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ARTICLES OF ARRANGEMENT (STATUTS D'ARRANGEMENT) ONTARIO CANADA
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Ontario Corporation Number
Numero de la societe en Ontario
_________________
As filed with the Ontario Ministry of Consumer and Business Services on _________________
ARTICLES OF ARRANGEMENT
STATUTS D'ARRANGEMENT
1. The name of the corporation is: Denomination sociale de la societes
--- --- --- - --- --- --- --- --- --- --- - --- --- --- --- --- --- --- --- --- --- --- --- --- - --- --- --- ---
___________________________________________________________________
Form 8
Business
Corporations
Act
Formule 8
Loi sur les 2. The new name of the corporation Nouvelle denominatio sociale de la societe si elle est
societes par (if changed by the arrangement:) modifiee par suite de la l'arrangement:
actions
3. Date of incorporation/amalgamation: Date de la constitution ou de la fusion:
_________________
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(Year, Month, Day)
(annee, mois, jour)
4. The arrangement has been approved by the Les actionnaires de la societe ont approuve l'arrangement
shareholders of the corporation in accordance conformement a l'article 182 de la Los sur les societes
with section 182 of the Business Corporation Act. par actions.
5. A copy of the arrangement is attached to these Une copie de l'arrangement constitue l'annexe "A".
articles as Exhibit "A"
6. The arrangement was approved by the court on La cour a approuve l'arrangement le
_________________
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(Year, Month, Day)
(annee, mois, jour)
and a certified copy of the Order of the court is Une copie certifee conforme de l'ordonnance de la cour
attached to these articles as Exhibit "B". constitue l'annexe "B".
7. The terms and conditions to which the scheme is Les conditions que l'ordonnance impose au projet
made subject by the Order have been complied d'arrangement ont ete respectees.
with.
These articles are signed in duplicate. Les presents status sont signes en double exemplaire.
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(Name of Corporation)
(Denomination sociale de la societe)
By/Par: Secretary
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(Signature) (Description of Office)
(Signature) (Fonction)
EXHIBIT "A"
TO THE ARRANGEMENT AGREEMENT DATED AS OF ________________
BETWEEN _________________ and _________________
PLAN OF ARRANGEMENT UNDER SECTION 182 OF THE
BUSINESS CORPORATIONS ACT (Ontario)
ARTICLE 1
DEFINITIONS AND INTERPRETATION
Section1.1 Definitions: In this Agreement, unless there is something in the
subject matter or context inconsistent therewith, the following capitalized
words and terms shall have the following meanings:
(a) "[COMPANY] Convertible Debt" means certain secured convertible debt of [COMPANY]
having an aggregate principal amount of $1,000,000 and evidenced by
promissory notes issued in series, namely Series A, Series B, Series C
and Series D:
(b) "[COMPANY] Options" means options in favour of directors, officers,
employees and other service providers to purchase [COMPANY] Shares as more
particularly described in the Information Circular and issued pursuant
and subject to the [COMPANY] Stock Option Plan;
(c) "[COMPANY] Shares" means the issued and outstanding common shares of [COMPANY],
and common shares of [COMPANY] that are allotted pursuant to the Subordinate
Notes as the same are constituted on the date hereof;
(d) "[COMPANY] Stock Option Plan" means the incentive stock option plan adopted
by [COMPANY], as amended form time to time, and approved by its shareholders
which is in effect at the date hereof and more particularly described
in the Information Circular;
(e) "[COMPANY] Warrants" means warrants to purchase up to 2,170,100 [COMPANY] Shares
which are issued and outstanding on the date hereof and are more
particularly described in the Information Circular;
(f) "Agreement" means this arrangement agreement including the exhibits
hereto as the same may be supplemented or amended from time to time;
(g) "Arrangement" means the arrangement proposed to be effected under the
provisions of Section 182 of the OBCA on the terms set out in the Plan
of Arrangement;
(h) "Business Day" means a day which is not a Saturday, Sunday or
statutory holiday;
(i) "Charter Documents" of any corporation means the articles and by-laws
of such corporation;
(j) "Corporation" means [COMPANY] and New [COMPANY];
(k) "Court" means the Ontario Superior Court of Justice;
(l) "Effective Date" means the effective date of the Arrangement pursuant
to the certificate of arrangement issued by the Director under the
OBCA giving effect to the Arrangement;
(m) "Final Order" means the final order of the Court approving the
Arrangement;
(n) "Information Circular" means the management information circular of
[COMPANY] to be sent to the shareholders of the [COMPANY] in connection with the
Meeting;
(o) "Interlocutory Order" means the interim order of the Court;
(p) "Meeting" means the special meeting of the shareholders of the [COMPANY] to
be held to consider and, if deemed advisable, to approve the
Arrangement;
(q) "New [COMPANY] Convertible Debt" means convertible secured debt of New [COMPANY]
to be exchanged for and having the same denomination, terms and
conditions as the [COMPANY] Convertible Debt;
(r) "New [COMPANY] Options" means options to purchase new New [COMPANY] Shares to be
exchanged for and having the same terms and conditions as the [COMPANY]
Options. New [COMPANY] Options will be issued pursuant and subject to the
[COMPANY] New Stock Option Plan;
(s) "New [COMPANY] Shares" means the common shares which New [COMPANY] is authorized
to issue, as the same are constituted on the date hereof
(t) "New [COMPANY] Stock Option Plan" means the incentive stock option plan to
be adopted by New [COMPANY] and having the same terms and conditions as the
[COMPANY] Stock Option Plan;
(u) "New [COMPANY] Warrants" means warrants to purchase new [COMPANY] newco Shares to
be exchanged for and having the same terms and conditions as the old
[COMPANY] Warrants;
(v) "OBCA" means the Business Corporations Act, R.S.O. 1990, c. B.16, as
amended;
(w) "Person" includes an individual, sole proprietorship, partnership,
unincorporated association, unincorporated syndicate, unincorporated
organization, trust, body corporate, a trustee, executor,
administrator or other legal representative and the Crown or any
agency or instrumentality thereof;
(x) "Plan of Arrangement" means the plan of arrangement attached to this
Agreement as Exhibit A, as it may be amended from time to time;
(y) "Subordinate Notes" means (i) the convertible secured notes (including
but not limited to Series A, Series B and Series C) issued to
Stonestreet Limited Partnership by [COMPANY] pursuant to a subscription
agreement dated as of ____________; (ii) the convertible secured
notes (including but not limited to Series D) issued to Greenwich
Growth Fund Ltd. by [COMPANY] pursuant to a subscription agreement dated as
of ____________; and (iii) the convertible secured notes issued to
subscribers other than Greenwich Growth Fund Ltd. by [COMPANY] for an amount
not greater than $300,000.
(z) "Subsidiary" means, with respect to a specified body corporate, a body
corporate which more than 50% of the outstanding shares ordinarily
entitled to elect a majority of the directors thereof whether or not
shares of any other class or classes shall or might be entitled to
vote upon the happening of any event or contingency, are at the time
owned, directly or indirectly, by such specified body corporate, and
includes a body corporate in like relation to a Subsidiary.
ARTICLE 2
THE ARRANGEMENT
Section2.1 Arrangement Agreement: This Plan of Arrangement is made pursuant
and subject to the provisions of the Arrangement Agreement.
ARTICLE 3
THE ARRANGEMENT
Section3.1 Arrangement and Related Transactions: The Corporations agree that
commencing at 12:01 am on the Effective Date (the "Effective Time") the
following will occur and shall be deemed to occur in the following order on the
terms and subject to the conditions contained in this Agreement:
(a) Each [COMPANY] Common Share (other than such shares held by dissenting
shareholders) shall be and be deemed to be exchanged with New [COMPANY] for
the sole consideration of one New [COMPANY] Common Share;
(b) New [COMPANY] shall have adopted the New [COMPANY] Stock Option Plan;
(c) each [COMPANY] Option, whether vested or not vested, outstanding on the
Effective Date shall be exchanged at the Effective Time for a New [COMPANY]
Option having the same terms and conditions and subject to the New [COMPANY] Stock Option
Plan. The obligations of [COMPANY] under the [COMPANY] Stock Option Plan shall
thereafter terminate;
(d) each [COMPANY] Warrant, whether vested or not vested, outstanding
immediately prior to the Effective Date shall be exchanged for an New
[COMPANY] Warrant having the same terms and conditions following which the
[COMPANY] Warrants shall be null and void;
(e) the [COMPANY] Convertible Debt outstanding immediately prior to the
Effective Time shall be exchanged for New [COMPANY] Convertible Debt having
the same terms and conditions following which the SDB Convertible Debt
shall be null and void; and immediately following the time that is
immediately following completion of he above-noted steps
(f) pursuant to a general assignment and assumption agreement, [COMPANY] will
transfer all of the [COMPANY] Assets (as defined in such agreement) to New
[COMPANY] in part as a return of capital and in part as in consideration of
the assumption of [COMPANY] Liabilities and New [COMPANY] will assume, fulfill and
perform all of the [COMPANY] Liabilities (as defined in such agreement). The
transaction will be approved by the court pursuant to the Bulk Sales
Act. Upon such transfer:
(i) New [COMPANY] shall be liable for the obligations of [COMPANY] (including
any obligations that may arise under any permit or agreement)
under the [COMPANY] Liabilities existing immediately before the
Effective Time or that arises after the Effective Time in
respect of facts or circumstances in existence immediately
prior to the Effective Time;
(ii) any existing cause of action, claim or liability to
prosecution of or affecting [COMPANY] existing immediately before
the Effective Time or that arises after the Effective Time in
respect of facts or circumstances in existence immediately
prior to the Effective Time shall be assumed by New [COMPANY];
(iii) New [COMPANY] shall be liable for the obligations of [COMPANY] to
dissenting shareholders, if any;
(iv) a civil, criminal or administrative action or proceeding
pending by or against [COMPANY] existing immediately before the
Effective Time or that arises after the Effective Time in
respect of facts or circumstances in existence immediately
prior to the Effective Time shall be continued to be
prosecuted by or against New [COMPANY];
(v) a conviction against [COMPANY] immediately before the Effective Time
may be enforced against New [COMPANY] or a ruling, order or judgment
in favour of or against [COMPANY] existing immediately before the
Effective Time or that arises after the Effective Time in
respect of facts or circumstances in existence
immediately prior to the Effective Time shall be enforced by or
against New [COMPANY];
(g) the registered office of New [COMPANY] shall be located in Mississauga,
Ontario:
(h) the articles of New [COMPANY] shall be substantively the same as the
articles of [COMPANY]:
(i) the number of directors of New [COMPANY] shall be a minimum of 3 and a
maximum of 15, the actual number of directors within the minimum and
maximum number to be determined from time to time by resolution of the
directors of New [COMPANY];
(j) the initial directors of New [COMPANY] shall be nominees of [COMPANY] until their
respective successors have been duly elected or appointed; and
(k) the initial by-laws of New [COMPANY] shall be the by-laws of [COMPANY] in effect
immediately before the Effective Time, to be supplemented, amended or
repealed in accordance with the provisions of the Act relating to the
making, amending and repealing of by-laws;
(l) the articles of amalgamation of [COMPANY] shall be amended as follows:
(i) to change the name of [COMPANY] to Bid.Com International Ltd. or such
other name as may be permitted under the OBCA;
(ii) to delete the authorized Preference Shares (as defined in such
articles), the terms and conditions attaching to such Preference
Shares and the restrictions on transfer of such Preference
Shares; and
(iii) to add transfer restrictions and limits on the number of
shareholders.
ARTICLE 4
SHARE CERTIFICATES
Section4.1 Share Certificates: Following the Effective Date, certificates
representing New [COMPANY] Shares to which each holder of [COMPANY] Shares is entitled will
be forwarded to each holder of New [COMPANY] Shares as soon as practicable and will be
registered in the same manner as such shareholder's [COMPANY] Shares are registered
immediately prior to the Effective Date. Certificates representing [COMPANY] Shares
held by each holder of [COMPANY] Shares issued and outstanding immediately prior to
the Effective Date shall thereafter represent the New [COMPANY] Shares held by such
holder immediately following the Effective Date.
ARTICLE 5
RIGHTS OF DISSENT
Section5.1 Rights of Dissent: Holders of [COMPANY] Shares may exercise rights of
dissent pursuant to and in the manner set forth in Section 185 of the OBCA and
this section 5.1 in connection with the Arrangement and holders who duly
exercise such right of dissent and who:
(a) are ultimately entitled to be paid fair value for their [COMPANY] Shares,
shall be deemed to have transferred their [COMPANY] Shares to [COMPANY] for
cancellation at the Effective Date of the Arrangement; or
(b) for any reason, are ultimately not entitled to be paid fair value for
their [COMPANY] Shares, shall (unless clause 29(b) of section 185 of the OBC
applies) be deemed to have participated in the Arrangement on the same
basis as any non-dissenting holder of [COMPANY] Shares as at and from the
Effective Date and shall receive New [COMPANY] Shares on the basis set forth
in section 3.01(a) of this Plan of Arrangement, subject to Article
Four hereof,
but in no case shall [COMPANY] be required to recognize such persons as holding [COMPANY]
Shares on and after the Effective Date
Source: http://www.sec.gov/Archives/edgar/containers/fix048/1079171/0000950130-02-007498.txt