concurrent Approval. It is acknowledged that the completion of the
Amalgamation is contingent upon its approval by the requisite majority of the
shareholders of the Company, Amalgamation Sub and Autodesk Quebec, which
approvals shall have been obtained prior to the Effective Date.
ARTICLE 2
Amalgamation
2.1 Amalgamation. The Amalgamating Companies hereby agree to amalgamate
pursuant to the provisions of Chapter XVII of Part 1A of the Quebec Act as at
the Effective Date to continue as one company, the Corporation, under the
Quebec Act on the terms set forth herein.
2.2 Name. The name of the Corporation shall be Discreet Logic Inc.
2.3 Head Office. The head office of the Corporation shall be located in the
Judicial District of Montreal, in the Province of Quebec. Unless changed by
the directors of the Corporation, the address of the head office of the
Corporation shall be 10 Duke Street, Montreal, Quebec, Canada, H3C 2L7.
2.4 Business and Powers. There shall be no restrictions on the business the
Corporation may carry on or on the powers it may exercise.
2.5 Authorized Share Capital. Upon the Amalgamation, the Corporation shall
be authorized to issue:
(a) an unlimited number of Class A Shares;
(b) an unlimited number of Class B Shares;
(c) an unlimited number of Class C Shares;
(d) 150,000 non-voting Class D Shares;
(e) an unlimited number of Class E Shares;
(f) an unlimited number of Class F Shares; and
(g) an unlimited number of Exchangeable Shares,
all of which shall be without par value, except for the Exchangeable Shares
which shall have a par value provided for in the Exchangeable Share
Provisions.
4
<PAGE>
The Class A Shares, the Class B Shares, the Class C Shares, the Class D
Shares, the Class E Shares, the Class F Shares and the Exchangeable Shares
shall have attached thereto the rights, privileges, restrictions and
conditions respectively as set out in Appendix A hereto.
2.6 Share Restrictions. There shall be no restrictions on the issue,
transfer or ownership of shares of the Corporation.
2.7 Number of Directors. The board of directors of the Corporation will,
until otherwise changed in accordance with the Quebec Act, consist of a
minimum of three and a maximum of ten directors.
2.8 Initial Directors and Officers. The three initial directors of the
Corporation shall be:
<TABLE>
<CAPTION>
Name Occupation Office
---- ---------- ------
<S> <C> <C>
Eric B. Herr Executive President
Steve Cakebread Executive Chief Executive
Officer
Marcia K. Sterling Executive Secretary
</TABLE>
These directors will hold office from the Effective Date until the close of
business of the annual meeting of shareholders of the Corporation first
following the date of this Agreement or until their successors are elected or
appointed. The business and affairs of the Corporation will be managed by the
directors, subject to the provisions of the Quebec Act.
2.9 By-laws. The by-laws of the Corporation shall be the by-laws of
Amalgamation Sub in effect immediately prior to the Amalgamation.
2.10 Fiscal Year. The fiscal year of the Corporation shall end on 31 of
each year.
2.11 Officers. Until changed by the directors or until their successors are
appointed, from the Effective Date the officers of the Corporation will be as
follows:
<TABLE>
<CAPTION>
Name Office
---- ------
<C> <S>
Eric B. Herr President
Steve Cakebread Vice-President
Marcia K. Sterling Secretary
</TABLE>
2.12 Auditors. From the Effective Date until the close of business of the
annual meeting of shareholders of the Corporation first following the date of
this Agreement, the auditors of the Corporation will be Ernst & Young,
Chartered Accountants, unless such auditors resign or are removed.
ARTICLE 3
Issuance of Shares on Amalgamation
3.1 Upon the Amalgamation:
(a) each holder of Amalgamation Sub Common Shares outstanding immediately
prior to the Amalgamation will receive one fully paid and non-assessable
Class A Share for each Amalgamation Sub Common Share held and the name of
each holder thereof shall be added to the register of holders of Class A
Shares accordingly and each certificate representing such Amalgamation Sub
Common Shares shall continue to evidence ownership of Class A Shares;
5
<PAGE>
(b) each holder of Autodesk Quebec Common Shares outstanding immediately
prior to the Amalgamation will receive one fully paid and non-assessable
Class C Share for each Autodesk Quebec Common Share held and the name of
each holder thereof shall be added to the register of holders of Class C
Shares accordingly and each certificate representing such Autodesk Quebec
Common Shares shall continue to evidence ownership of Class C Shares; and
(c) each holder of Company Common Shares outstanding immediately prior to
the Amalgamation will receive one fully paid and non-assessable Class B
Share for each Company Common Share held and the name of each holder
thereof shall be added to the register of holders of Class B Shares
accordingly and each certificate representing Company Common Shares shall
continue to evidence ownership of Class B Shares.
ARTICLE 4
Share Capital
4.1 Share Capital. For purposes of the Quebec Act and the Income Tax Act
(Canada):
(a) the issued and paid-up share capital account of the Class A Shares
issued in connection with the Amalgamation will be $100.00;
(b) the issued and paid-up share capital account of the Class B Shares
issued in connection with the Amalgamation will be the aggregate sum of the
aggregate issued and paid-up capital account of all of the outstanding
shares of all classes of Amalgamation Sub, Autodesk Quebec and the Company
for purposes of the Income Tax Act (Canada) determined immediately before
the Amalgamation, minus the amount of issued and paid-up share capital
accounts of the Class A Shares and the Class C Shares; and
(c) the issued and paid up share capital account of the Class C Shares
issued on the Amalgamation will be equal to the sum of $100.00.
ARTICLE 5
Certificates and Fractional Shares
5.1 Share Certificates. No certificates will be issued in respect of the
Class B Shares upon the Amalgamation and, until certificates are issued
representing Parent Common Shares or Exchangeable Shares upon (i) the
retraction of the Class B Shares for Exchangeable Shares or (ii) the
subsequent conversion of the Class B Shares into Class E Shares and Class F
Shares, the redemption of Class E Shares and Class F Shares by the Corporation
for Parent Common Shares or the purchase by Dutchco of the Class E Shares and
the Class F Shares in accordance with their terms, as the case may be, in
exchange for certificates which immediately prior to the Effective Date
represented Company Common Shares, all Class B Shares, Class E Shares and
Class F Shares will be evidenced by certificates representing Company Common
Shares.
5.2 Failure to Deposit Certificates Representing Company Common Shares. Any
certificate representing Company Common Shares not deposited with all other
necessary documents prior to the seventh anniversary of the Effective Date
shall cease to represent a claim or interest of any kind or nature against the
Corporation or Parent, as the case may be. On such date, the Exchangeable
Shares or the Parent Common Shares, as the case may be, to which the former
registered holder of such certificate was entitled shall be deemed to have
been surrendered to the Corporation or Parent together with all dividends,
distributions and interests held for such former registered holder.
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<PAGE>
ARTICLE 6
Amendment
6.1 Amendment
(a) The Company, Autodesk Quebec and Amalgamation Sub reserve the right
to amend, modify and/or supplement this Agreement at any time and from time
to time provided that any such amendment, modification, or supplement must
be contained in a written document which is (i) agreed to by the
Amalgamating Companies and by Parent and Dutchco pursuant to the
Combination Agreement and (ii) communicated to holders of Company Common
Shares (if so required).
(b) Any amendment, modification or supplement to this Agreement may be
proposed by the Company any time prior to or at the Company Meeting
(provided that Parent and Dutchco shall have previously consented thereto
unless otherwise permitted by the Combination Agreement) with or without
any other prior notice or communication, and if so proposed and accepted by
the persons voting at the Company Meeting, shall become part of the
Amalgamation for all purposes.
ARTICLE 7
Conditions Precedent to the Amalgamation
7.1 The respective obligations of the parties to this Agreement to
consummate the transactions contemplated hereby and, in particular, the
Amalgamation, are subject to the satisfaction of the following conditions, any
of which may be waived by the mutual consent of such parties without prejudice
to the right to rely on any other of such conditions:
(a) the holders of the Company Common Shares shall have confirmed Special
By-Law 1998-1, in accordance with the Quebec Act, and the holder of the
Autodesk Quebec Common Shares and the holder of the Amalgamation Sub Common
Shares shall have confirmed a similar special by-law providing for the
Amalgamation;
(b) there shall not be in force any order or decree restraining or
enjoining the consummation of the transactions contemplated by this
Agreement and the Combination Agreement;
(c) all necessary corporate action on the part of the Amalgamating
Companies to authorize the consummation of the transactions contemplated by
this Agreement shall be complete and effective; and
(d) all conditions set forth in the Combination Agreement shall have been
satisfied or waived.
ARTICLE 8
Implementation
8.1 Implementation.
(a) Any director of each of the Amalgamating Companies be and is hereby
authorized to execute and file articles on behalf of such director's
company giving effect to the Amalgamation and to execute and deliver all
other documents and to do all such other acts and things necessary or
desirable to give effect to the Amalgamation.
(b) The Directors of the Company are hereby authorized, if they deem
appropriate in their sole discretion, to revoke the Special By-Law 1998-1
and to not proceed with the Amalgamation without further approval of the
shareholders.
8.2 Effect of Amalgamation. From the date shown on the Certificate of
Amalgamation, each of the Amalgamating Companies shall continue their
existence as one and the same company and the Corporation shall
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<PAGE>
possess all of the property, rights and assets of the Amalgamating Companies
and shall be liable for all of the liabilities and obligations of the
Amalgamating Companies by operation of law.
8.3 Filing of Documents. Subject to the satisfaction or waiver of all
conditions precedent set out in Section 7.1 of this Agreement, the
Amalgamation will be effected by filing, on or prior to December 31, 1998 or
such later date as may be permitted by section 7.1(b) of the Combination
Agreement as the directors of each of the Amalgamating Companies may
determine, of the Articles of Amalgamation as provided under the Quebec Act
together with any and all documents required by the Quebec Act and the
regulations thereunder.
8.4 Termination. This Agreement may, at any time prior to the issuance of a
Certificate of Amalgamation, be terminated by the parties hereto if the
conditions precedent set out in Section 7.1 cannot be met. Notwithstanding
this Agreement, this Agreement shall terminate if a Certificate of
Amalgamation has not been issued on or prior to December 31, 1998 or such
later date as may be permitted under the Combination Agreement.
8.5 Existing Agreement Terminated. This Agreement amends and restates in its
entirety the Original Agreement and Existing Agreement. Accordingly, upon the
execution and delivery hereof by the parties, the Original Agreement and
Existing Agreement shall be terminated in all respects and be of no further
force or effect.
8.6 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the Province of Quebec and the laws of Canada
applicable therein.
8.7 Entire Agreement. This Agreement constitutes the entire agreement among
the parties to this Agreement relating to the Amalgamation and supersedes all
prior agreements and understandings, oral and written, between such parties
with respect to the subject matter hereof.
8.8 English Language. The parties hereto confirm that it is their wish that
this Agreement as well as all other documents relating hereto be drawn upon in
English only. Les parties aux presentes confirment leur volonte que cette
convention de meme que tous les documents s'y rattachant soient rediges en
anglais seulement.
8.9 Guarantee. Autodesk, by its intervention hereto, hereby unconditionally
and irrevocably guarantees the full and punctual performance of the
Corporation's and Dutchco's obligations hereunder and under the Articles of
Amalgamation of the Corporation.
8
<PAGE>
IN WITNESS WHEREOF the parties have executed this Agreement.
Discreet Logic Inc.
9066-9054 Quebec Inc.
By: /s/ Francois Plamondon By: /s/ Marcia K. Sterling
------------------------------- -------------------------------
Francois Plamondon Marcia K. Sterling
Executive Vice President, Chief Secretary
Financial Officer and Secretary
I have the authority to bind the
company
Autodesk, Inc. (As Intervenant)
I have the authority to bind the company
9066-9771 Quebec Inc.
By: /s/ Marcia K. Sterling By: /s/ Carol A. Bartz
------------------------------- -------------------------------
Marcia K. Sterling Carol A. Bartz
Secretary Chairman of the Board and Chief
Executive Officer
I have the authority to bind the company
I have the authority to bind the
corporation
9
<PAGE>
APPENDIX A
SHARE PROVISIONS
Definitions.
For the purposes of these share provisions, except as otherwise indicated:
"Amalgamation" means the amalgamation of Discreet Logic Inc., 9066-9854
Quebec Inc., and 9066-9771 Quebec Inc. under the Quebec Act.
"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 San Francisco, California
and Montreal, Quebec.
"Certificate of Amalgamation" means the certificate of amalgamation to be
issued to the Corporation by the Inspector General of Financial Institutions
under the Quebec Act in respect of the Amalgamation.
"Class A Shares" means the Class A voting common shares in the share capital
of the Corporation.
"Class B Conversion Time" has the meaning ascribed thereto in Section 5.1 of
the provisions attaching to the Class B Shares.
"Class B Retraction Time" has the meaning ascribed thereto in Section 4.1 of
the provisions attaching to the Class B Shares.
"Class B Shares" means the Class B non-voting common shares in the share
capital of the Corporation.
"Class C Shares" means the Class C non-voting preferred shares in the share
capital of the Corporation.
"Class D Redemption Date" has the meaning ascribed thereto in Section 4.2 of
the provisions attaching to the Class D Shares.
"Class D Redemption Price" has the meaning ascribed thereto in Section 4.1
of the provisions attaching to the Class D Shares.
"Class D Shares" means the Class D non-voting preferred shares in the share
capital of the Corporation.
"Class E Redemption Call Purchase Price" has the meaning ascribed thereto in
Section 4.3 of the provisions attaching to the Class E Shares.
"Class E Redemption Call Right" has the meaning ascribed thereto in Section
4.3 of the provisions attaching to the Class E Shares.
"Class E Redemption Price" has the meaning ascribed thereto in Section 4.1
of the provisions attaching to the Class E Shares.
"Class E Redemption Time" has the meaning ascribed thereto in Section 4.1 of
the provisions attaching to the Class E Shares.
"Class E Shares" means the Class E voting common shares in the share capital
of the Corporation.
"Class F Redemption Call Purchase Price" has the meaning ascribed thereto in
Section 4.3 of the provisions attaching to the Class F Shares.
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<PAGE>
"Class F Redemption Call Right" has the meaning ascribed thereto in Section
4.3 of the provisions attaching to the Class F Shares.
"Class F Redemption Price" has the meaning ascribed thereto in Section 4.1
of the provisions attaching to the Class F Shares.
"Class F Redemption Time" has the meaning ascribed thereto in Section 4.1 of
the provisions attaching to the Class F Shares.
"Class F Shares" means the Class F non-voting common shares in the share
capital of the Corporation.
"Company" means Discreet Logic Inc., a predecessor to the Corporation.
"Company Common Shares" means the common shares of the Company.
"Company Meeting" means the special general meeting of the shareholders of
the Company to be held to consider the Amalgamation.
"Corporation" means the company resulting from the Amalgamation.
"Current Market Price" means, in respect of a Parent Common Share on any
date, the Canadian Dollar Equivalent of the average of the closing prices of
Parent Common Shares on Nasdaq on each of the thirty (30) consecutive trading
days ending not more than five trading days before such date, or, if the
Parent Common Shares are not then quoted on Nasdaq, on such other stock
exchange or automated quotation system on which the Parent Common Shares are
listed or quoted, as the case may be, as may be selected by the Board of
Directors of the Corporation for such purpose; provided, however, that if
there is no public distribution or trading activity of Parent Common Shares
during such period, then the Current Market Price of a Parent 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.
"Dutchco" means Autodesk Development B.V., a corporation subsisting under
the laws of The Netherlands or, where applicable, such other subsidiary of
Autodesk or Dutchco to which Dutchco has assigned some or all of its rights
under the Combination Agreement.
"Effective Date" means the date of the Amalgamation as set forth in the
Certificate of Amalgamation.
"Effective Time" means 4:28 p.m. (Montreal time) on the Effective Date.
"Election Deadline" has the meaning ascribed thereto in section 4.1 of the
provisions attaching to the Class B Shares.
"Exchangeable Share Provisions" means the rights, privileges, restrictions
and conditions attaching to the Exchangeable Shares as set forth herein.
"Exchangeable Shares" means the exchangeable non-voting shares in the share
capital of the Corporation.
"Maximum Number" means the number that is equal to 19.99% of the number of
Company Common Shares outstanding immediately prior to the Amalgamation
multiplied by 0.33.
"Nasdaq" means the Nasdaq National Market.
"Parent" means Autodesk, Inc., a body corporate existing under the laws of
the State of Delaware.
"Parent Common Shares" means the common shares in the share capital of
Parent.
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"Quebec Act" means the Companies Act (Quebec), as amended.
"Transfer Agent" means The Trust Company of Bank of Montreal or such other
entity as may from time to time be the registrar and transfer agent for the
Exchangeable Shares.
PROVISIONS ATTACHING TO CLASS A SHARES
The Class A voting common shares in the share capital of the Corporation
shall have attached thereto the following rights, privileges, restrictions and
conditions:
1 Dividends
1.1 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 monies 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 of the
Class B Shares, the Class C Shares, the Class D Shares, the Class E Shares,
the Class F Shares or the Exchangeable Shares.
2 Dissolution
2.1 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 the Exchangeable
Shares in the capital of the Corporation, the Class D Shares, the Class C
Shares and to 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 of the Corporation, the holders of the Class A
Shares shall be entitled to receive the remaining property and assets of the
Corporation rateably with the holders of the Class B Shares, the Class E
Shares and the Class F Shares.
3 Voting Rights
3.1 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,
together with the holders of Class E Shares, 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.
4 Amendment and Approval
4.1 The rights, privileges, restrictions and conditions attaching to the
Class A Shares may be added to, changed or removed but only with the approval
of the holders of the Class A Shares given as hereinafter specified, and any
other approval required by law.
4.2 Any approval given by the holders of the Class A Shares to add to,
change or remove any right, privilege, restriction or condition attaching to
the Class A Shares or any other matter requiring the approval or consent of
the holders of the Class A 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 written resolution
signed by all holders of Class A Shares or by resolution passed by not less
than two-thirds of the votes cast on such resolution at a meeting of holders
of Class A Shares duly called and held at which the holders of at least 50% of
the outstanding Class A 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 Class A Shares at that time
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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 ten 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 Class A 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 Class A Shares.
PROVISIONS ATTACHING TO CLASS B SHARES
The Class B non-voting common shares in the share capital of the Corporation
shall have attached thereto the following rights, privileges, restrictions and
conditions:
1 Dividends
1.1 Subject to the prior rights of the holders of any shares ranking senior
to the Class B Shares with respect to priority in the payment of dividends,
the holders of Class B 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 monies 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 B Shares shall be declared and paid in equal amounts per share on
all Class B 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 B Shares without declaring dividends on any of the
Class A Shares, the Class C Shares, the Class D Shares, the Class E Shares,
the Class F Shares or the Exchangeable Shares.
2 Dissolution
2.1 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 the Exchangeable
Shares in the share capital of the Corporation, the Class D Shares and the
Class C Shares and to any other shares ranking senior to the Class B Shares
with respect to priority in the distribution of assets upon dissolution,
liquidation or winding-up, the holders of the Class B Shares shall be entitled
to receive the remaining property and assets of the Corporation rateably with
the holders of the Class A Shares, the Class E Shares and the Class F Shares.
3 Voting Rights
3.1 Except where specifically provided by the Quebec Act, the holders of the
Class B Shares shall not be entitled to receive notice of or to attend
meetings of the shareholders of the Corporation and shall not be entitled to
vote at any meeting of shareholders of the Corporation, but shall be entitled
to notice of meetings of shareholders called for the purpose of authorizing
the dissolution of the Corporation or the sale, lease or exchange of all or
substantially all of the property of the Corporation.
4 Retraction
4.1 A holder of Class B Shares shall be entitled immediately following the
Effective Time (the "Class B Retraction Time"), subject to applicable law and
otherwise upon compliance with and subject to the provisions of this Section
4, to require the Corporation to redeem all or any number of the Class B
Shares registered in the name of such holder for an amount per share equal to
the Current Market Price of 0.33 of one Parent Common Share on the last
Business Day prior to the Class B Retraction Time, which shall be satisfied in
full by the Corporation causing to be delivered to such holder 0.33 of one
Exchangeable Share for each Class B Share presented and surrendered by the
holder (the "Class B Retraction Price"). To effect such redemption, the holder
shall no later than 4:29 p.m. (Montreal time) on the Effective Date (the
"Election Deadline") present and surrender at the head office of the Company
acting on behalf of the Corporation or the Corporation or at any
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office of the Transfer Agent or such other place as may be specified by the
Corporation by notice to the holders of the Company's Common Shares (on behalf
of the holders of the Class B Shares) the certificate or certificates
representing the Class B Shares which the holder desires to have the
Corporation redeem (evidenced by the certificate or certificates representing
the Company's Common Shares which, as a result of the Amalgamation, represent
such Class B Shares), together with such other documents and instruments as
may be required to effect a transfer of Class B Shares under the Quebec Act
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 "Class B Retraction Request") in such form as may
be acceptable to the Corporation specifying that the holder desires to have
all or any number specified therein of the Class B Shares represented by such
certificate or certificates (the "Retracted Shares") redeemed by the
Corporation.
4.2 Upon receipt by the Corporation or the Transfer Agent in the manner
specified in Section 4.1 hereof of a certificate or certificates representing
the number of Class B Shares which the holder desires to have the Corporation
redeem, together with the documents and instruments contemplated by Section
4.1 (including a Class B Retraction Request), and provided that the Class B
Retraction Request is not revoked by the holder in the manner specified in
Section 4.6 hereof, the Corporation shall redeem the Retracted Shares
effective at the Class B Retraction Time and shall cause to be delivered to
such holder the total Retraction Price with respect to such shares. If only a
part of the Class B Shares represented by any certificate are redeemed, the
balance of shares represented by such certificate shall be governed by the
provisions of Section 5.1 of these share provisions relating to the Class B
Shares.
4.3 The Corporation 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 Class B Shares or at the address specified
in the holder's Class B Retraction Request or by holding for pick up by the
holder at the head 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 Class
B Shares, certificates representing the Exchangeable Shares (which shares
shall be duly issued as fully paid and non-assessable and shall be free and
clear of any lien, claim or encumbrance) registered in the name of the holder
or in such other name as the holder may request in payment of the total Class
B Retraction Price and such delivery of such certificates on behalf of the
Corporation or by the Transfer Agent shall be deemed to be payment of and
shall satisfy and discharge all liability for the total Class B Retraction
Price to the extent that the same is represented by such share certificates.
All Class B Shares which have been so retracted shall be cancelled.
4.4 As of the Class B Retraction Time, 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 Class B Retraction Price.
4.5 Notwithstanding any other provision of this Section 4, 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 (i)
would be contrary to solvency requirements or other provisions of applicable
law or (ii) would cause the aggregate number of Exchangeable Shares issuable
on retraction to exceed the Maximum Number. If the Corporation believes that
at the Class B Retraction Time it would not be permitted by the foregoing to
redeem the Retracted Shares tendered for redemption on such date, the
Corporation shall only be obligated to redeem Retracted Shares specified by a
holder in a Class B Retraction Request to the extent of the maximum number of
shares that may be so redeemed (rounded down to a whole number of shares) as
would not be contrary to such provisions or the maximum number of Exchangeable
Shares as would not exceed the Maximum Number and shall notify the holder
immediately following 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 or would cause the
Exchangeable Shares to be issued to exceed the Maximum Number, the Corporation
shall redeem Retracted Shares in accordance with Section 4.2 of these share
provisions on a pro rata basis.
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4.6 A holder of Retracted Shares may, by notice in writing given by the
holder to the Corporation at the head office of the Company on behalf of the
Corporation or of the Corporation, not less than two Business Days immediately
preceding the Class B Retraction Time, withdraw its Class B Retraction Request
in which event such Class B Retraction Request shall be null and void.
4.7 No certificates or scrip representing fractional Exchangeable Shares
shall be issued upon the surrender for exchange of certificates pursuant to
section 4.3 hereof and no dividend, stock split or other change in the capital
structure of Parent shall relate to any such fractional security and such
fractional interests shall not entitle the owner thereof to vote or to
exercise any rights as a security holder of Parent. In lieu of any such
fractional securities, each person entitled to a fractional interest in an
Exchangeable Share will receive from the Corporation an amount in cash
(rounded to the nearest whole cent), without interest, equal to the product of
(i) such fraction, multiplied by (ii) the average of the closing price for the
Parent Common Shares on Nasdaq as of each of the thirty (30) consecutive
trading days immediately preceding the Effective Date as quoted in The Wall
Street Journal or other reliable financial newspaper or publication. For the
purposes of the preceding sentence, a "trading day" means a day on which
trading generally takes place on Nasdaq and on which trading in Parent Common
Shares has occurred.
4.8 In the event of a transfer of ownership of Company Common Shares in
respect of which a Class B Retraction Request has been duly made prior to the
Class B Retraction Time but which is not registered in the transfer records of
the Company prior to the Effective Date, a certificate representing the proper
number of Exchangeable Shares may be issued to a transferee if the certificate
representing such Company Common Shares is presented to the Transfer Agent,
together with a Class B Retraction Request executed by the transferee
accompanied by all documents required to evidence and effect such transfer.
4.9 In the event any certificate which immediately prior to the Effective
Date represented outstanding Company Common Shares that were converted
pursuant to the Amalgamation into Class B Shares and subsequently retracted by
the holder pursuant to the Class B Share provisions shall have been lost,
stolen or destroyed, upon the making of an affidavit of that fact by the
person claiming such certificate to be lost, stolen or destroyed, the Transfer
Agent will issue in exchange for such lost, stolen or destroyed certificate,
certificates representing Exchangeable Shares deliverable in respect thereof
as determined in accordance with this Section 4. When authorizing such
issuance in exchange for any lost, stolen or destroyed certificate, the person
to whom certificates representing Exchangeable Shares are to be issued shall,
at the discretion of the Corporation, as a condition precedent to the issuance
thereof, give a bond satisfactory to the Corporation in such sum as the
Corporation may direct or otherwise indemnify the Corporation in a manner
satisfactory to the Corporation against any claim that may be made against the
Corporation with respect to the certificate alleged to have been lost, stolen
or destroyed.
4.10 A Class B Retraction Request executed by a holder of Company Common
Shares in respect of Class B Shares to be issued upon the Amalgamation shall
be deemed for all purposes to constitute a good and valid Class B Retraction
Request executed by a holder of Class B Shares. Any notice by the Company to a
holder of Company Common Shares in respect of Class B Shares to be issued upon
the Amalgamation shall be deemed for all purposes to constitute good and valid
notice by the Corporation to the holders of Class B Shares. Any notice by a
holder of Company Common Shares to the Company in respect of Class B Shares to
be issued upon the Amalgamation shall be deemed for all purposes of these
share provisions to constitute good and valid notice by a holder of Class B
Shares to the Corporation.
5 Automatic Conversion of Class B Shares
5.1 Immediately following the Class B Retraction Time (the "Class B
Conversion Time") each Class B Share then outstanding shall, automatically and
without any further action required on the part of either the Corporation or
the holder of the Class B Share, be converted into a unit consisting of one
fully paid and non- assessable Class E Share and one fully paid and non-
assessable Class F Share whereupon each such Class B
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Share will be cancelled, and the name of each holder thereof shall be removed
from the register of holders of Class B Shares and added to the registers of
holders of Class E Shares and Class F Shares accordingly.
5.2 No certificates shall be issued by the Corporation representing the
Class E Shares and the Class F Shares. The certificates representing the Class
B Shares shall continue to represent an equal number of Class E and Class F
Shares. On and after the Class B Conversion Time, the holders of the Class B
Shares so converted shall cease to be holders of such Class B Shares and shall
not be entitled to exercise any of the rights of holders in respect thereof.
6 Amendment and Approval
6.1 The rights, privileges, restrictions and conditions attaching to the
Class B Shares may be added to, changed or removed but only with the approval
of the holders of the Class B Shares given as hereinafter specified, and any
other approval required by law.
6.2 Any approval given by the holders of the Class B Shares to add to,
change or remove any right, privilege, restriction or condition attaching to
the Class B Shares or any other matter requiring the approval or consent of
the holders of the Class B 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 written resolution
signed by all holders of Class B Shares or by resolution passed by not less
than two-thirds of the votes cast on such resolution at a meeting of holders
of Class B Shares duly called and held at which the holders of at least 50% of
the outstanding Class B 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 Class B 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 ten 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 Class B 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 Class B Shares.
PROVISIONS ATTACHING TO CLASS C SHARES
The Class C non-voting preferred shares in the share capital of the
Corporation (the "Class C Shares") shall have attached thereto the following
rights, privileges, restrictions and conditions:
1 Dividends
1.1 The holders of Class C Shares shall be entitled to receive and the
Corporation shall pay to them, always in preference and priority to any
payment of dividends on the Class A Shares, the Class B Shares, the Class E
Shares and the Class F Shares of the Corporation and any other shares of the
Corporation ranking junior to the Class C Shares, but subject to the prior
rights of the holders of the Exchangeable Shares and Class D Shares, as and
when declared by the board of directors of the Corporation out of monies of
the Corporation properly applicable to the payment of dividends, annual fixed,
preferential, non-cumulative cash dividends in an amount per share equal to
$60,000 divided by the number of Class C Shares outstanding payable annually.
2 Dissolution
2.1 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 the Exchangeable
Shares and the Class D Shares and to any other shares ranking senior to the
Class C Shares with respect to priority in the distribution of assets upon
dissolution, liquidation or winding-up, the holders of the Class C Shares
shall be entitled to receive an amount per share equal to the fair market
value of all the issued and outstanding shares of 9066-9854 Quebec
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Inc. divided by the number of Class C Shares outstanding immediately prior to
the Amalgamation and no more, in priority to the rights of the holders of the
Class E Shares, the Class F Shares, the Class A Shares and the Class B Shares.
3 Voting Rights
3.1 Except where specifically provided by the Quebec Act, the holders of the
Class C Shares shall not be entitled to receive notice of or to attend
meetings of the shareholders of the Corporation and shall not be entitled to
vote at any meeting of shareholders of the Corporation, but shall be entitled
to notice of meetings of shareholders called for the purpose of authorizing
the dissolution of the Corporation or the sale, lease or exchange of all or
substantially all of the property of the Corporation.
4 Amendment and Approval
4.1 The rights, privileges, restrictions and conditions attaching to the
Class C Shares may be added to, changed or removed but only with the approval
of the holders of the Class C Shares given as hereinafter specified, and any
other approval required by law.
4.2 Any approval given by the holders of the Class C Shares to add to,
change or remove any right, privilege, restriction or condition attaching to
the Class C Shares or any other matter requiring the approval or consent of
the holders of the Class C 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 written resolution
signed by all holders of Class C Shares or by resolution passed by not less
than two-thirds of the votes cast on such resolution at a meeting of holders
of Class C Shares duly called and held at which the holders of at least 50% of
the outstanding Class C 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 Class C 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 ten 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 Class C 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 Class C Shares.
PROVISIONS ATTACHING TO CLASS D SHARES
The Class D non-voting preferred shares in the share capital of the
Corporation shall have attached thereto the following rights, privileges,
restrictions and conditions:
1 Dividends
1.1 The holders of Class D Shares shall be entitled to receive and the
Corporation shall pay to them, always in preference and priority to any
payment of dividends on the Class A Shares, the Class B Shares, the Class C
Shares, the Class E Shares and the Class F Shares of the Corporation and any
other shares of the Corporation ranking junior to the Class D Shares, as and
when declared by the board of directors of the Corporation out of monies of
the Corporation properly applicable to the payment of dividends, fixed,
preferential, cumulative cash dividends at the annual rate per share of 5% of
the Class D Liquidation Amount (as defined below) payable annually, by cheque
of the Corporation. Such dividend on any particular Class D Share shall accrue
and be cumulative from the date of issue of such Class D Share.
2 Dissolution
2.1 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 the Exchangeable
Shares and to any other
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shares ranking senior to the Class D Shares with respect to priority in the
distribution of assets upon dissolution, liquidation or winding-up, the
holders of the Class D Shares shall be entitled to receive in the aggregate an
amount per share equal to $150,000 divided by the number of issued and
outstanding Class D Shares (the "Class D Liquidation Amount") and no more, in
priority to the rights of the holders of the Class C Shares, the Class A
Shares, the Class B Shares, the Class E Shares and the Class F Shares.
3 Voting Rights
3.1 Except where specifically provided by the Quebec Act, the holders of the
Class D Shares shall not be entitled to receive notice of or to attend
meetings of the shareholders of the Corporation and shall not be entitled to
vote at any meeting of shareholders of the Corporation, but shall be entitled
to notice of meetings of shareholders called for the purpose of authorizing
the dissolution of the Corporation or the sale, lease or exchange of all or
substantially all of the property of the Corporation.
4 Redemption of Class D Shares by the Corporation
4.1 Subject to applicable law and to Section 4.1 of the Exchangeable Share
Provisions, the Corporation shall be entitled at any time from and after
October 31, 2028 to redeem any or all of the Class D Shares registered in the
name of a holder for an amount per share equal to (a) $150,000 divided by the
number of issued and outstanding Class D Shares plus (b) an additional amount
equivalent to the full amount on all dividends accrued and unpaid thereon
(herein collectively called the "Class D Redemption Price").
4.2 To effect such redemption the Corporation shall, at least ten days prior
to the date fixed for redemption (the "Class D Redemption Date") send to each
holder of Class D Shares to be redeemed a notice in writing of the redemption
by the Corporation of Class D Shares held by such holder. Such notice shall
set out the Class D Redemption Price and the Class D Redemption Date. On or
after the Class D Redemption Date, the Corporation shall cause to be delivered
to the holders of the Class D Shares to be redeemed the Class D Redemption
Price (less any tax required to be deducted and withheld therefrom by the
Corporation) for each such Class D Share upon presentation and surrender at
the head office of the Corporation of the certificates representing such Class
D Shares, together with such other documents and instruments as may be
required to effect a transfer of Class D Shares under the Quebec Act and the
by-laws of the Corporation and such additional documents and instruments as
the Corporation may reasonably require. Payment of the total Class D
Redemption Price for such Class D 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 head office of
the Corporation of a cheque of the Corporation payable at par at any branch of
the bankers of the Corporation in respect of the Class D Redemption Price
(less any tax required to be deducted and withheld therefrom by the
Corporation). On and after the Class D Redemption Date, the holders of the
Class D Shares called for redemption shall cease to be holders of such Class D
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 Class D Redemption Price, unless payment of the total Class D
Redemption Price for such Class D 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
Class D 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 Class D Shares as aforesaid to deposit or cause to
be deposited the total Class D Redemption Price of the Class D Shares so
called for redemption, or of such of the said Class D 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 Class D Redemption Date, the
Class D Shares in respect whereof such deposit shall have been made shall be
redeemed and the rights of the holders thereof after such deposit or Class D
Redemption Date, as the case may be, shall be limited to receiving their
proportionate part of the total Class D Redemption Price (less any tax
required to be deducted and withheld therefrom by the Corporation) for such
Class D Shares so deposited, against presentation and surrender of the said
certificates held by them, respectively, in accordance with the foregoing
provisions.
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5 Purchase for Cancellation
5.1 Subject to applicable law and to Section 4.1 of the Exchangeable Share
Provisions, the Corporation may at any time and from time to time purchase for
cancellation all or any part of the outstanding Class D Shares at any price by
tender to all the holders of record of Class D Shares then outstanding or
through the facilities of any stock exchange on which Class D Shares are
listed or quoted at any price per share. If in response to an invitation for
tenders under the provisions hereof, more Class D Shares are tendered at a
price or prices acceptable to the Corporation than the Corporation is prepared
to purchase, Class D 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 shares tendered at lower
prices. If part only of the Class D 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. Subject as aforesaid, the
Corporation may effect such purchase for cancellation without purchasing for
cancellation shares of any other class of shares of the Corporation.
6 Amendment and Approval
6.1 The rights, privileges, restrictions and conditions attaching to the
Class D Shares may be added to, changed or removed but only with the approval
of the holders of the Class D Shares given as hereinafter specified, and any
other approval required by law.
6.2 Any approval given by the holders of the Class D Shares to add to,
change or remove any right, privilege, restriction or condition attaching to
the Class D Shares or any other matter requiring the approval or consent of
the holders of the Class D 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 written resolution
signed by all holders of Class D Shares or by resolution passed by not less
than two-thirds of the votes cast on such resolution at a meeting of holders
of Class D Shares duly called and held at which the holders of at least 50% of
the outstanding Class D 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 Class D 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 ten 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 Class D 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 Class D Shares.
PROVISIONS ATTACHING TO CLASS E SHARES
The Class E voting common shares in the share capital of the Corporation
shall have attached thereto the following rights, privileges, restrictions and
conditions:
1 Dividends
1.1 Subject to the prior rights of the holders of any shares ranking senior
to the Class E Shares with respect to priority in the payment of dividends,
the holders of Class E 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 monies 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 E Shares shall be declared and paid in equal amounts per share on
all Class E Shares at the time outstanding; and, subject as aforesaid, the
board of directors of the Corporation may in their discretion declare
dividends on the
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Class E Shares without declaring dividends on any of the Class A Shares, Class
B Shares, Class C Shares, Class D Shares or Class F Shares.
2 Dissolution
2.1 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 the Exchangeable
Shares in the share capital of the Corporation, the Class D Shares, the Class
C Shares and to any other shares ranking senior to the Class E Shares with
respect to priority in the distribution of assets upon dissolution,
liquidation or winding-up, the holders of the Class E Shares shall be entitled
to receive the remaining property and assets of the Corporation rateably with
the holders of the Class A Shares, the Class B Shares and the Class F Shares.
3 Voting Rights
3.1 The holders of the Class E Shares shall be entitled to receive notice of
and to attend all meetings of the shareholders of the Corporation and,
together with the holders of Class A Shares, 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.
4 Redemption of Class E Shares by the Corporation
4.1 Subject to applicable law, and subject to the exercise by Dutchco of the
Class E Redemption Call Right, the Corporation shall be entitled, immediately
following the Class B Conversion Time (the "Class E Redemption Time") without
notice to the holders of the Class E Shares, but with prior notice to Dutchco,
to redeem the whole of the then outstanding Class E Shares for an amount per
share equal to the Current Market Price of 0.165 of one Parent Common Share on
the last Business Day prior to the Class E Redemption Time, which shall be
satisfied in full by the Corporation causing to be delivered to each holder of
Class E Shares 0.165 of one Parent Common Share for each Class E Share held by
such holder (the "Class E Redemption Price").
4.2 At or after the Class E Redemption Time and subject to the exercise by
Dutchco of the Class E Redemption Call Right, the Corporation shall cause to
be delivered to the holders of the Class E Shares to be redeemed the Class E
Redemption Price (less any tax required to be deducted and withheld therefrom
by the Corporation) for each such Class E Share upon presentation and
surrender (at the head office of the Corporation or at any office of the
Transfer Agent as may be specified by the Corporation) of the certificates
representing such Class E Shares, or such other certificates of securities of
any predecessor of the Corporation acceptable to the Corporation (including
those representing Company Common Shares) together with such other documents
and instruments as may be required to effect a transfer of Class E Shares
under the Quebec Act and the by-laws of the Corporation and such additional
documents and instruments as the Transfer Agent may reasonably require.
Payment of the total Class E Redemption Price for such Class E 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 head office of the Corporation or at any office of the Transfer Agent
as may be specified by the Corporation, on behalf of the Corporation of
certificates representing Parent Common Shares (which shares shall be duly
issued as fully paid and non-assessable and shall be free and clear of any
lien, claim or encumbrance) (less any tax required to be deducted and withheld
therefrom by the Corporation). At and after the Class E Redemption Time, the
holders of the Class E Shares called for redemption shall cease to be holders
of such Class E 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 Class E Redemption Price, unless payment of
the total Class E Redemption Price for such Class E 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 Class E Redemption Price has been paid in the
manner hereinbefore provided. Subject to the exercise of the Class E
Redemption Call Right, the Corporation shall have the right at any time to
deposit or cause to be deposited the total Class E Redemption Price of the
Class E Shares so called for redemption, or of such of the
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said Class E 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 or the United States. Upon the later of such deposit being made and the
Class E Redemption Time, the Class E Shares in respect whereof such deposit
shall have been made shall be redeemed and the rights of the holders thereof
after such deposit or Class E Redemption Time, as the case may be, shall be
limited to receiving their proportionate part of the total Class E Redemption
Price (less any tax required to be deducted and withheld therefrom by the
Corporation) for such Class E Shares so deposited, against presentation and
surrender of the said certificates held by them, respectively, in accordance
with the foregoing provisions. Upon such payment or deposit of the total Class
E Redemption Price, the holders of the Class E Shares shall thereafter be
considered and deemed for all purposes to be holders of the Parent Common
Shares delivered to them.
4.3 Dutchco shall have the overriding right (the "Class E Redemption Call
Right"), notwithstanding the proposed redemption of Class E Shares by the
Corporation, to purchase from all but not less than all of the holders of
Class E Shares to be redeemed at the Class E Redemption Time, all but not less
than all of the Class E Shares held by each such holder on payment by Dutchco
to the holder of an amount per share equal to the Current Market Price of
0.165 of one Parent Common Share on the last Business Day prior to the Class E
Redemption Time which shall be satisfied in full by causing to be delivered to
such holder 0.165 of one Parent Common Share (the "Class E Redemption Call
Purchase Price"). In the event of the exercise of the Class E Redemption Call
Right by Dutchco, each holder shall be obligated to sell all the Class E
Shares held by the holder and otherwise to be redeemed to Dutchco at the Class
E Redemption Time on payment by Dutchco to the holder of the Class E
Redemption Call Purchase Price for each such share.
4.4 To exercise the Class E Redemption Call Right, Dutchco must notify the
Corporation of Dutchco's intention to exercise such right prior to the Class E
Redemption Time (which notice may be given to the Company on behalf of the
Corporation). If Dutchco exercises the Class E Redemption Call Right, Dutchco
will, at the Class E Redemption Time, purchase and the holders will sell all
of the Class E Shares to be redeemed for a price per share equal to the Class
E Redemption Call Purchase Price. Any notice by Dutchco to the Company for and
on behalf of the Corporation shall be deemed to constitute good and valid
notice by Dutchco to the Corporation.
4.5 For the purposes of completing the purchase of Class E Shares pursuant
to the Class E Redemption Call Right, Dutchco shall deposit with the Transfer
Agent, at or before the Class E Redemption Time, certificates representing the
aggregate number of Parent Common Shares deliverable by Dutchco in payment of
the total Class E Redemption Call Purchase Price and a cheque or cheques in
the amount of the remaining portion, if any, of the total Class E Redemption
Call Purchase Price. Provided that the total Class E Redemption Call Purchase
Price has been so deposited with the Transfer Agent, at and after the Class E
Redemption Time the rights of each holder of Class E Shares so purchased will
be limited to receiving such holder's proportionate part of the total Class E
Redemption Call Purchase Price payable by Dutchco upon presentation and
surrender by the holder of certificates representing the Class E Shares
purchased by Dutchco from such holder and the holder shall at and after the
Class E Redemption Time be considered and deemed for all purposes to be the
holder of the Parent Common Shares delivered to such holder. Upon surrender to
the Transfer Agent of a certificate or certificates representing Class E
Shares, together with such other documents and instruments as may be required
to effect a transfer of Class E Shares under the Quebec Act and the by-laws of
the Corporation and such additional documents and instruments as the Transfer
Agent may reasonably require, the holder of such surrendered certificate or
certificates shall be entitled to receive in exchange therefor, and the
Transfer Agent on behalf of Dutchco shall deliver to such holder, certificates
representing the Parent Common Shares to which the holder is entitled and a
cheque or cheques of or on behalf of Dutchco payable at par and in Canadian
dollars at any branch of the bankers of Dutchco or of the Corporation in
Canada in payment of the remaining portion, if any, of the total Class E
Redemption Call Purchase Price. If Dutchco does not exercise the Class E
Redemption Call Right in the manner described herein, at the Class E
Redemption Time the holders of the Class E Shares will be entitled to receive
in exchange therefor the redemption price otherwise payable by the Corporation
in connection with the redemption of Class E Shares.
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4.6 No certificates or scrip representing fractional Parent Common Shares
shall be issued upon the surrender for exchange of certificates pursuant to
sections 4.2 or 4.5 hereof and no dividend, stock split or other change in the
capital structure of Parent shall relate to any such fractional security and
such fractional interests shall not entitle the owner thereof to vote or to
exercise any rights as a security holder of Parent. In lieu of any such
fractional securities, each person entitled to a fractional interest in a
Parent Common Share will receive from the Corporation or Dutchco, as the case
may be, an amount in cash (rounded to the nearest whole cent), without
interest, equal to the product of (i) such fraction, multiplied by (ii) the
average of the closing price for the Parent Common Shares on Nasdaq as of each
of the thirty (30) consecutive trading days immediately preceding the
Effective Date as quoted in The Wall Street Journal or other reliable
financial newspaper or publication. For the purposes of the preceding
sentence, a "trading day" means a day on which trading generally takes place
on Nasdaq and on which trading in Parent Common Shares has occurred.
4.7 No dividends or other distributions declared or made after the Class E
Redemption Time with respect to Parent Common Shares with a record date after
the Class E Redemption Time shall be paid to the holder of any unsurrendered
certificate which immediately prior to the Class E Redemption Time represented
Class E Shares that were redeemed or purchased pursuant to these Class E Share
provisions, and no cash payment in lieu of fractional shares shall be paid to
any such holder pursuant to section 4.6 hereof, unless and until the holder of
record of such certificate shall surrender such certificate in accordance with
sections 4.2 or 4.5 hereof, as the case may be. Subject to applicable law, at
the time of such surrender of any such certificate there shall be paid to the
record holder of the certificates representing whole Parent Common Shares
without interest (i) the amount of any cash payable in lieu of a fractional
Parent Common Share to which such holder is entitled pursuant to section 4.6
hereof, (ii) the amount of dividends or other distributions with a record date
after the Class E Redemption Time theretofore paid with respect to such whole
Parent Common Share and (iii) the amount of dividends or other distributions
with a record date after the Class E Redemption Time but prior to surrender
and a payment date subsequent to surrender payable with respect to such whole
Parent Common Share.
4.8 In the event of a transfer of ownership of Company Common Shares which
is not registered in the transfer records of the Company prior to the
Effective Date, a certificate representing the proper number of Parent Common
Shares may be issued to a transferee if the certificate representing such
Company Common Shares is presented to the Transfer Agent, accompanied by all
documents required to evidence and effect such transfer.
4.9 In the event any certificate which immediately prior to the Effective
Date represented outstanding Company Common Shares that were converted to
Class B Shares on the Amalgamation and subsequently converted into Class E
Shares at the Class B Conversion Time shall have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the person claiming
such certificate to be lost, stolen or destroyed, the Transfer Agent will
issue in exchange for such lost, stolen or destroyed certificate, certificates
representing Parent Common Shares (and any dividends or distributions with
respect thereto and any cash pursuant to section 4.6 hereof) deliverable in
respect thereof as determined in accordance with sections 4.2 or 4.5 hereof.
When authorizing such issuance and/or payment in exchange for any lost, stolen
or destroyed certificate, the person to whom certificates representing Parent
Common Shares are to be issued shall, at the discretion of the Corporation or
Dutchco, as the case may be, as a condition precedent to the issuance thereof,
give a bond satisfactory to the Corporation, the Affiliate or Dutchco, as the
case may be, in such sum as the Corporation or Dutchco may direct or otherwise
indemnify the Corporation or Dutchco in a manner satisfactory to the
Corporation, the Affiliate or the Dutchco, as the case may be, against any
claim that may be made against the Corporation, the Affiliate or Dutchco with
respect to the certificate alleged to have been lost, stolen or destroyed.
4.10 The Corporation and Dutchco shall be entitled to deduct and withhold
from the Class E Redemption Price, the Class E Redemption Call Price payable
pursuant to these Class E Share Provisions to any holder of Class E Shares
such amounts as Parent, the Affiliate, Dutchco or the Transfer Agent determine
is required to deduct and withhold with respect to the making of such payment
under the United States Internal Revenue Code of 1986, as amended, the Income
Tax Act (Canada) or any provision of state, local, provincial or foreign tax
law. To the extent that amounts are so withheld, such withheld amounts shall
be treated for all purposes hereof as having been paid to the holder of the
shares in respect of which such deduction and withholding was made,
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provided that such withheld amounts are actually remitted to the appropriate
taxing authority. To the extent any amount is required to be deducted or
withheld from any payment to a holder, the Corporation or Dutchco as the case
may be, are hereby authorized to sell or otherwise dispose of at fair market
value such portion of such consideration as is necessary to provide sufficient
funds to the Corporation or Dutchco, as the case may be, in order to enable it
to comply with such deduction or withholding requirement and the Corporation
or Dutchco, as the case may be, shall give an accounting to the holder with
respect thereto and any balance of such proceeds of sale.
4.11 The Corporation shall not be entitled to redeem, nor shall Dutchco be
entitled to purchase, any Class E Shares pursuant to this Section 4 unless at
the same time the Corporation redeems or Dutchco, purchases at the same time
and in the same manner all issued and outstanding Class F Shares.
5 Purchase for Cancellation
5.1 Subject to applicable law and to Section 4.1 of the Exchangeable Share
Provisions, the Corporation may at any time and from time to time purchase for
cancellation all or any part of the outstanding Class E Shares at any price by
tender to all the holders of record of Class E Shares then outstanding or
through the facilities of any stock exchange on which Class E Shares are
listed or quoted at any price per share. If in response to an invitation for
tenders under the provisions hereof, more Class E Shares are tendered at a
price or prices acceptable to the Corporation than the Corporation is prepared
to purchase, Class E 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 shares tendered at lower
prices. If only part of the Class E 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. Subject as aforesaid, the
Corporation may effect such purchase for cancellation without purchasing for
cancellation shares of any other class of shares of the Corporation.
6 Issued and Paid-Up Capital Account
6.1 Where Class E Shares and Class F Shares are issued on a conversion of
Class B Shares, the amount to be added to the issued and paid-up capital
account of the Class E Shares for purposes of the Quebec Act and the paid-up
capital account of the Class E Shares for purposes of the Income Tax Act
(Canada) shall be equal to the aggregate of the issued and paid-up capital of
such Class B Shares so converted, less $1.
7 Amendment and Approval
7.1 The rights, privileges, restrictions and conditions attaching to the
Class E Shares may be added to, changed or removed but only with the approval
of the holders of the Class E Shares given as hereinafter specified, and any
other approval required by law.
7.2 Any approval given by the holders of the Class E Shares to add to,
change or remove any right, privilege, restriction or condition attaching to
the Class E Shares or any other matter requiring the approval or consent of
the holders of the Class E 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 written resolution
signed by all holders of Class E Shares or by resolution passed by not less
than two-thirds of the votes cast on such resolution at a meeting of holders
of Class E Shares duly called and held at which the holders of at least 50% of
the outstanding Class E 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 Class E 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 ten 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 Class E Shares present
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or represented by proxy thereat may transact the business for which the
meeting was originally called and a resolution passed thereat by the
affirmative vote of not less than two-thirds of the votes cast on such
resolution at such meeting shall constitute the approval or consent of the
holders of the Class E Shares.
PROVISIONS ATTACHING TO CLASS F SHARES
The Class F non-voting common shares in the share capital of the Corporation
shall have attached thereto the following rights, privileges, restrictions and
conditions:
1 Dividends
1.1 Subject to the prior rights of the holders of any shares ranking senior
to the Class F Shares with respect to priority in the payment of dividends,
the holders of Class F 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 monies 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 F Shares shall be declared and paid in equal amounts per share on
all Class F 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 F Shares without declaring dividends on any of the
Class A Shares, the Class B Shares, the Class C Shares, the Class D Shares,
the Class E Shares or the Exchangeable Shares.
2 Dissolution
2.1 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 the Exchangeable
Shares, the Class D Shares and the Class C Shares and to any other shares
ranking senior to the Class F Shares with respect to priority in the
distribution of assets upon dissolution, liquidation or winding-up, the
holders of the Class F Shares shall be entitled to receive the remaining
property and assets of the Corporation rateably with the holders of the Class
A Shares, the Class B Shares and the Class E Shares.
3 Voting Rights
3.1 The holders of Class F Shares shall be entitled to vote separately as a
class on any change of the head office of the Corporation. Each Class F Share
shall carry one vote at any meeting called for such purpose. Except as
aforesaid and except where specifically provided by the Quebec Act the holders
of the Class F Shares shall not otherwise be entitled to receive notice of or
to attend meetings of the shareholders of the Corporation and shall not be
entitled to vote at any meeting of shareholders of the Corporation, but shall
be entitled to notice of meetings of shareholders called for the purpose of
authorizing the dissolution of the Corporation.
4 Redemption of Class F Shares by the Corporation
4.1 Subject to applicable law, and subject to the exercise by Dutchco of the
Class F Redemption Call Right, the Corporation shall be entitled, immediately
following the Class B Conversion Time (the "Class F Redemption Time") without
notice to the holders of Class F Shares, but with prior notice to Dutchco, to
redeem the whole of the then outstanding Class F Shares for an amount per
share equal to the Current Market Price of 0.165 of one Parent Common Share on
the last Business Day prior to the Redemption Time, which shall be satisfied
in full by the Corporation causing to be delivered to each holder of Class F
Shares 0.165 of one Parent Common Share for each Class F Share held by such
holder (the "Class F Redemption Price").
4.2 At or after the Class F Redemption Time and subject to the exercise by
Dutchco of the Class F Redemption Call Right, the Corporation shall cause to
be delivered to the holders of the Class F Shares to be redeemed the Class F
Redemption Price (less any tax required to be deducted and withheld therefrom
by the
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Corporation) for each such Class F Share upon presentation and surrender (at
the head 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 Class F Shares, or such other certificates of securities or
any predecessor of the Corporation acceptable to the Corporation (including
those representing Company Common Shares) together with such other documents
and instruments as may be required to effect a transfer of Class F Shares
under the Quebec Act and the by-laws of the Corporation and such additional
documents and instruments as the Transfer Agent may reasonably require.
Payment of the total Class F Redemption Price for such Class F 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 head office of the Corporation or at any office of the Transfer Agent
as may be specified by the Corporation, on behalf of the Corporation of
certificates representing Parent Common Shares (which shares shall be duly
issued as fully paid and non-assessable and shall be free and clear of any
lien, claim or encumbrance) (less any tax required to be deducted and withheld
therefrom by the Corporation). At and after the Class F Redemption Time, the
holders of the Class F Shares called for redemption shall cease to be holders
of such Class F 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 Class F Redemption Price, unless payment of
the total Class F Redemption Price for such Class F 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 Class F Redemption Price has been paid in the
manner hereinbefore provided. Subject to the exercise of the Class F
Redemption Call Right by Dutchco, the Corporation shall have the right at any
time to deposit or cause to be deposited the total Class F Redemption Price of
the Class F Shares so called for redemption, or of such of the said Class F
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 or the
United States. Upon the later of such deposit being made and the Class F
Redemption Time, the Class F Shares in respect whereof such deposit shall have
been made shall be redeemed and the rights of the holders thereof after such
deposit or Class F Redemption Time, as the case may be, shall be limited to
receiving their proportionate part of the total Class F Redemption Price (less
any tax required to be deducted and withheld therefrom by the Corporation) for
such Class F Shares so deposited, against presentation and surrender of the
said certificates held by them, respectively, in accordance with the foregoing
provisions. Upon such payment or deposit of the total Class F Redemption
Price, the holders of the Class F Shares shall thereafter be considered and
deemed for all purposes to be holders of the Parent Common Shares delivered to
them.
4.3 Dutchco shall have the overriding right (the "Class F Redemption Call
Right"), notwithstanding the proposed redemption of Class F Shares by the
Corporation, to purchase from all but not less than all of the holders of
Class F Shares to be redeemed at the Class F Redemption Time, all but not less
than all of the Class F Shares held by each such holder on payment by Dutchco
to the holder of an amount per share equal to the Current Market Price of
0.165 of one Parent Common Share on the last Business Day prior to the Class F
Redemption Time which shall be satisfied in full by causing to be delivered to
such holder 0.165 of one Parent Common Share (the "Class F Redemption Call
Purchase Price"). In the event of the exercise of the Class F Redemption Call
Right by Dutchco, each holder shall be obligated to sell all the Class F
Shares held by the holder and otherwise to be redeemed to Dutchco at the Class
F Redemption Time on payment by Dutchco to the holder of the Class F
Redemption Call Purchase Price for each such share.
4.4 To exercise the Class F Redemption Call Right, Dutchco must notify the
Corporation of Dutchco's intention to exercise such right prior to the Class F
Redemption Time (which notice may be given to the Company on behalf of the
Corporation). If Dutchco exercises the Class F Redemption Call Right, Dutchco
will, at the Class F Redemption Time, purchase and the holders will sell all
of the Class F Shares to be redeemed for a price per share equal to the Class
F Redemption Call Purchase Price. Any notice by Dutchco to the Company for and
on behalf of the Corporation shall be deemed to constitute good and valid
notice by Dutchco to the Corporation.
4.5 For the purposes of completing the purchase of Class F Shares pursuant
to the Class F Redemption Call Right, Dutchco shall deposit with the Transfer
Agent, at or before the Class F Redemption Time, certificates
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representing the aggregate number of Parent Common Shares deliverable by
Dutchco in payment of the total Class F Redemption Call Purchase Price and a
cheque or cheques in the amount of the remaining portion, if any, of the total
Class F Redemption Call Purchase Price. Provided that the total Class F
Redemption Call Purchase Price has been so deposited with the Transfer Agent,
at and after the Class F Redemption Time the rights of each holder of Class F
Shares so purchased will be limited to receiving such holder's proportionate
part of the total Class F Redemption Call Purchase Price payable by Dutchco
upon presentation and surrender by the holder of certificates representing the
Class F Shares purchased by Dutchco from such holder and the holder shall at
and after the Class F Redemption Time be considered and deemed for all
purposes to be the holder of the Parent Common Shares delivered to such
holder. Upon surrender to the Transfer Agent of a certificate or certificates
representing Class F Shares, together with such other documents and
instruments as may be required to effect a transfer of Class F Shares under
the Quebec Act and the by-laws of the Corporation and such additional
documents and instruments as the Transfer Agent may reasonably require, the
holder of such surrendered certificate or certificates shall be entitled to
receive in exchange therefor, and the Transfer Agent on behalf of Dutchco
shall deliver to such holder, certificates representing the Parent Common
Shares to which the holder is entitled and a cheque or cheques of or on behalf
of Dutchco payable at par and in Canadian dollars at any branch of the bankers
of Dutchco or of the Corporation in Canada in payment of the remaining
portion, if any, of the total Class F Redemption Call Purchase Price. If
Dutchco does not exercise the Class F Redemption Call Right in the manner
described herein, at the Class F Redemption Time the holders of the Class F
Shares will be entitled to receive in exchange therefor the redemption price
otherwise payable by the Corporation in connection with the redemption of
Class F Shares.
4.6 No certificates or scrip representing fractional Parent Common Shares
shall be issued upon the surrender for exchange of certificates pursuant to
sections 4.2 or 4.5 hereof and no dividend, stock split or other change in the
capital structure of Parent shall relate to any such fractional security and
such fractional interests shall not entitle the owner thereof to vote or to
exercise any rights as a security holder of Parent. In lieu of any such
fractional securities, each person entitled to a fractional interest in a
Parent Common Share will receive from the Corporation or Dutchco as the case
may be, an amount in cash (rounded to the nearest whole cent), without
interest, equal to the product of (i) such fraction, multiplied by (ii) the
average of the closing price for the Parent Common Shares on Nasdaq as of each
of the thirty (30) consecutive trading days immediately preceding the
Effective Date as quoted in The Wall Street Journal or other reliable
financial newspaper or publication. For the purposes of the preceding
sentence, a "trading day" means a day on which trading generally takes place
on Nasdaq and on which trading in Parent Common Shares has occurred.
4.7 No dividends or other distributions declared or made after the Class F
Redemption Time with respect to Parent Common Shares with a record date after
the Class F Redemption Time shall be paid to the holder of any unsurrendered
certificate which immediately prior to the Class F Redemption Date represented
Class F Shares that were redeemed or purchased pursuant to these Class F Share
provisions, and no cash payment in lieu of fractional shares shall be paid to
any such holder pursuant to section 4.6 hereof, unless and until the holder of
record of such certificate shall surrender such certificate in accordance with
sections 4.2 or 4.5 hereof, as the case may be. Subject to applicable law, at
the time of such surrender of any such certificate there shall be paid to the
record holder of the certificates representing whole Parent Common Shares
without interest (i) the amount of any cash payable in lieu of a fractional
Parent Common Share to which such holder is entitled pursuant to section 4.6
hereof, (ii) the amount of dividends or other distributions with a record date
after the Class F Redemption Time theretofore paid with respect to such whole
Parent Common Share and (iii) the amount of dividends or other distributions
with a record date after the Class F Redemption Time but prior to surrender
and a payment date subsequent to surrender payable with respect to such whole
Parent Common Share.
4.8 In the event of a transfer of ownership of Company Common Shares which
is not registered in the transfer records of the Company prior to the
Effective Date, a certificate representing the proper number of Parent Common
Shares may be issued to a transferee if the certificate representing such
Company Common Shares is presented to the Transfer Agent, accompanied by all
documents required to evidence and effect such transfer.
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4.9 In the event any certificate which immediately prior to the Effective
Date represented outstanding Company Common Shares that were converted to
Class B Shares on the Amalgamation and subsequently converted into Class F
Shares at the Class B Conversion Time shall have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the person claiming
such certificate to be lost, stolen or destroyed, the Transfer Agent will
issue in exchange for such lost, stolen or destroyed certificate, certificates
representing Parent Common Shares (and any dividends or distributions with
respect thereto and any cash pursuant to section 4.6 hereof) deliverable in
respect thereof as determined in accordance with sections 4.2 or 4.5 hereof.
When authorizing such issuance and/or payment in exchange for any lost, stolen
or destroyed certificate, the person to whom certificates representing Parent
Common Shares are to be issued shall, at the discretion of the Corporation or
Dutchco, as the case may be, as a condition precedent to the issuance thereof,
give a bond satisfactory to the Corporation or Dutchco, as the case may be, in
such sum as the Corporation or Dutchco may direct or otherwise indemnify the
Corporation or Dutchco in a manner satisfactory to the Corporation or the
Dutchco, as the case may be, against any claim that may be made against the
Corporation or Dutchco with respect to the certificate alleged to have been
lost, stolen or destroyed.
4.10 The Corporation and Dutchco shall be entitled to deduct and withhold
from the Class F Redemption Price or the Class F Redemption Call Price, as the
case may be, payable pursuant to these Class F Share Provisions to any holder
of Class F Shares such amounts as Parent, Dutchco or the Transfer Agent
determine is required to deduct and withhold with respect to the making of
such payment under the United States Internal Revenue Code of 1986, as
amended, the Income Tax Act (Canada) or any provision of state, local,
provincial or foreign tax law. To the extent that amounts are so withheld,
such withheld amounts shall be treated for all purposes hereof as having been
paid to the holder of the shares in respect of which such deduction and
withholding was made, provided that such withheld amounts are actually
remitted to the appropriate taxing authority. To the extent any amount is
required to be deducted or withheld from any payment to a holder, the
Corporation, the Affiliate or Dutchco, as the case may be, are hereby
authorized to sell or otherwise dispose of at fair market value such portion
of such consideration as is necessary to provide sufficient funds to the
Corporation, the Affiliate or Dutchco, as the case may be, in order to enable
it to comply with such deduction or withholding requirement and the
Corporation, the Affiliate or Dutchco, as the case may be shall give an
accounting to the holder with respect thereto and any balance of such proceeds
of sale.
4.11 The Corporation shall not be entitled to redeem, nor shall Dutchco or
the Affiliate, as the case may be, be entitled to purchase, any Class F Shares
pursuant to this Section 4 unless at the same time the Corporation redeems or
Dutchco or the Affiliate, as the case may be, purchases at the same time and
in the same manner all issued and outstanding Class E Shares.
5 Issued and Paid-Up Capital Account
5.1 Where Class E Shares and Class F Shares are issued on a conversion of
Class B Shares, the amount to be added to the issued and paid-up capital
account of the Class F Shares for purposes of the Quebec Act and the paid-up
capital account of the Class F Shares for purposes of the Income Tax Act
(Canada) shall be $1.
6 Amendment and Approval
6.1 The rights, privileges, restrictions and conditions attaching to the
Class F Shares may be added to, changed or removed but only with the approval
of the holders of the Class F Shares given as hereinafter specified, and any
other approval required by law.
6.2 Any approval given by the holders of the Class F Shares to add to,
change or remove any right, privilege, restriction or condition attaching to
the Class F Shares or any other matter requiring the approval or consent of
the holders of the Class F 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 written resolution
signed by all holders of Class F Shares or by resolution passed by not less
than two-thirds of the votes cast on such resolution at a meeting of holders
of Class F Shares duly called and held at which the
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holders of at least 50% of the outstanding Class F 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 Class F 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 ten 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 Class F
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 Class F Shares.
PROVISIONS ATTACHING TO EXCHANGEABLE SHARES
The exchangeable non-voting shares in the share capital of the Corporation
shall have the following rights, privileges, restrictions and conditions:
ARTICLE 1
Interpretation
1.1 For the purposes of these Exchangeable Share Provisions:
"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; provided, however, that any former directors, executive
officers or principal shareholders of the Company who may be deemed to be an
affiliate of Parent after the Effective Date, shall not be considered an
"Affiliate" for purposes of these share provisions.
"Amalgamation" means the amalgamation of Discreet Logic Inc., 9066-9854
Quebec Inc., and 9066-9771 Quebec Inc. under the Quebec Act.
"Automatic Redemption" has the meaning ascribed thereto in section 7.1 of
these share provisions.
"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 eleven years from the Effective Date (as
defined in the Amalgamation Agreement) unless (a) such date shall be extended
at any time or from time to time to a specified later date by the Board of
Directors provided at least 60 days' prior written notice of any such
extension is given to the registered holders of the Exchangeable Shares 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 250,000 Exchangeable
Shares outstanding (other than Exchangeable Shares held by Parent 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), provided at least 60 days' prior written notice of any such extension
or acceleration, as the case may be, is given 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 give any such notice of extension or acceleration, as the case may
be, to less than 5% of such holders of Exchangeable Shares shall not affect
the validity of such extension or acceleration.
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"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 San Francisco, California
and Montreal, Quebec.
"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.
"Certificate of Amalgamation" means the certificate of amalgamation to be
issued to the Corporation by the Inspector General of Financial Institutions
under the Quebec Act in respect of the Amalgamation.
"Class A Shares" mean the Class A voting common shares in the share capital
of the Corporation.
"Class B Shares" means the Class B non-voting common shares in the share
capital of the Corporation.
"Class C Shares" means the Class C non-voting preferred shares in the share
capital of the Corporation.
"Class D Shares" means the Class D non-voting preferred shares in the share
capital of the Corporation.
"Class E Shares" means the Class E voting common shares in the share capital
of the Corporation.
"Class F Shares" means the Class F non-voting common shares in the share
capital of the Corporation.
"Corporation" means the company resulting from the Amalgamation.
"Current Market Price" means, in respect of a Parent Common Share on any
date, the Canadian Dollar Equivalent of the average of the closing prices of
Parent Common Shares on Nasdaq on each of the thirty (30) consecutive trading
days ending not more than five trading days before such date, or, if the
Parent Common Shares are not then quoted on Nasdaq, on such other stock
exchange or automated quotation system on which the Parent 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 Parent Common Shares during such period,
then the Current Market Price of a Parent 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.
"Dutchco" means Autodesk Development B.V., a corporation subsisting under
the laws of The Netherlands or such other Affiliate of Autodesk to which
Dutchco has assigned its rights under the Voting and Exchange Trust Agreement.
"Effective Date" means the date of the Amalgamation as set forth in the
Certificate of Amalgamation.
"Exchange Act" has the meaning ascribed thereto in Section 7.1 of these
share provisions.
"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 Purchase Price" has the meaning ascribed thereto in
Section 5.4 of these share provisions.
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"Liquidation Call Right" has the meaning ascribed thereto in Section 5.4 of
these share provisions.
"Liquidation Date" has the meaning ascribed thereto in Section 5.1 of these
share provisions.
"Nasdaq" means the Nasdaq National Market.
"Parent" means Autodesk, Inc., a body corporate existing under the laws of
the State of Delaware.
"Parent (Dutchco) Call Notice" has the meaning ascribed thereto in Section
6.3 of these share provisions.
"Parent Common Shares" mean the common shares in the share capital of
Parent.
"Parent Dividend Declaration Date" means the date on which the Board of
Directors of Parent declares any dividend on the Parent Common Shares.
"Parent Special Share" means the one share of Series B Preferred Stock of
Parent with a par value of U.S.$0.01 and having voting rights at meetings of
holders of Parent Common Shares equal to that number of votes equal to the
number of votes that the Exchangeable Shares outstanding from time to time
(other than Exchangeable Shares held by Parent and its Affiliates) would be
entitled to if exchanged for Parent Common Shares, to be issued to and voted
by the Trustee pursuant to the Voting and Exchange Trust Agreement.
"Purchase Price" has the meaning ascribed thereto in Section 6.3 of these
share provisions.
"Quebec Act" means the Companies Act (Quebec), as amended.
"Record Holders" has the meaning ascribed thereto in Section 7.1 of these
share provisions.
"Redemption Call Right" has the meaning ascribed thereto in Section 7.3 of
these share provisions.
"Redemption Call Purchase Price" has the meaning ascribed thereto in Section
7.1 of these share provisions.
"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(a) of
these share provisions.
"Retraction Call Right" has the meaning ascribed thereto in Section 6.1(c)
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.
"Section 12(g) Redemption" has the meaning ascribed thereto in Section 7.1.
"Support Agreement" means the Support Agreement between Parent, Dutchco and
the Corporation, made on or about the Effective Date.
"Transfer Agent" means Harris Trust and Savings Bank or such other person as
may from time to time be the registrar and transfer agent for the Exchangeable
Shares.
"Trustee" means Montreal Trust Company of Canada, a trust company 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 Parent, Dutchco, the Corporation and the Trustee, made on or
about the Effective Date.
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ARTICLE 2
Ranking of Exchangeable Shares
2.1 The Exchangeable Shares shall be entitled to a preference over the Class
A Shares, the Class B Shares, the Class C Shares, the Class D Shares, the
Class E Shares and the Class F 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 Parent Dividend
Declaration Date, declare a dividend on each Exchangeable Share (a) in the
case of a cash dividend declared on the Parent Common Shares, in an amount in
cash for each Exchangeable Share equal to the Canadian Dollar Equivalent on
the Parent Dividend Declaration Date of the cash dividend declared on each
Parent Common Share or (b) in the case of a stock dividend declared on the
Parent Common Shares to be paid in Parent Common Shares, in such number of
Exchangeable Shares for each Exchangeable Share as is equal to the number of
Parent Common Shares to be paid on each Parent Common Share or (c) in the case
of a dividend declared on the Parent Common Shares in property other than cash
or Parent 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 Parent 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 as soon as payment of such
dividend is permitted by such law on a subsequent date or dates determined by
the Board of Directors.
3.2 Cheques of the Corporation or any dividend paying agent appointed by 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 Parent Common Shares.
3.4 If on any payment date for any dividends declared on the Exchangeable
Shares under Section 3.1 hereof the dividends are not paid in full on all of
the Exchangeable Shares then outstanding, any such dividends
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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, the Class B Shares, the
Class C Shares, the Class D Shares, the Class E Shares, the Class F Shares
or any other shares ranking junior to the Exchangeable Shares, other than
stock dividends payable in Class A Shares, Class B Shares, Class C Shares,
Class D Shares, Class E Shares, Class F Shares or any such other shares
ranking junior to the Exchangeable Shares, as the case may be;
(b) redeem, retract or purchase or make any capital distribution in
respect of Class A Shares, Class B Shares, Class C Shares, Class D Shares,
Class E Shares and Class F Shares or any other shares ranking junior to the
Exchangeable Shares;
(c) redeem or purchase any other shares of the Corporation ranking
equally with or junior to 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 respect to the payment of dividends or on any
liquidation distribution, or superior to, the Exchangeable Shares 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 Parent 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, the
Class B Shares, the Class C Shares, the Class D Shares, the Class E Shares,
the Class F Shares or any other shares ranking junior to the Exchangeable
Shares, an amount per share equal to (a) the Current Market Price of a Parent
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 one Parent 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 Parent Common Shares which have not been
declared on such Exchangeable Shares in accordance with Section 3.1 of these
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).
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5.2 On or promptly after the Liquidation Date, and subject to the exercise
by Dutchco 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 Quebec Act and the by-laws of the Corporation
and such additional documents and instruments as the Transfer Agent may be
specified by the Corporation by notice to the holders of the Exchangeable
Shares. Payment of the total Liquidation Amount for such Exchangeable Shares
shall be made by delivery to each holder, at the address of the holder
recorded in the securities register of the Corporation for the Exchangeable
Shares or by holding for pick up by the holder at the head 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 Parent Common Shares (which shares
shall be duly issued as fully paid and non-assessable and shall be free and
clear of any lien, claim or encumbrance) 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
and all dividends declared on Parent Common Shares which have not been
declared on such Exchangeable Shares in accordance with Section 3.1 of these
share provisions, 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
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 (less any tax required to
be deducted and withheld therefrom) for such Exchangeable Shares so deposited,
against presentation and surrender of the said certificates held by them,
respectively, in accordance with the foregoing provisions. Upon such payment
or deposit of the total Liquidation Amount, the holders of the Exchangeable
Shares shall thereafter be considered and deemed for all purposes to be the
holders of the Parent Common Shares delivered to them. 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.
5.4 Dutchco shall have the overriding right (the "Liquidation Call Right"),
in the event of and notwithstanding the proposed liquidation, dissolution or
winding-up of the Corporation pursuant to Article 5 of these share provisions,
to purchase from all but not less than all of the holders of Exchangeable
Shares on the Liquidation Date all but not less than all of the Exchangeable
Shares held by each such holder on payment by Dutchco of an amount per share
equal to (a) the Current Market Price of a Parent Common Share on the last
Business Day prior to the Liquidation Date, which shall be satisfied in full
by causing to be delivered to such holder one Parent Common Share, plus (b) an
additional amount equivalent to the full amount of all dividends declared and
unpaid on such Exchangeable Share and all dividends declared on Parent Common
Shares which have not been declared on such Exchangeable Shares in accordance
with Section 3.1 of these share provisions
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(collectively the "Liquidation Call Purchase Price", provided that if the
record date for any such declared and unpaid dividends occurs on or after the
Liquidation Date, the Liquidation Call Purchase Price shall not include such
additional amount equivalent to such dividends). In the event of the exercise
of the Liquidation Call Right by Dutchco, each holder shall be obligated to
sell all the Exchangeable Shares held by the holder to Dutchco on the
Liquidation Date on payment by Dutchco to the holder of the Liquidation Call
Purchase Price for each such share.
5.5 To exercise the Liquidation Call Right, Dutchco must notify the Transfer
Agent, as agent for the holders of Exchangeable Shares, and the Corporation of
Dutchco's intention to exercise such right at least sixty days before the
Liquidation Date in the case of a voluntary liquidation, dissolution or
winding-up of the Corporation and at least five Business Days before the
Liquidation Date in the case of an involuntary liquidation, dissolution or
winding-up of the Corporation. The Transfer Agent will notify the holders of
Exchangeable Shares as to whether or not Dutchco has exercised the Liquidation
Call Right forthwith after the expiry of the period during which the same may
be exercised by Dutchco. If Dutchco exercises the Liquidation Call Right, on
the Liquidation Date, Dutchco will purchase and the holders will sell all of
the Exchangeable Shares then outstanding for a price per share equal to the
Liquidation Call Purchase Price.
5.6 For the purposes of completing the purchase of the Exchangeable Shares
pursuant to the Liquidation Call Right, Dutchco shall deposit with the
Transfer Agent, on or before the Liquidation Date, certificates representing
the aggregate number of Parent Common Shares deliverable by Dutchco in payment
of the total Liquidation Call Purchase Price and a cheque or cheques in the
amount of the remaining portion, if any, of the total Liquidation Call
Purchase Price. Provided that the total Liquidation Call Purchase Price has
been so deposited with the Transfer Agent, on and after the Liquidation Date
the rights of each holder of Exchangeable Shares will be limited to receiving
such holder's proportionate part of the total Liquidation Call Purchase Price
payable by Dutchco upon presentation and surrender by the holder of
certificates representing the Exchangeable Shares held by such holder and the
holder shall on and after the Liquidation Date be considered and deemed for
all purposes to be the holder of the Parent Common Shares delivered to it.
Upon surrender to the Transfer Agent of a certificate or certificates
representing Exchangeable Shares, together with such other documents and
instruments as may be required to effect a transfer of Exchangeable Shares
under the Quebec Act and the by-laws of the Corporation and such additional
documents and instruments as the Transfer Agent may reasonably require, the
holder of such surrendered certificate or certificates shall be entitled to
receive in exchange therefor, and the Transfer Agent on behalf of Dutchco
shall deliver to such holder, certificates representing the Parent Common
Shares to which the holder is entitled and a cheque or cheques of Dutchco
payable at par and in Canadian dollars at any branch of the bankers of Dutchco
or of the Corporation in Canada in payment of the remaining portion, if any,
of the total Liquidation Call Purchase Price. If Dutchco does not exercise the
Liquidation Call Right in the manner described above, on the Liquidation Date
the holders of the Exchangeable Shares will be entitled to receive in exchange
therefor the liquidation price otherwise payable by the Corporation in
connection with the liquidation, dissolution or winding-up of the Corporation
pursuant to this Article 5.
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 the exercise by Dutchco of the Retraction Call Right (as
defined in subsection (c) below) 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 (a) the Current Market Price of a Parent 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 one Parent
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 Parent
Common Shares which have not been declared on such Exchangeable Shares in
accordance with Section 3.1 of these share
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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 head 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 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 Quebec Act 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 such 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 three Business Days nor
more than ten 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
Dutchco 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 Dutchco in
accordance with the Retraction Call Right on the terms and conditions set
out in Section 6.3 below.
6.2 Subject to the exercise by Dutchco 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 certificates 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 hereof,
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 Dutchco 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 Dutchco and Parent thereof. In order to exercise the
Retraction Call Right, Parent or Dutchco must notify the Corporation in writing
of Dutchco's determination to do so (the "Parent (Dutchco) Call Notice") within
two Business Days of notification to Parent and Dutchco by the Corporation of
the receipt by the Corporation of the Retraction Request. If the Parent or
Dutchco does not so notify the Corporation within such two Business Day period,
the Corporation will notify the holder as soon as possible thereafter that
Dutchco will not exercise the Retraction Call Right. If Parent or Dutchco
delivers the Parent (Dutchco) 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
Dutchco in accordance with the Retraction Call Right. In such event, the
Corporation shall not redeem the Retracted Shares and Dutchco shall purchase
from such holder and such holder shall sell to Dutchco on the Retraction Date,
the Retracted Shares for a purchase price (the "Purchase Price") per share equal
to the Retraction Price per share. For the purposes of completing a purchase
pursuant to the Retraction Call Right, Dutchco shall deposit with the Transfer
Agent, on or before the Retraction Date, certificates representing Parent 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 neither Parent nor Dutchco delivers a
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Parent (Dutchco) 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 Dutchco, 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 head 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 Parent Common Shares (which shares shall be duly issued as
fully paid and non-assessable and shall be free and clear of any lien, claim
or encumbrance) 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 Dutchco payable at par and in Canadian dollars at any branch of the bankers
of Dutchco 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 by
Dutchco, as the case may be, or 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 withheld 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 Dutchco, as the case may be, 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 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 Dutchco shall thereafter be
considered and deemed for all purposes to be a holder of the Parent 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 Dutchco 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 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
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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 a new certificate, at the expense of the Corporation,
representing the Retracted Shares not 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 hereof, 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 Dutchco to purchase
such Retracted Shares from such holder on the Retraction Date or as soon as
practicable thereafter on payment by Dutchco 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 Dutchco 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 Dutchco 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 (i) the Current Market
Price of a Parent 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 one Parent Common Share
for each Exchangeable Share held by such holder, plus (ii) an additional
amount equivalent to the full amount of all declared and unpaid dividends
thereon and all dividends declared on Parent Common Shares which have not been
declared on such Exchangeable Shares in accordance with Section 3.1 of these
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 12g5-1 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 such smaller number that the Corporation reasonably
determines is necessary to take the position that it need not register the
Exchangeable Shares 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 a 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 in this Section 7.2 as a "Redemption Date"), send or cause
to be sent to each holder of Exchangeable Shares to be redeemed a notice in
writing of the redemption by the Corporation or the purchase by Dutchco 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 Dutchco
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 withheld therefrom by the
Corporation) for each such Exchangeable Share upon presentation and surrender
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at the head 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 Quebec Act 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 head 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 Parent Common Shares (which shares
shall be duly issued as fully paid and non-assessable and shall be free and
clear of any lien, claim or encumbrance) 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 Parent Common Shares which have not
been declared on such Exchangeable Shares in accordance with Section 3.1 of
these share provisions comprising part of the total Redemption Price (less any
tax required to be deducted and withheld therefrom by the Corporation). 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 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
(less any tax required to be deducted and withheld therefrom by the
Corporation) for such Exchangeable Shares so deposited, against presentation
and surrender of the said certificates held by them, respectively, in
accordance with the foregoing provisions. Upon such payment or deposit of the
total Redemption Price, the holders of the Exchangeable Shares shall
thereafter be considered and deemed for all purposes to be holders of the
Parent Common Shares delivered to them. 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 shall give an accounting to the
holder with respect thereto and any balance of such proceeds of sale.
7.3 Dutchco shall have the overriding right (the "Redemption Call Right"),
notwithstanding the proposed redemption of Exchangeable Shares by the
Corporation pursuant to this Article 7 of these share provisions, to purchase
from all but not less than all of the holders of Exchangeable Shares to be
redeemed on the Redemption Date, all but not less than all of the Exchangeable
Shares held by each such holder on payment by Dutchco to the holder of an
amount per share equal to (a) the Current Market Price of a Parent Common
Share on the last Business Day prior to the Redemption Date which shall be
satisfied in full by causing to be delivered to such holder one Parent Common
Share plus (b) an additional amount equivalent to the full amount of all
dividends declared and unpaid on such Exchangeable Share and all dividends
declared on Parent Common Shares that have not been declared on such
Exchangeable Share in accordance with Section 3.1 of these share provisions
(collectively the "Redemption Call Purchase Price", provided that if the
record date for any such declared and unpaid dividends occurs on or after the
Redemption Date, the Redemption Call Purchase Price shall not include such
additional amount equivalent to such dividends). In the event of the exercise
of the Redemption Call Right by Dutchco, each holder shall be obligated to
sell all the Exchangeable Shares held by the holder and otherwise
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to be redeemed to Dutchco on the Redemption Date on payment by Dutchco to the
holder of the Redemption Call Purchase Price for each such share.
7.4 To exercise the Redemption Call Right, Dutchco must notify the Transfer
Agent, as agent for the holders of Exchangeable Shares, and the Corporation of
Dutchco's intention to exercise such right at least 125 days before the
Automatic Redemption Date (in the case of the Automatic Redemption) or at
least 35 days before the Section 12(g) Redemption Date (in the case of Section
12(g) Redemption). The Transfer Agent will notify the holders of the
Exchangeable Shares as to whether or not Dutchco has exercised the Redemption
Call Right forthwith after the expiry of the period during which the same may
be exercised by Dutchco. If Dutchco exercises the Redemption Call Right, on
the Redemption Date, Dutchco will purchase and the holders will sell all of
the Exchangeable Shares to be redeemed for a price per share equal to the
Redemption Call Purchase Price.
7.5 For the purposes of completing the purchase of Exchangeable Shares
pursuant to the Redemption Call Right, Dutchco shall deposit with the Transfer
Agent, on or before the Redemption Date, certificates representing the
aggregate number of Parent Common Shares deliverable by Dutchco in payment of
the total Redemption Call Purchase Price and a cheque or cheques in the amount
of the remaining portion, if any, of the total Redemption Call Purchase Price.
Provided that the total Redemption Call Purchase Price has been so deposited
with the Transfer Agent, on and after the Redemption Date the rights of each
holder of Exchangeable Shares so purchased will be limited to receiving such
holder's proportionate part of the total Redemption Call Purchase Price
payable by Dutchco upon presentation and surrender by the holder of
certificates representing the Exchangeable Shares purchased by Dutchco from
such holder and the holder shall on and after the Redemption Date be
considered and deemed for all purposes to be the holder of the Parent Common
Shares delivered to such holder. Upon surrender to the Transfer Agent of a
certificate or certificates representing Exchangeable Shares, together with
such other documents and instruments as may be required to effect a transfer
of Exchangeable Shares under the Quebec Act and the by-laws of the Corporation
and such additional documents and instruments as the Transfer Agent may
reasonably require, the holder of such surrendered certificate or certificates
shall be entitled to receive in exchange therefor, and the Transfer Agent on
behalf of Dutchco shall deliver to such holder, certificates representing the
Parent Common Shares to which the holder is entitled and a cheque or cheques
of Dutchco payable at par and in Canadian dollars at any branch of the bankers
of Dutchco or of the Corporation in Canada in payment of the remaining
portion, if any, of the total Redemption Call Purchase Price. If Dutchco does
not exercise the Redemption Call Right in the manner described above, on the
Redemption Date the holders of the Exchangeable Shares will be entitled to
receive in exchange therefor the redemption price otherwise payable by the
Corporation in connection with the redemption of Exchangeable Shares pursuant
to this Article 7.
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 than 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 shares tendered at lower prices. If
only part 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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ARTICLE 9
Voting Rights
9.1 Except as required by applicable law, 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 by 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 Parent, 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 Parent 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 ten 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 held by Parent, Dutchco or their Affiliates 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.
ARTICLE 11
Reciprocal Changes, Etc. in Respect of Parent Common Shares
11.1 (a) Pursuant to the Support Agreement, Parent 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 Parent Common Shares (or securities exchangeable
for or convertible into or carrying rights to acquire Parent Common Shares)
to the holders of all or substantially all of the then outstanding Parent
Common Shares by way of stock dividend or other distribution, other than an
issue of
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Parent Common Shares (or securities exchangeable for or convertible into or
carrying rights to acquire Parent Common Shares) to holders of Parent Common
Shares who exercise an option to receive dividends in Parent Common Shares (or
securities exchangeable for or convertible into or carrying rights to acquire
Parent 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 Parent Common Shares
entitling them to subscribe for or to purchase Parent Common Shares (or
securities exchangeable for or convertible into or carrying rights to
acquire Parent Common Shares); or
(iii) issue or distribute to the holders of all or substantially all of
the then outstanding Parent Common Shares (A) shares or securities of
Parent of any class other than Parent Common Shares (other than shares
convertible into or exchangeable for or carrying rights to acquire Parent
Common Shares), (B) rights, options or warrants other than those referred
to in Section 11.1(a)(ii) above, (C) evidences of indebtedness of Parent or
(D) assets of Parent;
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) Pursuant to the Support Agreement, Parent 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) subdivide, redivide or change the then outstanding Parent Common
Shares into a greater number of Parent Common Shares; or
(ii) reduce, combine or consolidate or change the then outstanding Parent
Common Shares into a lesser number of Parent Common Shares; or
(iii) reclassify or otherwise change the Parent Common Shares or effect
an amalgamation, merger, reorganization or other transaction affecting the
Parent 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.
Except for ministerial amendments contemplated by Section 3.5 of the Support
Agreement, 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 Parent, its subsidiaries and Affiliates)
are given certain rights to exchange their Exchangeable Shares for Parent
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 Parent and Dutchco with all provisions of the
Support Agreement and the Voting and Exchange Trust Agreement applicable to the
Corporation, Dutchco and Parent, 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 favor of the Corporation and such
holders under or pursuant to such agreements.
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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 (except as
contemplated therein) without the approval of the holders or the Exchangeable
Shares given in accordance with 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 for the protection of the Corporation or the holders of
Exchangeable Shares thereunder; or
(b) making such provisions or modifications not inconsistent with the
spirit and intent of 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 corrections 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 provision or
clerical omission or mistake or manifest error contained therein, provided
that the Board of Directors shall be of the opinion, after consultation
with counsel, that such changes or corrections will not be prejudicial to
the interests of the holders of the Exchangeable Shares.
ARTICLE 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 deemed delivery of a
Retraction Request as contemplated in Section 6.1 of these share provisions,
the provisions relating to the Liquidation Call Right and the Redemption Call
Right, and the Voting and Exchange Trust Agreement (including the provisions
with respect to the voting rights, exchange right and automatic exchange
thereunder).
ARTICLE 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 head 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 head
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 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
42
<PAGE>
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 holders of Exchangeable Shares shall not invalidate or otherwise alter or
affect any action or proceeding to be taken by the Corporation pursuant thereto.
ARTICLE 15
Guaranty/Assignment
15.1 Parent Guaranty/Assignment
Parent hereby unconditionally and irrevocably guarantees the full and
punctual performance of all of Dutchco's obligations hereunder. Dutchco may
assign all or a portion of its rights and obligations hereunder to Parent
without the consent of the Corporation or holders of Exchangeable Shares
provided Parent remains bound by these provisions.
ARTICLE 16
General
16.1 Withholding Rights
The Corporation, Parent, Dutchco and Transfer Agent shall be entitled to
deduct and withhold from the consideration otherwise payable to any holder of
Exchangeable Shares such amounts as Parent, Dutchco or the Transfer Agent
determine is required to deduct and withhold with respect to the making of
such payment under the United States Internal Revenue Code of 1986, as
amended, the Income Tax Act (Canada) or any provision of state, local,
provincial or foreign tax law. To the extent that amounts are so withheld,
such withheld amounts shall be treated for all purposes hereof as having been
paid to the holder of the shares in respect of which such deduction and
withholding was made, provided that such withheld amounts are actually
remitted to the appropriate taxing authority. To the extent that the amount so
required to be deducted or withheld from any payment to a holder exceeds the
cash portion of the consideration otherwise payable to the holder, the
Corporation, Dutchco and Transfer Agent are hereby authorized to sell or
otherwise dispose of at fair market value such portion of such consideration
as is necessary to provide sufficient funds to Parent, Dutchco or Transfer
Agent, as the case may be, in order to enable it to comply with such deduction
or withholding requirement and Parent, Dutchco or Transfer Agent shall give an
accounting to the holder with respect thereto and any balance of such proceeds
of sale.
ARTICLE 17
Par Value
17.1 Par Value
The Exchangeable Shares shall have a par value of $ per share.
43
<PAGE>
<TABLE>
<S> <C>
Gouvernement du Quebec Exhibit 2.3 A-110720-H9401
L'Inspecteur general
des Institutions financieres Form 6
ARTICLES OF AMALGAMATION
The Companies Act, R.S.Q., c. C-38
Part 1A
- ---------------------------------------------------------------------------------------------------------------------
1 Corporate name of the company resulting from the amalgamation 1.1 [_] Simplified
DISCREET LOGIC INC./ amalgamation
LOGIQUE DISCRETE INC.
- ---------------------------------------------------------------------------------------------------------------------
2 Quebec judicial district where 3 Precise number or minimum and 4 Effective date if after filing date
company has set up its head office maximum number of directors
Montreal MINIMUM: 1 MAXIMUM: 15 16/03/1999
- ---------------------------------------------------------------------------------------------------------------------
5 Description of share capital
See the provisions of the attached SCHEDULE A, forming an
integral part of the Form 6.
- ---------------------------------------------------------------------------------------------------------------------
6 Restrictions on the transfer of shares, if any
None
- ---------------------------------------------------------------------------------------------------------------------
7 Limitations on activities, if any
None
- ---------------------------------------------------------------------------------------------------------------------
8 Other provisions
See the provisions of the attached SCHEDULE B, forming an
integral part of this Form 6.
- ---------------------------------------------------------------------------------------------------------------------
Corporate name of amalgamating Signature of
companies authorized director
- ---------------------------------------------------------------------------------------------------------------------
DISCREET LOGIC INC./LOGIQUE DISCRETE INC. /s/ Richard J. Szalwinski
9066-9854 QUEBEC INC. /s/ Eric B. Herr
9066-9771 QUEBEC INC. /s/ Eric B. Herr
- ---------------------------------------------------------------------------------------------------------------------
If space allotted is insufficient, attach an appendix in two (2) copies
- ---------------------------------------------------------------------------------------------------------------------
For departmental use only CA-216 (Rev. 12-93)
</TABLE>
<PAGE>
Gouvernement du Quebec
L'Inspecteur general
des institutions financieres SCHEDULE A
Form 6
ARTICLES OF AMALGAMATION
The Companies Act, R.S.Q., c. C-38
Part 1A
5 Description of share capital
Authorized Share Capital.
- ------------------------
Upon the Amalgamation, the Company shall be authorized to issue:
an unlimited number of Class A voting common shares;
an unlimited number of Class B non-voting common shares;
an unlimited number of Class C non-voting preferred shares;
a limited number of 150,000 Class D non-voting preferred shares;
an unlimited number of Class E voting common shares;
an unlimited number of Class F non-voting common shares; and
an unlimited number of exchangeable non-voting shares,
all of which shall be without par value, except for the exchangeable non-voting
shares which shall have a par value provided for in the provisions set forth
herein for the said exchangeable non-voting shares.
Definitions.
- -----------
For the purposes of these share provisions, except as otherwise indicated:
"Amalgamation" means the amalgamation of Discreet Logic Inc., 9066-9854
Quebec Inc., and 9066-9771 Quebec Inc. under the Quebec Act.
"Board of Directors" means the board of directors of the Company.
"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 San Francisco,
California and Montreal, Quebec.
<PAGE>
Gouvernement du Quebec
L'Inspecteur general
des institutions financieres SCHEDULE A
Form 6
ARTICLES OF AMALGAMATION
The Companies Act, R.S.Q., c. C-38
Part 1A
"Certificate of Amalgamation" means the certificate of amalgamation to be
issued to the Company by the Inspector General of Financial Institutions
under the Quebec Act in respect of the Amalgamation.
"Class A Shares" means the Class A voting common shares in the share
capital of the Company.
"Class B Conversion Time" has the meaning ascribed thereto in Section 5.1
of the provisions attaching to the Class B Shares.
"Class B Retraction Time" has the meaning ascribed thereto in Section 4.1
of the provisions attaching to the Class B Shares.
"Class B Shares" means the Class B non-voting common shares in the share
capital of the Company.
"Class C Shares" means the Class C non-voting preferred shares in the share
capital of the Company.
"Class D Redemption Date" has the meaning ascribed thereto in Section 4.2
of the provisions attaching to the Class D Shares.
"Class D Redemption Price" has the meaning ascribed thereto in Section 4.1
of the provisions attaching to the Class D Shares.
"Class D Shares" means the Class D non-voting preferred shares in the share
capital of the Company.
"Class E Redemption Call Purchase Price" has the meaning ascribed thereto
in Section 4.3 of the provisions attaching to the Class E Shares.
"Class E Redemption Call Right" has the meaning ascribed thereto in Section
4.3 of the provisions attaching to the Class E Shares.
"Class E Redemption Price" has the meaning ascribed thereto in Section 4.1
of the provisions attaching to the Class E Shares.
<PAGE>
Gouvernement du Quebec
L'Inspecteur general
des institutions financieres SCHEDULE A
Form 6
ARTICLES OF AMALGAMATION
The Companies Act, R.S.Q., c. C-38
Part 1A
"Class E Redemption Time" has the meaning ascribed thereto in Section 4.1
of the provisions attaching to the Class E Shares.
"Class E Shares" means the Class E voting common shares in the share
capital of the Company.
"Class F Redemption Call Purchase Price" has the meaning ascribed thereto
in Section 4.3 of the provisions attaching to the Class F Shares.
"Class F Redemption Call Right" has the meaning ascribed thereto in Section
4.3 of the provisions attaching to the Class F Shares.
"Class F Redemption Price" has the meaning ascribed thereto in Section 4.1
of the provisions attaching to the Class F Shares.
"Class F Redemption Time" has the meaning ascribed thereto in Section 4.1
of the provisions attaching to the Class F Shares.
"Class F Shares" means the Class F non-voting common shares in the share
capital of the Company.
"Company" means the company resulting from the Amalgamation.
"Current Market Price" means, in respect of a Parent Common Share on any
date, the Canadian Dollar Equivalent of the average of the closing prices
of Parent Common Shares on Nasdaq on each of the thirty (30) consecutive
trading days ending not more than five trading days before such date, or,
if the Parent Common Shares are not then quoted on Nasdaq, on such other
stock exchange or automated quotation system on which the Parent 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 Parent Common Shares during such
period, then the Current Market Price of a Parent 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.
<PAGE>
Gouvernement du Quebec
L'Inspecteur general
des institutions financieres SCHEDULE A
Form 6
ARTICLES OF AMALGAMATION
The Companies Act, R.S.Q., c. C-38
Part 1A
"Discreet" means Discreet Logic Inc., a predecessor to the Company.
"Discreet Common Shares" means the common shares of Discreet.
"Discreet Meeting" means the special general meeting of the shareholders of
Discreet to be held to consider the Amalgamation.
"Dutchco" means Autodesk Development B.V., a corporation subsisting under
the laws of The Netherlands or, where applicable, such other subsidiary of
Autodesk or Dutchco to which Dutchco has assigned some or all of its rights
under the Combination Agreement.
"Effective Date" means the date of the Amalgamation as set forth in the
Certificate of Amalgamation.
"Effective Time" means 4:28 p.m. (Montreal time) on the Effective Date.
"Election Deadline" has the meaning ascribed thereto in Section 4.1 of the
provisions attaching to the Class B Shares.
"Exchangeable Share Provisions" means the rights, privileges, restrictions
and conditions attaching to the Exchangeable Shares as set forth herein.
"Exchangeable Shares" means the exchangeable non-voting shares in the share
capital of the Company.
"Maximum Number" means the number that is equal to 19.99% of the number of
Discreet Common Shares outstanding immediately prior to the Amalgamation
multiplied by 0.33.
"Nasdaq" means the Nasdaq National Market.
"Parent" means Autodesk, Inc., a body corporate existing under the laws of
the State of Delaware.
"Parent Common Shares" means the common shares in the share capital of
Parent.
<PAGE>
Gouvernement du Quebec
L'Inspecteur general
des institutions financieres SCHEDULE A
Form 6
ARTICLES OF AMALGAMATION
The Companies Act, R.S.Q., c. C-38
Part 1A
"Quebec Act" means the Companies Act (Quebec), as amended.
"Transfer Agent" means Harris Trust and Savings Bank or such other person
as may from time to time be the registrar and transfer agent for the
Exchangeable Shares.
PROVISIONS ATTACHING TO CLASS A SHARES
The Class A voting common shares in the share capital of the Company shall
have attached thereto the following rights, privileges, restrictions and
conditions:
1. Dividends
1.1 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 Company
shall pay dividends thereon, as and when declared by the Board of Directors out
of monies 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 may in their
discretion declare dividends on the Class A Shares without declaring dividends
on any of the Class B Shares, the Class C Shares, the Class D Shares, the Class
E Shares, the Class F Shares or the Exchangeable Shares.
2. Dissolution
2.1 In the event of the dissolution, liquidation or winding-up of the Company,
whether voluntary or involuntary, or any other distribution of assets of the
Company among its shareholders for the purpose of winding-up its affairs,
subject to the prior rights of the holders of the Exchangeable Shares in the
capital of the Company, the Class D Shares, the Class C Shares and to 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 of the
Company, the holders of the Class A Shares shall be entitled to receive the
remaining property and assets of the Company ratably with the holders of the
Class B Shares, the Class E Shares and the Class F Shares.
<PAGE>
Gouvernement du Quebec
L'Inspecteur general
des institutions financieres SCHEDULE A
Form 6
ARTICLES OF AMALGAMATION
The Companies Act, R.S.Q., c. C-38
Part 1A
3. Voting Rights
3.1 The holders of the Class A Shares shall be entitled to receive notice of
and to attend all meetings of the shareholders of the Company and, together with
the holders of Class E Shares, shall have one vote for each share held at all
meetings of the shareholders of the Company, except for meetings at which only
holders of another specified class or series of shares of the Company are
entitled to vote separately as a class or series.
4. Amendment and Approval
4.1 The rights, privileges, restrictions and conditions attaching to the Class
A Shares may be added to, changed or removed but only with the approval of the
holders of the Class A Shares given as hereinafter specified, and any other
approval required by law.
4.2 Any approval given by the holders of the Class A Shares to add to, change
or remove any right, privilege, restriction or condition attaching to the Class
A Shares or any other matter requiring the approval or consent of the holders of
the Class A 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 written resolution signed by all
holders of Class A Shares or by resolution passed by not less than two-thirds of
the votes cast on such resolution at a meeting of holders of Class A Shares duly
called and held at which the holders of at least 50% of the outstanding Class A
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 Class A 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 ten 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 Class A 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 Class A Shares.
<PAGE>
Gouvernement du Quebec
L'Inspecteur general
des institutions financieres SCHEDULE A
Form 6
ARTICLES OF AMALGAMATION
The Companies Act, R.S.Q., c. C-38
Part 1A
PROVISIONS ATTACHING TO CLASS B SHARES
The Class B non-voting common shares in the share capital of the Company
shall have attached thereto the following rights, privileges, restrictions and
conditions:
1. Dividends
1.1 Subject to the prior rights of the holders of any shares ranking senior to
the Class B Shares with respect to priority in the payment of dividends, the
holders of Class B Shares shall be entitled to receive dividends and the Company
shall pay dividends thereon, as and when declared by the Board of Directors out
of monies 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 B Shares shall be
declared and paid in equal amounts per share on all Class B Shares at the time
outstanding; and, subject as aforesaid, the Board of Directors may in their
discretion declare dividends on the Class B Shares without declaring dividends
on any of the Class A Shares, the Class C Shares, the Class D Shares, the Class
E Shares, the Class F Shares or the Exchangeable Shares.
2. Dissolution
2.1 In the event of the dissolution, liquidation or winding-up of the Company,
whether voluntary or involuntary, or any other distribution of assets of the
Company among its shareholders for the purpose of winding-up its affairs,
subject to the prior rights of the holders of the Exchangeable Shares in the
share capital of the Company, the Class D Shares and the Class C Shares and to
any other shares ranking senior to the Class B Shares with respect to priority
in the distribution of assets upon dissolution, liquidation or winding-up, the
holders of the Class B Shares shall be entitled to receive the remaining
property and assets of the Company ratably with the holders of the Class A
Shares, the Class E Shares and the Class F Shares.
3. Voting Rights
3.1 Except where specifically provided by the Quebec Act, the holders of the
Class B Shares shall not be entitled to receive notice of or to attend meetings
of the shareholders of the Company and shall not be entitled to vote at any
meeting of shareholders of the
<PAGE>
Gouvernement du Quebec
L'Inspecteur general
des institutions financieres SCHEDULE A
Form 6
ARTICLES OF AMALGAMATION
The Companies Act, R.S.Q., c. C-38
Part 1A
Company, but shall be entitled to notice of meetings of shareholders called
for the purpose of authorizing the dissolution of the Company or the sale,
lease or exchange of all or substantially all of the property of the Company.
4. Retraction
4.1 A holder of Class B Shares shall be entitled immediately following the
Effective Time (the "Class B Retraction Time"), subject to applicable law and
otherwise upon compliance with and subject to the provisions of this Section 4,
to require the Company to redeem all or any number of the Class B Shares
registered in the name of such holder for an amount per share equal to the
Current Market Price of 0.33 of one Parent Common Share on the last Business Day
prior to the Class B Retraction Time, which shall be satisfied in full by the
Company causing to be delivered to such holder 0.33 of one Exchangeable Share
for each Class B Share presented and surrendered by the holder (the "Class B
Retraction Price"). To effect such redemption, the holder shall no later than
4:29 p.m (Montreal time) on the Effective Date (the "Election Deadline") present
and surrender at the head office of Discreet acting on behalf of the Company or
the Company or at any office of the Transfer Agent or such other place as may be
specified by the Company by notice to the holders of Discreet's Common Shares
(on behalf of the holders of the Class B Shares) the certificate or certificates
representing the Class B Shares which the holder desires to have the Company
redeem (evidenced by the certificate or certificates representing Discreet's
Common Shares which, as a result of the Amalgamation, represent such Class B
Shares), together with such other documents and instruments as may be required
to effect a transfer of Class B Shares under the Quebec Act and the by-laws of
the Company and such additional documents and instruments as the Transfer Agent
may reasonably require, and together with a duly executed statement (the "Class
B Retraction Request") in such form as may be acceptable to the Company
specifying that the holder desires to have all or any number specified therein
of the Class B Shares represented by such certificate or certificates (the
"Retracted Shares") redeemed by the Company.
4.2 Upon receipt by the Company or the Transfer Agent in the manner specified
in Section 4.1 hereof of a certificate or certificates representing the number
of Class B Shares which the holder desires to have the Company redeem, together
with the documents and instruments contemplated by Section 4.1 (including a
Class B Retraction Request), and provided that the Class B Retraction Request is
not revoked by the holder in the manner specified in Section 4.6 hereof, the
Company shall redeem the Retracted Shares effective at the Class B Retraction
Time and shall cause to be delivered to such
<PAGE>
Gouvernement du Quebec
L'Inspecteur general
des institutions financieres SCHEDULE A
Form 6
ARTICLES OF AMALGAMATION
The Companies Act, R.S.Q., c. C-38
Part 1A
holder the total Retraction Price with respect to such shares. If only a part
of the Class B Shares represented by any certificate are redeemed, the balance
of shares represented by such certificate shall be governed by the provisions
of Section 5.1 of these share provisions relating to the Class B Shares.
4.3 The Company 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 Company for the Class B Shares or at the address specified in
the holder's Class B Retraction Request or by holding for pick up by the holder
at the head office of the Company or at any office of the Transfer Agent as may
be specified by the Company by notice to the holders of Class B Shares,
certificates representing the Exchangeable Shares (which shares shall be duly
issued as fully paid and non-assessable and shall be free and clear of any lien,
claim or encumbrance) registered in the name of the holder or in such other name
as the holder may request in payment of the total Class B Retraction Price and
such delivery of such certificates on behalf of the Company or by the Transfer
Agent shall be deemed to be payment of and shall satisfy and discharge all
liability for the total Class B Retraction Price to the extent that the same is
represented by such share certificates. All Class B Shares which have been so
retracted shall be cancelled.
4.4 As of the Class B Retraction Time, 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 Class B Retraction Price.
4.5 Notwithstanding any other provision of this Section 4, the Company shall
not be obligated to redeem Retracted Shares specified by a holder in a
Retraction Request to the extent that such redemption of Retracted Shares (i)
would be contrary to solvency requirements or other provisions of applicable law
or (ii) would cause the aggregate number of Exchangeable Shares issuable on
retraction to exceed the Maximum Number. If the Company believes that at the
Class B Retraction Time it would not be permitted by the foregoing to redeem the
Retracted Shares tendered for redemption on such date, the Company shall only be
obligated to redeem Retracted Shares specified by a holder in a Class B
Retraction Request to the extent of the maximum number of shares that may be so
redeemed (rounded down to a whole number of shares) as would not be contrary to
such provisions or the maximum number of Exchangeable Shares as would not exceed
the Maximum Number and shall notify the holder immediately following the
Retraction Date as to the number of Retracted Shares which will not be redeemed
by the Company. In any
<PAGE>
Gouvernement du Quebec
L'Inspecteur general
des institutions financieres SCHEDULE A
Form 6
ARTICLES OF AMALGAMATION
The Companies Act, R.S.Q., c. C-38
Part 1A
case in which the redemption by the Company of Retracted Shares would be
contrary to solvency requirements or other provisions of applicable law or
would cause the Exchangeable Shares to be issued to exceed the Maximum Number,
the Company shall redeem Retracted Shares in accordance with Section 4.2 of
these share provisions on a pro rata basis.
4.6 A holder of Retracted Shares may, by notice in writing given by the holder
to the Company at the head office of Discreet on behalf of the Company or of the
Company, not less than two Business Days immediately preceding the Class B
Retraction Time, withdraw its Class B Retraction Request in which event such
Class B Retraction Request shall be null and void.
4.7 No certificates or scrip representing fractional Exchangeable Shares shall
be issued upon the surrender for exchange of certificates pursuant to Section
4.3 hereof and no dividend, stock split or other change in the capital structure
of Parent shall relate to any such fractional security and such fractional
interests shall not entitle the owner thereof to vote or to exercise any rights
as a security holder of Parent. In lieu of any such fractional securities, each
person entitled to a fractional interest in an Exchangeable Share will receive
from the Company an amount in cash (rounded to the nearest whole cent), without
interest, equal to the product of (i) such fraction, multiplied by (ii) the
average of the closing price for the Parent Common Shares on Nasdaq as of each
of the thirty (30) consecutive trading days immediately preceding the Effective
Date as quoted in The Wall Street Journal or other reliable financial newspaper
or publication. For the purposes of the preceding sentence, a "trading day"
means a day on which trading generally takes place on Nasdaq and on which
trading in Parent Common Shares has occurred.
4.8 In the event of a transfer of ownership of Discreet Common Shares in
respect of which a Class B Retraction Request has been duly made prior to the
Class B Retraction Time but which is not registered in the transfer records of
Discreet prior to the Effective Date, a certificate representing the proper
number of Exchangeable Shares may be issued to a transferee if the certificate
representing such Discreet Common Shares is presented to the Transfer Agent,
together with a Class B Retraction Request executed by the transferee
accompanied by all documents required to evidence and effect such transfer.
4.9 In the event any certificate which immediately prior to the Effective Date
represented outstanding Discreet Common Shares that were converted pursuant to
the Amalgamation into Class B Shares and subsequently retracted by the holder
pursuant to the Class B Share provisions shall have been lost, stolen or
destroyed, upon the making of
<PAGE>
Gouvernement du Quebec
L'Inspecteur general
des institutions financieres SCHEDULE A
Form 6
ARTICLES OF AMALGAMATION
The Companies Act, R.S.Q., c. C-38
Part 1A
an affidavit of that fact by the person claiming such certificate to be lost,
stolen or destroyed, the Transfer Agent will issue in exchange for such lost,
stolen or destroyed certificate, certificates representing Exchangeable Shares
deliverable in respect thereof as determined in accordance with this Section 4.
When authorizing such issuance in exchange for any lost, stolen or destroyed
certificate, the person to whom certificates representing Exchangeable Shares
are to be issued shall, at the discretion of the Company, as a condition
precedent to the issuance thereof, give a bond satisfactory to the Company in
such sum as the Company may direct or otherwise indemnify the Company in a
manner satisfactory to the Company against any claim that may be made against
the Company with respect to the certificate alleged to have been lost, stolen or
destroyed.
4.10 A Class B Retraction Request executed by a holder of Discreet Common
Shares in respect of Class B Shares to be issued upon the Amalgamation shall be
deemed for all purposes to constitute a good and valid Class B Retraction
Request executed by a holder of Class B Shares. Any notice by Discreet to a
holder of Discreet Common Shares in respect of Class B Shares to be issued upon
the Amalgamation shall be deemed for all purposes to constitute good and valid
notice by the Company to the holders of Class B Shares. Any notice by a holder
of Discreet Common Shares to Discreet in respect of Class B Shares to be issued
upon the Amalgamation shall be deemed for all purposes of these share provisions
to constitute good and valid notice by a holder of Class B Shares to the
Company.
5. Automatic Conversion of Class B Shares
5.1 Immediately following the Class B Retraction Time (the "Class B Conversion
Time") each Class B Share then outstanding shall, automatically and without any
further action required on the part of either the Company or the holder of the
Class B Share, be converted into a unit consisting of one fully paid and non-
assessable Class E Share and one fully paid and non-assessable Class F Share
whereupon each such Class B Share will be cancelled, and the name of each holder
thereof shall be removed from the register of holders of Class B Shares and
added to the registers of holders of Class E Shares and Class F Shares
accordingly.
5.2 No certificates shall be issued by the Company representing the Class E
Shares and the Class F Shares. The certificates representing the Class B Shares
shall continue to represent an equal number of Class E and Class F Shares. On
and after the Class B Conversion Time, the holders of the Class B Shares so
converted shall cease to be holders
<PAGE>
Gouvernement du Quebec
L'Inspecteur general
des institutions financieres SCHEDULE A
Form 6
ARTICLES OF AMALGAMATION
The Companies Act, R.S.Q., c. C-38
Part 1A
of such Class B Shares and shall not be entitled to exercise any of the rights
of holders in respect thereof.
6. Amendment and Approval
6.1 The rights, privileges, restrictions and conditions attaching to the Class
B Shares may be added to, changed or removed but only with the approval of the
holders of the Class B Shares given as hereinafter specified, and any other
approval required by law.
6.2 Any approval given by the holders of the Class B Shares to add to, change
or remove any right, privilege, restriction or condition attaching to the Class
B Shares or any other matter requiring the approval or consent of the holders of
the Class B 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 written resolution signed by all
holders of Class B Shares or by resolution passed by not less than two-thirds of
the votes cast on such resolution at a meeting of holders of Class B Shares duly
called and held at which the holders of at least 50% of the outstanding Class B
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 Class B 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 ten 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 Class B 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 Class B Shares.
PROVISIONS ATTACHING TO CLASS C SHARES
The Class C non-voting preferred shares in the share capital of the Company
shall have attached thereto the following rights, privileges, restrictions and
conditions:
<PAGE>
Gouvernement du Quebec
L'Inspecteur general
des institutions financieres SCHEDULE A
Form 6
ARTICLES OF AMALGAMATION
The Companies Act, R.S.Q., c. C-38
Part 1A
1. Dividends
1.1 The holders of Class C Shares shall be entitled to receive and the Company
shall pay to them, always in preference and priority to any payment of dividends
on the Class A Shares, the Class B Shares, the Class E Shares and the Class F
Shares of the Company and any other shares of the Company ranking junior to the
Class C Shares, but subject to the prior rights of the holders of the
Exchangeable Shares and Class D Shares, as and when declared by the Board of
Directors out of monies of the Company properly applicable to the payment of
dividends, annual fixed, preferential, non-cumulative cash dividends in an
amount per share equal to $60,000 divided by the number of Class C Shares
outstanding payable annually.
2. Dissolution
2.1 In the event of the dissolution, liquidation or winding-up of the Company,
whether voluntary or involuntary, or any other distribution of assets of the
Company among its shareholders for the purpose of winding-up its affairs,
subject to the prior rights of the holders of the Exchangeable Shares and the
Class D Shares and to any other shares ranking senior to the Class C Shares with
respect to priority in the distribution of assets upon dissolution, liquidation
or winding-up, the holders of the Class C Shares shall be entitled to receive an
amount per share equal to the fair market value of all the issued and
outstanding shares of 9066-9854 Quebec Inc. immediately prior to the
Amalgamation divided by the number of issued and outstanding Class C Shares and
no more, in priority to the rights of the holders of the Class E Shares, the
Class F Shares, the Class A Shares and the Class B Shares.
3. Voting Rights
3.1 Except where specifically provided by the Quebec Act, the holders of the
Class C Shares shall not be entitled to receive notice of or to attend meetings
of the shareholders of the Company and shall not be entitled to vote at any
meeting of shareholders of the Company, but shall be entitled to notice of
meetings of shareholders called for the purpose of authorizing the dissolution
of the Company or the sale, lease or exchange of all or substantially all of the
property of the Company.
<PAGE>
Gouvernement du Quebec
L'Inspecteur general
des institutions financieres SCHEDULE A
Form 6
ARTICLES OF AMALGAMATION
The Companies Act, R.S.Q., c. C-38
Part 1A
4. Amendment and Approval
4.1 The rights, privileges, restrictions and conditions attaching to the Class
C Shares may be added to, changed or removed but only with the approval of the
holders of the Class C Shares given as hereinafter specified, and any other
approval required by law.
4.2 Any approval given by the holders of the Class C Shares to add to, change
or remove any right, privilege, restriction or condition attaching to the Class
C Shares or any other matter requiring the approval or consent of the holders of
the Class C 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 written resolution signed by all
holders of Class C Shares or by resolution passed by not less than two-thirds of
the votes cast on such resolution at a meeting of holders of Class C Shares duly
called and held at which the holders of at least 50% of the outstanding Class C
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 Class C 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 ten 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 Class C 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 Class C Shares.
PROVISIONS ATTACHING TO CLASS D SHARES
The Class D non-voting preferred shares in the share capital of the Company
shall have attached thereto the following rights, privileges, restrictions and
conditions:
1. Dividends
1.1 The holders of Class D Shares shall be entitled to receive and the Company
shall pay to them, always in preference and priority to any payment of dividends
on the Class A Shares, the Class B Shares, the Class C Shares, the Class E
Shares and the Class F Shares of the Company and any other shares of the Company
ranking junior to the Class D
<PAGE>
Gouvernement du Quebec
L'Inspecteur general
des institutions financieres SCHEDULE A
Form 6
ARTICLES OF AMALGAMATION
The Companies Act, R.S.Q., c. C-38
Part 1A
Shares, as and when declared by the Board of Directors out of monies of the
Company properly applicable to the payment of dividends, fixed, preferential,
cumulative cash dividends at the annual rate per share of 5% of the Class D
Liquidation Amount (as defined below) payable annually, by cheque of the
Company. Such dividend on any particular Class D Share shall accrue and be
cumulative from the date of issue of such Class D Share.
2. Dissolution
2.1 In the event of the dissolution, liquidation or winding-up of the Company,
whether voluntary or involuntary, or any other distribution of assets of the
Company among its shareholders for the purpose of winding-up its affairs,
subject to the prior rights of the holders of the Exchangeable Shares and to any
other shares ranking senior to the Class D Shares with respect to priority in
the distribution of assets upon dissolution, liquidation or winding-up, the
holders of the Class D Shares shall be entitled to receive in the aggregate an
amount per share equal to $150,000 divided by the number of issued and
outstanding Class D Shares (the "Class D Liquidation Amount") and no more, in
priority to the rights of the holders of the Class C Shares, the Class A Shares,
the Class B Shares, the Class E Shares and the Class F Shares.
3. Voting Rights
3.1 Except where specifically provided by the Quebec Act, the holders of the
Class D Shares shall not be entitled to receive notice of or to attend meetings
of the shareholders of the Company and shall not be entitled to vote at any
meeting of shareholders of the Company, but shall be entitled to notice of
meetings of shareholders called for the purpose of authorizing the dissolution
of the Company or the sale, lease or exchange of all or substantially all of the
property of the Company.
4. Redemption of Class D Shares by the Company
4.1 Subject to applicable law and to Section 4.1 of the Exchangeable Share
Provisions, the Company shall be entitled at any time from and after October 31,
2028 to redeem any or all of the Class D Shares registered in the name of a
holder for an amount per share equal to (a) $150,000 divided by the number of
issued and outstanding Class D Shares plus (b) an additional amount equivalent
to the full amount on all dividends accrued and unpaid thereon (herein
collectively called the "Class D Redemption Price").
<PAGE>
Gouvernement du Quebec
L'Inspecteur general
des institutions financieres SCHEDULE A
Form 6
ARTICLES OF AMALGAMATION
The Companies Act, R.S.Q., c. C-38
Part 1A
4.2 To effect such redemption the Company shall, at least ten days prior to the
date fixed for redemption (the "Class D Redemption Date") send to each holder of
Class D Shares to be redeemed a notice in writing of the redemption by the
Company of Class D Shares held by such holder. Such notice shall set out the
Class D Redemption Price and the Class D Redemption Date. On or after the Class
D Redemption Date, the Company shall cause to be delivered to the holders of the
Class D Shares to be redeemed the Class D Redemption Price (less any tax
required to be deducted and withheld therefrom by the Company) for each such
Class D Share upon presentation and surrender at the head office of the Company
of the certificates representing such Class D Shares, together with such other
documents and instruments as may be required to effect a transfer of Class D
Shares under the Quebec Act and the by-laws of the Company and such additional
documents and instruments as the Company may reasonably require. Payment of the
total Class D Redemption Price for such Class D Shares shall be made by delivery
to each holder, at the address of the holder recorded in the securities register
of the Company or by holding for pick up by the holder at the head office of the
Company of a cheque of the Company payable at par at any branch of the bankers
of the Company in respect of the Class D Redemption Price (less any tax required
to be deducted and withheld therefrom by the Company). On and after the Class D
Redemption Date, the holders of the Class D Shares called for redemption shall
cease to be holders of such Class D 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 Class D Redemption Price, unless payment
of the total Class D Redemption Price for such Class D 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 Class D Redemption Price has been paid in the manner
hereinbefore provided. The Company shall have the right at any time after the
sending of notice of its intention to redeem Class D Shares as aforesaid to
deposit or cause to be deposited the total Class D Redemption Price of the Class
D Shares so called for redemption, or of such of the said Class D 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 Class D
Redemption Date, the Class D Shares in respect whereof such deposit shall have
been made shall be redeemed and the rights of the holders thereof after such
deposit or Class D Redemption Date, as the case may be, shall be limited to
receiving their proportionate part of the total Class D Redemption Price (less
any tax required to be deducted and withheld therefrom by the Company) for such
Class D
<PAGE>
Gouvernement du Quebec
L'Inspecteur general
des institutions financieres SCHEDULE A
Form 6
ARTICLES OF AMALGAMATION
The Companies Act, R.S.Q., c. C-38
Part 1A
Shares so deposited, against presentation and surrender of the said
certificates held by them, respectively, in accordance with the foregoing
provisions.
5. Purchase for Cancellation
5.1 Subject to applicable law and to Section 4.1 of the Exchangeable Share
Provisions, the Company may at any time and from time to time purchase for
cancellation all or any part of the outstanding Class D Shares at any price by
tender to all the holders of record of Class D Shares then outstanding or
through the facilities of any stock exchange on which Class D Shares are listed
or quoted at any price per share. If in response to an invitation for tenders
under the provisions hereof, more Class D Shares are tendered at a price or
prices acceptable to the Company than the Company is prepared to purchase, Class
D Shares to be purchased by the Company 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 Company, 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 Company is prepared to purchase after the Company has purchased all the
shares tendered at lower prices. If part only of the Class D 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 Company. Subject as aforesaid, the
Company may effect such purchase for cancellation without purchasing for
cancellation shares of any other Class of shares of the Company.
6. Amendment and Approval
6.1 The rights, privileges, restrictions and conditions attaching to the Class
D Shares may be added to, changed or removed but only with the approval of the
holders of the Class D Shares given as hereinafter specified, and any other
approval required by law.
6.2 Any approval given by the holders of the Class D Shares to add to, change
or remove any right, privilege, restriction or condition attaching to the Class
D Shares or any other matter requiring the approval or consent of the holders of
the Class D 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 written resolution signed by all
holders of Class D Shares or by resolution passed by not less than two-thirds of
the votes cast on such resolution at a meeting of holders of Class D Shares duly
called and held at which the holders of at least 50% of the outstanding
<PAGE>
Gouvernement du Quebec
L'Inspecteur general
des institutions financieres SCHEDULE A
Form 6
ARTICLES OF AMALGAMATION
The Companies Act, R.S.Q., c. C-38
Part 1A
Class D 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 Class D
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 ten 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 Class D 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 Class D Shares.
PROVISIONS ATTACHING TO CLASS E SHARES
The Class E voting common shares in the share capital of the Company shall
have attached thereto the following rights, privileges, restrictions and
conditions:
1. Dividends
1.1 Subject to the prior rights of the holders of any shares ranking senior to
the Class E Shares with respect to priority in the payment of dividends, the
holders of Class E Shares shall be entitled to receive dividends and the Company
shall pay dividends thereon, as and when declared by the Board of Directors out
of monies 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 E Shares shall be
declared and paid in equal amounts per share on all Class E Shares at the time
outstanding; and, subject as aforesaid, the Board of Directors may in their
discretion declare dividends on the Class E Shares without declaring dividends
on any of the Class A Shares, Class B Shares, Class C Shares, Class D Shares or
Class F Shares.
2. Dissolution
2.1 In the event of the dissolution, liquidation or winding-up of the Company,
whether voluntary or involuntary, or any other distribution of assets of the
Company among its shareholders for the purpose of winding-up its affairs,
subject to the prior rights of the holders of the Exchangeable Shares in the
share capital of the Company, the Class D Shares, the Class C Shares and to any
other shares ranking senior to the Class E Shares
<PAGE>
Gouvernement du Quebec
L'Inspecteur general
des institutions financieres SCHEDULE A
Form 6
ARTICLES OF AMALGAMATION
The Companies Act, R.S.Q., c. C-38
Part 1A
with respect to priority in the distribution of assets upon dissolution,
liquidation or winding-up, the holders of the Class E Shares shall be entitled
to receive the remaining property and assets of the Company ratably with the
holders of the Class A Shares, the Class B Shares and the Class F Shares.
3. Voting Rights
3.1 The holders of the Class E Shares shall be entitled to receive notice of
and to attend all meetings of the shareholders of the Company and, together with
the holders of Class A Shares, shall have one vote for each share held at all
meetings of the shareholders of the Company, except for meetings at which only
holders of another specified Class or series of shares of the Company are
entitled to vote separately as a Class or series.
4. Redemption of Class E Shares by the Company
4.1 Subject to applicable law, and subject to the exercise by Dutchco of the
Class E Redemption Call Right, the Company shall be entitled, immediately
following the Class B Conversion Time (the "Class E Redemption Time") without
notice to the holders of the Class E Shares, but with prior notice to Dutchco,
to redeem the whole of the then outstanding Class E Shares for an amount per
share equal to the Current Market Price of 0.165 of one Parent Common Share on
the last Business Day prior to the Class E Redemption Time, which shall be
satisfied in full by the Company causing to be delivered to each holder of Class
E Shares 0.165 of one Parent Common Share for each Class E Share held by such
holder (the "Class E Redemption Price").
4.2 At or after the Class E Redemption Time and subject to the exercise by
Dutchco of the Class E Redemption Call Right, the Company shall cause to be
delivered to the holders of the Class E Shares to be redeemed the Class E
Redemption Price (less any tax required to be deducted and withheld therefrom by
the Company) for each such Class E Share upon presentation and surrender (at the
head office of the Company or at any office of the Transfer Agent as may be
specified by the Company) of the certificates representing such Class E Shares,
or such other certificates of securities of any predecessor of the Company
acceptable to the Company (including those representing Discreet Common Shares)
together with such other documents and instruments as may be required to effect
a transfer of Class E Shares under the Quebec Act and the by-laws of the Company
and such additional documents and instruments as the Transfer Agent may
reasonably require. Payment of the total Class E Redemption Price for such Class
E Shares shall be made by
<PAGE>
Gouvernement du Quebec
L'Inspecteur general
des institutions financieres SCHEDULE A
Form 6
ARTICLES OF AMALGAMATION
The Companies Act, R.S.Q., c. C-38
Part 1A
delivery to each holder, at the address of the holder recorded in the
securities register of the Company or by holding for pick up by the holder at
the head office of the Company or at any office of the Transfer Agent as may
be specified by the Company, on behalf of the Company of certificates
representing Parent Common Shares (which shares shall be duly issued as fully
paid and non-assessable and shall be free and clear of any lien, claim or
encumbrance) (less any tax required to be deducted and withheld therefrom by
the Company). At and after the Class E Redemption Time, the holders of the
Class E Shares called for redemption shall cease to be holders of such Class E
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 Class E Redemption Price, unless payment of the total Class E
Redemption Price for such Class E 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
Class E Redemption Price has been paid in the manner hereinbefore provided.
Subject to the exercise of the Class E Redemption Call Right, the Company
shall have the right at any time to deposit or cause to be deposited the total
Class E Redemption Price of the Class E Shares so called for redemption, or of
such of the said Class E 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 or the United States. Upon the later of such deposit being
made and the Class E Redemption Time, the Class E Shares in respect whereof
such deposit shall have been made shall be redeemed and the rights of the
holders thereof after such deposit or Class E Redemption Time, as the case may
be, shall be limited to receiving their proportionate part of the total Class
E Redemption Price (less any tax required to be deducted and withheld
therefrom by the Company) for such Class E Shares so deposited, against
presentation and surrender of the said certificates held by them,
respectively, in accordance with the foregoing provisions. Upon such payment
or deposit of the total Class E Redemption Price, the holders of the Class E
Shares shall thereafter be considered and deemed for all purposes to be
holders of the Parent Common Shares delivered to them.
4.3 Dutchco shall have the overriding right (the "Class E Redemption Call
Right"), notwithstanding the proposed redemption of Class E Shares by the
Company, to purchase from all but not less than all of the holders of Class E
Shares to be redeemed at the Class E Redemption Time, all but not less than all
of the Class E Shares held by each such holder on payment by Dutchco to the
holder of an amount per share equal to the Current Market Price of 0.165 of one
Parent Common Share on the last Business Day prior to the
<PAGE>
Gouvernement du Quebec
L'Inspecteur general
des institutions financieres SCHEDULE A
Form 6
ARTICLES OF AMALGAMATION
The Companies Act, R.S.Q., c. C-38
Part 1A
Class E Redemption Time which shall be satisfied in full by causing to be
delivered to such holder 0.165 of one Parent Common Share (the "Class E
Redemption Call Purchase Price"). In the event of the exercise of the Class E
Redemption Call Right by Dutchco, each holder shall be obligated to sell all
the Class E Shares held by the holder and otherwise to be redeemed to Dutchco
at the Class E Redemption Time on payment by Dutchco to the holder of the
Class E Redemption Call Purchase Price for each such share.
4.4 To exercise the Class E Redemption Call Right, Dutchco must notify the
Company of Dutchco's intention to exercise such right prior to the Class E
Redemption Time (which notice may be given to Discreet on behalf of the
Company). If Dutchco exercises the Class E Redemption Call Right, Dutchco will,
at the Class E Redemption Time, purchase and the holders will sell all of the
Class E Shares to be redeemed for a price per share equal to the Class E
Redemption Call Purchase Price. Any notice by Dutchco to Discreet for and on
behalf of the Company shall be deemed to constitute good and valid notice by
Dutchco to the Company.
4.5 For the purposes of completing the purchase of Class E Shares pursuant to
the Class E Redemption Call Right, Dutchco shall deposit with the Transfer
Agent, at or before the Class E Redemption Time, certificates representing the
aggregate number of Parent Common Shares deliverable by Dutchco in payment of
the total Class E Redemption Call Purchase Price and a cheque or cheques in the
amount of the remaining portion, if any, of the total Class E Redemption Call
Purchase Price. Provided that the total Class E Redemption Call Purchase Price
has been so deposited with the Transfer Agent, at and after the Class E
Redemption Time the rights of each holder of Class E Shares so purchased will be
limited to receiving such holder's proportionate part of the total Class E
Redemption Call Purchase Price payable by Dutchco upon presentation and
surrender by the holder of certificates representing the Class E Shares
purchased by Dutchco from such holder and the holder shall at and after the
Class E Redemption Time be considered and deemed for all purposes to be the
holder of the Parent Common Shares delivered to such holder. Upon surrender to
the Transfer Agent of a certificate or certificates representing Class E Shares,
together with such other documents and instruments as may be required to effect
a transfer of Class E Shares under the Quebec Act and the by-laws of the Company
and such additional documents and instruments as the Transfer Agent may
reasonably require, the holder of such surrendered certificate or certificates
shall be entitled to receive in exchange therefor, and the Transfer Agent on
behalf of Dutchco shall deliver to such holder, certificates representing the
Parent Common Shares to which the holder is entitled and a cheque or cheques of
or on behalf of Dutchco payable at par and in
<PAGE>
Gouvernement du Quebec
L'Inspecteur general
des institutions financieres SCHEDULE A
Form 6
ARTICLES OF AMALGAMATION
The Companies Act, R.S.Q., c. C-38
Part 1A
Canadian dollars at any branch of the bankers of Dutchco or of the Company in
Canada in payment of the remaining portion, if any, of the total Class E
Redemption Call Purchase Price. If Dutchco does not exercise the Class E
Redemption Call Right in the manner described herein, at the Class E
Redemption Time the holders of the Class E Shares will be entitled to receive
in exchange therefor the redemption price otherwise payable by the Company in
connection with the redemption of Class E Shares.
4.6 No certificates or scrip representing fractional Parent Common Shares shall
be issued upon the surrender for exchange of certificates pursuant to Sections
4.2 or 4.5 hereof and no dividend, stock split or other change in the capital
structure of Parent shall relate to any such fractional security and such
fractional interests shall not entitle the owner thereof to vote or to exercise
any rights as a security holder of Parent. In lieu of any such fractional
securities, each person entitled to a fractional interest in a Parent Common
Share will receive from the Company or Dutchco, as the case may be, an amount in
cash (rounded to the nearest whole cent), without interest, equal to the product
of (i) such fraction, multiplied by (ii) the average of the closing price for
the Parent Common Shares on Nasdaq as of each of the thirty (30) consecutive
trading days immediately preceding the Effective Date as quoted in The Wall
Street Journal or other reliable financial newspaper or publication. For the
purposes of the preceding sentence, a "trading day" means a day on which trading
generally takes place on Nasdaq and on which trading in Parent Common Shares has
occurred.
4.7 No dividends or other distributions declared or made after the Class E
Redemption Time with respect to Parent Common Shares with a record date after
the Class E Redemption Time shall be paid to the holder of any unsurrendered
certificate which immediately prior to the Class E Redemption Time represented
Class E Shares that were redeemed or purchased pursuant to these Class E Share
provisions, and no cash payment in lieu of fractional shares shall be paid to
any such holder pursuant to Section 4.6 hereof, unless and until the holder of
record of such certificate shall surrender such certificate in accordance with
Sections 4.2 or 4.5 hereof, as the case may be. Subject to applicable law, at
the time of such surrender of any such certificate there shall be paid to the
record holder of the certificates representing whole Parent Common Shares
without interest (i) the amount of any cash payable in lieu of a fractional
Parent Common Share to which such holder is entitled pursuant to Section 4.6
hereof, (ii) the amount of dividends or other distributions with a record date
after the Class E Redemption Time theretofore paid with respect to such whole
Parent Common Share and (iii) the amount of dividends or other distributions
with a record date after the Class E Redemption Time but prior to surrender
<PAGE>
Gouvernement du Quebec
L'Inspecteur general
des institutions financieres SCHEDULE A
Form 6
ARTICLES OF AMALGAMATION
The Companies Act, R.S.Q., c. C-38
Part 1A
and a payment date subsequent to surrender payable with respect to such whole
Parent Common Share.
4.8 In the event of a transfer of ownership of Discreet Common Shares which is
not registered in the transfer records of Discreet prior to the Effective Date,
a certificate representing the proper number of Parent Common Shares may be
issued to a transferee if the certificate representing such Discreet Common
Shares is presented to the Transfer Agent, accompanied by all documents required
to evidence and effect such transfer.
4.9 In the event any certificate which immediately prior to the Effective Date
represented outstanding Discreet Common Shares that were converted to Class B
Shares on the Amalgamation and subsequently converted into Class E Shares at the
Class B Conversion Time shall have been lost, stolen or destroyed, upon the
making of an affidavit of that fact by the person claiming such certificate to
be lost, stolen or destroyed, the Transfer Agent will issue in exchange for such
lost, stolen or destroyed certificate, certificates representing Parent Common
Shares (and any dividends or distributions with respect thereto and any cash
pursuant to Section 4.6 hereof) deliverable in respect thereof as determined in
accordance with Sections 4.2 or 4.5 hereof. When authorizing such issuance
and/or payment in exchange for any lost, stolen or destroyed certificate, the
person to whom certificates representing Parent Common Shares are to be issued
shall, at the discretion of the Company or Dutchco, as the case may be, as a
condition precedent to the issuance thereof, give a bond satisfactory to the
Company, the Affiliate or Dutchco, as the case may be, in such sum as the
Company or Dutchco may direct or otherwise indemnify the Company or Dutchco in a
manner satisfactory to the Company, the Affiliate or the Dutchco, as the case
may be, against any claim that may be made against the Company, the Affiliate or
Dutchco with respect to the certificate alleged to have been lost, stolen or
destroyed.
4.10 The Company and Dutchco shall be entitled to deduct and withhold from the
Class E Redemption Price, the Class E Redemption Call Price payable pursuant to
these Class E Share Provisions to any holder of Class E Shares such amounts as
Parent, the Affiliate, Dutchco or the Transfer Agent determine is required to
deduct and withhold with respect to the making of such payment under the United
States Internal Revenue Code of 1986, as amended, the Income Tax Act (Canada) or
any provision of state, local, provincial or foreign tax law. To the extent that
amounts are so withheld, such withheld amounts shall be treated for all purposes
hereof as having been paid to the holder of the shares in respect of which such
deduction and withholding was made, provided that such
<PAGE>
Gouvernement du Quebec
L'Inspecteur general
des institutions financieres SCHEDULE A
Form 6
ARTICLES OF AMALGAMATION
The Companies Act, R.S.Q., c. C-38
Part 1A
withheld amounts are actually remitted to the appropriate taxing authority. To
the extent any amount is required to be deducted or withheld from any payment to
a holder, the Company or Dutchco as the case may be, are hereby authorized to
sell or otherwise dispose of at fair market value such portion of such
consideration as is necessary to provide sufficient funds to the Company or
Dutchco, as the case may be, in order to enable it to comply with such deduction
or withholding requirement and the Company or Dutchco, as the case may be, shall
give an accounting to the holder with respect thereto and any balance of such
proceeds of sale.
4.11 The Company shall not be entitled to redeem, nor shall Dutchco be entitled
to purchase, any Class E Shares pursuant to this Section 4 unless at the same
time the Company redeems or Dutchco, purchases at the same time and in the same
manner all issued and outstanding Class F Shares.
5. Purchase for Cancellation
5.1 Subject to applicable law and to Section 4.1 of the Exchangeable Share
Provisions, the Company may at any time and from time to time purchase for
cancellation all or any part of the outstanding Class E Shares at any price by
tender to all the holders of record of Class E Shares then outstanding or
through the facilities of any stock exchange on which Class E Shares are listed
or quoted at any price per share. If in response to an invitation for tenders
under the provisions hereof, more Class E Shares are tendered at a price or
prices acceptable to the Company than the Company is prepared to purchase, Class
E Shares to be purchased by the Company 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 Company, 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 Company is prepared to purchase after the Company has purchased all the
shares tendered at lower prices. If only part of the Class E 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 Company. Subject as aforesaid, the
Company may effect such purchase for cancellation without purchasing for
cancellation shares of any other Class of shares of the Company.
<PAGE>
Gouvernement du Quebec
L'Inspecteur general
des institutions financieres SCHEDULE A
Form 6
ARTICLES OF AMALGAMATION
The Companies Act, R.S.Q., c. C-38
Part 1A
6. Issued and Paid-Up Capital Account
6.1 Where Class E Shares and Class F Shares are issued on a conversion of Class
B Shares, the amount to be added to the issued and paid-up capital account of
the Class E Shares for purposes of the Quebec Act and the paid-up capital
account of the Class E Shares for purposes of the Income Tax Act (Canada) shall
be equal to the aggregate of the issued and paid-up capital of such Class B
Shares so converted, less $1.
7. Amendment and Approval
7.1 The rights, privileges, restrictions and conditions attaching to the Class
E Shares may be added to, changed or removed but only with the approval of the
holders of the Class E Shares given as hereinafter specified, and any other
approval required by law.
7.2 Any approval given by the holders of the Class E Shares to add to, change
or remove any right, privilege, restriction or condition attaching to the Class
E Shares or any other matter requiring the approval or consent of the holders of
the Class E 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 written resolution signed by all
holders of Class E Shares or by resolution passed by not less than two-thirds of
the votes cast on such resolution at a meeting of holders of Class E Shares duly
called and held at which the holders of at least 50% of the outstanding Class E
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 Class E 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 ten 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 Class E 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 Class E Shares.
<PAGE>
Gouvernement du Quebec
L'Inspecteur general
des institutions financieres SCHEDULE A
Form 6
ARTICLES OF AMALGAMATION
The Companies Act, R.S.Q., c. C-38
Part 1A
PROVISIONS ATTACHING TO CLASS F SHARES
The Class F non-voting common shares in the share capital of the Company
shall have attached thereto the following rights, privileges, restrictions and
conditions:
1. Dividends
1.1 Subject to the prior rights of the holders of any shares ranking senior to
the Class F Shares with respect to priority in the payment of dividends, the
holders of Class F Shares shall be entitled to receive dividends and the Company
shall pay dividends thereon, as and when declared by the Board of Directors out
of monies 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 F Shares shall be
declared and paid in equal amounts per share on all Class F Shares at the time
outstanding; and, subject as aforesaid, the Board of Directors may in their
discretion declare dividends on the Class F Shares without declaring dividends
on any of the Class A Shares, the Class B Shares, the Class C Shares, the Class
D Shares, the Class E Shares or the Exchangeable Shares.
2. Dissolution
2.1 In the event of the dissolution, liquidation or winding-up of the Company,
whether voluntary or involuntary, or any other distribution of assets of the
Company among its shareholders for the purpose of winding-up its affairs,
subject to the prior rights of the holders of the Exchangeable Shares, the Class
D Shares and the Class C Shares and to any other shares ranking senior to the
Class F Shares with respect to priority in the distribution of assets upon
dissolution, liquidation or winding-up, the holders of the Class F Shares shall
be entitled to receive the remaining property and assets of the Company ratably
with the holders of the Class A Shares, the Class B Shares and the Class E
Shares.
3. Voting Rights
3.1 The holders of Class F Shares shall be entitled to vote separately as a
Class on any change of the head office of the Company. Each Class F Share shall
carry one vote at any meeting called for such purpose. Except as aforesaid and
except where specifically
<PAGE>
Gouvernement du Quebec
L'Inspecteur general
des institutions financieres SCHEDULE A
Form 6
ARTICLES OF AMALGAMATION
The Companies Act, R.S.Q., c. C-38
Part 1A
provided by the Quebec Act the holders of the Class F Shares shall not otherwise
be entitled to receive notice of or to attend meetings of the shareholders of
the Company and shall not be entitled to vote at any meeting of shareholders of
the Company, but shall be entitled to notice of meetings of shareholders called
for the purpose of authorizing the dissolution of the Company.
4. Redemption of Class F Shares by the Company
4.1 Subject to applicable law, and subject to the exercise by Dutchco of the
Class F Redemption Call Right, the Company shall be entitled, immediately
following the Class B Conversion Time (the "Class F Redemption Time") without
notice to the holders of Class F Shares, but with prior notice to Dutchco, to
redeem the whole of the then outstanding Class F Shares for an amount per share
equal to the Current Market Price of 0.165 of one Parent Common Share on the
last Business Day prior to the Redemption Time, which shall be satisfied in full
by the Company causing to be delivered to each holder of Class F Shares 0.165 of
one Parent Common Share for each Class F Share held by such holder (the "Class F
Redemption Price").
4.2 At or after the Class F Redemption Time and subject to the exercise by
Dutchco of the Class F Redemption Call Right, the Company shall cause to be
delivered to the holders of the Class F Shares to be redeemed the Class F
Redemption Price (less any tax required to be deducted and withheld therefrom by
the Company) for each such Class F Share upon presentation and surrender (at the
head office of the Company or at any office of the Transfer Agent as may be
specified by the Company in such notice) of the certificates representing such
Class F Shares, or such other certificates of securities or any predecessor of
the Company acceptable to the Company (including those representing Discreet
Common Shares) together with such other documents and instruments as may be
required to effect a transfer of Class F Shares under the Quebec Act and the by-
laws of the Company and such additional documents and instruments as the
Transfer Agent may reasonably require. Payment of the total Class F Redemption
Price for such Class F Shares shall be made by delivery to each holder, at the
address of the holder recorded in the securities register of the Company or by
holding for pick up by the holder at the head office of the Company or at any
office of the Transfer Agent as may be specified by the Company, on behalf of
the Company of certificates representing Parent Common Shares (which shares
shall be duly issued as fully paid and non-assessable and shall be free and
clear of any lien, claim or encumbrance) (less any tax required to be deducted
and withheld therefrom by the Company). At and after the Class F Redemption
Time, the holders of the
<PAGE>
Gouvernement du Quebec
L'Inspecteur general
des institutions financieres SCHEDULE A
Form 6
ARTICLES OF AMALGAMATION
The Companies Act, R.S.Q., c. C-38
Part 1A
Class F Shares called for redemption shall cease to be holders of such Class F
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 Class F Redemption Price, unless payment of the total Class F Redemption
Price for such Class F 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 Class F Redemption
Price has been paid in the manner hereinbefore provided. Subject to the exercise
of the Class F Redemption Call Right by Dutchco, the Company shall have the
right at any time to deposit or cause to be deposited the total Class F
Redemption Price of the Class F Shares so called for redemption, or of such of
the said Class F 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 or the United States. Upon the later of such deposit being made and the
Class F Redemption Time, the Class F Shares in respect whereof such deposit
shall have been made shall be redeemed and the rights of the holders thereof
after such deposit or Class F Redemption Time, as the case may be, shall be
limited to receiving their proportionate part of the total Class F Redemption
Price (less any tax required to be deducted and withheld therefrom by the
Company) for such Class F Shares so deposited, against presentation and
surrender of the said certificates held by them, respectively, in accordance
with the foregoing provisions. Upon such payment or deposit of the total Class F
Redemption Price, the holders of the Class F Shares shall thereafter be
considered and deemed for all purposes to be holders of the Parent Common Shares
delivered to them.
4.3 Dutchco shall have the overriding right (the "Class F Redemption Call
Right"), notwithstanding the proposed redemption of Class F Shares by the
Company, to purchase from all but not less than all of the holders of Class F
Shares to be redeemed at the Class F Redemption Time, all but not less than all
of the Class F Shares held by each such holder on payment by Dutchco to the
holder of an amount per share equal to the Current Market Price of 0.165 of one
Parent Common Share on the last Business Day prior to the Class F Redemption
Time which shall be satisfied in full by causing to be delivered to such holder
0.165 of one Parent Common Share (the "Class F Redemption Call Purchase Price").
In the event of the exercise of the Class F Redemption Call Right by Dutchco,
each holder shall be obligated to sell all the Class F Shares held by the holder
and otherwise to be redeemed to Dutchco at the Class F Redemption Time on
payment by Dutchco to the holder of the Class F Redemption Call Purchase Price
for each such share.
<PAGE>
Gouvernement du Quebec
L'Inspecteur general
des institutions financieres SCHEDULE A
Form 6
ARTICLES OF AMALGAMATION
The Companies Act, R.S.Q., c. C-38
Part 1A
4.4 To exercise the Class F Redemption Call Right, Dutchco must notify the
Company of Dutchco's intention to exercise such right prior to the Class F
Redemption Time (which notice may be given to Discreet on behalf of the
Company). If Dutchco exercises the Class F Redemption Call Right, Dutchco will,
at the Class F Redemption Time, purchase and the holders will sell all of the
Class F Shares to be redeemed for a price per share equal to the Class F
Redemption Call Purchase Price. Any notice by Dutchco to Discreet for and on
behalf of the Company shall be deemed to constitute good and valid notice by
Dutchco to the Company.
4.5 For the purposes of completing the purchase of Class F Shares pursuant to
the Class F Redemption Call Right, Dutchco shall deposit with the Transfer
Agent, at or before the Class F Redemption Time, certificates representing the
aggregate number of Parent Common Shares deliverable by Dutchco in payment of
the total Class F Redemption Call Purchase Price and a cheque or cheques in the
amount of the remaining portion, if any, of the total Class F Redemption Call
Purchase Price. Provided that the total Class F Redemption Call Purchase Price
has been so deposited with the Transfer Agent, at and after the Class F
Redemption Time the rights of each holder of Class F Shares so purchased will be
limited to receiving such holder's proportionate part of the total Class F
Redemption Call Purchase Price payable by Dutchco upon presentation and
surrender by the holder of certificates representing the Class F Shares
purchased by Dutchco from such holder and the holder shall at and after the
Class F Redemption Time be considered and deemed for all purposes to be the
holder of the Parent Common Shares delivered to such holder. Upon surrender to
the Transfer Agent of a certificate or certificates representing Class F Shares,
together with such other documents and instruments as may be required to effect
a transfer of Class F Shares under the Quebec Act and the by-laws of the Company
and such additional documents and instruments as the Transfer Agent may
reasonably require, the holder of such surrendered certificate or certificates
shall be entitled to receive in exchange therefor, and the Transfer Agent on
behalf of Dutchco shall deliver to such holder, certificates representing the
Parent Common Shares to which the holder is entitled and a cheque or cheques of
or on behalf of Dutchco payable at par and in Canadian dollars at any branch of
the bankers of Dutchco or of the Company in Canada in payment of the remaining
portion, if any, of the total Class F Redemption Call Purchase Price. If Dutchco
does not exercise the Class F Redemption Call Right in the manner described
herein, at the Class F Redemption Time the holders of the Class F Shares will be
entitled to receive in exchange therefor the redemption price otherwise payable
by the Company in connection with the redemption of Class F Shares.
<PAGE>
Gouvernement du Quebec
L'Inspecteur general
des institutions financieres SCHEDULE A
Form 6
ARTICLES OF AMALGAMATION
The Companies Act, R.S.Q., c. C-38
Part 1A
4.6 No certificates or scrip representing fractional Parent Common Shares shall
be issued upon the surrender for exchange of certificates pursuant to Sections
4.2 or 4.5 hereof and no dividend, stock split or other change in the capital
structure of Parent shall relate to any such fractional security and such
fractional interests shall not entitle the owner thereof to vote or to exercise
any rights as a security holder of Parent. In lieu of any such fractional
securities, each person entitled to a fractional interest in a Parent Common
Share will receive from the Company or Dutchco as the case may be, an amount in
cash (rounded to the nearest whole cent), without interest, equal to the product
of (i) such fraction, multiplied by (ii) the average of the closing price for
the Parent Common Shares on Nasdaq as of each of the thirty (30) consecutive
trading days immediately preceding the Effective Date as quoted in The Wall
Street Journal or other reliable financial newspaper or publication. For the
purposes of the preceding sentence, a "trading day" means a day on which trading
generally takes place on Nasdaq and on which trading in Parent Common Shares has
occurred.
4.7 No dividends or other distributions declared or made after the Class F
Redemption Time with respect to Parent Common Shares with a record date after
the Class F Redemption Time shall be paid to the holder of any unsurrendered
certificate which immediately prior to the Class F Redemption Date represented
Class F Shares that were redeemed or purchased pursuant to these Class F Share
provisions, and no cash payment in lieu of fractional shares shall be paid to
any such holder pursuant to Section 4.6 hereof, unless and until the holder of
record of such certificate shall surrender such certificate in accordance with
Sections 4.2 or 4.5 hereof, as the case may be. Subject to applicable law, at
the time of such surrender of any such certificate there shall be paid to the
record holder of the certificates representing whole Parent Common Shares
without interest (i) the amount of any cash payable in lieu of a fractional
Parent Common Share to which such holder is entitled pursuant to Section 4.6
hereof, (ii) the amount of dividends or other distributions with a record date
after the Class F Redemption Time theretofore paid with respect to such whole
Parent Common Share and (iii) the amount of dividends or other distributions
with a record date after the Class F Redemption Time but prior to surrender and
a payment date subsequent to surrender payable with respect to such whole Parent
Common Share.
4.8 In the event of a transfer of ownership of Discreet Common Shares which is
not registered in the transfer records of Discreet prior to the Effective Date,
a certificate representing the proper number of Parent Common Shares may be
issued to a transferee if
<PAGE>
Gouvernement du Quebec
L'Inspecteur general
des institutions financieres SCHEDULE A
Form 6
ARTICLES OF AMALGAMATION
The Companies Act, R.S.Q., c. C-38
Part 1A
the certificate representing such Discreet Common Shares is presented to the
Transfer Agent, accompanied by all documents required to evidence and effect
such transfer.
4.9 In the event any certificate which immediately prior to the Effective Date
represented outstanding Discreet Common Shares that were converted to Class B
Shares on the Amalgamation and subsequently converted into Class F Shares at the
Class B Conversion Time shall have been lost, stolen or destroyed, upon the
making of an affidavit of that fact by the person claiming such certificate to
be lost, stolen or destroyed, the Transfer Agent will issue in exchange for such
lost, stolen or destroyed certificate, certificates representing Parent Common
Shares (and any dividends or distributions with respect thereto and any cash
pursuant to Section 4.6 hereof) deliverable in respect thereof as determined in
accordance with Sections 4.2 or 4.5 hereof. When authorizing such issuance
and/or payment in exchange for any lost, stolen or destroyed certificate, the
person to whom certificates representing Parent Common Shares are to be issued
shall, at the discretion of the Company or Dutchco, as the case may be, as a
condition precedent to the issuance thereof, give a bond satisfactory to the
Company or Dutchco, as the case may be, in such sum as the Company or Dutchco
may direct or otherwise indemnify the Company or Dutchco in a manner
satisfactory to the Company or the Dutchco, as the case may be, against any
claim that may be made against the Company or Dutchco with respect to the
certificate alleged to have been lost, stolen or destroyed.
4.10 The Company and Dutchco shall be entitled to deduct and withhold from the
Class F Redemption Price or the Class F Redemption Call Price, as the case may
be, payable pursuant to these Class F Share Provisions to any holder of Class F
Shares such amounts as Parent, Dutchco or the Transfer Agent determine is
required to deduct and withhold with respect to the making of such payment under
the United States Internal Revenue Code of 1986, as amended, the Income Tax Act
(Canada) or any provision of state, local, provincial or foreign tax law. To the
extent that amounts are so withheld, such withheld amounts shall be treated for
all purposes hereof as having been paid to the holder of the shares in respect
of which such deduction and withholding was made, provided that such withheld
amounts are actually remitted to the appropriate taxing authority. To the extent
any amount is required to be deducted or withheld from any payment to a holder,
the Company, the Affiliate or Dutchco, as the case may be, are hereby authorized
to sell or otherwise dispose of at fair market value such portion of such
consideration as is necessary to provide sufficient funds to the Company, the
Affiliate or Dutchco, as the case may be, in order to enable it to comply with
such deduction or withholding requirement
<PAGE>
Gouvernement du Quebec
L'Inspecteur general
des institutions financieres SCHEDULE A
Form 6
ARTICLES OF AMALGAMATION
The Companies Act, R.S.Q., c. C-38
Part 1A
and the Company, the Affiliate or Dutchco, as the case may be shall give an
accounting to the holder with respect thereto and any balance of such proceeds
of sale.
4.11 The Company shall not be entitled to redeem, nor shall Dutchco or the
Affiliate, as the case may be, be entitled to purchase, any Class F Shares
pursuant to this Section 4 unless at the same time the Company redeems or
Dutchco or the Affiliate, as the case may be, purchases at the same time and in
the same manner all issued and outstanding Class E Shares.
5. Issued and Paid-Up Capital Account
5.1 Where Class E Shares and Class F Shares are issued on a conversion of Class
B Shares, the amount to be added to the issued and paid-up capital account of
the Class F Shares for purposes of the Quebec Act and the paid-up capital
account of the Class F Shares for purposes of the Income Tax Act (Canada) shall
be $1.
6. Amendment and Approval
6.1 The rights, privileges, restrictions and conditions attaching to the Class
F Shares may be added to, changed or removed but only with the approval of the
holders of the Class F Shares given as hereinafter specified, and any other
approval required by law.
6.2 Any approval given by the holders of the Class F Shares to add to, change
or remove any right, privilege, restriction or condition attaching to the Class
F Shares or any other matter requiring the approval or consent of the holders of
the Class F 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 written resolution signed by all
holders of Class F Shares or by resolution passed by not less than two-thirds of
the votes cast on such resolution at a meeting of holders of Class F Shares duly
called and held at which the holders of at least 50% of the outstanding Class F
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 Class F 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 ten 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 Class F Shares present or represented by proxy thereat may transact
the business for which the meeting was originally called and
<PAGE>
Gouvernement du Quebec
L'Inspecteur general
des institutions financieres SCHEDULE A
Form 6
ARTICLES OF AMALGAMATION
The Companies Act, R.S.Q., c. C-38
Part 1A
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 Class F Shares.
PROVISIONS ATTACHING TO EXCHANGEABLE SHARES
The exchangeable non-voting shares in the share capital of the Company
shall have the following rights, privileges, restrictions and conditions:
1. Interpretation
1.1 For the purposes of these Exchangeable Share Provisions:
"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; provided, however, that any former
directors, executive officers or principal shareholders of Discreet who may
be deemed to be an affiliate of Parent after the Effective Date, shall not
be considered an "Affiliate" for purposes of these share provisions.
"Amalgamation" means the amalgamation of Discreet Logic Inc., 9066-9854
Quebec Inc., and 9066-9771 Quebec Inc. under the Quebec Act.
"Automatic Redemption" has the meaning ascribed thereto in Section 7.1 of
these share provisions.
"Automatic Redemption Date" means the date for the automatic redemption by
the Company of Exchangeable Shares pursuant to Article 7 of these share
provisions, which date shall be eleven years from the Effective Date (as
defined in the Amalgamation Agreement) unless (a) such date shall be
extended at any time or from time to time to a specified later date by the
Board of Directors provided at least 60 days' prior written notice of any
such extension is given to the registered holders of the Exchangeable
Shares or (b) such date shall be accelerated at any
<PAGE>
Gouvernement du Quebec
L'Inspecteur general
des institutions financieres SCHEDULE A
Form 6
ARTICLES OF AMALGAMATION
The Companies Act, R.S.Q., c. C-38
Part 1A
time to a specified earlier date by the Board of Directors if at such time
there are less than 250,000 Exchangeable Shares outstanding (other than
Exchangeable Shares held by Parent 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),
provided at least 60 days' prior written notice of any such extension or
acceleration, as the case may be, is given 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 give any such notice of extension or acceleration, as the
case may be, to less than 5% 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 Company.
"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 San Francisco,
California and Montreal, Quebec.
"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.
"Certificate of Amalgamation" means the certificate of amalgamation to be
issued to the Company by the Inspector General of Financial Institutions
under the Quebec Act in respect of the Amalgamation.
"Class A Shares" mean the Class A voting common shares in the share capital
of the Company.
<PAGE>
Gouvernement du Quebec
L'Inspecteur general
des institutions financieres SCHEDULE A
Form 6
ARTICLES OF AMALGAMATION
The Companies Act, R.S.Q., c. C-38
Part 1A
"Class B Shares" means the Class B non-voting common shares in the share
capital of the Company.
"Class C Shares" means the Class C non-voting preferred shares in the share
capital of the Company.
"Class D Shares" means the Class D non-voting preferred shares in the share
capital of the Company.
"Class E Shares" means the Class E voting common shares in the share
capital of the Company.
"Class F Shares" means the Class F non-voting common shares in the share
capital of the Company.
"Company" means the company resulting from the Amalgamation.
"Current Market Price" means, in respect of a Parent Common Share on any
date, the Canadian Dollar Equivalent of the average of the closing prices
of Parent Common Shares on Nasdaq on each of the thirty (30) consecutive
trading days ending not more than five trading days before such date, or,
if the Parent Common Shares are not then quoted on Nasdaq, on such other
stock exchange or automated quotation system on which the Parent 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 Parent Common Shares during such
period, then the Current Market Price of a Parent 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.
"Dutchco" means Autodesk Development B.V., a corporation subsisting under
the laws of The Netherlands or such other Affiliate of Autodesk to which
Dutchco has assigned its rights under the Voting and Exchange Trust
Agreement.
"Effective Date" means the date of the Amalgamation as set forth in the
Certificate of Amalgamation.
<PAGE>
Gouvernement du Quebec
L'Inspecteur general
des institutions financieres SCHEDULE A
Form 6
ARTICLES OF AMALGAMATION
The Companies Act, R.S.Q., c. C-38
Part 1A
"Exchange Act" has the meaning ascribed thereto in Section 7.1 of these
share provisions.
"Exchangeable Shares" mean the exchangeable non-voting shares of the
Company 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 Purchase Price" has the meaning ascribed thereto in
Section 5.4 of these share provisions.
"Liquidation Call Right" has the meaning ascribed thereto in Section 5.4 of
these share provisions.
"Liquidation Date" has the meaning ascribed thereto in Section 5.1 of these
share provisions.
"Nasdaq" means the Nasdaq National Market.
"Parent" means Autodesk, Inc., a body corporate existing under the laws of
the State of Delaware.
"Parent (Dutchco) Call Notice" has the meaning ascribed thereto in Section
6.3 of these share provisions.
"Parent Common Shares" mean the common shares in the share capital of
Parent.
"Parent Dividend Declaration Date" means the date on which the Board of
Directors of Parent declares any dividend on the Parent Common Shares.
"Parent Special Share" means the one share of Series B Preferred Stock of
Parent with a par value of U.S.$0.01 and having voting rights at meetings
of holders of Parent Common Shares equal to that number of votes equal to
the number of votes that the Exchangeable Shares outstanding from time to
time (other than Exchangeable Shares held by Parent and its Affiliates)
would be entitled to if exchanged for Parent Common Shares, to be issued to
and voted by the Trustee pursuant to the Voting and Exchange Trust
Agreement.
<PAGE>
Gouvernement du Quebec
L'Inspecteur general
des institutions financieres SCHEDULE A
Form 6
ARTICLES OF AMALGAMATION
The Companies Act, R.S.Q., c. C-38
Part 1A
"Purchase Price" has the meaning ascribed thereto in Section 6.3 of these
share provisions.
"Quebec Act" means the Companies Act (Quebec), as amended.
"Record Holders" has the meaning ascribed thereto in Section 7.1 of these
share provisions.
"Redemption Call Right" has the meaning ascribed thereto in Section 7.3 of
these share provisions.
"Redemption Call Purchase Price" has the meaning ascribed thereto in
Section 7.3 of these share provisions.
"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(a) of
these share provisions.
"Retraction Call Right" has the meaning ascribed thereto in Section 6.1(c)
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.
"Section 12(g) Redemption" has the meaning ascribed thereto in Section 7.1.
"Support Agreement" means the Support Agreement between Parent, Dutchco and
the Company, made as of March 16, 1999.
<PAGE>
Gouvernement du Quebec
L'Inspecteur general
des institutions financieres SCHEDULE A
Form 6
ARTICLES OF AMALGAMATION
The Companies Act, R.S.Q., c. C-38
Part 1A
"Transfer Agent" means Harris Trust and Savings Bank or such other person
as may from time to time be the registrar and transfer agent for the
Exchangeable Shares.
"Trustee" means Montreal Trust Company of Canada, a trust company 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 Parent, Dutchco, the Company and the Trustee, made as of
March 16, 1999.
2. Ranking of Exchangeable Shares
2.1 The Exchangeable Shares shall be entitled to a preference over the Class A
Shares, the Class B Shares, the Class C Shares, the Class D Shares, the Class E
Shares and the Class F Shares and any other shares ranking junior to the
Exchangeable Shares with respect to the payment of dividends and the
distribution of assets in the event of the liquidation, dissolution or winding-
up of the Company, whether voluntary or involuntary, or any other distribution
of the assets of the Company among its shareholders for the purpose of winding-
up its affairs.
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 Parent Dividend
Declaration Date, declare a dividend on each Exchangeable Share (a) in the case
of a cash dividend declared on the Parent Common Shares, in an amount in cash
for each Exchangeable Share equal to the Canadian Dollar Equivalent on the
Parent Dividend Declaration Date of the cash dividend declared on each Parent
Common Share or (b) in the case of a stock dividend declared on the Parent
Common Shares to be paid in Parent Common Shares, in such number of Exchangeable
Shares for each Exchangeable Share as is equal to the number of Parent Common
Shares to be paid on each Parent Common Share or (c) in the case of a dividend
declared on the Parent Common Shares in property other than cash or Parent
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 Parent Common Share. Such
dividends shall be paid out of
<PAGE>
Gouvernement du Quebec
L'Inspecteur general
des institutions financieres SCHEDULE A
Form 6
ARTICLES OF AMALGAMATION
The Companies Act, R.S.Q., c. C-38
Part 1A
money, assets or property of the Company properly applicable to the payment of
dividends, or out of authorized but unissued shares of the Company. 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 Company as soon as payment of such dividend is
permitted by such law on a subsequent date or dates determined by the Board of
Directors.
3.2 Cheques of the Company or any dividend paying agent appointed by the
Company payable at par at any branch of the bankers of the Company shall be
issued in respect of any cash dividends contemplated by 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 Company in such manner as it shall determine
and the issuance, distribution or transfer thereof by the Company to each holder
of an Exchangeable Share shall satisfy the dividend represented thereby. No
holder of an Exchangeable Share shall be entitled to recover by action or other
legal process against the Company any dividend that is represented by a cheque
that has not been duly presented to the Company's bankers for payment or that
otherwise remains unclaimed for a period of six years from the date on which
such dividend was payable.
3.3 The record date for the determination of the holders of Exchangeable Shares
entitled to receive payment of, and the payment date for, any dividend declared
on the Exchangeable Shares under Section 3.1 hereof shall be the same dates as
the record date and payment date, respectively, for the corresponding dividend
declared on the Parent Common Shares.
3.4 If on any payment date for any dividends declared on the Exchangeable
Shares under Section 3.1 hereof the dividends are not paid in full on all of the
Exchangeable Shares then outstanding, any such dividends that remain unpaid
shall be paid on a subsequent date or dates determined by the Board of Directors
on which the Company shall have sufficient moneys, assets or property properly
applicable to the payment of such dividends.
<PAGE>
Gouvernement du Quebec
L'Inspecteur general
des institutions financieres SCHEDULE A
Form 6
ARTICLES OF AMALGAMATION
The Companies Act, R.S.Q., c. C-38
Part 1A
4. Certain Restrictions
4.1 So long as any of the Exchangeable Shares are outstanding, the Company
shall not at any time without, but may at any time with, the approval of the
holders of the Exchangeable Shares given as specified in Section 10.2 of these
share provisions:
(a) pay any dividends on the Class A Shares, the Class B Shares, the Class
C Shares, the Class D Shares, the Class E Shares, the Class F Shares
or any other shares ranking junior to the Exchangeable Shares, other
than stock dividends payable in Class A Shares, Class B Shares, Class
C Shares, Class D Shares, Class E Shares, Class F Shares or any such
other shares ranking junior to the Exchangeable Shares, as the case
may be;
(b) redeem, retract or purchase or make any capital distribution in
respect of Class A Shares, Class B Shares, Class C Shares, Class D
Shares, Class E Shares and Class F Shares or any other shares ranking
junior to the Exchangeable Shares;
(c) redeem or purchase any other shares of the Company ranking equally
with or junior to 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 Company
ranking equally with respect to the payment of dividends or on any
liquidation distribution, or superior to, the Exchangeable Shares
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
Parent Common Shares shall have been declared on the Exchangeable Shares and
paid in full.
5. Distribution on Liquidation
5.1 In the event of the liquidation, dissolution or winding-up of the Company
or any other distribution of the assets of the Company among its shareholders
for the purpose of
<PAGE>
Gouvernement du Quebec
L'Inspecteur general
des institutions financieres SCHEDULE A
Form 6
ARTICLES OF AMALGAMATION
The Companies Act, R.S.Q., c. C-38
Part 1A
winding-up its affairs, a holder of Exchangeable Shares shall be entitled,
subject to applicable law, to receive from the assets of the Company in respect
of each Exchangeable Share held by such holder on the effective date (the
"Liquidation Date") of such liquidation, dissolution or winding-up, before any
distribution of any part of the assets of the Company among the holders of the
Class A Shares, the Class B Shares, the Class C Shares, the Class D Shares, the
Class E Shares, the Class F Shares or any other shares ranking junior to the
Exchangeable Shares, an amount per share equal to (a) the Current Market Price
of a Parent Common Share on the last Business Day prior to the Liquidation Date,
which shall be satisfied in full by the Company causing to be delivered to such
holder one Parent 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 Parent Common Shares which have not been declared
on such Exchangeable Shares in accordance with Section 3.1 of these 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 by
Dutchco of the Liquidation Call Right, the Company 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 Company) 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 Quebec Act and the by-laws of the Company and such additional documents and
instruments as the Transfer Agent may be specified by the Company by notice to
the holders of the Exchangeable Shares. Payment of the total Liquidation Amount
for such Exchangeable Shares shall be made by delivery to each holder, at the
address of the holder recorded in the securities register of the Company for the
Exchangeable Shares or by holding for pick up by the holder at the head office
of the Company or at any office of the Transfer Agent as may be specified by the
Company by notice to the holders of Exchangeable Shares, on behalf of the
Company of certificates representing Parent Common Shares (which shares shall be
duly issued as fully paid and non-assessable and shall be free and clear of any
lien, claim or encumbrance) and a cheque of the Company payable at par at any
branch of the bankers of the Company in respect of the amount equivalent to the
full amount of all declared and unpaid dividends and all dividends declared on
Parent Common Shares which have not been declared on such Exchangeable Shares in
accordance with Section 3.1 of these share provisions, comprising
<PAGE>
Gouvernement du Quebec
L'Inspecteur general
des institutions financieres SCHEDULE A
Form 6
ARTICLES OF AMALGAMATION
The Companies Act, R.S.Q., c. C-38
Part 1A
part of the total Liquidation Amount (less any tax required to be deducted and
withheld therefrom by the Company). 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
Company shall have the right at any time 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 (less any
tax required to be deducted and withheld therefrom) for such Exchangeable Shares
so deposited, against presentation and surrender of the said certificates held
by them, respectively, in accordance with the foregoing provisions. Upon such
payment or deposit of the total Liquidation Amount, the holders of the
Exchangeable Shares shall thereafter be considered and deemed for all purposes
to be the holders of the Parent Common Shares delivered to them. 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
Company 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 Company in order to enable it to comply with
such deduction or withholding requirement and the Company shall give an
accounting to the holder with respect thereto and any balance of such proceeds
of sale.
5.3 After the Company has satisfied its obligations to pay the holders of the
Exchangeable Shares, the Liquidation Amount per Exchangeable Share pursuant to
Section 5.1 of these share provisions, such holders shall not be entitled to
share in any further distribution of the assets of the Company.
5.4 Dutchco shall have the overriding right (the "Liquidation Call Right"), in
the event of and notwithstanding the proposed liquidation, dissolution or
winding-up of the Company pursuant to Article 5 of these share provisions, to
purchase from all but not less than all of the holders of Exchangeable Shares on
the Liquidation Date all but not less than all of the
<PAGE>
Gouvernement du Quebec
L'Inspecteur general
des institutions financieres SCHEDULE A
Form 6
ARTICLES OF AMALGAMATION
The Companies Act, R.S.Q., c. C-38
Part 1A
Exchangeable Shares held by each such holder on payment by Dutchco of an amount
per share equal to (a) the Current Market Price of a Parent Common Share on the
last Business Day prior to the Liquidation Date, which shall be satisfied in
full by causing to be delivered to such holder one Parent Common Share, plus (b)
an additional amount equivalent to the full amount of all dividends declared and
unpaid on such Exchangeable Share and all dividends declared on Parent Common
Shares which have not been declared on such Exchangeable Shares in accordance
with Section 3.1 of these share provisions (collectively the "Liquidation Call
Purchase Price", provided that if the record date for any such declared and
unpaid dividends occurs on or after the Liquidation Date, the Liquidation Call
Purchase Price shall not include such additional amount equivalent to such
dividends). In the event of the exercise of the Liquidation Call Right by
Dutchco, each holder shall be obligated to sell all the Exchangeable Shares held
by the holder to Dutchco on the Liquidation Date on payment by Dutchco to the
holder of the Liquidation Call Purchase Price for each such share.
5.5 To exercise the Liquidation Call Right, Dutchco must notify the Transfer
Agent, as agent for the holders of Exchangeable Shares, and the Company of
Dutchco's intention to exercise such right at least sixty days before the
Liquidation Date in the case of a voluntary liquidation, dissolution or winding-
up of the Company and at least five Business Days before the Liquidation Date in
the case of an involuntary liquidation, dissolution or winding-up of the
Company. The Transfer Agent will notify the holders of Exchangeable Shares as to
whether or not Dutchco has exercised the Liquidation Call Right forthwith after
the expiry of the period during which the same may be exercised by Dutchco. If
Dutchco exercises the Liquidation Call Right, on the Liquidation Date, Dutchco
will purchase and the holders will sell all of the Exchangeable Shares then
outstanding for a price per share equal to the Liquidation Call Purchase Price.
5.6 For the purposes of completing the purchase of the Exchangeable Shares
pursuant to the Liquidation Call Right, Dutchco shall deposit with the Transfer
Agent, on or before the Liquidation Date, certificates representing the
aggregate number of Parent Common Shares deliverable by Dutchco in payment of
the total Liquidation Call Purchase Price and a cheque or cheques in the amount
of the remaining portion, if any, of the total Liquidation Call Purchase Price.
Provided that the total Liquidation Call Purchase Price has been so deposited
with the Transfer Agent, on and after the Liquidation Date the rights of each
holder of Exchangeable Shares will be limited to receiving such holder's
proportionate part of the total Liquidation Call Purchase Price payable by
Dutchco upon presentation and surrender by the holder of certificates
representing the Exchangeable Shares held by such
<PAGE>
Gouvernement du Quebec
L'Inspecteur general
des institutions financieres SCHEDULE A
Form 6
ARTICLES OF AMALGAMATION
The Companies Act, R.S.Q., c. C-38
Part 1A
holder and the holder shall on and after the Liquidation Date be considered and
deemed for all purposes to be the holder of the Parent Common Shares delivered
to it. Upon surrender to the Transfer Agent of a certificate or certificates
representing Exchangeable Shares, together with such other documents and
instruments as may be required to effect a transfer of Exchangeable Shares under
the Quebec Act and the by-laws of the Company and such additional documents and
instruments as the Transfer Agent may reasonably require, the holder of such
surrendered certificate or certificates shall be entitled to receive in exchange
therefor, and the Transfer Agent on behalf of Dutchco shall deliver to such
holder, certificates representing the Parent Common Shares to which the holder
is entitled and a cheque or cheques of Dutchco payable at par and in Canadian
dollars at any branch of the bankers of Dutchco or of the Company in Canada in
payment of the remaining portion, if any, of the total Liquidation Call Purchase
Price. If Dutchco does not exercise the Liquidation Call Right in the manner
described above, on the Liquidation Date the holders of the Exchangeable Shares
will be entitled to receive in exchange therefor the liquidation price otherwise
payable by the Company in connection with the liquidation, dissolution or
winding-up of the Company pursuant to this Article 5.
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 the exercise by Dutchco of the Retraction Call Right (as
defined in Subsection (c) below) and otherwise upon compliance with the
provisions of this Article 6, to require the Company to redeem any or all of the
Exchangeable Shares registered in the name of such holder for an amount per
share equal to (a) the Current Market Price of a Parent Common Share on the last
Business Day prior to the Retraction Date, which shall be satisfied in full by
the Company causing to be delivered to such holder one Parent 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 Parent Common Shares which have not
been declared on such Exchangeable Shares in accordance with Section 3.1 of
these 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 head office of the Company or at any office
of the Transfer Agent as may be specified by the Company by notice to the
holders of Exchangeable Shares the certificate or certificates representing the
Exchangeable Shares which the holder desires to have the Company redeem,
together with such other
<PAGE>
Gouvernement du Quebec
L'Inspecteur general
des institutions financieres SCHEDULE A
Form 6
ARTICLES OF AMALGAMATION
The Companies Act, R.S.Q., c. C-38
Part 1A
documents and instruments as may be required to effect a transfer of
Exchangeable Shares under the Quebec Act and the by-laws of the Company and such
additional documents and instruments as the Transfer Agent may reasonably
require, and together with a duly executed statement (the "Retraction Request")
in such form as may be acceptable to the Company:
(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 Company;
(b) stating the Business Day on which the holder desires to have the
Company redeem the Retracted Shares (the "Retraction Date"), provided
that the Retraction Date shall be not less than three Business Days
nor more than ten Business Days after the date on which the Retraction
Request is received by the Company 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 Company; and
(c) acknowledging the overriding right (the "Retraction Call Right") of
Dutchco 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 Dutchco in accordance with the Retraction Call Right on the
terms and conditions set out in Section 6.3 below.
In the event that, on or prior to the Automatic Redemption Date, any holder
of Exchangeable Shares notifies the Company, either directly or through the
Transfer Agent, that such holder desires to transfer or otherwise attempts to
transfer any such shares to any other person or entity (any such notification or
attempt, a "Transfer Attempt"), then such holder shall, by such action, be
deemed to have made a Retraction Request on the following terms and conditions:
(a) the Exchangeable Shares which are the subject of such Transfer Attempt
(the "Transferred Shares") shall be considered to be the Retracted
Shares for the purposes of such deemed Retraction Notice;
<PAGE>
Gouvernement du Quebec
L'Inspecteur general
des institutions financieres SCHEDULE A
Form 6
ARTICLES OF AMALGAMATION
The Companies Act, R.S.Q., c. C-38
Part 1A
(b) the Retraction Date shall be three Business Days after the date of
receipt by the Company or the Transfer Agent of notice of the Transfer
Attempt (or such lesser period as the Company may permit);
(c) the holder shall be deemed to have acknowledged the overriding
Redemption Call Right and the Retraction Call Right.
In accordance with the deemed Retraction Request, no certificates shall be
issued by the Company representing the Transferred Shares in the name of the
transferee, and the sole right of the transferee in respect of the Transferred
Shares shall be to receive the Parent Common Shares to which such person is
entitled as a result of the Retraction Notice.
6.2 Subject to the exercise by Dutchco of the Retraction Call Right, upon
receipt by the Company or the Transfer Agent in the manner specified in Section
6.1 hereof of a certificate or certificates representing the number of
Exchangeable Shares which the holder desires to have the Company 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 hereof, 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 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 Dutchco
pursuant to the Retraction Call Right), a new certificate for the balance of
such Exchangeable Shares shall be issued to the holder at the expense of the
Company.
6.3 Upon receipt by the Company of a Retraction Request, the Company shall
immediately notify Dutchco and Parent thereof. In order to exercise the
Retraction Call Right, Parent or Dutchco must notify the Company in writing of
Dutchco's determination to do so (the "Parent (Dutchco) Call Notice") within two
Business Days of notification to Parent and Dutchco by the Company of the
receipt by the Company of the Retraction Request. If the Parent or Dutchco does
not so notify the Company within such two Business Day period, the Company will
notify the holder as soon as possible thereafter that Dutchco will not exercise
the Retraction Call Right. If Parent or Dutchco delivers the Parent (Dutchco)
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 Dutchco in accordance with
the Retraction Call Right. In such event, the Company shall not redeem the
Retracted Shares and Dutchco shall purchase
<PAGE>
Gouvernement du Quebec
L'Inspecteur general
des institutions financieres SCHEDULE A
Form 6
ARTICLES OF AMALGAMATION
The Companies Act, R.S.Q., c. C-38
Part 1A
from such holder and such holder shall sell to Dutchco on the Retraction Date,
the Retracted Shares for a purchase price (the "Purchase Price") per share equal
to the Retraction Price per share. For the purposes of completing a purchase
pursuant to the Retraction Call Right, Dutchco shall deposit with the Transfer
Agent, on or before the Retraction Date, certificates representing Parent 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 Company of such Retracted Shares shall take place on the
Retraction Date. In the event that neither Parent nor Dutchco delivers a Parent
(Dutchco) 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 Company shall redeem the Retracted Shares on the Retraction
Date and in the manner otherwise contemplated in this Article 6.
6.4 The Company or Dutchco, 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 Company for the Exchangeable Shares
or at the address specified in the holder's Retraction Request or by holding for
pick up by the holder at the head office of the Company or at any office of the
Transfer Agent as may be specified by the Company by notice to the holders of
Exchangeable Shares, certificates representing the Parent Common Shares (which
shares shall be duly issued as fully paid and non-assessable and shall be free
and clear of any lien, claim or encumbrance) 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 Company payable at par at any branch of the bankers of the Company in
payment of the remaining portion, if any, of the total Retraction Price (less
any tax required to be deducted and withheld therefrom by the Company) or a
cheque of Dutchco payable at par and in Canadian dollars at any branch of the
bankers of Dutchco or of the Company 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 Company or by Dutchco,
as the case may be, or 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 withheld therefrom and remitted to the proper tax authority),
unless such cheque is not paid on due
<PAGE>
Gouvernement du Quebec
L'Inspecteur general
des institutions financieres SCHEDULE A
Form 6
ARTICLES OF AMALGAMATION
The Companies Act, R.S.Q., c. C-38
Part 1A
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 Company or Dutchco, as the case may be, 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 Company 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 Company or purchased by Dutchco shall thereafter be considered
and deemed for all purposes to be a holder of the Parent Common Shares delivered
to it.
6.6 Notwithstanding any other provision of this Article 6, the Company shall
not be obligated to redeem Retracted Shares specified by a holder in a
Retraction Request to the extent that such redemption of Retracted Shares would
be contrary to solvency requirements or other provisions of applicable law. If
the Company believes that on any Retraction Date it would not be permitted by
any of such provisions to redeem the Retracted Shares tendered for redemption on
such date, and provided that Dutchco shall not have exercised the Retraction
Call Right with respect to the Retracted Shares, the Company shall only be
obligated to redeem Retracted Shares specified by a holder in a Retraction
Request to the extent of the maximum number that may be so redeemed (rounded
down to a whole number of shares) as would not be contrary to such provisions
and shall notify the holder at least two Business Days prior to the Retraction
Date as to the number of Retracted Shares which will not be redeemed by the
Company. In any case in which the redemption by the Company of Retracted Shares
would be contrary to solvency requirements or other provisions of applicable
law, the Company shall redeem Retracted
<PAGE>
Gouvernement du Quebec
L'Inspecteur general
des institutions financieres SCHEDULE A
Form 6
ARTICLES OF AMALGAMATION
The Companies Act, R.S.Q., c. C-38
Part 1A
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 a new certificate, at
the expense of the Company, representing the Retracted Shares not redeemed by
the Company 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 hereof, the
holder of any such Retracted Shares not redeemed by the Company 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
Dutchco to purchase such Retracted Shares from such holder on the Retraction
Date or as soon as practicable thereafter on payment by Dutchco 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 Company 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 Dutchco shall be deemed to have been revoked.
7. Redemption of Exchangeable Shares by the Company
7.1 Subject to applicable law, and subject to the exercise by Dutchco of the
Redemption Call Right, (a) the Company 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 (i) the Current Market
Price of a Parent Common Share on the last Business Day prior to the Automatic
Redemption Date, which shall be satisfied in full by the Company causing to be
delivered to each holder of Exchangeable Shares one Parent Common Share for each
Exchangeable Share held by such holder, plus (ii) an additional amount
equivalent to the full amount of all declared and unpaid dividends thereon and
all dividends declared on Parent Common Shares which have not been declared on
such Exchangeable Shares in accordance with Section 3.1 of these 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 Company may, at any time when the
Company reasonably determines that Exchangeable Shares are "held of record" (as
such term is defined in Rule 12g5-1 promulgated under the United States
Securities Exchange Act of 1934, as amended (the "Exchange Act")) by 500 or more
<PAGE>
Gouvernement du Quebec
L'Inspecteur general
des institutions financieres SCHEDULE A
Form 6
ARTICLES OF AMALGAMATION
The Companies Act, R.S.Q., c. C-38
Part 1A
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 such smaller number that the Company reasonably determines is
necessary to take the position that it need not register the Exchangeable Shares
pursuant to Section 12(g) of the Exchange Act, the identity of such Record
Holders to be determined by the Company 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 a redemption of Exchangeable Shares under this Article 7,
the Company 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 in this Section 7.2 as a "Redemption Date"), send or cause to be
sent to each holder of Exchangeable Shares to be redeemed a notice in writing of
the redemption by the Company or the purchase by Dutchco 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 Dutchco of the Redemption Call
Right, the Company 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 withheld therefrom by the Company) for each such Exchangeable
Share upon presentation and surrender at the head office of the Company or at
any office of the Transfer Agent as may be specified by the Company 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 Quebec Act and the by-laws of the Company and such
additional documents and instruments as the Transfer Agent may reasonably
require. Payment of the total Redemption Price for such Exchangeable Shares
shall be made by delivery to each holder, at the address of the holder recorded
in the securities register of the Company or by holding for pick up by the
holder at the head office of the Company or at any office of the Transfer Agent
as may be specified by the Company in such notice, on behalf of the Company of
certificates representing Parent Common Shares (which shares shall be duly
issued as fully paid and non-assessable and shall be free and clear of any lien,
claim or encumbrance) and a cheque of the Company payable at par at any branch
of the bankers of the Company in respect of the additional amount equivalent to
the full amount of all declared and unpaid dividends and all dividends declared
on Parent
<PAGE>
Gouvernement du Quebec
L'Inspecteur general
des institutions financieres SCHEDULE A
Form 6
ARTICLES OF AMALGAMATION
The Companies Act, R.S.Q., c. C-38
Part 1A
Common Shares which have not been declared on such Exchangeable Shares in
accordance with Section 3.1 of these share provisions comprising part of the
total Redemption Price (less any tax required to be deducted and withheld
therefrom by the Company). 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 Company shall have the
right at any time after the sending of notice of its intention to redeem
Exchangeable Shares as aforesaid to deposit or cause to be deposited the total
Redemption Price of the Exchangeable Shares so called for redemption, or of such
of the said Exchangeable Shares represented by certificates that have not at the
date of such deposit been surrendered by the holders thereof in connection with
such redemption, in a custodial account with any chartered bank or trust
Discreet 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
(less any tax required to be deducted and withheld therefrom by the Company) for
such Exchangeable Shares so deposited, against presentation and surrender of the
said certificates held by them, respectively, in accordance with the foregoing
provisions. Upon such payment or deposit of the total Redemption Price, the
holders of the Exchangeable Shares shall thereafter be considered and deemed for
all purposes to be holders of the Parent Common Shares delivered to them. 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 Company 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 Company 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.
7.3 Dutchco shall have the overriding right (the "Redemption Call Right"),
notwithstanding the proposed redemption of Exchangeable Shares by the Company
pursuant to this Article 7 of these share provisions, to purchase from all but
not less than
<PAGE>
Gouvernement du Quebec
L'Inspecteur general
des institutions financieres SCHEDULE A
Form 6
ARTICLES OF AMALGAMATION
The Companies Act, R.S.Q., c. C-38
Part 1A
all of the holders of Exchangeable Shares to be redeemed on the Redemption Date,
all but not less than all of the Exchangeable Shares held by each such holder on
payment by Dutchco to the holder of an amount per share equal to (a) the Current
Market Price of a Parent Common Share on the last Business Day prior to the
Redemption Date which shall be satisfied in full by causing to be delivered to
such holder one Parent Common Share plus (b) an additional amount equivalent to
the full amount of all dividends declared and unpaid on such Exchangeable Share
and all dividends declared on Parent Common Shares that have not been declared
on such Exchangeable Share in accordance with Section 3.1 of these share
provisions (collectively the "Redemption Call Purchase Price", provided that if
the record date for any such declared and unpaid dividends occurs on or after
the Redemption Date, the Redemption Call Purchase Price shall not include such
additional amount equivalent to such dividends). In the event of the exercise of
the Redemption Call Right by Dutchco, each holder shall be obligated to sell all
the Exchangeable Shares held by the holder and otherwise to be redeemed to
Dutchco on the Redemption Date on payment by Dutchco to the holder of the
Redemption Call Purchase Price for each such share.
7.4 To exercise the Redemption Call Right, Dutchco must notify the Transfer
Agent, as agent for the holders of Exchangeable Shares, and the Company of
Dutchco's intention to exercise such right at least 125 days before the
Automatic Redemption Date (in the case of the Automatic Redemption) or at least
35 days before the Section 12(g) Redemption Date (in the case of Section 12(g)
Redemption). The Transfer Agent will notify the holders of the Exchangeable
Shares as to whether or not Dutchco has exercised the Redemption Call Right
forthwith after the expiry of the period during which the same may be exercised
by Dutchco. If Dutchco exercises the Redemption Call Right, on the Redemption
Date, Dutchco will purchase and the holders will sell all of the Exchangeable
Shares to be redeemed for a price per share equal to the Redemption Call
Purchase Price.
7.5 For the purposes of completing the purchase of Exchangeable Shares pursuant
to the Redemption Call Right, Dutchco shall deposit with the Transfer Agent, on
or before the Redemption Date, certificates representing the aggregate number of
Parent Common Shares deliverable by Dutchco in payment of the total Redemption
Call Purchase Price and a cheque or cheques in the amount of the remaining
portion, if any, of the total Redemption Call Purchase Price. Provided that the
total Redemption Call Purchase Price has been so deposited with the Transfer
Agent, on and after the Redemption Date the rights of each holder of
Exchangeable Shares so purchased will be limited to receiving such holder's
proportionate part of the total Redemption Call Purchase Price payable by
Dutchco
<PAGE>
Gouvernement du Quebec
L'Inspecteur general
des institutions financieres SCHEDULE A
Form 6
ARTICLES OF AMALGAMATION
The Companies Act, R.S.Q., c. C-38
Part 1A
upon presentation and surrender by the holder of certificates representing the
Exchangeable Shares purchased by Dutchco from such holder and the holder shall
on and after the Redemption Date be considered and deemed for all purposes to be
the holder of the Parent Common Shares delivered to such holder. Upon surrender
to the Transfer Agent of a certificate or certificates representing Exchangeable
Shares, together with such other documents and instruments as may be required to
effect a transfer of Exchangeable Shares under the Quebec Act and the by-laws of
the Company and such additional documents and instruments as the Transfer Agent
may reasonably require, the holder of such surrendered certificate or
certificates shall be entitled to receive in exchange therefor, and the Transfer
Agent on behalf of Dutchco shall deliver to such holder, certificates
representing the Parent Common Shares to which the holder is entitled and a
cheque or cheques of Dutchco payable at par and in Canadian dollars at any
branch of the bankers of Dutchco or of the Company in Canada in payment of the
remaining portion, if any, of the total Redemption Call Purchase Price. If
Dutchco does not exercise the Redemption Call Right in the manner described
above, on the Redemption Date the holders of the Exchangeable Shares will be
entitled to receive in exchange therefor the redemption price otherwise payable
by the Company in connection with the redemption of Exchangeable Shares pursuant
to this Article 7.
8. Purchase for Cancellation
8.1 Subject to applicable law and the articles of the Company, the Company 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 Company than the Company is prepared to purchase,
the Exchangeable Shares to be purchased by the Company 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 Company, 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 Company is prepared to purchase after the Company
has purchased all the shares tendered at lower prices. If only part 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
Company.
<PAGE>
Gouvernement du Quebec
L'Inspecteur general
des institutions financieres SCHEDULE A
Form 6
ARTICLES OF AMALGAMATION
The Companies Act, R.S.Q., c. C-38
Part 1A
9. Voting Rights
9.1 Except as required by applicable law, 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 Company or to vote at any such meeting.
9.2 Pursuant to the Voting and Exchange Trust Agreement (which by 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 Parent, 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 Parent Common Shares, all as provided for in
the Voting and Exchange Trust Agreement.
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 ten 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
<PAGE>
Gouvernement du Quebec
L'Inspecteur general
des institutions financieres SCHEDULE A
Form 6
ARTICLES OF AMALGAMATION
The Companies Act, R.S.Q., c. C-38
Part 1AGouvernement du Quebec
resolution at such meeting shall constitute the approval or consent of the
holders of the Exchangeable Shares.
10.3 Exchangeable Shares held by Parent, Dutchco or their Affiliates 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.
11. Reciprocal Changes, etc. in Respect of Parent Common Shares
11.1 (a) Pursuant to the Support Agreement, Parent will not without the prior
approval of the Company 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 Parent Common Shares (or securities
exchangeable for or convertible into or carrying rights to acquire
Parent Common Shares) to the holders of all or substantially all of
the then outstanding Parent Common Shares by way of stock dividend or
other distribution, other than an issue of Parent Common Shares (or
securities exchangeable for or convertible into or carrying rights to
acquire Parent Common Shares) to holders of Parent Common Shares who
exercise an option to receive dividends in Parent Common Shares (or
securities exchangeable for or convertible into or carrying rights to
acquire Parent 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 Parent Common Shares
entitling them to subscribe for or to purchase Parent Common Shares
(or securities exchangeable for or convertible into or carrying rights
to acquire Parent Common Shares); or
(iii) issue or distribute to the holders of all or substantially all
of the then outstanding Parent Common Shares (A) shares or securities
of Parent of any Class other than Parent Common Shares (other than
shares convertible into or exchangeable for or carrying rights to
acquire Parent Common Shares), (B) rights, options or warrants other
than those referred to in Section 11.1(a)(ii) above, (C) evidences of
indebtedness of Parent or (D) assets of Parent;
<PAGE>
L'Inspecteur general
des institutions financieres SCHEDULE A
Form 6
ARTICLES OF AMALGAMATION
The Companies Act, R.S.Q., c. C-38
Part 1A
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) Pursuant to the Support Agreement, Parent will not without the prior
approval of the Company and the prior approval of the holders of the
Exchangeable Shares given in accordance with Section 10.2 of these share
provisions:
(i) subdivide, redivide or change the then outstanding Parent Common
Shares into a greater number of Parent Common Shares; or
(ii) reduce, combine or consolidate or change the then outstanding
Parent Common Shares into a lesser number of Parent Common Shares; or
(iii) reclassify or otherwise change the Parent Common Shares or
effect an amalgamation, merger, reorganization or other transaction
affecting the Parent 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.
Except for ministerial amendments contemplated by Section 3.5 of the Support
Agreement, 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 Parent, its subsidiaries and Affiliates) are
given certain rights to exchange their Exchangeable Shares for Parent Common
Shares.
12. Actions by the Company under Support Agreement and under Voting and
Exchange Trust Agreement
12.1 The Company will take all such actions and do all such things as shall be
necessary or advisable to perform and comply with and to ensure performance and
compliance by Parent and Dutchco with all provisions of the Support Agreement
and the Voting and Exchange Trust Agreement applicable to the Company, Dutchco
and Parent, respectively, in accordance with the respective terms thereof
including, without limitation, taking all
<PAGE>
L'Inspecteur general
des institutions financieres SCHEDULE A
Form 6
ARTICLES OF AMALGAMATION
The Companies Act, R.S.Q., c. C-38
Part 1A
such actions and doing all such things as shall be necessary or advisable to
enforce to the fullest extent possible for the direct benefit of the Company and
the holders of Exchangeable Shares all rights and benefits in favor of the
Company and such holders under or pursuant to such agreements.
12.2 The Company shall not propose, agree to or otherwise give effect to any
amendment to, or waiver or forgiveness of its rights or obligations under, the
Support Agreement and the Voting and Exchange Trust Agreement (except as
contemplated therein) without the approval of the holders or the Exchangeable
Shares given in accordance with 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 for the protection of the Company or the holders of
Exchangeable Shares thereunder; or
(b) making such provisions or modifications not inconsistent with the
spirit and intent of 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 corrections to such agreement which, on the
advice of counsel to the Company, are required for the purpose of
curing or correcting any ambiguity or defect or inconsistent provision
or clerical omission or mistake or manifest error contained therein,
provided that the Board of Directors shall be of the opinion, after
consultation with counsel, that such changes or corrections will not
be prejudicial to the interests of the holders of the Exchangeable
Shares.
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 deemed delivery of a
Retraction Request as contemplated in
<PAGE>
L'Inspecteur general
des institutions financieres SCHEDULE A
Form 6
ARTICLES OF AMALGAMATION
The Companies Act, R.S.Q., c. C-38
Part 1A
Section 6.1 of these share provisions, the provisions relating to the
Liquidation Call Right and the Redemption Call Right, and the Voting and
Exchange Trust Agreement (including the provisions with respect to the voting
rights, exchange right and automatic exchange thereunder).
14. Notices
14.1 Any notice, request or other communication to be given to the Company by a
holder of Exchangeable Shares shall be in writing and shall be valid and
effective if given by mail (postage prepaid) or by telecopy or by delivery to
the head office of the Company and addressed to the attention of the President.
Any such notice, request or other communication, if given by mail, telecopy or
delivery, shall only be deemed to have been given and received upon actual
receipt thereof by the Company.
14.2 Any presentation and surrender by a holder of Exchangeable Shares to the
Company or the Transfer Agent of certificates representing Exchangeable Shares
in connection with the liquidation, dissolution or winding-up of the Company or
the retraction or redemption of Exchangeable Shares shall be made by registered
mail (postage prepaid) or by delivery to the head office of the Company or to
such office of the Transfer Agent as may be specified by the Company, in each
case addressed to the attention of the President of the Company. Any such
presentation and surrender of certificates shall only be deemed to have been
made and to be effective upon actual receipt thereof by the Company or the
Transfer Agent, as the case may be. Any such presentation and surrender of
certificates made by registered mail shall be at the sole risk of the holder
mailing the same.
14.3 Any notice, request or other communication to be given to a holder of
Exchangeable Shares by or on behalf of the Company shall be in writing and shall
be valid and effective if given by mail (postage prepaid) or by delivery to the
address of the holder recorded in the securities register of the Company or, in
the event of the address of any such holder not being so recorded, then at the
last known address of such holder. Any such notice, request or other
communication, if given by mail, shall be deemed to have been given and received
on the 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 holders of Exchangeable Shares shall not invalidate
or otherwise alter or affect any action or proceeding to be taken by the Company
pursuant thereto.
<PAGE>
L'Inspecteur general
des institutions financieres SCHEDULE A
Form 6
ARTICLES OF AMALGAMATION
The Companies Act, R.S.Q., c. C-38
Part 1A
15. Parent Guaranty/Assignment
15.1 Parent hereby unconditionally and irrevocably guarantees the full and
punctual performance of all of Dutchco's obligations hereunder. Dutchco may
assign all or a portion of its rights and obligations hereunder to Parent
without the consent of the Company or holders of Exchangeable Shares provided
Parent remains bound by these provisions.
16. Withholding Rights
16.1 The Company, Parent, Dutchco and Transfer Agent shall be entitled to
deduct and withhold from the consideration otherwise payable to any holder of
Exchangeable Shares such amounts as Parent, Dutchco or the Transfer Agent
determine is required to deduct and withhold with respect to the making of such
payment under the United States Internal Revenue Code of 1986, as amended, the
Income Tax Act (Canada) or any provision of state, local, provincial or foreign
tax law. To the extent that amounts are so withheld, such withheld amounts shall
be treated for all purposes hereof as having been paid to the holder of the
shares in respect of which such deduction and withholding was made, provided
that such withheld amounts are actually remitted to the appropriate taxing
authority. To the extent that the amount so required to be deducted or withheld
from any payment to a holder exceeds the cash portion of the consideration
otherwise payable to the holder, the Company, Dutchco and Transfer Agent are
hereby authorized to sell or otherwise dispose of at fair market value such
portion of such consideration as is necessary to provide sufficient funds to
Parent, Dutchco or Transfer Agent, as the case may be, in order to enable it to
comply with such deduction or withholding requirement and Parent, Dutchco or
Transfer Agent shall give an accounting to the holder with respect thereto and
any balance of such proceeds of sale.
17. Par Value
17.1 The Exchangeable Shares shall have a par value of $15.08 per share.
<PAGE>
Gouvernement du Quebec
L'Inspecteur general
des institutions financieres SCHEDULE B
Form 6
ARTICLES OF AMALGAMATION
The Companies Act, R.S.Q., c. C-38
Part 1A
8 Other Provisions
Upon the Amalgamation:
(a) each holder of a common share of 9066-9771 QUEBEC INC. outstanding
immediately prior to the Amalgamation will receive one fully paid and
non-assessable Class A voting common share of the Company for each
common share of 9066-9771 QUEBEC INC. held and the name of each holder
thereof shall be added to the register of holders of Class A voting
common shares of the Company accordingly and each certificate
representing such common share of 9066-9771 QUEBEC INC. shall continue
to evidence ownership of Class A voting common shares of the Company;
(b) each holder of a common share of 9066-9854 QUEBEC INC. outstanding
immediately prior to the Amalgamation will receive one fully paid and
non-assessable Class C non-voting preferred share of the Company for
each common share of 9066-9854 QUEBEC INC. held and the name of each
holder thereof shall be added to the register of holders of Class C
non-voting preferred shares of the Company accordingly and each
certificate representing such common share of 9066-9854 QUEBEC INC.
shall continue to evidence ownership of Class C non-voting preferred
shares of the Company; and
(c) each holder of a common share of DISCREET LOGIC INC. - LOGIQUE
DISCRETE INC. outstanding immediately prior to the Amalgamation will
receive one fully paid and non-assessable Class B non-voting common
share of the Company for each common share of DISCREET LOGIC INC. -
LOGIQUE DISCRETE INC. held and the name of each holder thereof shall
be added to the register of holders of Class B non-voting common
shares of the Company accordingly and each certificate representing
such common share of DISCREET LOGIC INC. - LOGIQUE DISCRETE INC. shall
continue to evidence ownership of Class B non-voting common shares of
the Company.
<PAGE>
Gouvernement du Quebec
L'Inspecteur general
des institutions financieres Form 2
NOTICE OF ADDRESS
OF HEAD OFFICE
The Companies Act, R.S.Q., c. C-38
Part 1A
[CAPTION]
<TABLE>
- ------------------------------------------------------------------------------------------------------------------------
<S> <C>
1. Corporate name
DISCREET LOGIC INC./
LOGIQUE DISCRETE INC.
- ------------------------------------------------------------------------------------------------------------------------
________________________________________________________________________________________________________________________
2. Notice is hereby given at the address of the head office of the company, within
the limits of the judicial district indicated in the articles, is as follows:
10 Duke Street
- ------------------------------------------------------------------------------------------------------------------------
No Street name
Montreal
- ------------------------------------------------------------------------------------------------------------------------
Municipality
Quebec H3C 2L7
- ------------------------------------------------------------------------------------------------------------------------
Province Postal code
- ------------------------------------------------------------------------------------------------------------------------
The company
Post occupied
/s/ Eric B. Herr by signatory Director
- --------------------------------------------------------------- -------------------------------------------
(signature)
- --------------------------------------------------------------------------------------------------------------------------
For departmental use only CA-212 (Rev. 12-93)
</TABLE>
<PAGE>
Gouvernement du Quebec
L'Inspecteur general
des institutions financieres Form 4
NOTICE CONCERNING COMPOSITION
OF THE BOARD OF DIRECTORS
The Companies Act, R.S.Q., c. C-38
Part 1A
[CAPTION]
<TABLE>
- --------------------------------------------------------------------------------------------------------------------------
<S> <C>
1. Corporate name
DISCREET LOGIC INC./
LOGIQUE DISCRETE INC.
- --------------------------------------------------------------------------------------------------------------------------
2. The directors of the company are:
- --------------------------------------------------------------------------------------------------------------------------
Name and surname | Full residential address
| (including postal code)
- --------------------------------------------------------------------------------------------------------------------------
HERR, ERIC B. 228 Massol Avenue
Los Gatos
California
U.S.A.
95030
CAKEBREAD, STEVE 1075 Greenfield
St. Helena
California
U.S.A.
94574
STERLING, MARCIA K. 4180 Oak Hill Avenue
Palo Alto
California
U.S.A.
94306
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If space is insufficient, attach an appendix in two (2) copies.
The Company
Post occupied
/s/ Eric B. Herr by signatory Director
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(signature)
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For departmental use only CA-214 (Rev. 05-95)
</TABLE>
<PAGE>
Exhibit 99.1
------------
Autodesk Completes Acquisition of Discreet Logic Inc.
San Rafael, California, March 16, 1999--Autodesk, Inc., (Nasdaq: ADSK) announced
that the Company's acquisition of Discreet Logic Inc. (Nasdaq: DSLGF) is
complete effective today. As a result of the acquisition, Autodesk will issue
approximately 10 million shares of Autodesk stock, based on an exchange ratio of
0.33 shares of Autodesk common stock for each outstanding share of Discreet
Logic stock. The transaction will be valued at approximately $410 million based
on today's closing price of Autodesk stock. The transaction will be accounted
for as pooling-of-interests. As of the close of the stock market on March 16,
1999, trading in shares of Discreet Logic common stock on the Nasdaq National
Market system will terminate.
About Autodesk, Inc.
Autodesk is the world's leading supplier of PC design software and digital
content creation. The company's 2D and 3D products are used in many industries
for architectural design, mechanical design, mapping, film and video production,
video game development and Web content development. Its Discreet division
develops systems and software for visual effects, editing, and broadcast
graphics used in the creation of digital moving pictures. They also develop
high-tech tools for design professionals. Recent Academy Award winners for Best
Visual Effects are Discreet customers.
The fourth largest PC software company in the world, Autodesk has more than four
million customers in over 150 countries. For more information, contact any
Authorized Autodesk Reseller, call Autodesk at 800-964-6432,or visit
www.autodesk.com. Autodesk shares are traded on the Nasdaq National Market
under the symbol ADSK.
