Document:

exv4w1

 

EXHIBIT 4.1

SHAREOWNER RIGHTS PLAN AGREEMENT

COTT CORPORATION

(the “Company” )

— and —

COMPUTERSHARE INVESTOR SERVICES INC.

(the “Rights Agent”)

Goodmans LLP

April 25, 2007

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 	 	 
	ARTICLE 1 - INTERPRETATION	 	 	1	 
	 
	 	1.1	 	Certain Definitions	 	 	1	 
	 
	 	1.2	 	Currency	 	 	11	 
	 
	 	1.3	 	Headings	 	 	11	 
	 
	 	1.4	 	Acting Jointly and in Concert	 	 	11	 
	 
	 	1.5	 	Number and Gender	 	 	11	 
	 
	 	1.6	 	Statutory References	 	 	11	 
	ARTICLE 2 - THE RIGHTS	 	 	11	 
	 
	 	2.1	 	Issuance and Evidence of Rights	 	 	11	 
	 
	 	2.2	 	Initial Exercise Price; Exercise of Rights; Detachment of Rights	 	 	12	 
	 
	 	2.3	 	Adjustments to Exercise Price; Number of Rights	 	 	15	 
	 
	 	2.4	 	Date on Which Exercise is Effective	 	 	19	 
	 
	 	2.5	 	Execution, Authentication, Delivery and Dating of Rights Certificates	 	 	19	 
	 
	 	2.6	 	Registration, Transfer and Exchange	 	 	19	 
	 
	 	2.7	 	Mutilated, Destroyed, Lost and Stolen Rights Certificates	 	 	20	 
	 
	 	2.8	 	Persons Deemed Owners	 	 	21	 
	 
	 	2.9	 	Delivery and Cancellation of Certificates	 	 	21	 
	 
	 	2.10	 	Agreement of Rights Holders	 	 	21	 
	 
	 	2.11	 	Rights Certificate Holder not
Deemed a Shareowner	 	 	22	 
	ARTICLE 3 - ADJUSTMENTS TO THE RIGHTS	 	 	22	 
	 
	 	3.1	 	Flip-In Event	 	 	22	 
	 
	 	3.2	 	Fiduciary Duties of the Board of Directors	 	 	23	 
	ARTICLE 4 - THE RIGHTS AGENT	 	 	24	 
	 
	 	4.1	 	General	 	 	24	 
	 
	 	4.2	 	Merger or Amalgamation or Change of Name of Rights Agent	 	 	24	 
	 
	 	4.3	 	Duties of Rights Agent	 	 	25	 
	 
	 	4.4	 	Change of Rights Agent	 	 	27	 
	ARTICLE 5 - MISCELLANEOUS	 	 	27	 
	 
	 	5.1	 	Redemption and Waiver	 	 	27	 
	 
	 	5.2	 	Expiration	 	 	29	 
	 
	 	5.3	 	Issuance of New Rights Certificates	 	 	29	 
	 
	 	5.4	 	Supplements and Amendments	 	 	29	 
	 
	 	5.5	 	Fractional Rights and Fractional Common Shares	 	 	29	 
	 
	 	5.6	 	Rights of Action	 	 	30	 
	 
	 	5.7	 	Regulatory Approvals	 	 	30	 
	 
	 	5.8	 	Notice of Proposed Actions	 	 	30	 
	 
	 	5.9	 	Notices	 	 	31	 
	 
	 	5.10	 	Declaration as to Non-Canadian Holders	 	 	31	 
	 
	 	5.11	 	Costs of Enforcement	 	 	32	 
	 
	 	5.12	 	Successors	 	 	32	 
	 
	 	5.13	 	Benefits of this Agreement	 	 	32	 
	 
	 	5.14	 	Governing Law	 	 	32	 
	 
	 	5.15	 	Severability	 	 	32	 
	 
	 	5.16	 	Effective Date and Expiration Time	 	 	33	 
	 
	 	5.17	 	Determination and Actions by the Board of Directors	 	 	33	 
	 
	 	5.18	 	Time of the Essence	 	 	33	 
	 
	 	5.19	 	Execution In Counterparts	 	 	33	 

 

SHAREOWNER RIGHTS PLAN AGREEMENT

          MEMORANDUM OF AGREEMENT, dated as of April 25, 2007, between Cott Corporation, a company
incorporated under the laws of Canada (the “Company”) and Computershare Investor Services Inc., a
corporation incorporated under the laws of Canada (the “Rights Agent”, which term shall include
any successor Rights Agent hereunder);

          WHEREAS
in order to maximize shareowner value, the board of directors of the Company has
determined that it is advisable for the Company to adopt a shareowner rights plan respecting the
Company (the “Rights Plan”);

          AND WHEREAS in order to implement the Rights Plan, the board of directors of the Company has:

	 	(a)	 	authorized effective as at the Effective Time (as hereinafter defined) on the Effective
Date (as hereinafter defined) the issuance of one Right (as hereinafter defined) in respect
of each Common Share (as hereinafter defined) outstanding at the Record Time (as
hereinafter defined), 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 Company pursuant to the terms and subject to the conditions set forth herein;

          AND WHEREAS the Company desires to appoint the Rights Agent to act on behalf of the Company
and the holders of Rights, 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;

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

ARTICLE 1 — INTERPRETATION

1.1 Certain 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; provided, however, that the term “Acquiring Person” shall
not include:

	 	(i)	 	the Company or any Subsidiary of the Company;
	 
	 	(ii)	 	any Person who becomes the Beneficial Owner of 20% or more of the outstanding
Common Shares as a result of one or any combination of (A) a Common Share
Reduction; (B) a Permitted Bid Acquisition; (C) an Exempt

 

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	 	 	 	Acquisition; or (D) a Permissible Acquisition; provided, however, that if a Person becomes the
Beneficial Owner of 20% or more of the outstanding Common Shares by reason of one or any
combination of a Common Share Reduction, a Permitted Bid Acquisition, an Exempt Acquisition or a
Permissible Acquisition and such Person’s Beneficial Ownership of Common Shares thereafter
increases by more than 1% of the number of Common Shares outstanding (other than pursuant to one or
any combination of a Common Share Reduction, a Permitted Bid Acquisition, an Exempt Acquisition or
a Permissible Acquisition), then as of the date such Person becomes the Beneficial Owner of such
additional Common Shares, such Person shall become an “Acquiring Person”; or

	 	(iii)	 	an underwriter or a 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 pursuant to an underwriting agreement with the Company;

	 	(b)	 	“Affiliate” when used to indicate a relationship with a Person, means a Person that
directly, or indirectly through one or more intermediaries, controls or is controlled by,
or is under common control with, such specified Person;
	 
	 	(c)	 	“Agreement” shall mean this shareowner
rights plan agreement dated as of April 25,
2007, between the Company and the Rights Agent, as amended or supplemented from time to
time; “hereof”, “herein”, “hereto” and similar expressions mean and refer to this
Agreement as a whole and not to any particular part of this Agreement;
	 
	 	(d)	 	“Associate” when used to indicate a relationship with a specified Person, means (a)
any corporation of which such Person Beneficially Owns, directly or indirectly, voting
securities carrying more than 10% of the voting rights attached to all voting securities of
such corporation for the time being outstanding, (b) any partner of that Person, (c) any
trust or estate in which such Person has a substantial beneficial interest or as to which
such Person serves as trustee or in a similar capacity, (d) any Person to whom such
specified Person is married, (e) any Person with whom such specified Person is living in a
conjugal relationship outside marriage, or (f) any relative of such specified Person or of
a Person mentioned in Clauses (d) or (e) of this definition if that relative has the same
residence as such specified Person;
	 
	 	(e)	 	A Person shall be deemed the “Beneficial Owner” of, and to have “Beneficial
Ownership” of, and to “Beneficially Own”:

	 	(i)	 	any securities of which such Person or any of such Person’s Affiliates or
Associates is the owner at law or in equity, including, for greater certainty,
pursuant to section 90 of the Securities Act;
	 
	 	(ii)	 	any securities which such Person or any of such Person’s Affiliates or
Associates has the right to acquire (where such right is exercisable within a
period of 60 days, whether or not on condition or the happening of any contingency
or the making of any payment) upon the exercise, conversion or exchange of any
Convertible Securities or pursuant to any agreement, arrangement, pledge or
understanding whether or not in writing (other than (A) the customary

 

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	 	 	 	agreements with and between underwriters and banking or selling group members with respect to a
distribution of securities and (B) pledges of securities in the ordinary course of the pledgee’s
business); or

	 	(iii)	 	any securities which are Beneficially Owned within the meaning of Clauses
1.1(e)(i) and (ii) by any other Person with whom 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:

	 	(iv)	 	because 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 acting jointly or in concert with such Person until the earlier of
such deposited or tendered security being (A) accepted unconditionally for payment
or exchange and (B) taken up and paid for;
	 
	 	(v)	 	if (A) the ordinary business of such Person (the “Investment Manager”)
includes the management of investment funds for others and the Investment Manager
holds such security in the ordinary course of managing such funds for the account
of any other Person, including non-discretionary accounts held on behalf of a
client by a broker or dealer registered under applicable law, or (B) 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 is acting in the ordinary course of such duties
for the estate of such deceased or incompetent Person or for such other accounts
or (C) 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
or is a Plan and holds such security for the purposes of its activity as such, or
(D) such Person is established by statute for purposes that include, and the
ordinary business or activity of such Person (the “Statutory Body”) 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 (E) such Person is a Crown agent or agency; provided, in any of
the above cases, that the Investment Manager, the Trust Company, the Plan Trustee,
the Plan, the Statutory Body or the Crown agent or agency, as the case may be, is
not making and 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 Company or by means of ordinary market transactions (including
prearranged trades entered into in the ordinary course of business of such Person)
executed through the facilities of a stock exchange or organized over-the-counter
market, alone or acting jointly or in concert with any other Person;
	 
	 	(vi)	 	because such Person is a client of the same Investment Manager as another
Person on whose account the Investment Manager holds such security or where such
Person is an account of the same Trust Company as another Person on whose account
the Trust Company holds such security, or because such Person is a pension fund or
plan and has a Plan Trustee who is also a Plan Trustee for

 

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	 	 	 	another pension fund or plan on whose account the Plan Trustee holds such security;
	 
	 	(vii)	 	because such Person is (A) a client of an Investment Manager and such security is
owned at law or in equity by the Investment Manager, or (B) an account of a Trust Company
and such security is owned at law or in equity by the Trust Company, or (C) a pension fund
or plan and such security is owned at law or in equity by the Plan Trustee; or
	 
	 	(viii)	 	because 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 agency.

For purposes of this Agreement, the percentage of outstanding Common Shares Beneficially
Owned by any Person shall 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 of the Company generally
attaching to the Common Shares Beneficially Owned by such Person; and
	 
	 	B = 	 	the number of votes for the election of all directors of the Company 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
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;

	 	(f)	 	“Board of Directors” means the board of directors of the Company or any duly constituted and
empowered committee thereof;
	 
	 	(g)	 	“Business Day” shall mean any day other than a Saturday, Sunday or a day on which banking
institutions in Toronto, Ontario are authorized or obligated by law to close or a day that is
treated as a holiday at the Company’s principal executive office in Toronto, Ontario;
	 
	 	(h)	 	“Canadian Dollar Equivalent” of any amount which is expressed in U.S. 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)	 	“Canadian—U.S. Exchange Rate” means, on any date, the inverse of the U.S. Canadian exchange
rate quoted by any Canadian chartered bank in effect on such date;

 

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	 	(j)	 	“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
office in Toronto of the Rights Agent) is closed to the public;
	 
	 	(k)	 	“Common Shares” means the common shares in the capital of the Company;
	 
	 	(l)	 	“Common Share Acquisition Date” shall mean the date of a public announcement (which, for
purposes of this definition, shall include, without limitation, the filing of a report pursuant to
the Securities Act or any other applicable securities laws) by the Company or an Acquiring Person
of facts indicating that a Person has become an Acquiring Person;
	 
	 	(m)	 	“Common Share Acquisition Time” shall mean the close of business on the Common Share
Acquisition Date;
	 
	 	(n)	 	“Common Share Reduction” means an acquisition or redemption by the Company of Common Shares
which, by reducing the number of Common Shares outstanding, increases the proportionate number of
Common Shares Beneficially Owned by any person to 20% or more of the Common Shares then
outstanding;
	 
	 	(o)	 	“Competing Permitted Bid” shall mean a Take-over Bid that:

	 	(i)	 	is made after a Permitted Bid has been made and prior to the expiry of the Permitted
Bid;
	 
	 	(ii)	 	satisfies all components of the definition of a Permitted Bid other than the
requirements set out in the Clause (ii) of that definition; and
	 
	 	(iii)	 	contains 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 a date that
is no earlier than the later of (A) the date on which Common Shares may be taken up under
the earliest Permitted Bid that preceded the Competing Permitted Bid (determined at the date
of making the Take-over Bid and assuming no amendment or variation to the terms and
satisfaction of all conditions to the completion of the Permitted Bid) and (B) 35 days
following the date of the Take-over Bid;

	 	(p)	 	“controlled” a Person is “controlled” by another Person or two or more Persons acting jointly
or in concert if:

	 	(i)	 	securities entitled to vote in the election of directors 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; and
	 
	 	(ii)	 	the votes carried by such securities are entitled, if exercised, to elect a majority
of the board of directors of such Person;

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

 

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	 	(q)	 	“Convertible Securities” shall mean at any time any right to acquire Common Shares or any
securities 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 carrying
any exercise, conversion or exchange right pursuant to which the holder thereof may ultimately
acquire Common Shares (in each case, provided such right is then exercisable or exercisable within
a period of 60 days from that time and whether or not on condition or the happening of any
contingency) including, at the relevant time of determination, any outstanding options for the
purchase of, or rights to acquire, Common Shares issued or purchased under the Company’s long-term
incentive programs (including, without limitation, the Restated 1986 Common Share Option Plan, as
amended, the Performance Share Unit Plan, the Share Appreciation Rights Plan, the Executive
Investment Share Purchase Plan and the Restated Executive Investment Share Purchase Plan) which are
then exercisable or exercisable within a period of 60 days from that time.
	 
	 	(r)	 	“Co-Rights Agents” shall have the meaning ascribed thereto in Subsection 4.1(a) hereof;
	 
	 	(s)	 	“Dividend Reinvestment Plan” means a dividend reinvestment or other plan of the Company made
available by the Company to holders of its securities where such plan permits the holder to direct
that some or all of:

	 	(i)	 	dividends paid in respect of any Common Shares of the Company;
	 
	 	(ii)	 	proceeds of redemption of Common Shares of the Company;
	 
	 	(iii)	 	interest paid on evidences of indebtedness of the Company; or
	 
	 	(iv)	 	optional cash payments;

be applied to the purchase from the Company of Common Shares;

	 	(t)	 	“Effective Date” means April 25, 2007;
	 
	 	(u)	 	“Effective Time” shall mean 8:01 p.m. (Toronto time) on the Effective Date;
	 
	 	(v)	 	“Election to Exercise” shall have the meaning ascribed thereto in Subsection 2.2(d) hereof;
	 
	 	(w)	 	“Exempt Acquisitions” shall mean Common Share acquisitions in respect of which the Board of
Directors has waived the application of Section 3.1 hereof pursuant to the provisions of
Subsections 5.1(b), 5.1(c) or 5.1(d);
	 
	 	(x)	 	“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 which, until adjustment thereof in accordance
with the terms hereof, shall be $100.00;
	 
	 	(y)	 	“Expansion Factor” shall have the meaning ascribed thereto in Subsection 2.3(a) hereof;

 

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	 	(z)	 	“Expiration Time” shall have the meaning ascribed thereto in Section 5.16;
	 
	 	(aa)	 	“Flip-In Event” shall mean a transaction in or pursuant to which any Person becomes
an Acquiring Person;
	 
	 	(bb)	 	“holder” shall have the meaning ascribed thereto in Section 2.8 hereof;
	 
	 	(cc)	 	“Independent Shareowners” means holders of outstanding Common Shares, other than
Common Shares Beneficially Owned by (i) any Acquiring Person; (ii) any Offeror other than a
Person who at the relevant time is deemed not to Beneficially Own such Common Shares by
reason of Clause 1.1(e)(v) hereof; (iii) any Person acting jointly or in concert with such
Acquiring Person or Offeror referred to in (ii); (iv) any Associate or Affiliate of such
Acquiring Person or Offeror referred to in (ii); and (v) any employee benefit plan,
deferred profit sharing plan and any similar plan or trust for the benefit of employees of
the Company unless the beneficiaries of the plan or trust direct the manner in which the
Common Shares are to be voted or withheld from voting or direct whether the Common Shares
are to be tendered to a Take-over Bid;
	 
	 	(dd)	 	“Market Price” of any securities on any date of determination shall mean the average
daily closing prices per Common Share 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; the closing price 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 security as reported by the
principal Canadian stock exchange on which such securities are listed or admitted
to trading; or
	 
	 	(ii)	 	if for any reason none of such prices is available on such day or the
securities are not listed or admitted to trading on a Canadian stock exchange, the
last sale price or, if such price is not available, the average of the closing bid
and asked prices, for such security as reported by such other securities exchange
on which such securities are listed or admitted to trading, or
	 
	 	(iii)	 	if for any reason none of such prices is available on such day or the
securities are not listed or admitted to trading on a Canadian stock exchange or
other securities exchange, the last sale price, or if no sale takes place on such
day, the average of the high bid and low asked prices for each such security in the
over-the-counter market, as quoted by any reporting system then in use, or
	 
	 	(iv)	 	if on any such date none of such prices is available or the securities are not
listed or admitted to trading on a Canadian stock exchange or any other securities
exchange or not quoted by any such reporting system, 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 none of such prices is available, the
closing price of such securities on such date means the fair value per Common Share
of such securities on such date as determined in good faith by a nationally or
internationally

 

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recognized investment dealer or investment banker with respect to the fair value 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 Days in United States dollars, such
amount shall be translated into Canadian dollars at the Canadian Dollar Equivalent thereof;

	 	(ee)	 	“Nominee” shall have the meaning ascribed thereto in Subsection 2.2(c) hereof;
	 
	 	(ff)	 	“Offer to Acquire” shall include:

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

	 	(gg)	 	“Offeror” shall mean a Person who has announced a current intention to make or who is making
or who has made a Take-over Bid;
	 
	 	(hh)	 	“Offeror’s Securities” shall mean Common Shares Beneficially Owned by an Offeror on the date
of the Offer to Acquire;
	 
	 	(ii)	 	“Permissible Acquisition” shall mean an acquisition by a Person of Common Shares and/or
Convertible Securities pursuant to:

	 	(i)	 	a Dividend Reinvestment Plan;
	 
	 	(ii)	 	a stock dividend distribution, stock split or other event in respect of securities of
the Company of one or more particular class, classes or series pursuant to which such
Person becomes the Beneficial Owner of Common Shares on the same pro rata basis as all
other holders of securities of the particular class, classes or series;
	 
	 	(iii)	 	the acquisition or the exercise by the Person of only those rights to purchase Common
Shares or Convertible Securities issued to all or substantially all the holders of Common
Shares pursuant to a rights offering or pursuant to a prospectus;
	 
	 	(iv)	 	a distribution by the Corporation of Common Shares or Convertible Securities made
pursuant to a prospectus or by way of a private placement or pursuant to a stand-by
commitment in connection with an issuance of rights by the Corporation, provided such Person
does not thereby acquire a greater percentage of Common Shares or Convertible Securities so
offered than the Person’s percentage of Common Shares Beneficially Owned immediately prior
to such acquisition; or

 

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	 	(v)	 	the exercise of any Convertible Securities which were acquired pursuant to any of Clauses (i)
through (iv) above.

	 	(jj)	 	“Permitted Bid” shall mean a Take-over Bid made by way of a take-over bid circular
which also complies with the following additional provisions:

	 	(i)	 	the Take-over Bid is for all Common Shares and is made to all holders of
Common Shares on the same terms and for the same consideration;
	 
	 	(ii)	 	the Take-over Bid contains, and the take up and payment for securities
tendered or deposited is subject to, an irrevocable and unqualified provision (the
“Take-Up 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 a date which is not less
than 60 days following the date of the Take-over Bid;
	 
	 	(iii)	 	the Take-over Bid contains an irrevocable and unqualified provision that all
Common Shares may be deposited pursuant to the Take-over Bid at any time prior to
the close of business on a date which is not less than 60 days following the date
of the Take-over Bid 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)	 	unless the Take-over Bid is withdrawn, the Take-over Bid contains an
irrevocable and unqualified condition that no Common Shares will be taken up or
paid for pursuant to the Take-over Bid unless not less than 50% of the then
outstanding Common Shares held by Independent Shareowners have been deposited or
tendered to the Take-over Bid and not withdrawn at the close of business on a date
which is not less than 60 days following the date of the Takeover Bid; and
	 
	 	(v)	 	the Take-over Bid contains an irrevocable and unqualified provision that,
should the condition referred to in Clause (iv) hereof be met, the Offeror shall
make a public announcement of such fact and the Take-over Bid will be extended on
the same terms for a period of not less than 10 Business Days from the date of
such public announcement;

	 	(kk)	 	“Permitted Bid Acquisition” shall mean an acquisition of Common Shares made pursuant
to a Permitted Bid or a Competing Permitted Bid;
	 
	 	(ll)	 	“Person” shall mean an individual, body corporate, company, partnership, syndicate or
other form of unincorporated association, trust, government and its agencies or
instrumentalities, entity or group whether or not having legal personality and any of the
foregoing acting in any derivative, representative or fiduciary capacity;
	 
	 	(mm)	 	“Record Date” shall mean the Effective Date;
	 
	 	(nn)	 	“Record Time” shall mean the Effective Time;
	 
	 	(oo)	 	“Redemption Price” shall have the meaning ascribed thereto in Subsection 5.1(a)
hereof;

 

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	 	(pp)	 	“Regular Cash Dividend” shall mean cash dividends paid at regular intervals in any fiscal
year of the Company to the extent that such cash dividends do not exceed, in the aggregate, one
hundred percent (100%) of the aggregate consolidated net income of the Company, before
extraordinary items, for its immediately preceding fiscal year.

	 
	 	(qq)	 	“Right” shall mean a right to purchase one Common Share, subject to adjustment as herein set
forth, upon the terms and subject to the conditions set forth in this Agreement;
	 
	 	(rr)	 	“Rights Certificate” shall have the meaning ascribed thereto and be substantially in the form
provided in Subsection 2.2(c) hereof;
	 
	 	(ss)	 	“Rights Register” shall have the meaning ascribed thereto in Clause 2.6(a) hereof;
	 
	 	(tt)	 	“Rights Registrar” shall have the meaning ascribed thereto in Clause 2.6(a) hereof;
	 
	 	(uu)	 	“Securities Act” shall mean the Securities Act (Ontario), as amended, and the rules and
regulations thereunder and any comparable or successor laws or regulations thereto;
	 
	 	(vv)	 	“Separation Time” shall mean:

	 	(i)	 	the close of business on the tenth Trading Day after the earlier of:

	 	(A)	 	the Common Share Acquisition Date; and
	 
	 	(B)	 	(1) the date of the commencement of, or first public announcement of the intent
of any Person (other than the Company or any Subsidiary of the Company) to
commence, a Take-over Bid (other than a Permitted Bid or a Competing Permitted
Bid); provided that, in respect of a Take-Over Bid (other than a Permitted Bid or
Competing Permitted Bid) that is commenced, or the intent of which is first
publicly announced, prior to the Effective Time, the Separation Time shall be the
close of business on the third Trading Day after the Effective Date, and (2) two
days following the date upon which a Permitted Bid or Competing Permitted Bid
ceases to be a Permitted Bid or Competing Permitted Bid, as the case may be;
provided, however, that, if any Take-over Bid referred to in this Clause (B) of
this definition expires, is cancelled, terminated or otherwise withdrawn prior to
the Separation Time, such Take-over Bid shall be deemed, for the purposes of this
definition, never to have been made; and

	 	(ii)	 	such later date as may be determined by the Board of Directors or any committee of the
Board of Directors so designated by the Board of Directors;

	 	(ww)	 	“Subsidiary” of a Person means any company or other entity controlled by such Person;
	 
	 	(xx)	 	“Take-over Bid” means an Offer to Acquire Common Shares or Convertible Securities, where the
Common Shares subject to the Offer to Acquire, together with the Common Shares underlying the
Convertible Securities subject to the Offer to Acquire, together with the Offeror’s Securities,
constitute in the aggregate 20% or more of the outstanding Common Shares at the date of the Offer
to Acquire;

 

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	 	(yy)	 	“Termination Time” shall mean the time at which the right to exercise Rights shall
terminate pursuant to Section 5.1(h); and
	 
	 	(zz)	 	“Trading Day” , when used with respect to any securities, shall mean a day on which
the principal Canadian securities exchange on which such securities are listed or admitted
to trading is open for the transaction of business or, if the securities are not listed or
admitted to trading on any Canadian securities exchange, a Business Day.

1.2 Currency

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

1.3 Headings

          The division of this Agreement into articles, sections, clauses and subclauses and the
insertion of headings, subheadings and a table of contents are for convenience of reference only
and shall not affect the construction or interpretation of this Agreement.

1.4 Acting Jointly and in Concert

          For the purposes of this Agreement, a Person is acting jointly or in concert with every Person
who is a party to an agreement, commitment or understanding, whether formal or informal, with the
first Person to acquire or offer to acquire Common Shares or Convertible Securities (other than
customary agreements with and between underwriters and banking group or selling group members with
respect to a distribution of securities or pursuant to a pledge of securities in the ordinary
course of the pledgee’ s business).

1.5 Number and Gender.

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

1.6 Statutory References.

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

ARTICLE 2 — THE RIGHTS

2.1 Issuance and Evidence of Rights

          One Right in respect of each Common Share outstanding at the Record Time and each Common Share
which may be issued after the Record Time and prior to the earlier of the Separation Time and the
Expiration Time shall be issued (such issuance to be effective as
soon as practicable after the filing of applicable regulatory
notices) in accordance with the terms hereof.
Notwithstanding the foregoing, one Right in respect of each Common Share issued after the
Record Time upon the exercise of rights pursuant to Convertible Securities outstanding at the
Common Share Acquisition Date may be issued after the Separation Time but prior to the Expiration
Time.

 

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          Certificates representing Common Shares 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 shall have impressed on, printed on, written on or otherwise affixed to
them the following legend:

“Until the Separation Time (defined in the Rights Agreement referred to below),
this certificate also evidences rights of the holder described in a
Shareowner
Rights Plan Agreement dated as of April 25, 2007 (the “Rights Agreement” ), as the
same may be amended or supplemented from time to time, between Cott Corporation
(the “Company” ) and Computershare Investor Services Inc., the terms of which are
hereby incorporated herein by reference and a copy of which is on file at the
principal executive offices of the Company. In certain circumstances set out in
the Rights Agreement, the rights may be redeemed, may expire, may become void or
may become exercisable and shall thereafter be evidenced by separate certificates
and no longer evidenced by this certificate. The Company 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 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 and prior to the Expiration Time, to purchase one Common Share
for the Exercise Price.
	 
	 	(b)	 	Until the Separation Time,

	 	(i)	 	the Rights shall not be exercisable and no Right may be exercised; and
	 
	 	(ii)	 	each Right will be evidenced by the certificate for the associated Common
Share registered in the name of the holder thereof and will be transferable only
together with, and will be transferred by a transfer of, such associated Common
Share.

	 	(c)	 	After the Separation Time and prior to the Expiration Time,

	 	(i)	 	the Rights shall be exercisable, and
	 
	 	(ii)	 	the registration and transfer of the Rights shall be separate from and
independent of Common Shares.

Promptly following the Separation Time, the Company will prepare and the Rights
Agent will mail to each holder of record of Common Shares as of the Separation Time
or who subsequently becomes a holder of record of Common Shares upon the exercise
of rights attaching to Convertible Securities outstanding
at the Common Share Acquisition Date (other than an Acquiring Person and any holder
of record of Rights which are Beneficially Owned by such Acquiring Person (a “Nominee” )), at such holder’s address

 

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as shown by the records of the Company (the Company hereby agreeing to furnish copies of
such records to the Rights Agent for this purpose),

	 	(A)	 	a Rights Certificate in substantially the form of Exhibit A hereto
appropriately completed, representing the number of Rights held by such holder at
the Separation Time and having such marks of identification or designation and such
legends, summaries or endorsements printed thereon as the Company may deem
appropriate and as are not inconsistent with the provisions of this Agreement, or
as may be required to comply with any law, rule, regulation or judicial or
administrative order or with any rule or regulation made pursuant thereto or with
any rule or regulation of any self-regulatory organization, stock exchange or
quotation system on which the Rights may from time to time be listed or traded, or
to conform to usage; and
	 
	 	(B)	 	a statement describing the Rights.

For greater certainty, a Nominee shall be sent the materials provided for in (A) and (B) in
respect of all Common Shares held of record by it which are not Beneficially Owned by an
Acquiring Person.

In order for the Company to determine whether any Person is holding Common Shares which are
Beneficially Owned by another Person, the Company may require such first mentioned Person
to furnish such information and documentation as the Company deems necessary.

	 	(d)	 	Rights may be exercised in whole or in part on any Business Day after the Separation Time and
prior to the Expiration Time by submitting to the Rights Agent, at its principal office in Toronto
or any other office of the Rights Agent or Co-Rights Agent in the cities designated from time to
time for that purpose by the Company with the approval of the Rights Agent:

	 	(i)	 	the Rights Certificate evidencing such Rights;
	 
	 	(ii)	 	an election to exercise such Rights (an “Election to Exercise” ) substantially in the
form attached to the Rights Certificate duly completed and executed by the holder or his
executors or administrators or other personal representatives or his or their legal
attorney duly appointed by an instrument in writing in form and executed in a manner
satisfactory to the Rights Agent; and
	 
	 	(iii)	 	payment by certified cheque, banker’s draft or money order payable to the order of
the Company, 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 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, which is accompanied by (i) a completed Election to
Exercise executed in accordance with Clause 2.2(d)(ii) that does not indicate that such Right is
null and void as provided by Subsection 3.1(b) and (ii) payment as set forth in

 

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	 	 	 	Clause 2.2(d)(iii), the Rights Agent (unless otherwise instructed by the Company in the
event that the Company is of the opinion that the Rights cannot be exercised in accordance
with this Agreement) will thereupon promptly:

	 	(i)	 	requisition from the transfer agent for the Common Shares certificates representing
the number of Common Shares to be purchased (the Company hereby irrevocably authorizing
its transfer agent to comply with all such requisitions);
	 
	 	(ii)	 	when appropriate, requisition from the Company the amount of cash to be paid in lieu
of issuing fractional Common Shares;
	 
	 	(iii)	 	after receipt of such 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;
	 
	 	(iv)	 	when appropriate, after receipt, deliver such payment referred to in Clause 2.2(e)(ii)
to or to the order of the registered holder of such Rights Certificate; and
	 
	 	(v)	 	tender to the Company 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
(subject to the provisions of Subsection 5.5(a)) will be issued by the Rights Agent to such holder
or to such holder’s duly authorized assigns.
	 
	 	(g)	 	The Company covenants and agrees that it will:

	 	(i)	 	take all such action as may be necessary and within its power to ensure that all
Common Shares delivered upon the exercise of Rights shall, at the time of delivery of the
certificates for such Common Shares (subject to payment of the Exercise Price), be duly
and validly authorized and issued as fully paid and non-assessable,
	 
	 	(ii)	 	take all such action as may be necessary and within its power to ensure compliance
with the provisions of Section 3.1 including, without limitation, all such action necessary
to comply with the requirements of the Canada Business Corporations Act, the Securities Act
and the regulations thereunder as same may be amended, re-enacted or replaced from time to
time and any other applicable law, rule or regulation, applicable to the issuance and
delivery of the Rights Certificates and the issuance of any securities upon exercise of
Rights,
	 
	 	(iii)	 	use reasonable efforts to cause all securities issued upon the exercise of Rights to
be listed upon issuance on the stock exchanges on which the Common Shares were traded
immediately prior to the Common Share Acquisition Date,
	 
	 	(iv)	 	pay when due and payable, if applicable, any and all Canadian and, if applicable,
United States, federal, provincial, municipal and state transfer taxes and charges (not
including any income or capital taxes of the holder or exercising holder or

 

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	 	 	 	any liability of the Company to withhold tax) which may be payable in
respect of the original issuance or delivery of the Rights Certificates or
certificates for Common Shares to be issued upon exercise of any Rights,
provided that the Company 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 securities in a name other than that of the holder of the
Rights being transferred or exercised,

	 	(v)	 	cause to be reserved and kept available out of its authorized 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
	 
	 	(vi)	 	after the Separation Time, except as permitted by Section 5.1, not take (or
permit any Subsidiary to take) any action if at the time such action is taken it is
reasonably foreseeable that such action will diminish substantially or otherwise
eliminate the benefits intended to be afforded by the Rights.

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 Company shall at any time after the date of this Agreement and prior
to the Expiration Time,

	 	(i)	 	declare or pay a dividend on its Common Shares payable in Common Shares (or
other securities exchangeable for or convertible into or giving a right to acquire
Common Shares or other securities of the Company) other than pursuant to any
Dividend Reinvestment Plan;
	 
	 	(ii)	 	subdivide or change the outstanding Common Shares into a greater number of
Common Shares;
	 
	 	(iii)	 	combine or change the outstanding Common Shares into a smaller number of
Common Shares; or
	 
	 	(iv)	 	issue any Common Shares (or other securities exchangeable for or convertible
into or giving a right to acquire Common Shares or other securities of the Company)
in respect of, in lieu of or in exchange for existing Common Shares except as
otherwise provided in this Section 2.3,

the Exercise Price 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 as of the payment or
effective date in respect of such event in the manner set forth below.

If the Exercise Price and number of Rights outstanding are to be adjusted:

 

-16-

	 	(v)	 	the Exercise Price in effect after such adjustment will be equal to the Exercise Price
in effect immediately prior to such adjustment divided by the number of Common Shares (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
	 
	 	(vi)	 	each Right held prior to such adjustment will become that number of Rights equal to the
Expansion Factor,

and the adjusted number of Rights will be deemed to be distributed among the Common Shares
with respect to which the original Rights were associated (if they remain outstanding) and
the Common Shares issued in respect of such dividend, subdivision, change, combination or
issuance, so that each such Common Share will have exactly one Right associated with it in
effect following the payment or effective date of the event referred to in Clause
2.3(a)(i), (ii), (iii) or (iv), as the case may be.

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 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 Company shall
issue any securities of the Company other than Common Shares in a transaction of a type
described in Clauses 2.3(a)(i) or (iv), such securities shall be treated herein as nearly
equivalent to Common Shares as may be practicable and appropriate under the circumstances
and the Company and the Rights Agent agree to amend this Agreement in order to give effect
thereto.

	 	(b)	 	In the event the Company shall at any time after the Record Time and prior to the Separation
Time fix a record date for the issuance of rights, options or warrants to all or substantially all
holders of Common Shares entitling them (for a period expiring within 45 calendar days after such
record date) to subscribe for or purchase Common Shares (or securities convertible into or
exchangeable for or carrying a right to purchase 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 Common Share) less than the
Market Price per Common Share on such record date, the Exercise Price to be in effect after such
record date shall be determined by multiplying the Exercise Price in effect immediately prior to
such record date by a fraction, the numerator of which shall be the number of Common Shares
outstanding on such record date, plus the number of Common Shares that the aggregate offering price
of the total number of Common Shares 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 per Common Share, and the denominator of
which shall be the number of Common Shares outstanding on such record date, plus the number of
additional Common Shares 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).

 

-17-

	 	 	 	In case such subscription price may be paid by delivery of consideration, part or
all of which may be in a form other than cash, the value of such consideration
shall be as determined in good faith by the Board of Directors, whose determination
shall be described in a 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, and in the event that such
rights or warrants are not so issued or if issued, are not exercised prior to the
expiration thereof, the Exercise Price shall be readjusted to be the Exercise Price
which would then be in effect if such record date had not been fixed, or to the
Exercise Price which would be in effect based on the number of Common Shares (or
securities convertible into or exchangeable or exercisable for Common Shares)
actually issued upon the exercise of such rights, options or warrants, as the case
may be.
	 
	 	 	 	For purposes of this Agreement, the granting of the right to purchase Common Shares
(whether from treasury or otherwise) pursuant to any Dividend Reinvestment Plan or
share compensation arrangement with employees (so long as such right to purchase is
in no case evidenced by the delivery of rights or warrants) shall be deemed not to
constitute an issue of rights, options or warrants by the Company; provided,
however, that, in all such cases, the right to purchase Common Shares is at a price
per Common Share of not less than 95% of the current Market Price per Common Share
(determined as provided in such plans) of the Common Shares.

	 	(c)	 	In the event the Company shall at any time after the Record Time and prior to the
Separation Time fix a record date for a dividend to all holders of Common Shares of
evidences of indebtedness, assets (other than cash and other than a Regular Cash Dividend
or a dividend paid in Common Shares on the liquidation of the Company), rights, options or
warrants (excluding those referred to in Subsection 2.3(b) hereof), the Exercise Price to
be in effect after such record date shall be determined by multiplying the Exercise Price
in effect immediately prior to such record date by a fraction, the numerator of which shall
be the Market Price per Common Share on such record date, less the fair market value (as
determined in good faith by the Board of Directors, whose determination shall be described
in a statement filed with the Rights Agent and shall be binding on the Rights Agent and the
holders of Rights), on a per Common Share basis, of the portion of the assets or evidences
of indebtedness so to be distributed and the denominator of which shall be such Market
Price per Common Share. Such adjustments shall be made successively whenever such a record
date is fixed, and in the event that such dividend is not so made, the Exercise Price shall
be adjusted to be the Exercise Price which would have been in effect if such record date
had not been fixed.
	 
	 	(d)	 	Notwithstanding anything herein to the contrary, no adjustment in the Exercise Price
shall be required unless such adjustment would require an increase or decrease of at least
one percent in the Exercise Price; provided, however, that any adjustments which by reason
of this Subsection 2.3(d) are not required to be made shall be carried forward and taken
into account in any subsequent adjustment. All calculations under this Section 2.3 shall
be made to the nearest cent or to the nearest ten-thousandth of a Common Share.
Notwithstanding the first sentence of this Subsection 2.3(d)), any adjustment required by
this Section 2.3 shall be made no later than the Expiration Date.
	 
	 	(e)	 	In the event the Company shall at any time after the Record Time and prior to the
Separation Time issue any securities of the Company (other than the Common Shares),

 

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	 	 	 	or rights, options or warrants to subscribe for or purchase any such securities of the
Company, or securities convertible into or exchangeable for any such securities of the
Company, in a transaction referred to in Clause 2.3(a)(i) or (iv) above, if the Board of
Directors acting in good faith determines that the adjustments contemplated by Subsections
2.3(a), (b) and (c) above in connection with such transaction will not appropriately
protect the interests of the holders of Rights, the Board of Directors may determine what
other adjustments to the Exercise Price, number of Rights and/or securities purchaseable
upon exercise of Rights would be appropriate and, notwithstanding Subsections 2.3(a), (b)
and (c) above, such adjustment, rather than the adjustments contemplated by Subsections
2.3(a), (b) and (c) above, shall be made. Subject to Subsection 5.4 and subject to the
approval of each stock exchange on which the Common Shares are listed for trading at the
relevant time, the Company shall amend this Agreement as appropriate to provide for such
adjustments.

	 	(f)	 	Each Right originally issued by the Company subsequent to any adjustment made to the Exercise
Price hereunder shall evidence the right to purchase, at the adjusted Exercise Price, the number of
Common Shares purchasable from time to time hereunder upon exercise of a Right immediately prior to
such issue, all subject to further adjustment as provided herein.
	 
	 	(g)	 	Irrespective of any adjustment or change in the Exercise Price or the number of Common Shares
issuable upon the exercise of the Rights, the Rights Certificates theretofore and thereafter issued
may continue to express the Exercise Price per Common Share and the number of Common Shares which
were expressed in the initial Rights Certificates issued hereunder.
	 
	 	(h)	 	In any case in which this Section 2.3 shall require that any adjustment in the Exercise Price
be made effective as of a record date for a specified event, the Company may elect to defer until
the occurrence of such event the issuance to the holder of any Right exercised after such record
date the number of Common Shares and other securities of the Company, if any, issuable upon such
exercise over and above the number of Common Shares and other securities of the Company, if any,
issuable upon such exercise on the basis of the Exercise Price in effect prior to such adjustment;
provided, however, that the Company shall deliver to such holder an appropriate instrument
evidencing such holder’s right to receive such additional Common Shares (fractional or otherwise)
or securities upon the occurrence of the event requiring such adjustment.
	 
	 	(i)	 	Notwithstanding anything in this Section 2.3 to the contrary, the Company shall be entitled to
make such reductions in the Exercise Price, in addition to those adjustments expressly required by
this Section 2.3, as and to the extent that in their good faith judgment the Board of Directors
shall determine to be advisable in order that any:

	 	(i)	 	consolidation or subdivision of the Common Shares,
	 
	 	(ii)	 	issuance (wholly or in part for cash) of Common Shares or securities that by their
terms are convertible into or exchangeable for Common Shares,
	 
	 	(iii)	 	Common Share distributions, or
	 
	 	(iv)	 	issuance of rights, options or warrants referred to in this Section 2.3,

 

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	 	 	 	hereafter made by the Company to holders of its Common Shares, shall not be taxable
to such shareholders.

2.4 Date on Which Exercise is Effective

          Each Person in whose name any certificate for Common Shares or other securities, if
applicable, is issued upon the exercise of Rights shall for all purposes be deemed to have become
the holder of record of the Common Shares or other securities, if applicable, represented thereby
on, and such certificate shall be dated, the date upon which the Rights Certificate evidencing such
Rights was duly surrendered in accordance with Subsection 2.2(d) (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 Company are closed, such Person shall be deemed to have become the
holder of record of such Common Shares on, and such certificate shall be dated, the next succeeding
Business Day on which the Common Share transfer books of the Company are open.

2.5 Execution, Authentication, Delivery and Dating of Rights Certificates

	 	(a)	 	The Rights Certificates shall be executed on behalf of the Company by any two officers
of the Company. 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 Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to be officers of the
Company either before or after the countersignature and delivery of such Rights
Certificates.
	 
	 	(b)	 	Promptly after the Company learns of the Separation Time, the Company will notify the
Rights Agent of such Separation Time and will deliver Rights Certificates executed by the
Company to the Rights Agent for countersignature, and the Rights Agent shall countersign
(manually or by facsimile signature in a manner satisfactory to the Company) and send such
Rights Certificates to the holders of the Rights pursuant to Subsection 2.2(c). No Rights
Certificate shall be valid for any purpose until countersigned by the Rights Agent as
aforesaid.
	 
	 	(c)	 	Each Rights Certificate shall be dated the date of countersignature thereof.

2.6 Registration, Transfer and Exchange

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

After the Separation Time and prior to the Expiration Time, upon surrender for
registration of transfer or exchange of any Rights Certificate, and subject to the

 

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provisions of Subsection 2.6(c), the Company will execute, and the Rights Agent
will countersign, register and deliver, in the name of the holder or the designated
transferee or transferees, as required pursuant to the holder’s instructions, one
or more new Rights Certificates evidencing the same aggregate number of Rights as
did the Rights Certificates so surrendered.

	 	(b)	 	All Rights issued upon any registration of transfer or exchange of Rights Certificates
shall be the valid obligations of the Company, and such Rights shall be entitled to the
same benefits under this Agreement as the Rights surrendered upon such registration of
transfer or exchange.
	 
	 	(c)	 	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 Company 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 Company 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 reasonable fees and expenses of the
Rights Agent) connected therewith.

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 Company 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.
	 
	 	(b)	 	If there shall be delivered to the Company and the Rights Agent prior to the Expiration
Time,

	 	(i)	 	evidence to their reasonable satisfaction of the destruction, loss or theft of
any Rights Certificate; and
	 
	 	(ii)	 	such surety bond as may be reasonably required by them to save each of them
and any of their agents harmless, then, in the absence of notice to the Company or
the Rights Agent that such Rights Certificate has been acquired by a bona fide
purchaser, the Company shall execute and, upon the Company’s 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 Company 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 reasonable 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 the contractual obligation of
the Company, whether or not the destroyed, lost or stolen Rights Certificate shall be at
any

 

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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

          Prior to due presentation of a Rights Certificate (or, prior to the Separation Time, the
associated Common Share certificate) for registration of transfer, the Company, the Rights Agent
and any agent of the Company 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. 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 Share).

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 Company may at
any time deliver to the Rights Agent for cancellation any Rights Certificates previously
countersigned and delivered hereunder which the Company may have acquired in any manner whatsoever,
and all Rights Certificates so delivered shall be promptly cancelled by the Rights Agent. No
Rights Certificate shall be countersigned in lieu of or in exchange for any Rights Certificates
cancelled as provided in this Section 2.9, except as expressly permitted by this Agreement. The
Rights Agent shall, subject to applicable laws, destroy all cancelled Rights Certificates and
deliver a certificate of destruction to the Company.

2.10 Agreement of Rights Holders

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

	 	(a)	 	to 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)	 	that 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 certificate
representing such Right;
	 
	 	(c)	 	that after the Separation Time, the Rights Certificates will be transferable only on
the Rights Register as provided herein;
	 
	 	(d)	 	that prior to due presentment of a Rights Certificate (or, prior to the Separation
Time, the associated Common Share certificate) for registration of transfer, the Company,
the Rights Agent and any agent of the Company 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 Company or the Rights Agent) for all purposes whatsoever, and neither the Company
nor the Rights Agent shall be affected by any notice, to the contrary;

 

-22-

	 	(e)	 	that such holder of Rights has waived his right to receive any fractional Common Shares
or other securities upon exercise of a Right (except as provided herein and as may be
permitted by the constating documents of the Company);
	 
	 	(f)	 	that, subject to the provisions of Section 5.4, without the approval of any holder of
Rights or Common Shares 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)	 	that notwithstanding anything in this Agreement to the contrary, neither the Company
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.

2.11
Rights Certificate Holder not Deemed a Shareowner

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

ARTICLE 3 — ADJUSTMENTS TO THE RIGHTS

3.1 Flip-In Event

	 	(a)	 	Subject to Subsection 3.1(b) and Section 5.1, in the event that prior to the Expiration
Time (including, for greater certainty, any time after the Effective
Time) a Flip-In Event shall occur, each Right shall constitute, effective on the close of
business on the tenth Trading Day after the Common Share Acquisition Date (or such longer
period as may be required to satisfy the requirements of the Securities Act and any
comparable legislation of any other applicable jurisdiction), the right to purchase from
the Company, upon payment of the Exercise Price and otherwise exercising such Right in
accordance with the terms hereof, that number of Common Shares having an aggregate Market
Price on the date 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 the occurrence of such Flip-In Event, an event of a type analogous to
any of the events described in Section 2.3 shall have occurred).

 

-23-

	 	(b)	 	Notwithstanding the foregoing or any other provisions of this Agreement, upon the
occurrence of any Flip-In Event, any Rights that are Beneficially Owned on or after the
earlier of the Separation Time and the Common Share 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 of Rights, directly or indirectly, from an Acquiring Person (or
of any Affiliate or Associate of an Acquiring Person or of any Person acting
jointly or in concert with an Acquiring Person or any Associate or Affiliate of an
Acquiring Person) in a transfer made after the date hereof, whether or not for
consideration, that the Board of Directors acting in good faith have determined is
part of a plan, arrangement or scheme of an Acquiring Person (or an Affiliate or
Associate of an Acquiring Person or of any Person acting jointly or in concert with
an Acquiring Person or an Associate or Affiliate 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 further shall thereafter not have any other rights whatsoever with
respect to 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 Clause 3.1(b)(i) or (ii) 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 an Affiliate or an
Associate of an Acquiring Person (as such terms are defined in the
Shareowner Rights Plan Agreement) or who was acting jointly or in concert
with an Acquiring Person or an Affiliate or Associate of an Acquiring
Person. This Rights Certificate and the Rights represented hereby are
void or shall become void in the circumstances specified in Subsection
3.1(b) of the Shareowner Rights Plan 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
impose such legend only if instructed to do so by the Company in writing or if a
holder fails to certify upon transfer or exchange in the space provided on the
Rights Certificate that such holder is not a Person described in such legend.

3.2 Fiduciary Duties of the Board of Directors

          For clarification, it is understood that nothing contained in this Agreement shall be
considered to affect the obligations of the Board of Directors to exercise their fiduciary duties.
Without limiting the generality of the foregoing, nothing contained herein shall be construed to
suggest or imply that the Board of Directors shall not be entitled to recommend that holders
of the Common Shares reject or accept any Take-over Bid or take any other action including, without
limitation, the commencement,

 

-24-

prosecution, defence or settlement of any litigation and the solicitation of additional or
alternative Takeover Bids or other proposals to holders of Common Shares that the Board of
Directors believes is necessary or appropriate in the exercise of their fiduciary duties.

ARTICLE 4 — THE RIGHTS AGENT

4.1 General

	 	(a)	 	The Company hereby appoints the Rights Agent to act as agent for the Company in
accordance with the terms and conditions hereof, and the Rights Agent hereby accepts such
appointment. The Company may from time to time appoint such co-Rights Agents (“Co-Rights
Agents”) as it may deem necessary or desirable, subject to the approval of the Rights
Agent. In the event the Company appoints one or more Co-Rights Agents, the respective
duties of the Rights Agent and Co-Rights Agents shall be as the Company may determine with
the approval of the Rights Agent and the Co-Rights Agent. The Company 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 administration and execution of this Agreement and the
exercise and performance of its duties hereunder (including the fees and disbursements of
any expert or advisor retained by the Rights Agent with the approval of the Company). The
Company also agrees to indemnify the Rights Agent and its officers, employees, agents and
directors for and to hold them harmless against any loss, liability, cost, claim, action,
damage, suit or expense incurred without negligence, bad faith or wilful misconduct on the
part of the Rights Agent for anything done or omitted by the Rights Agent in connection
with the acceptance and administration of this Agreement 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 or any Rights Certificate or
certificate for other securities of the Company, 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.
	 
	 	(c)	 	The Company shall inform the Rights Agent in a reasonably timely manner of events which
may materially affect the administration of this Agreement or the Rights Agent and will,
upon written request of the Rights Agent, provide the Rights Agent with an incumbency
certificate with respect to the then current officers of the Company.

4.2 Merger or Amalgamation or Change of Name of Rights Agent

	 	(a)	 	Any company into which the Rights Agent or any successor Rights Agent may be merged or
amalgamated or with which it may be consolidated, or any company resulting from any merger,
amalgamation, statutory arrangement or consolidation to
which the Rights Agent or any successor Rights Agent is a party, or any company succeeding
to the shareholder or stockholder services business of the Rights Agent or any successor
Rights

 

-25-

	 	 	 	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 company 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 Right 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 Right 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, all of which the Company and the holders of certificates for Common
Shares and holders of Rights Certificates, by their acceptance thereof, shall be bound:

	 	(a)	 	the Rights Agent at the Corporation’s expense may retain and consult with legal
counsel (who may be legal counsel for the Company) 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 and the Rights Agent at
the Corporation’s expense may also consult with such other experts as the Rights Agent
shall consider necessary or appropriate to properly carry out the duties and obligations
imposed under this Agreement and the Rights Agent shall be entitled to act and 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 Company
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, President or Vice President, Treasurer,
Secretary or any Assistant Secretary of the Company 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;

 

-26-

	 	(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
Company 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 Company 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)) or any adjustment required under the
provisions of Section 2.3 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 and issued as fully paid
and non-assessable;
	 
	 	(f)	 	the Company 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 in writing
with respect to the performance of its duties hereunder from any Person believed by the
Rights Agent to be the Chairman of the Board, President or Vice President, Treasurer,
Secretary or any Assistant Secretary of the Company 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, omitted or suffered by it in good faith in accordance with instructions of any such
Person;
	 
	 	(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
Company or become pecuniarily interested in any transaction in which the Company may be
interested, or contract with or lend money to the Company 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 Company or for any
other legal entity; and
	 
	 	(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
Company 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 Company) in writing mailed to the
Company 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, all of which shall be at the Company’s
expense. The Company may remove the Rights Agent upon 60 days notice in writing, mailed to the
Rights Agent and to each transfer agent of the Common Shares by registered or certified mail, and
to the holders of the Rights in accordance with Section 5.9, all of which shall be at the Company’s expense. If the Rights Agent should resign or be removed or otherwise become incapable of
acting, the Company will appoint a successor to the Rights Agent. If the Company fails to make
such appointment within a period of 60 days after such removal or after it has been notified in
writing of such resignation or incapacity by the resigning or incapacitated Rights Agent or by the
holder of any Rights (which holder shall, with such notice, submit such holder’s Rights
Certificate for inspection by the Company), the holder or the resigning Rights Agent may apply to
any court of competent jurisdiction for the appointment of a new Rights Agent at the Company’s
expense. Any successor Rights Agent, whether appointed by the Company or by such a court, shall be
a company incorporated under the laws of Canada or a province thereof authorized to carry on
business. 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 payment in full of any
outstanding amounts owing by the Company to the Rights Agent under this Agreement, 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 Company 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 Waiver

	 	(a)	 	The Board of Directors, acting in good faith, may at any time prior to the occurrence
of a Flip-In Event elect to redeem all but not less than all of the then outstanding Rights
at a redemption price of $0.00001 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 hereof shall have occurred
(such redemption price being herein referred to as the “Redemption Price”)).
	 
	 	(b)	 	The Board of Directors, acting in good faith, may determine, at any time prior to the
occurrence of a Flip-In Event, to waive the application of Section 3.1 to such Flip-In
Event 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.
	 
	 	(c)	 	The Board of Directors, acting in good faith, may determine, at any time prior to the
occurrence of a Flip-In Event, to waive the application of Section 3.1 to such Flip-In
Event if such Flip-In Event would occur by reason of a Take-over Bid made by means of

 

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	 	 	 	a take-over bid circular sent to all holders of record of Common Shares; provided that if
the Board of Directors waive the application of Section 3.1 to such a Flip-In Event, it
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 Takeover Bid in
respect of which the application of Section 3.1 is, or is deemed to have been, waived under
this Subsection 5.1(c).
	 
	 	(d)	 	The Board of Directors may, prior to the close of business on the tenth day following the
Common Share Acquisition Time, waive the application of Section 3.1 to any particular Flip-In
Event, provided that the Board of Directors have determined that the Acquiring Person became an
Acquiring Person by inadvertence and without any intent or knowledge that he would become an
Acquiring Person, provided that in the event of such waiver for the purposes of this Agreement,
such particular Flip-In Event shall be deemed never to have occurred and the Separation Time shall
be deemed not to have occurred as a result of such Person having inadvertently become an Acquiring
Person. Any such waiver pursuant to this Subsection 5.1(d) must be on the condition that such
Person, within 14 days after the foregoing determination by the Board of Directors or such earlier
or later date as the Board of Directors may determine (the “Disposition Date”), will reduce its
Beneficial Ownership of Common Shares such that the Person is no longer an Acquiring Person. If
the Person remains an Acquiring Person at the close of business on the Disposition Date the
Disposition Date shall be deemed to be the date of occurrence of a further Common Share Acquisition
Date and Section 3.1 shall apply thereto.
	 
	 	(e)	 	The Company 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.
	 
	 	(f)	 	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, a
Competing Permitted Bid or a Take-over Bid or, in the case of Subsection 5.1(b), who has entered
into an agreement for the acquisition of the Common Shares, in respect of which the Board of
Directors has waived or is deemed to have waived, pursuant to Subsection 5.1(b) or 5.1(c), the
application of Section 3.1, takes up and pays for Common Shares pursuant to the terms and
conditions of the Permitted Bid, Competing Permitted Bid or the Take-over Bid, as the case may be,
or, in the case of Subsection 5.1(b), acquires the Common Shares pursuant to the terms and
conditions of such acquisition.
	 
	 	(g)	 	Where a Take-over Bid that is not a Permitted Bid or a Competing 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 of Directors may elect to redeem all the outstanding Rights at the
Redemption Price. In such event, all the provisions of this Agreement shall continue to apply as
if the Separation Time had not occurred and as if Rights Certificates representing the number of
Rights held by each holder of record of Common Shares as of the Separation Time had not been mailed
to each such holder and for all purposes of this Agreement the Separation Time shall be deemed not
to have occurred.

 

-29-

	 	(h)	 	If the Board of Directors elects or is deemed to have elected to redeem the Rights, 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.
	 
	 	(i)	 	Within 10 days after the Board of Directors elects or is deemed to elect to redeem the
Rights in accordance with the terms hereof, the Company shall give notice of redemption to
the holders of the then outstanding Rights by mailing such notice to all such holders at
their last address as they appear upon the registry books of the Rights Agent or, prior to
the Separation Time, on the registry books of the transfer agent for the Common Shares.
Any notice which is mailed in the manner herein provided shall be deemed given, whether or
not the holder receives the notice. Each such notice of redemption will state the method
by which the payment of the Redemption Price will be made. The Company 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 other than in connection with the purchase
of Common Shares prior to the Separation Time. If the Redemption Price payable to any
holder of Rights includes a fraction of a cent, such Redemption Price shall be rounded to
the nearest cent.

5.2 Expiration

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

5.3 Issuance of New Rights Certificates

          Notwithstanding any of the provisions of this Agreement or of the Rights to the contrary, the
Company 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 or kind or
class of securities purchasable upon exercise of Rights made in accordance with the provisions of
this Agreement.

5.4 Supplements and Amendments

          Prior to the occurrence of a Flip-in Event, the Company may, at any time, amend, vary or
rescind 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). Any such amendment
shall be effective from the date of the resolution of the Board of Directors adopting such
amendment, or such earlier or later date as the Board of Directors may otherwise determine. The
implementation of any such supplement or amendment will be subject to the receipt of any necessary
regulatory approval including that of the Toronto Stock Exchange. 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 Agent to such supplement or amendment.

5.5 Fractional Rights and Fractional Common Shares

	 	(a)	 	The Company shall not be required to issue fractions of Rights or to distribute Rights
Certificates which evidence fractional Rights and no amount shall be paid to the registered
holders of the Rights Certificates with regard to which such fractional Rights would
otherwise be issuable.

 

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	 	(b)	 	The Company shall not be required to issue fractions of Common Shares upon exercise of
the Rights or to distribute certificates which evidence fractional Common Shares. In lieu
of issuing fractional Common Shares, the Company shall, subject to the provisions of the
constating documents of the Company, pay to the registered holders of Rights Certificates,
at the time such Rights are exercised as herein provided, an amount in cash equal to the
fraction of the Market Price of one Common Share that the fraction of a Common Share that
would otherwise be issuable upon the exercise of such Right is of one whole Common Share at
the date of such exercise.

5.6 Rights of Action

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

5.7 Regulatory Approvals

          Any obligation of the Company 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 having jurisdiction over the Company, including without limitation any requisite approval
of stock exchanges on which the Common Shares are listed for trading.

5.8 Notice of Proposed Actions

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

	 	(a)	 	to waive the application of Section 3.1 to a particular Flip-In Event; or
	 
	 	(b)	 	to effect the liquidation, dissolution or winding up of the Company or the sale of all
or substantially all of the Company’s assets,

then, in each such case, the Company shall give to each holder of a Right, in accordance with
Section 5.9, a notice of such proposed action, which shall specify the date on which such
adjustment to the Rights occurred or liquidation, dissolution, or winding up is to take place, and
such notice shall be so given within 10 Business Days after the occurrence of an adjustment to the
Rights and not less than 10 Business Days prior to the date of taking of such proposed action by
the Company.

 

-31-

5.9 Notices

          Notices or demands authorized or required by this Agreement to be given or made by the Rights
Agent or by the holder of any Rights to or on the Company shall be sufficiently given or made if
delivered or sent by registered or certified mail, postage prepaid, or sent by facsimile or by
other similar means of recorded electronic communication, charges prepaid and confirmed in writing,
addressed (until another address is filed in writing with the Rights Agent) as follows:

Cott Corporation

207 Queen’s Quay West 

Suite 340

Toronto, Ontario M5J 1A7 

Telecopier: (416) 203-6207

Attention: Corporate Secretary

          Any notices or demands authorized or required by this Agreement to be given or made by the
Company or by the holder of any Rights to or on the Rights Agent shall be sufficiently given or
made if delivered or sent by registered or certified mail, postage prepaid, or sent by facsimile or
by other similar means of recorded electronic communication, charges prepaid and confirmed in
writing, addressed (until another address is filed in writing with the Company) as follows:

Computershare Investor Services Inc.

Suite 700

1500 University Street

Montreal, Quebec H3A 3S8

Telecopier: (514) 982-7580

Attention: Manager, Client Services

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

          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
telegraphing, telecopying or sending of the same by other means of recorded electronic
communication (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 Company and the Rights
Agent may from time to time change its address for notice to the other given in the manner
aforesaid.

5.10 Declaration as to Non-Canadian Holders

          If, in the opinion of the Board of Directors (who may rely upon the advice of counsel), any
action or event contemplated by this Agreement would require compliance by the Company with the
securities laws or comparable legislation of a jurisdiction outside of Canada, the Board of
Directors, acting in good faith, shall take such actions as they may deem appropriate to ensure
that such compliance is not required, including, without limitation, establishing procedures for
the issuance to an appropriate

 

-32-

Canadian resident acting as a resident agent (a “Resident Agent” ) of Rights or securities
issuable on exercise of Rights, the holding thereof in trust for the Person entitled thereto (but
reserving such rights unto the Resident Agent or to the Resident Agent and the Company, as the
Company may determine in its 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 Company 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, in which such issue or delivery would be unlawful without registration of the relevant
Persons or securities for such purposes.

5.11 Costs of Enforcement

          The Company agrees that if the Company fails to fulfil any of its obligations pursuant to this
Agreement, then the Company will reimburse the holder of any Rights for the costs and expenses
(including legal fees) incurred by such holder to enforce his rights pursuant thereto in any
action, suit or proceeding in which a court of competent jurisdiction in a final non-appealable
judgment has rendered judgment in favour of the holder.

5.12 Successors

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

5.13 Benefits of this Agreement

          Nothing in this Agreement shall be construed to give to any Person other than the Company, 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 Company, the
Rights Agent and the holders of the Rights.

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 Severability

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

 

-33-

5.16 Effective Date and Expiration Time

          This Agreement is effective and in full force and effect in accordance with its terms from and
after the Effective Date. This Agreement and all outstanding Rights shall terminate and be void
and of no further force and effect from and after the close of business on the date that is the
earlier of:

	 	(a)	 	the Termination Time; and
	 
	 	(b)	 	October 24, 2007.

(the “Expiration Time”)

          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).

5.17 Determination and Actions by the Board of Directors

          All actions, calculations, interpretations and determinations (including all omissions with
respect to the foregoing) which are done or made by the Board of Directors, acting in good faith
for the purposes hereof, (x) may be relied on by the Rights Agent, and (y) shall not subject the
Board of Directors to any liability to the holders of the Rights or to any other parties.

5.18 Time of the Essence

          Time shall be of the essence in this Agreement.

5.19 Execution In Counterparts

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

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

	 	 	 	 	 
	 	COTT CORPORATION

 	 
	 	By:  	/s/
Frank
E. Weise	 
	 	 	c/s 	 
	 	 	Frank
E. Weise, Chairman	 
	 
	 	 	 
	 	By:  	/s/
Brent
Willis	 
	 	 	Brent
Willis, CEO	 
	 	 	 	 
	 
	 	COMPUTERSHARE INVESTOR SERVICES INC.

 	 
	 	By:  	/s/
Joseph
Chirico	 
	 	 	c/s 	 
	 	 	 	 
	 
	 	 	 
	 	By:  	/s/
Christine
Lawton	 
	 	 	 	 
	 	 	 	 
	 

 

Exhibit A

COTT CORPORATION

SHAREOWNER RIGHTS PLAN AGREEMENT

(Form of Rights Certificate)

			
	 	 	 
	Certificate No.                     
	 	                     Rights

THE RIGHTS
ARE SUBJECT TO TERMINATION ON THE TERMS SET FORTH IN THE SHAREOWNER RIGHTS PLAN
AGREEMENT. UNDER CERTAIN CIRCUMSTANCES (SPECIFIED IN SUBSECTION
3.1(b) OF THE SHAREOWNER RIGHTS
PLAN AGREEMENT), RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR CERTAIN RELATED PARTIES OR
TRANSFEREES OF AN ACQUIRING PERSON OR CERTAIN RELATED PARTIES MAY BECOME VOID.

Rights Certificate

This certifies that                                                              or registered assigns, is the registered holder of
the
number of Rights set forth above, each of which entitles the registered holder thereof, subject to
the terms, provisions and conditions of the Shareowner Rights Plan
Agreement dated as of April 25,
2007, as the same may be amended or supplemented from time to time (the “Rights Agreement”)
between Cott Corporation (the “Company”), a company incorporated under the laws of Canada and
Computershare Investor Services Inc., a corporation incorporated under the laws of Canada (the “Rights Agent”) (which term shall include any successor Rights Agent under the Rights Agreement),
to purchase from the Company at any time after the Separation Time (as such term is defined in the
Rights Agreement) and prior to the Expiration Time (as such term is defined in the Rights
Agreement), one fully paid Common Share of the Company (a “Common Share”) at the Exercise Price
referred to below, upon presentation and surrender of this Rights Certificate with the Form of
Election to Exercise (in the form provided hereinafter) duly executed and submitted to the Rights
Agent at its principal office in the City of Toronto. The Exercise Price shall be $100.00 per
Right and shall be subject to adjustment in certain events 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 Company and the holders of the Rights Certificates. Copies of the Rights Agreement are
on file at the registered office of the Company.

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.

 

 

-2-

Subject to the provisions of the Rights Agreement, the Rights evidenced by this Rights Certificate
may be redeemed by the Company at a redemption price of $0.00001 per Right, subject to adjustment
in certain events, under certain circumstances at its option.

No fractional Common Share will be issued upon the exercise of any Rights evidenced hereby but in
lieu thereof a cash payment may 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 shareowner
of the Company or any right to vote for the election of directors or upon any matter submitted to
shareowners at any meeting thereof, or to give or withhold consent to any action, or to receive
notice of meetings or other actions affecting shareowners (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 two of the proper officers of Cott Corporation

	 	 	 	 	 
	Date:  	 	 	 
	 
	COTT CORPORATION

 	 	 
	By:  	 	 	 
	 
	By:  	 	 	 
	 
	Countersigned:

COMPUTERSHARE INVESTOR SERVICES INC.

 	 	 
	By:  	 	 	 
	 	Authorized Signature 	 	 
	 	 	 	 
	By:  	 	 	 
	 	Authorized Signature 	 	 
	 	 	 	 

 

 

	 	 	 	 	 

FORM OF ASSIGNMENT

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

     FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto

 
(Please print name and address of transferee)

this Rights Certificate, together with all right, title and interest therein.

	 	 	 	 	 
	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 recognized Canadian stock exchange in Canada, a registered
national securities exchange in the United States, a member of the Transfer Association Medallion
(STAMP) Program or a commercial bank or trust company having an office or correspondent in Canada
or the United States.

(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 (as defined in the Rights
Agreement).

	 	 	 	 	 
	Dated:

	 	 

	 	 

	 

	 	 	 	Signature

 

 

[To be attached to each Rights Certificate]

FORM OF ELECTION TO EXERCISE

TO: COTT CORPORATION

AND TO: COMPUTERSHARE INVESTOR SERVICES INC.

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

 

(Name)

 

(Address)

 

(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)

 

(Address)

 

(Social Insurance, Social Security or Other Taxpayer Identification Number)

	 	 	 	 	 
	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.)

(To be completed if true)

 

 

- 2 -

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 (as defined in the Rights
Agreement).

	 	 	 	 	 
	Dated:
	 	 
	 	 

	 
	 	 
	 	 
Signature

 

 

NOTICE

In the event the certification set forth above in the Forms of Assignment and Election to Exercise
is not completed, the Company may deem the Beneficial Owner of the Rights 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 the foregoing (as defined in the Rights Agreement). No Rights
Certificates shall be issued in exchange for a Rights Certificate owned or deemed to have been
owned by an Acquiring Person or an Affiliate or Associate thereof.Commercial lease between Martell Electic LLC and Martell Properties, LLC

    
       

      Exhibit
        10.37

       

       

      COMMERCIAL
        LEASE

       

      This
        lease is entered into between Martell
        Properties, LLC ("Landlord") and Martell Electric, LLC ('Tenant"). 

       

      1.
         Agreement
        to Lease.
        Landlord is the owner of real estate and improvements located at 1904 N.
        Kenmore
        St., South Bend, Indiana, 46619, the legal description of which is attached
        as
        Exhibit “A” (“Real Estate” or “Property”). Subject to all the provisions of this
        Lease, Landlord leases to Tenant and Tenant leases from Landlord the Real
        Estate. Tenant shall be responsible for expenses on the entire Real Estate,
        such
        as taxes, utilities, etc. as provided in this Lease.

       

      2.
         Term.
        This Lease shall be for an initial term of five (5) years beginning on January
        1, 2007, (“Lease Commencement Date”) through December 31, 2011 (“Lease
        Termination Date”). 

       

      3.
         Use.
        Tenant shall use the Property for the operation of its business and any related
        purpose. 

       

      4.
         Rent.
        As rent for use of the Property, Tenant agrees to pay an annual amount of
        Eighty-Nine Thousand Sixty Dollars and Forty Cents ($89,060.40) (“the Rent”), to
        be paid in monthly payments of Seven Thousand Four Hundred Twenty One Dollars
        and Seventy Cents ($7,421.70), in advance, without notice, on the first day
        of
        each month during the Term hereof. Payments shall be made to Landlord at
        1125 S.
        Walnut Street, South Bend, Indiana 46619, or any other place Landlord may
        from
        time to time designate in writing. 

       

      If
        Tenant fails to pay any rent, expenses or other charges required under this
        Lease within five (5) days after the due date, then any unpaid amounts shall
        be
        subject

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      to
        a late
        charge of two percent (2%) interest per month from the due date to the date
        of
        payment, which percentage rate is an annual rate of twenty-four percent (24%).
        Notwithstanding this interest charge, nonpayment of any such amounts due
        under
        this Lease shall constitute a default. 

       

      5.
         Additional
        Expenses 

       

      a.
        Utilities.
        All utility bills, including water, sewerage, gas, electricity, telephone
        arid
        similar services on the Real Estate shall be paid by Tenant. Tenant shall
        not
        install any equipment which shall exceed the capacity of any utility facilities
        furnished by Landlord. If any equipment desired by Tenant requires additional
        utility facilities, the same shall be installed at Tenant's expense in
        compliance with all applicable code requirements and with Landlord's prior
        written approval. Further, Landlord shall not be liable to Tenant in damages
        or
        otherwise for any utilities or services, whether or not furnished by Landlord
        hereunder, which are interrupted or terminated for any reason, including
        repairs, installations, improvements, energy emergency or shortage.

       

      b.
         Taxes
        and Assessments.
        Tenant shall pay all real estate taxes (“Taxes”), assessments and any other
        governmental charges (“Assessments”) on the Real Estate as they come due during
        the term of the Lease. Tenant shall pay Taxes to Landlord in two (2) equal
        installments on or before May 10 and November 10 of each year during the
        term of
        this Lease. Tenant shall pay Assessments to Landlord at least ten (10) days
        before the Assessments are due and payable. Landlord agrees to furnish Tenant
        with copies of official statements from the County Treasurer or other taxing
        authority on or

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      before
        each April 15 and October 15 reflecting the Taxes and/or Assessments due
        on the
        Real Estate. 

       

      c.
         Maintenance.
        Tenant shall at all times maintain the complete Real Estate in good working
        order and repair, including but not limited to the foundations, roof and
        other
        structural portions of the Real Estate. All entrances, vestibules, partitions,
        windows, window frames and moldings, door openers, fixtures, equipment, and
        appurtenances thereof, as well as lighting, heating, electrical, plumbing,
        ventilation, air conditioning and similar systems (whether installed by Landlord
        or Tenant). Tenant shall keep the Real Estate in a clean, orderly, and safe
        manner. Tenant covenants that the Real Estate shall at all times comply with
        all
        ordinances, governmental regulations and applicable laws. If replacement
        of any
        aforesaid equipment, fixtures or appurtenances becomes necessary, Tenant
        shall
        replace the same with equipment, fixtures and appurtenances of the same size
        and
        quality and shall promptly repair any and all damage done by such replacement.
        If Tenant fails to perform these obligations, Landlord without notice may,
        but
        shall not be obligated to, perform such obligations and add the cost to the
        next
        installment of rent due. At the expiration of this Lease or any extension
        thereof, Tenant shall return the Real Estate to Landlord in its Original
        Condition, reasonable wear and tear excepted. Tenant shall pay for all repairs
        and Real Estate upkeep, including window and glass replacement, snow removal,
        trash removal, lawn care and similar expenses. 

       

      6.
         Insurance.

       

      a.
         Fire
        Insurance.
        Tenant at its sole cost and expense shall keep the building or buildings
        and
        improvements on the Real Estate insured under a policy with
        extended

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      coverage
        endorsements for not less than its full or their full replacement value.
        Tenant
        shall be responsible for insurance covering Tenant's personal property. Tenant
        shall also obtain business interruption insurance if Tenant wishes to be
        protected from this risk since it is understood the Landlord shall not be
        responsible for any loss to Tenant caused by fire (regardless of who is
        negligent). Tenant agrees not to keep or use anything on the Property which
        is
        prohibited by the standard policy form of fire insurance. 

       

      b.
         Public
        Liability Insurance. 
        At Tenants expense, Tenant shall procure comprehensive and general public
        liability insurance against claims for personal injury, death or property
        damage
        occurring in, or about the Property, such insurance to afford protection
        to the
        limit of not less than One Million Dollars ($1,000,000) in respect to injury
        or
        death of a single person, Five Million Dollars ($5,000,000) in respect to
        any
        one accident and Five Hundred Thousand Dollars ($500,000) in respect to property
        damage. 

       

      c.
         General
        Requirements.
        The insurance policies required to be obtained by Tenant shall name Tenant
        as
        the insured and the Landlord (and any mortgagee) as additional insureds.
        These
        insurance policies shall be issued by insurers authorized to do business
        in the
        State of Indiana. These policies shall provide that they not be cancelled
        without at least ten (10) days prior written notice to both Landlord and
        Tenant
        and further that any losses shall be payable notwithstanding any act or
        negligence of Tenant or Landlord which might otherwise result in forfeiture
        of
        the insurance.  Upon
        commencement of the term of this Lease and thereafter not less than fifteen
        (l5)
        days prior to the expiration date of each expiring policy, a certificate
        evidencing the

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      insurance
        policies issued by each insurer shall be delivered to Landlord, together
        with
        satisfactory evidence of payment of all required premiums.

       

      7.
         Acceptance
        of Premises.
        By occupying the premises, Tenant acknowledges that the Property has been
        examined and is in good order and repair ("Original Condition"). Tenant
        acknowledges that no representations as to the condition of repair have been
        made by Landlord, except those set out below regarding “2007 Build
        Out.”

       

      8.
         Alterations.
        Tenant shall make no structural changes alterations, additions, or improvements,
        or do any such work on or about the Property without the prior written consent
        of the Landlord. All structural changes or alterations shall become a part
        of
        the Property and remain thereon as Landlord's property at the termination
        of the
        Lease. However, Landlord hereby consents to and gives Tenant the right to
        install or provide such trade fixtures, partitions and equipment, together
        with
        any additional painting or decorative, nonstructural alterations, which Tenant
        may find necessary or desirable for operation of its business. It is further
        agreed that all such trade fixtures, partitions and equipment installed by
        Tenant ("Trade Fixtures"), regardless of the manner of their annexation,
        may be
        removed by Tenant at the termination of this Lease. 

       

      All
        changes, whether structural or nonstructural, shall be made at Tenant's own
        expense. Restoration of the Property to its Original Condition (including
        damage
        caused by removal of the Trade Fixtures) also shall be made at Tenant's expense.
        Tenant shall promptly pay for all materials and labor involved in making
        such
        changes or restoration and shall not permit any liens, claims or demands
        ("Claim") to exist against the Landlord or the Property. If a Claim is filed
        or
        made against the Landlord or the

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      Property,
        Tenant shall defend the same at its own expense and indemnify and hold Landlord
        harmless from all liability and expenses arising by virtue of the Claim (unless
        the Claim arose because of the fault of the Landlord). 

       

      9.
         Assignment
        and Subletting.
        Tenant shall not assign, pledge, mortgage, or otherwise encumber either this
        Lease or the Property. Tenant shall not sublet all or any part of the Property
        without the Landlord's prior written consent. However, no permitted subletting
        shall relieve Tenant of Tenant's obligations under this Lease. Tenant shall
        continue to be liable as a principal and not as a guarantor or surety to
        the
        same extent as though no subletting had been made. 

       

      10.
         Casualty
        Loss.
        If the Property is damaged or destroyed by fire or other casualty which renders
        it untenantable, Landlord may elect to either terminate the Lease or restore
        the
        Property to its former condition within one hundred twenty (120) days after
        such
        casualty. Landlord shall give written notice of such election to Tenant within
        thirty (30) days after the casualty; if such notice is not given, the Lease
        shall terminate. If Landlord does not restore the Property, rent shall be
        paid
        at the agreed rate only up to and including the date of such casualty. If
        Landlord repairs the Property, the rent shall abate until the Property is
        again
        tenantable. If the Property suffers only partial damage or destruction, Landlord
        shall repair the damage within a reasonable time and shall abate Tenant’s rent
        in proportion to the amount of the untenantable Property.

       

      11.
        Default
        of Tenant.
        Failure of Tenant to perform any requirements under this Lease within thirty
        (30) days after written notice of default is received from Landlord, except
        Tenant's failure to make rental payments for which no written notice of default
        is required from Landlord, shall be considered a default by Tenant under
        this
        Lease. 

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      12.
        Remedies
        of Landlord.
        If Tenant defaults in payment of rent, expenses or any other agreements
        contained in this Lease, Tenant will at once deliver peaceable possession
        of the
        Property to Landlord. 

       

      13.
        Signs. The
        Tenant may install appropriate signs on the Property. At the termination
        of this
        Lease, such signs shall be removed at Tenants expense. Any damage to the
        Property caused by the erection, maintenance or removal of such signs shall
        be
        paid for by the Tenant. 

       

      14.
        Environmental
        Representations.
        Tenant shall not use, or permit the Property to be used, in a manner that
        "violates any applicable federal, state or local law, regulation, or ordinance
        now or hereafter in force. This includes, but is not limited to, any law,
        regulation or ordinance pertaining to air or water quality or emissions;
        the
        handling, transportation, storage, treatment, usage or disposal of toxic
        or
        hazardous substances; or any other environmental matters. Compliance shall
        be at
        the sole cost and expense of Tenant, its agents, employee, contractors or
        invitees. 

       

      Tenant
        shall immediately notify the Landlord of any spills, releases or other potential
        failures to comply with applicable environmental laws and regulations, and
        of
        any inspections, notices, orders, fines or communications originating from
        environmental regulatory agencies. 

       

      Landlord,
        its officers, employees, contractors or agents shall have the right but not
        the
        duty to inspect the premises, including Tenants records pertaining to
        environmental compliance, and conduct any sampling or tests necessary to
        verify
        Tenant's compliance with applicable environmental law or regulations and
        this
        Lease. If Tenant is found to be in violation of this Lease or any applicable
        law
        or regulation, or

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      environmental
        contamination is detected, Tenant shall be responsible for all costs associated
        with such contamination or noncompliance.

       

      Tenant
        agrees to indemnify, defend and hold Landlord and its officers, directors,
        employees, contractors and agents harmless from all costs or liabilities
        arising
        from any environmental contamination or noncompliance with any applicable
        federal, state or local environmental law, regulation or ordinance now or
        hereafter in force, resulting from the operations of the Tenant, its agents,
        employees, contractors or invitees. 

       

      This
        indemnification includes, without limitation, all claims, judgments, damages
        (including natural resource damages), penalties, fines and costs incurred
        in
        connection with any site investigation to determine the presence or extent
        of
        any contamination, as well as the costs of any cleanup, removal or remedial
        work, whether or not it is required by any regulatory agency. Such costs
        shall
        include reasonable environmental consultant's and attorney fees. 

       

      This
        indemnification shall survive the expiration or earlier termination of this
        Lease. 

       

      15.
        Liability
        and Indemnification.
        Landlord shall not be liable to Tenant for any damage or injury to Tenant
        or
        Tenant's property arising out of or in any way related to the condition of
        the
        Property. Tenant shall indemnify and hold Landlord harmless against all
        liabilities, losses, claims, costs, expenses and judgments of any nature
        arising
        from or in connection with injuries to persons or damage to property arising
        from or connected with Tenant’s use of the Property. 

       

      16.
        Holding
        Over.
        At the termination of this Lease, by lapse of time or otherwise, Tenant will
        yield up immediate possession to Landlord. 

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      17.
        Option
        to Renew.
        Provided this Lease is in effect and Tenant is not in default, Tenant shall
        have
        the right and option to renew this Lease for two additional terms of three
        (3)
        years each under the same provisions as the original Lease, except for rental
        payments. To be effective, the option to renew must be exercised by Tenant
        by
        notice delivered to Landlord or mailed to Landlord by certified mail, postage
        prepaid and return receipt requested at least four months prior to the beginning
        date of the renewal term. 

       

      For
        each option renewal term, Tenant agrees to pay as rent for the Property an
        increase in monthly installments equal to five percent (5%) rounded to the
        nearest dollar. For the first renewal term, Tenant would pay as rent for
        the
        Property equal monthly installments of Seven Thousand Seven Hundred Ninety
        Two
        Dollars and Seventy Nine Cents ($7,792.79) each; the monthly rent for the
        second
        renewal term would be Eight Thousand One Hundred Eighty Two Dollars and Forty
        Two Cents ($8,182.42) per month. 

       

      18. 2007
        Build Out.
        Landlord will make certain improvements to the Real Estate in 2007 which
        are set
        forth on Exhibit “B” and include building out and remodeling the office space
        portion of the Real Estate (the “2007 Build Out”). 

       

      19.
         Miscellaneous.

       

      a.
         Quiet
        Enjoyment.
        So long as Tenant performs and observes all the provisions of this Lease,
        Landlord covenants and promises that Tenant shall have peaceful enjoyment
        of the
        Property. 

       

      b.
         Notice.
        Notice from one party to another relating to this Lease shall be deemed
        effective if made in writing (including telecommunications) and delivered
        to

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      the
        recipient’s address or facsimile number set forth under its name by any of the
        following means: (a) hand delivery, (b) registered or certified mail, postage
        prepaid, with return receipt requested, (c) first class or express mail,
        postage
        prepaid, (d) Federal Express or like overnight courier service or (e) facsimile
        transmission with request for assurance of receipt in a manner typical with
        facsimile transmissions. Notice made in accordance with this section shall
        be
        deemed delivered on receipt if delivered by hand or wire transmission, on
        the
        third business day after mailing if mailed by first class, registered or
        certified mail, or on the next business day after mailing or deposit with
        an
        overnight courier service if delivered by express mail or overnight courier.
        The
        current address of the parties is as follows:

      
        	
              	
                    
                  Landlord

              	
                 

              	    Tenant
	 	
                 

                Martell
                  Properties, LLC

                1125
                  South Walnut Street

                South
                  Bend, Indiana 46619

                Fax:
                  574-232-7648

              	
                 

                 

              	 

                Martell
                  Electric, LLC

                1125
                  South Walnut Street

                South
                  Bend, Indiana 46619

                Fax:
                  574-232-7648

              
	 	 	 	 

      

       

      
        c.
           Entry
          and Inspection.
          Landlord shall have the right to enter and inspect the Property at reasonable
          times. 

         

        d.
           Attorney
          Fees.
          Tenant shall pay all reasonable costs, attorney and paralegal fees and
          expenses
          that may be incurred by Landlord in the enforcement of the terms of this
          Lease
          including any expenses incurred on appeal. 

         

        e. Severability.
          If any provision of this Lease becomes invalid or unenforceable, the remainder
          of the Lease shall not be affected and the balance of the Lease provisions
          shall
          be valid and enforceable to the fullest extent permitted by law. 

         

        f.
           Successors.
          The provisions of this Lease shall be binding upon the successors in interest
          of
          both Landlord and Tenant. 

      

           

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

       

      g
         Headings.
        The paragraph headings contained in this Lease are for reference purposes
        only
        and shall not affect in any way the meaning or interpretation of this
        Lease.

       

      h. Counterparts.
        This Lease may be executed simultaneously m two or more counterparts, each
        of
        which shall be deemed an original, but all of which together shall constitute
        one and the same instrument.

       

      i.
         Entire
        Agreement.
        This Lease (including the exhibits hereto) is intended by the parties to
        and
        does constitute the entire agreement of the parties with respect to the rental
        of the Property. This Lease supersedes any and
        all prior understandings, written or oral, between the parties
        hereto.

       

      Landlord
        and Tenant now sign this Lease to be effective the 1st
        day of
        January, 2007.

      
        	
                 

                Landlord

              	 	
                 

                Tenant

              	 
	
                 

                Martell
                  Properties, LLC

                 

                 

                 

                /s/
                  John A. Martell 

              	 	
                 

                Martell
                  Electric, LLC

                 

                 

                 

                /s/
                  John A. Martell

              	 
	
                John
                  A. Martell, Manager

              	 	
                John
                  A. Martell, President

              	 

      

       

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      Legal
        Description

       

      The
        subject property is located at 1904 North Kenmore Street, Portage Township,
        South Bend, Indiana 46619. The subject property includes
        the offices and warehouse for Martell Electric, LLC. It is located in the
        Airport Industrial Complex. The legal description of the subject property
        is as
        follows:

       

      A
        tract
        of land In the Northeast Quarter of Section 33, Township 38 North, Range
        2 East,
        in and a part of the unrecorded plat of the Airport Industrial Park. City
        of
        South Bend, St. Joseph County, Indiana, more particularly described as follows:
        Commencing at the Northeast comer of the Southeast Quarter of Sectlon 33,
        Township 38 North, Range 2 East; thence South 00°07'29" West a distance of
        815.52 feet to a point on the North line of Voorde Drive projected East;
        thence
        North 89°40'09" West on and along the North line of Voorde Drive a distance of
        1,288.56 feet to the East line of Progress Drive; thence North 00°18'51- East on
        and along the East line of Progress Drive a distance of 885.00 feet to a
        1/2
        inch iron pipe and the place of beginning; thence continuing North 00°18'51"
        East along said East line of Progress Drive a distance of 300.00 feet to
        a 1
        inch iron rod; thence South 89°40'09" East a distance of 360.00 feet to a 1 inch
        iron rod; thence South 00°18'51" West a distance of 300.00 feet to a 1 inch iron
        rod; thence North 89°40'09- West a distance of 360.00 feet to the place of
        beginning. 

       

       

      

       

      

       

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      Exhibit
        “B”

       

      2007
        Build Out Plan

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