All KWG Longs,

Under the Summary of the Capital Reorganization, schedule Part 1 and 2 DO NOT contemplate the “creation of unlimited 1 shares and super 300 shares” as you have stated, but rather contemplate the renaming of the current common shares as Subordinate Voting shares and to “create a new class of convertible shares to be classified at Multiple Voting Shares in an unlimited number…”

You continue to confuse and mislead others with the “creation of new shares” (which never appears in the proposal) versus the “creation of a new class of shares”. Big difference – the former results in more shares, dilution and likely a lower share price, while the latter, creating a new class of shares, has no effect on the number of shares, no effect on dilution and no impact on the share price.

On the issue of the term “in an unlimited number”, we have discussed this concept at length. This is a very standard and typical term used in securities documents. I will re-post again for those that may have missed it or may benefit from a re-read.

Using the term “unlimited” in describing the multiple voting shares is a very common, typical and customary practice when drafting Management Information Circulars, Prospectuses and other securities documents. As this issue has been discussed at length already on this site, I direct all that care to refresh their memory on this issue to the posts that MarlboroDog and I posted back in early July. I also copy/pasted the appropriate section of my July 5 posting for convenience.

MarlboroDog on July 18

http://agoracom.com/ir/KWG/forums/discussion/topics/670130-notice-of-agm-meeting-place-unlimited-shares/messages/2101543#message

Keep Digging on July 5

http://agoracom.com/ir/KWG/forums/discussion/topics/670130-notice-of-agm-meeting-place-unlimited-shares/messages/2099134#message

“Second, there seems to be some sort of preoccupation with the term “unlimited” in the description of the Multiple Voting Shares in the Management Information Circular. Quite simply, management (and counsel who drafted the document) was compelled or more likely obligated to use the term ‘unlimited’ because they just do not know. They do not know how many common shares will be outstanding in the future and therefore do not know how many Multiple Voting Shares will exist in the future since the two are explicitly tied at a ratio of 300:1. Further, they do not know how many investors will exchange their common shares for multiple voting shares.”

On the issue of dilution, I find it very curious that you feel management gives themselves the right to create dilution by virtue of section 3.1 entitled “Anti-Dilution”. Perhaps we need the number of Frank’s lawyers? This section protects KWG shareholders from dilution. This section states that neither class of shares can be “…subdivided, consolidated, reclassified or otherwise changed unless contemporaneously wherein the other class of Participating Shares is subdivided, consolidated, reclassified or otherwise changed in the same proportion and in the same manner so as to preserve the rights conferred hereby on each class in relation to the other class”. What this clearly states is that whatever management does to one class of shares, they must do to the other class of shares in order to preserve the 300:1 ratio. No dilution possible here.

My best to all KWG Longs,

Keep Digging