Exhibit 10.1

EXECUTION COPY

 

 

SHAREHOLDER RIGHTS PLAN AGREEMENT

Dated November 4, 2013

Between

VITRAN CORPORATION INC.

(the “Corporation”)

and

COMPUTERSHARE TRUST COMPANY OF CANADA,

as Rights Agent

 

 

 

 

 

LOGO [g623556g76g86.jpg]

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TABLE OF CONTENTS

 

RECITALS

     1   

ARTICLE 1 – INTERPRETATION

     2   

Section 1.1 Certain Definitions

     2   

Section 1.2 Currency

     14   

Section 1.3 Headings

     14   

Section 1.4 Number and Gender

     14   

Section 1.5 Acting Jointly or in Concert

     14   

Section 1.6 Statutory References

     15   

ARTICLE 2 – THE RIGHTS

     16   

Section 2.1 Legend on Common Share Certificates

     16   

Section 2.2 Initial Exercise Price; Exercise of Rights; Detachment of Rights

     16   

Section 2.3 Adjustments to Exercise Price; Number of Rights

     19   

Section 2.4 Date on Which Exercise is Effective

     24   

Section 2.5 Execution, Authentication, Delivery and Dating of Rights
Certificates

     24   

Section 2.6 Registration, Registration of Transfer and Exchange

     24   

Section 2.7 Mutilated, Destroyed, Lost and Stolen Rights Certificates

     25   

Section 2.8 Persons Deemed Owners

     26   

Section 2.9 Delivery and Cancellation of Rights Certificates

     26   

Section 2.10 Agreement of Rights Holders

     26   

Section 2.11 Rights Certificate Holder not Deemed a Shareholder

     27   

ARTICLE 3 – ADJUSTMENTS TO THE RIGHTS IN THE EVENT OF CERTAIN TRANSACTIONS

     27   

Section 3.1 Flip-in Event

     27   

Section 3.2 Exchange Option

     29   

ARTICLE 4 – THE RIGHTS AGENT

     29   

Section 4.1 General

     29   

Section 4.2 Merger or Amalgamation or Change of Name of Rights Agent

     30   

Section 4.3 Duties of Rights Agent

     31   

Section 4.4 Change of Rights Agent

     32   

Section 4.5 Compliance with Anti-Money Laundering Legislation

     33   

Section 4.6 Compliance with Privacy Legislation

     33   

ARTICLE 5 – MISCELLANEOUS

     33   

Section 5.1 Redemption and Termination of Rights

     33   

Section 5.2 Waiver of Flip-In Events

     34   

Section 5.3 Expiration

     35   

Section 5.4 Issuance of New Rights Certificates

     35   

Section 5.5 Supplements and Amendments

     36   

Section 5.6 Fractional Rights and Fractional Shares

     36   

Section 5.7 Rights of Action

     36   

Section 5.8 Notice of Proposed Actions

     37   

Section 5.9 Notices

     37   

Section 5.10 Successors

     38   

Section 5.11 Benefits of this Agreement

     38   

Section 5.12 Governing Law

     38   

Section 5.13 Severability

     38   

Section 5.14 Effective Date and Termination

     38   

Section 5.15 Determinations and Actions by the Board of Directors

     38   

Section 5.16 Rights of Board, Corporation and Offeror

     39   

Section 5.17 Regulatory Approvals

     39   

Section 5.18 Declaration as to Non-Canadian Holders

     39   

Section 5.19 Time of the Essence

     39   

Section 5.20 Execution in Counterparts

     39   

Schedule A – Form of Rights Certificate

 

(i)

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SHAREHOLDER RIGHTS PLAN AGREEMENT

THIS SHAREHOLDER RIGHTS PLAN AGREEMENT dated November 4, 2013 between VITRAN
CORPORATION INC. (the “Corporation”), a corporation incorporated under the laws
of Ontario, and COMPUTERSHARE TRUST COMPANY OF CANADA, a trust company existing
under the federal laws of Canada, as Rights Agent (the “Rights Agent”, which
term shall include any successor Rights Agent hereunder).

RECITALS

A.    WHEREAS the Board of Directors of the Corporation, in the exercise of its
fiduciary duties to the Corporation, has determined that it is advisable and in
the best interests of the Corporation to adopt and maintain a shareholder rights
plan to:

 

  (1) ensure, to the extent possible, that the shareholders of the Corporation
and the Board of Directors have adequate time to consider and evaluate any
unsolicited Offer to Acquire the outstanding Voting Shares;

 

  (2) provide the Board of Directors with adequate time to identify, develop and
negotiate value-enhancing alternatives, if considered appropriate, to any such
unsolicited Offer to Acquire the outstanding Voting Shares;

 

  (3) encourage the fair treatment of shareholders of the Corporation in
connection with any Offer to Acquire the Voting Shares; and

B.    WHEREAS in order to implement the adoption of the shareholder rights plan
the Board of Directors has authorized the issuance of one Right:

 

  (1) effective at the Record Time in respect of each Common Share outstanding
at the Record Time; and

 

  (2) in respect of each Common Share issued after the Record Time and prior to
the earlier of the Separation Time and the Expiration Time; and

C.    WHEREAS each Right entitles the holder thereof, after the Separation Time,
to purchase securities of the Corporation pursuant to the terms and subject to
the conditions set forth herein; and

D.    WHEREAS the Corporation desires to appoint the Rights Agent to act on
behalf of the Corporation, and the Rights Agent is willing to so act, in
connection with the issuance, transfer, exchange and replacement of Rights
Certificates, the exercise of Rights and other matters referred to herein;

NOW THEREFORE, in consideration of the foregoing premises and the respective
covenants and agreements set forth herein, the parties hereby agree as follows:

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ARTICLE 1 – INTERPRETATION

Section 1.1 Certain Definitions

For purposes of this Agreement, the following terms have the meanings indicated:

(1)    “1933 Securities Act” shall mean the United States Securities Act of
1933, as amended, and the rules and regulations thereunder, and any comparable
or successor laws or regulations thereto.

(2)    “1934 Exchange Act” shall mean the United States Securities Exchange Act
of 1934, as amended, and the rules and regulations thereunder, and any
comparable or successor laws or regulations thereto.

(3)    “Acquiring Person” means, any Person who is the Beneficial Owner of 20%
or more of the outstanding Voting Shares; provided, however, that the term
“Acquiring Person” shall not include:

 

  (a) the Corporation or any Subsidiary of the Corporation;

 

  (b) any Person who becomes the Beneficial Owner of 20% or more of the
outstanding Voting Shares as a result of one or any combination of:
(A) Corporate Acquisitions, (B) Permitted Bid Acquisitions, (C) Corporate
Distributions, (D) Exempt Acquisitions, or (E) Convertible Security
Acquisitions; provided, however, that if a Person shall become the Beneficial
Owner of 20% or more of the Voting Shares then outstanding by reason of one or
more or any combination of (A), (B), (C), (D) or (E) above and thereafter
becomes the Beneficial Owner of an additional 0.25% or more of the outstanding
Voting Shares (other than pursuant to one or any combination of (A), (B), (C),
(D) or (E) above), then as of the date such Person becomes the Beneficial Owner
of such additional Voting Shares, such Person shall become an Acquiring Person;

 

  (c) for a period of 10 days after the Disqualification Date, any Person who
becomes the Beneficial Owner of 20% or more of the outstanding Voting Shares as
a result of such Person becoming disqualified from relying on Clause (ii) of the
definition of “Beneficial Owner” solely because such Person makes or announces
an intention to make a Take-over Bid in respect of securities of the Corporation
either alone, through such Person’s Affiliates or Associates or by acting
jointly or in concert with any other Person. For the purposes of this
definition, “Disqualification Date” means the first date of a public
announcement (which, for the purposes of this definition, shall include, without
limitation, a report filed pursuant to Section 13(d) of the 1934 Exchange Act or
Section 102.1 of the Securities Act (Ontario)) of facts indicating that any
Person is making or intends to make a Take-over Bid, either alone, through such
Person’s Affiliates or Associates or by acting jointly or in concert with any
other Person;

 

  (d) an underwriter or member of a banking or selling group that becomes the
Beneficial Owner of Voting Shares from the Corporation in connection with a
distribution of securities (including, for greater certainty, by way of private
placement of such securities) to the public; and

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- 3 -

  (e) a Person (a “Grandfathered Person”) who is the Beneficial Owner of 20% or
more of the outstanding Voting Shares as at the date hereof, provided, however,
that this exception shall not be, and shall cease to be, applicable to a
Grandfathered Person to the event that such Grandfathered Person shall, after
the date hereof: (1) cease to own 20% or more of the outstanding Voting Shares
or (2) become the Beneficial Owner (other than pursuant to any one or a
combination of a Corporate Acquisition, Permitted Bid Acquisition, Corporate
Distribution, Exempt Acquisition or Convertible Security Acquisition) of
additional Voting Shares constituting more than 0.25% of the number of Voting
Shares outstanding as at the date hereof.

(4)    “Affiliate” when used to indicate a relationship with a specified Person,
means a Person that directly or indirectly through one or more intermediaries,
controls, or is controlled by, or is under common control with, such specified
Person.

(5)    “Agreement” means this agreement as amended, modified or supplemented
from time to time.

(6)    “Associate” when used to indicate a relationship with a specified Person,
means any relative of such specified Person who has the same home as such
specified Person, or any Person to whom such specified Person is married or with
whom such specified Person is living in a conjugal relationship outside marriage
who has the same home as such specified Person, or any relative of such spouse
or other Person who has the same home as such specified Person.

(7)    A Person shall be deemed the “Beneficial Owner”, and to have “Beneficial
Ownership” of, and to “Beneficially Own”:

 

  (a) any securities of which such Person or any Affiliate or Associate of such
Person is the owner in law or equity, directly or indirectly;

 

  (b) any securities as to which such Person or any of such Person’s Affiliates
or Associates has the right to acquire or become the owner at law or equity,
where such right is exercisable immediately or after the passage of time and
whether or not on condition or the happening of any contingency or the making of
any payment, upon the exercise of any conversion right, exchange right or
purchase right attaching to Convertible Securities, or pursuant to any
agreement, arrangement, pledge or understanding (including, for greater
certainty, any lock-up agreement), whether or not in writing, (other than
(x) customary agreements with and between underwriters and/or banking group
members and/or selling group members with respect to a distribution of
securities pursuant to a prospectus or by way of private placement and
(y) pledges of securities in the ordinary course of business of the lender
granted as security for bona fide indebtedness) or otherwise;

 

  (c) any securities as to which such Person or any of such Person’s Affiliates
or Associates has the right to vote, or the right to direct the voting, where
such right is exercisable immediately or after the passage of time and whether
or not on condition or the occurrence of any contingency, pursuant to any
agreement, arrangement, pledge or understanding, written or oral (other than
pursuant to pledges of securities in the ordinary course of business of the
lender granted as security for bona fide indebtedness) or otherwise;

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- 4 -

  (d) any securities which are beneficially owned, directly or indirectly, by a
Counterparty (or any of such Counterparty’s Affiliates or Associates) under any
Derivatives Contract (without regard to any short or similar position under the
same or any other Derivatives Contract) to which such Person or any of such
Person’s Affiliates or Associates is a Receiving Party; provided, however that
the number of Voting Shares that a Person is deemed to Beneficially Own pursuant
to this Clause (d) in connection with a particular Derivatives Contract shall
not exceed the number of Notional Securities with respect to such Derivatives
Contract; provided, further, that the number of securities beneficially owned by
each Counterparty (including their respective Affiliates and Associates) under a
Derivatives Contract shall for purposes of this Clause (d) be deemed to include
all securities that are beneficially owned, directly or indirectly, by any other
Counterparty (or any of such other Counterparty’s Affiliates or Associates)
under any Derivatives Contract to which such first Counterparty (or any of such
first Counterparty’s Affiliates or Associates) is a Receiving Party and this
proviso shall be applied to successive Counterparties as appropriate; and

 

  (e) any securities that are Beneficially Owned within the meaning of
Clause 1.1(7)(a), (b), (c) or (d) hereof by any other Person with whom such
Person is acting jointly or in concert with respect to the Corporation or any of
its securities;

provided, however, that a Person shall not be deemed the “Beneficial Owner”, or
to have “Beneficial Ownership” of, or to “Beneficially Own”, any security solely
as a result of the existence of any one or more of the following circumstances:

 

  (i) such security has been deposited or tendered, pursuant to a Take-over Bid
made by such Person or made by any Affiliate or Associate of such Person or made
by any other Person acting jointly or in concert with such Person, until the
earlier time at which any such deposited or tendered security is accepted
unconditionally for payment or exchange or is taken up and paid for;

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- 5 -

  (ii) such Person or any Affiliate or Associate of such Person or any other
Person acting jointly or in concert with such Person, holds such security;
provided that (i) the ordinary business of any such Person (the “Fund Manager”)
includes the management of mutual funds or investment funds for others (which
others may include or be limited to one or more employee benefit plans or
pension plans) and/or includes the acquisition or holding of securities for a
non-discretionary account of a Client (as defined below) by a dealer or broker
registered under applicable securities laws to the extent required, and such
security is held by the Fund Manager in the ordinary course of such business in
the performance of such Fund Manager’s duties for the account of any other
Person (a “Client”), and such Person holds any and all qualifications including
registration, (ii) such Person (the “Trust Company”) is licensed to carry on the
business of a trust company under applicable law and, as such, acts as trustee
or administrator or in a similar capacity in relation to the estates of deceased
or incompetent Persons or in relation to other accounts and holds such security
in the ordinary course of such duties for the estate of any such deceased or
incompetent Person (each an “Estate Account”) or for such other accounts (each
an “Other Account”), (iii) the Person (the “Statutory Body”) is an independent
Person established by statute for purposes that include, and the ordinary
business or activity of such person includes, the management of investment funds
for employee benefit plans, pension plans, insurance plans of various public
bodies and the Statutory Body holds such security for the purposes of its
activities as such, (iv) the ordinary business of any such Person includes
acting as an agent of the Crown in the management of public assets (the “Crown
Agent”), or (v) the Person is the administrator or the trustee of one or more
pension funds or plans (each a “Pension Fund”) registered under the laws of
Canada or any province thereof or the United States or any state thereof (the
“Independent Person”), or is a Pension Fund and holds such securities for the
purposes of its activities as an Independent Person or as a Pension Fund;

 

  (iii) provided, however, that in any of the foregoing cases no one of the Fund
Manager, the Trust Company, the Statutory Body, the Crown Agent, the Independent
Person or the Pension Fund (A) Beneficially Owns or holds securities of the
Corporation for the purpose of or with the effect of changing or influencing the
control of the Corporation, either alone or acting jointly or in concert with
any other Person, or in connection with or as a participant in any transaction
having that purpose or effect, or (B) makes or announces a current intention to
make a Take-over Bid in respect of securities of the Corporation alone or by
acting jointly or in concert with any other Person (other than pursuant to a
distribution by the Corporation or by means of ordinary market transactions
(including prearranged trades entered in the ordinary course of business of such
Person) executed through the facilities of a stock exchange or organized
over-the-counter market);

 

  (iv) such Person is a Client of or has an account with the same Fund Manager
as another Person on whose account the Fund Manager holds such security, or such
Person is a Client of or has an account with the same Estate Account or an Other
Account of the same Trust Company as another Person on whose account the Trust
Company holds such security, or such Person is a Pension Fund with the same
Independent Person as another Pension Fund;

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- 6 -

  (v) such Person is a Client of a Fund Manager and such security is owned at
law or in equity by the Fund Manager, or such Person is an Estate Account or an
Other Account of a Trust Company and such security is owned at law or in equity
by the Trust Company, or such Person is a Pension Fund and such security is
owned at law or in equity by the Independent Person; or

 

  (vi) such Person is a registered holder of securities as a result of carrying
on the business of, or acting as a nominee of, a securities depository.

For purposes of this Agreement, the percentage of Voting Shares Beneficially
Owned by any Person, shall be and be deemed to be the product of 100 and the
number of which the numerator is the number of votes for the election of all
directors generally attaching to the Voting Shares Beneficially Owned by such
Person and the denominator of which is the number of votes for the election of
all directors generally attaching to all outstanding Voting Shares. Where any
Person is deemed to Beneficially Own unissued Voting Shares, such Voting Shares
shall be deemed to be issued and outstanding for the purpose of calculating the
percentage of Voting Shares Beneficially Owned by such Person.

(8)    “Board of Directors” means, at any time, the duly constituted board of
directors of the Corporation.

(9)    “Business Day” means any day other than a Saturday, Sunday or a day on
which banking institutions in Toronto are authorized or obligated by law to
close.

(10)    “Canadian Dollar Equivalent” of any amount which is expressed in United
States dollars shall mean on any date the Canadian dollar equivalent of such
amount determined by multiplying such amount by the U.S.-Canadian Exchange Rate
in effect on such date.

(11)    “Canadian-U.S. Exchange Rate” shall mean on any date the inverse of the
U.S.-Canadian Exchange Rate.

(12)    “close of business” on any given date means the time on such date (or,
if such date is not a Business Day, the time on the next succeeding Business
Day) at which the office of the transfer agent for the Common Shares in the City
of Toronto (or, after the Separation Time, the office of the Rights Agent in the
City of Toronto) is closed to the public.

(13)    “Common Shares”, when used with reference to the Corporation, means the
common shares in the capital of the Corporation.

(14)    “Competing Permitted Bid” means a Take-over Bid that: (i) is made while
another Permitted Bid or Competing Permitted Bid is in existence and open for
acceptance, and (ii) satisfies all the components of the definition of a
Permitted Bid, except that the requirements set out in Clause (b) of the
definition of a Permitted Bid shall be satisfied if the Take-over Bid shall
contain, and the take up and payment for securities tendered or deposited
thereunder shall be subject to, an irrevocable and unqualified condition that no
Voting Shares shall be taken up or paid for pursuant to the Competing Permitted
Bid prior to the close of business on the date that is no earlier than the date
which is the later of 35 days after the date the Competing Permitted Bid is made
or 90 days after the earliest date on which any other Permitted Bid or Competing
Permitted Bid that is then in existence was made and only if at that date, more
than 50% of the then outstanding Voting Shares held by Independent Shareholders
have been deposited or tendered to the Competing Permitted Bid and not
withdrawn; provided always that a Competing Permitted Bid will cease to be a
Competing Permitted Bid at any time when such bid ceases to meet any of the
provisions of this definition and any acquisitions of securities made pursuant
to such Competing Bid, including any acquisition of securities theretofore made,
will cease to be a Permitted Bid Acquisition.

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(15)    A Person is “controlled” by another Person if:

 

  (a) in the case of a body corporate:

 

  (i) securities entitled to vote in the election of directors carrying more
than 50% of the votes for the election of directors are held, other than by way
of security only, directly or indirectly, by or for the benefit of the other
Person; and

 

  (ii) the votes carried by such securities are entitled, if exercised, to elect
a majority of the board of directors of such corporation; or

 

  (b) in the case of a Person that is not a body corporate, more than 50% of the
voting or equity interests of such entity are held, directly or indirectly, by
or for the benefit of the other Person or Persons;

and “controls”, “controlling” and “under common control with” shall be
interpreted accordingly.

(16)    “Convertible Security” means at any time:

 

  (a) any right (regardless of whether such right constitutes a security) to
acquire Voting Shares from the Corporation; and

 

  (b) any securities issued by the Corporation from time to time (other than the
Rights) carrying any exercise, conversion or exchange right;

in each case pursuant to which the holder thereof may acquire Voting Shares or
other securities which are convertible into or exercisable or exchangeable for
Voting Shares (in each case, whether such right is exercisable immediately or
after a specified period and whether or not on condition or the happening of any
contingency).

(17)    “Convertible Security Acquisition” means the acquisition of Voting
Shares upon the exercise, conversion or exchange of Convertible Securities
received by such Person pursuant to a Permitted Bid Acquisition, Exempt
Acquisition or a Corporate Distribution.

(18)    “Corporate Acquisition” means an acquisition by the Corporation or a
Subsidiary of the Corporation or the redemption by the Corporation of Voting
Shares which by reducing the number of Voting Shares outstanding increases the
proportionate number of Voting Shares Beneficially Owned by any Person.

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(19) “Corporate Distribution” means an acquisition as a result of:

 

  (a) a stock dividend or a stock split or other event pursuant to which such
Person receives or acquires Voting Shares or Convertible Securities on the same
pro rata basis as all other holders of Voting Shares of the same class or series
of the Corporation; or

 

  (b) any other event pursuant to which all holders of Voting Shares are
entitled to receive Voting Shares or Convertible Securities on a pro rata basis,
including, without limiting the generality of the foregoing, pursuant to the
receipt and/or exercise of rights issued by the Corporation and distributed to
all the holders of a series or class of Voting Shares to subscribe for or
purchase Voting Shares or Convertible Securities of the Corporation, provided
that such rights are acquired directly from the Corporation and not from any
other Person and provided further that the Person in question does not thereby
acquire a greater percentage of Voting Shares, or Convertible Securities
representing the right to acquire Voting Shares of such class, than the
percentage of Voting Shares of the class Beneficially Owned immediately prior to
such acquisition.

(20) “Derivatives Contract” shall mean a contract between two parties (the
“Receiving Party” and the “Counterparty”) that is designed to expose the
Receiving Party to economic benefits and risks that correspond substantially to
the ownership by the Receiving Party of a number of Voting Shares or Convertible
Securities specified or referenced in such contract (the number corresponding to
such economic benefits and risks, the “Notional Securities”), regardless of
whether obligations under such contract are required or permitted to be settled
through the delivery of cash, Voting Shares, Convertible Securities or other
property, without regard to any short position under the same or any other
Derivatives Contract. For the avoidance of doubt, interests in broad-based index
options, broad-based index futures and broad-based publicly traded market
baskets of stocks approved for trading by the appropriate governmental authority
shall not be deemed to be Derivatives Contracts.

(21) “Disqualification Date” has the meaning ascribed thereto in
Section 1.1(3)(c) hereof.

(22) “Effective Date” has the meaning ascribed thereto in Section 5.14 hereof.

(23) “Election to Exercise” has the meaning ascribed thereto in Section 2.2(4)
hereof.

(24) “Exempt Acquisition” means an acquisition of Voting Shares:

 

  (a) in respect of which the Board of Directors has waived the application of
Section 3.1 hereof pursuant to the provisions of Section 5.2;

 

  (b) which was made on or prior to the Record Time;

 

  (c) pursuant to the receipt or exercise of rights issued by the Corporation to
all the holders of the Voting Shares (other than holders resident in a
jurisdiction where such distribution is restricted or impracticable as a result
of applicable law) to subscribe for or purchase Voting Shares or Convertible
Securities, provided that such rights are acquired directly from the Corporation
and not from any other Person and provided that the Person does not thereby
acquire a greater percentage of Voting Shares or Convertible Securities so
offered than the Person’s percentage of Voting Shares or Convertible Securities
Beneficially Owned immediately prior to such acquisition;

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- 9 -

  (d) pursuant to a distribution by the Corporation of Voting Shares or
Convertible Securities made pursuant to a prospectus provided that the Person
does not thereby acquire a greater class percentage of Voting Shares, or
Convertible Securities so offered than the Person’s percentage of Voting Shares
or Convertible Securities Beneficially Owned immediately prior to such
acquisition;

 

  (e) pursuant to an issuance and sale by the Corporation of Voting Shares or
Convertible Securities by way of a private placement by the Corporation,
provided that (x) all necessary stock exchange approvals for such private
placement have been obtained and such private placement complies with the terms
and conditions of such approvals, and (y) the purchaser does not become the
Beneficial Owner of more than 25% of the Voting Shares outstanding immediately
prior to the private placement (and in making this determination, the securities
to be issued to such purchaser on the private placement shall be deemed to be
held by such purchaser but shall not be included in the aggregate number of
outstanding Voting Shares immediately prior to the private placement).

(25) “Exercise Price” means, as of any date, the price at which a holder may
purchase the securities issuable upon exercise of one whole Right. Until
adjustment thereof in accordance with the terms hereof, the Exercise Price shall
be:

 

  (a) until the Separation Time, an amount equal to three times the Market
Price, from time to time, per Common Share; and

 

  (b) from and after Separation Time, an amount equal to three times the Market
Price, as at the Separation Time, per Common Share.

(26) “Expiration Time” means the close of business on that date that is the
earlier of (i) the Termination Time, and (ii) the date of termination of this
Agreement pursuant to Section 5.14.

(27) “Flip-in Event” means a transaction in or pursuant to which any Person
becomes an Acquiring Person.

(28) “Grandfathered Person” shall have the meaning ascribed thereto in
Section 1.1(3)(e);

(29) “Independent Shareholders” means holders of outstanding Voting Shares, but
shall not include (i) any Acquiring Person, Grandfathered Person or Offeror, or
any Affiliate or Associate of such Acquiring Person, Grandfathered Person or
Offeror, or any Person acting jointly or in concert with such Acquiring Person,
Grandfathered Person or Offeror, or (ii) a Person who is a trustee of any
employee benefit plan, stock purchase plan, deferred profit sharing plan or any
similar plan or trust for the benefit of employees of the Corporation or a
Subsidiary of the Corporation, unless the beneficiaries of any such plan or
trust direct the manner in which the Voting Shares are to be voted or direct
whether the Voting Shares are to be deposited or tendered to a Take-over Bid.

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(30) “Market Price” per security of any securities on any date of determination
shall mean the average of the daily closing prices per security of such
securities (determined as described below) on each of the 20 consecutive Trading
Days through and including the Trading Day immediately preceding such date;
provided, however, that if an event of a type analogous to any of the events
described in Section 2.3 hereof shall have caused the closing prices used to
determine the Market Price on any Trading Day not to be fully comparable with
the closing price on such date of determination (or, if the date of
determination is not a Trading Day, on the immediately preceding Trading Day),
each such closing price so used shall be appropriately adjusted in a manner
analogous to the applicable adjustment provided for in Section 2.3 hereof in
order to make it fully comparable with the closing price on such date of
determination (or, if the date of determination is not a Trading Day, on the
immediately preceding Trading Day). The closing price per security of any
securities on any date shall be:

 

  (a) the closing board lot sale price or, in case no such sale takes place on
such date, the average of the closing bid and asked prices for each of such
securities as reported by the stock exchange or national securities quotation
system in Canada or the United States of America on which such securities of the
Corporation are listed or admitted for trading on which the largest number of
such securities were trading during such 20 consecutive Trading Days period,

 

  (b) if such securities are not listed or posted for trading on any stock
exchange or national securities quotation system in Canada or the United States
of America, the last quoted price, or if not so quoted, the average of the high
bid and low asked prices for each share of such securities in the
over-the-counter market, as reported by the Financial Industry Regulatory
Authority Inc’s Over-the-Counter Bulletin Board, the OTC Markets Group LLC’s OTC
Link ATS system or such other system then in use, or

 

  (c) if on any such date the securities are not quoted by any such
organization, the average of the closing bid and asked prices as furnished by a
professional market maker making a market in the securities selected in good
faith by the Board of Directors;

provided, however, that if on any such date the securities are not traded on any
stock exchange or in the over-the-counter market, the closing price per security
of such securities on such date shall mean the fair value per security of such
securities on such date as determined by a nationally recognized investment
banking firm with respect to the fair value per security of such securities. The
Market Price shall be expressed in Canadian dollars and if initially determined
in respect of any day forming part of the 20 consecutive Trading Day period in
question in United States dollars, such amount shall be translated into Canadian
dollars on such date at the Canadian Dollar Equivalent thereof.

(31) “OBCA” means the Business Corporations Act (Ontario), and the regulations
thereunder, and any comparable or successor laws or regulations thereto.

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- 11 -

(32) “Offer to Acquire” shall include:

 

  (a) an offer to purchase, a public announcement of an intention to make an
offer to purchase, or a solicitation of an offer to sell; and

 

  (b) an acceptance of an offer to sell, whether or not such offer to sell has
been solicited;

or any combination thereof, and the Person accepting an offer to sell shall be
deemed to be making an Offer to Acquire to the Person that made the offer to
sell.

(33) “Offeror” means a Person who has announced a current intention to make, or
who makes and has outstanding, a Take-over Bid.

(34) “Offeror’s Securities” means Voting Shares Beneficially Owned by an
Offeror, any Affiliate or Associate of such Offeror or any Person acting jointly
or in concert with the Offeror.

(35) “Permitted Bid” means a Take-over Bid that is made by means of a take-over
bid circular and which also complies with the following additional provisions:

 

  (a) the Take-over Bid shall be made to all holders of Voting Shares (other
than the Voting Shares held by the Offeror and its Affiliates and Associates)
for all Voting Shares held by them;

 

  (b) the Take-over Bid shall contain, and the provisions for the take up and
payment for securities deposited thereunder shall be subject to, an irrevocable
and unqualified condition that no Voting Shares shall be taken up or paid for
pursuant to the Take-over Bid prior to the close of business on the date which
is not less than 90 days following the date of the Take-over Bid;

 

  (c) the Take-over Bid shall contain an irrevocable and unqualified provision
that, unless the Take-over Bid is withdrawn, Voting Shares may be deposited
pursuant to such Take-over Bid at any time prior to the close of business on the
date of first take-up or payment for Voting Shares and that all Voting Shares
deposited pursuant to the Take-over Bid may be withdrawn at any time prior to
the close of business on such date;

 

  (d) the Take-over Bid shall contain an irrevocable and unqualified condition
that more than 50% of the outstanding Voting Shares held by Independent
Shareholders, determined as at the close of business on the date of first
take-up or payment for Voting Shares under the Take-over Bid, must be deposited
to the Take-over Bid and not withdrawn at the close of business on the date of
first take-up or payment for Voting Shares; and

 

  (e) the Take-over Bid shall contain an irrevocable and unqualified provision
that in the event that more than 50% of the then outstanding Voting Shares held
by Independent Shareholders shall have been deposited to the Take-over Bid and
not withdrawn as at the close on business on the date of first take-up or
payment for Voting Shares under the Take-over Bid, the Offeror will make a
public announcement of that fact and the Take-over Bid will remain open for
deposits of Voting Shares for not less than 10 Business Days from the date of
such public announcement;

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- 12 -

provided always that a Permitted Bid will cease to be a Permitted Bid at any
time when such bid ceases to meet any of the provisions of this definition and
any acquisitions of shares made pursuant to such Permitted Bid, including any
acquisition of shares theretofore made, will cease to be a Permitted Bid
Acquisition.

(36) “Permitted Bid Acquisitions” means share acquisitions made pursuant to a
Permitted Bid or a Competing Permitted Bid.

(37) “Person” means any individual, firm, partnership, limited partnership,
limited liability company or partnership, association, trust, trustee, executor,
administrator, legal or personal representative, government, governmental body,
entity or authority, group, body corporate, corporation, unincorporated
organization or association, syndicate, joint venture or any other entity,
whether or not having legal personality, and any of the foregoing in any
derivative, representative or fiduciary capacity and pronouns have a similar
extended meaning.

(38) “Record Time” means the close of business on November 15, 2013.

(39) “Redemption Price” has the meaning ascribed thereto in Section 5.1 hereof.

(40) “regular periodic cash dividends” means cash dividends paid at regular
intervals in any fiscal year of the Corporation to the extent that such cash
dividends do not exceed, in the aggregate, the greatest of:

 

  (a) 100% of the aggregate consolidated net income of the Corporation, before
extraordinary items, for its immediately preceding fiscal year; and

 

  (b) 200% of the aggregate amount of cash dividends declared payable by the
Corporation on its Common Shares in its immediately preceding fiscal year; and

 

  (c) 300% of the arithmetic mean of the aggregate amounts of cash dividends
declared payable by the Corporation on its Common Shares in its three
immediately preceding fiscal years divided by the arithmetic mean of the number
of Common Shares outstanding as at the end of each of such fiscal years.

(41) “Right” means a right issued pursuant to this Agreement.

(42) “Rights Certificate” has the meaning ascribed thereto in Section 2.2(3)
hereof.

(43) “Rights Register” has the meaning ascribed thereto in Section 2.6(1)
hereof.

(44) “Securities Act (Ontario)” shall mean the Securities Act (Ontario) and the
regulations, rules, policies and notices made thereunder, and any comparable or
successor laws, regulations, rules, policies or notices thereto.

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- 13 -

(45) “Separation Time” means the close of business on the 10th Trading Day after
the earliest of

 

  (a) the Stock Acquisition Date,

 

  (b) the date of the commencement of, or first public announcement of the
intent of any person (other than the Corporation or any Subsidiary of the
Corporation) to commence, a Take-over Bid (other than a Permitted Bid or
Competing Permitted Bid), and

 

  (c) the date on which a Permitted Bid or Competing Permitted Bid ceases to
qualify as such;

or, in each case, such later date as may be determined by the Board of Directors
in its sole discretion acting in good faith; provided that, if any Take-over Bid
referred to in Clause (b) of this Section 1.1(45) or any Permitted Bid or
Competing Permitted Bid referred to in Clause (c) of this Section 1.1(45)
expires, or is cancelled, terminated or otherwise withdrawn prior to the
Separation Time, such Take-over Bid, Permitted Bid or Competing Permitted Bid,
as the case may be, shall be deemed, for the purposes of this Section 1.1(45),
never to have been made and provided further that if the Board of Directors
determines pursuant to Section 5.2 hereof to waive the application of
Section 3.1 hereof to a Flip-in Event, the Separation Time in respect of such
Flip-in Event shall be deemed never to have occurred.

(46) “Stock Acquisition Date” means the first date of public announcement
(which, for purposes of this definition, shall include, without limitation, a
report filed pursuant to the 1934 Exchange Act or the Securities Act (Ontario))
by the Corporation or an Offeror or an Acquiring Person of facts indicating that
a Person has become an Acquiring Person.

(47) “Subsidiary”: a corporation shall be deemed to be a Subsidiary of another
corporation if:

 

  (a) it is controlled by:

 

  (i) that other;

 

  (ii) that other and one or more corporations each of which is controlled by
that other; or

 

  (iii) two or more corporations each of which is controlled by that other; or

 

  (b) it is a Subsidiary of a corporation that is that other’s Subsidiary.

(48) “Take-over Bid” means an Offer to Acquire Voting Shares or securities
convertible into or exchangeable for or carrying a right to purchase Voting
Shares where the Voting Shares subject to the Offer to Acquire, together with
the Voting Shares into which the securities subject to the Offer to Acquire are
convertible, exchangeable or exercisable, together with the Offeror’s
Securities, constitute in the aggregate 20% or more of the outstanding Voting
Shares at the date of the Offer to Acquire.

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- 14 -

(49) “Termination Time” means the time at which the right to exercise Rights
shall terminate pursuant to Section 3.2 or Section 5.1.

(50) “Trading Day” shall mean a day on which the securities exchange or national
securities quotation system on which securities of the Corporation are listed or
admitted for trading on which the largest number of such securities were traded
during the most recently completed calendar year is open for the transaction of
business or, if the securities are not listed or admitted to trading on any
securities exchange, a Business Day.

(51) “U.S.-Canadian Exchange Rate” shall mean on any date: (i) if on such date
the Bank of Canada sets an average noon spot rate of exchange for the conversion
of one United States dollar into Canadian dollars, such rate; and; (ii) in any
other case, the rate for such date for the conversion of one United States
dollar into Canadian dollars which is calculated in the manner which shall be
determined by the Board of Directors from time to time acting in good faith.

(52) “United States” means the United States of America and its territories and
possessions, each state of the United States and the District of Columbia.

(53) “Voting Shares” means the Common Shares and any other shares of capital
stock or voting interests of the Corporation entitled to vote generally in the
election of all directors of the Corporation.

Section 1.2 Currency

All sums of money which are referred to in this Agreement are expressed in
lawful money of Canada, unless otherwise specified.

Section 1.3 Headings

The division of this Agreement into Articles, Sections and Clauses and the
insertion of headings, subheadings and a table of contents are for convenience
of reference only and shall not affect the construction or interpretation of
this Agreement.

Section 1.4 Number and Gender

Wherever the context so requires, terms used herein importing the singular
number only shall include the plural and vice-versa and words importing only one
gender shall include all others.

Section 1.5 Acting Jointly or in Concert

For purposes of this Agreement, it is a question of fact as to whether a Person
is acting jointly or in concert with another Person and, without limiting the
generality of the foregoing, the following shall be deemed to be acting jointly
or in concert with a Person (the “First Person”):

(1) every person who has any agreement, arrangement, commitment or understanding
(whether formal or informal and whether or not in writing) with the First
Person, any Associate or Affiliate of the First Person or any other Person
acting jointly or in concert with the First Person, for the purpose of an
acquisition of or an Offer to Acquire any Voting Shares including, without
limitation, any one or more of, or any combination of, (i) a put, call, option,
forward sale or purchase or other right or obligation relating to the sale or
disposition of any purchase or other right or obligation relating to the sale or
disposition of any Voting Shares to the First Person, any Associate or Affiliate
of the First Person or any other Person acting jointly or in concert with the
First Person (whether settled by delivery of securities, cash or a combination
thereof), (ii) any security the value of which varies with the value of Voting
Shares, or (iii) an agreement, arrangement, commitment or understanding (whether
formal or informal and whether or not in writing) pursuant to which all or
substantially all of the economic or market risk underlying a Voting Share,
directly or indirectly, is transferred to, or assumed by, the First Person, any
Associate or Affiliate of the First Person or any other Person acting jointly or
in concert with the First Person;

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- 15 -

(2) every Person who has any agreement, arrangement, commitment or understanding
(whether formal or informal and whether or not in writing) with the First
Person, any Associate or Affiliate of the First Person or any other Person
acting jointly or in concert with the First Person, for the purpose or with the
intention of exercising jointly or in concert with the First Person, any
Associate or Affiliate of the First Person or any other Person acting jointly or
in concert with the First Person, any voting rights attaching to any securities
of the Corporation; and

(3) every Person who has any agreement, arrangement, commitment or understanding
(whether formal or informal and whether or not in writing) with the First
Person, any Associate or Affiliate of the First Person or any other Person
acting jointly or in concert with the First Person, for the purpose of selling,
offering to sell, acquiring or offering to acquire any business, asset,
subsidiary or investee company of the Corporation through any one transaction or
series of transactions where the aggregate value of the business, asset,
subsidiary or investee company to acquired exceeds $1,000,000, such value to be
determined in good faith by the Board of Directors.

Notwithstanding the foregoing and for greater certainty, the phrase “acting
jointly or in concert” shall not include conduct consisting solely of:

 

(x) voting or directing the vote of securities of the Corporation pursuant to a
proxy given in response to a particular proxy solicitation; or

 

(y) voting or directing the vote of securities of the Corporation in connection
with or in order to participate in a particular proxy solicitation.

Section 1.6 Statutory References

Unless the context otherwise requires or except as expressly provided herein,
any reference herein to a specific part, section, clause or Rule of any statute
or regulation shall be deemed to refer to the same as it may be amended,
re-enacted or replaced or, if repealed and there shall be no replacement
therefor, to the same as it is in effect on the date of this Agreement.

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- 16 -

ARTICLE 2 – THE RIGHTS

Section 2.1 Legend on Common Share Certificates

(1) Certificates issued for Common Shares, including without limitation Common
Shares issued upon the conversion of Convertible Securities, after the Record
Time but prior to the earlier of the Separation Time and the Expiration Time
shall evidence one Right for each Common Share represented thereby and,
commencing as soon as reasonably practicable after the Effective Date, shall
have impressed on, printed on, written on or otherwise affixed to them, a legend
in substantially the following form:

Until the Separation Time (defined in the Rights Agreement referred to below),
this certificate also evidences rights of the holder described in a Shareholder
Rights Plan Agreement, dated November 4, 2013, as such may from time to time be
amended, restated, varied or replaced (the “Rights Agreement”), between the
Corporation and Computershare Trust Company of Canada, as Rights Agent, the
terms of which are hereby incorporated herein by reference, and a copy of which
is on file at the principal executive offices of the Corporation and is
available for viewing at www.sedar.com. Under certain circumstances set out in
the Rights Agreement, the rights may be redeemed, may expire, may become null
and void or may be evidenced by separate certificates and no longer evidenced by
this certificate.

(2) Until the earlier of the Separation Time and the Expiration Time,
certificates representing Common Shares that are issued and outstanding at the
Record Time shall evidence one Right for each Common Share evidenced thereby
notwithstanding the absence of the foregoing legend. Following the Separation
Time, Rights will be evidenced by Rights Certificates issued pursuant to
Section 2.2 hereof.

Section 2.2 Initial Exercise Price; Exercise of Rights; Detachment of Rights

(1) Right to entitle holder to purchase one Common Share prior to adjustment.
Subject to adjustment as herein set forth and subject to Section 3.1(1) hereof,
each Right will entitle the holder thereof, from and after the Separation Time
and prior to the Expiration Time, to purchase, for the Exercise Price as at the
Business Day immediately preceding the date of exercise of the Right, one Common
Share (which price and number of Common Shares are subject to adjustment as set
forth below and are subject to Section 3.1(1) hereof). Notwithstanding any other
provision of this Agreement, any Rights held by the Corporation or any of its
Subsidiaries shall be void.

(2) Rights not exercisable until Separation Time. Until the Separation Time,
(i) the Rights shall not be exercisable and no Right may be exercised, and
(ii) for administrative purposes each Right will be evidenced by the
certificates for the associated Common Shares registered in the names of the
holders thereof (which certificates shall also be deemed to be Rights
Certificates) and will be transferable only together with, and will be
transferred by a transfer of, such associated Common Shares.

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- 17 -

(3) Delivery of Rights Certificate and disclosure statement. From and after the
Separation Time and prior to the Expiration Time, (i) the Rights shall be
exercisable, and (ii) the registration and transfer of the Rights shall be
separate from, and independent of, Common Shares. Promptly following the
Separation Time, the Corporation will prepare and the Rights Agent will mail to
each holder of record of Rights as of the Separation Time and, in respect of
each Convertible Security converted into Common Shares after the Separation Time
and prior to the Expiration Time promptly after such conversion to the holder so
converting (other than an Acquiring Person and, in respect of any Rights
Beneficially Owned by such Acquiring Person which are not held of record by such
Acquiring Person, the holder of record of such Rights (a “Nominee”)) at such
holder’s address as shown by the records of the Corporation (the Corporation
hereby agreeing to furnish copies of such records to the Rights Agent for this
purpose), (A) a certificate (a “Rights Certificate”) in substantially the form
of Schedule A hereto appropriately completed, representing the number of Rights
held by such holder at the Separation Time, and having such marks of
identification or designation and such legends, summaries or endorsements
printed thereon as the Corporation may deem appropriate and as are not
inconsistent with the provisions of this Agreement, or as may be required to
comply with any law, rule, regulation or judicial or administrative order or
with any rule or regulation made pursuant thereto or with any rule or regulation
of any self-regulatory organization, stock exchange or quotation system on which
the Rights may from time to time be listed or traded, or to conform to usage,
and (B) a disclosure statement describing the Rights, provided that a Nominee
shall be sent the materials provided for in (A) and (B) in respect of all Common
Shares held of record by it which are not Beneficially Owned by an Acquiring
Person. In order for the Corporation to determine whether any Person is holding
Common Shares which are Beneficially Owned by another Person, the Corporation
may require such first mentioned Person to furnish it with such information and
documentation as the Corporation considers advisable.

(4) Exercise of Rights. Rights may be exercised in whole or in part on any
Business Day after the Separation Time and prior to the Expiration Time by
submitting to the Rights Agent (at the office of the Rights Agent in the City of
Toronto or any other office of the Rights Agent in the cities designated from
time to time for that purpose by the Corporation) the Rights Certificate
evidencing such Rights together with an election to exercise such Rights (an
“Election to Exercise”) substantially in the form attached to the Rights
Certificate duly completed and executed by the holder or his or her executors or
administrators or other legal personal representative or his or their attorney
duly appointed by an instrument in writing in form and executed in a manner
satisfactory to the Corporation and the Rights Agent, accompanied by payment by
certified cheque, banker’s draft or money order payable to the order of the
Rights Agent, of a sum equal to the Exercise Price multiplied by the number of
Rights being exercised and a sum sufficient to cover any transfer tax or charge
which may be payable in respect of any transfer involved in the transfer or
delivery of Rights Certificates or the issuance or delivery of certificates for
Common Shares in a name other than that of the holder of the Rights being
exercised, all of the above to be received before the Expiration Time by the
Rights Agent at its principal office in any of the cities listed on the Rights
Certificate.

(5) Duties of Rights Agent upon receipt of Election to Exercise. Upon receipt of
a Rights Certificate, which is accompanied by (i) a completed and duly executed
Election to Exercise, and (ii) payment as set forth in Section 2.2(4) above, the
Rights Agent (unless otherwise instructed by the Corporation) will thereupon
promptly:

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- 18 -

  (a) requisition from the transfer agent for the Common Shares certificates
representing the number of Common Shares to be purchased (the Corporation hereby
irrevocably authorizing its transfer agent to comply with all such
requisitions);

 

  (b) when appropriate, requisition from the Corporation the amount of cash to
be paid in lieu of issuing fractional Common Shares;

 

  (c) after receipt of such certificates, deliver the same to or upon the order
of the registered holder of such Rights Certificate, registered in such name or
names as may be designated by such registered holder;

 

  (d) when appropriate, after receipt, deliver such cash (less any amounts
required to be withheld) to or to the order of the registered holder of the
Rights Certificate; and

 

  (e) tender to the Corporation all payments received on exercise of the Rights.

(6) Partial Exercise of Rights. In case the holder of any Rights shall exercise
less than all of the Rights evidenced by such holder’s Rights Certificate, a new
Rights Certificate evidencing the Rights remaining unexercised will be issued by
the Rights Agent to such holder or to such holder’s duly authorized assigns.

(7) Duties of the Corporation. The Corporation covenants and agrees that it
will:

 

  (a) take all such action as may be necessary and within its power to ensure
that all Common Shares or other securities delivered upon exercise of Rights
shall, at the time of delivery of the certificates for such shares (subject to
payment of the Exercise Price), be duly and validly authorized, executed, issued
and delivered and fully paid and non-assessable;

 

  (b) take all such action as may be necessary and within its power to ensure
compliance with the provisions of Section 3.1 hereof including, without
limitation, all such action to comply with any applicable requirements of the
OBCA, the Securities Act (Ontario) and any applicable comparable securities
legislation of each of the provinces of Canada and the rules and regulations
thereunder, the 1933 Securities Act, the 1934 Exchange Act, and the securities
laws of each state of the United States, as applicable, or any other applicable
law, rule or regulation, in connection with the issuance and delivery of the
Rights Certificates and the issuance of any Common Shares or other securities
upon exercise of Rights;

 

  (c) use reasonable efforts to cause, from and after such time as the Rights
become exercisable, all Common Shares issued upon exercise of Rights to be
listed upon issuance on the principal stock exchange(s) on which the Common
Shares were traded immediately prior to the Stock Acquisition Date;

 

  (d) cause to be reserved and kept available out of its authorized and unissued
Common Shares, the number of Common Shares that, as provided in this Agreement,
will from time to time be sufficient to permit the exercise in full of all
outstanding Rights;

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- 19 -

  (e) pay when due and payable any and all Canadian and United States federal,
state and provincial transfer taxes and charges (not including any income or
capital taxes of the holder or exercising holder or any liability of the
Corporation to withhold tax) which may be payable in respect of the original
issuance or delivery of the Rights Certificates, provided that the Corporation
shall not be required to pay any transfer tax or charge which may be payable in
respect of any transfer involved in the transfer or delivery of Rights
Certificates or the issuance or delivery of certificates for shares or other
securities in a name other than that of the registered holder of the Rights
being transferred or exercised; and

 

  (f) after the Separation Time, except as permitted by this Agreement, not take
(or permit any Subsidiary to take) any action if at the time such action is
taken it is reasonably foreseeable that such action will diminish substantially
or otherwise eliminate the benefits intended to be afforded by the Rights.

Section 2.3 Adjustments to Exercise Price; Number of Rights

The Exercise Price, the number and kind of Common Shares or other securities
subject to purchase upon exercise of each Right and the number of Rights
outstanding are subject to adjustment from time to time as provided in this
Section 2.3.

(1) Adjustment to Exercise Price upon changes to share capital. In the event the
Corporation shall at any time after the Record Time:

 

  (a) declare or pay a dividend on the Common Shares payable in Common Shares
(or other securities exchangeable for or convertible into or giving a right to
acquire Common Shares or other securities) other than the issue of Common Shares
or such exchangeable or convertible securities to holders of Common Shares in
lieu of but not in an amount which exceeds the value of regular periodic cash
dividends;

 

  (b) subdivide or change the then outstanding Common Shares into a greater
number of Common Shares;

 

  (c) combine, consolidate or change the then outstanding Common Shares into a
smaller number of Common Shares; or

 

  (d) issue any Common Shares (or other securities exchangeable for or
convertible into or giving a right to acquire Common Shares or other securities)
in respect of, in lieu of or in exchange for existing Common Shares, except as
otherwise provided in this Section 2.3;

the Exercise Price in effect at the time of the record date for such dividend or
of the effective date of such subdivision, combination or reclassification, and
the number and kind of Common Shares, or other securities, as the case may be,
issuable on such date, shall be proportionately adjusted so that the holder of
any Right exercised after such time shall be entitled to receive, upon payment
of the Exercise Price then in effect, the aggregate number and kind of Common
Shares or other securities, as the case may be, which, if such Right had been
exercised immediately prior to such date and at a time when the Common Share
transfer books of the Corporation were open, such holder would have owned upon
such exercise and been entitled to receive by virtue of such dividend,
subdivision, combination or reclassification. If an event occurs which would
require an adjustment under both this Section 2.3 and Section 3.1 hereof, the
adjustment provided for in this Section 2.3 shall be in addition to and, shall
be made prior to, any adjustment required pursuant to Section 3.1 hereof.

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- 20 -

(2) Adjustment to Exercise Price upon issue of rights, options and warrants. In
case the Corporation shall at any time after the Record Time fix a record date
for the issuance of rights, options or warrants to all holders of Common Shares
entitling them (for a period expiring within 45 calendar days after such record
date) to subscribe for or purchase Common Shares (or shares having the same
rights, privileges and preferences as Common Shares (“equivalent common
shares”)) or securities convertible into or exchangeable for or carrying a right
to purchase Common Shares or equivalent common shares at a price per Common
Share or per equivalent common share (or having a conversion price or exchange
price or exercise price per share, if a security convertible into or
exchangeable for or carrying a right to purchase Common Shares or equivalent
common shares) less than 90% of the Market Price per Common Share on such record
date, the Exercise Price to be in effect after such record date shall be
determined by multiplying the Exercise Price in effect immediately prior to such
record date by a fraction, the numerator of which shall be the number of Common
Shares outstanding on such record date, plus the number of Common Shares that
the aggregate offering price of the total number of Common Shares and/or
equivalent common shares so to be offered (and/or the aggregate initial
conversion, exchange or exercise price of the convertible or exchangeable
securities or rights so to be offered, including the price required to be paid
to purchase such convertible or exchangeable securities or rights so to be
offered) would purchase at such Market Price per Common Share, and the
denominator of which shall be the number of Common Shares outstanding on such
record date, plus the number of additional Common Shares and/or equivalent
common shares to be offered for subscription or purchase (or into which the
convertible or exchangeable securities are initially convertible, exchangeable
or exercisable). In case such subscription price may be paid by delivery of
consideration, part or all of which may be in a form other than cash, the value
of such consideration shall be as determined in good faith by the Board of
Directors, whose determination shall be described in a certificate filed with
the Rights Agent and shall be binding on the Rights Agent and the holders of the
Rights. Such adjustment shall be made successively whenever such a record date
is fixed and, in the event that such rights or warrants are not so issued, the
Exercise Price shall be adjusted to be the Exercise Price which would then be in
effect if such record date had not been fixed.

For purposes of this Agreement, the granting of the right to purchase Common
Shares (or equivalent common shares) (whether from treasury shares or otherwise)
pursuant to any dividend or interest reinvestment plan and/or any Common Share
purchase plan providing for the reinvestment of dividends or interest payable on
securities of the Corporation and/or the investment of periodic optional
payments and/or employee benefit, stock option or similar plans (so long as such
right to purchase is in no case evidenced by the delivery of rights or warrants)
shall not be deemed to constitute an issue of rights, options or warrants by the
Corporation; provided, however, that, in the case of any dividend or interest
reinvestment plan, the right to purchase Common Shares (or equivalent common
shares) is at a price per share of not less than 90% of the current market price
per share (determined as provided in such plans) of the Common Shares.

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- 21 -

(3) Adjustment to Exercise Price upon Corporate Distributions. In case the
Corporation shall at any time after the Record Time fix a record date for a
distribution to all holders of Common Shares (including any such distribution
made in connection with a merger, amalgamation, arrangement, plan, compromise or
reorganization in which the Corporation is the continuing or successor
corporation) of evidences of indebtedness, cash (other than a regular periodic
cash dividend or a regular periodic cash dividend paid in Common Shares, but
including any dividend payable in securities other than Common Shares), assets
or subscription rights, options or warrants (excluding those referred to in
Section 2.3(2) above), the Exercise Price to be in effect after such record date
shall be determined by multiplying the Exercise Price in effect immediately
prior to such record date by a fraction, the numerator of which shall be the
Market Price per Common Share on such record date, less the fair market value
(as determined in good faith by the Board of Directors, whose determination
shall be described in a statement filed with the Rights Agent) of the portion of
the cash, assets or evidences of indebtedness so to be distributed or of such
subscription rights, options or warrants applicable to a Common Share and the
denominator of which shall be such Market Price per Common Share. Such
adjustments shall be made successively whenever such a record date is fixed, and
in the event that such distribution is not so made, the Exercise Price shall be
adjusted to be the Exercise Price which would have been in effect if such record
date had not been fixed.

(4) De minimis threshold for adjustment to Exercise Price. Notwithstanding
anything herein to the contrary, no adjustment in the Exercise Price shall be
required unless such adjustment would require an increase or decrease of at
least 1% in the Exercise Price; provided, however, that any adjustments which by
reason of this Section 2.3(4) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment. All calculations
under this Section 2.3 shall be made to the nearest cent or to the nearest
one-hundredth of a Common Share or other share, as the case may be.
Notwithstanding the first sentence of this Section 2.3(4), any adjustment
required by this Section 2.3 shall be made no later than the earlier of
(i) 3 years from the date of the transaction which mandates such adjustment or
(ii) the Expiration Time.

(5) Corporation may provide for alternate means of adjustment. In the event the
Corporation shall at any time after the Record Time issue any shares of capital
stock (other than Common Shares), or rights or warrants to subscribe for or
purchase any such capital stock, or securities convertible into or exchangeable
for any such capital stock, in a transaction referred to in Section 2.3(1)(a) or
Section 2.3(1)(d) or Section 2.3(2) or Section 2.3(3) above, if the Board of
Directors acting in good faith determines that the adjustments contemplated by
Section 2.3(1), Section 2.3(2) and Section 2.3(3) above in connection with such
transaction will not appropriately protect the interests of the holders of
Rights, the Corporation shall be entitled to determine what other adjustments to
the Exercise Price, number of Rights and/or securities purchasable upon exercise
of Rights would be appropriate and, notwithstanding Section 2.3(1),
Section 2.3(2) and Section 2.3(3) above, such adjustments, rather than the
adjustments contemplated by Section 2.3(1), Section 2.3(2) and Section 2.3(3)
above, shall be made. The Corporation and the Rights Agent shall amend this
Agreement as appropriate to provide for such adjustments.

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(6) Adjustment to Rights exercisable into shares other than Common Shares. If as
a result of an adjustment made pursuant to Section 3.1, the holder of any Right
thereafter exercised shall become entitled to receive any shares other than
Common Shares, thereafter the number of such other shares so receivable upon
exercise of any Right and the Exercise Price thereof shall be subject to
adjustment from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the Common Shares contained in
Section 2.3(1), Section 2.3(2), Section 2.3(3), Section 2.3(4), Section 2.3(5),
Section 2.3(7), Section 2.3(8), Section 2.3(9), Section 2.3(10), Section 2.3(11)
and Section 2.3(12) above and below, as the case may be, and the provisions of
this Agreement with respect to the Common Shares shall apply on like terms to
any such other shares.

(7) Rights to evidence right to purchase Common Shares at adjusted Exercise
Price. Each Right originally issued by the Corporation subsequent to any
adjustment made to the Exercise Price hereunder shall evidence the right to
purchase, at the adjusted Exercise Price, the number of Common Shares
purchasable from time to time hereunder upon exercise of such Right, all subject
to further adjustment as provided herein.

(8) Adjustment to number of Common Shares purchasable upon adjustment to
Exercise Price. Unless the Corporation shall have exercised its election as
provided in Section 2.3(9) below, upon each adjustment of the Exercise Price as
a result of the calculations made in Section 2.3(2) and Section 2.3(3) above,
each Right outstanding immediately prior to the making of such adjustment shall
thereafter evidence the right to purchase, at the adjusted Exercise Price, that
number of Common Shares (calculated to the nearest one ten-thousandth) obtained
by (A) multiplying (x) the number of shares purchasable upon exercise of a Right
immediately prior to this adjustment by (y) the Exercise Price in effect
immediately prior to such adjustment of the Exercise Price, and (B) dividing the
product so obtained by the Exercise Price in effect immediately after such
adjustment of the Exercise Price.

(9) Election to adjust number of Rights upon adjustment to Exercise Price. The
Corporation shall be entitled to elect on or after the date of any adjustment of
the Exercise Price to adjust the number of Rights, in lieu of any adjustment in
the number of Common Shares purchasable upon the exercise of a Right. Each of
the Rights outstanding after the adjustment in the number of Rights shall be
exercisable for the number of Common Shares for which a Right was exercisable
immediately prior to such adjustment. Each Right held of record prior to such
adjustment of the number of Rights shall become that number of Rights
(calculated to the nearest one ten-thousandth) obtained by dividing the Exercise
Price in effect immediately prior to adjustment of the Exercise Price by the
Exercise Price in effect immediately after adjustment of the Exercise Price. The
Corporation shall make a public announcement of its election to adjust the
number of Rights, indicating the record date for the adjustment and, if known at
the time, the amount of the adjustment to be made. This record date may be the
date on which the Exercise Price is adjusted or any day thereafter but, if
Rights Certificates have been issued, shall be at least 10 days later than the
date of the public announcement. If Rights Certificates have been issued, upon
each adjustment, of the number of Rights pursuant to this Section 2.3(9), the
Corporation shall, as promptly as practicable, cause to be distributed to
holders of record of Rights Certificates on such record date Rights Certificates
evidencing, subject to Section 5.6 hereof, the additional Rights to which such
holders shall be entitled as a result of such adjustment, or, at the option of
the Corporation, shall cause to be distributed to such holders of record in
substitution and replacement for the Rights Certificates held by such holders
prior to the date of adjustment, and upon surrender thereof, new Rights
Certificates evidencing all the Rights to which such holders shall be entitled
after such adjustment. Rights Certificates so to be distributed shall be issued,
executed and countersigned in the manner provided for herein and may bear, at
the option of the Corporation, the adjusted Exercise Price and shall be
registered in the names of the holders of record of Rights Certificates on the
record date for the adjustment specified in the public announcement.

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(10) Rights Certificates may contain Exercise Price before adjustment.
Irrespective of any adjustment or change in the Exercise Price or the number of
Common Shares issuable upon the exercise of the Rights, the Rights Certificates
theretofore and thereafter issued may continue to express the Exercise Price per
share and the number of shares which were expressed in the initial Rights
Certificates issued hereunder.

(11) Corporation may in certain cases defer issues of securities. In any case in
which this Section 2.3 shall require that an adjustment in the Exercise Price be
made effective as of a record date for a specified event, the Corporation may
elect to defer until the occurrence of such event the issuance to the holder of
any Right exercised after such record date the number of Common Shares and other
securities of the Corporation, if any, issuable upon such exercise over and
above the number of Common Shares and other securities of the Corporation, if
any, issuable upon such exercise on the basis of the Exercise Price in effect
prior to such adjustment; provided, however, that the Corporation shall deliver
to such holder an appropriate instrument evidencing such holder’s right to
receive such additional shares (fractional or otherwise) or securities upon the
occurrence of the event requiring such adjustment.

(12) Corporation has discretion to reduce Exercise Price for tax reasons.
Notwithstanding anything in this Section 2.3 to the contrary, the Corporation
shall be entitled to make such reductions in the Exercise Price, in addition to
those adjustments expressly required by this Section 2.3, as and to the extent
that in their good faith judgment, the Board of Directors shall determine to be
advisable in order that any (A) consolidation or subdivision of the Common
Shares, (B) issuance of any Common Shares at less than the Market Price,
(C) issuance of securities convertible into or exchangeable for Common Shares,
(D) stock dividends or (E) issuance of rights, options or warrants, referred to
in this Section 2.3 hereafter made by the Corporation to holders of its Common
Shares, shall not be taxable to such shareholders.

(13) Notice in Respect of Adjustments. Whenever an adjustment to the Exercise
Price or a change in the securities purchasable upon exercise of the Rights is
made at any time after the Separation Time pursuant to this Section 2.3, the
Corporation shall promptly:

 

  (a) file with the Rights Agent and with the transfer agent for the Common
Shares a certificate specifying the particulars of such adjustment or change;
and

 

  (b) cause notice of the particulars of such adjustment or change to be given
to the holders of the Rights; provided that failure to file such certificate or
cause such notice to be given as aforesaid, or any defect therein, shall not
affect the validity of any such adjustment or change.

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Section 2.4 Date on Which Exercise is Effective

Each person in whose name any certificate for Common Shares is issued upon the
exercise of Rights, shall for all purposes be deemed to have become the holder
of record of the Common Shares represented thereby on, and such certificate
shall be dated, the date upon which the Rights Certificate evidencing such
Rights was duly surrendered (together with a duly completed Election to
Exercise) and payment of the Exercise Price for such Rights (and any applicable
transfer taxes and other governmental charges payable by the exercising holder
hereunder) was made; provided, however, that if the date of such surrender and
payment is a date upon which the Common Share transfer books of the Corporation
are closed, such person shall be deemed to have become the record holder of such
shares on, and such certificate shall be dated, the next succeeding Business Day
on which the Common Share transfer books of the Corporation are open.

Section 2.5 Execution, Authentication, Delivery and Dating of Rights
Certificates

(1) The Rights Certificates shall be executed on behalf of the Corporation by
its Chairman, Chief Executive Officer or Chief Financial Officer, under its
corporate seal reproduced thereon attested by its Vice President, Chief
Financial Officer, Secretary or Assistant Secretary. The signature of any of
these officers on the Rights Certificates may be manual, by facsimile or by
other electronically transmitted form. Rights Certificates bearing the manual,
facsimile or electronically transmitted signatures of individuals who were at
any time the proper officers of the Corporation shall bind the Corporation,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to or after the countersignature and delivery of such Rights
Certificates.

(2) Promptly after the Corporation learns of the Separation Time, the
Corporation will notify the Rights Agent of such Separation Time and will
deliver Rights Certificates executed by the Corporation to the Rights Agent for
countersignature and disclosure statements as described in Section 2.2(3), and
the Rights Agent shall manually or by facsimile signature countersign and send
such Rights Certificates and disclosure statements to the holders of the Rights
pursuant to Section 2.2(3) hereof. No Rights Certificate shall be valid for any
purpose until countersigned by the Rights Agent as aforesaid.

(3) Each Rights Certificate shall be dated the date of countersignature thereof.

Section 2.6 Registration, Registration of Transfer and Exchange

(1) Following the Separation Time, the Corporation will cause to be kept a
register (the “Rights Register”) in which, subject to such reasonable
regulations as it may prescribe, the Corporation will provide for the
registration and transfer of Rights. The Rights Agent is hereby appointed
“Rights Registrar” for the purpose of maintaining the Rights Register for the
Corporation and registering Rights and transfers of Rights as herein provided
and the Rights Agent hereby accepts such appointment. In the event that the
Rights Agent shall cease to be the Rights Registrar, the Rights Agent will have
the right to examine the Rights Register at all reasonable times.

After the Separation Time and prior to the Expiration Time, upon surrender for
registration of transfer or exchange of any Rights Certificate and subject to
the provisions of Section 2.6(3) below and the other provisions of this
Agreement, the Corporation will execute and the Rights Agent will countersign,
register and deliver, in the name of the holder or the designated transferee or
transferees as required pursuant to the holder’s instructions, one or more new
Rights Certificates evidencing the same aggregate number of Rights as did the
Rights Certificates so surrendered.

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- 25 -

(2) All Rights issued upon any registration of transfer or exchange of Rights
Certificates shall be the valid obligations of the Corporation, and such Rights
shall be entitled to the same benefits under this Agreement (subject to the
provisions of this Agreement) as the Rights surrendered upon such registration
of transfer or exchange.

(3) Every Rights Certificate surrendered for registration of transfer or
exchange shall be duly endorsed, or be accompanied by a written instrument of
transfer in form satisfactory to the Corporation or the Rights Agent, as the
case may be, duly executed by the registered holder thereof or such holder’s
attorney duly authorized in writing. As a condition to the issuance of any new
Rights Certificate under this Section 2.6, the Corporation or the Rights Agent
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and the Corporation
may require payment of a sum sufficient to cover any other expenses (including
the fees and expenses of the Rights Agent) in connection therewith.

Section 2.7 Mutilated, Destroyed, Lost and Stolen Rights Certificates

(1) If any mutilated Rights Certificate is surrendered to the Rights Agent prior
to the Expiration Time, the Corporation shall execute and the Rights Agent shall
countersign and deliver in exchange therefor a new Rights Certificate evidencing
the same number of Rights as did the Rights Certificate so surrendered.

(2) If there shall be delivered to the Corporation and the Rights Agent prior to
the Expiration Time (i) evidence to their reasonable satisfaction of the
ownership, destruction, loss or theft of any Rights Certificate, and (ii) such
indemnity or other security as may be required by each of them in their own
discretion to save each of them and any of their agents harmless then, in the
absence of notice to the Corporation or the Rights Agent that such Rights
Certificate has been acquired by a bona fide purchaser, the Corporation shall
execute and upon its request the Rights Agent shall countersign and deliver, in
lieu of any such destroyed, lost or stolen Rights Certificate, a new Rights
Certificate evidencing the same number of Rights as did the Rights Certificate
so destroyed, lost or stolen.

(3) As a condition to the issuance of any new Rights Certificate under this
Section 2.7, the Corporation or the Rights Agent may require the payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in relation thereto and the Corporation may require payment of a sum sufficient
to cover any other expenses (including the fees and expenses of the Rights
Agent) in connection therewith.

(4) Every new Rights Certificate issued pursuant to this Section 2.7 in lieu of
any destroyed, lost or stolen Rights Certificate shall evidence an original
additional contractual obligation of the Corporation, whether or not the
destroyed lost or stolen Rights Certificate shall be at any time enforceable by
anyone, and the holder thereof shall be entitled to all the benefits of this
Agreement equally and proportionately with any and all other holders of Rights
duly issued by the Corporation.

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- 26 -

Section 2.8 Persons Deemed Owners

Prior to due presentment of a Rights Certificate (or, prior to the Separation
Time, the associated Common Share certificate) for registration of transfer, the
Corporation, the Rights Agent and any agent of the Corporation or the Rights
Agent shall be entitled to deem and treat the person in whose name a Rights
Certificate (or, prior to the Separation Time, the associated Common Share
certificate) is registered as the absolute owner thereof and of the Rights
evidenced thereby for all purposes whatsoever. As used in this Agreement, unless
the context otherwise requires, the term “holder” of any Rights shall mean the
registered holder of such Rights (or, prior to the Separation Time, the
associated Common Shares).

Section 2.9 Delivery and Cancellation of Rights Certificates

All Rights Certificates surrendered upon exercise or for redemption,
registration of transfer or exchange shall, if surrendered to any person other
than the Rights Agent, be delivered to the Rights Agent and, in any case, shall
be promptly cancelled by the Rights Agent. The Corporation may at any time
deliver to the Rights Agent for cancellation any Rights Certificates previously
countersigned and delivered hereunder which the Corporation may have acquired in
any manner whatsoever, and all Rights Certificates so delivered shall be
promptly cancelled by the Rights Agent. No Rights Certificate shall be
countersigned in lieu of or in exchange for any Rights Certificates cancelled as
provided in this Section 2.9 except as expressly permitted by this Agreement.
The Rights Agent shall, subject to applicable laws, destroy all cancelled Rights
Certificates and deliver a certificate of destruction to the Corporation.

Section 2.10 Agreement of Rights Holders

Every holder of Rights, by accepting the same, consents and agrees with the
Corporation and the Rights Agent and with every other holder of Rights:

(1) to be bound by and subject to the provisions of this Agreement, as amended
or supplemented from time to time in accordance with the terms hereof, in
respect of all Rights held;

(2) that, prior to the Separation Time, each Right will be transferable only
together with, and will be transferred by a transfer of, the Common Share
certificate representing such Right;

(3) that after the Separation Time, the Rights Certificates will be transferable
only on the Rights Register as provided herein;

(4) that prior to due presentment of a Rights Certificate (or, prior to the
Separation Time, the associated Common Share certificate) for registration of
transfer, the Corporation, the Rights Agent and any agent of the Corporation or
the Rights Agent shall be entitled to deem and treat the person in whose name
the Rights Certificate (or prior to the Separation Time, the associated Common
Share certificate) is registered as the absolute owner thereof and of the Rights
evidenced thereby (notwithstanding any notations of ownership or writing on such
Rights Certificate or the associated Common Share certificate made by anyone
other than the Corporation or the Rights Agent) for all purposes whatsoever, and
neither the Corporation nor the Rights Agent shall be affected by any notice to
the contrary;

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- 27 -

(5) that such holder of Rights has waived his right to receive any fractional
Rights or any fractional shares upon exercise of Right;

(6) that, in accordance with Section 5.5 hereof, without the approval of any
holder of Rights and upon the sole authority of the Board of Directors acting in
good faith this Agreement may be supplemented or amended from time to time
pursuant to and as provided herein; and

(7) that notwithstanding anything in this Agreement to the contrary, neither the
Corporation nor the Rights Agent shall have any liability to any holder of a
Right or any other Person as a result of its inability to perform any of its
obligations under this Agreement by reason of any preliminary or permanent
injunction or other order, decree or ruling issued by a court of competent
jurisdiction or by a governmental, regulatory or administrative agency or
commission, or any statute, rule, regulation, or executive order promulgated or
enacted by any governmental authority, prohibiting or otherwise restraining
performance of such obligation.

Section 2.11 Rights Certificate Holder not Deemed a Shareholder

No holder, as such, of any Rights or Rights Certificate shall be entitled to
vote, receive dividends or be deemed for any purpose whatsoever the holder of
any Common Share or any other share or security of the Corporation which may at
any time be issuable on the exercise of the Rights represented thereby, nor
shall anything contained herein or in any Rights Certificate be construed or
deemed to confer upon the holder of any Right or Rights Certificate, as such,
any of the rights, titles, benefits or privileges of a holder of Common Shares
or any other shares or securities of the Corporation or any right to vote at any
meeting of shareholders of the Corporation whether for the election of directors
or otherwise or upon any matter submitted to holders of shares of the
Corporation at any meeting thereof, or to give or withhold consent to any action
of the Corporation, or to receive notice of any meeting or other action
affecting any holder of Common Shares or any other shares or securities of the
Corporation except as expressly provided herein, or to receive dividends,
distributions or subscription rights, or otherwise, until the Right or Rights
evidenced by Rights Certificates shall have been duly exercised in accordance
with the terms and provisions hereof.

ARTICLE 3 – ADJUSTMENTS TO THE RIGHTS IN THE EVENT OF CERTAIN TRANSACTIONS

Section 3.1 Flip-in Event

(1) Subject to Section 3.1(2) below, and Section 5.2 hereof, in the event that
prior to the Expiration Time a Flip-in Event shall occur, the Corporation shall
take such action as may be necessary to ensure and provide within 10 Business
Days of such occurrence, or such longer period as may be required to satisfy all
applicable requirements of the Securities Act (Ontario), and the securities
legislation of each other province of Canada and the 1933 Securities Act and
1934 Exchange Act and the securities laws of each state of the United States, as
applicable, that, except as provided below, each Right shall thereafter
constitute the right to purchase from the Corporation upon exercise thereof in
accordance with the terms hereof that number of Common Shares of the Corporation
having an aggregate Market Price on the date of the occurrence of such Flip-in
Event equal to twice the Exercise Price for an amount in cash equal to the
Exercise Price (such Right to be appropriately adjusted in a manner analogous to
the applicable adjustment provided for in Section 2.3 hereof in the event that
after such date of occurrence an event of a type analogous to any of the events
described in Section 2.3 hereof shall have occurred with respect to such Common
Shares).

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- 28 -

(2) Notwithstanding anything in this Agreement to the contrary, upon the
occurrence of any Flip-in Event, any Rights that are Beneficially Owned by
(i) an Acquiring Person, or any Affiliate or Associate of an Acquiring Person,
or any Person acting jointly or in concert with an Acquiring Person or any
Affiliate or Associate of such Acquiring Person, or any Affiliate or Associate
of such Person so acting jointly or in concert, or (ii) a transferee or other
successor in title of Rights, directly or indirectly, of an Acquiring Person (or
of any Affiliate or Associate of an Acquiring Person) or of any Person acting
jointly or in concert with an Acquiring Person or any Associate or Affiliate of
an Acquiring Person (or of any Affiliate or Associate of such Person so acting
jointly or in concert) who becomes a transferee or successor in title
concurrently with or subsequent to the Acquiring Person becoming such, shall
become null and void without any further action, and any holder of such Rights
(including transferees or successors in title) shall not have any rights
whatsoever to exercise such Rights under any provision of this Agreement and
shall not have thereafter any other rights whatsoever with respect to such
Rights, whether under any provision of this Agreement or otherwise.

(3) Any Rights Certificate that represents Rights Beneficially Owned by a Person
described in either clauses (i) or (ii) of Section 3.1(2) or transferred to any
nominee of any such Person, and any Rights Certificate issued upon transfer,
exchange, replacement or adjustment of any other Rights Certificate referred to
in this sentence, shall contain the following legend:

“The Rights represented by this Rights Certificate were Beneficially Owned by a
Person who was an Acquiring Person or who was an Affiliate or an Associate of an
Acquiring Person (as such terms are defined in the Rights Agreement) or was
acting jointly or in concert with any of them. This Rights Certificate and the
Rights represented hereby shall become void in the circumstances specified in
subsection 3.1(2) of the Rights Agreement.”,

provided that the Rights Agent shall not be under any responsibility to
ascertain the existence of facts that would require the imposition of such
legend but shall be required to impose such legend only if instructed to do so
by the Corporation in writing or if a holder fails to certify upon transfer or
exchange in the space provided on the Rights Certificate that such holder is not
an Acquiring Person, an Affiliate or Associate thereof or a Person acting
jointly or in concert with any of them.

(4) From and after the Separation Time, the Corporation shall do all such acts
and things as shall be necessary and within its power to ensure compliance with
the provisions of this Section 3.1 including, without limitation, all such acts
and things as may be required to satisfy the requirements of the OBCA, the
Securities Act (Ontario), the securities laws or comparable legislation of each
of the provinces of Canada, the 1933 Securities Act and the 1934 Exchange Act,
the securities laws of each state of the United States, as applicable, and any
other applicable laws in respect of the issue of Common Shares upon the exercise
of Rights in accordance with this Agreement.

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- 29 -

Section 3.2 Exchange Option

(1) The Board of Directors may, at its sole option and without seeking the
approval of holders of Voting Shares or Rights but with the prior written
consent of any stock exchange on which the Common Shares are then listed if
required by such exchange, at any time after a Flip-in Event has occurred,
authorize the Corporation to issue or deliver in respect of each Right which is
not void pursuant to Section 3.1(2), either: (i) in return for the applicable
Exercise Price and the Right, debt, equity or other securities or assets (or a
combination thereof) having a value equal to twice the applicable Exercise
Price; or (ii) in return for the Right, subject to any amounts that may be
required to be paid under applicable law, debt, equity or other securities or
assets (or a combination thereof) having a value equal to the value of the
Right, in full and final settlement of all rights attaching to the Rights, where
in either case the value of such debt, equity or other securities or other
assets (or a combination thereof) and, in the case of Clause (ii), the value of
the Right, shall be determined by the Board of Directors which may rely upon the
advice of a nationally or internationally recognized firm of investment dealers
or investment bankers selected by the Board of Directors.

(2) If the Board of Directors authorizes the exchange of debt or equity
securities or assets (or a combination thereof) for Rights pursuant to
Section 3.2(1), without any further action or notice, the right to exercise the
Rights will terminate and the only right thereafter of a holder of Rights shall
be to receive the debt or equity securities or assets (or a combination thereof)
in accordance with the exchange formula authorized by the Board of Directors.
Within 10 Business Days after the Board of Directors has authorized the exchange
of debt or equity securities or assets (or a combination thereof) for Rights
pursuant to Section 3.2(1), the Corporation shall give notice of exchange to the
holders of such Rights by mailing such notice to all such holders at their last
addresses as they appear upon the Rights Register. Each such notice of exchange
will state the method by which the exchange of debt or equity securities or
assets (or a combination thereof) for Rights will be effected.

ARTICLE 4 – THE RIGHTS AGENT

Section 4.1 General

(1) The Corporation hereby appoints the Rights Agent to act as agent for the
Corporation and holders of Rights in accordance with the terms and conditions
hereof, and the Rights Agent hereby accepts such appointment. The Corporation
may from time to time appoint such co-Rights Agents as it may deem necessary or
desirable, subject to the prior approval of the Rights Agent. In the event the
Corporation appoints one or more co-Rights Agents, the respective duties of the
Rights Agents and co-Rights Agents shall be as the Corporation may determine,
with the approval of the Rights Agent. The Corporation agrees to pay to the
Rights Agent reasonable compensation for all services rendered by it hereunder
and, from time to time, on demand of the Rights Agent, its reasonable expenses
(including reasonable counsel fees and disbursements) incurred in the
administration and execution of this Agreement and the exercise and performance
of its duties hereunder. The Corporation also agrees to indemnify the Rights
Agent, its officers, directors and employees for, and to hold such persons
harmless against, any loss, liability, cost, claim, action, suit, damage, or
expense incurred (that is not the result of gross negligence, bad faith or
wilful misconduct on the part of any one or all of the Rights Agent, its
officers, directors or employees) for anything done, suffered or omitted by the
Rights Agent in connection with the acceptance, execution and administration of
this Agreement and the exercise and performance of its duties hereunder,
including the costs and expenses of defending against any claim of liability,
which right to indemnification will survive the termination of this Agreement or
the resignation or removal of the Rights Agent.

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- 30 -

(2) The Rights Agent shall be protected from and shall incur no liability for or
in respect of any action taken, suffered or omitted by it in connection with its
administration of this Agreement in reliance upon any certificate for Common
Shares or any Rights Certificate or certificate for other securities of the
Corporation, instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction, consent, certificate,
statement, or other paper or document reasonably believed by it to be genuine
and to be signed, executed and, where necessary, verified or acknowledged, by
the proper Person or Persons.

(3) The Corporation shall inform the Rights Agent in a reasonably timely manner
of events which may materially affect the administration of this Agreement by
the Rights Agent and at any time, upon request, shall provide to the Rights
Agent an incumbency certificate certifying the then current officers of the
Corporation.

Section 4.2 Merger or Amalgamation or Change of Name of Rights Agent

(1) Any corporation into which the Rights Agent or any successor rights agent
may be merged or amalgamated or with which it may be consolidated, or any
corporation resulting from any merger, amalgamation, statutory arrangement or
consolidation to which the Rights Agent or any successor rights agent is a
party, or any corporation succeeding to the shareholder or stockholder services
business of the Rights Agent or any successor rights agent, will be the
successor to the Rights Agent under this Agreement without the execution or
filing of any paper or any further act on the part of any of the parties hereto,
provided that such corporation would be eligible for appointment as a successor
rights agent under the provisions of Section 4.4 hereof. In case at the time
such successor rights agent succeeds to the agency created by this Agreement any
of the Rights Certificates have been countersigned but not delivered, any such
successor rights agent may adopt the countersignature of the predecessor Rights
Agent and deliver such Rights Certificates so countersigned; and in case at that
time any of the Rights Certificates have not been countersigned, any successor
rights agent may countersign such Rights Certificates either in the name of the
predecessor Rights Agent or in the name of the successor rights agent; and in
all such cases such Rights Certificates will have the full force provided in the
Rights Certificates and in this Agreement.

(2) In case at any time the name of the Rights Agent is changed and at such time
any of the Rights Certificates shall have been countersigned but not delivered,
the Rights Agent may adopt the countersignature under its prior name and deliver
Rights Certificates so countersigned; and in case at that time any of the Rights
Certificates shall not have been countersigned, the Rights Agent may countersign
such Rights Certificates either in its prior name or in its changed name; and in
all such cases such Rights Certificates shall have the full force provided in
the Rights Certificates and in this Agreement.

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Section 4.3 Duties of Rights Agent

The Rights Agent undertakes the duties and obligations imposed by this Agreement
upon the following terms and conditions, to all of which the Corporation and the
holders of Rights Certificates, by their acceptance thereof, shall be bound:

(1) The Rights Agent may, at the expense of the Corporation, retain and consult
with legal counsel (who may be legal counsel for the Corporation) and the
opinion of such counsel will be full and complete authorization and protection
to the Rights Agent as to any action taken or omitted to be taken by it in good
faith and in accordance with such opinion. Subject to the prior written consent
of the Corporation, which consent will not be unreasonably withheld, the Rights
Agent may also consult with such other experts as the Rights Agent shall
consider necessary or appropriate to properly carry out the duties and
obligations imposed under this Agreement at the expense of the Corporation and
the Rights Agent shall be entitled to act and rely in good faith on the advice
of any such expert.

(2) Whenever in the performance of its duties under this Agreement the Rights
Agent deems it necessary or desirable that any fact or matter be proved or
established by the Corporation prior to taking or suffering any action
hereunder, such fact or matter (unless other evidence in respect thereof be
herein specifically prescribed) may be deemed to be conclusively proven and
established by a certificate signed by a person reasonably believed by the
Rights Agent to be the Chairman, Chief Executive Officer or Chief Financial
Officer of the Corporation and delivered to the Rights Agent; and such
certificate will be full authorization to the Rights Agent for any action taken
or suffered in good faith by it under the provisions of this Agreement in
reliance upon such certificate.

(3) The Rights Agent will be liable hereunder only for events which are the
result of its own gross negligence, bad faith or wilful misconduct and that of
its officers, directors and employees.

(4) The Rights Agent will not be liable for or by reason of any of the
statements of fact or recitals contained in this Agreement or in the
certificates for Common Shares or the Rights Certificates (except its
countersignature thereof) or be required to verify the same, but all such
statements and recitals are and will be deemed to have been made by the
Corporation only.

(5) The Rights Agent will not be under any responsibility in respect of the
validity of this Agreement or the execution and delivery hereof (except the due
authorization, execution and delivery hereof by the Rights Agent) or in respect
of the validity or execution of any Common Share certificate or Rights
Certificate (except its countersignature thereof); nor will it be responsible
for any breach by the Corporation of any covenant or condition contained in this
Agreement or in any Rights Certificate; nor will it be responsible for any
change in the exercisability of the Rights (including the Rights becoming void
pursuant to Section 3.1(2) hereof) or any adjustment required under the
provisions of Section 2.3 hereof or responsible for the manner, method or amount
of any such adjustment or the ascertaining of the existence of facts that would
require any such adjustment (except with respect to the exercise of Rights after
receipt of the certificate contemplated by Section 2.3 hereof describing any
such adjustment); nor will it by any act hereunder be deemed to make any
representation or warranty as to the authorization of any Common Shares to be
issued pursuant to this Agreement or any Rights or as to whether any Common
Shares will, when issued, be duly and validly authorized, executed, issued and
delivered or fully paid and non-assessable.

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(6) The Corporation agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged, and delivered all such
further and other acts, instruments and assurances as may reasonably be required
by the Rights Agent for the carrying out or performing by the Rights Agent of
the provisions of this Agreement.

(7) The Rights Agent is hereby authorized and directed to accept instructions
with respect to the performance of its duties hereunder from any person
reasonably believed by the Rights Agent to be the Chairman, Chief Executive
Officer or Chief Financial Officer of the Corporation and to apply to such
persons for advice or instructions in connection with its duties, and it shall
not be liable for any action taken or suffered by it in good faith in accordance
with instructions of any such person. It is understood that instructions to the
Rights Agent shall, except where circumstances make it impracticable or the
Rights Agent otherwise agrees, be given in writing and, where not in writing,
such instructions shall be confirmed in writing as soon as reasonably possible
after the giving of such instructions.

(8) The Rights Agent and any shareholder or stockholder, director, officer or
employee of the Rights Agent may buy, sell or deal in Common Shares, Rights or
other securities of the Corporation or become pecuniarily interested in any
transaction in which the Corporation may be interested or contract with or lend
money to the Corporation or otherwise act as fully and freely as though it were
not Rights Agent under this Agreement. Nothing herein shall preclude the Rights
Agent from acting in any other capacity for the Corporation or for any other
legal entity.

(9) The Rights Agent may execute and exercise any of the rights or powers hereby
vested in it or perform any duty hereunder either itself or, by or through its
attorneys or agents. The Rights Agent will not be answerable or accountable for
any act, omission, default, neglect or misconduct of any such attorneys or
agents or for any loss to the Corporation resulting from any such act, omission,
default, neglect or misconduct, provided reasonable care was exercised in the
selection and continued employment thereof.

Section 4.4 Change of Rights Agent

The Rights Agent may resign and be discharged from its duties under this
Agreement upon 60 days’ notice (or such lesser notice as is acceptable to the
Corporation) in writing mailed to the Corporation and to each transfer agent of
Voting Shares by registered or certified mail, and to the holders of the Rights
in accordance with Section 5.9 hereof (all of which shall be at the expense of
the Corporation). The Corporation may remove the Rights Agent upon 30 days’
notice in writing, given to the Rights Agent and to each transfer agent of the
Voting Shares by registered or certified mail and to the holders of the Rights
in accordance with Section 5.9 hereof. If the Rights Agent should resign or be
removed or otherwise become incapable of acting, the Corporation will appoint a
successor to the Rights Agent. If the Corporation fails to make such appointment
within a period of 30 days after such removal or after it has been notified in
writing of such resignation or incapacity by the resigning or incapacitated
Rights Agent or by the holder of any Rights (which holder shall, with such
notice, submit such holder’s Rights Certificate for inspection by the
Corporation), then the Rights Agent or the holder of any Rights may apply to any
court of competent jurisdiction for the appointment of a new Rights Agent at the
Corporation’s expense. Any successor rights agent, whether appointed by the
Corporation or by such a court, shall be a corporation incorporated under the
laws of Canada or a province thereof authorized to carry on the business of
acting as a rights agent in the Province of Ontario. After appointment, the
successor Rights Agent will be vested with the same powers, rights, duties and
responsibilities as if it had been originally named as Rights Agent without
further act or deed; but the predecessor Rights Agent, upon receiving from the
Corporation payment in full of all amounts outstanding under this Agreement,
shall deliver and transfer to the successor Rights Agent any property at the
time held by it hereunder, and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose. Not later than the effective
date of any such appointment, the Corporation will file notice thereof in
writing with the predecessor Rights Agent and each transfer agent of the Voting
Shares, and mail a notice thereof in writing to the holders of the Rights. The
cost of giving any notice required under this Section 4.4 shall be borne solely
by the Corporation. Failure to give any notice provided for in this Section 4.4
however, or any defect therein, shall not affect the legality or validity of the
resignation or removal of the Rights Agent or the appointment of the successor
Rights Agent, as the case may be.

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Section 4.5 Compliance with Anti-Money Laundering Legislation

The Rights Agent shall retain the right not the act and shall not be liable for
refusing to act if, due to a lack of information or for any reason whatsoever,
the Rights Agent reasonably determines that such an act might cause it to be in
non-compliance with any applicable anti-money laundering or anti-terrorist
financing legislation, regulation or guideline. Further, should the Rights Agent
reasonably determine at any time that its acting under the Agreement has
resulted in it being in non-compliance with any applicable anti-money laundering
or anti-terrorist legislation, regulation or guideline, then it shall have the
right to resign on 10 days’ written notice to the Corporation, provided that:
(i) the Rights Agent’s written notice shall describe the circumstances of such
non-compliance; and (ii) that if such circumstances are rectified to the Rights
Agent’s satisfaction within such 10 day period, then such resignation shall not
be effective.

Section 4.6 Compliance with Privacy Legislation

The parties acknowledge that the federal and/or provincial legislation that
addresses the protection of individual’s personal information (collectively,
“Privacy Laws”) applies to obligations and activities under this Agreement.
Despite any other provision of this Agreement, neither party will take or direct
any action that would contravene, or cause the other to contravene, applicable
Privacy Laws. The Corporation will, prior to transferring or causing to be
transferred personal information to the Rights Agent, obtain and retain required
information, or will have determined that such consents either have previously
been given upon which the parties can rely or are not required under applicable
Privacy Laws. The Rights Agent will use commercially reasonable efforts to
ensure that its services hereunder comply with applicable Privacy Laws.

ARTICLE 5 – MISCELLANEOUS

Section 5.1 Redemption and Termination of Rights

(1)    The Board of Directors acting in good faith may, at any time prior to the
occurrence of a Flip-in Event as to which the application of Section 3.1 has not
been waived pursuant to Section 5.2, elect to redeem all but not less than all
of the outstanding Rights at a redemption price of $0.00001 per Right,
appropriately adjusted in a manner analogous to the applicable adjustment to the
Exercise Price provided for in Section 2.3 if an event analogous to any of the
events described in Section 2.3 shall have occurred (such redemption price being
herein referred to as the “Redemption Price”).

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(2) Where a Person acquires, pursuant to a Permitted Bid, a Competing Permitted
Bid or an Exempt Acquisition occurring under Section 5.2, outstanding Voting
Shares and/or Convertible Securities, the Board of Directors shall,
notwithstanding the provisions of Section 5.1(1), immediately upon such
acquisition and without further formality, be deemed to have elected to redeem
the Rights at the Redemption Price.

(3) Where a Take-over Bid that is not a Permitted Bid or a Competing Permitted
Bid expires, is terminated or is otherwise withdrawn after the Separation Time
has occurred and prior to the occurrence of a Flip-in Event, the Board of
Directors may elect to redeem all of the outstanding Rights at the Redemption
Price.

(4) If the Board of Directors elects or is deemed to have elected to redeem the
Rights (i) the right to exercise the Rights will thereupon, without further
action and without notice, terminate and each Right will after redemption be
null and void and the only right thereafter of the holders of Rights shall be to
receive the Redemption Price, and (ii) subject to Section 5.1(6), no further
Rights shall thereafter be issued.

(5) Within 10 Business Days of the Board of Directors electing or having been
deemed to have elected to redeem the Rights, the Corporation shall give or cause
to be given notice of redemption to the holders of the outstanding Rights by
mailing such notice to each such holder at his last address as it appears upon
the Rights Register or, prior to the Separation Time, on the register of Voting
Shares maintained by the Corporation’s transfer agent or transfer agents. Each
such notice of redemption shall state the method by which the payment of the
Redemption Price shall be made.

(6) Upon the Rights being redeemed pursuant to Section 5.1(3), all the
provisions of this Agreement shall continue to apply as if the Separation Time
had not occurred and Rights Certificates representing the number of Rights held
by each holder of record of Voting Shares as of the Separation Time had not been
mailed to each such holder and, for all purposes of this Agreement, the
Separation Time shall be deemed not to have occurred and Rights shall remain
attached to the outstanding Voting Shares, subject to and in accordance with the
provisions of this Agreement.

(7) The Corporation shall not be obligated to make a payment of the Redemption
Price to any holder of Rights unless such holders is entitled to receive at
least $1.00 in respect of all Rights held by such holder.

Section 5.2 Waiver of Flip-In Events

(1) The Board of Directors may, at any time prior to the occurrence of a Flip-in
Event that would occur by reason of an acquisition of Voting Shares otherwise
than in the circumstances described in Section 5.2(2) or Section 5.2(3), waive
the application of Section 3.1 to such Flip-in Event by written notice delivered
to the Rights Agent.

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(2) The Board of Directors may, at any time prior to the occurrence of a Flip-in
Event that would occur by reason of a Take-over Bid for all Voting Shares made
by means of a take-over bid circular sent to all holders of record of Voting
Shares (which, for greater certainty, shall not include the circumstances
described in Section 5.2(3)), waive the application of Section 3.1 to such
Flip-in Event by written notice delivered to the Rights Agent, provided,
however, that if the Board of Directors waives the application of Section 3.1 to
such a Flip-in Event, the Board of Directors shall be deemed to have waived the
application of Section 3.1 to any other Flip-in Event occurring by reason of any
Take-over Bid for all Voting Shares which is made by means of a take-over bid
circular sent to all holders of record of Voting Shares prior to the expiry,
termination or withdrawal of any Take-over Bid in respect of which a waiver is,
or is deemed to have been, granted under this Section 5.2(2).

(3) The Board of Directors may waive the application of Section 3.1 to a Flip-in
Event provided that the following conditions are satisfied:

 

  (a) the Board of Directors has determined that the Acquiring Person became an
Acquiring Person by inadvertence and without any intention to become, or
knowledge that it would become, an Acquiring Person; and

 

  (b) such Acquiring Person:

 

  (i) has reduced its Beneficial Ownership of Voting Shares such that, at the
time of the waiver pursuant to this Section 5.2(3), it is no longer an Acquiring
Person; or

 

  (ii) covenants in favour of the Corporation, on terms acceptable to the Board
of Directors, to reduce its Beneficial Ownership of Voting Shares within a
period of time specified by the Board of Directors such that, at the time the
waiver becomes effective at the expiry of such period of time, it is no longer
an Acquiring Person;

and in the event of such waiver, for the purposes of the Agreement, the Flip-in
Event shall be deemed never to have occurred.

Section 5.3 Expiration

No person shall have any rights whatsoever pursuant to or arising out of this
Agreement or in respect of any Right after the Expiration Time, except the
Rights Agent as specified in Section 4.1(1) hereof.

Section 5.4 Issuance of New Rights Certificates

Notwithstanding any of the provisions of this Agreement or of the Rights to the
contrary, the Corporation may, at its option, issue new Rights Certificates
evidencing Rights in such form as may be approved by its Board of Directors to
reflect any adjustment or change in the number or kind or class of shares
purchasable upon exercise of Rights made in accordance with the provisions of
this Agreement.

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Section 5.5 Supplements and Amendments

(1) Prior to the occurrence of a Flip-in Event, the Corporation may at any time
amend, supplement, vary or delete any of the provisions of this Agreement and
the Rights in its sole discretion by resolution of the Board of Directors acting
in good faith (whether or not such action would materially adversely affect the
interests of the holders of Rights generally); provided that no such amendment,
supplement, variation or deletion shall be made to the provisions of Article 4
except with the written concurrence of the Rights Agent. Any such amendment,
supplement, variation or deletion shall be effective from the date of the
resolution of the Board of Directors adopting such amendment, supplement,
variation or deletion or such earlier or later date as the Board of Directors
may otherwise determine. The implementation of any such amendment, supplement,
variation or deletion will be subject to receipt of any necessary regulatory
approval including that of any securities regulatory authority or stock
exchange.

(2) The Corporation shall be required to provide the Rights Agent with notice in
writing of any such amendment, supplement, variation or deletion to this
Agreement as referred to in this Section 5.5 within 5 days of effecting such
amendment, supplement, variation or deletion.

Section 5.6 Fractional Rights and Fractional Shares

(1) The Corporation shall not be required to issue fractions of Rights or to
distribute Rights Certificates which evidence fractional Rights. Any such
fractional Right shall be null and void and the Corporation will not have any
obligation or liability in respect thereof.

(2) The Corporation shall not be required to issue fractions of Common Shares or
other securities upon exercise of the Rights or to distribute certificates which
evidence fractional Common Shares or other securities. In lieu of issuing
fractional Common Shares or other securities, the Corporation shall pay to the
registered holders of Rights Certificates at the time such Rights are exercised
as herein provided, an amount in cash equal to the same fraction of the Market
Price of one Common Share. The Rights Agent shall have no obligation to make any
payments in lieu of fractional Common Shares unless the Corporation shall have
provided the Rights Agent with the necessary funds to pay in full all amounts
payable in accordance with Section 2.2(5).

Section 5.7 Rights of Action

Subject to the terms of this Agreement, all rights of action in respect of this
Agreement, other than rights of action vested solely in the Rights Agent, are
vested in the respective registered holders of the Rights; and any registered
holder of any Rights, without the consent of the Rights Agent or of the
registered holder of any other Rights, may, on such holder’s own behalf and for
such holder’s own benefit and the benefit of other holders of Rights enforce,
and may institute and maintain any suit, action or proceeding against the
Corporation to enforce such holder’s right to exercise such holder’s Rights in
the manner provided in such holder’s Rights Certificate and in this Agreement.
Without limiting the foregoing or any remedies available to the holders of
Rights, it is specifically acknowledged that the holders of Rights would not
have an adequate remedy at law for any breach of this Agreement and will be
entitled to specific performance of the obligations under, and injunctive relief
against actual or threatened violations of the obligations of any Person subject
to, this Agreement.

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Section 5.8 Notice of Proposed Actions

In case the Corporation shall propose after the Separation Time and prior to the
Expiration Time to effect the liquidation, dissolution or winding-up of the
Corporation or the sale of all or substantially all of the Corporation’s assets,
then, in each such case, the Corporation shall give to each holder of a Right,
in accordance with Section 5.9 hereof, a notice of such proposed action, which
shall specify the date on which such liquidation, dissolution, winding up, or
sale is to take place, and such notice shall be so given at least 20 Business
Days prior to the date of taking of such proposed action.

Section 5.9 Notices

(1) Notices or demands authorized or required by this Agreement to be given or
made by the Rights Agent or by the holder of any Rights to or on the Corporation
shall be sufficiently given or made if delivered or sent by first-class mail,
postage prepaid, addressed (until another address is filed in writing with the
Rights Agent) as follows:

Vitran Corporation Inc.

185 The West Mall

Suite 701

Toronto, Ontario

M9C 5L5

Attention: Chief Financial Officer

(2) Any notice or demand authorized or required by this Agreement to be given or
made by the Corporation or by the holder of any Rights to or on the Rights Agent
shall be sufficiently given or made if delivered or sent by first-class mail,
postage prepaid, addressed (until another address is filed in writing with the
Corporation) as follows:

Computershare Trust Company of Canada

100 University Avenue

8th Floor

Toronto, Ontario

M5J 2Y1

Attention: Manager – Client Services

(3) Notices or demands authorized or required by this Agreement to be given or
made by the Corporation or the Rights Agent to or on the holder of any Rights
shall be sufficiently given or made if delivered or sent by first-class mail,
postage prepaid, addressed to such holder at the address of such holder as it
appears upon the Rights Register or, prior to the Separation Time, on the
registry books of the transfer agent for the Common Shares. Any notice which is
mailed in the manner herein provided shall be deemed given, whether or not the
holder receives the notice.

(4) Notwithstanding the foregoing provisions of this Section 5.9, if mail
service is or is threatened to be interrupted at a time when the Corporation or
the Rights Agent wishes to give a notice or demand hereunder to or on the
holders of the Rights, the Corporation or the Rights Agent may give such notice
by means of a publication in the business section of the Globe and Mail and the
Wall Street Journal or in such other publications as may be designated by the
Corporation.

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Section 5.10 Successors

All the covenants and provisions of this Agreement by or for the benefit of the
Corporation or the Rights Agent shall bind and enure to the benefit of their
respective successors and assigns hereunder.

Section 5.11 Benefits of this Agreement

This Agreement shall be for the sole and exclusive benefit of the Corporation,
the Rights Agent and the holders of the Rights; nothing in this Agreement shall
be construed to give to any Person other than the Corporation, the Rights Agent
and the holders of the Rights any legal or equitable right, remedy or claim
under this Agreement.

Section 5.12 Governing Law

This Agreement and each Right issued hereunder shall be deemed to be a contract
made under the laws of the Province of Ontario and for all purposes shall be
governed by and construed in accordance with the laws of such province.

Section 5.13 Severability

If any Section, Clause, term or provision hereof or the application thereof to
any circumstances or any right hereunder shall, in any jurisdiction and to any
extent, be invalid or unenforceable, such Section, Clause, term or provision or
such right shall be ineffective only in such jurisdiction and to the extent of
such invalidity or unenforceability in such jurisdiction without invalidating or
rendering unenforceable or ineffective the remaining Sections, Clauses, terms
and provisions hereof or rights hereunder in such jurisdiction or the
application of such Section, Clause, term or provision or rights hereunder in
any other jurisdiction or to circumstances other than those as to which it is
specifically held invalid or unenforceable.

Section 5.14 Effective Date and Termination

This Agreement is effective and in full force and effect in accordance with its
terms and conditions from and after the date hereof (the “Effective Date”). This
Agreement and all outstanding Rights shall, without further formality, terminate
and be void and of no further force and effect on and from the earlier of
(i) May 2, 2014 and (ii) such earlier date or time as may be determined by the
Board of Directors, in its sole discretion.

Section 5.15 Determinations and Actions by the Board of Directors

All actions, calculations and determinations (including all omissions with
respect to the foregoing) which are done or made by the Board of Directors, in
good faith, in relation to or in connection with this Agreement, shall not
subject the Board of Directors or any director of the Corporation to any
liability to the holders of the Rights.

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Section 5.16 Rights of Board, Corporation and Offeror

Without limiting the generality of the foregoing, nothing contained herein shall
be construed to suggest or imply that the Board of Directors shall not be
entitled to recommend that holders of Voting Shares reject or accept any
Take-over Bid or take any other action (including, without limitation, the
commencement, prosecution, defence or settlement of any litigation and the
submission of additional or alternative Take-over Bids or other proposals to the
holders of Voting Shares) with respect to any Take-over Bid or otherwise that
the Board of Directors believes is necessary or appropriate in the exercise of
its fiduciary duties.

Section 5.17 Regulatory Approvals

Any obligation of the Corporation or action or event contemplated by this
Agreement shall be subject to the receipt of any required prior or subsequent
approval or consent from any governmental or regulatory authority in any
jurisdiction including any securities regulatory authority or stock exchange.

Section 5.18 Declaration as to Non-Canadian Holders

If in the opinion of the Board of Directors (who may rely upon the advice of
counsel) any action or event contemplated by this Agreement would require
compliance with the securities laws or comparable legislation of a jurisdiction
outside Canada or the United States, the Board of Directors acting in good faith
may take such actions as it may deem appropriate to ensure such compliance. In
no event shall the Corporation or the Rights Agent be required to issue or
deliver Rights or securities issuable on exercise of Rights to Persons who are
citizens, residents or nationals of any jurisdiction other than Canada or the
United States in which such issue or delivery would be unlawful without
registration of the relevant Persons or securities for such purposes, or (until
such notice is given as required by law) without advance notice to any
regulatory or self-regulatory body.

Section 5.19 Time of the Essence

Time shall be of the essence in this Agreement.

Section 5.20 Execution in Counterparts

This Agreement may be executed in any number of counterparts and each of such
counterparts shall for all purposes be deemed to be an original, and all such
counterparts shall together constitute one and the same instrument.

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The parties have executed this Agreement.

 

VITRAN CORPORATION INC. By:   “William Deluce”  

Name: William Deluce

Title:   Interim President and

            Chief Executive Officer

 

COMPUTERSHARE TRUST COMPANY

OF CANADA

By:   “Josette Koffyberg”  

Name: Josette Koffyberg

Title:   Professional, Client Services

 

By:   “Roxanne Parsaud”  

Name: Roxanne Parsaud

Title:   Professional, Client Services

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Schedule A – Form of Rights Certificate

 

Certificate No.    Rights

THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE CORPORATION, ON THE
TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES (SPECIFIED
IN SECTION 3.1(2) OF THE RIGHTS AGREEMENT), RIGHTS BENEFICIALLY OWNED BY AN
ACQUIRING PERSON, ANY PERSON ACTING JOINTLY OR IN CONCERT WITH AN ACQUIRING
PERSON OR THEIR RESPECTIVE ASSOCIATES AND AFFILIATES (AS SUCH TERMS ARE DEFINED
IN THE RIGHTS AGREEMENT) AND THEIR RESPECTIVE TRANSFEREES SHALL BECOME VOID
WITHOUT ANY FURTHER ACTION.

RIGHTS CERTIFICATE

This certifies that                                  or registered assigns, is
the registered holder of the number of Rights set forth above each of which
entitles the registered holder thereof, subject to the terms, provisions and
conditions of the Shareholder Rights Plan Agreement dated November 4, 2013, as
amended and restated from time to time (the “Rights Agreement”), between VITRAN
CORPORATION INC., a corporation incorporated under the laws of Ontario (the
“Corporation”), and COMPUTERSHARE TRUST COMPANY OF CANADA, a trust company
existing under the federal laws of Canada, as rights agent (the “Rights Agent”,
which term shall include any successor Rights Agent under the Rights Agreement)
to purchase from the Corporation at any time after the Separation Time (as such
term is defined in the Rights Agreement) and prior to the Expiration Time (as
such term is defined in the Rights Agreement) one fully paid and non-assessable
Common Share of the Corporation (a “Common Share”) at the Exercise Price
referred to below, upon presentation and surrender of this Rights Certificate
together with the Form of Election to Exercise duly executed and submitted to
the Rights Agent at its principal offices in the city of Toronto. The Exercise
Price is an amount equal to three times the Market Price (as such term is
defined in the Rights Agreement) per Common Share, subject to adjustment in
certain events as provided in the Rights Agreement.

In certain circumstances described in the Rights Agreement, each Right evidenced
hereby may entitle the registered holder thereof to purchase or receive assets,
debt securities or other equity securities of the Corporation (or a combination
thereof) all as provided in the Rights Agreement.

This Rights Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities thereunder of the
Rights Agent, the Corporation and the holders of the Rights. Copies of the
Rights Agreement are on file at the registered head office of the Corporation
and are available upon written request.

This Rights Certificate, with or without other Rights Certificates, upon
surrender at any of the offices of the Rights Agent designated for such purpose,
may be exchanged for another Rights Certificate or Rights Certificates of like
tenor and date evidencing an aggregate number of Rights entitling the holder to
purchase a like aggregate number of Common Shares as the Rights evidenced by the
Rights Certificate or Rights Certificates surrendered. If this Rights
Certificate shall be exercised in part, the registered holder shall be entitled
to receive, upon surrender hereof, another Rights Certificate or Rights
Certificates for the number of whole Rights not exercised.

 

A-1

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Subject to the provisions of the Rights Agreement, the Rights evidenced by this
Rights Certificate may be, and under certain circumstances are required to be,
redeemed by the Corporation at a redemption price of $0.00001 per Right.

No fractional Common Shares will be issued upon the exercise of any Right or
Rights evidenced hereby.

No holder of this Rights Certificate, as such, shall be entitled to vote,
receive dividends or be deemed for any purpose the holder of Common Shares or of
any other securities of the Corporation which may at any time be issuable upon
the exercise hereof, nor shall anything contained in the Rights Agreement or
herein be construed to confer upon the holder hereof any of the rights of a
shareholder of the Corporation or any right to vote for the election of
directors or upon any matter submitted to shareholders of the Corporation at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting shareholders of the
Corporation (except as expressly provided in the Rights Agreement), or to
receive dividends, distributions or subscription rights, or otherwise until the
Rights evidenced by this Rights Certificate shall have been exercised as
provided in the Rights Agreement.

This Rights Certificate shall not be valid or obligatory for any purpose until
it shall have been manually countersigned by the Rights Agent.

WITNESS the facsimile signature of the proper officers of the Corporation.

 

Dated    

 

VITRAN CORPORATION INC. By:       Authorized Signature

 

COMPUTERSHARE TRUST COMPANY OF CANADA By:       Authorized Signature

 

A-2

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(To be attached to each Rights Certificate)

FORM OF ELECTION TO EXERCISE

 

TO: VITRAN CORPORATION INC.

The undersigned hereby irrevocably elects to exercise ________________ whole
Rights represented by the attached Rights Certificate to purchase the Common
Shares issuable upon the exercise of such Rights and requests that certificates
for such Common Shares be issued to:

 

  (NAME)   (ADDRESS)   (CITY AND PROVINCE OR STATE )

If such number of Rights shall not be all the Rights evidenced by this Rights
Certificate, a new Rights Certificate for the balance of such Rights shall be
registered in the name of and delivered to:

 

  (NAME)   (ADDRESS)   (CITY AND PROVINCE OR STATE )

 

SOCIAL INSURANCE, SOCIAL SECURITY OR OTHER TAXPAYER NUMBER

 

Dated

      

Signature Guaranteed

          Signature      (Signature must correspond to name as written upon the
face of this Rights Certificate in every particular, without alteration or
enlargement or any change whatsoever)

Signature must be guaranteed by a Schedule 1 Canadian Chartered Bank or a
Financial Institution that is a member of a recognized STAMP, MSP or SEMP
Program.

 

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To be completed if true

The undersigned hereby represents, for the benefit of all holders of Rights and
Common Shares, that the Rights evidenced by this Rights Certificate are not,
and, to the knowledge of the undersigned, have never been, Beneficially Owned by
an Acquiring Person or an Affiliate or Associate thereof or any Person acting
jointly or in concert with any of the foregoing or any Affiliate or Associate of
such Person (as defined in the Rights Agreement).

 

 

 

Signature

 

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NOTICE

In the event the certification set forth in the Form of Election to Exercise is
not completed, the Corporation will deem the Beneficial Owner of the Rights
evidenced by this Rights Certificate to be an Acquiring Person or an Affiliate
or Associate thereof (as defined in the Rights Agreement) and accordingly such
Rights shall be null and void.

 

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FORM OF ASSIGNMENT

(To be executed by the registered holder if such

holder desires to transfer the Rights Certificate)

FOR VALUE RECEIVED ____________________________________________ hereby sells,
assigns and transfers unto _____________________________________________

 

      (Please print name and address of transferee)

the Rights represented by this Rights Certificate, together with all right,
title and interest therein and does hereby irrevocably constitute and appoint
________________________ as attorney to transfer the within Rights on the books
of the Corporation, with full power of substitution.

Dated ______________________

 

Signature Guaranteed       Signature   (Signature must correspond to name as
written upon the face of this Rights Certificate in every particular, without
alteration or enlargement or any change whatsoever)

Signature must be guaranteed by a Schedule 1 Canadian Chartered Bank or a
Financial Institution that is a member of a recognized STAMP, MSP or SEMP
Program.

To be completed if true

The undersigned hereby represents, for the benefit of all holders of Rights and
Common Shares, that the Rights evidenced by this Rights Certificate are not and,
to the knowledge of the undersigned, have never been, Beneficially Owned by an
Acquiring Person or an Affiliate or Associate thereof or any Person acting
jointly or in concert with any of the foregoing (as defined in the Rights
Agreement).

 

      Signature

 

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NOTICE

In the event the certification set forth in the Form of Assignment is not
completed, the Corporation will deem the Beneficial Owner of the Rights
evidenced by this Rights Certificate to be an Acquiring Person or an Affiliate
or Associate thereof (as defined in the Rights Agreement) and accordingly such
Rights shall be null and void.

 

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