Exhibit 10.1

 

SHAREHOLDER RIGHTS PLAN AGREEMENT

 

BETWEEN

 

OPEN TEXT CORPORATION

 

and

 

COMPUTERSHARE TRUST COMPANY OF CANADA

as Rights Agent

 

Dated as of November 1, 2004

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TABLE OF CONTENTS

 

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     ARTICLE 1           DEFINITIONS      1.1    Definitions    2 1.2   
Currency    11 1.3    Acting Jointly or in Concert    11 1.4    Control    11
1.5    Holder of Rights and Trust Units    12 1.6    References to this
Agreement    12      ARTICLE 2           THE RIGHTS      2.1    Legend on Common
Share Certificates    12 2.2    Initial Exercise Price; Exercise of Rights;
Detachment of Rights    13 2.3    Adjustments to Exercise Price; Number of
Rights    14 2.4    Date on Which Exercise is Effective    17 2.5    Execution,
Authentication, Delivery and Dating of Rights Certificates    17 2.6   
Registration, Registration of Transfer and Exchange    18 2.7    Mutilated,
Destroyed, Lost and Stolen Rights Certificates    18 2.8    Persons Deemed
Owners    19 2.9    Delivery and Cancellation of Certificates    19 2.10   
Agreement of Rights Holders    19      ARTICLE 3           ADJUSTMENTS TO THE
RIGHTS IN THE EVENT OF CERTAIN TRANSACTIONS      3.1    Flip-in Event    20     
ARTICLE 4           THE RIGHTS AGENT      4.1    General    21 4.2    Merger,
Amalgamation or Consolidation or Change of Name of Rights Agent    22 4.3   
Duties of Rights Agent    22 4.4    Change of Rights Agent    23      ARTICLE 5
          MISCELLANEOUS      5.1    Redemption and Termination    24 5.2   
Expiration    26 5.3    Issuance of New Rights Certificates    26 5.4   
Supplements and Amendments    26 5.5    Fractional Rights and Fractional Shares
   27 5.6    Rights of Action    28 5.7    Holder of Rights Not Deemed a
Shareholder    28 5.8    Notice of Proposed Actions    28 5.9    Notices    28
5.10    Costs of Enforcement    29 5.11    Successors    29 5.12    Benefits of
this Agreement    29 5.13    Descriptive Headings    30 5.14    Governing Law   
30 5.15    Language    30 5.16    Counterparts    30

 

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TABLE OF CONTENTS

(continued)

 

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5.17    Severability    30 5.18    Effective Date    30 5.19    Shareholder
Review    30 5.20    Regulatory Approvals    31 5.21    Declaration as to
Non-Canadian and Non-U.S. Holders    31 5.22    Determinations and Actions by
the Board of Directors    31

 

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SHAREHOLDER RIGHTS PLAN AGREEMENT

 

THIS SHAREHOLDER RIGHTS PLAN AGREEMENT made as of the 1st day of November, 2004.

 

BETWEEN:

 

OPEN TEXT CORPORATION, a body corporate organized under the laws of Ontario
(hereinafter referred to as the “Corporation”)

 

OF THE FIRST PART

 

- and -

 

COMPUTERSHARE TRUST COMPANY OF CANADA, a trust company incorporated under the
laws of Canada (hereinafter referred to as the “Rights Agent”)

 

OF THE SECOND PART

 

WHEREAS the board of directors of the Corporation (the “Board of Directors”) has
determined that it is advisable to adopt a shareholder rights plan to take
effect immediately upon receipt of approval of the Independent Shareholders (the
“Rights Plan”) to ensure, to the extent possible, that all shareholders of the
Corporation are treated fairly in connection with any take-over offer or bid for
the common shares of the Corporation, and to ensure that the Board of Directors
is provided with a sufficient time to evaluate unsolicited take-over bids and to
explore and develop alternatives to maximize shareholder value;

 

AND WHEREAS, in order to implement the adoption of the Rights Plan as
established by this agreement, the Board of Directors has:

 

  (a) authorized the issuance of one right (a “Right”) in respect of each Common
Share (as hereinafter defined) outstanding at the close of business on November
1, 2004 (the “Record Time”), such distribution to be made to shareholders of
record at the Record Time; and

 

  (b) authorized the issuance of one Right in respect of each Common Share
issued after the Record Time and prior to the earlier of the Separation Time (as
hereinafter defined) and the Expiration Time (as hereinafter defined);

 

AND 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 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 (as
hereinafter defined), the exercise of Rights and other matters referred to
herein;

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

 

ARTICLE 1

DEFINITIONS

 

1.1 Definitions

 

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

 

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

 

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

 

  (ii) any Person who becomes the Beneficial Owner of 20% or more of the
outstanding Common Shares of the Corporation as a result of any one or a
combination of:

 

  (A) an acquisition or redemption by the Corporation of Common Shares of the
Corporation which, by reducing the number of Common Shares outstanding,
increases the proportionate number of Common Shares Beneficially Owned by such
Person to 20% or more of the Common Shares of the Corporation then outstanding;

 

  (B) share acquisitions made pursuant to a Permitted Bid (“Permitted Bid
Acquisitions”);

 

  (C) share acquisitions (1) in respect of which the Board of Directors has
waived the application of Section 3.1 pursuant to subsections 5.1(b), 5.1(c) or
5.1(d); or (2) which were made pursuant to a dividend reinvestment plan of the
Corporation; or (3) pursuant to the receipt or exercise of rights issued by the
Corporation to all the holders of the Common 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 Common 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 Common Shares or Convertible Securities
so offered than the Person’s percentage of Common Shares or Convertible
Securities beneficially owned immediately prior to such acquisition; or (4)
pursuant to a distribution by the Corporation of Common Shares or Convertible
Securities made pursuant to a prospectus, provided that the Person does not
thereby acquire a greater percentage of Common Shares or Convertible Securities
so offered than the Person’s percentage of Common Shares or Convertible
Securities beneficially owned immediately prior to such acquisition; or (5)
pursuant to a distribution by the Corporation of Common Shares or Convertible
Securities by way of a private placement or a securities exchange take-over bid
circular or upon the exercise by an individual employee of stock options granted
under a stock option plan of the Corporation or rights to purchase securities
granted under a share purchase plan of the Corporation, provided that (i) all
necessary stock exchange approvals for such private placement, stock option plan
or share purchase plan have been obtained and such private placement, stock
option plan or share purchase plan complies with the terms and conditions of
such approvals and (ii) such Person does not become the Beneficial Owner of more
than 25% of the Common Shares outstanding immediately prior to the distribution,
and in making this determination, the

 

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Common Shares to be issued to such Person in the distribution shall be deemed to
be held by such Person but shall not be included in the aggregate number of
outstanding Common Shares immediately prior to the distribution; or (6) pursuant
to an amalgamation, merger or other statutory procedure requiring shareholder
approval (“Exempt Acquisitions”);

 

  (D) the acquisition of Common Shares upon the exercise of Convertible
Securities received by such Person pursuant to a Permitted Bid Acquisition,
Exempt Acquisition or a Pro Rata Acquisition (as defined below) (“Convertible
Security Acquisitions”); or

 

  (E) acquisitions as a result of a stock dividend, a stock split or other event
pursuant to which such Person receives or acquires Common Shares or Convertible
Securities on the same pro rata basis as all other holders of Common Shares of
the same class (“Pro Rata Acquisitions”);

 

provided, however, that if a Person shall become the Beneficial Owner of 20% or
more of the Common Shares of the Corporation then outstanding by reason of any
one or a combination of (i) share acquisitions or redemptions by the Corporation
or (ii) Permitted Bid Acquisitions or (iii) Exempt Acquisitions or (iv)
Convertible Security Acquisitions or (v) Pro Rata Acquisitions and, after such
share acquisitions or redemptions by the Corporation or Permitted Bid
Acquisitions or Exempt Acquisitions or Convertible Security Acquisitions or Pro
Rata Acquisitions, such Person subsequently becomes the Beneficial Owner of more
than an additional 1% of the number of Common Shares of the Corporation
outstanding other than pursuant to any one or a combination of share
acquisitions or redemptions of shares by the Corporation, Permitted Bid
Acquisitions, Exempt Acquisitions, Convertible Security Acquisitions or Pro Rata
Acquisitions, then as of the date of any such acquisition such Person shall
become an “Acquiring Person”;

 

  (iii) for a period of 10 days after the Disqualification Date, any Person who
becomes the Beneficial Owner of 20% or more of the outstanding Common Shares as
a result of such Person becoming disqualified from relying on clause 1.1(d)(B)
solely because such Person makes or announces an intention 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. For the purposes of this
definition, “Disqualification Date” means the first date of public announcement
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;

 

  (iv) an underwriter or member of a banking or selling group that becomes the
Beneficial Owner of 20% or more of the Common Shares in connection with a
distribution of securities by way of prospectus or private placement; or

 

  (v) a Person (a “Grandfathered Person”) who is the Beneficial Owner of 20% or
more of the outstanding Common Shares of the Corporation as at the Record Time,
provided, however, that this exception shall not be, and shall cease to be,
applicable to a Grandfathered Person in the event that such Grandfathered Person
shall, after the Record Time: (1) cease to own 20% or more of the outstanding
Common Shares or (2) become the Beneficial Owner (other than pursuant to any one
or a combination of (A) share acquisitions or redemptions by the Corporation or
(B) Permitted Bid Acquisitions (C) Exempt Acquisitions or (D) Convertible
Security Acquisition or (E) Pro Rata Acquisitions) of additional Common Shares
constituting more than 1% of the number of Common Shares outstanding as at the
Record Time.

 

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  (b) “Affiliate”, used to indicate a relationship with a specified Person,
shall mean 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.

 

  (c) “Associate” of a specified individual shall mean any individual to whom
such specified individual is married or with whom such specified individual is
living in a conjugal relationship, outside marriage, or any relative of such
specified individual or said spouse who has the same home as such specified
individual.

 

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

 

  (i) any securities as to which such Person or any of such Person’s Affiliates
or Associates is the owner at law or in equity;

 

  (ii) any securities as to which such Person or any of such Person’s Affiliates
or Associates has the right to acquire (A) upon the exercise of any Convertible
Securities, or (B) pursuant to any agreement, arrangement or understanding, in
either case where such right is exercisable within a period of 60 days and
whether or not on condition or the happening of any contingency (other than (1)
customary agreements with and between underwriters and banking group or selling
group members with respect to a distribution to the public or pursuant to a
private placement of securities, or (2) pursuant to a pledge of securities in
the ordinary course of business); and

 

  (iii) any securities which are Beneficially Owned within the meaning of
clauses 1.1(d)(i) or (ii) above by any other Person with which such Person is
acting jointly or in concert;

 

provided, however, that a Person shall not be deemed the “Beneficial Owner”, or
to have “Beneficial Ownership” of, or to “Beneficially Own”, any security:

 

  (A) where (1) the holder of such security has agreed to deposit or tender such
security pursuant to a Permitted Lock-up Agreement to a Take-over Bid made by
such Person or any of such Person’s Affiliates or Associates or any other Person
referred to in clause 1.1(d)(iii), or (2) such security has been deposited or
tendered pursuant to a Take-over Bid made by such Person or any of such Person’s
Affiliates or Associates or any other Person referred to in clause 1.1(d)(iii),
in each case until the earliest time at which any such tendered security is
accepted unconditionally for payment or exchange or is taken up and paid for;

 

  (B) where such Person, any of such Person’s Affiliates or Associates or any
other Person referred to in clause 1.1(d)(iii), holds such security provided
that (1) the ordinary business of any such Person (the “Investment Manager”)
includes the management of investment funds for others and such security is held
by the Investment Manager in the ordinary course of such business in the
performance of such Investment Manager’s duties for the account of any other
Person, including the acquisition or holding of securities for non-discretionary
accounts held on behalf of a client by a broker or dealer registered under
applicable securities laws, or (2) such Person (the “Trust Company”) is licensed
to carry on the business of a trust company under applicable laws 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 estates of
deceased or incompetent Persons or for such other accounts, or (3) such Person
(the “Plan Trustee”) is the administrator or trustee of one or more pension
funds or plans (each a “Plan”) registered under applicable laws and holds such
security for the

 

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purposes of its activity as such, or (4) such Person is a Plan or is a Person
established by statute (the “Statutory Body”) 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
(other than plans administered by insurance companies) or various public bodies,
or (5) such Person is a Crown agent or agency or (6) such Person (the “Manager”)
is the manager or trustee of a mutual fund (“Mutual Fund”) that is registered or
qualified to issue its securities to investors under the securities laws of any
province of Canada or the laws of the United States of America or is a Mutual
Fund; provided in any of the above cases, that the Investment Manager, the Trust
Company, the Plan Trustee, the Plan, the Statutory Body, the Crown agent or
agency, the Manager or the Mutual Fund, as the case may be, is not then making a
Take-over Bid or has not announced a current intention to make a Take-over Bid,
other than an Offer to Acquire Common Shares or other securities pursuant to a
distribution by the Corporation or by means of ordinary market transactions
(including pre-arranged trades entered into in the ordinary course of business
of such Person) executed through the facilities of a stock exchange, securities
quotation system or organized over-the-counter market, alone, through its
Affiliates or Associates or by acting jointly or in concert with any other
Person; or

 

  (C) because such Person is a client of or has an account with the same
Investment Manager as another Person on whose account the Investment Manager
holds such security, or where such Person is a client of or has an account with
the same Trust Company as another Person on whose account the Trust Company
holds such security, or where such Person is a Plan and has a Plan Trustee who
is also a Plan Trustee for another Plan on whose account the Plan Trustee holds
such security; or

 

  (D) where such Person is (i) a client of an Investment Manager and such
security is owned at law or in equity by the Investment Manager, or (ii) an
account of a Trust Company and such security is owned at law or in equity by the
Trust Company, or (iii) a Plan and such security is owned at law or in equity by
the Plan Trustee; or

 

  (E) where such Person is the registered holder of securities as a result of
carrying on the business of or acting as a nominee of a securities depositary.

 

For purposes of this Agreement, the percentage of Common Shares Beneficially
Owned by any Person, shall be and be deemed to be the product determined by the
formula:

 

100 x A/B

 

Where:

 

A    =

 

    the number of votes for the election of all directors generally attaching to
the Common Shares Beneficially Owned by such Person; and

B    =

 

    the number of votes for the election of all directors generally attaching to
all outstanding Common Shares.

 

 

For the purposes of the foregoing formula, where any Person is deemed to
Beneficially Own unissued Common Shares which may be acquired pursuant to
Convertible Securities, such Common Shares shall be deemed to be outstanding for
the purpose of calculating the percentage of Common Shares Beneficially Owned by
such Person in both the numerator and the

 

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denominator, but no other unissued Common Shares which may be acquired pursuant
to any other outstanding Convertible Securities shall, for the purposes of that
calculation, be deemed to be outstanding.

 

  (e) “Business Day” shall mean any day other than a Saturday, Sunday or a day
that is treated as a holiday at the Corporation’s principal executive offices in
Waterloo, Canada.

 

  (f) “Business Corporations Act” shall mean the Business Corporations Act
(Ontario), R.S.O. 1990, c. B.16, as amended, and the regulations thereunder, and
any comparable or successor laws or regulations thereto.

 

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

 

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

 

  (i) “close of business” on any given date shall mean 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 offices of the Rights
Agent in the City of Toronto) becomes closed to the public.

 

  (j) “Common Shares of the Corporation” and “Common Shares” shall mean the
common shares in the capital stock of the Corporation and any other share of the
Corporation into which such common shares may be subdivided, consolidated,
reclassified or changed from time to time.

 

  (k) “Competing Permitted Bid” means a Take-over Bid that:

 

  (i) is made after a Permitted Bid or another Competing Permitted Bid has been
made and prior to the expiry of the Permitted Bid or Competing Permitted Bid;

 

  (ii) satisfies all components of the definition of a Permitted Bid other than
the requirements set out in clause (ii) of that definition; and

 

  (iii) contains, and the take-up and payment for securities tendered or
deposited is subject to, an irrevocable and unqualified provision that no Common
Shares will be taken up or paid for pursuant to the Take-over Bid prior to the
close of business on the date that is no earlier than the later of (1) the
earliest date on which Common Shares may be taken up or paid for under any
Permitted Bid or Competing Permitted Bid that is then in existence and (2) 35
days (or such other minimum period of days as may be prescribed by applicable
law in Ontario) after the date of the Take-over Bid constituting the Competing
Permitted Bid.

 

  (l) “Convertible Securities” means, at any time, any securities issued by the
Corporation from time to time (other than the Rights) carrying any exercise,
conversion or exchange right pursuant to which the holder thereof may acquire
Common Shares or other securities which are convertible into or exercisable or
exchangeable for Common Shares.

 

  (m) “Convertible Security Acquisitions” has the meaning set forth in the
definition of “Acquiring Person” herein.

 

  (n) “Co-Rights Agents” shall have the meaning set forth in subsection 4.1(a).

 

  (o) “Effective Date” shall mean the close of business on November 1, 2004.

 

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  (p) “Exempt Acquisition” has the meaning set forth in the definition of
“Acquiring Person” herein.

 

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

 

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

 

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

 

  (r) “Expansion Factor” shall have the meaning set forth in subsection
2.3(a)(x).

 

  (s) “Expiration Time” shall mean the earlier of:

 

  (i) the Termination Time; and

 

  (ii) the termination of the annual meeting of the shareholders of the
Corporation in the year 2007;

 

provided, however, that if the resolution referred to in Section 5.19 is
approved by Independent Shareholders in accordance with Section 5.19 at or prior
to such annual meeting, “Expiration Time” means the earlier of (i) the
Termination Time and (ii) the termination of the annual meeting of the
shareholders of the Corporation in the year 2010.

 

  (t) “Fiduciary” shall mean a trust company registered under the trust company
legislation of Canada or any province thereof, a trust company organized under
the laws of any state of the United States, a portfolio manager registered under
the securities legislation of one or more provinces of Canada or an investment
adviser registered under the United States Investment Advisers Act of 1940 or
any other securities legislation of the United States or any state of the United
States.

 

  (u) A “Flip-in Event” shall mean a transaction occurring subsequent to the
date of this Agreement as a result of which any Person shall become an Acquiring
Person provided, however, that a Flip-in Event, shall be deemed to occur at the
close of business on the tenth day (or such later day as the Board of Directors
of the Corporation may determine) after the Stock Acquisition Date.

 

  (v) “Independent Shareholders” shall mean holders of outstanding Common Shares
of the Corporation excluding (i) any Acquiring Person; or (ii) any Person (other
than a Person referred to in clause 1.1(d)(B)) that is making or has announced a
current intention to make a Take-over Bid for Common Shares of the Corporation
(including a Permitted Bid or a Competing Permitted Bid) but excluding any such
Person if the Take-over Bid so announced or made by such Person has been
withdrawn, terminated or expired; or (iii) any Affiliate or Associate of such
Acquiring Person or a Person referred to in clause (ii); or (iv) any Person
acting jointly or in concert with such Acquiring Person or a Person referred to
in clause (ii); or (v) a Person who is a trustee of any employee benefit plan,
share 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 the plan or trust direct the manner in
which the Common Shares are to be voted or direct whether the Common Shares are
to be tendered to a Take-over Bid.

 

  (w) “Market Price” per security of any securities on any date of determination
shall mean the average of the daily Closing Price 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 price used to determine
the Closing Price Per Security on

 

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any Trading Day not to be fully comparable with the price used to determine the
Closing Price Per Security on such date of determination or, if the date of
determination is not a Trading Day, on the immediately preceding Trading Day,
each such 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 price per security used to determine the Closing Price
Per Security 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:

 

  (i) the closing board lot sale price or, if such price is not available, the
average of the closing bid and asked prices, for such securities as reported by
the securities exchange or national securities quotation system on which such
securities are listed or admitted for trading on which the largest number of
such securities were traded during the most recently completed calendar year;

 

  (ii) if, for any reason, none of such prices is available on such date or the
securities are not listed or admitted to trading on a securities exchange or on
a national securities quotation system, the last sale price, or in case no sale
takes place on such date, the average of the high bid and low asked prices for
such securities in the over-the-counter market, as quoted by any reporting
system then in use (as selected by the Board of Directors); or

 

  (iii) if the securities are not listed or admitted to trading as contemplated
in clause 1.1(w)(i) or (ii), the average of the closing bid and asked prices as
furnished by a professional market maker making a market in the securities
provided, however, that if on any such date the Closing Price Per Security
cannot be determined in accordance with the foregoing, the Closing Price Per
Security of such securities on such date shall mean the fair value per share of
such securities on such date as determined in good faith by an internationally
recognized investment dealer or investment banker with respect to the fair value
per share 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 at the Canadian Dollar Equivalent thereof.

 

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

 

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

 

  (z) “Offer to Acquire” shall include:

 

  (i) an offer to purchase, or a solicitation of an offer to sell, Common
Shares; and

 

  (ii) an acceptance of an offer to sell Common Shares, 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.

 

  (aa) “Offeror’s Securities” means Common Shares Beneficially Owned on the date
of an Offer to Acquire by any Person who is making a Take-over Bid and “Offeror”
means a Person who has announced a current intention to make or is making a
Take-over Bid.

 

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  (bb) “Permitted Bid” means a Take-over Bid made by a Person by means of a
Take-over Bid circular and which also complies with the following additional
provisions:

 

  (i) the Take-over Bid is made to all holders of record of Common Shares, other
than the Offeror;

 

  (ii) the Take-over Bid shall contain, and the provisions for the take-up and
payment for Common Shares tendered or deposited thereunder shall be subject to,
an irrevocable and unqualified condition that no Common Shares shall be taken up
or paid for pursuant to the Take-over Bid prior to the close of business on a
date which is not less than 60 days following the date of the Take-over Bid;

 

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

 

  (iv) the Take-over Bid shall contain an irrevocable and unqualified condition
that more than 50% of the outstanding Common Shares held by Independent
Shareholders, determined as at the close on business on the date of first
take-up or payment for Common 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 Common Shares; and

 

  (v) the Take-over Bid shall contain an irrevocable and unqualified provision
that in the event that more than 50% of the then outstanding Common 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 Common 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 and tenders of Common Shares for not less than 10 Business Days from
the date of such public announcement;

 

provided that if a Take-over Bid constitutes a Competing Permitted Bid, the term
“Permitted Bid” shall also mean the Competing Permitted Bid.

 

  (cc) “Permitted Bid Acquisitions” has the meaning set forth in the definition
of “Acquiring Person” herein.

 

  (dd) “Permitted Lock-up Agreement” means an agreement (the “Lock-up
Agreement”) between a Person and one or more holders of Common Shares (each such
holder herein referred to as a “Locked-up Person”) (the terms of which are
publicly disclosed and a copy of which is made available to the public
(including the Corporation) not later than the date of the Lock-up Bid (as
defined below), or if the Lock-up Bid has been made prior to the date of the
Lock-up Agreement not later than the first Business Day following the date of
the Lock-up Agreement) pursuant to which each Locked-up Person agrees to deposit
or tender the Common Shares held by such holder to a Take-over Bid (the “Lock-up
Bid”) made by the Person or any of such Person’s Affiliates or Associates or any
other Person referred to in clause 1.1(d)(iii), provided that:

 

  (i) the Lock-up Agreement permits the Locked-up Person to withdraw its Common
Shares from the Lock-up Agreement in order to deposit or tender the Common
Shares to another Take-over Bid or to support another transaction prior to the
Common Shares being taken up and paid for under the Lock-up Bid at a price or
value per Common Share that exceeds the price or value per Common Share offered
under the Lock-up Bid; or

 

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  (ii) the Lock-up Agreement permits the Locked-up Person to withdraw its Common
Shares from the Lock-up Agreement in order to deposit or tender the Common
Shares to another Take-over Bid or to support another transaction prior to the
Common Shares being taken up and paid for under the Lock-up Bid at an offering
price for each Common Share that exceeds by as much as or more than a specified
amount (the “Specified Amount”) the offering price for each Common Share
contained in or proposed to be contained in the Lock-up Bid and that does not by
itself provide for a Specified Amount that is greater than 7% of the offering
price contained in or proposed to be contained in the Lock-up Bid;

 

and, for greater clarity, the agreement may contain a right of first refusal or
require a period of delay to give the Person who made the Lock-up Bid an
opportunity to match a higher price in another Take-over Bid or transaction or
other similar limitation on a Locked-up Person’s right to withdraw Common Shares
from the agreement, so long as the limitation does not preclude the exercise by
the Locked-up Person of the right to withdraw Common Shares during the period of
the other Take-over Bid or transaction; and

 

  (iii) no “break-up” fees, “top-up” fees, penalties, expenses or other amounts
that exceed in aggregate the greater of:

 

  (A) 2.5% of the price or value of the consideration payable under the Lock-up
Bid to a Locked-up Person; and

 

  (B) 50% of the amount by which the price or value of the consideration
received by a Locked-up Person under another Take-over Bid or transaction
exceeds the price or value of the consideration that the Locked-up Person would
have received under the Lock-up Bid;

 

shall be payable by such Locked-up Person if the Locked-up Person fails to
deposit or tender Common Shares to the Lock-up Bid, or withdraws Common Shares
previously tendered thereto in order to deposit or tender such Common Shares to
another Take-over Bid or support another transaction.

 

  (ee) “Person” shall mean any individual, firm, partnership, association,
trust, trustee, personal representative, body corporate, corporation,
unincorporated organization, syndicate or other entity.

 

  (ff) “Pro Rata Acquisition” has the meaning set forth in the definition of
“Acquiring Person” herein.

 

  (gg) “Record Time” shall mean the close of business on November 1, 2004.

 

  (hh) “Redemption Price” has the meaning set forth in subsection 5.1(a) herein.

 

  (ii) “Rights Certificate” shall mean, after the Separation Time, the
certificate representing the Rights substantially in the form of Exhibit A
hereto;

 

  (jj) “Securities Act” shall mean the Securities Act (Ontario), R.S.O. 1990, c.
S-5, and the rules and regulations thereunder, each as may be amended from time
to time, and any comparable or successor laws, rules or regulations thereto.

 

  (kk) “Separation Time” shall mean the close of business on the tenth Business
Day after the earlier of:

 

  (i) the Stock Acquisition Date;

 

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  (ii) 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 Take-over Bid which is a
Permitted Bid so long as such Take-over Bid continues to satisfy the
requirements of a Permitted Bid), provided that, if any Take-over Bid referred
to in this clause (ii) expires, is cancelled, terminated or otherwise withdrawn
prior to the Separation Time, such Take-over Bid shall be deemed, for purposes
of this subsection 1.1(kk), never to have been made; and

 

  (iii) the date upon which a Permitted Bid ceases to be a Permitted Bid;

 

or such later date as may be determined by the Board of Directors acting in good
faith provided that, if the foregoing results in the Separation Time being prior
to the Record Time, the Separation Time shall be the Record Time and if the
Board of Directors determines pursuant to Section 5.1 to waive the application
of Section 3.1 to a Flip-in Event, the Separation Time in respect of such
Flip-in Event shall be deemed never to have occurred.

 

  (ll) “Stock Acquisition Date” shall mean the first date of public announcement
(which, for purposes of this definition, shall include, without limitation, a
report filed pursuant to Section 101 of the Securities Act or Section 13(d)
under the 1934 Exchange Act) by the Corporation or an Acquiring Person that a
Person has become an Acquiring Person.

 

  (mm) “Subsidiary” of any specified Person shall mean any corporation or other
entity controlled by such specified Person.

 

  (nn) “Take-over Bid” means an Offer to Acquire Common Shares or securities
convertible into Common Shares, where the Common Shares subject to the Offer to
Acquire, together with the Common Shares into which the securities subject to
the Offer to Acquire are convertible, and the Offeror’s Securities, constitute
in the aggregate 20% or more of the outstanding Common Shares at the date of the
Offer to Acquire.

 

  (oo) “Termination Time” shall mean the time at which the right to exercise
Rights shall terminate pursuant to Section 5.1, 5.18 or 5.19 hereof.

 

  (pp) “Trading Day”, when used with respect to any securities, shall mean a day
on which the securities exchange or national securities quotation system on
which such securities 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.

 

  (qq) “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 with a conversion of one United States dollar into Canadian dollars,
such rate;

 

  (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.

 

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

 

1.2 Currency

 

All sums of money which are referred to in this Agreement are expressed in
lawful money of Canada.

 

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1.3 Acting Jointly or in Concert

 

For purposes of this Agreement, a Person is acting jointly or in concert with
another Person if such Person has any agreement, arrangement or understanding
(whether formal or informal and whether or not in writing) with such other
Person to acquire, or Offer to Acquire, any Common Shares of the Corporation
(other than (A) customary agreements with and between underwriters and banking
group or selling group members with respect to a distribution of securities by
way of prospectus or private placement, or (B) pursuant to a pledge of
securities in the ordinary course of business).

 

1.4 Control

 

A Person is “controlled” by another Person or two or more other Persons acting
jointly or in concert if:

 

  (a) in the case of a body corporate, securities entitled to vote in the
election of directors of such body corporate carrying more than 50% of the votes
for the election of directors are held, directly or indirectly, by or for the
benefit of the other Person or Persons acting jointly or in concert and the
votes carried by such securities are entitled, if exercised, to elect a majority
of the board of directors of such body corporate; or

 

  (b) in the case of a Person which 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.

 

1.5 Holder of Rights and Trust Units

 

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).

 

1.6 References to this Agreement

 

In this Agreement, unless otherwise provided herein and unless the context
otherwise requires, references to “this Agreement”, “herein”, “hereby” and
“hereunder” mean this Shareholder Rights Plan Agreement dated as of November 1,
2004 between the Corporation and the Rights Agent as amended and supplemented
from time to time.

 

ARTICLE 2

THE RIGHTS

 

2.1 Legend on Common Share Certificates

 

Certificates for the Common Shares, including without limitation Common Shares
issued upon the conversion of Convertible Securities, issued 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 Record Time, shall have
impressed on, printed on, written on or otherwise affixed to them a legend,
substantially in the following form:

 

Until the Separation Time (as defined in the Rights Agreement referred to
below), this certificate also evidences and entitles the holder hereof to
certain Rights as set forth in a Shareholder Rights Plan Agreement dated as of
November 1, 2004, as such may from time to time be amended, restated, varied or
replaced (the “Rights Agreement”), between Open Text Corporation (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

 

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which is on file at the registered office of the Corporation. In certain
circumstances, as set forth in the Rights Agreement, such Rights may be amended,
redeemed, may expire, may become void (if, in certain cases, they are
“Beneficially Owned” by an “Acquiring Person”, as such terms are defined in the
Rights Agreement, or a transferee thereof) or may be evidenced by separate
certificates and may no longer be evidenced by this certificate. The Corporation
will mail or arrange for the mailing of a copy of the Rights Agreement to the
holder of this certificate without charge as soon as practicable, after the
receipt of a written request therefor.

 

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, until the earlier of the
Separation Time and the Expiration Time.

 

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

 

  (a) Subject to adjustment as herein set forth, each Right will entitle the
holder thereof, after the Separation Time, to purchase, for the Exercise Price,
or its U.S. Dollar Equivalent as at the Business Day immediately preceding the
day of exercise of the Right, one Common Share. Notwithstanding any other
provision of this Agreement, any Rights held by the Corporation or any of its
Subsidiaries shall be void.

 

  (b) Until the Separation Time,

 

  (i) no Right may be exercised; and

 

  (ii) each Right will be evidenced by the certificate for the associated Common
Share and will be transferable only together with, and will be transferred by a
transfer of, such associated share.

 

  (c) After the Separation Time and prior to the Expiration Time, the Rights (i)
may be exercised; and (ii) will be transferable independent of Common Shares.
Promptly following the Separation Time the Rights Agent will mail to each holder
of record of Common Shares 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) 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), (x) a
Rights Certificate with registration particulars 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 or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange or securities
quotation system on which the Rights may from time to time be listed or traded,
or to conform to usage, and (y) a disclosure statement describing the Rights.

 

  (d) Rights may be exercised in whole or in part on any Business Day (or on any
other day which, in the city at which an Election to Exercise (as hereinafter
defined) is duly submitted to the Rights Agent in accordance with this
Agreement, is not a Saturday, Sunday or a day that is treated as a holiday in
such city) after the Separation Time and prior to the Expiration Time by
submitting to the Rights Agent (at its office in the City of Toronto, Canada or
at 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 (an “Election to Exercise”)
substantially in the form attached to the Rights Certificate duly completed,

 

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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.

 

  (e) Upon receipt of a Rights Certificate, with a duly completed Election to
Exercise (which does not indicate that the holder so exercising is an Acquiring
Person) accompanied by payment as set forth in subsection 2.2(d) above, the
Rights Agent will thereupon promptly:

 

  (i) requisition from the transfer agent or any co-transfer agent of the Common
Shares certificates for the number of Common Shares to be purchased (the
Corporation hereby irrevocably authorizing its transfer agent to comply with all
such requisitions);

 

  (ii) when appropriate, requisition from the Corporation the amount of cash to
be paid in lieu of issuing fractional Common Shares and, after receipt, deliver
such cash to or to the order of the registered holder of the Rights Certificate;

 

  (iii) after receipt of the Common Share 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 holder; and

 

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

 

  (f) In case the holder of any Rights shall exercise less than all 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.

 

  (g) The Corporation covenants and agrees that it will:

 

  (i) take all such action as may be necessary and within its power to ensure
that all shares 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;

 

  (ii) take all such action as may be necessary and within its power to comply
with any applicable requirements of the Business Corporations Act, the
Securities Act, the securities acts or comparable legislation of each of the
other provinces of Canada, the 1933 Securities Act and the 1934 Exchange Act,
and the rules and regulations thereunder or any other applicable law, rule or
regulation, in connection with the issuance and delivery of the Rights
Certificates and the issuance of any shares upon exercise of Rights;

 

  (iii) use reasonable efforts to cause all shares issued upon exercise of
Rights to be listed on the principal exchanges or traded in the over-the-counter
markets on which the shares were traded immediately prior to the Stock
Acquisition Date;

 

  (iv) 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; and

 

  (v) pay when due and payable any and all Canadian and United States federal,
provincial, and state transfer taxes (for greater certainty not including any
income taxes or capital gains of the holder or exercising holder or any
liability of the Corporation to withhold tax) and charges which may be payable
in respect of the original issuance or delivery of

 

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the Rights Certificates or certificates for shares, 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 in a
name other than that of the holder of the Rights being transferred or exercised.

 

2.3 Adjustments to Exercise Price; Number of Rights

 

The Exercise Price, the number and kind of 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.

 

  (a) In the event the Corporation shall at any time after the Record Date and
prior to the Expiration Time:

 

  (i) declare or pay a dividend on the Common Shares payable in Common Shares
(or other capital stock or securities exchangeable for or convertible into or
giving a right to acquire Common Shares or other capital stock) other than
pursuant to any optional stock dividend program, dividend reinvestment plan or a
dividend payable on Common Shares in lieu of a regular periodic cash dividend;

 

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

 

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

 

  (iv) issue any Common Shares (or other capital stock or securities
exchangeable for or convertible into or giving a right to acquire Common Shares
or other capital stock) in respect of, in lieu of or in exchange for existing
Common Shares in a reclassification, amalgamation, merger, statutory arrangement
or consolidation,

 

the Exercise Price and the number of Rights outstanding, or, if the payment or
effective date therefor shall occur after the Separation Time, the securities
purchasable upon exercise of Rights shall be adjusted in the manner set forth
below. If the Exercise Price and number of Rights outstanding are to be adjusted
(x) the Exercise Price in effect after such adjustment shall be equal to the
Exercise Price in effect immediately prior to such adjustment divided by the
number of Common Shares (or other capital stock) (the “Expansion Factor”) that a
holder of one Common Share immediately prior to such dividend, subdivision,
change, combination or issuance would hold thereafter as a result thereof and
(y) each Right held prior to such adjustment shall become that number of Rights
equal to the Expansion Factor, and the adjusted number of Rights will be deemed
to be allocated among the Common Shares with respect to which the original
Rights were associated (if they remain outstanding) and the shares issued in
respect of such dividend, subdivision, change, combination or issuance, so that
each such Common Share (or other capital stock) will have exactly one Right
associated with it. If the securities purchasable upon exercise of Rights are to
be adjusted, the securities purchasable upon exercise of each Right after such
adjustment will be the number of securities that a holder of the securities
purchasable upon exercise of one Right immediately prior to such dividend,
subdivision, change, combination or issuance would hold thereafter as a result
thereof. If after the Record Time and prior to the Expiration Time the
Corporation shall issue any shares of capital stock other than Common Shares in
a transaction of a type described in clause 2.3(a)(i) or (iv), shares of such
capital stock shall be treated herein as nearly equivalent to Common Shares as
may be practicable and appropriate under the circumstances and the Corporation
and the Rights Agent agree to amend this Agreement in order to effect such
treatment. 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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Adjustments pursuant to subsection 2.3(a) shall be made successively, whenever
an event referred to in subsection 2.3(a) occurs.

 

In the event the Corporation shall at any time after the Record Time and prior
to the Separation Time issue any Common Shares otherwise than in a transaction
referred to in the preceding paragraph, each such Common Share so issued shall
automatically have one new Right associated with it, which Right shall be
evidenced by the certificate representing such Common Share.

 

  (b) In the event the Corporation shall at any time after the Record Time and
prior to the Expiration Time fix a record date for the making of a distribution
to all holders of Common Shares of rights or warrants entitling them (for a
period expiring within 45 calendar days after such record date) to subscribe for
or purchase Common Shares (or securities convertible into or exchangeable for or
carrying a right to purchase or subscribe for Common Shares) at a price per
Common Share (or, if a security convertible into or exchangeable for or carrying
a right to purchase or subscribe for Common Shares, having a conversion,
exchange or exercise price (including the price required to be paid to purchase
such convertible or exchangeable security or right per share)) less than 90% of
the Market Price per Common Share on such record date, the Exercise Price shall
be adjusted in the manner set forth below. The Exercise Price in effect after
such record date shall equal the Exercise Price in effect immediately prior to
such record date multiplied by a fraction, of which the numerator shall be the
number of Common Shares outstanding on such record date plus the number of
Common Shares which the aggregate offering price of the total number of 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)) would purchase at such Market Price and of
which the denominator shall be the number of Common Shares outstanding on such
record date plus the number of additional Common Shares to be offered for
subscription or purchase (or into which the convertible or exchangeable
securities or rights so to be offered are initially convertible, exchangeable or
exercisable). In case such subscription price is satisfied in whole or in part
by consideration 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 statement filed with the Rights Agent and shall be
binding on the Rights Agent and the holders of Rights.

 

Such adjustment shall be made successively whenever such a record date is fixed.
For purposes of this paragraph (b), the granting of the right to purchase Common
Shares 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 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 or warrants by the
Corporation; provided, however, that in the case of any dividend or interest
reinvestment plan, the right to purchase 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.

 

  (c) In the event the Corporation shall at any time after the Record Time and
prior to the Expiration Time fix a record date for the making of a distribution
to all holders of Common Shares of evidences of indebtedness or assets (other
than a regular periodic cash dividend or a dividend paid in Common Shares) or
rights or warrants entitling them to subscribe for or purchase Common Shares (or
Convertible Securities in respect of Common Shares) at a price per Common Share
(or, in the case of a Convertible Security in respect of Common Shares having a
conversion or exercise price per share (including the price required to be paid
to purchase such Convertible Security) less than 90% of the Market Price per
Common Share on such record date (excluding those referred to in subsection
2.3(b)), the Exercise Price shall be adjusted in the manner set forth below. The
Exercise Price in effect after such record date shall equal the Exercise Price
in effect immediately prior to such record date less the fair market value (as
determined in good faith by the Board of Directors of the Corporation) of the
portion of the assets, evidences of indebtedness, rights or

 

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warrants so to be distributed applicable to each of the securities purchasable
upon exercise of one Right (such determination to be described in a statement
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.

 

  (d) Each adjustment made pursuant to this Section 2.3 shall be made as of:

 

  (i) the payment or effective date for the applicable dividend, subdivision,
change, combination or issuance, in the case of an adjustment made pursuant to
paragraph (a) above; and

 

  (ii) the record date for the applicable dividend or distribution, in the case
of an adjustment made pursuant to paragraph (b) or (c) above,

 

subject to readjustment to reverse the same if such distribution shall not be
made.

 

  (e) In the event the Corporation shall at any time after the Record Time and
prior to the Expiration 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 clause (a)(i) or (a)(iv) above,
or if the Corporation shall take any other action (other than the issue of
Common Shares) which might have a negative effect on the holders of Rights, if
the Board of Directors acting in good faith determines that the adjustments
contemplated by paragraphs (a), (b) and (c) above are not applicable or will not
appropriately protect the interests of the holders of Rights, the Corporation
may determine what other adjustments to the Exercise Price, number of Rights
and/or securities purchasable upon exercise of Rights would be appropriate and,
if the adjustments contemplated by paragraphs (a), (b) and (c) above are
applicable, notwithstanding such paragraphs, the adjustments so determined by
the Corporation, rather than adjustments contemplated by paragraphs (a), (b) and
(c) above, shall be made. The Corporation and the Rights Agent shall amend this
Agreement in accordance with subsections 5.4(b) and 5.4(c), as the case may be,
to provide for such adjustments.

 

  (f) Each adjustment to the Exercise Price made pursuant to this Section 2.3
shall be calculated to the nearest cent. Whenever an adjustment to the Exercise
Price is made pursuant to this Section 2.3, the Corporation shall:

 

  (i) promptly prepare a certificate setting forth such adjustment and a brief
statement of the facts accounting for such adjustment; and

 

  (ii) promptly file with the Rights Agent and with each transfer agent for the
Common Shares a copy of such certificate and mail a brief summary thereof to
each holder of Rights who requests a copy.

 

Failure to file such certificate or cause such summary to be mailed as
aforesaid, or any defect therein, shall not affect the validity of any such
adjustment or change.

 

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, 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.

 

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2.5 Execution, Authentication, Delivery and Dating of Rights Certificates

 

  (a) The Rights Certificates shall be executed on behalf of the Corporation by
any one of its Chairman of the Board, the President, the Chief Executive
Officer, the Chief Financial Officer, any Vice President, the Treasurer, any
Assistant Treasurer, the Secretary or any Assistant Secretary of the
Corporation. The signature of any of these officers on the Rights Certificates
may be manual or facsimile. Rights Certificates bearing the manual or facsimile
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 the countersignature and
delivery of such Rights Certificates. 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 the Rights Agent shall countersign
(manually or by facsimile signature in a manner satisfactory to the Corporation)
and mail such Rights Certificates to the holders of the Rights pursuant to
subsection 2.2(c) hereof. No Rights Certificate shall be valid for any purpose
until countersigned by the Rights Agent as aforesaid.

 

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

 

2.6 Registration, Registration of Transfer and Exchange

 

  (a) 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. 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.

 

  (b) 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 subsection 2.6(d) below, the Corporation shall execute, and
the Rights Agent shall countersign 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.

 

  (c) 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 as the Rights
surrendered upon such registration of transfer or exchange.

 

  (d) 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 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 may require the payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in relation thereto.

 

2.7 Mutilated, Destroyed, Lost and Stolen Rights Certificates

 

  (a) 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.

 

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  (b) If there shall be delivered to the Corporation and the Rights Agent prior
to the Expiration Time (i) evidence of ownership of any Rights Certificate, (ii)
evidence to their satisfaction of the destruction, loss or theft of any Rights
Certificate and (iii) such security or indemnity as may be required by them in
their sole 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.

 

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

 

  (d) 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 shall be entitled to all the benefits of this Agreement equally and
proportionately with any and all other Rights, duly issued hereunder.

 

2.8 Persons Deemed Owners

 

The Corporation, the Rights Agent and any agent of the Corporation or the Rights
Agent may 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.

 

2.9 Delivery and Cancellation of 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 law, destroy all cancelled Rights
Certificates and deliver a certificate of destruction to the Corporation.

 

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 that:

 

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

 

  (b) prior to the Separation Time, each Right will be transferable only
together with, and will be transferred by a transfer of, the associated Common
Share;

 

  (c) after the Separation Time, the Rights Certificates will be transferable
only on the Rights Register as provided herein.

 

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  (d) 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 may 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;

 

  (e) such holder of Rights has waived his right to receive any fractional
Rights or any fractional shares upon exercise of a Right (except as provided
herein);

 

  (f) 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 as provided herein; and

 

  (g) 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.

 

ARTICLE 3

ADJUSTMENTS TO THE RIGHTS IN THE EVENT OF CERTAIN TRANSACTIONS

 

3.1 Flip-in Event

 

  (a) Subject to subsections 3.1(b), 5.1(b), 5.1(c) and 5.1(d) hereof, in the
event that prior to the Expiration Time a Flip-in Event shall occur, the
Corporation shall take such action as shall be necessary to ensure and provide,
within 10 Business Days thereafter or such longer period as may be required to
satisfy the requirements of the applicable securities acts or comparable
legislation so 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 consummation or
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 in
the event that after such date of consummation or occurrence an event of a type
analogous to any of the events described in Section 2.3 shall have occurred with
respect to such Common Shares).

 

  (b) Notwithstanding the foregoing or any other provisions of this Agreement,
upon the occurrence of any Flip-in Event, any Rights that are or were
Beneficially Owned on or after the earlier of the Separation Time or the Stock
Acquisition Date 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 an Acquiring Person); or

 

  (ii) a transferee, direct or indirect, of 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 an Acquiring
Person) in a transfer made after the date hereof, whether or not for
consideration, that the Board of Directors acting in good faith

 

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has determined is part of a plan, arrangement or scheme of an Acquiring Person
(or any Affiliate or Associate of an Acquiring Person) that has the purpose or
effect of avoiding clause (i) of this subsection 3.1(b),

 

shall become void and any holder of such Rights (including transferees) shall
thereafter have no right, to exercise such Rights under any provision of this
Agreement and shall not have any other rights whatsoever in respect of such
Rights, whether under any provision of this Agreement or otherwise.

 

  (c) Any Rights Certificate that represents Rights Beneficially Owned by a
Person described in either clauses (i) or (ii) of subsection 3.1(b) 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(b) 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 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.

 

ARTICLE 4

THE RIGHTS AGENT

 

4.1 General

 

  (a) The Corporation hereby appoints the Rights Agent to act as agent for the
Corporation and the 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 (the “Co-Rights
Agents”) as it may deem necessary or desirable. In the event the Corporation
appoints one or more Co-Rights Agents, the respective duties of the Rights Agent
and Co-Rights Agents shall be as the Corporation may determine with the approval
of the Rights Agent and Co-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
and counsel fees and other disbursements incurred in the execution and
administration of this Agreement and the exercise and performance of its duties
hereunder. The Corporation also agrees to indemnify the Rights Agent, its
directors, officers, employees and agents for, and to hold them harmless
against, any loss, liability, cost, claim, action, damage or expense, incurred
without negligence, bad faith or wilful misconduct on the part of the Rights
Agent or its directors, officers, employees and agents 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.

 

  (b) The Rights Agent shall be protected 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, Rights Certificate, 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 believed by it to be genuine and to be signed, executed and, where
necessary, verified or acknowledged, by the proper person or persons.

 

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  (c) 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. At any time, upon request, the Corporation shall
provide to the Rights Agent an incumbency certificate with respect to the
current directors and officers of the Corporation.

 

4.2 Merger, Amalgamation or Consolidation or Change of Name of Rights Agent

 

  (a) 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 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.

 

  (b) 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.

 

4.3 Duties of Rights Agent

 

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

 

  (a) The Rights Agent may 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 by it in good faith and in accordance with such opinion; the Rights
Agent may also, with the approval of the Corporation (such approval not to be
unreasonably withheld) and at the expense of the Corporation, 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 and
the Rights Agent shall be entitled to rely in good faith on the advice of any
such expert.

 

  (b) 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 proved and
established by a certificate signed by a person believed by the Rights Agent to
be the Chairman of the Board, the President, the Chief Executive Officer, the
Chief Financial Officer, any Vice

 

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President, the Treasurer, any Assistant Treasurer, the Secretary or any
Assistant Secretary 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.

 

  (c) The Rights Agent will be liable hereunder only for its own negligence, bad
faith or wilful misconduct.

 

  (d) 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.

 

  (e) 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 subsection 3.1(b) 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 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 and fully paid and non-assessable.

 

  (f) 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.

 

  (g) The Rights Agent is hereby authorized and directed to accept instructions
with respect to the performance of its duties hereunder from any person believed
by the Rights Agent to be the Chairman of the Board, the President, the Chief
Executive Officer, the Chief Financial Officer, any Vice President, the
Secretary or any Assistant Secretary or the Treasurer or any Assistant Treasurer
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 reliance upon 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.

 

  (h) 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.

 

  (i) 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, and 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.

 

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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
Common Shares by registered or certified mail, and to the holders of the Rights
in accordance with Section 5.9. 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 Common Shares (by personal delivery, or registered or certified mail). 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, then the resigning
Rights Agent, at the expense of the Corporation, or any holder of any Rights may
apply to any court of competent jurisdiction for the appointment of a new Rights
Agent. 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 a trust company 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 shall, upon the receipt of all outstanding fees and
expenses, 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 Common
Shares, and mail a notice thereof in writing to the holders of the Rights.
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.

 

ARTICLE 5

MISCELLANEOUS

 

5.1 Redemption and Termination

 

  (a) The Board of Directors acting in good faith may, with the prior consent of
holders of Common Shares or of the holders of Rights given in accordance with
subsection 5.1(f) or 5.1(g), as the case may be, 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 the provisions of this Section 5.1, elect to redeem all
but not less than all of the then outstanding Rights at a redemption price of
$0.000001 per Right appropriately adjusted in a manner analogous to the
applicable adjustment provided for in Section 2.3 in the event that an event of
the type 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”).

 

  (b) The Board of Directors acting in good faith may, with the prior consent of
the holders of Common Shares given in accordance with subsection 5.1(f),
determine, 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 this Section 5.1,
if such Flip-in Event would occur by reason of an acquisition of Common Shares
otherwise than pursuant to a Take-over Bid made by means of a Take-over Bid
circular to all holders of record of Common Shares and otherwise than in the
circumstances set forth in subsection 5.1(d), to waive the application of
Section 3.1 to such Flip-in Event. In the event that the Board of Directors
proposes such a waiver, the Board of Directors shall extend the Separation Time
to a date subsequent to and not more than ten Business Days following the
meeting of shareholders called to approve such waiver.

 

  (c) The Board of Directors acting in good faith may, prior to the occurrence
of a Flip-in Event as to which the application of Section 3.1 has not been
waived under this clause, determine, upon prior written notice to the Rights
Agent, to waive the application of Section 3.1 to that Flip-in Event provided
that the Flip-in Event would occur by reason of a Take-over Bid made by means of
a

 

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Take-over Bid circular sent to all holders of record of Common Shares; further
provided that if the Board 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 made by means of a Take-over Bid circular to all holders of record
of Common Shares which is made prior to the expiry of any Take-over Bid in
respect of which a waiver is, or is deemed to have been, granted under this
subsection 5.1(c).

 

  (d) The Board of Directors acting in good faith may, in respect of any Flip-in
Event waive the application of Section 3.1 to that Flip-in Event, provided that
both of the following conditions are satisfied:

 

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

 

  (ii) such Acquiring Person has reduced its Beneficial Ownership of Common
Shares such that at the time of waiver pursuant to this subsection 5.1(d) it is
no longer an Acquiring Person.

 

  (e) The Board of Directors shall, without further formality, be deemed to have
elected to redeem the Rights at the Redemption Price on the date that a Person
who has made a Permitted Bid or a Take-over Bid in respect of which the Board of
Directors has waived, or is deemed to have waived, pursuant to subsection
5.1(c), the application of Section 3.1, takes up and pays for the Common Shares
pursuant to the terms and conditions of the Permitted Bid or Take-over Bid, as
the case may be.

 

  (f) If a redemption of Rights pursuant to subsection 5.1(a) or a waiver of a
Flip-in Event pursuant to subsection 5.1(b) is proposed at any time prior to the
Separation Time, such redemption or waiver shall be submitted for approval to
the holders of Common Shares. Such approval shall be deemed to have been given
if the redemption or waiver is approved by the affirmative vote of a majority of
the votes cast by Independent Shareholders represented in person or by proxy at
a meeting of such holders duly held in accordance with applicable laws and the
Corporation’s by-laws.

 

  (g) If a redemption of Rights pursuant to subsection 5.1(a) is proposed at any
time after the Separation Time, such redemption shall be submitted for approval
to the holders of Rights. Such approval shall be deemed to have been given if
the redemption is approved by holders of Rights by a majority of the votes cast
by the holders of Rights represented in person or by proxy at and entitled to
vote at a meeting of such holders. For the purposes hereof, each outstanding
Right (other than Rights which are Beneficially Owned by any Person referred to
in clauses (i) to (v) inclusive of the definition of Independent Shareholders)
shall be entitled to one vote, and the procedures for the calling, holding and
conduct of the meeting shall be those, as nearly as may be, which are provided
in the Corporation’s by-laws and the Business Corporations Act with respect to
meetings of shareholders of the Corporation.

 

  (h) Where a Take-over Bid that is not a Permitted Bid is withdrawn or
otherwise terminated after the Separation Time has occurred and prior to the
occurrence of a Flip-in Event, the Board may elect to redeem all the outstanding
Rights at the Redemption Price. Notwithstanding such redemption, all of the
provisions of this Agreement shall continue to apply as if the Separation Time
had not occurred and it shall be deemed not to have occurred and Rights shall
remain attached to the outstanding Common Shares, subject to and in accordance
with the provisions of this Agreement.

 

  (i) If the Board of Directors elects or is deemed to have elected to redeem
the Rights, and, in circumstances where subsection 5.1(a) is applicable, such
redemption is approved by the holders of Common Shares or the holders of Rights
in accordance with subsection 5.1(f) or (g), as the case may be, the right to
exercise the Rights will thereupon, without further action and without notice,
terminate and the only right thereafter of the holders of Rights will be to
receive the Redemption Price.

 

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  (j) Within 10 Business Days of the Board of Directors electing or having been
deemed to have elected to redeem the Rights or, if subsection 5.1(a) is
applicable within 10 Business Days after the holders of Common Shares or the
holders of Rights have approved a redemption of Rights in accordance with
subsection 5.1(f) or 5.1(g), as the case may be, the Corporation shall give
notice of redemption to the holders of the then outstanding Rights by mailing
such notice to each such holder at its last address as it appears upon the
register of the Rights Agent or, prior to the Separation Time, on the register
of the transfer agent for the Common Shares. Any notice which is mailed in the
manner herein provided will be deemed given, whether or not the holder receives
the notice. Each such notice of redemption will state the method by which the
payment of the Redemption Price will be made. The Corporation may not redeem,
acquire or purchase for value any Rights at any time in any manner other than
that specifically set forth in this Section 5.1 or in connection with the
purchase of Common Shares prior to the Separation Time.

 

  (k) The Corporation shall give prompt written notice to the Rights Agent of
any waiver of the application of Section 3.1 made by the Board of Directors
under this Section 5.1.

 

5.2 Expiration

 

No Person shall have any rights pursuant to this Agreement or in respect of any
Right after the Expiration Time, except the Rights Agent as specified in
subsection 4.1(a) of this Agreement.

 

5.3 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 the Board of Directors to
reflect any adjustment or change in the number of or kind or class of shares
purchasable upon exercise of Rights made in accordance with the provisions of
this Agreement.

 

5.4 Supplements and Amendments

 

  (a) The Corporation may make amendments to this Agreement to correct any
clerical or typographical error or which are required to maintain the validity
of this Agreement as a result of any change in any applicable legislation, rules
or regulations thereunder. The Corporation may, prior to the date of the
shareholders’ meeting referred to in Section 5.18, supplement, amend, vary,
rescind or delete any of the provisions of this Agreement without the approval
of any holders of Rights or Common Shares (whether or not such action would
materially adversely affect the interests of the holders of Rights generally)
where the Board of Directors acting in good faith deems such action necessary or
desirable. Notwithstanding anything in this Section 5.4 to the contrary, no such
supplement or amendment shall be made to the provisions of Article 4 except with
the written concurrence of the Rights Agents to such supplement or amendment.

 

  (b) Subject to subsection 5.4(a), the Corporation may, with the prior consent
of the holders of Common Shares, obtained as set forth below, at any time prior
to the Separation Time, supplement, amend, vary, rescind or delete any of the
provisions of this Agreement and the Rights (whether or not such action would
materially adversely affect the interests of the holders of Rights generally).
Such consent shall be deemed to have been given if the action requiring such
approval is authorized by the affirmative vote of a majority of the votes cast
by Independent Shareholders present or represented at and entitled to be voted
at a meeting of the holders of Common Shares duly called and held in compliance
with applicable laws and the articles and by-laws of the Corporation.

 

- 26 -

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  (c) The Corporation may, with the prior consent of the holders of Rights, at
any time on or after the Separation Time, supplement, amend, vary, rescind or
delete any of the provisions of this Agreement and the Rights (whether or not
such action would materially adversely affect the interests of the holders of
Rights generally), provided that no such amendment, variation or deletion shall
be made to the provisions of Article 4 except with the written concurrence of
the Rights Agent thereto. Such consent shall be deemed to have been given if
such amendment, variation or deletion is authorized by the affirmative votes of
the holders of Rights present or represented at and entitled to be voted at a
meeting of the holders held in accordance with subsection 5.4(d) and
representing 50% plus one of the votes cast in respect thereof.

 

  (d) Any approval of the holders of Rights shall be deemed to have been given
if the action requiring such approval is authorized by the affirmative votes of
the holders of Rights present or represented at and entitled to be voted at a
meeting of the holders of Rights and representing 50% plus one of the votes cast
in respect thereof. For the purposes hereof, each outstanding Right (other than
Rights which are void pursuant to the provisions hereof) shall be entitled to
one vote, and the procedures for the calling, holding and conduct of the meeting
shall be those, as nearly as may be, which are provided in the Corporation’s
by-laws and the Business Corporations Act with respect to meetings of
shareholders of the Corporation.

 

  (e) Any amendments made by the Corporation to this Agreement pursuant to
subsection 5.4(a) which are required to maintain the validity of this Agreement
as a result of any change in any applicable legislation, rules or regulation
thereunder shall:

 

  (i) if made before the Separation Time, be submitted to the shareholders of
the Corporation at the next meeting of shareholders and the shareholders may, by
the majority referred to in subsection 5.4(b), confirm or reject such amendment;

 

  (ii) if made after the Separation Time, be submitted to the holders of Rights
at a meeting to be called for a date not later than immediately following the
next meeting of shareholders of the Corporation and the holders of Rights may,
by resolution passed by the majority referred to in subsection 5.4(d), confirm
or reject such amendment.

 

Any such amendment shall be effective from the date of the resolution of the
Board of Directors adopting such amendment, until it is confirmed or rejected or
until it ceases to be effective (as described in the next sentence) and, where
such amendment is confirmed, it continues in effect in the form so confirmed. If
such amendment is rejected by the shareholders or the holders of Rights or is
not submitted to the shareholders or holders of Rights as required, then such
amendment shall cease to be effective from and after the termination of the
meeting at which it was rejected or to which it should have been but was not
submitted or from and after the date of the meeting of holders of Rights that
should have been but was not held, and no subsequent resolution of the Board of
Directors to amend this Agreement to substantially the same effect shall be
effective until confirmed by the shareholders or holders of Rights as the case
may be.

 

  (f) The Corporation shall be required to provide the Rights Agent with notice
in writing of any such amendment, recission or variation to this Agreement as
referred to in this Section 5.4 within five days of effecting such amendment,
recission or variation.

 

  (g) Any supplement or amendment to this Agreement pursuant to subsection
5.4(b) through 5.4(e) shall be subject to the receipt of any requisite approval
or consent from any governmental or regulatory authority having jurisdiction
over the Corporation, including without limitation any requisite approval of
stock exchanges on which the Common Shares are listed.

 

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5.5 Fractional Rights and Fractional Shares

 

  (a) The Corporation shall not be required to issue fractions of Rights or to
distribute Rights Certificates which evidence fractional Rights. After the
Separation Time there shall be paid to the registered holders of the Rights
Certificates with regard to which fractional Rights would otherwise be issuable,
an amount in cash equal to the same fraction of the Market Price of a whole
Right in lieu of such fractional Rights as of the date such fractional Rights
would otherwise be issuable. The Rights Agent shall have no obligation to make
any payments in lieu of fractional Rights unless the Corporation shall have
provided the Rights Agent with the necessary funds to pay in full all amounts
payable in accordance with subsection 2.2(e).

 

  (b) The Corporation shall not be required to issue fractional Common Shares
upon exercise of the Rights or to distribute certificates which evidence
fractional Common Shares. In lieu of issuing fractional Common Shares, the
Corporation shall pay to the registered holder 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 at the date of such
exercise. 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 subsection 2.2(e).

 

5.6 Rights of Action

 

Subject to the terms of this Agreement, rights of action in respect of this
Agreement, other than rights of action vested solely in the Rights Agent, are
vested in the respective holders of the Rights; and any holder of any Rights,
without the consent of the Rights Agent or of the 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, or otherwise act
in respect of, such holder’s right to exercise such holder’s Rights, or Rights
to which he is entitled, in the manner provided in this Agreement and in such
holder’s Rights Certificate. 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.

 

5.7 Holder of Rights Not Deemed a Shareholder

 

No holder, as such, of any Rights shall be entitled to vote, receive dividends
or be deemed for any purpose the holder of Common Shares or any other securities
which may at any time be issuable on the exercise of Rights, nor shall anything
contained herein or in any Rights Certificate be construed to confer upon the
holder of any Rights, as such, 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 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 (except as provided in Section 5.8 hereof), or to
receive dividends or subscription rights or otherwise, until such Rights, or
Rights to which such holder is entitled, shall have been exercised in accordance
with the provisions hereof.

 

5.8 Notice of Proposed Actions

 

In case the Corporation shall propose after the Separation Time and prior to the
Expiration Time:

 

  (a) to effect or permit (in cases where the Corporation’s permission is
required) any Flip-in Event; or

 

  (b) 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 Flip-in Event, liquidation, dissolution, or
winding up is to take place, and such notice shall be so given at least 10
Business Days prior to the date of taking of such proposed action by the
Corporation.

 

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5.9 Notices

 

Notices or demands to be given or made in connection with this Agreement 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 mail, postage prepaid or by
fax (with, in the case of fax, an original copy of the notice or demand sent by
first class mail, postage prepaid, to the Corporation following the giving of
the notice or demand by fax), addressed (until another address is filed in
writing with the Rights Agent) as follows:

 

Open Text Corporation

185 Columbia Street West

Waterloo, Ontario

N2L 5Z5

Attention:    Chief Executive Officer

Fax:             519-888-6763

 

Notices or demands to be given or made in connection with this Agreement 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 mail, postage prepaid, or by
fax (with, in the case of fax, an original copy of the notice or demand sent by
first class mail, postage prepaid, to the Rights Agent following the giving of
the notice or demand by fax), addressed (until another address is filed in
writing with the Corporation) as follows:

 

Computershare Trust Company of Canada

100 University Avenue, 9th Floor

Toronto, Ontario

M5J 2Y1

Attention:    General Manager, Client Services

Fax:             416-981-9800

 

Notices or demands to be given or made in connection with this Agreement 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, or by fax (with, in the case of fax, an original copy of the notice or
demand sent by first class mail, postage prepaid, to such holder following the
giving of the notice or demand by fax), addressed to such holder at the address
of such holder as it appears upon the register of the Rights Agent or, prior to
the Separation Time, on the register of the Corporation for the Common Shares.

 

Any notice given or made in accordance with this Section 5.9 shall be deemed to
have been given and to have been received on the day of delivery, if so
delivered, on the third Business Day (excluding each day during which there
exists any general interruption of postal service due to strike, lockout or
other cause) following the mailing thereof, if so mailed, and on the day of
faxing (provided such sending is during the normal business hours of the
addressee on a Business Day and if not, on the first Business Day thereafter).
Each of the Corporation and the Rights Agent may from time to time change its
address for notice by notice to the other given in the manner aforesaid.

 

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,
notwithstanding the foregoing provisions of this Section 5.9, give such notice
by means, of publication once in each of two successive weeks in the business
section of The Globe and Mail and, so long as the Corporation has a transfer
agent in the United States, in a daily publication in the United States
designated by the Corporation, or in such other publication or publications as
may be designated by the Corporation and notice so published shall be deemed to
have been given on the date on which the first publication of such notice in any
such publication has taken place.

 

- 29 -

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5.10 Costs of Enforcement

 

The Corporation agrees that if the Corporation fails to fulfil any of its
obligations pursuant to this Agreement, then the Corporation will reimburse the
holder of any Rights for the costs and expenses (including legal fees) incurred
by such holder in actions to enforce his rights pursuant to any Rights or this
Agreement.

 

5.11 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.

 

5.12 Benefits of this Agreement

 

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; but this Agreement shall
be for the sole and exclusive benefit of the Corporation, the Rights Agent and
the holders of the Rights.

 

5.13 Descriptive Headings

 

Descriptive headings appear herein for convenience only and shall not control or
affect the meaning or construction of any of the provisions hereof.

 

5.14 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
applicable to contracts to be made and performed entirely within such Province.

 

5.15 Language

 

Les parties aux présentes ont exigé que la présente convention ainsi que tous
les documents et avis qui s’y rattachent et/ou qui en découleront soient rédigés
en langue anglaise. The parties hereto have required that this Agreement and all
documents and notices related thereto and/or resulting therefrom be drawn up in
the English language.

 

5.16 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 but one and the same instrument.

 

5.17 Severability

 

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

 

5.18 Effective Date

 

This Agreement (subject to receipt of the approval of the Independent
Shareholders as set forth below) is effective from the Effective Date. If this
Agreement is not approved by resolution passed by a majority of the votes cast
by Independent Shareholders who vote at a meeting of shareholders to be held not
later than the date on which the 2004 annual meeting of shareholders of the
Corporation terminates, then this Agreement shall terminate and be void and of
no further force and effect.

 

- 30 -

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5.19 Shareholder Review

 

At or prior to the annual meeting of the shareholders of the Corporation in
2007, provided that a Flip-in Event has not occurred prior to such time, the
Board of Directors shall submit a resolution ratifying the continued existence
of this Agreement to the Independent Shareholders for their consideration and,
if thought advisable, approval. Unless the majority of the votes cast by
Independent Shareholders who vote in respect of such resolution are voted in
favour of the continued existence of this Agreement, the Board of Directors
shall, immediately upon the confirmation by the Chairman of such shareholders’
meeting of the results of the votes on such resolution and without further
formality, be deemed to elect to redeem the Rights at the Redemption Price.

 

5.20 Regulatory Approvals

 

Any obligation of the Corporation or action or event contemplated by this
Agreement shall be subject to the receipt of any requisite approval or consent
from any governmental or regulatory authority. Without limiting the generality
of the foregoing, any issuance or delivery of debt or equity securities (other
than non-convertible debt securities) of the Corporation upon the exercise of
Rights and any amendment or supplement to this Agreement shall be subject to the
prior consent of the Toronto Stock Exchange.

 

5.21 Declaration as to Non-Canadian and Non-U.S. 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 and the United States of America, its territories and
possessions, the Board of Directors acting in good faith may take such actions
as it may deem appropriate to ensure that such compliance is not required,
including without limitation establishing procedures for the issuance to a
Canadian resident Fiduciary of Rights or securities issuable on exercise of
Rights, the holding thereof in trust for the Persons entitled thereto (but
reserving to the Fiduciary or to the Fiduciary and the Corporation, as the
Corporation may determine, absolute discretion with respect thereto) and the
sale thereof and remittance of the proceeds of such sale, if any, to the Persons
entitled thereto. 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 and a province or territory thereof and the United States of America
and any state thereof in which such issue or delivery would be unlawful without
registration of the relevant Persons or securities for such purposes.

 

5.22 Determinations and Actions by the Board of Directors

 

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

 

- 31 -

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the date first above written.

 

OPEN TEXT CORPORATION PER:  

“P. Thomas Jenkins”

--------------------------------------------------------------------------------

Name:   P. Thomas Jenkins Title:   Chief Executive Officer PER:  

“Sheldon Polansky”

--------------------------------------------------------------------------------

Name:   Sheldon Polansky Title:   Vice President, General Counsel and Secretary
COMPUTERSHARE TRUST COMPANY OF CANADA PER:  

“Irene Zelman”

--------------------------------------------------------------------------------

Name:   Irene Zelman Title:   Professional, Client Services PER:  

“Christine Lawton”

--------------------------------------------------------------------------------

Name:   Christine Lawton Title:   Manager, Client Services

 

- 32 -

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EXHIBIT 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. IN CERTAIN CIRCUMSTANCES (SPECIFIED IN
SUBSECTION 3.1(b) OF THE RIGHTS AGREEMENT), RIGHTS BENEFICIALLY OWNED BY AN
ACQUIRING PERSON OR TRANSFEREE OF AN ACQUIRING PERSON OR ITS AFFILIATES OR
ASSOCIATES (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) OR ANY PERSON
ACTING JOINTLY OR IN CONCERT WITH ANY OF THEM MAY BECOME VOID.

 

Rights Certificate

 

This certifies that                                         
                         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 as of November 1, 2004, as such may from time to time be amended,
restated, varied or replaced, (the “Rights Agreement”) between Open Text
Corporation, a corporation organized under the laws of Ontario (the
“Corporation”), and Computershare Trust Company of Canada, a trust company
incorporated under the 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 earlier of (i) the
Termination Time (as such term is defined in the Rights Agreement) and (ii) the
termination of the first annual meeting of the shareholders of the Corporation
after the third anniversary of the Rights Agreement (unless extended in
accordance with the Rights Agreement), one fully paid 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 to the Rights Agent at its principal office
in the City of Toronto or in such other cities as may be designated by the
Corporation from time to time. Until adjustment thereof in certain events as
provided in the Rights Agreement, the Exercise Price shall be: (i) until the
Separation Time, an amount equal to three times the Market Price (as such term
is defined in the Rights Agreement), from time to time, per Common Share; and
(ii) from and after the Separation Time, an amount equal to three times the
Market Price, as at the Separation Time, per Common Share.

 

In certain circumstances described in the Rights Agreement, the number of Common
Shares which each Right entitles the registered holder thereof to purchase shall
be adjusted 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 Certificates. Copies
of the Rights Agreement are on file at the registered 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 equal to the aggregate
number of 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.

 

Subject to the provisions of the Rights Agreement, the Rights evidenced by this
Certificate may be redeemed by the Corporation at a redemption price of
$0.000001 per Right, subject to adjustment in certain events, under certain
circumstances at its option.

--------------------------------------------------------------------------------

No fractional Common Shares will be issued upon the exercise of any Rights
evidenced hereby, but in lieu thereof a cash payment will be made, as provided
in the Rights Agreement.

 

No holder of this Rights Certificate, as such, shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of Common Shares or of
any other securities 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, as such, 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 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 (except as provided in the Rights Agreement), or
to receive dividends 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 countersigned by the Rights Agent.

 

WITNESS the facsimile signature of the proper officers of the Corporation and
its corporate seal.

 

Date:  

 

--------------------------------------------------------------------------------

OPEN TEXT CORPORATION By:  

 

--------------------------------------------------------------------------------

    Authorized Officer Countersigned: COMPUTERSHARE TRUST COMPANY OF CANADA By:
 

 

--------------------------------------------------------------------------------

    Authorized Signature

 

- 2 -

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FORM OF ASSIGNMENT

 

(To be executed by the registered holder if such holder desires to transfer the
Rights represented by this Rights Certificate.)

 

FOR VALUE RECEIVED
______________________________________________________________________________________________________________________

 

hereby sells, assigns and transfers to
__________________________________________________________________________________________________________________

 

(Please print name and address of transferee)

 

the Rights represented by this Rights Certificate, together with all right,
title and interest therein, and hereby irrevocably constitutes and appoints
                                                  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 Canadian Schedule 1 chartered bank, a major
Canadian trust company, a member of a recognized stock exchange or a member of a
recognized Medallion Program (STAMP, MSP or SEMP).

 

_______________________________________________________________________________________________________________________________________________

(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 by any Person acting
jointly or in concert with any of the foregoing (all capitalized terms are used
as defined in the Rights Agreement).

 

Dated:  

 

_______________________________________

 

 

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.)

 

NOTICE

 

In the event the certification set forth above in the Form of Election to
Exercise is not completed upon exercise of the Right(s) evidenced hereby or in
the event that the certification set forth above in the Form of Assignment is
not completed upon the assignment of the Right(s) evidenced hereby, the
Corporation will deem the Beneficial Owner of the Right(s) evidenced by this
Rights Certificate to be an Acquiring Person or an Affiliate or Associate
thereof or a Person acting jointly or in concert with any of them (each as
defined in the Rights Agreement) and, in the case of an assignment, will affix a
legend to that effect on any Rights Certificates issued in exchange for this
Rights Certificate.

--------------------------------------------------------------------------------

(To be attached to each Rights Certificate)

 

FORM OF ELECTION TO EXERCISE

 

TO:      OPEN TEXT CORPORATION

 

The undersigned hereby irrevocably elects to exercise
                                         whole Rights represented by the
attached Rights Certificate to purchase the Common Shares (or other securities
or property) issuable upon the exercise of such Rights and requests that
certificates for such shares (or other, securities or title to such property) be
issued in the name of:

 

 

--------------------------------------------------------------------------------

(Name)

 

--------------------------------------------------------------------------------

(Street)

 

--------------------------------------------------------------------------------

(City and State or Province)

 

--------------------------------------------------------------------------------

(Country, Postal Code or Zip Code)

 

--------------------------------------------------------------------------------

SOCIAL INSURANCE, SOCIAL SECURITY OR OTHER TAXPAYER IDENTIFICATION NUMBER

--------------------------------------------------------------------------------

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)

 

--------------------------------------------------------------------------------

(Street)

 

--------------------------------------------------------------------------------

(City and State or Province)

 

--------------------------------------------------------------------------------

(Country, Postal Code or Zip Code)

 

--------------------------------------------------------------------------------

SOCIAL INSURANCE, SOCIAL SECURITY OR OTHER TAXPAYER IDENTIFICATION 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 Canadian Schedule 1 chartered bank, a major
Canadian trust company, a member of a recognized stock exchange or a member of a
recognized Medallion Program (STAMP, MSP or SEMP).

 

 

_______________________________________________________________________________________________________________________________________________

(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 by any Person acting
jointly or in concert with any of the foregoing (all capitalized terms are used
as defined in the Rights Agreement).

 

Dated:

 

 

--------------------------------------------------------------------------------

  Signature:  

--------------------------------------------------------------------------------

 

NOTICE

 

In the event the certification set forth above in the Form of Election to
Exercise is not completed upon exercise of the Right(s) evidenced hereby or in
the event that the certification set forth above in the Form of Assignment is
not completed upon the assignment of the Right(s) evidenced hereby, the
Corporation will deem the Beneficial Owner of the Right(s) evidenced by this
Rights Certificate to be an Acquiring Person, an Affiliate or Associate thereof
or a Person acting jointly or in concert with any of them (each as defined in
the Rights Agreement) and, in the case of an assignment, will affix a legend to
that effect on any Rights Certificates issued in exchange for this Rights
Certificate.

 

-2-