Sumtra to add approval of property sale to annual meeting agenda
TORONTO, Feb. 22, 2014 /CNW/ - Sumtra Diversified Inc. (NEX Board: YSU.H) ("Sumtra" or the "Company") announced today that it plans to ask shareholders to also consider the approval of the sale of certain real property held by Sumtra (the "Property Sale") as other business at the Company's upcoming annual and special meeting of shareholders to be held in Toronto on Tuesday, February 25, 2014 (the "Meeting").
The Company and Marketable Holdings Limited have entered into two agreements of purchase and sale dated January 6, 2014 with the Ministry of Transportation (Ontario) (the "MOT") to each sell their 50% interest in two parcels of vacant land in the City of Guelph aggregating approximately six acres to the MOT who requires the land for road widening purposes. The aggregate purchase price for the two parcels of land is $1,350,000 (Sumtra's share - $675,000) and the MOT has also agreed to pay the reasonable costs incurred by the vendors in effecting the sales. It is expect that the sale transactions will be completed in April 2014 and no material conditions remain for the completion of the transactions.
Under the Company's governing corporate legislation, the Business Companys Act (Ontario) (the "Act"), as the Property Sale constitutes the sale of substantially all of the property of the Company, the sale must be approved by a special resolution of shareholders (the "Property Sale Resolution"). The form of Property Sale Resolution to be presented to the shareholders at the Meeting is attached as Schedule A to this press release. To be effective, the Property Sale Resolution must be passed by at least 66 2/3% of the votes cast by holders of common shares present or represented by proxy at the Meeting and entitled to vote on the Property Sale Resolution.
Under the provisions of section 185 of the Act, a registered shareholder is entitled to send to the Company a written objection to the Property Sale Resolution in respect of approval of the Property Sale. In addition to any other right a shareholder may have, when the Property Sale becomes effective, a registered shareholder who complies with the dissent procedure under section 185 of the Act (a "Dissenting Shareholder") is entitled to be paid the fair value of the common shares held by them in respect of which they dissent, determined as at the close of business on the day before the Property Sale Resolution is adopted. If the statutory procedures are complied with, this right could lead to a judicial determination of the fair value required to be paid to a Dissenting Shareholder for their common shares. A registered shareholder may only exercise the right to dissent under section 185 of the Act in respect of common shares which are registered in that shareholder's name.
A non-registered shareholder who wishes to exercise the right to dissent should immediately contact the intermediary with whom the non-registered shareholder deals in respect of the common shares and either: (i) instruct the intermediary to exercise the right to dissent on the shareholder's behalf (which, if the common shares are registered in the name of CDS or other clearing agency, would require that the common shares first be re-registered in the name of the intermediary); or (ii) instruct the intermediary to re-register the shares in the name of the non-registered shareholder, in which case the non-registered shareholder would have to exercise the right to dissent directly.
The dissent procedure provided by section 185 of the Act is summarized in Schedule B to this press release. Shareholders who may wish to dissent should seek legal advice, as failure to comply with the strict requirements set out in section 185 of the Act may result in the loss or unavailability of any right to dissent.
How To Vote Against Approval of the Property Sale by Proxy
The form of management proxy previously distributed to shareholders provides management with discretionary authority to vote on other matters properly coming before the Meeting and it is intended that all such proxies will be voted in favour of Property Sale. Accordingly, registered and non-registered shareholders who have previously provided a proxy or Voting Information Form (VIF) in hard copy or online in favour of management and wish to vote in favour of the Property Sale need not take any further action.
Shareholders who wish to vote against the Property Sale should contact the Company by phone (416 863 6096) or e-mail (firstname.lastname@example.org) to obtain a revised form of proxy permitting them to vote against approval of the Property Sale. Completed proxies should be sent to the Company's agent, Adams Corporate Services Limited, by fax at 705 355 0699 or mail to P. O. Box 5121, Penetanguishene, Ontario, L9M 2G3. A later filed proxy or VIF will automatically revoke any previously filed proxy or VIF.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
PROPERTY SALE RESOLUTION
BE IT RESOLVED AS A SPECIAL RESOLUTION THAT:
- the Company is hereby authorized to sell its 50% interest in two parcels of vacant land located in the City of Guelph, constituting all or substantially all of the assets of the Company, pursuant to two agreements of purchase and sale dated January 6, 2014 entered into with the Ministry of Transportation (Ontario), as more particularly described in the press release of the Company dated February 22, 2014;
- notwithstanding that this special resolution has been duly passed by the shareholders of the Company, the directors are hereby authorized in their sole discretion to revoke this special resolution before it is acted on without further approval of the shareholders of the Company; and
- any director or officer of the Company is hereby authorized and directed, acting for, in the name of and on behalf of the Company, to execute or cause to be executed, under the seal of the Company or otherwise, and to deliver or to cause to be delivered, all such other deeds, documents, instruments and assurances and to do or cause to be done all such other acts and things, as in the opinion of such director or officer of the Company may be necessary or desirable to carry out the terms of the foregoing special resolution.
SUMMARY OF PROCEDURE TO EXERCISE DISSENT RIGHT
The following is a summary of the procedure set out in Section 185 of the Business Corporations Act (Ontario) ("OBCA") to be followed by a shareholder who intends to dissent from the special resolution (the "Property Sale Resolution") approving the sale of the 50% interest of Sumtra Diversified Inc. (the "Company") in two parcels of vacant land in the City of Guelph, constituting substantially all of the assets of the Company as described in the press release to which this Schedule B is attached, and who wishes to require the Company to acquire his or her shares of the Company and pay him or her the fair value thereof, determined as of the close of business on the day before the Property Sale Resolution is adopted.
Section 185 provides that a shareholder may only exercise the right to dissent with respect to all the shares of a class held by him or her on behalf of any one beneficial owner and registered in the shareholder's name. One consequence of this provision is that a shareholder may only exercise the right to dissent under section 185 in respect of shares that are registered in that shareholder's name. In many cases, shares beneficially owned by a person (a "Non-Registered Holder") are registered either: (i) in the name of an intermediary that the Non-Registered Holder deals with in respect of the shares (such as banks, trust companies, securities dealers and brokers, trustees or administrators of self-administered RRSPs, RRIFs, RESPs and similar plans, and their nominees); or (ii) in the name of a clearing agency (such as CDS Clearing and Depository Services Inc. (CDS)) of which the intermediary is a participant. Accordingly, a Non-Registered Holder will not be entitled to exercise the right to dissent under section 185 directly (unless the shares are re-registered in the Non-Registered Holder's name). A Non-Registered Holder who wishes to exercise the right to dissent should immediately contact the intermediary who the Non-Registered Holder deals with in respect of the shares and either: (i) instruct the intermediary to exercise the right to dissent on the Non-Registered Holder's behalf (which, if the shares are registered in the name of CDS or other clearing agency, would require that the share first be re-registered in the name of the intermediary); or (ii) instruct the intermediary to re-register the shares in the name of the Non-Registered Holder, in which case the Non-Registered Holder would have to exercise the right to dissent directly.
A registered shareholder who wishes to invoke the provisions of section 185 of the OBCA must send to the Company a written objection to the Property Sale Resolution (the "Notice of Dissent") at or before the time fixed for the shareholders' meeting at which the Property Sale Resolution is to be voted on. The sending of a Notice of Dissent does not deprive a registered shareholder of his or her right to vote on the Property Sale Resolution but a vote either in person or by proxy against the Property Sale Resolution does not constitute a Notice of Dissent. A vote in favour of the Property Sale Resolution will deprive the registered shareholder of further rights under section 185 of the OBCA.
Within 10 days after the adoption of the Property Sale Resolution by the shareholders, the Company is required to notify in writing each Dissenting Shareholder that the Property Sale Resolution has been adopted. A Dissenting Shareholder shall, within 20 days after he or she receives notice of adoption of the Property Sale Resolution or, if he or she does not receive such notice, within 20 days after he or she learns that the Property Sale Resolution has been adopted, send to the Company a written notice (the "Demand for Payment") containing his or her name and address, the number and class of shares in respect of which he or she dissents, and a demand for payment of the fair value of such shares. Within 30 days after sending his Demand for Payment, the Dissenting Shareholder shall send the certificates representing the shares in respect of which he or she dissents to the Company or its transfer agent. The Company or the transfer agent shall endorse on the share certificates notice that the holder thereof is a Dissenting Shareholder under section 185 of the OBCA and shall forthwith return the share certificates to the Dissenting Shareholder.
If a Dissenting Shareholder fails to send the Notice of Dissent, the Demand for Payment or his share certificates, he or she may lose his or her right to make a claim under section 185 of the OBCA.
After sending a Demand for Payment, a Dissenting Shareholder ceases to have any rights as a holder of the shares in respect of which he or she has dissented other than the right to be paid the fair value of such shares as determined under section 185 of the OBCA, unless: (i) the Dissenting Shareholder withdraws his or her Demand for Payment before the Company makes a written offer to pay (the "Offer to Pay"); (ii) the Company fails to make a timely Offer to Pay to the Dissenting Shareholder and the Dissenting Shareholder withdraws his or her Demand for Payment; or (iii) the directors of the Company revoke the Property Sale Resolution relating to the Property Sale, in all of which cases the Dissenting Shareholder's rights as a shareholder are reinstated.
Not later than seven days after the later of the effective date of the Property Sale and the day the Company receives the Demand for Payment, the Company shall send, to each Dissenting Shareholder who has sent a Demand for Payment, an Offer to Pay for the shares of the Dissenting Shareholder in respect of which he or she has dissented in an amount considered by the directors of the Company to be the fair value thereof, accompanied by a statement showing how the fair value was determined. Every Offer to Pay made to Dissenting Shareholders for shares of the same class shall be on the same terms. The amount specified in an Offer to Pay which has been accepted by a Dissenting Shareholder shall be paid by the Company within 10 days after it has been accepted, but an Offer to Pay lapses if the Company has not received an acceptance thereof within 30 days after the Offer to Pay has been made.
If an Offer to Pay is not made by the Company or if a Dissenting Shareholder fails to accept an Offer to Pay, the Company may, within 50 days after the effective date of the Property Sale or within such further period as a court may allow, apply to the court to fix a fair value for the shares of any Dissenting Shareholder. If the Company fails to so apply to the court, a Dissenting Shareholder may apply to the court for the same purpose within a further period of 20 days or within such further period as the court may allow. A Dissenting Shareholder is not required to give security for costs in any application to the court. An application to the court by either the Company or the Dissenting Shareholder must be made to the Ontario Superior Court of Justice.
On an application to the court, the Company shall give to each Dissenting Shareholder notice of the date, place and consequences of the application and of such shareholder's right to appear and be heard in person or by counsel. All such Dissenting Shareholders shall be joined as parties to any such application to the court to fix a fair value and shall be bound by the decision rendered by the court in the proceedings commenced by such application. The court is authorized to determine whether any other person is a Dissenting Shareholder who should be joined as a party to such application.
The court shall fix a fair value for the shares of all Dissenting Shareholders and may in its discretion allow a reasonable rate of interest on the amount payable to each Dissenting Shareholder from the effective date of the Property Sale until the date of payment of the amount ordered by the court. The fair value fixed by the court may be more or less than the amount specified in an Offer to Pay. The final order of the court in the proceedings commenced by an application by the Company or a Dissenting Shareholder shall be rendered against the Company and in favour of each Dissenting Shareholder who has not accepted an Offer to Pay.
The above is only a summary of the dissenting shareholder provisions of the OBCA, which are technical and complex. The full text is attached as Schedule D to this Information Circular. It is suggested that a shareholder of the Company wishing to exercise a right to dissent should seek legal advice, as failure to comply strictly with the provisions of the OBCA may result in the loss or unavailability of the right to dissent.
SOURCE Sumtra Diversified Inc.For further information:
Robert G. Shoniker
Sumtra Diversified Inc.
Tel: 416 863 6096