EXHIBIT 2.2
ARRANGEMENT AGREEMENT AMENDING AGREEMENT
THIS AGREEMENT made as of April 23, 2002.
B E T W E E N:
TRIZEC XXXX CORPORATION, a corporation
governed by the Business Corporations Act
(Ontario)
(hereinafter, "TrizecHahn"),
and
TRIZEC CANADA INC., a corporation governed by
the Canada Business Corporations Act
(hereinafter, "Trizec Canada"),
and
4007069 CANADA INC., a corporation governed by
the Canada Business Corporations Act
(hereinafter, "Trizec Subco"),
and
TRIZEC PROPERTIES, INC., a corporation
governed by the Delaware General Corporation
Law
(hereinafter, "Trizec Properties").
WHEREAS TrizecHahn, Trizec Canada, Trizec Subco and Trizec Properties
(collectively, the "Parties") are party to an arrangement agreement (the
"Arrangement Agreement") made as of March 8, 2002;
AND WHEREAS pursuant to section 3.1(e) of the Arrangement Agreement each of
the Parties covenanted to co-operate in making such amendments to the
Arrangement Agreement (including the Plan of Arrangement (as that term is
defined in the Arrangement Agreement)) as may be necessary to implement the Plan
of Arrangement or as may be reasonably desired by any Party to enable it to
carry out transactions deemed advantageous by it;
AND WHEREAS TrizecHahn has determined that it would be desirable to amend
the Plan of Arrangement to permit Holdcos (as that term is defined in the Plan
of Arrangement) to be incorporated under the Canada Business Corporations Act;
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AND WHEREAS it is desirable to make certain minor typographical amendments
to the Plan of Arrangement;
AND WHEREAS pursuant to section 6.1 of the Arrangement Agreement amendments
to the Arrangement Agreement (including the Plan of Arrangement) must be agreed
to in writing by each of the Parties;
NOW THEREFORE THIS AGREEMENT WITNESSES that, in consideration of the
premises and the covenants and agreements herein contained and other good and
valuable consideration the receipt and sufficiency of which are hereby
acknowledged by each of the Parties to the others, the Parties covenant and
agree as follows:
ARTICLE 1
INTERPRETATION
1.1 Definitions
In this Agreement, unless something in the subject matter or context is
inconsistent therewith:
(a) "Amended and Restated Plan of Arrangement" means the amended and
restated plan of arrangement set out as Appendix I hereto as the same
may be amended or varied from time to time in accordance with the
terms of the Arrangement Agreement; and
(b) all other terms used but not defined herein have the meanings ascribed
thereto in the Arrangement Agreement.
1.2 Appendices
The following appendix is attached to this Agreement and forms part hereof:
Appendix I - Amended and Restated Plan of Arrangement.
1.3 Construction
In this Agreement, unless otherwise expressly stated or the context
otherwise requires:
(a) references to "herein", "hereby", "hereunder", "hereof" and similar
expressions are references to this Agreement and not to any particular
Article, Section or Appendix;
(b) references to an "Article", "Section" or "Appendix" are references to
an article, section or appendix of or to this Agreement;
(c) words importing the singular shall include the plural and vice versa,
words importing gender shall include the masculine, feminine and
neuter genders, and
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references to a "person" or "persons" shall include individuals,
corporations, partnerships, associations, bodies politic and other
entities, all as may be applicable in the context;
(d) the use of headings is for convenience of reference only and shall not
affect the construction or interpretation hereof;
(e) the word "including", when following any general term or statement, is
not to be construed as limiting the general term or statement to the
specific items or matters set forth or to similar items or matters,
but as referring to all other items or matters that could reasonably
fall within the broadest possible scope of the general term or
statement; and
(f) a reference to a statute or code includes every regulation made
pursuant thereto, all amendments to the statute or code or to any such
regulation in force from time to time, and any statute, code or
regulation which supplements or supersedes such statute, code or
regulation.
ARTICLE 2
AMENDED AND RESTATED PLAN OF ARRANGEMENT
2.1 Amendment
The Arrangement Agreement is hereby amended by deleting the Plan of
Arrangement as set out in Appendix I thereto the substituting therefore the
Amended and Restated Plan of Arrangement.
2.2 References to the Plan of Arrangement
Any reference to the Plan of Arrangement made in any documents delivered
pursuant to the Arrangement Agreement or in connection therewith shall be deemed
to refer to the Amended and Restated Plan of Arrangement.
2.3 Confirmation of Arrangement Agreement
The Arrangement Agreement, as amended by this Agreement, shall continue in
full force and effect and is hereby confirmed.
ARTICLE 3
GENERAL
3.1 Binding Effect
This Agreement shall be binding upon and shall enure to the benefit of the
Parties hereto and their respective successors.
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3.2 Governing Law
This Agreement shall governed by and construed in accordance with the laws
of the Province of Ontario and the laws of Canada applicable therein and shall
be treated in all respects as an Ontario contract.
3.3 Counterparts
This Agreement and any amendment, supplement or restatement thereof may be
executed in one or more counterparts, each of which shall be deemed to
constitute an original.
IN WITNESS WHEREOF the Parties hereto have executed this Agreement.
TRIZEC XXXX CORPORATION
by /s/ Xxxxx X. Xxxxxxxx
---------------------------------------
by /s/ Luigi Favit
---------------------------------------
TRIZEC CANADA INC.
by /s/ Xxxxxx X. Xxxxxxx
---------------------------------------
4007069 CANADA INC.
by /s/ Xxxxx X. Xxxxxxxx
---------------------------------------
TRIZEC PROPERTIES, INC.
by /s/ Xxxxx X. Xxxxxxxx
---------------------------------------
APPENDIX I
AMENDED AND RESTATED
PLAN OF ARRANGEMENT UNDER SECTION 182
OF THE BUSINESS CORPORATIONS ACT (ONTARIO)
ARTICLE 1
INTERPRETATION
1.1 Definitions
In this Plan of Arrangement, unless something in the subject matter or
context is inconsistent therewith:
"1987 SOP" means the TrizecHahn Amended and Restated 1987 Stock Option Plan;
"Arrangement" means the proposed arrangement under the provisions of section 182
of the OBCA, on and subject to the terms and conditions set forth in this Plan
of Arrangement and any amendments hereto;
"Available Number of Trizec Properties Shares" means the difference between (i)
the Number of Trizec Subco Trizec Properties Shares and (ii) the aggregate
number of TrizecHahn Shares held by Dissenting Shareholders immediately before
the Effective Time;
"Business Day" means a day, other than a Saturday or Sunday, on which the
Toronto Stock Exchange is open for trading;
"Canadian Resident" means a partnership or a person who is a resident of Canada
for purposes of the Tax Act and who has so certified in the Share Election Form
but does not include (i) a partnership that is not a "Canadian partnership" as
defined in the Tax Act or (ii) a trust unless the trust is a resident of Canada
for purposes of the Tax Act and the interests in such trust of beneficiaries who
are Canadian Residents have an aggregate value equal to or greater than 95% of
the value of the interests of all beneficiaries in the trust;
"CBCA" means the Canada Business Corporations Act, as amended;
"Circular" means the Management Information Circular of TrizecHahn dated March
13, 2002 relating to the Arrangement;
"Custodian" means Mellon Investor Services LLC, in its capacity as custodian
under the Exchange Certificate Agreement;
"Director" means the person appointed as the Director under the OBCA;
"Dissent Rights" means the right of a TrizecHahn SVS Shareholder to dissent in
respect of the Arrangement pursuant to the procedures set forth in section 185
of the OBCA as modified by Section 3.1;
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"Dissenting Shareholder" means a TrizecHahn SVS Shareholder who exercises such
holder's Dissent Rights;
"Effective Date" means the effective date of the Arrangement, being the date of
effectiveness of the certificate of arrangement to be issued by the Director
under the OBCA giving effect to the Arrangement;
"Effective Time" means the earliest moment on the Effective Date;
"Election Deadline" means 5:00 p.m. (Toronto time) on April 23, 2002, or in the
case of any postponement(s) or adjournment(s) of the Meeting, 5:00 p.m. (Toronto
time) on that date on which the adjourned Meeting is reconvened or the postponed
Meeting is convened;
"Eligible Shareholder" means (a) a TrizecHahn Shareholder who is (i) resident in
Canada for purposes of the Tax Act and not exempt from tax thereunder, (ii) a
non-resident of Canada for purposes of the Tax Act to whom the TrizecHahn SVS
are "taxable Canadian property" and not "treaty protected property" (as those
terms are defined in the Tax Act) or (iii) a partnership if one or more of its
members would be described in (i) or (ii) if such member held the partnership's
TrizecHahn SVS directly, or (b) a Holdco Shareholder;
"Exchange Certificate" means a certificate delivered to a holder of a share of
Trizec Properties Common Stock who is not, or has not certified that it is, a
Qualifying U.S. Person evidencing the ownership of a share of Trizec Properties
Common Stock by such person, subject to the terms and conditions set out in the
Exchange Certificate Agreement;
"Exchange Certificate Agreement" means the custody agreement to be entered into
between Trizec Properties and the Custodian and all owners and beneficial
owners, from time to time, of Exchange Certificates, pursuant to which, among
other things, each such holder agrees that the shares of Trizec Properties
Common Stock transferred to it pursuant to Section 2.2(a)(v) will be held by the
Custodian on such holder's behalf on the terms and conditions provided for in
such agreement;
"Holdco" has the meaning ascribed to such term in Section 2.4(a);
"Holdco Agreement" means a share purchase agreement relating to the acquisition
of a particular Holdco among all of the Holdco Shareholders of such Holdco,
Trizec Canada and Trizec Subco providing for the acquisition of all issued and
outstanding Holdco Shares of such Holdco in accordance with Section 2.4(b) and
containing such representations and warranties, terms and conditions and
indemnities as Trizec Canada and Trizec Subco may reasonably request in
connection therewith, including, without limitation, the representations and
warranties, terms and conditions and indemnities set out in Appendix 1;
"Holdco Election" has the meaning ascribed to such term in Section 2.4(a);
"Holdco Election Deadline" means 5:00 p.m. (Toronto time) on April 15, 2002, or
in the case of any postponement(s) or adjournment(s) of the Meeting, 5:00 p.m.
(Toronto time) on that date which is five business days prior to the date the
adjourned Meeting is reconvened or the postponed Meeting is convened;
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"Holdco Share" means a common share in the capital of a Holdco;
"Holdco Shareholder" has the meaning ascribed to such term in Section 2.4(a);
"Meeting" means the meeting of TrizecHahn Shareholders called for April 23,
2002, and any adjournment(s) or postponement(s) thereof, to be held for the
purpose of considering, and if considered advisable, approving the Arrangement;
"MVS Security" means a Holdco Share of a particular Holdco where the only asset
of such Holdco is TrizecHahn MVS, or a TrizecHahn MVS held by any person other
than such a Holdco;
"Number of Trizec Canada SVS" means the result obtained by (i) subtracting the
sum of the Number of Trizec Subco Trizec Properties Shares and the number of
TrizecHahn MVS outstanding immediately before the Effective Time from (ii) the
number of TrizecHahn Shares outstanding immediately before the Effective Time;
"Number of Trizec Subco Trizec Properties Shares" means that number of
outstanding shares of Trizec Properties Common Stock held by Trizec Subco
immediately before the Effective Time, which is estimated to be 60% of the
aggregate of the then issued and outstanding number of TrizecHahn Shares [actual
number to be determined immediately prior to Effective Date];
"OBCA" means the Business Corporations Act (Ontario), as amended;
"Plan of Arrangement" means this plan of arrangement as the same may be amended
from time to time;
"Qualifying U.S. Person" means a person who has satisfied the conditions set out
in Annex M to the Circular and has so certified in the Share Election Form;
"Share Election Form" means the letter of transmittal and share election form
accompanying the Circular pursuant to which, inter alia, a TrizecHahn
Shareholder makes elections with respect to its TrizecHahn Shares and represents
certain other matters;
"Tax Act" means the Income Tax Act (Canada), as amended;
"Tax Deferral Election" means an election to exchange Trizec Canada Elected
Shares or Trizec Properties Elected Shares that, by virtue of Section 2.3, are
not Trizec Properties Exchanged Shares with Trizec Canada made in the Share
Election Form by an Eligible Shareholder;
"Trizec Canada" means Trizec Canada Inc., a corporation existing under the CBCA;
"Trizec Canada Elected Share" means a TrizecHahn SVS or a Holdco Share, the
holder of which is an Eligible Shareholder who has validly elected in the Share
Election Form or Holdco Agreement, as applicable, to exchange such TrizecHahn
SVS or Holdco Share with Trizec Canada for a Trizec Canada SVS;
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"Trizec Canada Exchanged Share" means a TrizecHahn SVS or a Holdco Share
exchanged with Trizec Canada for a Trizec Canada SVS pursuant to Section
2.2(a)(ii), as determined in accordance with Section 2.3;
"Trizec Canada MVS" means the multiple voting shares in the capital of Trizec
Canada;
"Trizec Canada Option" means an option to purchase Trizec Canada SVS governed by
the Trizec Canada SOP and issued in replacement of a TrizecHahn Option pursuant
to Section 2.2(b);
"Trizec Canada Shares" means, collectively, the Trizec Canada SVS and Trizec
Canada MVS;
"Trizec Canada SOP" means the stock option plan adopted by Trizec Canada in
accordance with section 3.3(c) of the Arrangement Agreement;
"Trizec Canada SVS" means the subordinate voting shares in the capital of Trizec
Canada;
"Trizec Properties" means Trizec Properties, Inc., a corporation governed by the
laws of the State of Delaware;
"Trizec Properties Common Stock" means the common stock of Trizec Properties;
"Trizec Properties Elected Share" means a TrizecHahn SVS which the holder has
validly elected in the Share Election Form to exchange with Trizec Subco for a
share of Trizec Properties Common Stock;
"Trizec Properties Exchanged Share" means a TrizecHahn SVS or a Holdco Share
exchanged with Trizec Subco for a share of Trizec Properties Common Stock
pursuant to Section 2.2(a)(v), as determined in accordance with Section 2.3;
"Trizec Properties Option" means an option to purchase Trizec Properties Common
Stock governed by the Trizec Properties SOP and issued in replacement of a
TrizecHahn Option pursuant to Section 2.2(b);
"Trizec Properties SOP" means the Trizec Properties, Inc. 2002 Stock Option Plan
adopted by Trizec Properties on February 8, 2002, to be effective as of the
Effective Date;
"Trizec Properties Warrant" means a warrant to purchase a share of Trizec
Properties Common Stock issued in replacement of, or in connection with the
replacement of, a TrizecHahn Option pursuant to Section 2.2(b);
"Trizec Subco" means 4007069 Canada Inc., a corporation existing under the CBCA
and a wholly-owned subsidiary of Trizec Canada;
"Trizec Subco Common Shares" means common shares in the capital of Trizec Subco;
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"Trizec Subco Elected Share" means a TrizecHahn SVS or a Holdco Share which the
holder has validly elected (or is deemed to have elected) in the Share Election
Form or Holdco Agreement, as applicable, to exchange with Trizec Subco for a
Trizec Canada SVS;
"Trizec Subco Exchanged Share" means a TrizecHahn SVS or a Holdco Share
exchanged with Trizec Subco for a Trizec Canada SVS pursuant to Section
2.2(a)(iii), as determined in accordance with Section 2.3;
"TrizecHahn" means Trizec Xxxx Corporation, a corporation governed by the OBCA;
"TrizecHahn MVS" means the multiple voting shares in the capital of TrizecHahn;
"TrizecHahn Option" means an option to purchase TrizecHahn SVS granted by
TrizecHahn pursuant to the 1987 SOP and outstanding immediately prior to the
Effective Time;
"TrizecHahn Shareholder" means a holder of TrizecHahn Shares;
"TrizecHahn Shares" means, collectively, the TrizecHahn SVS and TrizecHahn MVS;
"TrizecHahn SVS" means the subordinate voting shares in the capital of
TrizecHahn; and
"TrizecHahn SVS Shareholder" means a holder of TrizecHahn SVS.
1.2 Construction
In this Plan of Arrangement, unless otherwise expressly stated or the
context otherwise requires:
(a) reference to "herein", "hereby", "hereunder", "hereof" and similar
expressions are references to this Plan of Arrangement and not to any
particular Article, Section or Appendix;
(b) references to an "Article", "Section" or "Appendix" are references to
an Article or Section of or Appendix to this Plan of Arrangement;
(c) words importing the singular shall include the plural and vice versa,
words importing gender shall include the masculine, feminine and
neuter genders, and references to a "person" or "persons" shall
include individuals, corporations, partnerships, associations, bodies
politic and other entities, all as may be applicable in the context;
(d) the use of headings is for convenience of reference only and shall not
affect the construction or interpretation hereof;
(e) the word "including", when following any general term or statement, is
not to be construed as limiting the general term or statement to the
specific items or matters set forth or to similar items or matters,
but as referring to all other items or
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matters that could reasonably fall within the broadest possible scope
of the general term or statement; and
(f) a reference to a statute or code includes every regulation made
pursuant thereto, all amendments to the statute or code or to any such
regulation in force from time to time, and any statute, code or
regulation which supplements or supersedes such statute, code or any
such regulation.
1.3 Currency
All references to currency herein are to lawful money of the United States
unless otherwise specified.
ARTICLE 2
THE ARRANGEMENT
2.1 Arrangement
This Plan of Arrangement is made pursuant to, and constitutes an
arrangement as referred to in, Section 182 of the OBCA.
2.2 Arrangement Transactions
Commencing at the Effective Time the following shall occur and be deemed to
occur in the following order without any further act or formality, with the
transactions or events described in each paragraph being deemed to occur
immediately after the occurrence of the transactions or events in the
immediately preceding paragraph:
(a) Simultaneously:
(i) each holder of MVS Securities will transfer such MVS Securities
to Trizec Canada and Trizec Canada will issue one Trizec Canada
MVS to such holder in exchange for each such MVS Security
transferred to it by such holder pursuant to this Section
2.2(a)(i);
(ii) each holder of Trizec Canada Exchanged Shares will transfer such
shares to Trizec Canada and Trizec Canada will issue one Trizec
Canada SVS to such holder in exchange for each Trizec Canada
Exchanged Share transferred to Trizec Canada by such holder
pursuant to this Section 2.2(a)(ii);
(iii) each holder of Trizec Subco Exchanged Shares will transfer such
shares to Trizec Subco and Trizec Canada, on behalf of Trizec
Subco, will deliver one Trizec Canada SVS to such holder in
exchange for each Trizec Subco Exchanged Share transferred to it
by such holder pursuant to this Section 2.2(a)(iii);
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(iv) in consideration for the issuance by Trizec Canada of that number
of Trizec Canada SVS as is equal to the number of Trizec Subco
Exchanged Shares, Trizec Subco will issue to Trizec Canada an
equal number of Trizec Subco Common Shares; and
(v) each holder of Trizec Properties Exchanged Shares will transfer
such shares to Trizec Subco and Trizec Subco will transfer one
share of Trizec Properties Common Stock to such holder in
exchange for each Trizec Properties Exchanged Share transferred
to it by such holder pursuant to this Section 2.2(a)(v); provided
that, if a holder of Trizec Properties Exchanged Shares is not a
Qualifying U.S. Person such person will acquire its shares of
Trizec Properties Common Stock subject to the terms of the
Exchange Certificate Agreement and, in furtherance thereof,
Trizec Subco will deliver the shares of Trizec Properties Common
Stock to which such holder is entitled pursuant to this Section
2.2(a)(v) to the Custodian and the Custodian will deliver that
number of Exchange Certificates as is equal to the number of
shares of Trizec Properties Common Stock delivered to the
Custodian.
(b) Each TrizecHahn Option will be cancelled (each such TrizecHahn Option
referred to hereinafter as the "cancelled TrizecHahn Option") and
Trizec Canada, TrizecHahn or Trizec Properties, as applicable, will
issue or cause to be delivered, in replacement of each cancelled
TrizecHahn Option, one Trizec Canada Option, one Trizec Properties
Option or one Trizec Properties Warrant, as determined by the
compensation committee of the board of directors of TrizecHahn.
2.3 Pro ration
The number of Trizec Properties Exchanged Shares shall equal the Available
Number of Trizec Properties Shares. Accordingly, the number of Trizec Properties
Exchanged Shares, Trizec Subco Exchanged Shares and Trizec Canada Exchanged
Shares shall be determined as follows:
(a) If the Available Number of Trizec Properties Shares is equal to or
less than the aggregate number of Trizec Properties Elected Shares of
Qualifying U.S. Persons, then (i) the number of Trizec Properties
Exchanged Shares of each TrizecHahn Shareholder who is not a
Qualifying U.S. Person will be zero and each TrizecHahn SVS held by
such a TrizecHahn Shareholder (other than a Dissenting Shareholder)
shall be a Trizec Canada Exchanged Share where the holder has validly
made a Tax Deferral Election and a Trizec Subco Exchanged Share where
the holder has not done so, and (ii) the number of Trizec Properties
Exchanged Shares of each TrizecHahn Shareholder who is a Qualifying
U.S. Person shall be the number determined in accordance with the
following formula:
B
A x ---
C
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Where:
A = the Available Number of Trizec Properties Shares;
B = the number of Trizec Properties Elected Shares of the
particular Qualifying U.S. Person; and
C = the aggregate number of Trizec Properties Elected Shares
of all Qualifying U.S. Persons,
and each other TrizecHahn Share held by such Qualifying U.S. Persons
shall be a Trizec Canada Exchanged Share where the holder has validly
made a Tax Deferral Election and a Trizec Subco Exchanged Share where
the holder has not done so.
(b) If the Available Number of Trizec Properties Shares exceeds the
aggregate number of Trizec Properties Elected Shares of Qualifying
U.S. Persons but is less than the aggregate number of Trizec
Properties Elected Shares of all TrizecHahn Shareholders, then (i)
each Qualifying U.S. Person's Trizec Properties Elected Shares shall
be Trizec Properties Exchanged Shares and (ii) subject to Section
2.3(d), the number of Trizec Properties Exchanged Shares of each
TrizecHahn Shareholder other than a Qualifying U.S. Person shall be
the number determined in accordance with the following formula:
C
(A-B) x ---
D
Where:
A = the Available Number of Trizec Properties Shares;
B = the aggregate number of Trizec Properties Elected Shares
held by Qualifying U.S. Persons;
C = the number of Trizec Properties Elected Shares of the
particular TrizecHahn Shareholder; and
D = the aggregate number of Trizec Properties Elected Shares
of all TrizecHahn Shareholders other than Qualifying U.S.
Persons,
and each other TrizecHahn Share held by such a TrizecHahn Shareholder
(other than a Dissenting Shareholder) shall be a Trizec Canada
Exchanged Share where the holder has validly made a Tax Deferral
Election and a Trizec Subco Exchanged Share where the holder has not
done so.
(c) If the Available Number of Trizec Properties Shares exceeds the number
of Trizec Properties Elected Shares, then, subject to Section 2.3(d),
(i) each Trizec Properties Elected Share shall be a Trizec Properties
Exchanged Share; (ii) the
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number of Trizec Canada Exchanged Shares of each TrizecHahn
Shareholder or Holdco Shareholder shall be the number determined in
accordance with the following formula:
B
A x ---
C
Where:
A = the Number of Trizec Canada SVS;
B = the number of Trizec Canada Elected Shares
of the particular TrizecHahn Shareholder or
Holdco Shareholder; and
C = the aggregate number of Trizec Canada
Elected Shares and Trizec Subco Elected
Shares of all TrizecHahn Shareholders and
Holdco Shareholders,
and (iii) the number of Trizec Subco Exchanged Shares of each
TrizecHahn Shareholder or Holdco Shareholder shall be the number
determined in accordance with the following formula:
B
A x ---
C
Where:
A = the Number of Trizec Canada SVS;
B = the number of Trizec Subco Elected Shares
of the particular TrizecHahn Shareholder or
Holdco Shareholder; and
C = the aggregate number of Trizec Subco
Elected Shares and Trizec Canada Elected
Shares of all TrizecHahn Shareholders and
Holdco Shareholders,
and each other TrizecHahn Share or Holdco Share held by a TrizecHahn
Shareholder or Holdco Shareholder (other than a Dissenting
Shareholder) shall be deemed to be a Trizec Properties Exchanged
Share.
(d) Where, but for this Section 2.3(d), following the application of
Section 2.3(b) or (c) the number of Trizec Canada Constrained Shares
that would be held by persons or partnerships other than Canadian
Residents (in this Section, the "Initial Non-Canadian Shares"), would
be more than the Maximum Aggregate Holdings and Canadian Residents
would, but for this Section 2.3(d), have Trizec Properties Exchanged
Shares in a number determined pursuant to Section 2.3(b) or (c), then:
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(i) the number of Trizec Properties Exchanged Shares of each Canadian
Resident (other than a Dissenting Shareholder) as determined
without regard to this Section 2.3(d) shall be reduced by the
number determined by the formula:
B
A x ---
C
Where:
A = the difference between (x) the number of Initial
Non-Canadian Shares and (y) the Maximum Aggregate
Holdings on the Effective Date;
B = the number of such Canadian Resident's Trizec
Properties Exchanged Shares, determined without
reference to this Section 2.3(d); and
C = the aggregate number of Trizec Properties Exchanged
Shares of all Canadian Residents, determined
without reference to this Section 2.3(d);
(ii) the number of each such Canadian Resident's Trizec Subco
Exchanged Shares, or, where such Canadian Resident has validly
made a Tax Deferral Election, Trizec Canada Exchanged Shares,
shall be the total of (x) the number of such shares as
determined without regard to this Section 2.3(d) and (y) the
number by which the number of such Canadian Resident's Trizec
Properties Exchanged Shares is reduced pursuant to
Section 2.3(d)(i);
(iii) the number of Trizec Properties Exchanged Shares of each
TrizecHahn Shareholder (other than a Dissenting Shareholder)
who is not a Canadian Resident as determined without regard
to this Section 2.3(d) shall be increased by the number
determined by the formula:
B
A x ---
C
Where:
A = the difference between (x) the number of Initial
Non-Canadian Shares and (y) the Maximum Aggregate
Holdings on the Effective Date;
B = the number of such TrizecHahn Shareholder's Trizec
Canada Exchanged Shares or Trizec Subco Exchanged
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Shares, determined without reference to this
Section 2.3(d); and
C = the aggregate number of Trizec Canada Exchanged Shares
and Trizec Subco Exchanged Shares of all such
TrizecHahn Shareholders, determined without reference
to this Section 2.3(d); and
(iv) the number of Trizec Subco Exchanged Shares of each TrizecHahn
Shareholder (other than a Dissenting Shareholder) who is not a
Canadian Resident, or Trizec Canada Exchanged Shares where such
person has validly made a Tax Deferral Election, shall be the
difference between (x) the number of such shares as determined
without regard to this Section 2.3(d) and (y) the number by which
the number of such TrizecHahn Shareholder's Trizec Properties
Exchanged Shares is increased pursuant to Section 2.3(d)(iii).
2.4 Holdco Election
(a) Persons resident in Canada for purposes of the Tax Act ("Holdco
Shareholders") who are taxable Canadian corporations as defined in the Tax Act
and who are shareholders of a corporation ("Holdco") which: (i) was incorporated
under the OBCA or CBCA on or after April 1, 2002; (ii) has never had any assets
other than TrizecHahn Shares; (iii) has no liabilities whatsoever; and (iv) on
the Effective Date has, as its only issued and outstanding securities, a number
of common shares of Holdco equal to the number of TrizecHahn Shares which are
owned by such Holdco, may elect in respect of all the TrizecHahn Shares held by
such Holdco (the "Holdco Election"), prior to the Holdco Election Deadline, to
have all the issued and outstanding common shares of the Holdco treated as
Trizec Canada Elected Shares or Trizec Subco Elected Shares and transferred to
Trizec Canada or Trizec Subco in accordance herewith. For greater certainty, the
consideration received for such Holdco Shares shall be identical to the
consideration which such Holdco would have been entitled to receive if the
TrizecHahn Shares held by such Holdco were acquired directly by Trizec Canada or
Trizec Subco, as applicable, under the Plan of Arrangement.
(b) Each Holdco Shareholder that has made the Holdco Election will be
required to enter into a share purchase agreement (the "Holdco Agreement") with
Trizec Canada and Trizec Subco providing for the acquisition by Trizec Canada
and/or Trizec Subco of all the issued and outstanding Holdco Shares in
accordance with Section 2.2 and containing such representations and warranties,
terms and conditions and indemnities as Trizec Canada and Trizec Subco may
reasonably request in connection therewith, including, without limitation, the
representations and warranties, terms and conditions and indemnities set out in
Appendix 1, and containing the requirement for the Holdco Shareholders to
arrange for the provision of a legal opinion of such holders' legal counsel in a
form satisfactory to Trizec Canada and Trizec Subco, acting reasonably, in
connection with the purchase and sale of such Holdco Shares. Failure of any
holder of TrizecHahn Shares to properly make a Holdco Election on or prior to
the Holdco Election Deadline or failure of Holdco Shareholders to properly enter
into a Holdco Agreement will disentitle such shareholders to the Holdco
Election.
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(c) Any election under this Section 2.4 in respect of TrizecHahn SVS Shares
shall be subject to pro ration as provided in Section 2.3.
2.5 Elections
Each person who, at or prior to the Election Deadline, is a holder of
record of TrizecHahn SVS will be entitled, with respect to all or a portion of
such shares, to elect, at or prior to the Election Deadline, to exchange such
shares for Trizec Properties Shares or Trizec Canada Shares, or a combination
thereof, on the basis set forth herein and in the Share Election Form; Holdco
Shareholders will be required in the Holdco Agreement to elect to exchange
Holdco Shares for Trizec Canada Shares. If a holder of record of TrizecHahn
Shares (other than a Dissenting Shareholder) fails to make a proper election in
the Share Election Form, such holder shall be deemed to have elected to exchange
their TrizecHahn Shares under the Arrangement with Trizec Subco in exchange for
Trizec Canada Shares and each TrizecHahn Share of such holder shall be deemed to
be a Trizec Subco Elected Share. An Eligible Shareholder may make a Tax Deferral
Election in which event it will elect to exchange its TrizecHahn Shares or
Holdco Shares with Trizec Canada. No TrizecHahn Shares or Holdco Shares of a
person who is not an Eligible Shareholder will be Trizec Canada Exchanged
Shares. Any election described in this Section 2.5 shall be subject to pro
ration as provided in Section 2.3.
2.6 Fractional TrizecHahn Shares
Each fraction of a TrizecHahn SVS that is equal to or greater than one half
of a TrizecHahn SVS shall participate in the Arrangement as if it were a whole
share and each fraction of a TrizecHahn SVS that is less than one half of a
TrizecHahn SVS shall not participate in the Arrangement and shall be cancelled
without payment of consideration in respect of such cancellation.
ARTICLE 3
RIGHTS OF DISSENT
3.1 Rights of Dissent
(a) TrizecHahn SVS Shareholders may exercise dissent rights pursuant to and
in the manner set forth in Section 185 of the OBCA, as amended by this Section
3.1, in connection with the Arrangement.
(b) A Dissenting Shareholder shall transfer its TrizecHahn SVS to Trizec
Subco simultaneously with the Arrangement steps described in Section 2.2(a) and,
as such, shall not be permitted to withdraw its notice of dissent after the
Effective Time and the only right of a Dissenting Shareholder, as such, after
the Effective Time shall be to be paid fair value for his TrizecHahn Shares. In
no case shall any person be required to recognize such holders as holders of
TrizecHahn Shares, Trizec Canada Shares or Trizec Properties Common Stock after
the Effective Time and the names of such holders shall be deleted from the
applicable register of TrizecHahn Shareholders at the Effective Time.
(c) References to "the corporation" in sections 185(15) through 185(30) of
the OBCA shall be construed as referring to Trizec Subco (with the exceptions
that, for the purposes of
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section 185(15) the day the corporation received the notice referred to in
subsection (10) shall be the day TrizecHahn received such notice and for the
purposes of section 185(15)(a) the determination of fair value shall be made by
the directors of Trizec Canada) and any TrizecHahn SVS held by Dissenting
Shareholders in respect of which the Dissenting Shareholders dissent shall be
acquired by, and shall be paid for by, Trizec Subco.
ARTICLE 4
CERTIFICATES
4.1 Issuance of Certificates
At or promptly after the Effective Time, Trizec Canada or Trizec Subco, as
applicable, shall deposit or cause to be deposited with the Depositary, for the
benefit of the holders of TrizecHahn SVS (other than Dissenting Shareholders),
certificates representing the Trizec Canada SVS, shares of Trizec Properties
Common Stock (other than shares of Trizec Properties Common Stock represented by
Exchange Certificates) and Exchange Certificates acquired by such holders
pursuant to Section 2.2(a). Upon surrender to the Depositary for cancellation of
a certificate that immediately prior to the Effective Time represented one or
more TrizecHahn SVS that were exchanged under the Arrangement, together with
such other documents and instruments as would have been required to effect the
transfer of the shares formerly represented by such certificate under the OBCA
and the by-laws of TrizecHahn and such additional documents and instruments as
the Depositary may reasonably require, the holder of such surrendered
certificate shall be entitled to receive in exchange therefore, and the
Depositary shall deliver to such holder, as applicable, certificate(s)
representing that number of Trizec Canada SVS, shares of Trizec Properties
Common Stock and/or Exchange Certificates, and/or a combination thereof, that
such holder has the right to receive (together with any dividends or
distributions with respect thereto pursuant to Section 4.2), and the surrendered
certificate shall forthwith be cancelled. In the event of a transfer of
ownership of TrizecHahn SVS that is not registered in the transfer records of
TrizecHahn, certificate(s) representing the proper number of Trizec Canada SVS,
shares of Trizec Properties Common Stock and/or Exchange Certificates, and/or a
combination thereof may be issued to the transferee if the certificate
representing such TrizecHahn SVS is presented to the Depositary, accompanied by
all documents required to evidence and effect such transfer. Until surrendered
as contemplated by this Section 4.1, each certificate which immediately prior to
the Effective Time represented TrizecHahn SVS (other than TrizecHahn SVS held by
Dissenting Shareholders) shall be deemed at any time after the Effective Time to
represent only the right to receive upon such surrender (i) the certificate(s)
representing Trizec Canada SVS, shares of Trizec Properties Common Stock and/or
Exchange Certificates as contemplated by this Section 4.1, and (ii) any
dividends or distributions with a record date after the Effective Time
theretofore paid or payable with respect to Trizec Canada SVS or shares of
Trizec Properties Common Stock (including shares represented by Exchangeable
Certificates) as contemplated by Section 4.2.
4.2 Distributions with Respect to Unsurrendered Certificates
No dividends or other distributions declared or made after the Effective
Time with respect to Trizec Canada SVS or shares of Trizec Properties Common
Stock with a record date after the Effective Time shall be paid to the holder of
any unsurrendered certificate that
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immediately prior to the Effective Time represented outstanding TrizecHahn SVS
that were acquired pursuant to Section 2.2(a) unless and until the holder of
record of such certificate shall surrender such certificate in accordance with
Section 4.1. Subject to applicable law, there shall be paid to the record holder
of the certificates representing Trizec Canada SVS or shares of Trizec
Properties Common Stock (including shares represented by Exchange Certificates),
as the case may be, without interest, (i) at the time of such surrender of any
such certificate, the amount of dividends or other distributions with a record
date after the Effective Time theretofore paid with respect to such Trizec
Canada SVS or shares of Trizec Properties Common Stock (including shares
represented by Exchange Certificates), as the case may be, and (ii) at the
appropriate payment date, the amount of dividends or other distributions with a
record date after the Effective Time but prior to surrender and with a payment
date subsequent to surrender that is payable with respect to such Trizec Canada
SVS or shares of Trizec Properties Common Stock (including shares represented by
Exchange Certificates), as the case may be.
4.3 Lost Certificates
In the event any certificate which immediately prior to the Effective Time
represented one or more outstanding TrizecHahn SVS (other than TrizecHahn SVS
held by Dissenting Shareholders) shall have been lost, stolen or destroyed, the
Depositary will deliver in exchange for such lost, stolen or destroyed
certificate, one or more certificates representing one or more of Trizec Canada
SVS, shares of Trizec Properties Common Stock and/or Exchange Certificates (and
any dividends or distributions with respect thereto) deliverable in accordance
with such holder's Share Election Form and this Plan of Arrangement. When
authorizing such payment in exchange for any lost, stolen or destroyed
certificate, the person to whom certificates representing Trizec Canada SVS,
shares of Trizec Properties Common Stock and/or Exchange Certificates are to be
issued shall, as a condition precedent to the issuance thereof, give a bond
satisfactory to Trizec Canada, Trizec Subco, and/or the transfer agent and
registrar, as the case may be, in such sum as Trizec Canada, Trizec Subco and/or
the transfer agent and registrar may, acting reasonably, direct or otherwise
indemnify Trizec Canada, Trizec Subco and/or the transfer agent and registrar,
acting reasonably, against any claim that may be made against Trizec Canada,
Trizec Subco and/or the transfer agent and registrar with respect to the
certificate alleged to have been lost, stolen or destroyed.
4.4 Fractional Shares
No certificates or scrip representing fractional Trizec Canada Shares,
fractional shares of Trizec Properties Common Stock or fractional Exchange
Certificates shall be issued upon the surrender for exchange of certificates
pursuant to Section 4.1 and no dividend, stock split or other change in the
capital structure of Trizec Canada or Trizec Properties shall relate to any such
fractional security and such fractional interests shall not entitle the owner
thereof to vote or to exercise any rights as a security holder of Trizec Canada
or Trizec Properties. In lieu of such fractional securities:
(a) each person otherwise entitled as a result of the Arrangement to a
fractional interest in a Trizec Canada Share, the fractional amount of
which is less than the fractional amount of a share of Trizec
Properties Common Stock to which such person is entitled as a result
of the Arrangement, shall receive, in respect of both
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such fractional interests, one whole share of Trizec Properties Common
Stock; and
(b) each person otherwise entitled as a result of the Arrangement to a
fractional interest in a Trizec Canada Share, the fractional amount of
which is at least equal to the fractional amount of a share of Trizec
Properties Common Stock to which such person is entitled as a result
of the Arrangement, shall receive, in respect of both such fractional
interests, one whole Trizec Canada Share;
subject to adjustment in the discretion of Trizec Subco so that the total number
of Trizec Properties Exchanged Shares equals the Available Number of Trizec
Properties Shares.
APPENDIX 1
PROVISIONS TO BE INCLUDED IN
HOLDCO AGREEMENT
Each Holdco Agreement shall include the following representations and
warranties, terms and conditions, and indemnities in favour of Trizec Canada and
Trizec Subco:
I. Representations and Warranties of the Holdco Shareholders
Each of the Holdco Shareholders hereby represents and warrants to Trizec
Canada and Trizec Subco as follows and hereby acknowledges and confirms that
Trizec Canada and Trizec Subco are relying on such representations and
warranties in connection with the purchase by Trizec Canada and/or Trizec Subco
of the Holdco Shares:
(a) the execution and delivery of this Holdco Agreement by the Holdco
Shareholders and Holdco and the completion by the Holdco Shareholders
and Holdco of the transactions contemplated hereby:
(i) will not conflict with, result in the breach of or constitute a
default under the articles, by-laws or resolutions of Holdco or
any agreement, indenture, contract, lease, deed of trust,
licence, option, instrument or other commitment, whether written
or oral (a "Contract") to which the Holdco Shareholders or Holdco
is a party; and
(ii) do not and will not violate any provision of law or
administrative regulation or any judicial or administrative
award, judgment or decree binding upon the Holdco Shareholders or
Holdco;
(b) the TrizecHahn Shares which are owned by Holdco on the Effective Date
have been held since April 1, 2002 by Holdco or by a Holdco
Shareholder;
(c) each of the Holdco Shareholders is a taxable Canadian corporation for
the purposes of the Tax Act;
(d) Holdco is a resident of Canada for the purposes of the Tax Act;
(e) this Holdco Agreement has been duly executed and delivered by each of
the Holdco Shareholders and Holdco and is a valid and binding
obligation of each of the Holdco Shareholders and Holdco enforceable
against each of the Holdco Shareholders and Holdco in accordance with
its terms, subject to applicable bankruptcy, insolvency and other laws
affecting the enforcement of creditors' rights generally and provided
that equitable remedies will only be awarded in the discretion of a
court of competent jurisdiction;
(f) all of the Holdco Shares are registered in the name of, and
beneficially owned by, not more than five Holdco Shareholders free and
clear of all liens, charges, encumbrances, claims and equities
(collectively, "Liens");
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(g) no person has any Contract, warrant or option or any right capable of
becoming a Contract, warrant or option for the purchase from any of
the Holdco Shareholders of any of the Holdco Shares or from Holdco of
any shares or other securities of Holdco or of any of the [insert
number] TrizecHahn Shares held by Holdco (the "Subject Shares");
(h) the Holdco Shares are validly issued and outstanding as fully paid and
non-assessable shares in the capital of Holdco and are the only issued
and outstanding shares in the capital of Holdco and, as of the
Effective Date, the number of Holdco Shares outstanding is equal to
the number of Subject Shares;
(i) Holdco is a corporation duly incorporated under the OBCA or CBCA on or
after April 1, 2002 and duly organized and validly existing under the
laws of the Province of Ontario or the federal laws of Canada, as
applicable;
(j) Holdco is the beneficial and registered holder of the Subject Shares
all of which are held by Holdco free and clear of all Liens;
(k) Holdco does not own or hold and has never owned or held property or
assets or any interests therein of any nature or kind whatsoever other
than the Subject Shares and Holdco does not carry on, and has never
carried on, an active business;
(l) Holdco has no obligations, liabilities (whether actual or contingent)
or indebtedness to any person, including without limitation any
liabilities in respect of federal or provincial income, corporate,
goods and services, capital, harmonized sales, sales, excise, employer
health, surtaxes, education, social services, social security,
employment insurance, health insurance, Canada, Quebec and other
governmental pension plan premiums or contributions, land transfer or
any other taxes, duties or imposts of any nature or kind whatsoever,
or in respect of any judgments, orders, fines, interest, penalties,
awards or decrees of any court, tribunal or governmental,
administrative or regulatory department, commission, board, bureau,
agency or instrumentality, domestic or foreign;
(m) Holdco has no subsidiaries and is not bound by any Contract to acquire
or lease in any manner any shares or assets of any nature or kind
whatsoever;
(n) Holdco does not have, and has never had, any employees and its
directors and officers receive no remuneration or compensation from
Holdco;
(o) Holdco is not a party to any Contract of any nature or kind whatsoever
except for the Contract with the Holdco Shareholder(s) pursuant to
which Holdco acquired the Subject Shares (a true and complete copy of
which has been provided to Trizec Canada and Trizec Subco);
(p) there are no claims, investigations, actions, suits or proceedings
pending or threatened against or affecting Holdco or the Holdco
Shareholders, whether at law or in equity or before or by any federal,
provincial, municipal or other governmental or administrative or
regulatory department, commission, board,
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tribunal, bureau, agency or instrumentality, domestic or foreign, that
would adversely affect in any manner the ability of Holdco and the
Holdco Shareholders to enter into this Holdco Agreement and perform
their obligations hereunder;
(q) there are no claims, investigations, actions, suits or proceedings
pending or threatened against or affecting Holdco, whether at law or
in equity or before or by any federal, provincial, municipal or other
governmental or administrative or regulatory department, commission,
board, tribunal, bureau, agency or instrumentality, domestic or
foreign;
(r) Holdco is in full compliance with all laws, rules or regulations to
which Holdco or the Subject Shares may be subject;
(s) the books and records of Holdco fairly and correctly set out and
disclose in all respects, in accordance with generally accepted
accounting principles in Canada consistently applied, the financial
position of Holdco as of the date hereof and all financial
transactions of Holdco have been accurately recorded in such books and
records; and
(t) the corporate records and minute books of Holdco contain complete and
accurate minutes of all meetings of the directors and shareholders of
Holdco held since its incorporation and all such meetings were duly
called and held and the share certificate books, register of
shareholders, register of transfers and register of directors and
officers of Holdco are complete and accurate.
II. Covenants
(a) Holdco Documents. The Holdco Shareholders and Holdco shall forthwith
make available to Trizec Canada and Trizec Subco and their authorized
representatives all minute books, share certificate books, share
registers, books of account, accounting records, corporate documents
and all other books or records, documents, information or data
relating to Holdco (collectively the "Holdco Documents"). At the time
of closing, all of the Holdco Documents shall be delivered to Trizec
Canada and Trizec Subco by the Holdco Shareholders and Holdco.
(b) No Share Issuances or Distributions. No Holdco Shareholder that is a
corporation shall (i) issue any shares from and after the date hereof
to and including the Effective Date in connection with any direct or
indirect transfer of TrizecHahn Shares or (ii) declare or pay any
dividends (other than stock dividends) or effect other redemptions or
distributions at any time prior to the Effective Date.
(c) Opinion. The Holdco Shareholders shall deliver to Trizec Canada and
Trizec Subco a written legal opinion satisfactory to Trizec Canada and
Trizec Subco in connection with the purchase and sale of the Holdco
Shares.
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III. Indemnification
(a) Obligations to Indemnify. Each of the Holdco Shareholders agrees to
indemnify and save harmless Trizec Canada and Trizec Subco from all claims,
demands, proceedings, losses, damages, liabilities, deficiencies, costs and
expenses (including, without limitation, reasonable legal and other
professional fees and disbursements, interest, penalties and amounts paid
in settlement) (singly a "Loss" and collectively "Losses") suffered or
incurred by Trizec Canada or Trizec Subco as a result of or arising
directly or indirectly out of or in connection with any breach by the
Holdco Shareholders or Holdco of any representation, warranty, obligation
or covenant of the Holdco Shareholders or Holdco contained in this Holdco
Agreement. Trizec Canada and Trizec Subco agree to indemnify and save
harmless the Holdco Shareholders from all Losses suffered or incurred by
them as a result of or arising directly or indirectly out of or in
connection with any breach by Trizec Canada or Trizec Subco of any
representation, warranty, obligation or covenant of Trizec Canada or Trizec
Subco contained in this Holdco Agreement.
(b) Notice of Claim. In the event that a party (the "Indemnified Party") shall
become aware of any claim, proceeding or other matter (a "Claim") in
respect of which another party (the "Indemnifying Party") agreed to
indemnify the Indemnified Party pursuant to this Holdco Agreement, the
Indemnified Party shall promptly give written notice thereof to the
Indemnifying Party. Such notice shall specify whether the Claim arises as a
result of a claim by a person against the Indemnified Party (a "Third Party
Claim") or whether the Claim does not so arise (a "Direct Claim"), and
shall also specify with reasonable particularity (to the extent that the
information is available) the factual basis for the Claim and the amount of
the Claim, if known. If, through the fault of the Indemnified Party, the
Indemnifying Party does not receive notice of any Claim in time to contest
effectively the determination of any liability susceptible of being
contested, the Indemnifying Party shall be entitled to set off against the
amount claimed by the Indemnified Party the amount of any Losses incurred
by the Indemnifying Party resulting directly from the Indemnified Party's
failure to give such notice on a timely basis.
(c) Direct Claims. With respect to any Direct Claim, following receipt of
notice from the Indemnified Party of the Claim, the Indemnifying Party
shall have 60 days to make such investigation of the Claim as is considered
necessary or desirable. For the purpose of such investigation, the
Indemnified Party shall make available to the Indemnifying Party the
information relied upon by the Indemnified Party to substantiate the Claim,
together with all such other information as the Indemnifying Party may
reasonably request. If both parties agree at or prior to the expiration of
such 60-day period (or any mutually agreed upon extension thereof) to the
validity and amount of such Claim, the Indemnifying Party shall immediately
pay to the Indemnified Party the full agreed upon amount of the Claim.
(d) Third Party Claims. With respect to any Third Party Claim, the Indemnified
Party shall have the exclusive right, at the expense of the Indemnifying
Party, to
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contest, settle or pay the amount claimed and to retain counsel and other
experts or advisers selected by the Indemnified Party in its sole
discretion in connection therewith; provided, however, that the Indemnified
Party shall not settle any Third Party Claim without the written consent of
the Indemnifying Party, which consent shall not be unreasonably withheld or
delayed. If the Indemnified Party elects to assume such control, the
Indemnifying Party shall have the right, at its sole expense, to
participate in the negotiation, settlement or defence of such Third Party
Claim. If any Third Party Claim is of a nature such that the Indemnified
Party is required by applicable law to make a payment to any person (a
"Third Party") with respect to the Third Party Claim before the completion
of settlement negotiations or related legal proceedings, the Indemnified
Party may make such payment and the Indemnifying Party shall, forthwith
after demand by the Indemnified Party, reimburse the Indemnified Party for
such payment. If the amount of any liability of the Indemnified Party under
the Third Party Claim in respect of which such payment was made, as finally
determined, is less than the amount that was paid by the Indemnifying Party
to the Indemnified Party, the Indemnified Party shall, forthwith after
receipt of the difference from the Third Party, pay the amount of such
difference to the Indemnifying Party.
(e) Payment and Cooperation. The Indemnifying Party shall pay to the
Indemnified Party all amounts for which the Indemnifying Party is liable
pursuant to this Section promptly after the Indemnified Party incurs the
Loss in respect of which such liability arises. The Indemnified Party and
the Indemnifying Party shall co-operate fully with each other with respect
to Third Party Claims, and shall keep each other fully advised with respect
thereto (including supplying copies of all relevant documentation promptly
as it becomes available).
(f) Tax Effect. If any payment received by an Indemnified Party hereunder (an
"Indemnity Payment") would constitute income for tax purposes to such
Indemnified Party, the Indemnifying Party shall pay a Tax Gross Up to the
Indemnified Party at the same time and on the same terms, as to interest
and otherwise, as the Indemnity Payment. The amount of any Loss for which
indemnification is provided shall be adjusted to take into account any tax
benefit realized by the Indemnified Party or any of its affiliates by
reason of the Loss for which indemnification is so provided or the
circumstances giving rise to such Loss. For purposes of this paragraph (f),
any tax benefit shall be taken into account at such time as it is received
by the Indemnified Party or its affiliate. For purposes of this paragraph
(f), "Tax Gross Up" shall mean, with respect to any Indemnity Payment, such
additional amount (calculated in accordance with the Calculation Method) as
is necessary to place the Indemnified Party in the same after tax position
as it would have been in had such Indemnity Payment been received tax free;
and "Calculation Method" with respect to the calculation of any Tax Gross
Up on any Indemnity Payments shall mean that such Tax Gross Up shall be
calculated by using the combined Canadian federal and Canadian provincial
income tax rate applicable to the Indemnified Party and, except as provided
in this paragraph (f), without regard to any losses, credits, refunds or
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deductions that the Indemnified Party may have which could affect the
amount of tax payable on any such Indemnity Payment.
