Exhibit 99.3
ARRANGEMENT AGREEMENT
THIS AMENDED AND RESTATED AGREEMENT made as of the 3rd day of May,
2006.
BETWEEN:
CINRAM INTERNATIONAL INCOME FUND,
a trust governed by the laws of the Province of Ontario
(hereinafter referred to as the "FUND")
-and-
CII TRUST,
a trust governed by the laws of the Province of Ontario
(hereinafter referred to as the "TRUST")
-and-
CINRAM INTERNATIONAL GENERAL PARTNER INC.,
a corporation existing under the laws of the Province of Ontario
(hereinafter referred to as the "HOLDING GP")
-and-
CINRAM INTERNATIONAL LIMITED PARTNERSHIP,
a limited partnership existing under the laws of the Province of
Manitoba
(hereinafter referred to as the "HOLDING PARTNERSHIP")
-and-
CINRAM INTERNATIONAL INC.,
a corporation existing under the laws of Canada
(hereinafter referred to as "CINRAM")
-and-
CINRAM ACQUISITION INC.,
a corporation existing under the laws of Canada
(hereinafter referred to as "NEWCO")
-and-
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CINRAM INTERNATIONAL ULC,
an unlimited liability corporation existing under the laws of the
Province of Nova Scotia
(hereinafter referred to as the "ULC")
-and-
CINRAM INTERNATIONAL LLC,
a limited liability corporation existing under the laws of the
State of Delaware
(hereafter referred to as the "LLC")
WHEREAS the board of directors of Cinram have approved and agreed to
effect, subject to obtaining approval of Cinram's shareholders at the Meeting
(as defined below), a statutory plan of arrangement under Section 192 of the
Canada Business Corporations Act on the terms and conditions set out in this
Agreement and the Plan of Arrangement annexed hereto as Exhibit 1;
AND WHEREAS each of the Fund, the Trust, the Holding GP, the Holding
Partnership, Newco, the ULC and the LLC has been established to participate in
the Arrangement on the terms and conditions set forth herein;
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 the following terms have the following meanings,
respectively:
"AFFILIATE" has the meaning ascribed thereto in Section 1.2 of National
Instrument 45-106 Prospectus and Registration Exemptions, on the date hereof;
"AGREEMENT" means this agreement including the Exhibits hereto and all
amendments made hereto;
"AMALCO" means the corporation to be formed as a result of the amalgamation of
Cinram and Newco contemplated by the Plan of Arrangement and to be known as
"Cinram International Inc.";
"AMALCO NOTES" means the one or more unsecured subordinated promissory notes
issued by Amalco to the ULC pursuant to the Plan of Arrangement;
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"ARRANGEMENT" means the proposed arrangement under Section 192 of the CBCA on
and subject to the terms and conditions set forth in the Plan of Arrangement and
any supplement, modification or amendment thereto made in accordance with
Section 5.1;
"ARRANGEMENT FILINGS" has the meaning ascribed thereto in the Plan of
Arrangement;
"ARRANGEMENT RESOLUTION" means the special resolution in respect of the
Arrangement in substantially the form attached as Appendix A to the Information
Circular to be voted upon by Shareholders at the Meeting;
"AUTHORITY" means any: (i) multinational, federal, provincial, state, municipal,
local or foreign governmental or public department, court, or commission,
domestic or foreign; (ii) any subdivision or authority of any of the foregoing;
or (iii) any quasi-governmental or self-regulatory organization exercising any
regulatory, expropriation or taxing authority under or for the account of its
members or any of the above;
"BUSINESS DAY" means a day, other than a Saturday, Sunday or statutory or civil
holiday, when banks are generally open for the transaction of business in
Toronto, Ontario;
"CBCA" means the Canada Business Corporations Act, R.S.C. 1985 c. C-44, as
amended, including the regulations promulgated thereunder;
"CCHL" means Cinram Canadian Holdings Limited, a corporation formed under the
federal laws of Canada;
"CINRAM FINANCE" means Cinram Finance, a general partnership formed under the
laws of the State of Delaware, the sole partners of which are Cinram (with an
ownership interest of 99.0%) and CCHL (with an ownership interest of 1.0%);
"CINRAM SHARES" means the common shares in the capital of Cinram;
"CLASS A HOLDING PARTNERSHIP UNITS" means the Class A limited partnership units
of the Holding Partnership;
"CLOSING" means the completion of the transactions contemplated by this
Agreement;
"COURT" means the Ontario Superior Court of Justice;
"CUSH" means Cinram (U.S.) Holding's Inc., a corporation existing under the laws
of the State of Delaware;
"DIRECTOR" means the Director appointed under Section 260 of the CBCA;
"DISSENT RIGHTS" means the right of a Shareholder, pursuant to the Interim Order
and Section 190 of the CBCA, to dissent to the Arrangement Resolution and to be
paid the fair value of the Shares in respect of which the Shareholder dissents,
all in accordance with Section 190 of the CBCA, subject to and as modified by
the Interim Order and Article 4 of the Plan of Arrangement;
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"DISSENTING SHAREHOLDER" means a registered holder of Cinram Shares who
exercises such registered holder's right to dissent in respect of the
Arrangement pursuant to the procedures set forth in Section 190 of the CBCA and
Section 4.1 of the Plan of Arrangement as described in the Information Circular;
"EFFECTIVE DATE" means the effective date on which the Arrangement Filings are
duly filed pursuant to the CBCA and the Final Order;
"EFFECTIVE TIME" means the time on the Effective Date at which the Arrangement
is effective, as specified in the Arrangement Filings filed pursuant to the CBCA
and the Final Order;
"ENCUMBRANCE" means any mortgage, charge, pledge, lien, hypothec, security
interest, encumbrance, adverse claim and right of third parties to acquire or
restrict the use of property;
"EXCHANGE AGREEMENT" means the exchange agreement to be entered into on the
Effective Date substantially on the terms described in the Information Circular
among the Fund, the Trust, the Holding Partnership, the Holding GP and each
Person who from time to time becomes or is deemed to become a party thereto by
reason of his, her or its registered ownership of Exchangeable LP Units, as the
same may be amended, supplemented or restated from time to time;
"EXCHANGE RIGHTS" means the exchange rights set out in the Exchange Agreement
and the limited partnership agreement governing the Holding Partnership;
"EXCHANGEABLE LP UNITS" means the Class B limited partnership units of the
Holding Partnership;
"EXISTING SENIOR CREDIT FACILITY" means the term loans and revolving credit
facility of Cinram, Cinram Finance and CUSH with a syndicate of financial
institutions, in each case, pursuant to a credit agreement entered into October
24, 2003 between, among others, Cinram, Cinram Finance and CUSH, as borrowers,
and such syndicate of financial institutions, as amended, extended, renewed,
restated, supplemented or otherwise modified;
"FINAL ORDER" means the order of the Court approving the Arrangement under
Section 192 of the CBCA, as such order may be affirmed, amended or modified by
any court of competent jurisdiction;
"FUND DECLARATION OF TRUST" means the declaration of trust dated March 21, 2006,
governing the Fund, as the same may be amended and/or restated from time to
time;
"FUND GROUP" means, collectively, the Fund, the Trust, the Holding GP, the
Holding Partnership, Amalco, the ULC, the LLC and their respective Affiliates;
"FUND OPTION" means an option granted pursuant to the Arrangement in exchange
for an Option, entitling the holder thereof to purchase one Fund Unit for an
exercise price per Fund Unit equal to the exercise price per Cinram Share under
the exchanged Option;
"FUND UNIT" means a unit (other than a Special Voting Unit) authorized and
issued under the Fund Declaration of Trust for the time being outstanding and
entitled to the benefits and subject to the limitations set forth therein;
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"FUND UNITHOLDERS" means the holders of Fund Units from time to time;
"HOLDING GP SHARES" means the common shares in the capital of Holding GP;
"HOLDING PARTNERSHIP UNITS" means, collectively, the general partner interest in
the Holding Partnership, Class A Holding Partnership Units and Exchangeable LP
Units;
"INFORMATION CIRCULAR" means the management proxy circular of Cinram relating to
the Arrangement to be sent to Shareholders in connection with the Meeting;
"INTERIM ORDER" means the interim order of the Court to be issued pursuant to
the application referred to in Section 3.5 of this Agreement, as such order may
be affirmed, amended or modified by any court of competent jurisdiction;
"MEETING" means the annual and special meeting of holders of Cinram Shares, and
any adjournment(s) or postponement(s) thereof, to be held for the purpose of
considering and, if thought fit, approving the Arrangement and other matters set
out in the notice of meeting accompanying the Information Circular;
"NEWCO SHARES" means the common shares in the capital of Newco;
"NEW CREDIT FACILITY" means the term loans and revolving credit facility of
Amalco and one or more Amalco Subsidiaries with a syndicate of financial
institutions, in each case, pursuant to a credit agreement to be entered into
concurrent with the Closing, between, among others, Amalco, CUSH, Cinram Inc.
and ▇▇▇ ▇▇▇▇ Corporation, each as borrowers, and Cinram ULC, Cinram LLC, Amalco
and each existing and subsequently acquired or organized Amalco Subsidiary
(subject to certain exceptions to be agreed upon) as guarantors, and such
syndicate of financial institutions;
"OPTIONS" means, collectively, the outstanding and unexpired options to acquire
Cinram Shares issued pursuant to the Stock Option Incentive Plan;
"PARTIES" means, collectively, the Fund, Trust, the Holding GP, the Holding
Partnership, Cinram, Newco, the ULC and the LLC, and "PARTY" means any one of
them;
"PERSON" means any individual, partnership, association, body corporate,
trustee, executor, administrator, legal representative, government, regulatory
authority or other entity;
"PLAN OF ARRANGEMENT" means the plan of arrangement set out as Exhibit 1 hereto,
as the same may be amended or supplemented from time to time in accordance with
the terms thereof;
"POST-ARRANGEMENT TRANSACTIONS" means the transactions occurring after the
implementation of the Plan of Arrangement, including transactions whereby Amalco
will repay the Amalco Notes, and all of the interests in the LLC will be
transferred to the ULC;
"PRE-ARRANGEMENT TRANSACTIONS" means the transactions to be carried out by
Cinram and various of its Subsidiaries pursuant to which, among other things
(and unless otherwise agreed to by the respective parties to the applicable
Pre-Arrangement Transaction): (i) Cinram and Cinram Finance will repay all
amounts owing by them, respectively, under the Existing Senior Credit Facility
and Amalco and one or more of its Subsidiaries will borrow funds under the New
Credit
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Facility; and (ii) the LLC will acquire indebtedness of CUSH and/or one or more
of its Subsidiaries as evidenced by the US Note;
"SHAREHOLDERS" means the holders of Cinram Shares from time to time;
"SPECIAL VOTING UNITS" means the special voting units of the Fund received by
the holders of Exchangeable LP Units (other than any member of the Fund Group)
and authorized under the Fund Declaration of Trust for the time being
outstanding and entitled to the benefits and subject to the limitations set
forth therein;
"STOCK OPTION INCENTIVE PLAN" means Cinram's stock option incentive plan
approved by the Shareholders on June 23, 1994, as amended by the Shareholders on
June 16, 2004;
"SUBSIDIARY" has the meaning ascribed thereto in Section 1.2 National Instrument
45-106 Prospectus and Registration Exemptions on the date hereof;
"TRUST DECLARATION OF TRUST" means the declaration of trust dated March 21, 2006
governing the Trust, as the same may be amended and/or restated from time to
time;
"TRUST UNIT" means a unit authorized and issued under the Trust Declaration of
Trust for the time being outstanding and entitled to the benefits and subject to
the limitations set forth therein;
"TRUSTEES" means the trustees of the Fund from time to time;
"TSX" means the Toronto Stock Exchange;
"ULC SHARES" means the common shares in the capital of the ULC; and
"U.S. NOTE" means the subordinated promissory note issued by CUSH in favour of
the LLC.
1.2 EXHIBITS
The following Exhibit is attached to this Agreement and forms part hereof:
Exhibit 1 - 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
section, subsection or Exhibit;
(b) references to an "Article", "Section" or "Exhibit" are references to an
Article, Section or Exhibit 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 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;
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(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 rather as
referring to all other items or matters that could reasonably fall within
the broadest possible scope of the general term or statement;
(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; and
(g) each of the Parties acknowledges the obligations of the Fund and the Trust
under this Agreement and that such obligations will not be personally
binding upon any of the trustees of the Fund or the trustees of the Trust,
any registered or beneficial holder of Fund Units, Special Voting Units or
Trust Units or any beneficiary under a plan of which a holder of such units
acts as a trustee or carrier, and that resort will not be had to, nor will
recourse be sought from, any of the foregoing or the private property of
any of the foregoing in respect of any indebtedness, obligation or
liability of the Fund or the Trust arising hereunder, and recourse for such
indebtedness, obligations or liabilities of the Fund or the Trust, as the
case may be, will be limited to, and satisfied only out of, the assets of
the Fund or the Trust, as the case may be.
1.4 CURRENCY
All references to currency herein are to lawful money of the United States
unless otherwise specified.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES
2.1 MUTUAL REPRESENTATIONS AND WARRANTIES OF THE HOLDING GP, THE HOLDING
PARTNERSHIP, CINRAM, NEWCO, THE ULC AND THE LLC
The Holding GP, the Holding Partnership, Cinram, Newco, the ULC and the LLC
each represents and warrants to each other and to the Fund and the Trust as
follows, and acknowledges that each of them is relying upon such representations
and warranties in connection with the matters contemplated by this Agreement:
(a) each of the Holding GP, Cinram, and Newco (i) is a corporation duly
incorporated or amalgamated and validly existing under the laws of its
jurisdiction of incorporation, (ii) is duly qualified to carry on its
business in each jurisdiction where the conduct of its business is
currently conducted and is presently proposed to be conducted, or the
ownership, leasing or operation of its property and assets requires such
qualification, and (iii) on its behalf and, in the case of the Holding GP
(in its capacity as the general partner of the Holding Partnership) on
behalf of the Holding Partnership, has all requisite corporate power and
authority to carry on its business and to enter into and perform its
obligations under this Agreement;
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(b) the ULC (i) is an unlimited liability corporation duly incorporated and
validly existing under the laws of the Province of Nova Scotia, (ii) is
duly qualified to carry on its business in each jurisdiction where the
conduct of its business is currently conducted and is presently proposed to
be conducted, or the ownership, leasing or operation of its property and
assets requires such qualification, and (iii) has all requisite corporate
power and authority to carry on its business and to enter into and perform
its obligations under this Agreement;
(c) the Holding Partnership (i) is a limited partnership duly formed and
validly existing under the laws of the Province of Manitoba, (ii) is duly
registered to carry on its business in each jurisdiction where the conduct
of its business is currently conducted and is presently proposed to be
conducted, or the ownership, leasing or operation of its property and
assets requires such registration, and (iii) has all requisite power and
authority to carry on its business and to enter into and perform its
obligations under this Agreement;
(d) the LLC (i) is a limited liability corporation duly formed and validly
existing under the laws of the State of Delaware, (ii) is duly registered
to carry on its business in each jurisdiction where the conduct of its
business is currently conducted and is presently proposed to be conducted,
or the ownership, leasing or operation of its property and assets requires
such registration, and (iii) has all requisite power and authority to carry
on its business and to enter into and perform its obligations under this
Agreement;
(e) the execution and delivery of this Agreement by it and the completion by it
of the transactions contemplated herein and in the Plan of Arrangement do
not and will not:
(i) result in the breach of, or violate any term or provision of, its
articles or by-laws or other constating documents;
(ii) conflict with, result in the breach of, constitute a default under, or
accelerate or permit the acceleration of the performance required by,
any agreement, instrument, licence or permit to which it is a party or
by which it is bound and which is material to it, or to which any
material property of such Party is subject, or result in the creation
of any Encumbrance upon any of its material assets under any such
agreement, instrument licence or permit or give to others any material
interest or right, including rights of purchase, termination,
cancellation or acceleration, under any such agreement, instrument,
licence or permit; or
(iii) violate any provision of law or administrative regulation or any
judicial or administrative award, judgment, order or decree applicable
and known to it, the breach of which would have a material adverse
effect on it;
(f) there are no actions, suits, proceedings or investigations commenced,
contemplated or threatened against or affecting it, at law or in equity,
before or by any Authority nor are there any existing facts or conditions
which may reasonably be expected to form a proper basis for any actions,
suits, proceedings or investigations, which, in any case, would prevent or
hinder the consummation of the transactions contemplated by this Agreement;
(g) no dissolution, winding up, bankruptcy, liquidation or similar proceeding
has been commenced or is pending or proposed in respect of it;
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(h) the execution and delivery of this Agreement, and the completion of the
transactions contemplated herein and in the Plan of Arrangement have been
duly approved by its board of directors (or, in the case of the Holding
Partnership, by the board of directors of the Holding GP in its capacity as
the general partner of the Holding Partnership) and this Agreement
constitutes a valid and binding obligation of such Party enforceable
against it in accordance with its terms, subject to bankruptcy, insolvency
and other laws affecting the enforcement of creditors' rights generally and
to general principles of equity and limitations upon the enforcement of
indemnification for fines or penalties imposed by law; and
(i) there are no actions, suits, proceedings or investigations commenced,
contemplated or threatened against or affecting it, at law or in equity,
before or by any Authority nor are there any existing facts or conditions
which may reasonably be expected to form a proper basis for any actions,
suits, proceedings or investigations, which, in any case, would prevent or
hinder the consummation of the transactions contemplated by this Agreement.
2.2 REPRESENTATIONS AND WARRANTIES OF CINRAM
Cinram represents and warrants to and in favour of each of the Fund, the
Trust, the Holding GP, the Holding Partnership, Newco, the ULC and the LLC as
follows, and acknowledges that each of them is relying upon such representations
and warranties in connection with the matters contemplated by this Agreement:
(a) the authorized capital of Cinram consists of an unlimited number of Cinram
Shares;
(b) as at March 27, 2006, the issued and outstanding share capital of Cinram
consisted of 57,305,960 Cinram Shares; and
(c) at the date hereof, no Person holds any securities convertible into Cinram
Shares or any other shares of Cinram or has any agreement, warrant, option
or any other right capable of becoming an agreement, warrant or option for
the purchase or other acquisition of any unissued shares of Cinram, other
than pursuant to Options to purchase 1,230,768 Cinram Shares granted to
officers and directors of Cinram pursuant to the Stock Option Incentive
Plan.
2.3 REPRESENTATIONS AND WARRANTIES OF THE FUND AND THE TRUST
Each of the Fund and the Trust represents and warrants to and in favour of
each of the other Parties as follows, and acknowledges that each of them is
relying upon such representations and warranties in connection with the matters
contemplated by this Agreement:
(a) each of the Fund and the Trust is a trust duly settled and existing under
the laws of the Province of Ontario and has the power and capacity to enter
into this Agreement and to perform its obligations hereunder;
(b) the Fund currently has eleven (11) outstanding Fund Units, which are
fully-paid and non-assessable and are owned legally and beneficially by the
settlor of the Fund;
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(c) the Trust currently has one outstanding Trust Unit, which is fully-paid and
non-assessable and is owned legally and beneficially by the Fund; and
(d) neither the Fund nor the Trust has carried on any business since it was
settled or undertaken any activity, other than as provided for herein and
in the Plan of Arrangement.
2.4 REPRESENTATIONS AND WARRANTIES OF HOLDING GP
Holding GP represents and warrants to and in favour of each of the other
Parties and acknowledges that each of them is relying on such representations
and warranties in connection with the matters contemplated in this Agreement:
(a) the authorized capital of Holding GP consists of an unlimited number of
Holding GP Shares, of which one (1) Holding GP Share is issued and
outstanding, fully-paid and non-assessable and owned legally and
beneficially by the Fund;
(b) at the date hereof, no Person holds any securities convertible into Holding
GP Shares or has any agreement, warrant, option or other right capable of
becoming an agreement, warrant or option for the purchase or other
acquisition of any issued or unissued shares of Holding GP, except as
contemplated by the Plan of Arrangement; and
(c) Holding GP has no non-cash assets and no liabilities and has not carried on
any business since its date of incorporation.
2.5 REPRESENTATIONS AND WARRANTIES OF NEWCO
Newco represents and warrants to and in favour of each of the other Parties
and acknowledges that each of them is relying on such representations and
warranties in connection with the matters contemplated in this Agreement:
(a) the authorized capital of Newco consists of an unlimited number of Newco
Shares, of which one (1) Newco Share is issued and outstanding, fully-paid
and non-assessable and owned legally and beneficially by the ULC;
(b) at the date hereof, no Person holds any securities convertible into Newco
Shares or has any agreement, warrant, option or other right capable of
becoming an agreement, warrant or option for the purchase or other
acquisition of any issued or unissued shares of Newco, except as
contemplated by the Plan of Arrangement; and
(c) Newco has no non-cash assets and no liabilities and has not carried on any
business since its date of incorporation.
2.6 REPRESENTATIONS AND WARRANTIES OF THE ULC
The ULC represents and warrants to and in favour of each of the other
Parties and acknowledges that each of them is relying on such representations
and warranties in connection with the matters contemplated in this Agreement:
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(a) the authorized capital of the ULC consists of an unlimited number of ULC
Shares, of which one (1) ULC Share is issued and outstanding, fully-paid
and non-assessable and owned legally and beneficially by the Holding
Partnership;
(b) at the date hereof, no Person holds any securities convertible into ULC
Shares or has any agreement, warrant, option or other right capable of
becoming an agreement, warrant or option for the purchase or other
acquisition of any issued or unissued shares of the ULC, except as
contemplated by the Plan of Arrangement; and
(c) The ULC has no non-cash assets and no liabilities and has not carried on
any business since its date of incorporation.
2.7 REPRESENTATIONS AND WARRANTIES OF THE HOLDING PARTNERSHIP AND THE LLC
Each of the Holding Partnership and the LLC represents and warrants to and
in favour of each of the other Parties as follows, and acknowledges that each of
them is relying on such representations and warranties in connection with the
matters contemplated in this Agreement:
(a) the authorized capital of the Holding Partnership consists of a 0.01%
general partner interest and an unlimited number of Class A Holding
Partnership Units and an unlimited number of Exchangeable LP Units, of
which a 0.01% general partner interest and 10 Class A Holding Partnership
Units are issued and outstanding, all of which are fully paid and
non-assessable and are owned legally and beneficially by the Holding GP (in
the case of the 0.01% general partner interest) and the Trust (in the case
of the 10 Class A Holding Partnership Units);
(b) the authorized capital of the LLC consists of an unlimited number of
membership interests all of which are owned legally and beneficially by
Cinram;
(c) at the date hereof, no Person holds any securities convertible into Holding
Partnership Units or LLC membership interests or has any agreement,
warrant, option or other right capable of becoming an agreement, warrant or
option for the purchase or other acquisition of any issued or unissued
Holding Partnership Units or LLC membership interests, except as
contemplated by the Plan of Arrangement; and
(d) neither the Holding Partnership nor the LLC has non-cash assets or
liabilities or has carried on any business since its date of formation,
other than as provided herein and in the Plan of Arrangement.
ARTICLE 3
COVENANTS
3.1 GENERAL COVENANTS
Each of the Parties covenants with the other Parties that it will:
(a) use commercially reasonable efforts and do all things reasonably required
of it to cause the Arrangement to become effective on or before June 30,
2006;
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(b) do and perform all such acts and things, and execute and deliver all such
agreements, assurances, notices and other documents and instruments as may
reasonably be required, both prior to and following the Effective Date, to
facilitate the carrying out of the intent and purposes of this Agreement;
and
(c) use commercially reasonable efforts to cause each of the conditions
precedent set forth in Article 4, which are within its control, to be
satisfied on or prior to the Effective Date.
3.2 COVENANTS OF CINRAM
Cinram hereby covenants and agrees with each of the other Parties that it
will:
(a) until the Effective Date, not perform any act or enter into any
transaction, nor permit Cinram or any of its Subsidiaries to perform any
act or enter into any transaction, which interferes or is inconsistent with
the completion of the Arrangement;
(b) apply to the Court for the Interim Order;
(c) solicit proxies to be voted at the Meeting in favour of the Arrangement
Resolution and prepare, as soon as practicable, in consultation with the
other Parties, the Information Circular and proxy solicitation materials
and any amendments or supplements thereto as required by, and in compliance
with, the Interim Order and applicable law and, subject to receipt of the
Interim Order, convene the Meeting as ordered by the Interim Order and
conduct the Meeting in accordance with the Interim Order and as otherwise
required by law;
(d) in a timely and expeditious manner, file the Information Circular in all
jurisdictions where the same is required to be filed by it and mail the
same to the holders of Cinram Shares in accordance with the Interim Order
and applicable law;
(e) ensure that the information set forth in the Information Circular relating
to Cinram and its Subsidiaries, and their respective businesses and
properties and the effect of the Plan of Arrangement thereon will be true,
correct and complete in all material respects and will not contain any
untrue statement of any material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein not misleading in light of the circumstances in which they are
made;
(f) without limiting the generality of any of the foregoing covenants, until
the Effective Date:
(i) except pursuant to the exercise of outstanding Options in accordance
with the terms thereof prior to the date hereof, not issue any
additional Cinram Shares or other securities or allow any of its
Subsidiaries to issue any shares or other securities;
(ii) not issue or enter into, or allow any of its Subsidiaries to issue or
enter into, any agreement or agreements to issue or grant options,
warrants or rights to purchase any of its shares or other securities
or those of such Subsidiaries;
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(iii) except as specifically provided for hereunder, not alter or amend its
articles or by-laws or those of its Subsidiaries as the same exist at
the date of this Agreement;
(g) prior to the Effective Date, make application to list the Fund Units
(including Fund Units to be issued from time to time upon exchange of the
Exchangeable LP Units and exercise of the Fund Options) on the TSX;
(h) prior to the Effective Date, make application to the Canadian securities
regulatory authorities for such orders as may be necessary or desirable in
connection with the Fund Units and other securities to be issued pursuant
to the Arrangement;
(i) perform the obligations required to be performed by it under the Plan of
Arrangement and do all such other acts and things as may be necessary or
desirable and are within its power and control in order to carry out and
give effect to the Arrangement, including (without limitation) using
commercially reasonable efforts to obtain:
(i) the approval of holders of Cinram Shares required for the
implementation of the Arrangement;
(ii) the Interim Order and, subject to the obtaining of all required
consents, orders, rulings and approvals (including, without
limitation, required approvals of Shareholders), the Final Order;
(iii) such other consents, orders, rulings or approvals and assurances as
are necessary or desirable for the implementation of the Arrangement,
including those referred to in Section 4.1; and
(iv) satisfaction of the other conditions precedent referred to in Section
4.1; and
(j) upon issuance of the Final Order and subject to the conditions precedent in
Article 4, forthwith proceed to file the Arrangement Filings in accordance
with the CBCA.
3.3 COVENANTS OF THE FUND, THE TRUST, THE HOLDING GP, THE HOLDING PARTNERSHIP,
NEWCO, THE ULC AND THE LLC
Each of the Fund, the Trust, the Holding GP, the Holding Partnership,
Newco, the ULC and the LLC hereby covenants and agrees with each of the other
Parties that it will:
(a) until the Effective Date, not carry on business or undertake any activity,
except as otherwise contemplated by this Agreement and the Plan of
Arrangement;
(b) until the Effective Date, not perform any act or enter into any
transaction, nor permit any of its Subsidiaries to perform any act or enter
into any transaction, which interferes or is inconsistent with the
completion of the Arrangement;
(c) cooperate with and support Cinram in its application for the Interim Order;
(d) without limiting the generality of any of the foregoing covenants, until
the Effective Date:
14
(i) not issue any additional units, shares or other securities or allow
any of its Subsidiaries to issue any units, shares or other
securities;
(ii) not issue or enter into, or allow any of its Subsidiaries to issue or
enter into, any agreement or agreements to issue or grant options,
warrants or rights to purchase any of its units, shares or other
securities or those of such Subsidiaries; and
(iii) except as specifically provided for hereunder, not alter or amend its
articles, by-laws or other governing and constating documents, or
those of its Subsidiaries, as the same exist at the date of this
Agreement; and
(e) perform the obligations required to be performed by it under the Plan of
Arrangement and do all such other acts and things as may be necessary or
desirable and are within its power and control in order to carry out and
give effect to the Arrangement, including (without limitation) using
commercially reasonable efforts to obtain:
(i) such consents, orders, rulings or approvals and assurances as are
necessary or desirable for the implementation of the Arrangement,
including those referred to in Section 4.1, and
(ii) satisfaction of the other conditions precedent referred to in Section
4.1.
3.4 ADDITIONAL COVENANTS OF THE FUND
The Fund hereby covenants and agrees with each of the other Parties that it
will:
(a) prior to the Effective Date, cooperate with Cinram in making the
application to list the Fund Units (including any Fund Units to be issued
from time to time upon exchange of the Exchangeable LP Units and exercise
of the Fund Options) on the TSX; and
(b) authorize for issuance the Fund Units which are to be issued from time to
time upon exchange of the Exchangeable LP Units and exercise of the Fund
Options.
3.5 INTERIM ORDER
As soon as practicable, Cinram shall apply to the Court pursuant to Section
192 of the CBCA for the Interim Order providing for, among other things, the
calling and holding of the Meeting.
3.6 FINAL ORDER
If the Interim Order and all Shareholder approvals as required in respect
of the Arrangement are obtained, Cinram shall promptly thereafter take the
necessary steps to submit the Arrangement to the Court and apply for the Final
Order in such fashion as the Court may direct and as soon as practicable
following receipt of the Final Order, and subject to the satisfaction or waiver
of the other conditions provided for in Article 4 hereof, Cinram shall file the
Arrangement Filings to give effect to the Arrangement pursuant to the Final
Order.
15
ARTICLE 4
CONDITIONS
4.1 MUTUAL CONDITIONS PRECEDENT
The respective obligations of the Parties to complete the transactions
contemplated by this Agreement and to file the Arrangement Filings in order to
give effect to the Arrangement shall be subject to satisfaction of the following
conditions:
(a) the Arrangement Resolution shall have been approved by not less than
two-thirds of the votes cast by the Shareholders, in person or by proxy, at
the Meeting;
(b) the Final Order approving the Arrangement shall have been obtained from the
Court in form and substance satisfactory to the parties to the Arrangement
Agreement;
(c) the Articles of Arrangement, together with a copy of the Plan of
Arrangement and the Final Order and such other materials as may be required
by the Director, in form and substance satisfactory to the parties to the
Arrangement Agreement, shall have been filed with the Director in
accordance with subsection 192(6) of the CBCA;
(d) all necessary consents, orders, rulings, approvals, opinions and
assurances, including regulatory, judicial, third party and advisor
approvals, opinions and orders, required for the completion of the
transactions provided for in the Arrangement Agreement and the Plan of
Arrangement shall have been obtained or received;
(e) no action shall have been instituted and be continuing on the Effective
Date for an injunction to restrain, a declaratory judgment in respect of,
or damages on account of, or relating to, the Arrangement, there shall not
be in force any order or decree restraining or enjoining the consummation
of the transactions contemplated by the Arrangement Agreement and no cease
trading or similar order with respect to any securities of any of the
parties to the Arrangement Agreement shall have been issued and remain
outstanding;
(f) none of the consents, orders, rulings, decisions, approvals, opinions or
assurances required for the implementation of the Arrangement shall contain
terms or conditions or require undertakings or security deemed
unsatisfactory or unacceptable by any of the parties to the Arrangement
Agreement;
(g) no law, regulation or policy shall have been proposed, enacted, promulgated
or applied which interferes or is inconsistent with the completion of the
Arrangement, including any material change to the income tax laws of Canada
or the United States, or any province, state or territory thereof, or which
would have a material adverse effect upon Shareholders or the Fund Group if
the Arrangement is completed;
(h) the conditional approval of the TSX of the listing of the Fund Units to be
issued pursuant to the Arrangement (and upon exchange of the Exchangeable
LP Units and Fund Options) shall have been obtained, subject only to the
filing of required documents which cannot be filed prior to the Effective
Date;
(i) the Pre-Arrangement Transactions shall have been completed;
16
(j) the board of directors of Cinram shall be satisfied, in its sole
discretion, that the Post-Arrangement Transactions contemplated by this
Agreement will occur;
(k) no Shareholder shall have exercised his, her or its Dissent Rights;
(l) Shareholders who immediately prior to the Effective Time are not resident
in Canada for the purposes of the Tax Act (based on reasonable evidence
available to the board of directors of Cinram) and who are to receive Fund
Units under the Arrangement shall not, immediately following Closing, own
in excess of 40% of all then outstanding Fund Units; and
(m) this Agreement shall not have been terminated under Article 5.
4.2 ADDITIONAL CONDITIONS TO OBLIGATIONS OF EACH PARTY
The obligation of each Party to complete the transactions contemplated by
this Agreement is further subject to the condition, which may be waived by such
Party without prejudice to its right to rely on any other condition in its
favour, that the covenants of the other Parties to be performed on or before the
Effective Date pursuant to the terms of this Agreement shall have been duly
performed by them and that the representations and warranties of the other
Parties shall be true and correct in all material respects as at the Effective
Date, with the same effect as if such representations and warranties had been
made at, and as of, such time and each such Party shall receive a certificate,
dated the Effective Date, of a senior officer of each other Party confirming the
same.
4.3 MERGER OF CONDITIONS
The conditions set out in this Article 4 shall be conclusively deemed to
have been satisfied, waived or released on the filing by Cinram of the
Arrangement Filings under the CBCA to give effect to the Plan of Arrangement.
ARTICLE 5
AMENDMENT AND TERMINATION
5.1 AMENDMENT AND WAIVER
This Agreement may, at any time and from time to time before and after the
holding of the Meeting, but not later than the Effective Date, be amended by the
unanimous written agreement of the Parties without, subject to applicable law,
further notice to or authorization on the part of their respective shareholders,
Fund Unitholders, members or partners, as the case may be. Without limiting the
generality of the foregoing, any such amendment may:
(a) waive compliance with or modify any of the covenants herein contained or
waive or modify performance of any of the obligations of the Parties or
satisfaction of any of the conditions precedent set forth in Article 4 of
this Agreement;
(b) waive any inaccuracies or modify any representation contained herein or in
any document to be delivered pursuant hereto;
17
(c) change the time for performance of any of the obligations, covenants or
other acts of the Parties; or
(d) make such alterations in this Agreement as the Parties may consider
necessary or desirable in connection with the Interim Order.
5.2 TERMINATION
This Agreement may, at any time before or after the holding of the Meeting
but prior to the filing of the Arrangement Filings giving effect to the
Arrangement, be terminated by the mutual agreement of the Parties, without
approval of the Shareholders. This Agreement shall terminate without any further
action by the Parties if the Effective Date shall not have occurred on or before
June 30, 2006.
5.3 EXCLUSIVITY
None of the covenants of Cinram contained herein shall prevent the board of
directors of Cinram from (i) responding as required by law to any unsolicited
submission or proposal regarding any acquisition or disposition of its assets or
assets of any of its Subsidiaries, or any unsolicited proposal to amalgamate,
merge or effect an arrangement or any unsolicited acquisition proposal generally
involving Cinram or any of its Subsidiaries, or (ii) make any disclosure to its
Shareholders with respect thereto, which in the judgment of the board of
directors of Cinram is required under applicable law.
ARTICLE 6
GENERAL
6.1 NOTICES
Any notice or other communication required or permitted to be given
hereunder will be in writing and will be given by prepaid first-class mail, by
facsimile or other means of electronic communication or by delivery as hereafter
provided. Any such notice or other communication, if mailed by prepaid
first-class mail at any time other than during a general discontinuance of
postal service due to strike, lockout or otherwise, will be deemed to have been
received on the fourth Business Day after the post-marked date thereof, or if
sent by facsimile or other means of electronic communication, will be deemed to
have been received on the Business Day following the sending, or if delivered by
hand, will be deemed to have been received at the time it is delivered to the
applicable address noted below either to the individual designated below or to
an individual at such address having apparent authority to accept deliveries on
behalf of the addressee. Notice of change of address will also be governed by
this Section. In the event of a general discontinuance of postal service due to
strike, lock-out or otherwise, notices or other communications will be delivered
by hand or sent by facsimile or other means of electronic communication and will
be deemed to have been received in accordance with this Section. Notices and
other communications will be addressed, in the case of each party, to or care
of:
18
Cinram International Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Fogler, ▇▇▇▇▇▇▇▇ LLP
▇▇▇▇-▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
Attention: ▇▇▇▇▇▇ May
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
6.2 SEVERABILITY
If any term or other provision of this Agreement is invalid, illegal or
incapable of being enforced by any rule or law, or public policy, all other
conditions and provisions of this Agreement will nevertheless remain in full
force and effect so long as the economic or legal substance of the transactions
contemplated by this Agreement is not affected in any manner materially adverse
to any party to this Agreement. Upon any determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties to
this Agreement will negotiate in good faith to modify this Agreement so as to
effect the original intent of the parties as closely as possible in an
acceptable manner to the end that the transactions contemplated by this
Agreement are fulfilled to the fullest extent possible.
6.3 ENUREMENT
This Agreement will be binding upon and enure to the benefit of the parties
to this Agreement and their respective successors and permitted assigns from
time to time.
6.4 ASSIGNMENT
This Agreement may not be assigned by any party to this Agreement without
the prior written consent of each of the other parties.
Notwithstanding anything to the contrary contained herein, each party to
this Agreement shall have the right, without being released, to transfer or
assign this Agreement to any third party as security for any bona fide financing
or as security for any guarantee granted by such transferor in respect of the
obligations of its Affiliates to such third party for any bona fide financing.
6.5 GOVERNING LAW
This Agreement will be governed by and construed in accordance with the
laws of the Province of Ontario and the federal laws of Canada applicable
therein.
19
Each of the Parties agrees that any action or proceeding arising out of or
relating to this Agreement may be instituted in the courts of Ontario, waives
any objection which it may have now or later to the venue of that action or
proceeding, irrevocably submits to the non-exclusive jurisdiction of those
courts in that action or proceeding and agrees to be bound by any judgment of
those courts.
6.6 FOGLER, ▇▇▇▇▇▇▇▇ LLP AND GOODMANS LLP ACTING FOR MORE THAN ONE PARTY
Each of the parties to this Agreement has been advised and acknowledges
that Fogler, ▇▇▇▇▇▇▇▇ LLP and Goodmans LLP are each acting as counsel to and
jointly representing the Fund, the Trust, the Holding GP, the Holding
Partnership, Cinram, Newco, the LLC and certain of their Affiliates (each a
"CLIENT" and, collectively, "CLIENTS"), and, in this role, information disclosed
to that Fogler, ▇▇▇▇▇▇▇▇ LLP or Goodmans LLP by one Client will not be kept
confidential and will be disclosed to all Clients and each of the parties to
this Agreement consents to that Fogler, ▇▇▇▇▇▇▇▇ LLP and Goodmans LLP so acting.
In addition, should a conflict arise between any Clients, that Fogler, ▇▇▇▇▇▇▇▇
LLP and Goodmans LLP may not be able to continue to act for any of such Clients.
6.7 TIME OF ESSENCE
Time is of the essence in respect of this Agreement.
6.8 ENTIRE AGREEMENT
This Agreement, the Plan of Arrangement and the other agreements
contemplated hereby and thereby constitute the entire agreement between the
parties to this Agreement pertaining to the subject matter hereof. There are no
warranties, conditions, or representations (including any that may be implied by
statute) and there are no agreements in connection with such subject matter
except as specifically set forth or referred to in this Agreement or as
otherwise set out in writing and delivered at Closing. No reliance is placed on
any warranty, representation, opinion, advice or assertion of fact made by any
Party or its trustees, directors, officers, employees or agents, to any other
Party or its trustees, directors, officers, employees or agents, except to the
extent that the same has been reduced to writing and included as a term of this
Agreement. Accordingly, there will be no liability, either in tort or in
contract, assessed in relation to any such warranty, representation, opinion,
advice or assertion of fact, except to the extent aforesaid.
6.9 COUNTERPARTS
This Agreement may be executed in any number of counterparts, each of which
will be deemed to be an original and all of which taken together will be deemed
to constitute one and the same instrument. Counterparts may be executed either
in original or faxed form and the Parties adopt any signatures received by a
receiving fax machine as original signatures of the Parties.
6.10 FURTHER ASSURANCES
Each of the Parties will promptly do, make, execute or deliver, or cause to
be done, made, executed or delivered, all such further acts, documents and
things as the other Party may reasonably require from time to time for the
purpose of giving effect to this Agreement and will
20
use reasonable efforts and take all such steps as may be reasonably within its
power to implement to their full extent the provisions of this Agreement.
6.11 LANGUAGE
The Parties confirm their express wish that this Agreement and all
documents and agreements directly or indirectly relating thereto be drawn up in
the English language. Les parties reconnaissent leur volonte express que la
presente entente ainsi que tous les documents et contrats s'y rattachant
directement ou indirectement soient rediges en anglais.
IN WITNESS WHEREOF the parties hereto have executed this Agreement.
CINRAM INTERNATIONAL INCOME FUND
Per: (signed)
-----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Trustee
CII TRUST
Per: (signed)
-----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Trustee
CINRAM INTERNATIONAL INC.
Per: (signed)
-----------------------------------
Name: ▇▇▇▇▇▇▇ Philosophe
Title: Director and Chief Executive
Officer
CINRAM INTERNATIONAL GENERAL PARTNER
INC.
Per: (signed)
-----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Director, President and Secretary
21
CINRAM INTERNATIONAL LIMITED
PARTNERSHIP, BY ITS GENERAL PARTNER,
CINRAM INTERNATIONAL GENERAL PARTNER
INC.
Per: (signed)
-----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Director, President and Secretary
CINRAM ACQUISITION INC.
Per: (signed)
-----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Director, President and Secretary
CINRAM INTERNATIONAL ULC
Per: (signed)
-----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Director, President and Secretary
CINRAM INTERNATIONAL LLC
Per: (signed)
-----------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: Director, President and Secretary
EXHIBIT 1
PLAN OF ARRANGEMENT UNDER THE PROVISIONS OF SECTION 192
OF THE
CANADA BUSINESS CORPORATIONS ACT
ARTICLE 1
INTERPRETATION
1.1 Definitions.
In this Plan of Arrangement, the following terms have the following
meanings:
"AMALCO" means the corporation to be formed as a result of the amalgamation
of Cinram and Newco contemplated by this Plan of Arrangement and to be
known as "Cinram International Inc.";
"AMALCO NOTES" means the one or more unsecured subordinated promissory
notes issued by Amalco to the ULC pursuant to this Plan of Arrangement;
"AMALCO SHARES" means the common shares in the capital of Amalco;
"ANCILLARY RIGHTS" means, in respect of an Exchangeable LP Unit, the
Exchange Rights and related Special Voting Units, collectively;
"ARRANGEMENT", "HEREIN", "HEREOF", "HERETO", "HEREUNDER" and similar
expressions mean and refer to the arrangement pursuant to Section 192 under
the CBCA set forth in this Plan of Arrangement as supplemented, modified or
amended, and not to any particular Article, Section or other portion
hereof;
"ARRANGEMENT AGREEMENT" means the arrangement agreement dated March 28,
2006 among the Fund, the Trust, the Holding GP, the Holding Partnership,
Cinram, Newco, the ULC and the LLC, pursuant to which such parties have
proposed to implement the Arrangement, as the same may be amended and/or
restated from time to time;
"ARRANGEMENT FILINGS" means a certified copy of the Final Order, together
with this Plan of Arrangement, Articles of Arrangement, Notice of
Registered Officers and Directors and Federal NUANS search for "Cinram
International Inc." to be filed pursuant to the CBCA;
"ARRANGEMENT RESOLUTION" means the special resolution in respect of the
Arrangement in substantially the form attached as Appendix A to the
Information Circular to be voted upon by Shareholders at the Meeting;
"BUSINESS DAY" means a day, other than a Saturday, Sunday or statutory or
civic holiday, when banks are generally open for the transaction of
business in Toronto, Ontario;
"CBCA" means the Canada Business Corporations Act, R.S.C. 1985 c. C-44, as
amended, including the regulations promulgated thereunder;
2
"CERTIFICATE" means the certificate or certificates or other confirmation
of filing to be issued by the Director pursuant to subsection 192(7) of the
CBCA, giving effect to the Arrangement;
"CINRAM" means Cinram International Inc., a corporation existing under the
laws of Canada;
"CINRAM SHARES" means the common shares in the capital of Cinram;
"CLASS A HOLDING PARTNERSHIP UNITS" means the Class A limited partnership
units of the Holding Partnership;
"CLOSING" means the completion of the transactions contemplated by the
Arrangement Agreement;
"COURT" means the Ontario Superior Court of Justice;
"CRA" means the Canada Revenue Agency;
"DEPOSITARY" means Computershare Investor Services Inc. at its offices
referred to in the Letter of Transmittal and Election Form;
"DIRECTOR" has the meaning ascribed thereto in the CBCA;
"DISSENT RIGHT" means the right of a Shareholder, pursuant to the Interim
Order and Section 190 of the CBCA, to dissent to the Arrangement Resolution
and to be paid the fair value of the securities in respect of which the
holder dissents, in accordance with Sections 190 of the CBCA, subject to
and as modified by the Interim Order and Section 4.1 of this Plan of
Arrangement and as described in the Information Circular;
"DISSENTING SHAREHOLDER" means a registered holder of Cinram Shares who
exercises such registered holder's right to dissent in respect of the
Arrangement pursuant to the procedures set forth in Section 190 of the CBCA
and Section 4.1 of this Plan of Arrangement as described in the Information
Circular;
"EFFECTIVE DATE" means the effective date of the Arrangement pursuant to
the Final Order and the Certificate;
"EFFECTIVE TIME" means the time on the Effective Date at which the
Arrangement is effective, as specified in the Arrangement Filings filed
pursuant to the CBCA and the Final Order;
"ELECTED NUMBER" means, in respect of an Electing Shareholder, the number
of Shares the Electing Shareholder has specified to be transferred to the
Holding Partnership in the Letter of Transmittal and Election Form
delivered by such Electing Shareholder to the Depositary on or before the
Election Deadline;
"ELECTING SHAREHOLDER" means a Shareholder (other than an Excluded
Shareholder) that elects to transfer Cinram Shares to the Holding
Partnership in exchange for Exchangeable LP Units pursuant to, and in
accordance with, the terms of this Arrangement;
3
"ELECTION DEADLINE" means 5:00 p.m. (Toronto time) on the second last
Business Day immediately preceding the date of the Meeting or, if such
meeting is adjourned or postponed, such time on the second last Business
Day immediately preceding the date of such adjourned or postponed meeting;
"EXCHANGE AGREEMENT" means the exchange agreement to be entered into on the
Effective Date substantially on the terms described in the Information
Circular among the Fund, the Trust, the Holding Partnership, the Holding GP
and each Person who from time to time becomes or is deemed to become a
party thereto by reason of his, her or its registered ownership of
Exchangeable LP Units, as the same may be amended, supplemented or restated
from time to time;
"EXCHANGE RIGHTS" means the exchange rights set out in the Exchange
Agreement and the Limited Partnership Agreement;
"EXCHANGEABLE LP UNITS" means the Class B limited partnership units of the
Holding Partnership;
"EXCLUDED SHAREHOLDER" means a Shareholder that (i) is a Non-Resident; (ii)
is a Tax Exempt Shareholder; (iii) is a partnership; or (iv) would acquire
Exchangeable LP Units as a "tax shelter investment" for the purposes of the
Tax Act or an interest in which is a "tax shelter investment" for the
purposes of the Tax Act;
"FINAL ORDER" means the order of the Court approving the Arrangement to be
applied for following the Meeting and to be granted pursuant to the
provisions of Section 192 of the CBCA as such order may be affirmed,
amended or modified by any court of competent jurisdiction;
"FUND" means Cinram International Income Fund, a trust established under
the laws of the Province of Ontario pursuant to the Fund Declaration of
Trust;
"FUND DECLARATION OF TRUST" means the declaration of trust dated March 21,
2006, governing the Fund, as the same may be amended and/or restated from
time to time;
"FUND OPTION" means an option granted pursuant to this Plan of Arrangement
in exchange for an Option, entitling the holder thereof to purchase one
Fund Unit for an exercise price per Fund Unit equal to the exercise price
per Cinram Share under the exchanged Option;
"FUND UNIT" means a unit of the Fund (other than a Special Voting Unit)
authorized and issued under the Fund Declaration of Trust for the time
being outstanding and entitled to the benefits and subject to the
limitations set forth therein;
"HOLDING GP" means Cinram International General Partner Inc., a corporation
existing under the laws of the Province of Ontario;
"HOLDING PARTNERSHIP" means Cinram International Limited Partnership, a
limited partnership formed under the laws of the Province of Manitoba;
4
"INFORMATION CIRCULAR" means the management proxy circular of Cinram
relating to the Arrangement to be sent to Shareholders in connection with
the Meeting;
"INTERIM ORDER" means the interim order of the Court to be issued pursuant
to the application referred to in Section 3.5 of the Arrangement Agreement,
as such order may be affirmed, amended or modified by any court of
competent jurisdiction;
"LETTER OF TRANSMITTAL AND ELECTION FORM" means the Letter of Transmittal
and Election Form enclosed with the Information Circular pursuant to which
a Shareholder is required to deliver certificates representing Cinram
Shares, and may elect to receive, on completion of the Arrangement, Fund
Units or, unless such Shareholder is an Excluded Shareholder, Exchangeable
LP Units or a combination of Fund Units and Exchangeable LP Units, for his,
her or its Cinram Shares;
"LIMITED PARTNERSHIP AGREEMENT" means the limited partnership agreement
dated March 24, 2006 among the Holding GP, the Trust and the holders of the
Exchangeable LP Units, as amended from time to time;
"LLC" means Cinram International LLC, a limited liability corporation
incorporated under the laws of the State of Delaware;
"MAXIMUM NUMBER OF EXCHANGEABLE LP UNITS" means the maximum number of
Exchangeable LP Units that may be issued by the Holding Partnership
pursuant to this Arrangement, as determined by the Holding GP in its sole
and absolute discretion, provided that the Maximum Number of Exchangeable
LP Units shall in no event exceed 20% of the outstanding Cinram Shares
immediately prior to Closing without the consent of the board of directors
of the Holding General Partner;
"MEETING" means the annual and special meeting of holders of Cinram Shares,
and any adjournment(s) or postponement(s) thereof, to be held for the
purpose of considering and, if thought fit, approving the Arrangement
Resolution and other matters set out in the notice of meeting accompanying
the Information Circular;
"NEWCO" means Cinram Acquisition Inc., a corporation existing under the
laws of Canada;
"NEWCO NOTES" means the one or more unsecured subordinated promissory notes
(in the aggregate principal amounts of $886 million) issued by Newco to the
ULC pursuant to this Plan of Arrangement;
"NEWCO SHARES" means the common shares in the capital of Newco;
"NON-RESIDENT" means a Person who is not a resident of Canada within the
meaning of the Tax Act;
"OPTIONHOLDERS" means the holders of Options from time to time;
"OPTIONS" means, collectively, all outstanding and unexpired options to
acquire Cinram Shares issued pursuant to the Stock Option Incentive Plan;
5
"PERSON" means any individual, partnership, association, body corporate,
trustee, executor, administrator, legal representative, government,
regulatory authority or other entity;
"PLAN OF ARRANGEMENT" means this plan of arrangement, as amended or
supplemented from time to time in accordance with the terms hereof;
"SERIES 1 TRUST NOTES" means the series 1, unsecured, subordinated notes of
the Trust issued pursuant to the Plan of Arrangement under the Trust Note
Indenture;
"SHAREHOLDERS" means the holders of Cinram Shares from time to time;
"SPECIAL VOTING UNITS" means the special voting units of the Fund
authorized and issued to the holders of Exchangeable LP Units (other than
the Fund, the Trust and the Holding Partnership) under the Fund Declaration
of Trust for the time being outstanding and entitled to the benefits and
subject to the limitations set forth therein;
"SUBSIDIARY" has the meaning ascribed thereto in Section 1.2 National
Instrument 45-106 Prospectus and Registration Exemptions on the date
hereof;
"TAX ACT" means the Income Tax Act (Canada), as amended, including the
regulations promulgated thereunder;
"TAX EXEMPT SHAREHOLDER" means a Shareholder that is generally exempt from
tax under Part I of the Tax Act;
"TRUST" means the CII Trust, an unincorporated open-ended limited purpose
trust established under the laws of the Province of Ontario pursuant to the
Trust Declaration of Trust;
"TRUST DECLARATION OF TRUST" means the declaration of trust dated March 21,
2006 governing the Trust, as the same may be amended and/or restated from
time to time;
"TRUST NOTE INDENTURE" means the note indenture to be entered into on the
Effective Date between the Trust and Computershare Trust Company of Canada,
pursuant to which the Trust will issue the Series 1 Trust Notes, as the
same may be amended, supplemented or restated from time to time;
"TRUST UNIT" means a unit authorized and issued under the Trust Declaration
of Trust for the time being outstanding and entitled to the benefits and
subject to the limitations set forth therein;
"ULC" means Cinram International ULC, an unlimited liability corporation
existing under the laws of the Province of Nova Scotia; and
"ULC SHARES" means the common shares in the capital of the ULC.
1.2 In this Plan of Arrangement, unless otherwise expressly stated or the
context otherwise requires:
6
(a) references to "herein", "hereby", "hereunder", "hereof' and similar
expressions are references to this Plan of Arrangement and not to any
particular Section, subsection or Schedule;
(b) references to an "Article", "Section" or "Schedule" are references to an
Article, Section or Schedule of or 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;
(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 rather as
referring to all other items or matters that could reasonably fall within
the broadest possible scope of the general term or statement;
(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; and
(g) each of the Fund, the Trust, the Holding GP, the Holding Partnership,
Cinram, Newco, the ULC and the LLC acknowledges the obligations of the Fund
and the Trust under this Agreement and that such obligations will not be
personally binding upon any of the trustees of the Fund or the trustees of
the Trust, any registered or beneficial holder of Fund Units, Special
Voting Units or Trust Units or any beneficiary under a plan of which a
holder of such units acts as a trustee or carrier, and that resort will not
be had to, nor will recourse be sought from, any of the foregoing or the
private property of any of the foregoing in respect of any indebtedness,
obligation or liability of the Fund or the Trust arising hereunder, and
recourse for such indebtedness, obligations or liabilities of the Fund or
the Trust, as the case may be, will be limited to, and satisfied only out
of, the assets of the Fund or the Trust, as the case may be.
1.3 The following schedule to this Plan of Arrangement is incorporated by
reference herein and forms part of this Plan of Arrangement.
Schedule A - Amalco Article Provisions
1.4 In the event that the date on which any action is required to be taken
hereunder by any of the parties is not a Business Day in the place where
the action is required to be taken, such action shall be required to be
taken on the next succeeding day which is a Business Day in such place.
7
ARTICLE 2
ARRANGEMENT AGREEMENT
2.1 This Plan of Arrangement is made pursuant and subject to the provisions of
the Arrangement Agreement.
2.2 This Plan of Arrangement, upon the filing of the Arrangement Filings in
accordance with the CBCA and the Final Order, will, subject to section 4.1,
become effective on, and be binding on and after the Effective Time on: the
Fund, the Trust, the Holding GP, the Holding Partnership, Cinram, the
Shareholders, the Optionholders, Newco, the ULC and the LLC.
2.3 The filing of the Arrangement Filings shall be conclusive evidence that the
Arrangement has become effective and that each of the provisions of Article
3 has become effective in the sequence and at the times set out therein.
ARTICLE 3
ARRANGEMENT
3.1 On the Effective Date, each of the events below will, except as otherwise
expressly provided, be deemed to occur sequentially without further act or
formality:
(a) the Cinram Shares held by Dissenting Shareholders who have exercised
Dissent Rights which remain valid immediately before the Effective Date
will be deemed to have been transferred to Cinram and cancelled and cease
to be outstanding, and such Dissenting Shareholders will cease to have any
rights as Shareholders other than the right to be paid the fair value of
their Cinram Shares;
(b) each issued and outstanding Cinram Share in respect of which an Electing
Shareholder (who is not an Excluded Shareholder) has validly elected to
receive an Exchangeable LP Unit (except, for greater certainty, any such
Cinram Shares elected to be transferred in consideration for Exchangeable
LP Units exceeding the Shareholder's pro rata allocation of the Maximum
Number of Exchangeable LP Units) will be transferred to Holding Partnership
in consideration for one Exchangeable LP Unit and related Ancillary Rights;
(c) each issued and outstanding Cinram Share not transferred to Holding
Partnership under paragraph (b) will be transferred to the Fund in
consideration for one Fund Unit;
(d) the Fund will transfer the Cinram Shares held by it to the Trust in
consideration for Trust Units and Series 1 Trust Notes;
(e) the Trust will transfer the Cinram Shares held by it to Holding Partnership
in consideration for Class A Holding Partnership Units;
(f) Holding Partnership will transfer the Cinram Shares held by it (which, at
that time, will be all of the issued and outstanding Cinram Shares) to the
ULC in consideration for ULC Shares pursuant to a joint election under
Section 85 of the Tax Act;
8
(g) the ULC will transfer the Cinram Shares held by it to Newco in
consideration for Newco Shares and the Newco Notes pursuant to a joint
election under Section 85 of the Tax Act;
(h) Cinram and Newco (collectively, the "PREDECESSOR CORPORATIONS") will
amalgamate pursuant to the laws of Canada to form Amalco, with the effect
that:
(i) all of the property of the predecessor corporations held immediately
before the amalgamation (except any amounts receivable from any
predecessor corporation or shares of any predecessor corporation) will
become the property of Amalco;
(ii) all of the liabilities of the predecessor corporations immediately
before the amalgamation (except amounts payable to any predecessor
corporation) will become liabilities of Amalco;
(iii) all of the issued and outstanding Cinram Shares held by Newco
immediately before the amalgamation will be cancelled without
repayment of capital;
(iv) the articles and by-laws of Amalco will be the same as the articles
and by-laws of the Newco; and
(v) the Newco Shares and the Newco Notes held by the ULC immediately
before the amalgamation will become Amalco Shares and the Amalco
Notes, respectively, by virtue of the amalgamation and the stated
capital of the Amalco Shares will be equal to the stated capital of
the Newco Shares immediately before such amalgamation; and
(i) each Option will be exchanged for a Fund Option.
3.2 Subject to Section 3.3, with respect to the elections required to be made
by a Shareholder in order to dispose of Cinram Shares pursuant to Section
3.1(b):
(a) each such Shareholder shall make such election by depositing with the
Depositary a duly completed Letter of Transmittal and Election Form prior
to the Election Deadline, indicating such Shareholder's election, together
with certificates representing such Shareholder's Cinram Shares; and
(b) any Shareholder who does not deposit with the Depositary a completed Letter
of Transmittal and Election Form prior to the Election Deadline or
otherwise fails to comply with the requirements of Section 3.2(a) and the
Letter of Transmittal and Election Form shall be deemed to have elected to
dispose of Cinram Shares to the Fund pursuant to Section 3.1(c).
3.3 With respect to any election required to be made by a Shareholder in order
to effect the transfer of Cinram Shares pursuant to Section 3.1(b), such
Shareholder may so elect in respect of any portion of the aggregate number
of Cinram Shares (excluding any fractions of a Cinram Share) held by such
holder and otherwise satisfying the conditions to such election. In the
event that the aggregate Elected Number of all Electing Shareholders is
greater than the Maximum Number of Exchangeable LP Units, the Exchangeable
LP Units will be allocated on a pro rata basis to each Electing Shareholder
in accordance
9
with the following formula: the Maximum Number of Exchangeable LP Units
divided by the aggregate Elected Number of all Electing Shareholders
multiplied by the Elected Number of the particular Electing Shareholder.
Each Electing Shareholder will be deemed to have elected to exchange that
number of Cinram Shares equal to the number of Exchangeable LP Units
allocated to such Electing Shareholder and the balance of such Electing
Shareholder's Cinram Shares shall be transferred to the Fund in exchange
for Fund Units pursuant to Section 3.1(c).
3.4 With respect to each Shareholder (other than Dissenting Shareholders), on
the Effective Date:
(a) upon the transfer of Cinram Shares to the Holding Partnership in
consideration for Exchangeable LP Units and related Ancillary Rights
pursuant to Section 3.1(b):
(i) such former Shareholder shall be added to the registers of holders of
Exchangeable LP Units and Special Voting Units, added as a party to
the Limited Partnership Agreement and the Exchange Agreement and the
name of such holder shall be removed from the register of holders of
Cinram Shares as it relates to the Cinram Shares so transferred; and
(ii) the Holding Partnership shall become the holder of the Cinram Shares
so transferred and shall be added to the register of holders of Cinram
Shares;
(b) upon the transfer of Cinram Shares to the Fund in consideration for Fund
Units and an obligation of the Fund to issue and deliver one Unit for each
Cinram Share so transferred pursuant to Section 3.1(b) or Section 3.1(c):
(i) such former Shareholder shall be added to the register of holders of
Fund Units and the name of such holder shall be removed from the
register of holders of Cinram Shares as it relates to the Cinram
Shares so transferred; and
(ii) the Fund shall become the holder of the Cinram Shares so transferred
and shall be added to the register of holders of Cinram Shares;
(c) upon the transfer of Cinram Shares by the Fund to the Trust in
consideration for Trust Units and Series 1 Trust Notes pursuant to Section
3.1(d);
(i) the Fund shall cease to be a holder of the Cinram Shares so
transferred and the name of the Fund shall be removed from the
register of holders of Cinram Shares as it relates to the Cinram
Shares so transferred;
(ii) the Trust shall become the holder of the Cinram Shares so transferred
and shall be added to the register of holders of Cinram Shares; and
(iii) the Trust shall issue to the Fund the Trust Units and Series 1 Trust
Notes issuable to the Fund on the basis set forth in Section 3.1(d)
and the name of the Fund shall be added to the registers of holders of
Trust Units and Series 1 Trust Notes;
(d) upon the transfer of Cinram Shares by the Trust to the Holding Partnership
in consideration for Class A Holding Partnership pursuant to Section
3.1(e):
10
(i) the Trust shall cease to be a holder of the Cinram Shares so
transferred and the name of the Trust shall be removed from the
register of holders of Cinram Shares as it relates to the Cinram
Shares so transferred;
(ii) the Holding Partnership shall become the holder of the Cinram Shares
so transferred and shall be added to the register of holders of Cinram
Shares; and
(iii) the Holding Partnership shall issue to the Trust the Class A Holding
Partnership Units issuable to the Trust on the basis set forth in
Section and the name of the Trust shall be added to the register of
holders of Class A Holding Partnership Units;
(e) upon the transfer of Cinram Shares by the Holding Partnership to the ULC in
consideration for ULC Shares pursuant to Section 3.1(f):
(i) the Holding Partnership shall cease to be a holder of the Cinram
Shares so transferred and the name of the Holding Partnership shall be
removed from the register of holders of Cinram Shares as it relates to
the Cinram Shares so transferred;
(ii) the ULC shall become the holder of the Cinram Shares so transferred
and shall be added to the register of holders of Cinram Shares; and
(iii) the ULC shall issue to the Holding Partnership the ULC Shares
issuable to the Holding Partnership on the basis set forth in Section
3.1(f) and the name of the Holding Partnership shall be added to the
register of holders of the ULC Shares;
(f) upon the transfer of Cinram Shares by the ULC to Newco in consideration for
Newco Shares and the Newco Notes pursuant to Section 3.1(g);
(i) the ULC shall cease to be a holder of the Cinram Shares so transferred
and the name of the ULC shall be removed from the register of holders
of Cinram Shares as it relates to the Cinram Shares so transferred;
(ii) Newco shall become the holder of the Cinram Shares so transferred and
shall be added to the register of holders of Cinram Shares; and
(iii) Newco shall issue to the ULC the Newco Shares and the Newco Notes
issuable to the ULC on the basis set forth in Section 3.1(g) and the
name of the ULC shall be added to the registers of holders of the
Newco Shares and the Newco Notes;
(g) upon the amalgamation of Cinram and Newco pursuant to Section 3.1(h):
(i) all of the Cinram Shares held by Newco immediately before the
amalgamation shall be cancelled, and Newco shall be removed from the
register of holders of Cinram Shares; and
(ii) the Newco Shares and the Newco Notes will become Amalco Shares and the
Amalco Notes on the basis set forth in Section 3.1(h), and the ULC
shall be added to the register of holders of Amalco Shares; and
11
(h) upon the exchange of Options for Fund Options pursuant to Section 3.1(i),
each holder of Options shall cease to be a holder of Options and the name
of such former holder of Options shall be removed from the register of
holders of Options as it relates to the Options so exchanged and the name
of such former holder of Options shall be added to the register of holders
of Fund Options.
3.5 A Shareholder, who is not an Excluded Shareholder, may elect to transfer
Cinram Shares to the Partnership pursuant to Section 3.1(b). A holder who
has transferred Cinram Shares pursuant to Section 3.1(b) shall be entitled
to make an income tax election pursuant to subsection 97(2) of the Tax Act
(and the analogous provisions of provincial income tax law) with respect
thereto by providing two signed copies of the necessary election forms to
the Holding Partnership within 60 days following the Effective Date, duly
completed with the details of the number of Cinram Shares transferred and
the applicable agreed amounts for the purposes of such elections.
Thereafter, subject to the election forms complying with the provisions of
the Tax Act (and applicable provincial tax law), the election forms will be
signed and one copy thereof shall be forwarded by mail to such former
Shareholders within 30 days after the receipt thereof by the Holding
Partnership for filing with the CRA (and/or the applicable provincial
taxing authority). The Holding Partnership will not be responsible for the
proper completion and filing of any election form, except for the
obligation of the Holding Partnership to so sign and return election forms
which are received by the Holding Partnership within 60 days of the
Effective Date, and the Holding Partnership will not be responsible for any
taxes, interest or penalties resulting from the failure by a former
Shareholder to properly complete or file the election forms in the form and
manner and within the time prescribed by the Tax Act (and any applicable
provincial legislation).
ARTICLE 4
DISSENTING SHAREHOLDERS
4.1 Each registered Shareholder shall have the right to dissent with respect to
the Arrangement. The right of dissent will be effected in accordance with
Section 190 of the CBCA, as modified by the Interim Order, and provided
that a Dissenting Shareholder who for any reason is not entitled to be paid
the fair value of the holder's Cinram Shares shall be treated as if the
holder had participated in the Arrangement on the same basis as a
non-dissenting Shareholder pursuant to Sections 3.1(b) and (c). A
Dissenting Shareholder shall, on the Effective Date, be deemed to have
transferred the holder's Cinram Shares to Cinram for cancellation and cease
to have any rights as a Shareholder except that the Dissenting Shareholder
shall be entitled to be paid the fair value of the holder's Cinram Shares.
The fair value of the Cinram Shares shall be determined as at the point in
time immediately prior to the Arrangement Resolution in accordance with
Section 190 of the CBCA, but in no event shall Cinram or Amalco be required
to recognize such Dissenting Shareholders as shareholders of Cinram or
Amalco after the Effective Date, and the names of such holders shall be
removed from the applicable register of shareholders. For greater
certainty, in addition to any other restrictions in Section 190 of the
CBCA, no Person who has voted in favour of the Arrangement shall be
entitled to dissent with respect to the Arrangement. It is a condition of
this Plan of Arrangement that no Dissent Rights be exercised in respect of
the Cinram Shares.
12
ARTICLE 5
OUTSTANDING CERTIFICATES
5.1 From and after the Effective Date, certificates formerly representing
Cinram Shares under the Arrangement shall represent only the right to
receive the consideration to which the holders are entitled under the
Arrangement, or as to those held by Dissenting Shareholders, other than
those Dissenting Shareholders deemed to have participated in the
Arrangement pursuant to Section 4.1, to receive the fair value of the
Cinram Shares represented by such certificates.
5.2 From the Effective Date, the option agreements providing for the Options
shall become agreements providing for the Fund Options to which the holders
thereof are entitled under the Arrangement.
5.3 The Fund shall, as soon as practicable following the later of the Effective
Date and the date of deposit by a former Shareholder of a duly completed
Letter of Transmittal and Election Form, and the certificates representing
such Cinram Shares, either:
(a) forward or cause to be forwarded by first class mail (postage prepaid)
to such former Shareholder at the address specified in the Letter of
Transmittal; or
(b) if requested by such Shareholder in the Letter of Transmittal, make
available or cause to be made available at the Depositary for pickup
by such Shareholder,
certificates representing the number of Fund Units and/or Exchangeable LP
Units issued to such holder or to which such holder is entitled pursuant to
the Arrangement.
5.4 If any certificate which immediately prior to the Effective Time
represented an interest in outstanding Cinram Shares that were exchanged
pursuant to Section 3.1 has been lost, stolen or destroyed, upon the making
of an affidavit of that fact by the Person claiming such certificate to
have been lost, stolen or destroyed, the Depositary will issue and deliver
in exchange for such lost stolen or destroyed certificate the consideration
to which the holder is entitled pursuant to the Arrangement (and any
distributions with respect thereto) as determined in accordance with the
Arrangement. The person who is entitled to receive such consideration
shall, as a condition precedent to the receipt thereof, give a bond to each
of the Fund, the Holding Partnership and Cinram and their respective
transfer agents, which bond is in form and substance satisfactory to each
of the Fund, the Holding Partnership and Cinram, and their respective
transfer agents, or shall otherwise indemnify the Fund, the Holding
Partnership and Cinram and their respective transfer agents against any
claim that may be made against any of them with respect to the certificate
alleged to have been lost, stolen or destroyed.
5.5 Subject to any applicable escheat laws, any certificate formerly
representing Cinram Shares that is not deposited with all other documents
as required by this Plan of Arrangement on or before the sixth anniversary
of the Effective Date shall cease to represent a right or claim of any kind
or nature, including the right of the holder of such Cinram Shares to
receive Fund Units and/or Exchangeable LP Units together with Ancillary
Rights contemplated by Sections 3.1(b) and/or (c). Fund Units, Exchangeable
LP Units and Ancillary Rights issued or made pursuant to the Arrangement
shall be
13
deemed to be surrendered to the Fund (in the case of the Fund Units
contemplated by Section 3.1(c)) and to the Holding Partnership and the Fund
(in the case of the Exchangeable LP Units and Special Voting Units
contemplated by Section 3.1(b)), together with all distributions thereon
held for such holder.
5.6 No certificates representing fractional Fund Units, Exchangeable LP Units
or Special Voting Units shall be issued pursuant to this Plan of
Arrangement.
ARTICLE 6
AMENDMENTS
6.1 The parties to the Arrangement Agreement may amend, modify and/or
supplement this Plan of Arrangement at any time and from time to time prior
to the Effective Time, provided that each such amendment, modification
and/or supplement must be: (i) set out in writing; (ii) filed with the
Court and, if made following the Meeting, approved by the Court; and (iii)
communicated to holders of Cinram Shares if and as required by the Court.
6.2 Any amendment of, modification to or supplement to this Plan of Arrangement
may be proposed by Cinram at any time prior to or at the Meeting with or
without any other prior notice or communication, and if so proposed and
accepted by the Shareholders at the Meeting (other than as may be required
under the Interim Order), shall become part of this Plan of Arrangement for
all purposes.
6.3 Any amendment, modification or supplement to this Plan of Arrangement may
be made following the Effective Time but shall only be effective if it is
consented to by each of the Fund, the Trust, the Holding GP, the Holding
Partnership, Amalco and the LLC, provided that it concerns a matter which,
in the reasonable opinion of the Fund, the Trust, the Holding GP, the
Holding Partnership, Amalco is of an administrative nature or required to
better give effect to the implementation of this Plan of Arrangement and is
not adverse to the financial or economic interests of the Fund, the Trust,
the Holding GP, the Holding Partnership, Amalco or any former Shareholder
or Optionholder.
SCHEDULE A
AMALCO ARTICLE PROVISIONS
NAME OF AMALGAMATED CORPORATION
The name of the Amalgamated Corporation shall be Cinram International Inc.
REGISTERED OFFICE
The registered office of the Amalgamated Corporation shall be located at ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇ in the City of Toronto, in the Province of
Ontario.
BOARD OF DIRECTORS
(a) The board of directors of the Amalgamated Corporation shall consist of a
minimum of one (1) and a maximum of twenty (20) directors. The first
directors of the Amalgamated Corporation shall be the persons whose name,
address and resident Canadian status is as set out below:
NAME RESIDENCE ADDRESS CANADIAN STATUS
---- ----------------- ---------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇. ▇▇
▇▇▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇
▇▇▇▇▇▇ May ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ Philosophe ▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇-▇▇▇ ▇▇▇▇▇▇ ▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇
-A2-
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ No
Apartment 8A
New York, New York
10021-2843
(b) The directors shall hold office until the first annual meeting of the
Amalgamated Corporation or their successors are elected or appointed.
Subsequent directors of the Amalgamated Corporation shall be elected in
accordance with the provisions of the CBCA.
RESTRICTIONS ON BUSINESS AND POWERS
There are no restrictions on the business that the Amalgamated Corporation may
carry on or on the powers that the Amalgamated Corporation may exercise.
AUTHORIZED CAPITAL
Unlimited number of Common Shares.
RIGHTS, PRIVILEGES, RESTRICTIONS AND CONDITIONS ATTACHING TO COMMON SHARES
The Common Shares shall have attached thereto, as a class, the following rights,
privileges, restrictions and conditions:
The holders of the Common Shares shall be entitled to:
(a) one vote for each Common Share held at all meetings of shareholders of the
Amalgamated Corporation, other than meetings at which only the holders of
another class or series of shares are entitled to vote separately as a
class or series;
(b) receive any dividend declared by the Amalgamated Corporation in respect of
the Common Shares; and
(c) receive the remaining property of the Amalgamated Corporation upon
dissolution.
No share of the Amalgamated Corporation shall be transferred without:
(a) either the express consent of the Board of Directors evidenced by a
resolution passed at a meeting of directors by the affirmative vote of not
less than a majority of the directors or by instrument or instruments in
writing signed by all of the directors; or
(b) the express consent of the shareholders of the Amalgamated Corporation
expressed by a resolution passed at a meeting of the holders of such shares
or by an instrument or instruments in writing signed by the holders of all
of the shares.
OTHER PROVISIONS
The following provisions shall be applicable to the Amalgamated Corporation:
-A3-
(a) The number of shareholders of the Amalgamated Corporation, exclusive of
persons who are in the employment of the Amalgamated Corporation, and
exclusive of persons who, having been formerly in the employment of the
Amalgamated Corporation, were, while in that employment, and have continued
after termination of that employment to be, shareholders of the Amalgamated
Corporation, is limited to not more than fifty, two or more persons who are
the joint registered owners of one or more shares being counted as one
shareholder.
(b) Any invitation to the public to subscribe for securities of the Amalgamated
Corporation is prohibited.
(c) The Amalgamated Corporation shall have a lien on the shares registered in
the name of a shareholder or his legal representative for a debt of that
shareholder to the Amalgamated Corporation.
(d) The holders of any fractional shares issued by the Amalgamated Corporation
shall be entitled to exercise voting rights and to receive dividends in
respect of each such fractional share.
(e) The directors may appoint one or more directors, who shall hold office for
a term expiring not later than the close of the next annual meeting of the
shareholders, but the total number of directors so appointed may not exceed
one-third of the number of directors elected at the previous annual meeting
of shareholders.