Dissent Rights..... "Fair Value""The following description of the right to dissent to which registered Husky Shareholders are entitled is not a comprehensive statement of the procedures to be followed by a Dissenting Shareholder who seeks payment of the fair value of such Dissenting Shareholder’s Husky Common Shares or Husky Preferred Shares, as applicable, and is qualified in its entirety by reference to the full text of the Plan of Arrangement, Interim Order and the text of section 191 of the ABCA, which are attached to this Information Circular as Appendices E, F and O, respectively. A Dissenting Shareholder who intends to exercise the right to dissent should carefully consider and comply with the provisions of the ABCA, as modified by the Plan of Arrangement and by the Interim Order. Failure to adhere to the procedures established therein may result in the loss of all rights thereunder.
Accordingly, each Dissenting Shareholder who might desire to exercise Dissent Rights should consult his or her own legal advisor
A Court hearing the application for the Final Order has the discretion to alter the Dissent Rights described herein based on the evidence presented at such hearing. Subject to certain tests as described below, pursuant to the Interim Order, Dissenting Shareholders are entitled, in addition to any other right such Dissenting Shareholder may have, to dissent and to be paid by Cenovus the fair value of the Husky Common Shares or Husky Preferred Shares, as applicable, held by such Dissenting Shareholder in respect of which such Dissenting Shareholder dissents, determined as of the close of business on the last Business Day before the day on which the Arrangement Resolution or Preferred Shareholder Resolution, as the case may be, from which such Dissenting Shareholder’s dissent was adopted and provided the Arrangement is completed in respect of such Husky Shareholders. A Dissenting Shareholder may dissent only with respect to all of the Husky Common Shares or Husky Preferred Shares, as the case may be, held by such Dissenting Shareholder, or on behalf of any one beneficial owner and registered in the Dissenting Shareholder’s name. Only registered Husky Shareholders may dissent. Persons who are beneficial owners of Husky Shares registered in the name of a broker, dealer, bank, trust company or other nominee (including CDS) who wish to dissent, should be aware that they may only do so through the registered owner of such Husky Shares. A registered Husky Shareholder, such as a broker or CDS, who holds Husky Shares as nominee for beneficial holders, some of whom wish to dissent, must exercise the Dissent Right on behalf of such beneficial owners with respect to all of the Husky Common Shares or Husky Preferred Shares held for such beneficial owners. In such case, the written objection to the Arrangement Resolution or Preferred Shareholder Resolution, as the case may be, should set forth the number of Husky Common Shares and/or Husky Preferred Shares covered by it.
Dissenting Shareholders must provide a written objection to the Arrangement Resolution or Preferred Shareholder Resolution, as the case may be, so that it is received by Husky c/o Osler, Hoskin & Harcourt LLP, Suite 2500, TC Energy Tower, 450 – 1st Street SW, Calgary, Alberta T2P 5H1, Attention: Tristram Mallett, by 5:00 p.m. (Calgary time) on December 8, 2020 being the fifth Business Day immediately preceding the date of the Husky Meeting, or the fifth Business Day immediately preceding the date of any adjournment or postponement of the Husky Meeting, as applicable. No Husky Common Shareholder or Husky Preferred Shareholder who has voted in favour of the Arrangement Resolution or Preferred Shareholder Resolution, respectively, shall be entitled to dissent with respect to the Arrangement.
Either Husky (which for purposes hereof shall include any successor to Husky) or a Dissenting Shareholder, as the case may be, may apply to the Court, after the approval of the Arrangement Resolution or the Preferred Shareholder Resolution, as the case may be, to fix the fair value of such Dissenting Shareholder’s Husky Common Shares or Husky Preferred Shares, as applicable, which fair value shall be determined as of the close of business, in respect of the Husky Common Shares, on the day before the Arrangement Resolution was adopted and, in respect of the Husky Preferred Shares, on the day before the Preferred Shareholder Resolution was adopted. If such an application is made to the Court by either Husky or a Dissenting Shareholder, as the case may be, Cenovus must, unless the Court orders otherwise, send to each Dissenting Shareholder, a written offer to pay such Dissenting Shareholder an amount considered by the Cenovus Board to be the fair value of the Husky Common Shares or Husky Preferred Shares held by such Dissenting Shareholder. The offer, unless the Court orders otherwise, must be sent to each Dissenting Shareholder, as the case may be, at least 10 days before the date on which the application is returnable, if Husky is the - 98 - applicant, or within 10 days after Husky is served a copy of the application, if a Dissenting Shareholder is the applicant. Every offer will be made on the same terms to each Dissenting Shareholder and contain or be accompanied with a statement showing how the fair value was determined. A Dissenting Shareholder may make an agreement with Cenovus for the purchase of such holder’s Husky Common Shares or Husky Preferred Shares, as the case may be, in the amount of the offer made by Cenovus, or otherwise, at any time before the Court pronounces an order fixing the fair value of the Husky Common Shares or Husky Preferred Shares, as the case may be. A Dissenting Shareholder will not be required to give security for costs in respect of an application and, except in special circumstances, will not be required to pay the costs of the application or appraisal. On the application, the Court will make an order fixing the fair value of the Husky Common Shares or Husky Preferred Shares of all Dissenting Shareholders, as the case may be, who are parties to the application, giving judgment in that amount against Cenovus and in favour of each of those Dissenting Shareholders, and fixing the time within which Cenovus must pay the amount payable to each Dissenting Shareholder calculated from the date on which such Dissenting Shareholder ceases to have any rights as a Husky Common Shareholder or Husky Preferred Shareholder, as the case may be, until the date of payment. On the Arrangement becoming effective in respect of the Husky Common Shares or Husky Preferred Shares, as the case may be, the Husky Common Shares or Husky Preferred Shares held by the Dissenting Shareholder and in respect of which Dissent Rights have been validly exercised shall be deemed to have been transferred to, and acquired by, Cenovus (free and clear of all encumbrances), and: (a) the Dissenting Shareholder shall cease to be the holder of such Husky Common Shares or Husky Preferred Shares, as applicable, so transferred to Cenovus and to have any rights as a Husky Common Shareholder or Husky Preferred Shareholder, as applicable, other than the right to be paid the fair value for such Dissenting Shareholder’s Husky Common Shares or Husky Preferred Shares, as applicable; (b) such Dissenting Shareholder’s name shall be removed from the applicable register or registers of holders of Husky Common Shares or Husky Preferred Shares, as applicable, maintained by or on behalf of Husky as it relates to the Husky Common Shares or the Husky Preferred Shares, as applicable, so transferred; and (c) Cenovus shall become the transferee (free and clear of all Encumbrances) of the Husky Common Shares or the Husky Preferred Shares, as applicable, so transferred and shall be added to the applicable register or registers of Husky Common Shares or Husky Preferred Shares, as applicable, maintained by or on behalf of Husky. A Dissenting Shareholder who has duly exercised their Dissent Rights in respect of Husky Common Shares or Husky Preferred Shares, as applicable, shall be deemed to have transferred the Husky Common Shares and the Husky Preferred Shares, as applicable, held by them and in respect of which Dissent Rights have been validly exercised to Cenovus (free and clear of all Encumbrances) for cancellation without any further act or formality at the Effective Time, and (a) if such Dissenting Shareholder is ultimately entitled to be paid fair value for such Husky Common Shares or Husky Preferred Shares, as applicable, then such Dissenting Shareholder: (i) shall be deemed not to have participated in the Arrangement (other than to transfer its Husky Common Shares or Husky Preferred Shares, as applicable, to Cenovus); (ii) shall be paid by Cenovus the fair value of such Husky Common Shares or Husky Preferred Shares, as applicable, which fair value shall be determined as of the close of business, in respect of the Husky Common Shares, on the last Business Day before the Arrangement Resolution was adopted and, in respect of the Husky Preferred Shares, on the last Business Day before the Preferred Shareholder Resolution was adopted; and (iii) will not be entitled to any other payment or consideration, including any payment that would be payable under the Arrangement had such holders not exercised their Dissent Rights in respect of such Husky Common Shares or Husky Preferred Shares, as applicable; or (b) if such Dissenting Shareholder is ultimately not entitled, for any reason, to be paid fair value for such Husky Common Shares or Husky Preferred Shares, as applicable, such Dissenting Shareholder shall be deemed to have participated in the Arrangement, commencing at the Effective Time, on the same basis as a Husky Common Shareholder or Husky Preferred Shareholder, as applicable, notwithstanding the provisions of section 191 of the ABCA, and such holder shall receive Cenovus Common Shares and Cenovus Warrants for such holder’s Husky Common Shares or Cenovus Preferred Shares for such holder’s Husky Preferred Shares, as applicable, on the basis set forth in the Plan of Arrangement, as applicable. Cenovus shall not make a payment to a Dissenting Shareholder under section 191 of the ABCA, as modified by the Interim Order and the Plan of Arrangement, if there are reasonable grounds for believing that Cenovus is or would after the payment be unable to pay its liabilities as they become due, or that the realizable value of its assets of Cenovus would thereby be less than the aggregate of its liabilities. In such event, Cenovus shall notify each Dissenting Shareholder that it is unable lawfully to pay such Dissenting Shareholder for his or her Husky Common Share or Husky Preferred Shares, as applicable, in which case the Dissenting Shareholder may, by written notice to Cenovus within 30 days after receipt of such notice, withdraw such holder’s written objection, in which case the holder shall be deemed to have participated in the Arrangement as a Husky Common Shareholder or Husky Preferred Shareholder, as the case may be. If the Dissenting Shareholder does not withdraw such holder’s written objection, such Dissenting Shareholder retains status as a claimant against Cenovus to be paid as soon as Cenovus is lawfully entitled to do so or, in a liquidation, to be ranked subordinate to the rights of creditors of Cenovus but in priority to its shareholders. - 99 - The above summary does not purport to provide a comprehensive statement of the procedures to be followed by a Dissenting Shareholders who seek payment of the fair value of their Husky Common Shares or Husky Preferred Shares, as the case may be. Section 191 of the ABCA, other than as amended by the Arrangement and the Interim Order, requires adherence to the procedures established therein and failure to do so may result in the loss of all rights thereunder. Accordingly, Dissenting Shareholders who might desire to exercise the right to dissent and appraisal should carefully consider and comply with the provisions of section 191 of the ABCA, the full text of which is set out in Appendix O to this Information Circular and consult their own legal advisor. Unless otherwise waived, it is a condition to the completion of the Arrangement that holders of not more than 10% of the issued and outstanding Husky Common Shares shall have properly exercised Dissent Rights in respect of the Arrangement that have not been withdrawn as of the Effective Date. Further, unless otherwise determined by Cenovus in its sole discretion, if holders of more than 10% of the Husky Preferred Shares have validly exercised, and not withdrawn, Dissent Rights, the Husky Preferred Shares will not be exchanged for Cenovus Preferred Shares pursuant to the Plan of Arrangement and will remain outstanding in a subsidiary of Cenovus following completion of the Arrangement and listed on the TSX. Notwithstanding the foregoing, registered Husky Preferred Shareholders who have validly exercised Dissent Rights shall not be entitled to dissent nor to be paid the fair value of their Husky Preferred Shares in the event that the Husky Preferred Shares are not exchanged for Cenovus Preferred Shares pursuant to the Arrangement"