Sherman Bernard C, et al. – ‘SC 13D’ on 12/29/03 re: Counsel Corp – EX-99.B

On:  Monday, 12/29/03, at 4:26pm ET   ·   Accession #:  950136-3-3208   ·   File #:  5-48086

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General Statement of Beneficial Ownership   —   Schedule 13D
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: SC 13D      General Statement of Beneficial Ownership             21     66K 
 2: EX-99.A     Agreement Between Reporting Persons                    2±     9K 
 3: EX-99.B     Miscellaneous Exhibit                                  9     34K 

EX-99.B   —   Miscellaneous Exhibit

EX-99.B
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SCHEDULE "A"

The Corporation is authorized to issue, as a series of Preferred Shares,        
12,000,000 shares designated as Preferred Shares, Series A ("SERIES A SHARES")  
with the rights, privileges, restrictions and conditions set out below:         

In these provisions:                                                            

(a)  "BOARD" means the board of directors of the Corporation;         

  (b)  "BUSINESS DAY" means any day which is not a Saturday, a Sunday or a
        day observed as a holiday under the laws of the Province of Ontario;

     (c)  "COMMON SHARES" means common shares in the capital of the Corporation;

(d)  "CONVERSION PRICE" has the meaning set forth in Section 4;       

(e)  "CORPORATION" means the corporation governed by these articles;  

   (f)  "EXCHANGE" means the Toronto Stock Exchange or, if the Common Shares
       are not listed on such stock exchange, such other stock exchange or
      over-the-counter market which is the principal market (measured by
    volume of shares traded in the preceding fiscal quarter) for the
Common Shares at the time any calculation is being made;    

(g)  "ORIGINAL ISSUE DATE" shall mean December 19, 2003;              

(h)  "PERSON" means any individual, body corporate, partnership, firm,
      joint venture, association, joint stock company, limited liability
    company, trust, unincorporated organization, a government or any
          department or agency thereof, and the heirs, executors, administrators
and other legal representatives of an individual;           

(i)  "SUBSCRIPTION PRICE" means, in respect of a Series A Share, the  
          subscription price paid for such Series A Share or the effective issue
price of such Series A Share issued as a stock dividend, as 
applicable;                                                 

  (j)  "HOLDER" in respect of shares held by joint holders, means all such
joint holders;                                              

     (k)  "THESE PROVISIONS" means the provisions of this item of these articles
    of the Corporation as amended or supplemented from time to time;

    (l)  the expression "section" followed by a number means and refers to the
specified section of these provisions; and                  

     (m)  the rate of exchange for determining the Canadian dollar equivalent in
        United States dollars (or vice versa) on any particular day shall be
    based on the Bank of Canada's noon rate of exchange on such day.

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1.   VOTING RIGHTS                                                              

In addition to any voting rights the holders of Series A Shares may have under  
applicable law, on all matters submitted to a vote of holders of Common Shares, 
a holder of Series A Shares shall be entitled to the number of votes equal to   
the number of Common Shares into which the Series A Shares are convertible on   
the record date for such vote (whether or not so converted) and in all ways     
shall have voting rights and powers equal to the voting rights and powers of the
Common Shares, including the right to receive notice of, and to attend and vote 
at, all meetings of shareholders of the Corporation.                            

2.   DIVIDENDS                                                                  

   (a)  Each holder of outstanding Series A Shares, in priority to all other
        shares of the Corporation, including, without limitation, the Common
       Shares, shall be entitled to receive, and the Corporation shall pay
        thereon, cumulative preferential dividends in cash at the rate of 6%
      per annum (less the amount of any tax or other amounts required by
 applicable law to be deducted or withheld by the Corporation)
       calculated on the aggregate Subscription Price of such shares. Such
          dividends shall accrue on outstanding Series A Shares cumulatively, on
    a daily basis, commencing on their date of issuance and shall be
      payable semi-annually on January 1 and July 1 in each year (each a
       "DIVIDEND PAYMENT DATE"), commencing on July 1, 2004 for the period
from the Original Issue Date to such first payment date.    

    (b)  Notwithstanding Section 2(a), if (i) the Corporation does not pay all
     or any part of the cash dividend described in Section 2(a) to the
   holders of Series A Shares within seven days after any Dividend
          Payment Date and (ii) the volume weighted average trading price of the
        Common Shares on the Exchange for the five most recent days on which
  Common Shares traded on the Exchange ending on the trading day
          immediately prior to the relevant Dividend Payment Date is equal to or
      less than US$1.76 (or the Canadian dollar equivalent thereof), the
        Corporation shall pay forthwith, but in no event later than the 15th
    day following the Dividend Payment Date, such accrued and unpaid
         dividends by way of a stock dividend payable in additional fully paid
       and non-assessable Series A Shares. The value of any stock dividend
       shall be an amount equal to the total U.S. dollar amount of accrued
          and unpaid dividends and the number of Series A Shares issued shall be
        such amount (less the amount of any tax or other amounts required by
         applicable law to be deducted or withheld by the Corporation) divided
    by US$1.50. If the Corporation is prohibited from paying a stock
     dividend because the volume weighted average trading price of the
          Common Shares on the Exchange is greater than US$1.76 (or the Canadian
   dollar equivalent thereof)as aforesaid in respect to a Dividend
      Payment Date, but, subsequent thereto, the volume weighted average
  share price of the Common Shares on the Exchange over any five
     consecutive days on which Common Shares traded on the Exchange is
    equal to or less than US$1.76 (or the Canadian dollar equivalent
         thereof), the holder of any Series A Shares may send a written notice
 to the Corporation requiring the Corporation to pay any stock
         dividends which were due on any preceding Dividend Payment Date which
      were not paid due to the restriction contained in Section 2(b)(ii)
        above (the "MARKET ADJUSTMENT NOTICE") and the Corporation shall pay
such stock                                                  

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        dividend to such holder of Series A Shares within five business days
    of receiving such notice. Unless the Board otherwise determines,
holders of Series A Shares shall receive cash in lieu of any
   fractional interests in shares to which they would otherwise be
entitled pursuant to any stock dividend. Notwithstanding the
      foregoing, in no circumstances shall the number of Series A Shares
  issued as a stock dividend pursuant to this Section 2(b), when
          combined with the number of Common Shares issued in respect of accrued
       and unpaid dividends on conversion of any Series A Shares exceed an
     aggregate of 2,000,000 shares, subject to any adjustments for any
          subdivisions or consolidation of the Common Shares or Series A Shares.

    (c)  If dividends on any Series A Shares are not paid in additional Series
        A Shares as provided in Section 2(b) above as a result of either (i)
    the 2,000,000 share limit having been reached or (ii) the volume
       weighted average trading price of the Common Shares on the Exchange
         exceeding the limit set forth in subsection 2(b)(ii) hereof, provided
          that the Corporation has not received a Market Adjustment Notice, such
       dividends, or the unpaid part thereof, shall be payable in cash and
shall compound at the rate provided for in Section 2(a).    

    (d)  The holders of Series A Shares shall not be entitled to any dividends
   other than, or in excess of, the dividends provided for in this
Section 2.                                                  

  (e)  No dividends shall at any time be declared or paid or set apart for
        any other shares of the Corporation if the Corporation fails to pay,
        for any reason whatsoever, any dividends as provided for in Sections
2(a) and (b) hereof.                                        

3.   LIQUIDATION, DISSOLUTION OR WINDING-UP                                     

In the event of the liquidation, dissolution or winding up of the Corporation   
whether voluntary or involuntary, the holders of Series A Shares shall be       
entitled to receive on a pro rata basis in accordance with the total number of  
Series A Shares held by such holders and prior and in preference to any         
distribution of any of the assets and property of the Corporation to the holders
of all other shares of all classes of the Corporation, including, without       
limitation, the Common Shares, an amount equal to the aggregate Subscription    
Price plus all accrued and unpaid cumulative dividends in respect of such Series
A Shares, whether or not such dividends have been declared and which for such   
purposes shall be calculated as if such dividends were accruing for the period  
from the expiration of the last period for which dividends have been paid up to 
the date of determination (the "REDEMPTION PRICE") (less the amount of any tax  
or other amounts required by applicable law to be deducted or withheld by the   
Corporation). If the amount available for such distribution is insufficient to  
pay the Redemption Price on all outstanding Series A Shares, the assets         
available for distribution shall be distributed among the holders of the Series 
A Shares on a pro rata basis in accordance with the number of Series A Shares   
held by such holders in priority to all other shares of the Corporation.        

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4.   CONVERSION.                                                                

The Series A Shares shall be subject to the following conversion rights:        

(a)  Right of the Holder to Convert. Each Series A Share shall be     
      convertible, at the option of the holder thereof, at any time, and
       from time to time, after the date of issuance of such share, at the
       registered office of the Corporation or any transfer agent for such
          shares, into such number of fully paid and nonassessable Common Shares
        as is determined by dividing the Redemption Price applicable to such
         share by the Conversion Price applicable to such share, determined as
  hereinafter provided, in effect on the date the certificate is
         surrendered for conversion. The price at which Common Shares shall be
       deliverable upon conversion of the Series A Shares (the "CONVERSION
     PRICE") shall initially be US$1.50 per Common Share. Such initial
   Conversion Price shall be adjusted as hereinafter provided. The
    maximum aggregate number of Common Shares which may be issued on
      conversion of any accrued and unpaid dividends forming part of the
       Redemption Price of the Series A Shares so converted, when combined
         with Series A Shares issued as a stock dividend in respect of accrued
         and unpaid dividends on the Series A Shares, shall not exceed a total
        of 2,000,000 shares, subject to any adjustments for any subdivisions
or consolidations of the Common Shares or Series A Shares.  

  (b)  Right of the Corporation to Require Conversion. Each Series A Share
      shall be convertible at the option of the Corporation, at any time
      following the first anniversary of the Original Issue Date, in the
following circumstances:                                    

          (i)    the Corporation may require the conversion of 25% of the Series
                A Shares held by each holder into Common Shares if a board lot
                 (as determined by the Exchange) of Common Shares has not traded
                 at or below US$3.00 (or the Canadian dollar equivalent thereof)
  on the Exchange for 30 consecutive trading days;

          (ii)   the Corporation may require the conversion of an additional 25%
               of the Series A Shares held by each holder into Common Shares
              if a board lot (as determined by the Exchange) of the Common
            Shares has not traded at or below US$3.50 (or the Canadian
               dollar equivalent thereof) on the Exchange for 30 consecutive
trading days;                                 

          (iii)  the Corporation may require the conversion of an additional 25%
               of the Series A Shares held by each holder into Common Shares
              if a board lot (as determined by the Exchange) of the Common
            Shares has not traded at or below US$3.75 (or the Canadian
               dollar equivalent thereof) on the Exchange for 30 consecutive
trading days; and                             

          (iv)   the Corporation may require the conversion of an additional 25%
               of the Series A Shares held by each holder into Common Shares
              if a board lot (as determined by the Exchange) of the Common
            Shares has not traded at or below US$4.00 (or the Canadian
               dollar equivalent thereof) on the Exchange for 30 consecutive
trading days.                                 

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           The right of the Corporation to require the conversion of
             Series A Shares as described above must be exercised by the
                 Corporation within 15 days of such right arising, failing which
                the Corporation will have no further rights in respect to such
              30 consecutive trading day period, provided that such rights
                 will be available for any subsequent 30 consecutive trading day
period.                                       

                The conversion price of any Series A Shares converted pursuant
                to this Section 4(b) shall be the Conversion Price on the date
          the Corporation sends the notice requiring conversion as
described in Section 4(d).                    

     (c)  Mechanics of Conversion by the Holder. To convert Series A Shares into
     Common Shares, the holder must first surrender the certificate or
 certificates for those Series A Shares, duly endorsed, at the
          registered office of the Corporation or of any transfer agent for such
        shares, and give notice in writing to the Corporation at such office
          that the holder elects to convert those shares. This notice shall also
         state the name or names in which the holder wishes the certificate or
          certificates for Common Shares to be issued. The Corporation shall, as
       soon as practicable thereafter, issue and deliver at such office to
         such holder of Series A Shares, a certificate or certificates for the
       number of Common Shares to which the holder shall be entitled. Such
         conversion shall be deemed to have been made immediately prior to the
        close of business on the date of surrender of the Series A Shares to
          be converted, and the person or persons entitled to receive the Common
          Shares issuable upon such conversion shall be treated for all purposes
          as the record holder or holders of such Common Shares on such date. If
      some but not all Series A Shares represented by the certificate or
       certificates surrendered by a holder are converted, the Corporation
          shall execute and deliver to the holder a new certificate representing
the number of Series A Shares which were not converted.     

     (d)  Mechanics of Conversion at the Request of the Corporation. In order to
  exercise its right to require conversion of Series A Shares as
     described in Section 4(b), the Corporation shall send a notice in
          writing to each registered holder of Series A Shares specifying a date
        for conversion not less than 10 days and not more than 30 days after
        the date the Corporation sends such notice. Such conversion shall be
          deemed to have been made immediately prior to the close of business on
          the date selected for conversion by the Corporation, and the person or
    persons entitled to receive the Common Shares issuable upon such
        conversion shall be treated for all purposes as the record holder or
     holders of such Common Shares on such date. Upon surrender of the
         certificate or certificates for Series A Shares to be converted, duly
       endorsed, at the office of the Corporation or of any transfer agent
  for such shares, the Corporation shall, as soon as practicable
          thereafter issue and deliver at such office to such holder of Series A
         Shares, a certificate or certificates for the number of Common Shares
         to which such holder is entitled. If some but not all Series A Shares
          represented by the certificate or certificates surrendered by a holder
          are converted, the Corporation shall execute and deliver to the holder
      a new certificate representing the number of Series A Shares which
were not converted.                                         

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(e)  Adjustments to Conversion Prices for Share Dividends and for     
        Combinations or Subdivisions of Common Shares. If the Corporation at
        any time or from time to time after the Original Issue Date declares
     or pays, without consideration, any dividend on the Common Shares
         payable in Common Shares or in any right to acquire Common Shares for
        no consideration, or effects a subdivision of the outstanding Common
  Shares into a greater number of Common Shares (by share split,
         reclassification or otherwise than by payment of a dividend in Common
Shares or in any right to acquire Common Shares), or if the 
outstanding Common Shares are combined or consolidated, by  
         reclassification or otherwise, into a lesser number of Common Shares,
then the Conversion Price for the Series A Shares in effect 
immediately prior to such event shall, concurrently with the
effectiveness of such event, be proportionately decreased or
increased, as appropriate.                                  

 (f)  Adjustments for Reclassification and Reorganization. If the Common
       Shares are changed into the same or a different number of shares of
any other class or classes of shares, whether by capital    
reorganization, reclassification or otherwise (other than a 
       subdivision or combination of shares provided for in Section 4(e)),
          then each Series A Share shall, concurrently with the effectiveness of
         such reorganization or reclassification, be convertible into, in lieu
         of the number of Common Shares which the holders would otherwise have
         been entitled to receive, the kind and number of shares of such other
    class or classes of shares resulting from that reorganization or
     reclassification to which a holder of the number of Common Shares
      deliverable upon conversion of the Series A Shares would have been
         entitled upon that reorganization or reclassification. The provisions
     of this Section 4(f) shall apply to successive reorganizations or
reclassifications.                                          

 (g)  Certificates as to Adjustments. Whenever there is an adjustment or
        readjustment of the Conversion Price pursuant to this Section 4, the
        Corporation at its expense shall promptly compute such adjustment or
    readjustment in accordance with the terms hereof and prepare and
       furnish to each holder of Series A Shares a certificate executed by
        the Corporation's Chief Executive Officer or Chief Financial Officer
       setting forth such adjustment or readjustment and showing in detail
      the facts upon which such adjustment or readjustment is based. The
         Corporation shall, upon the written request at any time of any holder
         of Series A Shares, furnish or cause to be furnished to such holder a
          like certificate setting forth (i) such adjustments and readjustments,
    (ii) the Conversion Price for the Series A Shares at the time in
         effect, and (iii) the number of Common Shares and the amount, if any,
  of other property which at the time would be received upon the
conversion of the Series A Shares.                          

(h)  Notices of Record Date. If the Corporation proposes at any time: 

        (i)  to declare any dividend or distribution upon its Common Shares,
    whether in cash, property, shares or other securities;

          (ii) to offer for subscription pro rata to the holders of any class or
               series of its shares any additional shares of shares of any class
or series or other rights;                        

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    (iii)  to effect any reclassification or recapitalization of its
Common Shares outstanding; or                 

         (iv)   to merge or consolidate with or into any other corporation, or
               sell, lease or convey all or substantially all of its assets,
or to liquidate, dissolve or wind up;         

        then, in connection with each such event, the Corporation shall send
          to the holders of Series A Shares: (1) at least 10 days' prior written
          notice of the date on which a record shall be taken for such dividend,
         distribution or subscription rights (and specifying the date on which
  the holders of Common Shares shall be entitled thereto) or for
          determining rights to vote, if any, in respect of the matters referred
  to in (iii) and (iv) above; and (2) in the case of the matters
        referred to in (iii) and (iv) above, at least 10 days' prior written
         notice of the date when the same shall take place (and specifying the
   date on which the holders of Common Shares shall be entitled to
 exchange their Common Shares for securities or other property
deliverable upon the occurrence of such event).             

    (i)  Reservation of Shares Issuable Upon Conversion. The Corporation shall
     at all times reserve and keep available out of its authorized but
   unissued Common Shares, solely for the purpose of effecting the
       conversion of the shares of the Series A Shares, such number of its
        Common Shares as shall from time to time be sufficient to effect the
conversion of all outstanding shares of the Series A Shares.

(j)  Fractional Shares. No fractional share shall be issued upon the  
   conversion of any Series A Shares. All Common Shares (including
         fractions thereof) issuable upon conversion of more than one Series A
 Share by a holder thereof shall be aggregated for purposes of
          determining whether the conversion would result in the issuance of any
   fractional share. If, after the aforementioned aggregation, the
     conversion would result in the issuance of a fraction of a Common
          Share, the Corporation shall, in lieu of issuing any fractional share,
          pay the holder otherwise entitled to such fraction a sum in cash equal
       to the fair market value of such fraction on the date of conversion
(as determined in good faith by the Board).                 

     (k)  Notices. Any notice required by the provisions of this Section 4 to be
    given to the holders of Series A Shares shall be deemed given if
          mailed, postage prepaid, and addressed to each holder of record at his
address appearing on the books of the Corporation           

5.   REDEMPTION AT THE OPTION OF THE HOLDER                                     

 (a)  At any time, and from time to time, on or after January 1, 2009, a
         holder of Series A Shares shall have the right, at his or her option,
         to require the Corporation to redeem all, or any part of, such shares
  which are registered in such holder's name on the books of the
      Corporation at the Redemption Price except for those for which the
         Corporation has sent a notice of conversion pursuant to Section 4(b).
        Such right shall be exercised by the registered holder delivering to
the Corporation at its registered office:                   

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(i)  a notice in writing executed by such holder specifying:

            (A)  the number of Series A Shares which such holder wishes to
have redeemed by the Corporation; and   

         (B)  the business day (the "RETRACTION DATE") on which such
                 holder wishes to have the Corporation redeem such shares,
                  provided that the Retraction Date must be at least 10 days
 after notice is given by such holder; and

      (ii) a share certificate or certificates representing such shares,
             duly endorsed, which such holder wishes to have the Corporation
redeem.                                           

 (b)  Upon receipt of the documents set out in Sections 5(a)(i) and (ii)
 above, the Corporation shall, on the Retraction Date, pay the
          Redemption Price (less the amount of any tax or other amounts required
        by applicable law to be deducted or withheld by the Corporation) for
      each Series A Share to be redeemed. Payment in respect of Series A
     Shares being redeemed pursuant to this Section 5 shall be made by
       cheque payable to the holders thereof in lawful money of the United
  States. Such cheques shall be made available not later than 10
        business days after the Retraction Date, to be picked up by Series A
        Holders who have elected to have shares redeemed, at the place where
 the certificate or certificates representing such shares were
          surrendered if such holder has indicated in the said instructions that
      he wishes to pick up such cheque. Otherwise, the Corporation shall
          mail by prepaid first class mail such cheques on or before 10 business
         days after the Retraction Date to the Series A Holders whose Series A
     Shares are being redeemed at their last addresses as shown on the
     books of the Corporation. From and after the Retraction Date, the
        Series A Shares presented and surrendered for redemption pursuant to
          this Section 5 shall cease to be entitled to dividends and the holders
          thereof shall not be entitled to exercise any of their other rights as
          shareholders in respect thereof unless payment of the Redemption Price
       (less the amount of any tax or other amounts required by applicable
      law to be deducted or withheld by the Corporation) provided for in
        this Section 5 is not made as aforesaid, in which case the rights of
the holders shall remain unaffected.                        

     (c)  If the Corporation is not permitted, by insolvency provisions or other
          provisions of applicable law to redeem all of the Series A Shares duly
   tendered pursuant to the optional redemption right provided for
          herein, the Corporation shall redeem only the maximum number of Series
         A Shares (rounded to the next lower multiple of 100 shares) which the
         Corporation is then permitted to redeem. Such redemption will be made
   pro rata (disregarding fractions of shares) from each holder of
       tendered Series A Shares according to the number of Series A Shares
         tendered for redemption by each such holder and the Corporation shall
         issue and deliver to each such holder a new share certificate, at the
    expense of the Corporation, representing the Series A Shares not
redeemed by the Corporation.                                

   (d)  If the Corporation fails to redeem, because of insolvency provisions
         or other provisions of applicable law all of the Series A Shares duly
   tendered pursuant to the optional redemption right provided for
herein, then the Corporation shall                          

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     redeem on each Dividend Payment Date thereafter from the Series A
    Shares tendered by the holders thereof on or before the 15th day
          preceding such Dividend Payment Date for redemption in the same manner
     as set forth in this Section 5 , the lesser of: (i) the number of
       Series A Shares so tendered; and (ii) the number of Series A Shares
      (rounded to the next lower multiple of 100 shares and selected pro
         rata from each holder of Series A Shares so tendered according to the
        number of Series A Shares so tendered by each such holder) which the
Corporation is then permitted to redeem.                    

   (e)  Series A Shares which have been redeemed by the Corporation pursuant
to this Section 5 shall be cancelled.                       

Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
This ‘SC 13D’ Filing		Date		First		Last			Other Filings
		1/1/09		7
		7/1/04		2
Filed on:		12/29/03							3,  4
		12/19/03		1					3,  4
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