Cooperative Energy Act (S.C. 1980-81-82-83, c. 108)

• Marginal note:Name of the Corporation

  1 The name of the Corporation is the “Cooperative Energy Corporation” in English and “Société coopérative de l’énergie” in French.

PART IAttributes of Shares of the Corporation

• Marginal note:Unlimited number of authorized shares

  2 The Corporation is authorized to issue an unlimited number of Class A Shares, Class B Shares, Class C Shares and Class D Shares.

Class A Shares

• Marginal note:Restrictions

  • 3 (1) The right to issue, transfer or own Class A Shares is restricted in the manner set out in this schedule.

  • Marginal note:Idem

    (2) Class A Shares shall not be issued to, transferred to or registered on the books of the Corporation in the name of, or owned or held legally or beneficially by, any person other than a cooperative.

  • Marginal note:Idem

    (3) No transfer, sale or assignment of a Class A Share is valid unless it is approved by the directors of the Corporation.

• Marginal note:Voting rights

  • 4 (1) Each holder of a Class A Share is entitled to receive notice of and to attend all meetings of shareholders of the Corporation, except class meetings of other classes of shareholders.

  • Marginal note:Idem

    (2) Each Class A Share entitles the holder thereof to three votes at a meeting of shareholders.

  • Marginal note:Representatives

    (3) Each holder of a Class A Share may appoint, in accordance with the by-laws of the Corporation, one or more representatives, not exceeding five, to represent it at meetings of shareholders of the Corporation.

• Marginal note:Issuance as fully paid

  • 5 (1) Subject to subsection (2), a Class A Share shall not be issued until the consideration for the share is fully paid.

  • Marginal note:Partly paid converted shares

    (2) Class A Shares issued on the conversion of Class C Shares, Class D Shares or Equity Debentures of the Corporation (in this section referred to as “converted securities”), to the extent that such converted securities were not fully paid at the time of conversion, may be issued as partly paid shares.

  • Marginal note:Application of section 24

    (3) Class A Shares issued as partly paid shares pursuant to subsection (2) are issued subject to section 24 of this schedule and payment therefor shall be made on the same terms as would apply if the Class A Shares were the converted securities.

• Marginal note:Rights to participate

  6 Except as otherwise provided in this schedule, in all respects, whether as to dividends, distribution of assets on dissolution or otherwise, Class A Shares rank equally, share for share, with Class B Shares.

• Marginal note:Special provisions on dissolution

  7 The rights of the holders of Class A Shares in the circumstances described in section 28 of this schedule are as stipulated in that section.

• Marginal note:First lien on shares

  • 8 (1) The Corporation has a first and preferential lien on all Class A Shares, whether fully paid or partly paid, registered in the name of a shareholder or the legal representative of that shareholder for any amount unpaid by that shareholder to the Corporation in respect of partly paid shares or Equity Debentures issued by the Corporation.

  • Marginal note:Enforcement of lien

    (2) The lien referred to in subsection (1) may be enforced in accordance with section 24 of this schedule.

Class B Shares

• Marginal note:Restrictions

  • 9 (1) The right to issue, transfer or own Class B Shares is restricted in the manner set out in this schedule.

  • Marginal note:Idem

    (2) Class B Shares shall not be issued except to Her Majesty in right of Canada as represented by the Minister and shall not be transferred to any person, other than a cooperative or registered on the books of the Corporation in the name of, or owned or held legally or beneficially by, any person other than a cooperative or Her Majesty in right of Canada.

• Marginal note:Voting rights

  • 10 (1) Each holder of a Class B Share is entitled to receive notice of and to attend all meetings of shareholders of the Corporation, except class meetings of other classes of shareholders.

  • Marginal note:Idem

    (2) Each Class B Share entitles the holder thereof to one vote at a meeting of shareholders.

  • Marginal note:Representatives

    (3) Each holder of Class B Shares may appoint, in accordance with the by-laws of the Corporation, one or more representatives, not exceeding ten, to represent the holder at meetings of shareholders of the Corporation.

• Marginal note:Issuance as fully paid

  11 A Class B Share shall not be issued until the consideration for the share is fully paid.

• Marginal note:Rights to participate

  12 Except as otherwise provided in this schedule, in all respects, whether as to dividends, distribution of assets on dissolution or otherwise, Class B Shares rank equally, share for share, with Class A Shares.

• Marginal note:Special provisions on dissolution

  13 The rights of the holders of Class B Shares in the circumstances described in section 28 of this schedule are as stipulated in that section.

Class C Shares

• Marginal note:Restrictions

  14 The right to issue, transfer or own Class C Shares is restricted in the manner set out in this schedule.

• Marginal note:Issuance

  15 Class C Shares may only be issued instead of payment of interest on outstanding Equity Debentures and shall be issued in such numbers and at such times as the directors of the Corporation may determine to be required to satisfy the obligations of the Corporation in respect of interest on its outstanding Equity Debentures.

• Marginal note:Ownership

  16 Class C Shares shall not be issued to, transferred to or registered on the books of the Corporation in the name of, or owned or held legally or beneficially by, any person other than a cooperative or Her Majesty in right of Canada as represented by the Minister.

• Marginal note:Voting rights

  17 Except as otherwise specifically provided in the Canada Business Corporations Act, Class C Shares do not carry any voting rights and the holders thereof, as such, are not entitled to receive notice of or to attend any meetings of the shareholders of the Corporation.

• Marginal note:Rights to participate

  18 Class C Shares do not carry any rights to dividends or to any distribution of assets (whether by way of return of capital or otherwise) on liquidation, dissolution, winding-up, insolvency, bankruptcy or in any other case.

• Marginal note:Conversion

  19 Class C Shares are subject to the automatic conversion described in section 29 of this schedule.

• Marginal note:First lien on shares

  • 20 (1) The Corporation has a first and preferential lien on all Class C Shares, registered in the name of a shareholder that is a cooperative or the legal representative of that shareholder for any amount unpaid by that shareholder to the Corporation in respect of partly paid shares or Equity Debentures issued by the Corporation.

  • Marginal note:Enforcement of lien

    (2) The lien referred to in subsection (1) may be enforced in accordance with section 24 of this schedule.

Class D Shares

• Marginal note:Restrictions

  21 The right to issue, transfer or own Class D Shares is restricted in the manner set out in this schedule.

• Marginal note:Idem

  22 Class D Shares shall not be issued to, transferred to or registered on the books of the Corporation in the name of, or owned or held legally or beneficially by, any person other than a cooperative or Her Majesty in right of Canada as represented by the Minister.

• Marginal note:Voting rights

  23 Except as otherwise specifically provided in the Canada Business Corporations Act, Class D Shares do not carry any voting rights and the holders thereof, as such, are not entitled to receive notice of or to attend any meeting of the shareholders of the Corporation.

• Marginal note:Issuance as Partly Paid

  • 24 (1) Class D Shares may be issued as fully paid or as partly paid or with no payment having been made thereon, in the discretion of the directors of the Corporation, on the terms of payment determined by the directors of the Corporation.

  • Marginal note:Demand for payment

    (2) The directors of the Corporation may demand that the shareholders pay the whole or any part of the amount unpaid on shares held by them, at such times and places, and in such payments or instalments, as the terms of issue of such shares require or allow.

  • Marginal note:Idem

    (3) A demand for payment shall state that if the demand is not paid in accordance with its terms, all of the securities whether fully paid or partly paid, of the holder of the shares in respect of which the demand is made are liable to be forfeited.

  • Marginal note:Interest

    (4) Where a shareholder fails to make a payment in accordance with a demand therefor on or before the day appointed for the payment, the shareholder is liable to pay interest on the amount thereof at a rate established by the directors of the Corporation from the day appointed for payment to the day of payment.

  • Marginal note:Forfeiture of unpaid securities

    (5) Where a demand for payment is not paid in accordance with its terms, the directors of the Corporation may declare forfeited all of the securities, whether fully paid or partly paid, of the holder of the shares in respect of which the demand is made.

  • Marginal note:Disposition of unpaid securities

    (6) Any securities declared forfeited pursuant to subsection (5) become the property of the Corporation on the forfeiture, and may be cancelled, sold or otherwise dealt with as determined by the directors of the Corporation.

  • Marginal note:Liability of shareholders

    (7) Notwithstanding the forfeiture of any securities, the holder of the shares in respect of which the demand is made continues to be liable for the full amount unpaid on the securities at that time, less any amounts that are subsequently received by the Corporation in respect thereof.

  • Marginal note:Excess on sale of forfeited securities

    (8) Where the Corporation receives on the sale of forfeited securities an amount in excess of the full amount unpaid thereon at the time of forfeiture together with interest, the person who, immediately prior to the forfeiture, was the registered owner of the securities or a person who satisfies the Corporation that, immediately prior to the forfeiture, that person could properly have been treated as the registered owner or holder of the securities under section 47 of the Canada Business Corporations Act shall, from the time of the sale, be entitled to receive the net proceeds of the sale, together with any income earned thereon from the beginning of the month next following the date of the receipt by the Corporation of the proceeds of the sale, less

    • (a) the full amount unpaid on the securities at the time of forfeiture together with interest thereon calculated in accordance with subsection (4); and

    • (b) any taxes thereon and any costs of administration of a trust fund constituted in relation thereto.

  • Marginal note:Application of certain subsections

    (9) Subsection (8) and subsections 15(8) to (14) of this Act apply, with such modifications as the circumstances require,

    • (a) in respect of a person who is entitled under subsection (8) to receive a portion of the proceeds of a sale of securities of the Corporation under subsection (6), and

    • (b) to such portion of the proceeds,

      subject to any provisions in respect of the sale of constrained shares set out in, or prescribed pursuant to, the Canada Business Corporations Act.

  • Marginal note:Right of action

    (10) The directors of the Corporation may, in addition to declaring forfeited any securities, enforce payment of all demands and interest thereon by action in any court of competent jurisdiction.

  • Marginal note:Definition

    (11) In this section, security means a share of any class of shares of the Corporation or an Equity Debenture.

• Marginal note:Rights to participate

  25 Class D Shares do not carry any rights to dividends or to any distribution of assets (whether by way of return of capital or otherwise) on liquidation, dissolution, winding-up, insolvency, bankruptcy or in any other case.

• Marginal note:Conversion

  26 Class D Shares are subject to the automatic conversion described in section 29 of this schedule.

• Marginal note:First lien on shares

  • 27 (1) The Corporation has a first and preferential lien on all Class D Shares, whether fully paid or partly paid, registered in the name of a shareholder that is a cooperative or the legal representative of that shareholder for any amount unpaid by that shareholder to the Corporation in respect of partly paid shares or Equity Debentures issued by the Corporation.

  • Marginal note:Enforcement of lien

    (2) The lien referred to in subsection (1) may be enforced in accordance with section 24 of this schedule.

Special Provisions

• Marginal note:Definition of insolvency

  • 28 (1) In this section and section 29 of this schedule, insolvency means, in relation to the Corporation, that

    • (a) the liabilities of the Corporation exceed the realizable value of its assets; or

    • (b) the Corporation is unable to pay its debts as they become due.

  • Marginal note:Special provisions on dissolution

    (2) Subject to subsection (4), if the commencement of a liquidation, dissolution or winding-up of the Corporation, whether voluntary or involuntary, or if the insolvency or bankruptcy of the Corporation occurs at any time prior to the expiration of three years from the first issuance by the Corporation of any of its shares, any distribution of capital to holders of Class A Shares or Class B Shares of the Corporation shall be effected as follows:

    • (a) first, fifty per cent of the aggregate amount subscribed, except premiums, by holders of Class A Shares or their predecessors in title in respect of their Class A Shares, for shares of all classes and Equity Debentures of the Corporation shall be returned to holders of Class A Shares from the capital of the Corporation as and when the capital is paid in and available for distribution and regardless of the class of shares or Equity Debentures in respect of which, or by whom, it has been paid,

      • (i) prorated among such holders on the basis of the percentage of Class A Shares held by each such holder, and

      • (ii) in amounts not exceeding a maximum returned amount of fifty per cent of the aggregate amount so subscribed by such holders,

      but no such holder shall receive an amount in excess of the aggregate amount it has paid in respect of its subscriptions for shares of all classes and Equity Debentures of the Corporation;

    • (b) secondly, after the payment in full of fifty per cent of the aggregate amount subscribed by holders of Class A Shares is made in accordance with paragraph (a), thirty-five per cent of the aggregate amount subscribed by holders of Class B Shares for shares of all classes and Equity Debentures of the Corporation shall be returned to the holders of Class B Shares from the capital of the Corporation as and when the capital is paid in and available for distribution and regardless of the class of shares or Equity Debentures in respect of which, or by whom, it has been paid, in amounts not exceeding a maximum returned amount of thirty-five per cent of the aggregate amount so subscribed by such holders;

    • (c) thirdly, after the payment in full of thirty-five per cent of the aggregate amount subscribed by holders of Class B Shares is made in accordance with paragraph (b), any balance then or from time to time subsequently available for distribution to shareholders shall be distributed in the following manner:

      • (i) on a share for share basis, in respect of Class A Shares and Class B Shares, as if such classes were the same in all respects, with distributions being made concurrently on Class A Shares and Class B Shares as payments are made in respect of Class A Shares, until such time as all of the holders of Class A Shares have received the aggregate amount subscribed by them or their predecessors in title for shares of all classes and Equity Debentures of the Corporation, except premiums,

      • (ii) subsequently, to Her Majesty in right of Canada as represented by the Minister, until such time as the aggregate amount subscribed by Her Majesty in right of Canada for shares of all classes and Equity Debentures of the Corporation has been received, and

      • (iii) finally, on a share for share basis, in respect of Class A Shares and Class B Shares of the Corporation as if such classes were the same in all respects.

  • Marginal note:Idem

    (3) Subject to subsection (4), if any of the circumstances described in subsection (2) occurs on or after the expiration of three years from the first issuance by the Corporation of any of its shares, the Class A Shares and Class B Shares of the Corporation shall, as to their respective entitlement to return of capital, be treated as if such classes were the same in all respects and distributions shall be made concurrently on Class A Shares and Class B Shares of the Corporation as payments are made in respect of Class A Shares.

  • Marginal note:Exceptions

    (4) Subsections (2) and (3) do not apply to the extent otherwise provided in the Agreement.

• Marginal note:Conversion of Class C and Class D Shares and Equity Debentures

  • 29 (1) On the earlier of

    • (a) the expiration of five years from the first issuance by the Corporation of any of its shares, and

    • (b) the commencement of a liquidation, dissolution or winding-up of the Corporation, whether voluntary or involuntary, or the occurrence of the insolvency or bankruptcy of the Corporation,

    (in this section, referred to as the “conversion date”) all issued and outstanding Class C Shares, Class D Shares and Equity Debentures of the Corporation held by holders of Class A Shares of the Corporation shall be automatically converted into Class A Shares and all issued and outstanding Class C Shares, Class D Shares and Equity Debentures of the Corporation held by holders of Class B Shares of the Corporation shall be automatically converted into Class B Shares in accordance with subsection (2).

  • Marginal note:Number of shares to be issued on conversion

    (2) The number of Class A Shares or Class B Shares of the Corporation, as the case may be, issued on conversion to each holder of Class C Shares, Class D Shares or Equity Debentures of the Corporation shall be such number as results in an aggregate holding by each holder of Class A Shares or Class B Shares, as the case may be, equal to the number of Class A Shares or Class B Shares, as the case may be, that such holder would have held had such holder, or in the case of a Class A holder, its predecessors in title in respect of its Class A Shares, subscribed for and been issued, Class A Shares or Class B Shares, as the case may be, rather than Class D Shares and Equity Debentures.

  • Marginal note:Surrender of share certificates

    (3) On the conversion date, each holder of a Class C Share, a Class D Share or an Equity Debenture shall deliver to the Corporation or its transfer agent, for surrender, the certificate representing the Class C Share, Class D Share or Equity Debenture, whereupon the Corporation or its transfer agent shall, if it receives certificates representing all Class C Shares, Class D Shares and Equity Debentures of such holder, issue to such holder a certificate representing the appropriate number of Class A Shares or Class B Shares, as the case may be, determined in accordance with subsection (2).

  • Marginal note:Automatic conversion

    (4) Notwithstanding the failure of any holder of a Class C Share, a Class D Share or an Equity Debenture to deliver and surrender its certificate pursuant to subsection (3), on the conversion date, all Class C Shares, Class D Shares and Equity Debentures of that holder are automatically converted pursuant to subsection (1) and the holder thereof shall cease to have any rights in respect thereof, except the right to receive certificates for Class A Shares or Class B Shares, as the case may be, on complying with subsection (3).

PART IIGeneral

• Marginal note:Directors

  30 There shall be a minimum of twelve and a maximum of thirteen directors of the Corporation.

• Marginal note:Registered Office

  31 The registered office of the Corporation shall be situated in the city of Calgary in the Province of Alberta.