EXHIBIT 2.1
BUSINESS CORPORATIONS ACT FORM 9
(SECTION 179)
Alberta Consumer and
Corporate Affairs ARTICLES OF AMALGAMATION
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1. NAME OF AMALGAMATED CORPORATION 2. CORPORATE ACCESS NO.
TomaHawk Corporation
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3. THE CLASSES AND ANY MAXIMUM NUMBER OF SHARES THAT THE CORPORATION IS
AUTHORIZED TO ISSUE.
Unlimited number of Common voting shares without nominal par value;
Unlimited number of Class "B" Common non-voting shares without nominal or
par value; Unlimited number of Preferred shares without nominal or par
value; all subject to the rights, privileges, restrictions and conditions
as set forth in Schedule "A" attached hereto.
The designation of a series of Preferred Shares as 6% Non-Cumulative
Redeemable Convertible Retractable First Preferred Shares, Series A having
the rights, privileges, restrictions and conditions as set forth in
Schedule "B" attached hereto.
The designation of the three series of Preferred Shares as "Class A",
"Series II" and" Series III" Preferred Shares having the rights,
privileges, restrictions and conditions as set forth in Schedule "C"
attached hereto.
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4. RESTRICTIONS IF ANY ON SHARE TRANSFERS.
None.
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5. NUMBER (OR MINIMUM AND MAXIMUM NUMBER) OF DIRECTORS.
Minimum three (3) - Maximum fifteen (15).
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6. RESTRICTIONS IF ANY ON BUSINESS THE CORPORATION MAY CARRY ON.
None.
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7. OTHER PROVISIONS IF ANY.
None.
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8. NAME OF AMALGAMATING CORPORATIONS. CORPORATE ACCESS NO.
TomaHawk Corporation 20353521
TomaHawk Imaging & Financial Inc. 20546749
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9. DATE: SIGNATURE TITLE
/s/ Steven M. Caira
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February 17, 1999 Steven M. Caira President and Chief Executive
Officer
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For Departmental Use Only Filed
STATUTORY DECLARATION
SAN DIEGO ) IN THE MATTER OF the Business
) Corporations Act (Alberta) AND IN THE
STATE OF CALIFORNIA ) MATTER OF the Amalgamation of TOMAHAWK
) CORPORATION And TOMAHAWK IMAGING &
WIT: ) FINANCIAL INC.
I, Steven M. Caira, of the City of San Diego, in the State of California,
do solemnly declare that:
1. I am a proposed director of Tomahawk Corporation, the amalgamated
corporation resulting from the amalgamation of Tomahawk Corporation and
Tomahawk Imaging & Financial Inc. (hereinafter referred to as the
"Amalgamated Corporation"), and as such have personal knowledge of the
matters herein declared to.
2. I have conducted such examinations of the books and records of the
Amalgamated Corporation and have made such inquiries and investigations as
are necessary to enable me to make this declaration.
3. There are reasonable grounds for believing that:
a. the Amalgamated Corporation will be able to pay its liabilities as
they become due; and
b. the realizable value of the Amalgamated Corporation's assets will
not be less than the aggregate of its liabilities and stated capital
of all classes.
4. There are reasonable grounds for believing that no creditor will be
prejudiced by the amalgamation.
AND I MAKE THIS SOLEMN DECLARATION conscientiously believing the same to
be true.
DECLARED before me at the City of )
San Diego, in the State of California, )
This 17th day of February, 1999. )
)
) /s/ Steven M. Caira
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A Notary Public in and for the State ) Steven M. Caira
Of California )
CALIFORNIA ALL-PURPOSE ACKNOWLEDGEMENT
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State of California
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County of San Diego
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On 17 February 1999 before me, Nyla Marson, Notary Public
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NAME, TITLE OF OFFICER -
E.G., "JANE DOE, NOTARY PUBLIC"
personally appeared Steven M. Caira
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NAME(S) OF SIGNER(S)
|x| personally known to me - OR - |_| proved to me on the basis of satisfactory
evidence to be the person whose names
is subscribed to the within instrument
and acknowledged to me that he executed
================================== the same in his authorized capacity,
[SEAL] NYLA MARSON and that by his signature(s) on
Commission # 1132170 the instrument the person, or the
Notary Public -- California entity upon behalf of which the person
San Diego County acted, executed the instrument.
My Comm. Expires Apr. 1, 2001
==================================
WITNESS my hand and official seal.
/s/ Nyla Marson
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SIGNATURE OF NOTARY
================================ OPTIONAL ======================================
Though the data below is not required by law, it may prove valuable to persons
relying on the document and could prevent fraudulent reattachment of this form.
CAPACITY CLAIMED BY SIGNER DESCRIPTION OF ATTACHED DOCUMENT
|_| INDIVIDUAL
|X| CORPORATE OFFICER
PROPOSED DIRECTOR STATUTORY DECLARATION
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TITLE(S) TITLE TYPE OF DOCUMENT
|_| PARTNER(S) |_| LIMITED ONE
|_| GENERAL ----------------------------------------
NUMBER OF PAGES
|_| ATTORNEY-IN-FACT
|_| TRUSTEE(S)
|_| GUARDIAN/CONSERVATOR
|_| OTHER: __________________________ 02/17/99
_________________________________ -----------------------------------------
_________________________________ DATE OF DOCUMENT
SIGNER IS REPRESENTING:
NAME OF PERSON(S) OR ENTITY(IES)
TOMAHAWK CORPORATION_________________ N/A
_____________________________________ ----------------------------------------
_____________________________________ SIGNER(S) OTHER THAN NAME ABOVE
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BUSINESS CORPORATIONS ACT FORM 3
(SECTION 27 OR 171)
CONSUMER AND NOTICE OF ADDRESS OR
Alberta CORPORATE AFFAIRS NOTICE OF CHANGE OF ADDRESS
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1. NAME OF CORPORATION: 2. CORPORATE ACCESS NUMBER
TomaHawk Corporation
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3. ADDRESS OF REGISTERED OFFICE (STREET ADDRESS, INCLUDING POSTAL CODE, OR
LEGAL LAND DESCRIPTION).
1400, 350 - 7th Avenue S.W.
Calgary, Alberta
T2P 3N9
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4. RECORDS ADDRESS (STREET ADDRESS, INCLUDING POSTAL CODE, OR LEGAL LAND
DESCRIPTION).
1400, 350 - 7th Avenue, S.W.
Calgary, Alberta
T2P 3N9
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5. ADDRESS FOR SERVICE BY MAIL, IF DIFFERENT FROM ITEM 3 (POST OFFICE BOX,
INCLUDING POSTAL CODE).
Not applicable
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DATE SIGNATURE TITLE
/s/ Steven M. Caira
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February 17, 1999 Steven M. Caira President and Chief Executive Officer
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BUSINESS CORPORATIONS ACT
(Sections 101, 108 and 276)
Form 6
NOTICE OF DIRECTORS OR
NOTICE OF CHANGE OF DIRECTORS
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1. NAME OF CORPORATION 2. CORPORATE ACCESS NO.
TomaHawk Corporation
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3. ON THE 17TH DAY OF FEBRUARY, 1999, THE FOLLOWING PERSONS WERE APPOINTED
DIRECTORS:
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Name Mailing Address (including Postal Code) Resident
Canadian?
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STEVEN M. CAIRA 4444 Adams Street, Carlsbad, California 92008 NO
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THOMAS M. DUSMET 6712 Highway 25 RR1, Milton, Ontario L9T 2X5 YES
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DOUGLAS W. LOUGHRAN 13459 Cedar Way, Maple Ridge, B.C. V2X 7E7 YES
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JONATHAN F. TURPIN 2805 Fromme Road N., Vancouver, B.C. V7J 2R4 YES
4. ON THE ____ DAY OF ________, 1998, THE FOLLOWING PERSON(S) CEASED TO
HOLD OFFICE AS DIRECTOR(S):
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Name Mailing Address (including Postal Code)
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5. AS OF THIS DATE, THE DIRECTOR(S) OF THE CORPORATION ARE:
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Name Mailing Address (including Postal Code) Resident
Canadian?
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STEVEN M. CAIRA 4444 Adams Street, Carlsbad, California 92008 NO
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THOMAS M. DUSMET 6712 Highway 25 RR1, Milton, Ontario L9T 2X5 YES
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DOUGLAS W. LOUGHRAN 13459 Cedar Way, Maple Ridge, B.C. V2X 7E7 YES
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JONATHAN F. TURPIN 2805 Fromme Road N., Vancouver, B.C. V7J 2R4 YES
6. TO BE COMPLETED ONLY BY ALBERTA CORPORATIONS:
ARE AT LEAST HALF OF THE MEMBERS OF THE BOARD OF DIRECTORS RESIDENT
CANADIANS?
YES |X| NO |_|
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7. DATE: Signature Title
99 02 17 /s/ Steven M. Caira President and Chief Executive Officer
Year Month Day --------------------
Steven M. Caira
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For Departmental Use Only Telephone Number
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Filed
SCHEDULE "A" TO THE
ARTICLES OF AMALGAMATION OF TOMAHAWK CORPORATION
The classes and any maximum number of shares that the Corporation is
authorized to issue are:
Unlimited number of Common voting shares without nominal or par value;
Unlimited number of Class "B" Common non-voting shares without nominal or
par value;
Unlimited number of Preferred shares without nominal or par value;
all subject to the rights, privileges, restrictions and conditions as
hereinafter set forth:
1. The Common and Class "B" Common shares shall respectively carry and be
subject to the following rights, privileges, restrictions and conditions,
namely:
a. The holders of the Common shares shall be entitled to one (1) vote in
respect of each such Common share held at all meetings of the shareholders
of the Corporation;
b. Subject to the right to vote at a meeting of the holders of Class "B"
Common shares, the holders of the Class "B" Common shares shall not be
entitled as such to receive notice of or to attend any meeting of the
shareholders of the Corporation, and shall not be entitled to vote at any
such meeting;
c. In the event of the liquidation, dissolution or winding up of the
Corporation or other distribution of assets of the Corporation (except
payment of dividends) among shareholders for the purpose of winding up its
affairs, the holders of the Common and Class "B" Common shares shall rank
equally in the distribution of all or any part of the property and assets
of the Corporation, which property and assets shall be distributed to the
holders of common shares pro rata to the number of common shares issued
and outstanding on the date of such distribution;
d. The holders of Common and Class "B" Common shares need not rank equally or
be treated equally in the declaration or payment of dividends and the
Directors shall have full and absolute discretion to declare and pay
dividends:
i. to the holders of Common shares only; or
ii. to the holders of Class "B" Common shares only; or
iii. of differing amounts per share to the holders of Common shares and
the holders of Class "B" Common shares;
provided that within each class of shares, all dividends shall be paid to
the shareholders in proportion to the number of shares held by them.
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2. The Preferred shares shall have attached thereto, as a class, the following
rights, privileges, restrictions and conditions, namely:
a. Directors' Right to Issue in One or More Series
The Preferred shares may at any time, or from time to time, be issued in
one or more series, each series to consist of such number of shares as
may, before the issue thereof, be determined by resolution of the Board of
Directors of the Corporation;
b. Directors' Right to Fix Terms of Each Series
The Directors of the Corporation shall, by ordinary resolution, fix from
time to time before the issue thereof the designation, price,
restrictions, conditions and limitations attaching to the Preferred shares
of each series including, without limiting the generality of the
foregoing, the rate or amount of dividends or the method of calculating
dividends, the dates of payment thereof, the redemption or purchase prices
and terms and conditions of redemption or purchase, any voting rights, any
conversion rights and any sinking fund or other provisions;
c. Ranking of Preferred Shares
The Preferred shares of each series shall rank, both as regards dividends
and return of capital, in priority to all other shares of the Corporation.
The Preferred shares of any series may also be given such other
preferences over the Common shares and over any other shares of the
Corporation ranking junior to the Preferred shares, as may be fixed in
accordance with paragraph 2(b) hereof; provided, however, that no rights,
privileges, restrictions or conditions attached to a series of shares
shall confer on a series a priority in respect of voting, dividends or
return of capital over any other series of shares of the same class that
are then outstanding.
SCHEDULE "B" TO THE
ARTICLES OF AMALGAMATION OF TOMAHAWK CORPORATION
Provisions attaching to the 6% Non-Cumulative Redeemable
Convertible Retractable First Preferred Shares, Series A
The first series of Preferred Shares of TomaHawk Corporation (the
"Corporation") shall consist of 100,000 shares without nominal or par value,
shall be designated as 6% Non-Cumulative Redeemable Convertible Retractable
First Preferred Shares, Series A (the "Series A Shares") and, in addition to the
rights, conditions, restrictions and limitations attached to the Preferred
Shares as a class, shall have attached thereto rights, conditions, restrictions
and limitations substantially as hereinafter set forth, that is to say:
1. Issue Price
1.1 The stated value of the Series A Shares shall be $10.00 per share.
2. Dividends
2.1 The holders of the Series A Shares shall be entitled to receive fixed,
non-cumulative, preferential cash dividends, out of monies properly applicable
to the payment of dividends, at the lesser of the following rates:
a. a rate of 6% of the stated value per Series A Share ($0.60 per
Series A Share) per annum, as and when declared by the board of
directors of the Corporation;
or
b. a rate of 20% of the Corporation's net income before depreciation,
before depletion and after current income taxes as computed in
accordance with generally accepted accounting principles.
2.2 The Corporation shall, promptly after the preparation of its annual
financial statements, provide notice to the Transfer Agent as to the amount set
forth in paragraph 2.1(b).
2.3 Cheques of the Corporation, dated the dividend payment date and payable at
par at any branch of the Corporation's bankers for the time being in Canada,
shall be issued in respect of each such dividend and the mailing thereof to any
holder shall satisfy the dividend represented thereby unless the cheque be not
paid upon presentation. No shareholder shall be entitled to recover by action or
other legal process against the Corporation respecting any dividend that is
represented by a cheque that has not been duly presented to the Corporation's
bankers for payment and that otherwise remains unclaimed for a period of six
years from the date on which it was payable. If, on any dividend payment date,
the dividend payable on such date is not paid in full on all the Series A Shares
then issued and outstanding, such dividend or the unpaid part thereof shall not
be required to be paid on a subsequent date.
2.4. The holders of the Series A Shares shall not be entitled to any dividends
other than or in excess of the dividends for which provision is expressly made
herein.
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3. Liquidation
3.1 In the event of the voluntary or involuntary liquidation, dissolution or
winding up of the Corporation or other distribution of assets of the Corporation
among its shareholders for the purpose of winding up its affairs, the holders of
Series A Shares shall be entitled to receive $10.00 for each Series A Share
held.
3.2 In all cases the holders of the Series A Shares shall be entitled to be paid
all moneys payable pursuant to paragraph 3.1 before any amount shall be paid or
any distribution of the assets of the Corporation shall be made to the holders
of the common shares or any other shares of the Corporation ranking junior to
the Series A Shares with respect to distributions upon liquidation.
3.3 After payment to the holders of the Series A Shares of the amounts so
payable to them they shall not be entitled to share in any further distribution
of the property or assets of the Corporation.
4. Retraction Privilege
4.1 Holders of the Series A Shares shall have the option or privilege (the
"Retraction Privilege") of requiring the Corporation in any calendar year, to
redeem, subject to applicable law, up to 25% of the holder's Series A Shares
(the "Retraction Limit") which have not previously been converted to common
shares of the Corporation (the "Common Shares") pursuant to the provisions of
Section 7 hereof, in the event that the net earnings of the Corporation have
exceeded $250,000 for that calendar year (the "Retraction Event"), which
Retraction Privilege shall be effected at a price (the "Retraction Price") equal
to $10.00 per share.
4.2 The Corporation shall promptly provide notice of the Retraction Event to the
Transfer Agent and during the 10 day period following the Retraction Event, mail
to each person who at the date of mailing is a registered holder of Series A
Shares a written notice (the "Retraction Notice") giving details of the
Retraction Privilege and specifying a place or places in the Province of Alberta
for the deposit by the holder of the certificate or certificates representing
the Series A Shares and the date on or prior to which such deposit shall be made
by such holder in order to exercise such Retraction Privilege, which date shall
be 35 days following the Retraction Event (the "Retraction Payment Date").
Subject to the provisions of Clause 4.1, the Corporation shall pay the
Retraction Price on the Retraction Payment Date to the Transfer Agent on behalf
of the holders of Series A Shares who have exercised their Retraction Privilege.
The Retraction Notice will also contain, if the Corporation determines under the
provisions of Clause 4.5 that it will not be permitted to retract the Series A
Shares in accordance with the provisions of Clause 4.1, the statement required
under the provisions of Clause 4.5.
4.3 At least 7 days prior to the applicable Retraction Payment Date, a holder of
Series A Shares desiring to exercise the Retraction Privilege shall deposit the
certificate or certificates representing the Series A Shares to be purchased
together with a written notice signed by the holder requesting purchase of the
Series A Shares represented by such certificate up to the Retraction Limit or
certificates or such lesser number thereof as may be specified in such notice.
If a part only of the Series A Shares represented by any certificate shall be
purchased a new certificate for the balance shall be issued at the expense of
the Corporation. Such deposit shall, subject to Clause 4.5, be irrevocable.
Payment of the Retraction Price, subject to the Corporation's obligations set
out in this Section 4, shall be made by depositing with the Transfer Agent the
Retraction Price of the Series A
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Shares which are represented by certificates which have been delivered to the
Custodian in accordance herewith. Series A Shares purchased pursuant to the
provisions hereof shall be and be deemed to be cancelled and shall not be
reissued. No shareholder shall be entitled to recover by action or other legal
process against the Corporation any portion of the Retraction Price that is
represented by a cheque that has not been duly presented to the Corporation's
bankers for payment and that otherwise remains unclaimed for a period of six
years from the date on which it was payable. Upon such deposit being made or
upon the date specified for purchase of Series A Shares, whichever is the later,
the Series A Shares in respect of which such deposit shall have been made shall
be deemed to have been purchased and the rights of the holders thereof shall be
limited to receiving without interest their proportionate part of the amount so
deposited on presentation and surrender of the certificates representing their
Series A Shares being purchased. Any interest allowed on any such deposit shall
belong to the Corporation.
4.4 Upon payment by the Corporation of the Retraction Price for the Series A
Shares purchased pursuant to the provisions of this Section 4, the Series A
Shares so purchased shall cease to be entitled to dividends or any other
participation in the assets of the Corporation and the holders of such shares
shall not be entitled to exercise any of the rights of shareholders in respect
of them. In the event that the Corporation fails to pay the full Retraction
Price, the Series A Shares deposited for purchase shall be entitled to dividends
in proportion to that portion of the Retraction Price unpaid.
4.5 Subject to the provisions of Clause 4.1 and subject to the provisions of
Clause 4.6, the Corporation shall on the Retraction Payment Date purchase all
Series A Shares up to the Retraction Limit in respect of which holders shall
have exercised the Retraction Privilege. If prior to the mailing or publication
of the Retraction Notice for the Retraction Payment Date, the Corporation
determines that it will not be permitted under the provisions of any applicable
law to purchase the number of Series A Shares pursuant to its obligations
hereunder, the Corporation shall include in such Retraction Notice a statement
of the maximum amount (in multiples of $10) which it then believes it will be
permitted to pay on the Retraction Payment Date and, in reasonable detail, the
basis of the calculation thereof. Insofar as the Corporation has acted in good
faith in making such determination, the Corporation shall have no liability in
the event that such determination proves inaccurate. Notwithstanding the
provisions of Clause 4.3 if the aggregate amount that the Corporation is able to
pay on the Retraction Payment Date is less than the aggregate amount determined
by the Corporation for the Retraction Notice, the holder of Series A Shares
deposited for retraction shall have the right to withdraw such shares from such
deposit on or before 10 days following the Retraction Payment Date and Clause
4.1 shall otherwise apply mutatis mutandis to the retraction of the Series A
Shares so withdrawn from deposit.
4.6 If the Corporation fails to pay the full Retraction Price, because of the
provisions of any applicable law, for any of the Series A Shares deposited for
purchase on the Retraction Payment Date in respect of which the holders thereof
have exercised their rights up to the Retraction Limit under the Retraction
Privilege, the remainder of the Retraction Price of such Series A Shares shall
be paid on a pro rata basis as soon as reasonably feasible to the extent the
Corporation is able to do so under the provisions of any applicable law, on each
succeeding date for the payment of dividends on the Series A Shares until the
full amount of the Retraction Price of the Series A Shares so deposited has been
paid. In the event that the Corporation shall as aforesaid pay only a portion of
the full amount of the Retraction Price of the Series A Shares deposited for
retraction, the certificates representing such Series A Shares shall be
cancelled and new share certificates shall be issued to the depositing
shareholders representing the Series A Shares not retracted. The
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provisions of this Section 4 shall, to the extent reasonably possible, apply to
such further Retraction Privilege mutatis mutandis, except that the Retraction
Notice to be mailed by the Corporation shall be mailed during the 30 day period
ended 30 days prior to the applicable dividend payment date and the date on or
prior to which deposit of certificate(s) shall be made by a holder of Series A
Shares in order to exercise such Retraction Privilege shall be 7 days prior to
such applicable dividend payment date.
5. Redemption
5.1 The Series A Shares are not redeemable on or prior to July 31, 1989 without
the prior consent of the holders of such shares.
5.2 After July 31, 1989, the Corporation may at its option redeem at any time
all of the outstanding Series A Shares or, subject to the provisions of Section
8, from time to time any part thereof selected by lot in such manner as the
board of directors shall decide, or, if the board of directors so decide, pro
rata, on payment of $10.00 for each such share to be redeemed (the "Redemption
Price").
5.3 On any redemption of Series A Shares under this Section 5, the Corporation
shall give in the manner provided in Section 9 at least 30 days prior notice to
each person who, at the date of giving such notice, is the registered holder of
Series A Shares to be redeemed, of the intention of the Corporation to redeem
such shares. Such notice shall set out the Redemption Price and the date on
which the redemption is to take place and, unless all the Series A Shares held
by the holder to whom it is addressed are to be redeemed, shall also set out the
number of such shares so held which are to be redeemed. On or after the date so
specified for redemption, the Corporation shall pay or cause to be paid to the
holders of such Series A Shares to be redeemed the Redemption Price on
presentation and surrender at the head office of the Corporation or at any other
place or places within Canada designated by such notice, of the certificate or
certificates for such Series A Shares so called for redemption. Such payment
shall be made by cheque payable at par at any branch in Canada of the
Corporation's bankers. If a part only of the Series A Shares represented by any
certificate shall be redeemed, a new certificate for the balance shall be issued
at the expense of the Corporation. From and after the redemption date specified
in any such notice, the Series A Shares called for redemption shall cease to be
entitled to dividends and the holders thereof shall not be entitled to exercise
any of the rights of shareholders in respect thereof unless payment of the
Redemption Price shall not be duly made by the Corporation. At any time after
the notice of redemption is given the Corporation shall have the right to
deposit the Redemption Price of any or all Series A Shares called for redemption
with any chartered bank or banks or with any trust corporation or trust
companies in Canada named for such purpose in the notice of redemption to the
credit of a special account or accounts in trust for the respective holders of
such shares, to be paid to them respectively upon surrender to such bank or
banks or trust company or trust companies of the certificate or certificates
representing the same. Upon such deposit or deposits being made, such shares
shall be deemed to be redeemed and the rights of the holders of such shares
shall be limited to receiving the proportion of the amounts so deposited
applicable to their respective shares without interest. Any interest allowed on
such deposit or deposits shall belong to the Corporation.
5.4 Series A Shares which are redeemed or deemed to be redeemed in accordance
with this Section 5 shall be and be deemed to be cancelled and shall not be
reissued.
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6. Purchase for Cancellation
6.1 Subject to the provisions of Section 8 and in addition to its right to
redeem the Series A Shares as provided in Section 5, the Corporation may at any
time and from time to time purchase for cancellation the whole or any part of
the outstanding Series A Shares by invitations for tender addressed to all
holders of record of the outstanding Series A Shares. In the event that, upon
any request for tenders, the Corporation shall receive two or more tenders of
Series A Shares at the same price and which shares, when added to any shares
tendered at a lower price or prices, aggregate more than the amount for which
the Corporation is prepared to accept tenders, if any of the Series A Shares so
tendered at the same price are purchased by the Corporation they shall be
purchased pro rata from such holders tendering at the same price, disregarding
fractions.
6.2 Series A Shares which are purchased in accordance with this Section 6 shall
be and be deemed to be cancelled and shall not be reissued.
7. Conversion Privilege
7.1 For the purposes of these share provisions:
a. "Certificate of the Corporation" means a certificate under the
corporate seal of the Corporation signed by any two of the Chairman,
the President, or any Vice president or any one of them together
with the Secretary, an Assistant Secretary, the Treasurer or an
Assistant Treasurer of the Corporation and may consist of one or
more instruments so executed;
b. "Close of business" means with respect to the conversion of any
Series A Share the normal closing time of the office of the Transfer
Agent at which the holder of such share elects to have such share
converted;
c. "Common Shares" shall mean common shares without nominal or par
value in the capital of the Corporation as such shares were
constituted on July 25, 1998, and any other shares resulting from
reclassification or change of such Common Shares or amalgamation,
consolidation, merger or sale, all as referred to in Clause 7.10;
d. "Current Conversion Price" shall mean the Current Market Price for
each Common Share to be issued upon conversion of any Series A
Shares, subject to adjustment as hereinafter provided;
e. "Current Conversion Basis" means at any particular time 20 Common
Shares into which at such time one (1) Series A Share shall be
convertible at the Current Conversion Price in accordance with the
provisions of this Section 7;
f. "Current Market Price", as at any date when the Current Market Price
is to be determined, shall mean the weighted average price at which
Common Shares have traded on the Alberta Stock Exchange for any
fifteen (15) consecutive trading days ending on a date not earlier
than the fifth trading day preceding such date. In the event the
Common Shares are not so traded on the Alberta Stock Exchange but
are listed on another stock exchange, or stock exchanges in Canada,
the foregoing references to the Alberta Stock Exchange shall be
deemed to be references to such
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other stock exchange, or, if more than one, to such one as shall be
designated by the board of directors of the Corporation. In the
event the Common Shares are not so traded on any stock exchange in
Canada, the Current Market Price thereof shall be determined by the
board of directors of the Corporation, acting reasonably, which
determination shall be conclusive;
g. "dividends paid in the ordinary course" means dividends, whether in
cash or in shares of the capital stock of the Corporation, paid in
any fiscal year of the Corporation to the extent that the aggregate
of such cash and the paid up capital of such shares does not in such
fiscal year exceed the greatest of:
i. 150% of the aggregate amount of dividends paid by the
Corporation on the Common Shares in the period of 12
consecutive months ended immediately prior to the first day of
such fiscal year;
ii. 80% of the aggregate amount of dividends paid by the
Corporation on the Common Shares in the period of 36
consecutive months ended immediately prior to the first day of
such fiscal year; and
iii. 100% of the consolidated net earnings of the Corporation,
before extraordinary items, for the period of 12 consecutive
months ended immediately prior to the first day of such fiscal
year (such consolidated net earnings to be as shown in the
audited financial statements of the Corporation for such
period of 12 consecutive months or, if there are no audited
financial statements in respect of such period, computed in
accordance with generally accepted accounting principles
consistent with those applied in the preparation of the most
recent audited consolidated financial statements of the
Corporation)
and for such purpose the amount of any dividend paid in shares shall
be the aggregate paid up capital of such shares.
h. "trading day" means a day on which the relevant stock exchange
referred to in subclause 7.1(f) is open for business;
i. "Transfer Agent" means the person appointed as registrar and
transfer agent for the Common Shares;
j. "weighted average price" means at any specific date, the weighted
average price per Common Share of all trades in board lot quantities
of the Common Shares for the specified period in trading days
immediately prior to such date on the relevant stock exchange
referred to in subclause 7.1(f) above.
7.2 A holder of any Series A Shares has the right at his option at any time, or,
in the case of shares called for redemption, up to the close of business on the
third business day preceding the date fixed for redemption, whichever is
earlier, to conversion, subject to the terms and provisions hereof, such Series
A Shares into fully paid and non-assessable Common Shares at the Current
Conversion Basis. Should payment of the Redemption Price of Series A Shares
which have been
7
called for redemption not be paid upon surrender of the certificate for such
Series A Shares the right of conversion shall revive and continue from the time
of the failure to pay as if such Series A Shares had not been called for
redemption. The conversion of Series A Shares in accordance with this clause may
be effected by the surrender of the certificate or certificates representing the
same at any time during usual business hours at the option of the holder at any
office of the Transfer Agent at which the Common Shares are transferable,
accompanied by: (1) payment or evidence of payment of the tax (if any) payable
as provided in Clause 7.9, and (2) a written instrument of surrender in form
satisfactory to the Corporation duly executed by the registered holder, or his
attorney duly authorized in writing, in which instrument such holder may also
elect to convert part only of:
a. the Series A Shares represented by such certificate or certificates
not theretofore called for redemption, in which event such holder
shall be entitled to receive, at the expense of the Corporation, a
new certificate representing the Series A Shares represented by such
certificate or certificates which have not been converted; or
b. the Series A Shares, represented by such certificate or
certificates, theretofore called for redemption, in which event on
the date specified for the redemption of such Series A Shares such
holder shall be entitled to payment of the Redemption Price of the
Series A Shares represented by such certificate or certificates
which have been called for redemption and which have not been
converted, and to receive, at the expense of the Corporation, a
certificate representing Series A Shares represented by such
certificate or certificates which have been neither converted nor
redeemed.
As promptly as practicable after the surrender of any Series A Shares for
conversion, the Corporation shall cause to be delivered to or upon the written
order of the holder of the Series A Shares so surrendered, a certificate or
certificates issued in the name of, or in such name or names as may be directed
by, such holder representing the number of Common Shares to which such holder is
entitled together with a payment by cheque or the issue of scrip certificates in
respect of any fraction of a Common Share issuable on such conversion as
provided in Clause 7.8. Such conversion shall be deemed to have been made at the
close of business on the date such Series A Shares shall have been surrendered
for conversion, so that the rights of the holder of such Series A Shares as the
holder thereof shall cease at such time and the person or persons entitled to
receive Common Shares upon such conversion shall be treated for all purposes as
having become the holder or holders of record of such Common Shares at such time
and such conversion shall be on the Current Conversion Basis as at such time.
The date of surrender of any Series A Shares for conversion shall be deemed to
be the date when the certificate representing such Series A Shares is received
by the Transfer Agent.
7.3 The registered holder of any Series A Shares on the record date for any
dividend payable on such share shall be entitled to such dividend
notwithstanding that such share is converted after such record date and before
the payment date of such dividend and the registered holder of any Common Share
resulting from any conversion shall be entitled to rank equally with the
registered holders of all other Common Shares in respect of all dividends
declared payable to holders of Common Shares of record on any date after the
date of conversion. Subject as aforesaid and subject to the provisions hereof,
upon the conversion of any Series A Shares, the Corporation shall not make
payment or adjustment on account of any dividends on the Series A Shares so
converted nor on account of any dividends on the Common Shares issuable upon
such conversion.
8
7.4 The Current Conversion Price shall be subject to adjustment from time to
time as follows:
a. if the Corporation shall at any time, or from time to time,
hereafter (i) subdivide its outstanding Common Shares into a greater
number of shares, (ii) combine, consolidate or reclassify its
outstanding Common Shares into a smaller number of shares, or (iii)
issue Common Shares to the holders of any of its outstanding Common
Shares by way of a stock dividend (other than an issue of Common
Shares to holders of Common Shares who exercise an option to receive
dividends in the form of Common Shares in lieu of receiving cash
dividends paid in the ordinary course), the Current Conversion Price
in effect on the effective date of such subdivision or combination,
consolidation or reclassification or on the record date for such
issue of Common Shares by way of a stock dividend, as the case may
be, shall be adjusted immediately after such effective date or
record date, as the case may be, so that it shall thereafter equal
the price determined by multiplying the Current Conversion Price in
effect on such date by a fraction of which the numerator shall be
the total number of Common Shares outstanding immediately prior to
such date and the denominator shall be the total number of Common
Shares outstanding immediately after such date; such adjustment
shall be made successively whenever any event referred to in this
subclause 7.4(a) shall occur; any such issue of Common Shares by way
of a stock dividend shall be deemed to have been made on the record
date for the stock dividend for the purpose of calculating the
number of outstanding Common Shares under this Clause 7.4;
b. in case the Corporation shall fix a record date for the issuance of
rights, options or warrants to all or substantially all the holders
of its outstanding Common Shares entitling them for a period
expiring not more than forty-five (45) days after such record date,
to subscribe for or purchase Common Shares (or securities
convertible into Common Shares) at a subscription or purchase price
per share (or having a conversion price per share) less than 90% of
the Current Market Price on such record date, then the Current
Conversion Price shall be adjusted immediately after such record
date so that it shall equal the price determined by multiplying the
Current Conversion Price in effect on such record date by a
fraction, of which the numerator shall be the total number of Common
Shares outstanding on such record date plus a number of Common
Shares equal to the number arrived at by dividing the aggregate
price of the total number of additional Common Shares offered for
subscription or purchase (or the aggregate conversion price of the
convertible securities so offered) by the Current Market Price of a
Common Share, and of which the denominator shall be the total number
of Common Shares outstanding on such record date plus the total
number of additional Common Shares offered for subscription or
purchase (or into which the convertible securities so offered
are/convertible). Any Common Shares owned by or held for the account
of the Corporation shall be deemed not to be outstanding for the
purpose of any such computation. Such adjustment shall be made
successively whenever such a record date is fixed. To the extent
that any such rights, options or warrants are not so issued or any
such rights, options or warrants are not exercised prior to the
expiration thereof, the Current Conversion Price shall be readjusted
to the Current Conversion Price which would then be in effect based
upon the number of rights, options or warrants actually issued or
the number of Common Shares (or securities
9
convertible into Common Shares) actually issued upon the exercise of
such rights, options or warrants, as the case may be; and
c. in case the Corporation shall fix a record date for the making of a
distribution to all or substantially all the holders of its
outstanding Common Shares of (i) shares of any class other than
Common Shares, or (ii) rights, options or warrants (excluding those
referred to in subclause 7.4(b) and excluding rights, options or
warrants entitling the holders for a period expiring not more than
forty-five (45) days after such record date to subscribe for or
purchase Common Shares (or securities convertible into Common
Shares) at a subscription or purchase price per share (or having a
conversion price per share) greater than or equal to 90% of the
Current Market Price on such record date), or (iii) evidences of its
indebtedness, or (iv) any assets (excluding cash dividends paid in
the ordinary course and shares or other property or assets
distributed in lieu of such cash dividends at the option of
shareholders), then in each such case the Current Conversion Price
shall be adjusted immediately after such record date so that it
shall equal the price determined by multiplying the Current
Conversion Price in effect on such record date by a fraction, of
which the numerator shall be the total number of Common Shares
outstanding on such record date multiplied by the Current Market
Price per Common Share on such record date, less the fair market
value (as determined by the board of directors of the Corporation
acting reasonably, whose determination shall be conclusive) of such
shares or rights, options or warrants or evidences of indebtedness
or assets so distributed, and of which the denominator shall be the
total number of Common Shares outstanding on such record date
multiplied by such Current Market Price per Common Share. Any Common
Shares owned by or held for the account of the Corporation shall be
deemed not to be outstanding for the purposes of any such
computation. Such adjustment shall be made successively whenever
such a record date is fixed. To the extent that such distribution of
shares, evidences of indebtedness or assets is not so made or to the
extent that any rights, options or warrants so distributed are not
exercised, the Current Conversion Price shall be readjusted to the
Current Conversion Price which would then be in effect based upon
such shares, evidences of indebtedness or assets actually
distributed or based upon the number of Common Shares (or securities
convertible into Common Shares) actually delivered upon the exercise
of such rights, options or warrants, as the case may be.
7.5 No adjustments of the Current Conversion Price shall be made pursuant to
subclause 7.4(b) or 7.4(c) if the holders of the Series A Shares are permitted
to participate in the issue of such rights, options or warrants or such
distribution, as the case may be, as though and to the same effect as if they
had converted their Series A Shares into Common Shares prior to the issue of
such rights, options or warrants or such distribution, as the case may be.
7.6 No adjustment of the Current Conversion Price shall be made in any case in
which the cumulative effect of the resulting increase or decrease in the Current
Conversion Price would be less than 1% of the then Current Conversion Price, but
in such case any adjustment that would otherwise have been required then to be
made shall be carried forward and made at the time of, and together with, the
next subsequent adjustment to the Current Conversion Price which, together with
any and all such adjustments so carried forward, shall result in an increase or
decrease in the Current Conversion Price by not less than 1%.
10
7.7 When any action is taken which requires an increase or decrease of the
Current Conversion Price under Clause 7.4, the Corporation shall forthwith file
with the Transfer Agent a Certificate of the Corporation setting forth the
details of the action taken and, as the case may be, the increased or decreased
Current Conversion Price, the details of the computation of the adjusted Current
Conversion Price and the resulting adjusted Current Conversion Basis. The
Transfer Agent shall be under no duty to make any investigation or inquiry as to
the statements contained in any such Certificate of the Corporation or the
manner in which any computation was made, but the Transfer Agent may accept such
Certificate as conclusive evidence of the statements therein contained and shall
be fully protected with respect to any and all acts done or action taken or
suffered by it in reliance thereon. The Corporation shall exhibit a copy of such
Certificate of the Corporation from time to time to any holder of Series A
Shares desiring to inspect the same, and shall give notice of any such
adjustment of the Current Conversion Price and the resulting adjustment of the
Current Conversion Basis to the holders of the Series A Shares in the manner
provided in Section 9. The Corporation may retain a firm of independent
chartered accountants (who may be the auditors of the Corporation) to make any
computation required under Clause 7.4, and any computation so made shall be
final and binding on the Corporation and the holders of the Series A Shares.
Such firm of independent chartered accountants may, as to questions of law,
request and rely upon an opinion of counsel (who may be counsel for the
Corporation).
7.8 Upon the surrender of any Series A Shares for conversion, the number of full
Common Shares issuable upon conversion thereof shall be equal to the aggregate
number of such Series A Shares to be converted multiplied by the Current
Conversion Basis. Fractional shares will not be issued on any conversion but in
lieu thereof the Corporation shall make cash payments. Payment shall be by
cheque of an amount equal to the then value of such fractional interest computed
on the basis of the Current Market Price.
7.9 The issuance of certificates for Common Shares upon the conversion of Series
A Shares shall be made without charge to the holders of the Series A Shares so
converted, of any fee or tax imposed on the Corporation in respect of the
issuance of such certificates or the Common Shares represented thereby; provided
that the Corporation shall not be required to pay any tax which may be imposed
upon the person or persons to whom such Common Shares are issued in respect of
the issuance of such Common Shares or the certificate therefor or which may be
payable in respect of any transfer involved in the issuance and delivery of any
such certificate in a name or names other than that of the holder of the Series
A Shares converted, and the Corporation shall not be required to issue or
deliver such certificate unless the person or persons requesting the issuance
thereof shall have paid to the Corporation the amount of such tax or shall have
established to the satisfaction of the Corporation that such tax has been paid,
or that the Corporation shall have no liability in respect thereof.
7.10 In case of any reclassification or change (other than a change resulting
only from consolidation or subdivision) of the Common Shares, or in case of any
amalgamation, consolidation or merger of the Corporation with or into any other
corporation, or in the case of any sale of the properties and assets of the
Corporation as, or substantially as, an entirety to any other corporations each
Series A Share shall, after such reclassification, change, amalgamation,
consolidation, merger, or sale be convertible into the number of shares or other
securities or property of the Corporation or such continuing, successor,
purchasing corporation, as the case may be, to which a holder of the number of
Common Shares as would have been issued if such Series A Shares had been
converted immediately prior to such reclassification,
11
change, amalgamation, consolidation, merger or sale would have been entitled
upon such reclassification, change, amalgamation, consolidation, merger or sale.
The board of directors of the Corporation may accept the certificate of any firm
of independent chartered accountants (who may be the auditors of the
Corporation) as to the foregoing calculation, and the board of directors may
determine such entitlement on the basis of such certificate. Any such
determination shall be conclusive and binding on the Corporation and the holders
of the Series A Shares. No such reclassification, change, amalgamation,
consolidation, merger or sale shall be carried into effect unless, in the
opinion of the board of directors of the Corporation, all necessary steps shall
have been taken to ensure that the holders of the Series A Shares shall
thereafter be entitled to receive such number of shares or other securities or
property of the Corporation or such continuing, successor or purchasing
corporation, as the case may be, subject to adjustment thereafter in accordance
with provisions similar, as nearly as may be, to those contained in this Section
7.
7.11 The Corporation shall give to the holders of Series A Shares at least
fourteen (14) days' prior notice of the record date for any of the events set
forth in Clause 7.4 other than a subdivision, combination, consolidation or
reclassification of the Common Shares and for the payment of any cash dividend
paid in the ordinary course or the distribution of shares or other property or
assets in lieu thereof and of the issue to any of the Corporation's shareholders
of rights to subscribe for Common Shares or other securities and shall give at
least thirty (30) days' prior notice of any repayment of capital on the Common
Shares. The accidental failure or omission to give the notice required by this
Clause 7.11 or any defect therein shall not affect the legality or validity of
any such payment, distribution or issue.
7.12 If in the opinion of the board of directors of the Corporation the
provisions of this Section 7 are not strictly applicable, or if strictly
applicable would not fairly protect the rights of the holders of the Series A
Shares in accordance with the intent and purposes hereof, the board of directors
shall make any adjustment in such provisions as the board of directors deems
appropriate.
8. Restrictions on Dividends and Retirement of Shares
8.1 So long as any of the Series A Shares are outstanding, the Corporation will
not, without the approval of the holders of the Series A Shares given in the
manner set forth in Section 12,
a. declare any dividend, other than stock dividend, on any shares of
the Corporation ranking junior to the Series A Shares with respect
to the payment of dividends;
b. redeem or purchase or make any capital distribution in respect of
any shares of the Corporation ranking junior to the Series A Shares
with respect to the payment of dividends or repayment of capital
(except out of the proceeds of a new issue of shares ranking junior
to the Series A Shares in both such respects);
c. except in connection with the Retraction Privilege and pursuant to
the Retraction Limit attaching to the Series A Shares, redeem or
purchase less than all the Series A Shares; or
d. except in connection with any retraction privilege attaching thereto
and provided a similar retraction privilege is extended or available
to the holders of the Series A Shares, redeem or purchase any shares
ranking on a parity with the Series A Shares.
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9. Notices
9.1 Any notice, required to be given under the provisions attaching to the
Series A Shares to the registered holders thereof shall be given by ordinary
unregistered mail, postage prepaid, addressed to each holder at the last address
of such holder as it appears on the books of the Corporation or, in the event of
the address of any such holder not so appearing, then to the address of such
holder last known to the Corporation; provided that accidental failure or
omission to give any notice as aforesaid to one or more of such holders shall
not invalidate any action or proceeding founded thereon. Any such notice shall
be deemed to have been given on the second business day after mailing.
10. Interpretation
10.1 In the event that any date on which any dividend on the Series A Shares is
payable by the Corporation, or on or by which any other action is required to be
taken by the Corporation hereunder, is not a business day (as hereinafter
defined), then such dividend shall be payable, or such other action shall be
required to be taken, on or by the next succeeding date that is a business day.
A "business day" shall be a day other than a Saturday, a Sunday or any other day
that is treated as a holiday in the Province in which the Corporation has its
principal office in Canada.
11. Amendments
11.1 The rights, restrictions, conditions and limitations attached to the Series
A Shares may be amended, modified, suspended, altered or repealed but only if
consented to, or approved by, the holders of the Series A Shares in the manner
hereinafter specified and in accordance with any requirements of the applicable
legislation and any amendments thereto from time to time.
12. Approval by Holders of Series A Shares
12.1. For the purposes of Sections 8 and 11, any consent or approval given by
the holders of Series A Shares shall be deemed to have been sufficiently given
if it shall have been given in writing by the holders of at least 66-2/3% of the
outstanding Series A Shares or by a resolution passed at a meeting of holders of
Series A Shares duly called and held upon not less than twenty-one (21) days
notice to the holders and carried by the affirmative vote of not less than
66-2/3% of the votes cast at such meeting. A quorum for the purposes of a
meeting of the holders of Series A Shares shall be the holders of twenty (20%)
percent of the outstanding Series A Shares being present in person or
represented by proxy. If at any such meeting of the holders of Series A Shares
called by the Corporation a quorum is not present within one-half hour after the
time appointed for such meeting then the meeting shall be adjourned to such date
not less than twenty-one (21) nor more than twenty-eight (28) days thereafter
and to such time and place as may be designated by the chairman, and not less
than ten (10) days' written notice shall be given of such adjourned meeting. At
such adjourned meeting the holders of Series A Shares present or represented by
proxy may transact the business for which the meeting was originally convened
and a resolution passed thereat by the affirmative vote of not less than 66-2/3%
of the votes cast at such meeting shall constitute the consent or approval of
the holders of Series A Shares. On every poll taken at every meeting every
holder of Series A Shares shall be entitled to one vote in respect of each
Series A Share held.
13
13. Voting Rights
13.1 Except as required by law, the holders of the Series A Shares shall not be
entitled as such to receive notice of or to attend any meeting of the
shareholders of the Corporation or to vote at any such meeting.
13.2 When the holders of Series A Shares vote separately as holders of Preferred
Shares in accordance with Clause 12, each holder shall be entitled to one (1)
vote in respect of each Series A Share held by such holder.
14. Taxable Preferred Shares Election
14.1 The Corporation shall elect pursuant to proposed subsection 191.2(1) of the
Income Tax Act (Canada) (the "Tax Act"), or pursuant to any similar provision
enacted in substitution for that subsection (provided such substitution is not
detrimental to the Corporation compared to the proposed subsection) by filing
the form prescribed pursuant to proposed subsection 191.2(1) of the Tax Act (and
within the time period referred to in proposed subsection 191.2(1)) with the
Minister of National Revenue with respect to the Series A Shares.
SCHEDULE "C" TO THE
ARTICLES OF AMALGAMATION OF TOMAHAWK CORPORATION
Designation of Series
Three series of Preferred Shares are designated by the Corporation as Class "A",
Series "I", Series "II", and Series "III" Preferred Shares, respectively, the
said Series of Preferred Shares being so designated pursuant to subsection 27(5)
of the Business Corporations Act and consisting of such number, and having the
rights, privileges, restrictions and conditions attaching thereto as follows:
1. Number
Each of the Class "A" Preferred Shares shall consist of an unlimited
number of such shares.
2. Dividends
Subject to the prior rights of the holders of any other Series of
Preferred Shares of the Corporation with respect to priority in the
payment of dividends, the holders of Class "A" Preferred Shares shall be
entitled to receive dividends, as and when declared by the Directors of
the Corporation out of assets properly applicable to the payment of
dividends, in such amount and in such form as the board of directors may
from time to time determine.
3. Priority on Liquidation
In the event of the dissolution or liquidation of the Corporation or a
sale of all of its assets, whether voluntary or involuntary, or in the
event of its insolvency, or upon any distribution of its capital, there
shall be paid to the holders of Class "A" Preferred Shares the amount paid
up thereon plus the amount of all unpaid dividends accrued thereon without
interest (in these Articles collectively called "the Redemption Amount")
before any sum shall be paid to or any assets distributed among the
holders of the Common shares. After such payment to the holders of the
Series "A" Preferred Shares, the remaining assets and funds of the
Corporation shall be divided among and paid to the holders of the Common
Shares in proportion to their holdings of such shares.
4. Conversion Right
a. For each $1.50 of Cumulative Cash Flow (as that term is hereinafter
defined) a share of Series I Preferred Shares is convertible into 10
common shares of the Corporation. Following the right of conversion
for all Series I preferred Shares, for each $2.00 of Cumulative Cash
Flow a share of the Series II preferred Shares is convertible into
10 common shares of the Corporation. Following the right of
conversion for all Series I and Series II Preferred Shares, for each
$2.50 of Cumulative Cash Flow a share of the Series III Preferred
Shares is convertible into 10 common shares of the Corporation.
2
On a consolidation, subdivision, algamation or reclassification of
the Corporation's shares, the conversion calculation must be
adjusted so that the proportion of the outstanding Class "A"
Preferred Shares available for conversion is unaffected by the
consolidation, subdivision, amalgamation or reclassification.
The Class "A" Preferred Shares may be converted only once during the
Corporation's financial year. The conversion calculation must be
based on the Corporation's annual audited consolidated financial
statements for the year or years during which the conversion
requirements were met in respect of the Class "A" Preferred Shares
to be converted.
For the purposes of the above-referenced conversion formula, "Cash
Flow" means net income or loss after tax, generated from the
business of TomaHawk Imaging & Financial Inc. or any of its
subsidiaries as shown on the consolidated audited financial
statements or verified by the Corporation's auditors, adjusted to
add back the following expenses:
i. Depreciation,
ii. Depletion,
iii. Deferred taxes,
iv. Amortization of goodwill, and
v. Deferred research and development costs.
"Cumulative Cash Flow" means, at any time the aggregate Cash Flow of
the Corporation up to that time from a date no earlier than June 1,
1993, net of any negative Cash Flow.
b. A holder of Class "A" Preferred Shares who wishes to avail himself
of this right of conversion shall submit to the head office of the
Corporation a written notice indicating the number of each Class "A"
Preferred shares he wishes to convert. Certificates representing the
Class "A" Preferred Shares to be converted shall be attached to the
notice. Upon receipt of any such notice and the Certificates, the
Corporation shall consult its auditors to confirm the number of
Class "A" Preferred Shares which are at that time convertible, and
without charge issue ten (10) Common Shares for each Class "A"
Preferred Shares which is then requested to be converted or which
then is convertible having regard to the Cumulative Cash Flow of the
Corporation, whichever is less, and if only some of the Class "A"
Preferred Shares evidenced on the certificates are converted, the
Corporation shall without charge, issue a new certificate
representing the remaining Class "A" Preferred Shares.
c. Notwithstanding paragraph a., the Corporation may apply to The
Alberta Stock Exchange for earlier conversion of the Class "A"
Preferred Shares or amendment to the terms of conversion herein
stated.
3
5. Transferability
Class "A" Preferred Shares may not be transferred except with the prior
approval of the directors, who may in their absolute discretion, refuse to
register the transfer of any said shares, such approval to be evidenced by
a resolution of the directors.
6. Cancellation
In the event that any of the Class "A" Series I Preferred Shares are not
eligible for conversion to Common Shares at the conclusion of the
Corporation's fiscal year beginning 1995, subject to the discretion of The
Alberta Stock Exchange, the ineligible Class "A" Series I Preferred Shares
shall be cancelled.
In the event that any of the Class "A" Series II Preferred Shares are not
eligible for conversion to Common Shares at the conclusion of the
Corporation's fiscal year beginning 1997, subject to the discretion of The
Alberta Stock Exchange, the Class "A" Series II Preferred Shares shall be
cancelled.
In the event that any of the Class "A" Series III Preferred Shares are not
eligible for conversion to Common Shares at the conclusion of the
Corporation's fiscal year beginning 1999, subject to the discretion of The
Alberta Stock Exchange, the Class "A" Series III Preferred Shares shall be
cancelled.
7. Other Provisions
In the event that TomaHawk Imaging & Financial Inc. or any of its
subsidiaries either becomes insolvent, is petitioned into bankruptcy,
takes legislative protection from its creditors or ceases to carry on its
business, then any Class "A" Preferred Shares which remain outstanding
must be surrendered to the Corporation for cancellation and the
Corporation and holders of such shares covenant to attend to their
cancellation immediately.