EXHIBIT 4.9
VOTING AND EXCHANGE TRUST AGREEMENT
MEMORANDUM OF AGREEMENT made the 31stWaste Services, day of
July, 2004,
AMONG:
WASTE SERVICES, INC., a corporation existing under the laws
of the State of Delaware (hereinafter referred to as "WSI")
- and -
WASTE SERVICES (CA) INC. (FORMERLY CAPITAL ENVIRONMENTAL
RESOURCE INC.), a corporation existing under the laws of
the Province of Ontario (hereinafter referred to as "CERI")
- and -
COMPUTERSHARE TRUST COMPANY OF CANADA, a trust company
continued under the laws of Canada and authorized to carry
on the trust business in each province of Canada
(hereinafter referred to as "Trustee")
WHEREAS in connection with the Arrangement Agreement (defined
herein), certain holders of common shares in the capital of CERI will receive
and hold exchangeable shares in the capital of CERI pursuant to the plan of
arrangement contemplated by the Arrangement Agreement;
AND WHEREAS pursuant to the Arrangement Agreement, WSI and
CERI have agreed to execute a voting and exchange trust agreement substantially
in the form of this Agreement;
The foregoing recitals are made as representations and
statements of fact by WSI and CERI and not by the Trustee.
NOW THEREFORE in consideration of the respective covenants and
agreements herein contained and for other good and valuable consideration (the
receipt and sufficiency of which are hereby acknowledged), the parties hereto
covenant and agree as follows:
ARTICLE 1
DEFINITIONS AND INTERPRETATION
1.1 DEFINITIONS
In this Agreement, unless there is something in the subject
matter or context inconsistent therewith, the following terms shall have the
following meanings, respectively:
"AFFILIATE" of any person means any other person directly or indirectly
controlled by, or under control of, that person. For the purposes of
this definition, "control" (including, with correlative meanings, the
terms "controlled by" and "under common control of"), as applied to any
person, means the possession by another person of the power to direct
or cause the direction of the
management and policies of that first mentioned person through the
direct or indirect ownership of over 50% of the voting securities.
"AGREEMENT" means this agreement, including any Schedules or Exhibits
to this agreement, as it may be amended or supplemented from time to
time in accordance with the provisions hereof.
"ARRANGEMENT" means the arrangement under section 182 of the OBCA on
the terms and subject to the conditions set out in the Plan of
Arrangement, subject to any amendments or variations thereto made in
accordance with section 6.1 of the Arrangement Agreement or Article 6
of the Plan of Arrangement or made at the direction of the Court.
"ARRANGEMENT AGREEMENT" means the agreement made June 9, 2004 among
WSI, CERI and Capital Holdings, a copy of which is attached as Exhibit
A, as amended, supplemented or restated in accordance therewith prior
to the Effective Date (as defined in the Arrangement Agreement),
providing for, among other things, the Arrangement.
"AUTOMATIC EXCHANGE RIGHT" means the benefit of the obligation of WSI
to effect the automatic exchange of Exchangeable Shares for WSI Common
Shares pursuant to Section 5.12 hereof.
"BENEFICIARIES" means the registered holders from time to time of
Exchangeable Shares, other than WSI and its Affiliates.
"BENEFICIARY VOTES" has the meaning ascribed thereto in Section 4.2
hereof.
"BOARD OF DIRECTORS" means the board of directors of WSI.
"BUSINESS DAY" means any day on which commercial banks are generally
open for business in ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, other
than a Saturday, a Sunday or a day observed as a statutory holiday in
New York, New York under the laws of the State of New York or the
federal laws of the United States or in Toronto, Ontario under the laws
of the Province of Ontario or the federal laws of Canada.
"CANADIAN DOLLAR EQUIVALENT" means, in respect of an amount expressed
in a currency other than Canadian dollars (the "FOREIGN CURRENCY
AMOUNT") at any date, the product obtained by multiplying (a) the
Foreign Currency Amount by (b) the noon spot exchange rate on such date
for such foreign currency expressed in Canadian dollars as reported by
the Bank of Canada or, in the event such spot exchange rate is not
available, such exchange rate on such date for such foreign currency
expressed in Canadian dollars as may be deemed by the Board of
Directors to be appropriate for such purpose.
"CAPITAL HOLDINGS" means Capital Environmental Holdings Company, an
unlimited liability company existing under the laws of the Province of
Nova Scotia which, at the time of the consummation of the Arrangement,
will be a direct wholly-owned subsidiary of WSI.
"COURT" means the Ontario Superior Court of Justice.
"CURRENT MARKET PRICE" means, in respect of a WSI Common Share on any
date, the Canadian Dollar Equivalent of the average of the closing bid
and ask prices of WSI Common Shares during a period of 20 consecutive
trading days ending not more than three trading days before such date
on the NASDAQ, or, if the WSI Common Shares are not then quoted on the
NASDAQ, on such other stock exchange or automated quotation system on
which the WSI Common Shares are listed
or quoted, as the case may be, as may be selected by the Board of
Directors for such purpose; provided, however, that if in the opinion
of the Board of Directors the public distribution or trading activity
of WSI Common Shares during such period (whether or not traded on a
stock exchange or automated quotation system) does not create a market
which reflects the fair market value of a WSI Common Share, then the
Current Market Price of a WSI Common Share shall be determined by the
Board of Directors, in good faith and in its sole discretion, and
provided further that any such selection, opinion or determination by
the Board of Directors shall be conclusive and binding.
"EXCHANGE PUT RIGHT" has the meaning ascribed thereto in Section 5.14
hereof.
"EXCHANGE RIGHT" has the meaning ascribed thereto in Section 5.1
hereof.
"EXCHANGEABLE SHARES" means the exchangeable shares in the capital of
CERI, having substantially the rights, privileges, restrictions and
conditions set out in Appendix 1 to the Plan of Arrangement.
"INDEMNIFIED PARTIES" has the meaning ascribed thereto in Section 9.1
hereof.
"INSOLVENCY EVENT" means the institution by CERI of any proceeding to
be adjudicated a bankrupt or insolvent or to be wound up, or the
consent of CERI to the institution of bankruptcy, insolvency or
winding-up proceedings against it, or the filing of a petition, answer
or consent seeking dissolution or winding-up under any bankruptcy,
insolvency or analogous laws, including without limitation the
Companies Creditors' Arrangement Act (Canada) and the Bankruptcy and
Insolvency Act (Canada), and the failure by CERI to contest in good
faith any such proceedings commenced in respect of CERI within 30 days
of becoming aware thereof, or the consent by CERI to the filing of any
such petition or to the appointment of a receiver, or the making by
CERI of a general assignment for the benefit of creditors, or the
admission in writing by CERI of its inability to pay its debts
generally as they become due, or CERI not being permitted, pursuant to
solvency requirements of applicable law, to redeem any Retracted Shares
pursuant to section 6.6 of the Share Provisions.
"LIQUIDATION CALL PURCHASE PRICE" has the meaning ascribed thereto in
section 5.1 of the Plan of Arrangement.
"LIQUIDATION CALL RIGHT" has the meaning ascribed thereto in section
5.1 of the Plan of Arrangement.
"LIQUIDATION EVENT" has the meaning ascribed thereto in Section 5.12(b)
hereof.
"LIQUIDATION EVENT EFFECTIVE DATE" has the meaning ascribed thereto in
Section 5.12(c) hereof.
"LIST" has the meaning ascribed thereto in Section 4.6 hereof.
"NASDAQ" means the NASDAQ National Market.
"OBCA" means the Business Corporations Act (Ontario), as amended.
"OFFICER'S CERTIFICATE" means, with respect to WSI or CERI, as the case
may be, a certificate signed by any officer or director of WSI or CERI,
as the case may be.
"PERSON" includes any individual, firm, partnership, joint venture,
venture capital fund, limited liability company, unlimited liability
company, association, trust, trustee, executor, administrator, legal
personal representative, estate, group, body corporate, corporation,
unincorporated association or organization, government body, syndicate
or other entity, whether or not having legal status.
"PLAN OF ARRANGEMENT" means the plan of arrangement substantially in
the form and content of Schedule C annexed to the Arrangement Agreement
and any amendments or variations thereto made in accordance with
section 6.1 of the Arrangement Agreement or Article 6 of the Plan of
Arrangement or made at the direction of the Court.
"PURCHASE PRICE" has the meaning ascribed thereto in section 6.3 of the
Share Provisions.
"REDEMPTION CALL PURCHASE PRICE" has the meaning ascribed thereto in
section 5.2 of the Plan of Arrangement.
"REDEMPTION CALL RIGHT" has the meaning ascribed thereto in section 5.2
of the Plan of Arrangement.
"REDEMPTION PRICE" has the meaning ascribed thereto in section 7.1 of
the Share Provisions.
"RETRACTED SHARES" has the meaning ascribed thereto in Section 5.7
hereof.
"RETRACTION CALL RIGHT" has the meaning ascribed thereto in section 6.1
of the Share Provisions.
"RETRACTION PRICE" has the meaning ascribed thereto in section 6.1 of
the Share Provisions.
"SHARE PROVISIONS" means the rights, privileges, restrictions and
conditions attaching to the Exchangeable Shares.
"SUPPORT AGREEMENT" means that certain support agreement made as of
even date herewith among CERI, WSI and Capital Holdings substantially
in the form and content of Schedule D annexed to the Arrangement
Agreement, with such changes thereto as the parties to the Arrangement
Agreement, acting reasonably, may agree.
"TRUST" means the trust created by this Agreement.
"TRUST ESTATE" means the WSI Special Voting Share, any other
securities, the Exchange Right, the Automatic Exchange Right, the
Exchange Put Right and any money or other property which may be held by
the Trustee from time to time pursuant to this Agreement.
"TRUSTEE" means Computershare Trust Company of Canada and, subject to
the provisions of Article 10, includes any successor trustee.
"VOTING RIGHTS" means the voting rights attached to the WSI Special
Voting Share.
"WSI AFFILIATES" means Affiliates of WSI.
"WSI COMMON SHARE" means a share of voting common stock in the capital
of WSI.
"WSI CONSENT" has the meaning ascribed thereto in Section 4.2 hereof.
"WSI MEETING" has the meaning ascribed thereto in Section 4.2 hereof.
"WSI SPECIAL VOTING SHARE" means the one share of special voting stock
of WSI issued in its own series which entitles the holder of record to
a number of votes at meetings of holders of WSI Common Shares equal to
the number of Exchangeable Shares outstanding from time to time (other
than Exchangeable Shares held by WSI and WSI Affiliates), which share
is to be issued to, deposited with, and voted by, the Trustee as
described herein.
"WSI SUCCESSOR" has the meaning ascribed thereto in Section 11.1(a)
hereof.
1.2 INTERPRETATION NOT AFFECTED BY HEADINGS, ETC.
The division of this Agreement into Articles, Sections and other
portions and the insertion of headings are for convenience of reference only and
shall not affect the construction or interpretation of this Agreement. Unless
otherwise indicated, all references to an "Article" or "Section" followed by a
number or a letter refer to the specified Article or Section of this Agreement.
The terms "this Agreement", "hereof", "herein" and "hereunder" and similar
expressions refer to this Agreement and not to any particular Article, Section
or other portion hereof and include any agreement or instrument supplementary or
ancillary hereto.
1.3 DATE, NUMBER, GENDER, ETC.
If any date on which any action is required to be taken under
this Agreement is not a Business Day, such action shall be required to be taken
on the next succeeding Business Day. Words importing the singular number only
shall include the plural and vice versa. Words importing any gender shall
include all genders.
1.4 CERTIFICATE OF INCUMBENCY
Each of the other parties to this Agreement shall file with the
Trustee a certificate of incumbency setting forth the names and titles of the
individuals authorized to give instructions, directions or other instruments
(including Officer's Certificates) to the Trustee ("AUTHORIZED PERSONS"),
together with specimen signatures of such persons, and the Trustee shall be
entitled to rely on the latest certificate of incumbency filed with it unless it
receives notice, in accordance with this agreement, of a change in Authorized
Persons with updated specimen signatures.
ARTICLE 2
PURPOSE OF AGREEMENT
2.1 ESTABLISHMENT OF TRUST
The purpose of this Agreement is to create the Trust for the
benefit of the Beneficiaries, and to create the Exchange Right, the Automatic
Exchange Right and the Exchange Put Right, all as herein provided. The Trustee
will hold the WSI Special Voting Share in order to enable the Trustee to
exercise the Voting Rights and will hold the Exchange Right, the Automatic
Exchange Right and the Exchange Put Right in order to enable the Trustee to
exercise or enforce such rights, in each case as trustee for and on behalf of
the Beneficiaries as provided in this Agreement.
ARTICLE 3
WSI SPECIAL VOTING SHARE
3.1 ISSUE AND OWNERSHIP OF THE WSI SPECIAL VOTING SHARE
WSI concurrently with the execution and delivery hereof issues
to and deposits with the Trustee the WSI Special Voting Share to be hereafter
held of record by the Trustee as trustee for and on behalf of, and for the use
and benefit of, the Beneficiaries and in accordance with the provisions of this
Agreement. WSI hereby acknowledges receipt from the Trustee as trustee for and
on behalf of the Beneficiaries of good and valuable consideration (and the
adequacy thereof) for the issuance of the WSI Special Voting Share by WSI to the
Trustee (and, in the event a taxing authority subsequently determines that the
amount of consideration paid by CERI to WSI in exchange for the Special Voting
Share was inadequate, CERI shall promptly pay out of its own funds the remaining
amount deemed to be owing to WSI (plus an appropriate amount of interest)).
During the term of the Trust and subject to the terms and conditions of this
Agreement, the Trustee shall possess and be vested with full legal ownership of
the WSI Special Voting Share and shall be entitled to exercise all of the rights
and powers of an owner with respect to the WSI Special Voting Share, provided
that the Trustee shall:
(a) hold the WSI Special Voting Share and the legal title thereto as
trustee solely for the use and benefit of the Beneficiaries in
accordance with the provisions of this Agreement; and
(b) except as specifically authorized by this Agreement, have no
power or authority to sell, transfer, vote or otherwise deal in
or with the WSI Special Voting Share and the WSI Special Voting
Share shall not be used, or disposed of, by the Trustee for any
purpose other than the purposes for which this Trust is created
pursuant to this Agreement.
3.2 LEGENDED SHARE CERTIFICATES
CERI will cause each certificate representing Exchangeable
Shares to bear an appropriate legend notifying the Beneficiaries of their right
to instruct the Trustee with respect to the exercise of the Voting Rights in
respect of the Exchangeable Shares held by the Beneficiaries. The Trustee shall
have no duty under the Agreement to monitor or enforce compliance by CERI with
the aforesaid legending requirements.
3.3 SAFE KEEPING OF CERTIFICATE
The certificate representing the WSI Special Voting Share shall
at all times be held in safe keeping by the Trustee.
ARTICLE 4
EXERCISE OF VOTING RIGHTS
4.1 VOTING RIGHTS
The Trustee, as the holder of record of the WSI Special Voting
Share, shall be entitled to all of the Voting Rights, including the right to
vote in person or by proxy the WSI Special Voting Share on any matters,
questions, proposals or propositions whatsoever that may properly come before
the shareholders of WSI at a WSI Meeting or in connection with a WSI Consent.
The Voting Rights shall be and remain vested in and exercised by the Trustee
subject to the terms of this Agreement. Subject to Section 7.14:
(a) the Trustee shall exercise the Voting Rights only on the basis
of instructions received pursuant to this Article 4 from
Beneficiaries on the record date established by WSI or by
applicable law for such WSI meeting who are entitled to instruct
the Trustee as to the voting thereof at the time at which the
WSI Meeting is held or a WSI Consent is sought; and
(b) to the extent that no instructions are received from a
Beneficiary with respect to the Voting Rights to which such
Beneficiary is entitled, the Trustee shall not exercise or
permit the exercise of such Voting Rights.
4.2 NUMBER OF VOTES
With respect to all meetings of shareholders of WSI at which
holders of WSI Common Shares are entitled to vote (each, a "WSI MEETING") and
with respect to all written consents sought by WSI from its shareholders
including the holders of WSI Common Shares (each, a "WSI CONSENT"), each
Beneficiary shall be entitled to instruct the Trustee to cast and exercise one
of the votes comprised in the Voting Rights for each Exchangeable Share owned of
record by such Beneficiary on the record date established by WSI or by
applicable law for such WSI Meeting or WSI Consent, as the case may be (the
"BENEFICIARY VOTES"), in respect of each matter, question, proposal or
proposition to be voted on at such WSI Meeting or in connection with such WSI
Consent. WSI shall provide the Trustee with notice by the close of business on
the third Business Day prior to a WSI Meeting or WSI Consent, that neither WSI
nor its affiliates have exercised any votes in respect of the Exchangeable
Shares.
4.3 MAILINGS TO SHAREHOLDERS
With respect to each WSI Meeting and WSI Consent, the Trustee
will use its reasonable efforts to mail promptly or cause to be mailed (or
otherwise communicate in the same manner as WSI utilizes in communications to
holders of WSI Common Shares, subject to applicable regulatory requirements and
provided such manner of communication is reasonably available to the Trustee) to
each of the Beneficiaries named in the List (referred to in Section 4.6), such
mailing or communication to commence whenever practicable on the same day as the
mailing or notice (or other communication) with respect thereto is commenced by
WSI to its holders of WSI Common Shares:
(a) a copy of such notice (or other communication), together with
any related materials, including, without limitation, any proxy
or information statement, to be provided to shareholders of WSI,
but excluding proxies to vote WSI Common Shares;
(b) a statement that such Beneficiary is entitled to instruct the
Trustee as to the exercise of the Beneficiary Votes with respect
to such WSI Meeting or WSI Consent or, pursuant to Section 4.7,
to attend such WSI Meeting and to exercise personally the
Beneficiary Votes thereat;
(c) a statement as to the manner in which such instructions may be
given to the Trustee, including an express indication that
instructions may be given to the Trustee to give:
(i) a proxy to such Beneficiary or his designee to exercise
personally the Beneficiary Votes; or
(ii) a proxy to a designated agent or other representative of
the management of WSI to exercise such Beneficiary Votes;
(d) a statement that if no such instructions are received from the
Beneficiary, the Beneficiary Votes to which such Beneficiary is
entitled will not be exercised;
(e) a form of direction whereby the Beneficiary may so direct and
instruct the Trustee as contemplated herein; and
(f) a statement of the time and date by which such instructions must
be received by the Trustee in order to be binding upon it, which
in the case of a WSI Meeting shall not be earlier than the close
of business on the fourth Business Day prior to such meeting,
and of the method for revoking or amending such instructions.
The materials referred to in this Section 4.3 are to be provided
to the Trustee by WSI and the materials referred to in Section 4.3(c), (e) and
(f) shall be subject to reasonable comment by the Trustee in a timely manner,
provided, however, that the Trustee shall have no obligation to review such
materials. Subject to the foregoing, WSI shall ensure that the materials to be
provided to the Trustee are provided in sufficient time to permit the Trustee to
comment as aforesaid and to send all materials to each Beneficiary at the same
time as such materials are first sent to holders of WSI Common Shares. WSI
agrees not to communicate with holders of WSI Common Shares with respect to the
materials referred to in this Section 4.3 otherwise than by mail unless such
method of communication is also reasonably available to the Trustee for
communication with the Beneficiaries.
For the purpose of determining Beneficiary Votes to which a
Beneficiary is entitled in respect of any WSI Meeting or WSI Consent, the number
of Exchangeable Shares owned of record by the Beneficiary shall be determined at
the close of business on the record date established by WSI or by applicable law
for purposes of determining shareholders entitled to vote at such WSI Meeting or
consent in respect of such WSI Consent. WSI will notify the Trustee of any
decision of the Board of Directors with respect to the calling of any WSI
Meeting or the seeking of a WSI Consent and shall provide all necessary
information and materials to the Trustee in each case promptly and in any event
in sufficient time to enable the Trustee to perform its obligations contemplated
by this Section 4.3.
4.4 COPIES OF SHAREHOLDER INFORMATION
WSI will deliver to the Trustee copies of all proxy materials
(including notices of WSI Meetings but excluding proxies to vote WSI Common
Shares), information statements, reports (including without limitation, all
interim and annual financial statements) and other written communications that,
in each case, are to be distributed from time to time to holders of WSI Common
Shares in sufficient quantities and in sufficient time so as to enable the
Trustee to send or cause to be sent those materials to each Beneficiary at the
same time as such materials are first sent to holders of WSI Common Shares. The
Trustee will mail or otherwise send or cause to be mailed or otherwise sent, to
each Beneficiary, at the expense of WSI, copies of all such materials (and all
materials specifically directed to the Beneficiaries or to the Trustee for the
benefit of the Beneficiaries by WSI) received by the Trustee from WSI
contemporaneously with the sending of such materials to holders of WSI Common
Shares. The Trustee will also make available for inspection by any Beneficiary
at the Trustee's principal office in Toronto, Ontario all proxy materials,
information statements, reports and other written communications that are:
(a) received by the Trustee as the registered holder of the WSI
Special Voting Share and made available by WSI generally to the
holders of WSI Common Shares; or
(b) specifically directed to the Beneficiaries or to the Trustee for
the benefit of the Beneficiaries by WSI.
4.5 OTHER MATERIALS
As soon as reasonably practicable after receipt by WSI or
holders of WSI Common Shares (if such receipt is known by WSI) of any material
sent or given by or on behalf of a third party to holders of WSI Common Shares
generally, including without limitation, dissident proxy and information
circulars (and related information and material) and tender and exchange offer
circulars (and related information and material), WSI shall use its reasonable
efforts to obtain and deliver to the Trustee copies thereof in sufficient
quantities so as to enable the Trustee to forward or cause to be forwarded such
material (unless the same has been provided directly to Beneficiaries by such
third party) or cause to be mailed or otherwise sent, to each Beneficiary as
soon as possible thereafter. As soon as reasonably practicable after receipt
thereof, the Trustee will mail or otherwise send to each Beneficiary, at the
expense of WSI, copies of all such materials received by the Trustee from WSI.
The Trustee will also make available for inspection by any Beneficiary at the
Trustee's principal office in Toronto, Ontario copies of all such materials.
4.6 LIST OF PERSONS ENTITLED TO VOTE
Unless the Trustee also acts as the transfer agent for the
Exchangeable Shares (in which case the Trustee shall be able to prepare a list
of the Beneficiaries from time to time), CERI shall, (a) prior to each annual,
general and special WSI Meeting or the seeking of any WSI Consent and (b)
forthwith upon each request made at any time by the Trustee in writing, prepare
or cause to be prepared a list (a "LIST") of the names and addresses of the
Beneficiaries arranged in alphabetical order and showing the number of
Exchangeable Shares held of record by each such Beneficiary, in each case at the
close of business on the date specified by the Trustee in such request or, in
the case of a List prepared in connection with a WSI Meeting or a WSI Consent,
at the close of business on the record date established by WSI or pursuant to
applicable law for determining the holders of WSI Common Shares entitled to
receive notice of and/or to vote at such WSI Meeting or to give consent in
connection with such WSI Consent. Each such List shall be delivered to the
Trustee promptly after receipt by CERI of such request or the record date for
such meeting or seeking of consent, as the case may be, and in any event within
sufficient time as to permit the Trustee to perform its obligations under this
Agreement and the Trustee may rely solely on each such List to identify the
Beneficiaries in order to perform its obligations hereunder in connection with a
WSI Meeting or a WSI Consent. WSI agrees to give CERI notice (with a copy to the
Trustee) of the calling of any WSI Meeting or the seeking of any WSI Consent,
together with the record dates therefor, sufficiently prior to the date of the
calling of such meeting or seeking of such consent so as to enable CERI to
perform its obligations under this Section 4.6.
4.7 ENTITLEMENT TO DIRECT VOTES
Any Beneficiary named in a List prepared in connection with any
WSI Meeting or WSI Consent will be entitled (a) to instruct the Trustee in the
manner described in Section 4.3 with respect to the exercise of the Beneficiary
Votes to which such Beneficiary is entitled or (b) to attend such meeting and
personally exercise thereat, as the proxy of the Trustee, the Beneficiary Votes
to which such Beneficiary is entitled.
4.8 VOTING BY TRUSTEE AND ATTENDANCE OF TRUSTEE REPRESENTATIVE AT
MEETING
(a) In connection with each WSI Meeting and WSI Consent, the Trustee
shall exercise, either in person or by proxy, in accordance with
the instructions received from a Beneficiary pursuant to Section
4.3, the Beneficiary Votes as to which such Beneficiary is
entitled to direct the vote (or any lesser number thereof as may
be set forth in the instructions), other than any Beneficiary
votes that are the subject of Section 4.8(b), provided, however,
that
such written instructions are received by the Trustee from the
Beneficiary prior to the time and date fixed by the Trustee for
receipt of such instruction in the notice given by the Trustee
to the Beneficiary pursuant to Section 4.3.
(b) The Trustee shall cause a representative who is empowered by it
to sign and deliver, on behalf of the Trustee, proxies for
Voting Rights to attend each WSI Meeting. Upon submission by a
Beneficiary (or its designee) named in the List prepared in
connection with the relevant meeting, of identification
satisfactory to the Trustee's representative, and at the
Beneficiary's request, such representative shall sign and
deliver to such Beneficiary (or its designee) a proxy to
exercise personally the Beneficiary Votes as to which such
Beneficiary is otherwise entitled hereunder to direct the vote,
if such Beneficiary either (i) has not previously given the
Trustee instructions pursuant to Section 4.3 in respect of such
meeting or (ii) submits to such representative written
revocation of any such previous instructions. At such meeting,
the Beneficiary (or its designee) exercising such Beneficiary
Votes shall have the same rights as the Trustee to speak at the
meeting in favour of any matter, question, proposal or
proposition, to vote by way of ballot at the meeting in respect
of any matter, question, proposal or proposition and to vote at
such meeting by way of a show of hands in respect of any matter,
question or proposition.
4.9 DISTRIBUTION OF WRITTEN MATERIALS
Any written materials distributed by the Trustee pursuant to
this Agreement shall be sent by mail (or otherwise communicated in the same
manner as WSI utilizes in communications to holders of WSI Common Shares,
subject to applicable regulatory requirements and provided such manner of
communication is reasonably available to the Trustee) to each Beneficiary at its
address as shown on the register of holders of Exchangeable Shares maintained by
the registrar and transfer agent. WSI agrees not to communicate with holders of
WSI Common Shares with respect to such written materials otherwise than by mail
unless such method of communication is also reasonably available to the Trustee
for communication with the Beneficiaries. CERI shall provide or cause to be
provided to the Trustee for purposes of communication, on a timely basis and
without charge or other expense:
(a) a current List; and
(b) upon the request of the Trustee, mailing labels to enable the
Trustee to carry out its duties under this Agreement (unless the
Trustee also acts as the transfer agent for the Exchangeable
Shares, in which case the Trustee shall prepare such mailing
labels itself).
4.10 TERMINATION OF VOTING RIGHTS
All of the rights of a Beneficiary with respect to the
Beneficiary Votes exercisable in respect of the Exchangeable Shares held by such
Beneficiary, including the right to instruct the Trustee as to the voting of or
to vote personally such Beneficiary Votes, shall be deemed to be surrendered by
the Beneficiary to WSI or Capital Holdings, as the case may be, and such
Beneficiary Votes and the Voting Rights represented thereby shall cease
immediately upon (i) the delivery by such holder to the Trustee of the
certificates representing such Exchangeable Shares, in connection with the
exercise by the Beneficiary of the Exchange Right or Exchange Put Right, or upon
the exercise of the Automatic Exchange Right (unless, in any such case, WSI or
Capital Holdings shall not have delivered the requisite WSI Common Shares
issuable in exchange therefor to the Trustee for delivery to the Beneficiaries),
or (ii) upon the redemption of Exchangeable Shares pursuant to Article 6 or 7 of
the Share Provisions, or (iii) upon the effective date of the liquidation,
dissolution or winding-up of CERI pursuant to Article 5 of the Share
Provisions, or (iv) upon the purchase of Exchangeable Shares from the holder
thereof by Capital Holdings pursuant to the exercise by Capital Holdings of the
Retraction Call Right, the Redemption Call Right or the Liquidation Call Right.
ARTICLE 5
EXCHANGE RIGHT AND AUTOMATIC EXCHANGE
5.1 GRANT AND OWNERSHIP OF THE EXCHANGE RIGHT
WSI hereby grants to the Trustee as trustee for and on behalf
of, and for the use and benefit of, the Beneficiaries (i) the right (the
"EXCHANGE RIGHT"), upon the occurrence and during the continuance of an
Insolvency Event, to require WSI to purchase from each and every Beneficiary all
or any part of the Exchangeable Shares held by the Beneficiary, (ii) the
Automatic Exchange Right, and (iii) the Exchange Put Right, all in accordance
with the provisions of this Agreement. WSI hereby acknowledges receipt from the
Trustee as trustee for and on behalf of the Beneficiaries of good and valuable
consideration (and the adequacy thereof) for the grant of the Exchange Right,
the Automatic Exchange Right and the Exchange Put Right by WSI to the Trustee.
During the term of the Trust and subject to the terms and conditions of this
Agreement, the Trustee shall possess and be vested with full legal ownership of
the Exchange Right, the Automatic Exchange Right and the Exchange Put Right and
shall be entitled to exercise all of the rights and powers of an owner with
respect to the Exchange Right, the Automatic Exchange Right and the Exchange Put
Right, provided that the Trustee shall:
(a) hold the Exchange Right, the Automatic Exchange Right and the
Exchange Put Right and the legal title thereto as trustee solely
for the use and benefit of the Beneficiaries in accordance with
the provisions of this Agreement; and
(b) except as specifically authorized by this Agreement, have no
power or authority to exercise or otherwise deal in or with the
Exchange Right, the Automatic Exchange Right or the Exchange Put
Right, and the Trustee shall not exercise any such rights for
any purpose other than the purposes for which the Trust is
created pursuant to this Agreement.
5.2 LEGENDED SHARE CERTIFICATES
CERI will cause each certificate representing Exchangeable
Shares to bear an appropriate legend notifying the Beneficiaries of:
(a) their right to instruct the Trustee with respect to the exercise
of the Exchange Right in respect of the Exchangeable Shares held
by a Beneficiary;
(b) the Automatic Exchange Right; and
(c) the Exchange Put Right.
The Trustee shall have no duty under this Agreement to monitor
or enforce compliance by CERI with aforesaid legending requirements.
5.3 GENERAL EXERCISE OF EXCHANGE RIGHT
The Exchange Right shall be and remain vested in and exercisable
by the Trustee. Subject to Section 7.14, the Trustee shall exercise the Exchange
Right only on the basis of instructions
received pursuant to this Article 5 from Beneficiaries entitled to instruct the
Trustee as to the exercise thereof. To the extent that no instructions are
received from a Beneficiary with respect to the Exchange Right, the Trustee
shall not exercise or permit the exercise of the Exchange Right.
5.4 PURCHASE PRICE
The purchase price payable by WSI (or Capital Holdings, as the
case may be) for each Exchangeable Share to be purchased by WSI (or Capital
Holdings, as the case may be) under the Exchange Right and the Exchange Put
Right shall be an amount per share equal to (a) the Current Market Price of a
WSI Common Share on the last Business Day prior to the day of closing of the
purchase and sale of such Exchangeable Share under the Exchange Right or the
Exchange Put Right, which shall be satisfied in full by WSI causing to be
delivered to such holder one WSI Common Share, plus (b) to the extent not paid
by CERI on the designated payment date therefor, an additional amount equal to
and in satisfaction of the full amount of all declared and unpaid dividends on
each such Exchangeable Share held by such holder on any dividend record date
which occurred prior to the closing of the purchase and sale. In connection with
each exercise of the Exchange Right or the Exchange Put Right, WSI shall provide
to the Trustee an Officer's Certificate setting forth the calculation of the
purchase price for each Exchangeable Share. The purchase price for each such
Exchangeable Share so purchased may be satisfied only by WSI issuing and
delivering or causing to be delivered to the Trustee, on behalf of the relevant
Beneficiary, one WSI Common Share and on the applicable payment date a cheque
for the balance, if any, of the purchase price without interest (but less any
amounts withheld pursuant to Section 5.13). Upon payment by WSI (or Capital
Holdings, as the case may be) of such purchase price, the relevant Beneficiary
shall cease to have any right to be paid any amount in respect of declared and
unpaid dividends on each such Exchangeable Share by CERI.
5.5 EXERCISE INSTRUCTIONS
Subject to the terms and conditions herein set forth, a
Beneficiary shall be entitled, upon the occurrence and during the continuance of
an Insolvency Event, to instruct the Trustee to exercise the Exchange Right with
respect to all or any part of the Exchangeable Shares registered in the name of
such Beneficiary on the register of holders of Exchangeable Shares maintained by
the registrar and transfer agent. To cause the exercise of the Exchange Right by
the Trustee, the Beneficiary shall deliver to the Trustee, in person or by
certified or registered mail, at its principal office in Toronto, Ontario or at
such other places as the Trustee may from time to time designate by written
notice to the Beneficiaries, the certificates representing the Exchangeable
Shares which such Beneficiary desires WSI to purchase, duly endorsed in blank
for transfer, and accompanied by such other documents and instruments as may be
required to effect a transfer of Exchangeable Shares under the OBCA and the
articles and by-laws of CERI and such additional documents and instruments as
the Trustee, CERI and WSI may reasonably require together with (a) a duly
completed form of notice of exercise of the Exchange Right, contained on the
reverse of or attached to the Exchangeable Share certificates, stating (i) that
the Beneficiary thereby instructs the Trustee to exercise the Exchange Right so
as to require WSI to purchase from the Beneficiary the number of Exchangeable
Shares specified therein, (ii) that such Beneficiary has good title to and owns
all such Exchangeable Shares to be acquired by WSI free and clear of all liens,
claims and encumbrances, (iii) the names in which the certificates representing
WSI Common Shares issuable in connection with the exercise of the Exchange Right
are to be issued and (iv) the names and addresses of the persons to whom such
new certificates should be delivered and (b) payment (or evidence satisfactory
to the Trustee, CERI and WSI of payment) of the taxes (if any) payable as
contemplated by Section 5.8 of this Agreement. If only a part of the
Exchangeable Shares represented by any certificate or certificates delivered to
the Trustee are to be purchased by WSI under the Exchange Right, a new
certificate for the balance of such Exchangeable Shares shall be issued to the
holder at the expense of CERI.
5.6 DELIVERY OF WSI COMMON SHARES; EFFECT OF EXERCISE
Promptly after the receipt of the certificates representing the
Exchangeable Shares which the Beneficiary desires WSI to purchase under the
Exchange Right, together with such documents and instruments of transfer and a
duly completed form of notice of exercise of the Exchange Right (and payment of
taxes, if any payable as contemplated by Section 5.8 or evidence thereof), duly
endorsed for transfer to WSI, the Trustee shall notify WSI and CERI of its
receipt of the same, which notice to WSI and CERI shall constitute exercise of
the Exchange Right by the Trustee on behalf of the holder of such Exchangeable
Shares, and WSI shall promptly thereafter deliver or cause to be delivered to
the Trustee, for delivery to the relevant Beneficiary (or to such other persons,
if any, properly designated by such Beneficiary) the number of WSI Common Shares
issuable in connection with the exercise of the Exchange Right, and on the
applicable payment date cheques for the balance, if any, of the total purchase
price therefor without interest (but less any amounts withheld pursuant to
Section 5.13); provided, however, that no such delivery shall be made unless and
until the Beneficiary requesting the same shall have paid (or provided evidence
satisfactory to the Trustee, CERI and WSI of the payment of) the taxes (if any)
payable as contemplated by Section 5.8 of this Agreement. Immediately upon the
giving of notice by the Trustee to WSI and CERI of the exercise of the Exchange
Right as provided in this Section 5.6, the closing of the transaction of
purchase and sale contemplated by the Exchange Right shall be deemed to have
occurred and the relevant Beneficiary shall be deemed to have transferred to WSI
all of such Beneficiary's right, title and interest in and to the Exchangeable
Shares which are the subject of the Exchange Right and the related interest in
the Trust Estate and shall cease to be a holder of such Exchangeable Shares and
shall not be entitled to exercise any of the rights of a holder in respect
thereof, other than the right to receive such Beneficiary's proportionate part
of the total purchase price therefor, unless the requisite number of WSI Common
Shares is not allotted, issued and delivered by WSI to the Trustee within five
Business Days of the date of the giving of such notice by the Trustee or the
balance of the purchase price, if any, is not paid by WSI on the applicable
payment date therefor, in which case the rights of the Beneficiary shall remain
unaffected until such WSI Common Shares are so allotted, issued and delivered,
and the balance of the purchase price, if any, has been paid, by WSI. Upon
delivery by WSI to the Trustee of such WSI Common Shares, and the balance of the
purchase price, if any, the Trustee shall deliver such WSI Common Shares to such
Beneficiary (or to such other persons, if any, properly designated by such
Beneficiary). Concurrently with such Beneficiary ceasing to be a holder of
Exchangeable Shares, the Beneficiary shall be considered and deemed for all
purposes to be the holder of the WSI Common Shares delivered to it pursuant to
the exercise of the Exchange Right. If only a part of the Exchangeable Shares
represented by any certificate or certificates delivered to the Trustee are to
be purchased by WSI under the Exchange Right, a new certificate for the balance
of such Exchangeable Shares shall be issued to the holder at the expense of
CERI.
5.7 EXERCISE OF EXCHANGE RIGHT SUBSEQUENT TO RETRACTION
In the event that a Beneficiary has exercised its right under
Article 6 of the Share Provisions to require CERI to redeem any or all of the
Exchangeable Shares held by the Beneficiary (the "RETRACTED SHARES") and is
notified by CERI pursuant to section 6.6 of the Share Provisions that CERI will
not be permitted as a result of solvency requirements of applicable law to
redeem all such Retracted Shares, and provided that Capital Holdings shall not
have exercised the Retraction Call Right with respect to the Retracted Shares
and that the Beneficiary has not revoked the retraction request delivered by the
Beneficiary to CERI pursuant to section 6.7 of the Share Provisions and provided
further that the Trustee has received written notice of the retraction request
from CERI or WSI, the retraction request will constitute and will be deemed to
constitute notice from the Beneficiary to the Trustee instructing the Trustee to
exercise the Exchange Right with respect to those Retracted Shares that CERI is
unable to redeem. In any such event, CERI hereby agrees with the Trustee and in
favour of the Beneficiary promptly to forward or cause to be forwarded to the
Trustee all relevant materials delivered by the
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Beneficiary to CERI or to the transfer agent of the Exchangeable Shares
(including without limitation, a copy of the retraction request delivered
pursuant to section 6.1 of the Share Provisions) in connection with such
proposed redemption of the Retracted Shares and the Trustee will thereupon
exercise the Exchange Right with respect to the Retracted Shares that CERI is
not permitted to redeem and will require WSI to purchase such shares in
accordance with the provisions of this Article 5.
5.8 STAMP OR OTHER TRANSFER TAXES
Upon any sale of Exchangeable Shares to WSI pursuant to the
Exchange Right, the Exchange Put Right, the Automatic Exchange Right or the
Exchange Put Right, the share certificate or certificates representing WSI
Common Shares to be delivered in connection with the payment of the total
purchase price therefor shall be issued in the name of the relevant Beneficiary
in respect of the Exchangeable Shares so sold or in such names as such
Beneficiary may otherwise direct in writing without charge to the holder of the
Exchangeable Shares so sold; provided, however, that such Beneficiary (a) shall
pay (and none of WSI, CERI or the Trustee shall be required to pay) any
documentary, stamp, transfer or other taxes that may be payable in respect of
any transfer involved in the issuance or delivery of such shares to a person
other than such Beneficiary or (b) shall have evidenced to the satisfaction of
the Trustee, WSI and CERI that such taxes, if any, have been paid.
5.9 NOTICE OF INSOLVENCY EVENT
As soon as practicable following the occurrence of an Insolvency
Event or any event that with the giving of notice or the passage of time or both
would be an Insolvency Event, CERI and WSI shall give written notice thereof to
the Trustee. As soon as practicable following the receipt of notice from either
CERI or WSI of the occurrence of an Insolvency Event, or upon the Trustee
otherwise becoming aware of an Insolvency Event, the Trustee will mail to each
Beneficiary, at the expense of WSI (such funds to be received in advance by the
Trustee), a notice of such Insolvency Event in the form provided by WSI, which
notice shall contain a brief statement of the rights of the Beneficiaries with
respect to the Exchange Right; provided, however, that notice of an Insolvency
Event based on CERI not being permitted, pursuant to solvency requirements of
applicable law, to redeem any Retracted Shares pursuant to section 6.6 of the
Share Provisions need not be given more than once during each three-month
period.
5.10 QUALIFICATION OF WSI COMMON SHARES
WSI covenants that if any WSI Common Shares to be issued and
delivered pursuant to the Exchange Right, the Automatic Exchange Right or the
Exchange Put Right, require registration or qualification with or approval of or
the filing of any document, including any prospectus or similar document, or the
taking of any proceeding with or the obtaining of any order, ruling or consent
from any governmental or regulatory authority under any Canadian or United
States federal, provincial, territorial or state law or regulation or pursuant
to the rules and regulations of any regulatory authority or the fulfillment of
any other Canadian or United States federal, provincial, territorial or state
legal requirement before such shares may be issued and delivered by WSI to the
initial holder thereof or in order that such shares may be freely traded
thereafter (other than any restrictions of general application on transfer by
reason of a holder being a "control person" of WSI for purposes of Canadian
provincial securities law or an "affiliate" of WSI for purposes of United States
federal or state securities law), WSI will in good faith expeditiously take all
such actions and do all such things as are necessary or desirable to cause such
WSI Common Shares to be and remain duly registered, qualified or approved. WSI
will in good faith expeditiously take all such actions and do all such things as
are reasonably necessary or desirable to cause all WSI Common Shares to be
delivered pursuant to the Exchange Right, the Automatic Exchange Right or the
Exchange Put Right to be listed, quoted or posted for trading on all stock
exchanges and quotation
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systems on which outstanding WSI Common Shares have been listed by WSI and
remain listed and are quoted or posted for trading at such time.
5.11 WSI COMMON SHARES
WSI hereby represents, warrants and covenants that the WSI
Common Shares issuable as described herein will be duly authorized and validly
issued as fully paid and non-assessable and shall be free and clear of any lien,
claim or encumbrance.
5.12 AUTOMATIC EXCHANGE ON LIQUIDATION OF WSI
(a) WSI will give the Trustee written notice of each of the
following events at the time set forth below:
(i) in the event of any determination by the Board of
Directors to institute voluntary liquidation, dissolution
or winding-up proceedings with respect to WSI or to effect
any other distribution of assets of WSI among its
shareholders for the purpose of winding up its affairs, at
least 30 days prior to the proposed effective date of such
liquidation, dissolution, winding-up or other
distribution; and
(ii) as soon as practicable following the earlier of (A)
receipt by WSI of notice of, and (B) WSI otherwise
becoming aware of, any threatened or instituted claim,
suit, petition or other proceedings with respect to the
involuntary liquidation, dissolution or winding-up of WSI
or to effect any other distribution of assets of WSI among
its shareholders for the purpose of winding up its
affairs, in each case where WSI has failed to contest in
good faith any such proceeding commenced in respect of WSI
within 30 days of becoming aware thereof.
(b) As soon as practicable following receipt by the Trustee from WSI
of notice of any event (a "LIQUIDATION EVENT") contemplated by
Section 5.12(a)(i) or 5.12(a)(ii) above, the Trustee will give
notice thereof to the Beneficiaries at the expense of WSI (such
funds to be received in advance). Such notice shall be provided
to the Trustee by WSI and shall include a brief description of
the automatic exchange of Exchangeable Shares for WSI Common
Shares provided for in Section 5.12(c).
(c) In order that the Beneficiaries will be able to participate on a
pro rata basis with the holders of WSI Common Shares in the
distribution of assets of WSI in connection with a Liquidation
Event, on the fifth Business Day prior to the effective date
(the "LIQUIDATION EVENT EFFECTIVE DATE") of a Liquidation Event
all of the then outstanding Exchangeable Shares shall be
automatically exchanged for WSI Common Shares. To effect such
automatic exchange, WSI shall purchase on the fifth Business Day
prior to the Liquidation Event Effective Date each Exchangeable
Share then outstanding and held by Beneficiaries, and each
Beneficiary shall sell the Exchangeable Shares held by it at
such time, for a purchase price per share equal to (a) the
Current Market Price of a WSI Common Share on the fifth Business
Day prior to the Liquidation Event Effective Date, which shall
be satisfied in full by WSI issuing to the Beneficiary one WSI
Common Share, and (b) to the extent not paid by CERI, an
additional amount equal to and in satisfaction of the full
amount of all declared and unpaid dividends on each such
Exchangeable Share held by such holder on any dividend record
date which occurred prior to the date of the exchange. WSI shall
provide the Trustee with an Officer's
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Certificate in connection with each automatic exchange setting
forth the calculation of the purchase price for each
Exchangeable Share.
(d) On the fifth Business Day prior to the Liquidation Event
Effective Date, the closing of the transaction of purchase and
sale contemplated by the automatic exchange of Exchangeable
Shares for WSI Common Shares shall be deemed to have occurred,
and each Beneficiary shall be deemed to have transferred to WSI
all of the Beneficiary's right, title and interest in and to
such Beneficiary's Exchangeable Shares and the related interest
in the Trust Estate, any right of each such Beneficiary to
receive declared and unpaid dividends from CERI shall be deemed
to be satisfied and discharged and each such Beneficiary shall
cease to be a holder of such Exchangeable Shares and WSI shall
issue to the Beneficiary the WSI Common Shares issuable upon the
automatic exchange of Exchangeable Shares for WSI Common Shares
and on the applicable payment date shall deliver to the Trustee
for delivery to the Beneficiary a cheque for the balance, if
any, of the total purchase price for such Exchangeable Shares
without interest but less any amounts withheld pursuant to
Section 5.13. Concurrently with such Beneficiary ceasing to be a
holder of Exchangeable Shares, the Beneficiary shall be
considered and deemed for all purposes to be the holder of the
WSI Common Shares issued pursuant to the automatic exchange of
Exchangeable Shares for WSI Common Shares and the certificates
held by the Beneficiary previously representing the Exchangeable
Shares exchanged by the Beneficiary with WSI pursuant to such
automatic exchange shall thereafter be deemed to represent WSI
Common Shares issued to the Beneficiary by WSI pursuant to such
automatic exchange. Upon the request of a Beneficiary and the
surrender by the Beneficiary to the Trustee or WSI of
Exchangeable Share certificates deemed to represent WSI Common
Shares, duly endorsed in blank and accompanied by such
instruments of transfer as WSI may reasonably require, WSI shall
deliver or cause to be delivered to the Beneficiary certificates
representing WSI Common Shares of which the Beneficiary is the
holder.
5.13 WITHHOLDING RIGHTS
(a) WSI, CERI and the Trustee shall be entitled to deduct and
withhold from any consideration otherwise payable under this
Agreement to any holder of Exchangeable Shares or WSI Common
Shares such amounts as WSI, CERI or the Trustee is required to
deduct and withhold with respect to such payment under the
Income Tax Act (Canada), the United States Internal Revenue Code
of 1986 or any provision of provincial, territorial, state,
local or foreign tax law, in each case as amended or succeeded.
The Trustee may act and rely on the advice of counsel with
respect to such matters. To the extent that amounts are so
withheld, such withheld amounts shall be treated for all
purposes as having been paid to the holder of the shares in
respect of which such deduction and withholding was made,
provided that such withheld amounts are actually remitted to the
appropriate taxing authority. To the extent that the amount so
required to be deducted or withheld from any payment to a holder
exceeds the cash portion of the consideration otherwise payable
to the holder, WSI, CERI and the Trustee are hereby authorized
to sell or otherwise dispose of such portion of the
consideration as is necessary to provide sufficient funds to
WSI, CERI or the Trustee, as applicable, as the case may be, to
enable it to comply with such deduction or withholding
requirement and WSI, CERI or the Trustee shall notify the holder
thereof and remit to such holder any unapplied balance of the
net proceeds of such sale.
20
(b) Any other provision of this agreement notwithstanding, the
Trustee shall not be responsible for determining and shall have
no duty to determine or verify whether any taxes are payable or,
if any taxes are payable, the amount thereof to be deducted and
remitted to any taxing authority or agency in any jurisdiction,
in respect of any consideration or the amount otherwise payable
under this agreement to any person (including any holder or
former holder of Exchangeable Shares or WSI Common Shares) at
any time. The Trustee shall not be responsible for determining
the adequacy of or otherwise examining any evidence of the
payment of any taxes which any Beneficiary or other party may at
any time submit to the Trustee. The making of such
determinations is the responsibility solely of WSI and CERI and
the Trustee shall be entitled to rely and act upon any written
instructions which it may receive from either WSI and CERI or
their respective counsel with regard to the withholding and
remittance of tax and/or the retention of sufficient funds by
the Trustee to enable it to comply with any applicable
withholding taxes. If no written instructions to withhold have
been received by the Trustee from WSI and CERI or their counsel
by the date when the Trustee is required to make or forward
payment to a given party, the Trustee may proceed to make or
forward such payment without deduction or withholding or
retention of funds on account of taxes on the assumption that no
deduction or withholding or retention of funds on account of
taxes is required. Prior to the making of any distributions to
holders or former holders of Exchangeable Shares, WSI and/or
CERI shall ensure that the Trustee has access to sufficient
funds (by directly providing, if necessary, such funds to the
Trustee) to enable the Trustee to comply with any applicable
withholding taxes in connection with such distribution.
5.14 PURCHASE OF EXCHANGEABLE SHARES BY WSI
WSI hereby grants to the Trustee, as trustee for and on behalf
of, and for the use and benefit of, the Beneficiaries the benefit of its
covenant and agreement (the "EXCHANGE PUT RIGHT") that it shall purchase (or
cause Capital Holdings to purchase) all Exchangeable Shares in respect of which
the holder thereof has not, in the circumstances contemplated in the Share
Provisions and, if applicable, the Plan of Arrangement, received the full amount
of the Liquidation Call Purchase Price, Retraction Price, Purchase Price,
Redemption Price or Redemption Call Purchase Price, as the case may be, together
with all declared and unpaid dividends, as applicable, to which the holder is
entitled in respect of such shares pursuant to the Share Provisions and, if
applicable, the Plan of Arrangement, and it shall be at the discretion of WSI to
decide, in respect of each such holder, which of Capital Holdings and WSI shall
purchase the Exchangeable Shares.
ARTICLE 6
RESTRICTIONS ON ISSUE OF WSI SPECIAL VOTING STOCK
6.1 ISSUE OF ADDITIONAL SHARES
During the term of this Agreement, WSI will not, without the
consent of the holders at the relevant time of Exchangeable Shares, given in
accordance with section 10.2 of the Share Provisions, issue any shares of its
special voting preferred stock in the same series as the WSI Special Voting
Share. The Trustee shall have no duty under this Agreement to monitor or enforce
compliance by WSI with its obligations under this Article 6.
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ARTICLE 7
CONCERNING THE TRUSTEE
7.1 POWERS AND DUTIES OF THE TRUSTEE
The rights, powers, duties and authorities of the Trustee under
this Agreement, in its capacity as trustee of the Trust, shall include:
(a) receipt and deposit of the WSI Special Voting Share from WSI as
Trustee for and on behalf of the Beneficiaries in accordance
with the provisions of this Agreement;
(b) granting proxies and distributing materials to the Beneficiaries
as provided in this Agreement;
(c) voting the Beneficiary Votes in accordance with the provisions
of this Agreement;
(d) receiving the grant of the Exchange Right, the Automatic
Exchange Right and the Exchange Put Right from WSI as Trustee
for and on behalf of the Beneficiaries in accordance with the
provisions of this Agreement;
(e) exercising the Exchange Right and enforcing the benefit of the
Automatic Exchange Right and the Exchange Put Right, in each
case in accordance with the provisions of this Agreement, and in
connection therewith receiving from the Beneficiaries
Exchangeable Shares and other requisite documents and
distributing to such Beneficiaries WSI Common Shares and
cheques, if any, to which such Beneficiaries are entitled upon
the exercise of the Exchange Right or pursuant to the Automatic
Exchange Right or the Exchange Put Right, as the case may be;
(f) holding title to the Trust Estate;
(g) taking action at the direction of a Beneficiary or Beneficiaries
to enforce the obligations of WSI and CERI under this Agreement;
and
(h) taking such other actions and doing such other things as are
specifically provided in this Agreement.
In the exercise of such rights, powers, duties and authorities
the Trustee shall have (and is granted) such incidental and additional rights,
powers, duties and authority not in conflict with any of the provisions of this
Agreement as the Trustee, acting in good faith and in the reasonable exercise of
its discretion, may deem necessary, appropriate or desirable to effect the
purpose of the Trust. Any exercise of duties or of such discretionary rights,
powers, duties and authorities by the Trustee shall be final, conclusive and
binding upon all persons. For greater certainty, and anything else herein
notwithstanding, the Trustee shall have only those duties as set out
specifically in this Agreement.
The Trustee in exercising its rights, powers, duties and
authorities hereunder shall act honestly and in good faith and with a view to
the best interests of the Beneficiaries and shall exercise the degree of care,
diligence and skill that a reasonably prudent trustee would exercise in
comparable circumstances.
The Trustee shall not be bound to give notice or do or take any
act, action or proceeding by virtue of the powers conferred on it hereby unless
and until it shall be specifically required to do so
22
under the terms hereof; nor shall the Trustee be required to take any notice of,
or to do, or to take any act, action or proceeding as a result of any default or
breach of any provision hereunder, unless and until notified in writing of such
default or breach, which notices shall distinctly specify the default or breach
desired to be brought to the attention of the Trustee, and in the absence of
such notice the Trustee may for all purposes of this Agreement conclusively
assume that no default or breach has been made in the observance or performance
of any of the representations, warranties, covenants, agreements or conditions
contained herein.
7.2 NO CONFLICT OF INTEREST
The Trustee represents to WSI and CERI that at the date of
execution and delivery of this Agreement there exists no material conflict of
interest in the role of the Trustee as a fiduciary hereunder. The Trustee shall,
within 90 days after it becomes aware that such material conflict of interest
exists, either eliminate such material conflict of interest or resign in the
manner and with the effect specified in Article 10. If, notwithstanding the
foregoing provisions of this Section 7.2, the Trustee has such a material
conflict of interest, the validity and enforceability of this Agreement shall
not be affected in any manner whatsoever by reason only of the existence of such
material conflict of interest. If the Trustee contravenes the foregoing
provisions of this Section 7.2, any interested party may apply to the Court for
an order that the Trustee be replaced as Trustee hereunder.
7.3 DEALINGS WITH TRANSFER AGENTS, REGISTRARS, ETC.
WSI and CERI irrevocably authorize the Trustee, from time to
time, to:
(a) consult, communicate and otherwise deal with the respective
registrars and transfer agents, and with any such subsequent
registrar or transfer agent, of the Exchangeable Shares and WSI
Common Shares; and
(b) requisition, from time to time, (i) from any such registrar or
transfer agent any information readily available from the
records maintained by it which the Trustee may reasonably
require for the discharge of its duties and responsibilities
under this Agreement and (ii) from the transfer agent of WSI
Common Shares, and any subsequent transfer agent of such shares,
the share certificates issuable upon the exercise from time to
time of the Exchange Right and pursuant to the Automatic
Exchange Right and the Exchange Put Right.
WSI and CERI irrevocably authorize their respective registrars
and transfer agents to comply with all such requests. WSI covenants that it will
supply its transfer agent with duly executed share certificates for the purpose
of completing the exercise from time to time of the Exchange Right, the
Automatic Exchange Right and the Exchange Put Right.
7.4 BOOKS AND RECORDS
The Trustee shall keep available for inspection by WSI and CERI
at the Trustee's principal office in Toronto, Ontario correct and complete books
and records of account relating to the Trust created by this Agreement,
including without limitation, all relevant data relating to mailings and
instructions to and from Beneficiaries and all transactions pursuant to the
Exchange Right, the Automatic Exchange Right and the Exchange Put Right. On or
before January 31, 2005, and on or before January 31st in every year thereafter
(and on any other date upon request by WSI or CERI, acing reasonably, in respect
of any other period), so long as the WSI Special Voting Share is on deposit with
the Trustee, the
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Trustee shall transmit to WSI and CERI a brief report, dated as of the preceding
December 31st (or such other specified date in respect of any other requested
period), with respect to:
(a) the property and funds comprising the Trust Estate as of that
date;
(b) the number of exercises of the Exchange Right, if any, and the
aggregate number of Exchangeable Shares received by the Trustee
on behalf of Beneficiaries in consideration of the issuance and
delivery by WSI of WSI Common Shares in connection with the
Exchange Right, during the calendar year ended on such December
31st (or such other specified date in respect of any other
requested period); and
(c) any action taken by the Trustee in the performance of its duties
under this Agreement which it had not previously reported and
which, in the Trustee's opinion, materially affects the Trust
Estate.
7.5 INCOME TAX RETURNS AND REPORTS
The Trustee shall, to the extent necessary, and as advised by
counsel, cause to be prepared and filed on behalf of the Trust appropriate
United States and Canadian income tax returns and any other returns or reports
as may be required by applicable law or pursuant to the rules and regulations of
any securities exchange or other trading system through which the Exchangeable
Shares are traded. In connection therewith, the Trustee may obtain the advice
and assistance of such experts or advisors as the Trustee considers necessary or
advisable (who may be experts or advisors to WSI or CERI). If requested by the
Trustee, WSI or CERI shall retain qualified experts or advisors for the purpose
of providing such tax advice or assistance. Further, the Trustee shall provide
draft copies of any such returns and reports to WSI and CERI prior to their
being filed and shall permit WSI and CERI to comment thereon and shall consider
in good faith any comments made by WSI or CERI.
7.6 INDEMNIFICATION PRIOR TO CERTAIN ACTIONS BY TRUSTEE
The Trustee shall exercise any or all of the rights, duties,
powers or authorities vested in it by this Agreement at the request, order or
direction of any Beneficiary upon such Beneficiary furnishing to the Trustee
reasonable funding, security and indemnity against the costs, expenses and
liabilities which may be incurred by the Trustee therein or thereby, provided
that no Beneficiary shall be obligated to furnish to the Trustee any such
security or indemnity in connection with the exercise by the Trustee of any of
its rights, duties, powers and authorities with respect to the WSI Special
Voting Share pursuant to Article 4, subject to Section 7.14, and with respect to
the Exchange Right pursuant to Article 5, subject to Section 7.14, and with
respect to the Automatic Exchange Right and the Exchange Put Right pursuant to
Article 5.
None of the provisions contained in this Agreement shall require
the Trustee to expend or risk its own funds or otherwise incur financial
liability in the exercise of any of its rights, powers, duties, or authorities
unless funded, given security and indemnified as aforesaid.
7.7 ACTION OF BENEFICIARIES
No Beneficiary shall have the right to institute any action,
suit or proceeding or to exercise any other remedy authorized by this Agreement
for the purpose of enforcing any of its rights or for the execution of any trust
or power hereunder unless the Beneficiary has requested the Trustee to take or
institute such action, suit or proceeding and furnished the Trustee with the
funding, security and indemnity referred to in Section 7.6 and the Trustee shall
have failed to act within a reasonable time
thereafter. In such case, but not otherwise, the Beneficiary shall be entitled
to take proceedings in any court of competent jurisdiction such as the Trustee
might have taken; it being understood and intended that no one or more
Beneficiaries shall have any right in any manner whatsoever to affect, disturb
or prejudice the rights hereby created by any such action, or to enforce any
right hereunder or the Voting Rights, the Exchange Rights, the Automatic
Exchange Right or the Exchange Put Right except subject to the conditions and in
the manner herein provided, and that all powers and trusts hereunder shall be
exercised and all proceedings at law shall be instituted, had and maintained by
the Trustee, except only as herein provided, and in any event for the equal
benefit of all Beneficiaries.
7.8 RELIANCE UPON DECLARATIONS
(a) The Trustee shall not be considered to be in contravention of
any of its rights, powers, duties and authorities hereunder if,
when required, it acts and relies in good faith upon lists,
(including any Lists), notices, statutory declarations,
certificates (including share certificates and Officers'
Certificates), opinions or reports or other paper or documents
furnished pursuant to the provisions hereof or required by the
Trustee to be furnished to it in the exercise of its rights,
powers, duties and authorities hereunder if such lists
(including Lists), notices, statutory declarations, certificates
(including share certificates and Officers' Certificates),
opinions or reports or other paper or documents comply with the
provisions of Section 7.9, if applicable, and with any other
applicable provisions of this Agreement.
(b) Any other provision of this Agreement notwithstanding, the
Trustee as trustee under this Agreement shall have no obligation
to ensure or verify compliance with any applicable laws or rules
or regulatory requirements (including those of any securities
commission or securities exchange or other relevant trading
system), or articles or by-laws of WSI or CERI, on the issuance
or delivery of WSI Common Shares or the transfer of any
Exchangeable Shares, occurring in connection with or upon any
exercise of the Exchange Right, Automatic Exchange Right, and
the Exchange Put Right. Except to the extent it may be
specifically advised in writing to the contrary by legal
counsel, the Trustee as trustee under this Agreement shall be
entitled to regard all transfers of Exchangeable Shares and the
issuance and delivery of all WSI Common Shares related to the
exercise of the Exchange Right, Automatic Exchange Right, and
the Exchange Put Right, upon the presumption that such transfers
and issuances and deliveries are permissible pursuant to all
applicable laws and rules and regulatory requirements (including
those of any securities commission or securities exchange or
other relevant trading system), and the articles and by-laws of
WSI or CERI, as applicable, and the terms of this Agreement and
the Exchangeable Shares Provisions. Except to the extent it may
be specifically advised in writing to the contrary by legal
counsel or WSI or CERI in the case of specifically identified
Beneficiaries, the Trustee may assume for all purposes of this
Agreement that the address of any Beneficiary as shown on the
register of holders of Exchangeable Shares maintained by the
registrar or transfer agent of the Exchangeable Shares is the
Beneficiary's actual address for the time being and is also
determinative of the Beneficiary's residency for the time being.
Any other provision of this Agreement notwithstanding, the
Trustee shall not be responsible for verifying or determining at
any time (a) whether an Insolvency Event or any event which,
with the giving of notice or the passage of time or both would
be an Insolvency Event, has in fact occurred; (b) whether the
solvency requirements of any applicable law will or will not
permit CERI to redeem all Retracted Shares or, if less than all,
how many, (and shall be entitled to rely on any notification
given by CERI in this regard); (c) whether applicable law
establishes a record date for any WSI Meeting, or WSI Consent
or, if applicable law does establish any such
record date, what the date so established is, and the Trustee
shall be entitled to accept as valid and lawful for all purposes
any record date established or stated by WSI for any WSI Meeting
or WSI Consent unless advised in writing by legal counsel of a
different record date established by applicable law.
7.9 EVIDENCE AND AUTHORITY TO TRUSTEE
WSI and/or CERI shall furnish to the Trustee evidence of
compliance with the conditions provided for in this Agreement relating to any
action or step required or permitted to be taken by WSI and/or CERI or the
Trustee under this Agreement or as a result of any obligation imposed under this
Agreement, including, without limitation, in respect of the Voting Rights or the
Exchange Right or the Automatic Exchange Right or the Exchange Put Right and the
taking of any other action to be taken by the Trustee at the request of, or on
the application of, WSI and/or CERI, promptly, if and when:
(a) such evidence is required by any other Section of this Agreement
to be furnished to the Trustee in accordance with the terms of
this Section 7.9; or
(b) the Trustee, in the exercise of its rights, powers, duties and
authorities under this Agreement, gives WSI and/or CERI written
notice requiring it to furnish such evidence in relation to any
particular action or obligation or matter specified in such
notice.
Such evidence shall consist of an Officer's Certificate of WSI
and/or CERI or a statutory declaration or a certificate made by persons entitled
to sign an Officer's Certificate stating that any such condition has been
complied with in accordance with the terms of this Agreement.
Whenever such evidence relates to a matter other than the Voting
Rights, the Exchange Right, the Automatic Exchange Right or the Exchange Put
Right or the taking of any other action to be taken by the Trustee at the
request or on the application of WSI and/or CERI, and except as otherwise
specifically provided herein, such evidence may consist of a report or opinion
of any solicitor, attorney, auditor, accountant, appraiser, valuator, engineer
or other expert or any other person whose qualifications give authority to a
statement made by him, provided that if such report or opinion is furnished by a
director, officer or employee of WSI and/or CERI it shall be in the form of an
Officer's Certificate or a statutory declaration.
Each statutory declaration, Officer's Certificate, opinion or
report furnished to the Trustee as evidence of compliance with a condition
provided for in this Agreement shall include a statement by the person giving
the evidence:
(a) declaring that he has read and understands the provisions of
this Agreement relating to the condition in question;
(b) describing the nature and scope of the examination or
investigation upon which he based the statutory declaration,
certificate, statement or opinion; and
(c) declaring that he has made such examination or investigation as
he believes is necessary to enable him to make the statements or
give the opinions contained or expressed therein.
7.10 EXPERTS, ADVISERS AND AGENTS
The Trustee may:
(a) in relation to these presents act, or not act, and rely on the
opinion or advice of or information obtained from any solicitor,
attorney, auditor, accountant, appraiser, valuator, engineer or
other expert, whether retained by the Trustee or by WSI and/or
CERI or otherwise, and may retain or employ such assistants as
in its reasonable opinion may be necessary to the proper
discharge of its powers and duties and determination of its
rights hereunder and may pay proper and reasonable compensation
for all such legal and other advice or assistance as aforesaid.
The fees of such experts are to be part of the Trustee's fees
hereunder; and
(b) employ such agents and other assistants as it may reasonably
require for the proper determination and/or discharge of its
powers and duties hereunder, and may pay reasonable remuneration
for all services performed for it (and shall be entitled to
receive reasonable remuneration for all services performed by
it) in the discharge of the trusts hereof and compensation for
all disbursements, costs and expenses made or incurred by it in
the discharge of its duties hereunder and in the management of
the Trust.
7.11 TRUSTEE NOT REQUIRED TO GIVE SECURITY
The Trustee shall not be required to give any bond or security
in respect of the execution of the trusts, rights, duties, powers and
authorities of this Agreement or otherwise in respect of the premises.
7.12 TRUSTEE NOT BOUND TO ACT ON REQUEST
Except as in this Agreement otherwise specifically provided, the
Trustee shall not be bound to act in accordance with any direction or request of
WSI and/or CERI or of the directors thereof until a duly authenticated copy of
the instrument or resolution containing such direction or request shall have
been delivered to the Trustee, and the Trustee shall be empowered to act upon
any such copy purporting to be authenticated and believed by the Trustee to be
genuine.
7.13 AUTHORITY TO CARRY ON BUSINESS
The Trustee represents to WSI and CERI that at the date of
execution and delivery by it of this Agreement it is authorized to carry on the
business of a trust company in Canada but if, notwithstanding the provisions of
this Section 7.13, it ceases to be so authorized to carry on business, the
validity and enforceability of this Agreement and the Voting Rights, the
Exchange Right, the Automatic Exchange Right and the Exchange Put Right shall
not be affected in any manner whatsoever by reason only of such event but the
Trustee shall, within 90 days after ceasing to be authorized to carry on the
business of a trust company in Canada, either become so authorized or resign in
the manner and with the effect specified in Article 10.
7.14 CONFLICTING CLAIMS
If conflicting claims or demands are made or asserted with
respect to any interest of any Beneficiary in any Exchangeable Shares, including
any disagreement between the heirs, representatives, successors or assigns
succeeding to all or any part of the interest of any Beneficiary in any
Exchangeable Shares, resulting in conflicting claims or demands being made in
connection with such interest, then the Trustee shall be entitled, at its sole
discretion, to refuse to recognize or to comply with any such claims or demands.
In so refusing, the Trustee may elect not to exercise any Voting Rights,
Exchange Rights, Automatic Exchange Right or Exchange Put Right subject to such
conflicting claims or demands and, in so doing, the Trustee shall not be or
become liable to any person on account of such election or its failure
or refusal to comply with any such conflicting claims or demands. The Trustee
shall be entitled to continue to refrain from acting and to refuse to act until:
(a) the rights of all adverse claimants with respect to the Voting
Rights, Exchange Right, Automatic Exchange Right or Exchange Put
Right subject to such conflicting claims or demands have been
adjudicated by a final judgment of a court of competent
jurisdiction; or
(b) all differences with respect to the Voting Rights, Exchange
Right, Automatic Exchange Right or Exchange Put Right subject to
such conflicting claims or demands have been conclusively
settled by a valid written agreement binding on all such adverse
claimants, and the Trustee shall have been furnished with an
executed copy of such agreement certified to be in full force
and effect.
If the Trustee elects to recognize any claim or comply with any
demand made by any such adverse claimant, it may in its discretion require such
claimant to furnish such surety bond or other security satisfactory to the
Trustee as it shall deem appropriate to fully indemnify it as between all
conflicting claims or demands.
7.15 ACCEPTANCE OF TRUST
The Trustee hereby accepts the Trust created and provided for by
and in this Agreement and agrees to perform the same upon the terms and
conditions herein set forth and to hold all rights, privileges and benefits
conferred hereby and by law in trust for the various persons who shall from time
to time be Beneficiaries, subject to all the terms and conditions herein set
forth.
ARTICLE 8
COMPENSATION
8.1 FEES AND EXPENSES OF THE TRUSTEE
WSI and CERI jointly and severally agree to pay the Trustee
reasonable compensation for all of the services rendered by it under this
Agreement and will reimburse the Trustee for all reasonable expenses (including,
but not limited to, taxes other than taxes based on the net income of the
Trustee, fees paid to legal counsel and other experts and advisors and travel
expenses) and disbursements, including the cost and expense of any suit or
litigation of any character and any proceedings before any governmental agency
reasonably incurred by the Trustee in connection with its duties under this
Agreement; provided that WSI and CERI shall have no obligation to reimburse the
Trustee for any expenses or disbursements paid, incurred or suffered by the
Trustee in any suit or litigation in which the Trustee is determined to have
acted in bad faith or with negligence, recklessness or wilful misconduct. Any
amount owing under this Section or otherwise under this Agreement and unpaid
thirty (30) days after request for such payment with appropriate supporting
documentation, shall bear interest from the expiration of such thirty (30) day
period at a rate per annum equal to the then current reasonable rate charged by
the Trustee. The obligation in this Section shall survive the resignation or
removal of the Trustee and the termination of the trusts created by this
Agreement.
ARTICLE 9
INDEMNIFICATION AND LIMITATION OF LIABILITY
9.1 INDEMNIFICATION OF THE TRUSTEE
WSI and CERI jointly and severally agree to indemnify and hold
harmless the Trustee and each of its directors, officers, employees and agents
appointed and acting in accordance with this Agreement (collectively, the
"INDEMNIFIED PARTIES") against all claims, losses, damages, reasonable costs,
penalties, fines and reasonable expenses (including reasonable expenses of the
Trustee's legal counsel) which, without fraud, negligence, recklessness, wilful
misconduct or bad faith on the part of such Indemnified Party, may be paid,
incurred or suffered by the Indemnified Party by reason or as a result of the
Trustee's acceptance or administration of the Trust, its compliance with its
duties set forth in this Agreement, or any written or oral instruction delivered
to the Trustee by WSI or CERI pursuant hereto.
In no case shall WSI or CERI be liable under this indemnity for
any claim against any of the Indemnified Parties unless WSI and CERI shall be
notified by the Trustee of the written assertion of a claim or of any action
commenced against the Indemnified Parties, promptly after any of the Indemnified
Parties shall have received any such written assertion of a claim or shall have
been served with a summons or other first legal process giving information as to
the nature and basis of the claim. Subject to (ii) below, WSI and CERI shall be
entitled to participate at their own expense in the defence and, if WSI and CERI
so elect at any time after receipt of such notice, either of them may assume the
defence of any suit brought to enforce any such claim. The Trustee shall have
the right to employ separate counsel in any such suit and participate in the
defence thereof, but the fees and expenses of such counsel shall be at the
expense of the Trustee unless: (i) the employment of such counsel has been
authorized by WSI or CERI; or (ii) the named parties to any such suit include
both the Trustee and WSI or CERI and the Trustee shall have been advised by
counsel acceptable to WSI or CERI that there may be one or more legal defences
available to the Trustee that are different from or in addition to those
available to WSI or CERI and that, in the judgment of such counsel, would
present a conflict of interest were a joint representation to be undertaken (in
which case WSI and CERI shall not have the right to assume the defence of such
suit on behalf of the Trustee but shall be liable to pay the reasonable fees and
expenses of counsel for the Trustee). This indemnity shall survive the
termination of this Agreement and the resignation or removal of the Trustee.
9.2 LIMITATION OF LIABILITY
The Trustee shall not be held liable for any loss which may
occur by reason of depreciation of the value of any part of the Trust Estate or
any loss incurred on any investment of funds pursuant to this Agreement, except
to the extent that such loss is attributable to the fraud, negligence,
recklessness, wilful misconduct or bad faith on the part of the Trustee.
ARTICLE 10
CHANGE OF TRUSTEE
10.1 RESIGNATION
The Trustee, or any trustee hereafter appointed, may at any time
resign by giving written notice of such resignation to WSI and CERI specifying
the date on which it desires to resign, provided that such notice shall not be
given less than 30 days before such desired resignation date unless WSI and CERI
otherwise agree and provided further that such resignation shall not take effect
until the date of the appointment of a successor trustee and the acceptance of
such appointment by the successor trustee. Upon
receiving such notice of resignation, WSI and CERI shall promptly appoint a
successor trustee, which shall be a corporation organized and existing under the
laws of Canada or any province therein and authorized to carry on the business
of a trust company in Canada, by written instrument in duplicate, one copy of
which shall be delivered to the resigning trustee and one copy to the successor
trustee. Failing the appointment and acceptance of a successor trustee, a
successor trustee may be appointed by order of a court of competent jurisdiction
upon application of one or more of the parties to this Agreement. If the
retiring trustee is the party initiating an application for the appointment of a
successor trustee by order of a court of competent jurisdiction, WSI and CERI
shall be jointly and severally liable to reimburse the retiring trustee for its
legal costs and expenses incurred in connection with same.
10.2 REMOVAL
The Trustee, or any trustee hereafter appointed, may (provided a
successor trustee is appointed) be removed at any time on not less than 30 days'
prior notice by written instrument executed by WSI and CERI, in duplicate, one
copy of which shall be delivered to the trustee so removed and one copy to the
successor trustee.
10.3 SUCCESSOR TRUSTEE
Any successor trustee appointed as provided under this Agreement
shall execute, acknowledge and deliver to WSI and CERI and to its predecessor
trustee an instrument accepting such appointment. Thereupon the resignation or
removal of the predecessor trustee shall become effective and such successor
trustee, without any further act, deed or conveyance, shall become vested with
all the rights, powers, duties and obligations of its predecessor under this
Agreement, with the like effect as if originally named as trustee in this
Agreement. However, on the written request of WSI and CERI or of the successor
trustee, the trustee ceasing to act shall, upon payment of any amounts then due
it pursuant to the provisions of this Agreement, execute and deliver an
instrument transferring to such successor trustee all the rights and powers of
the trustee so ceasing to act. Upon the request of any such successor trustee,
WSI, CERI and such predecessor trustee shall execute any and all instruments in
writing for more fully and certainly vesting in and confirming to such successor
trustee all such rights and powers.
10.4 NOTICE OF SUCCESSOR TRUSTEE
Upon acceptance of appointment by a successor trustee as
provided herein, WSI and CERI shall cause to be mailed notice of the succession
of such trustee hereunder to each Beneficiary specified in a List. If WSI or
CERI shall fail to cause such notice to be mailed within 10 days after
acceptance of appointment by the successor trustee, the successor trustee shall
cause such notice to be mailed at the expense of WSI and CERI.
ARTICLE 11
WSI SUCCESSORS
11.1 CERTAIN REQUIREMENTS IN RESPECT OF COMBINATION, ETC.
WSI shall not consummate any transaction (whether by way of
reconstruction, reorganization, consolidation, merger, transfer, sale, lease or
otherwise) whereby all or substantially all of its undertaking, property and
assets would become the property of any other person or, in the case of a
merger, of the continuing corporation resulting therefrom unless, but may do so
if:
(a) such other person or continuing corporation (herein called the
"WSI SUCCESSOR"), by operation of law, becomes, without more,
bound by the terms and provisions of this
Agreement or, if not so bound, executes, prior to or
contemporaneously with the consummation of such transaction, a
trust agreement supplemental hereto and such other instruments
(if any) as are satisfactory to the Trustee, acting reasonably,
and in the opinion of legal counsel to the Trustee are
reasonably necessary or advisable to evidence the assumption by
the WSI Successor of liability for all moneys payable and
property deliverable hereunder and the covenant of such WSI
Successor to pay and deliver or cause to be delivered the same
and its agreement to observe and perform all the covenants and
obligations of WSI under this Agreement; and
(b) such transaction shall, to the satisfaction of the Trustee,
acting reasonably, and in the opinion of legal counsel to the
Trustee, be upon such terms and conditions as to preserve
substantially and not impair in any material respect any of the
rights, duties, powers and authorities of the Trustee or of the
Beneficiaries hereunder.
11.2 VESTING OF POWERS IN SUCCESSOR
Whenever the conditions of Section 11.1 have been duly observed
and performed, the Trustee, WSI Successor and CERI shall, if required by Section
11.1, execute and deliver the supplemental trust agreement provided for in
Article 12 and thereupon the WSI Successor shall possess and from time to time
may exercise each and every right and power of WSI under this Agreement in the
name of WSI or otherwise and any act or proceeding by any provision of this
Agreement required to be done or performed by the Board of Directors of WSI or
any officers of WSI may be done and performed with like force and effect by the
directors or officers of such WSI Successor.
11.3 WHOLLY-OWNED SUBSIDIARIES
Subject to section 4.6 of the Arrangement Agreement, nothing
herein shall be construed as preventing the amalgamation or merger of any
wholly-owned direct or indirect subsidiary of WSI with or into WSI or the
winding-up, liquidation or dissolution of any wholly-owned subsidiary of WSI
provided that all of the assets of such subsidiary are transferred to WSI or
another wholly-owned direct or indirect subsidiary of WSI and any such
transactions are expressly permitted by this Article 11.
ARTICLE 12
AMENDMENTS AND SUPPLEMENTAL TRUST AGREEMENTS
12.1 AMENDMENTS, MODIFICATIONS, ETC.
This Agreement may not be amended or modified except by an
agreement in writing executed by WSI, CERI and the Trustee and approved by the
Beneficiaries in accordance with section 10.2 of the Share Provisions.
12.2 MINISTERIAL AMENDMENTS
Notwithstanding the provisions of Section 12.1, the parties to
this Agreement may in writing, at any time and from time to time, without the
approval of the Beneficiaries, amend or modify this Agreement for the purposes
of:
(a) adding to the covenants of any or all parties hereto for the
protection of the Beneficiaries hereunder provided that the
board of directors of each of CERI and WSI shall be of the good
faith opinion (confirmed in writing by each to the Trustee) that
such additions will not be prejudicial to the rights or
interests of the Beneficiaries;
(b) making such amendments or modifications not inconsistent with
this Agreement as may be necessary or desirable with respect to
matters or questions which, in the good faith opinion of the
board of directors of each of WSI and CERI (confirmed in writing
by each to the Trustee) and in the opinion of the Trustee,
having in mind the best interests of the Beneficiaries, it may
be expedient to make, provided that such boards of directors and
the Trustee, acting on the advice of counsel, shall be of the
opinion that such amendments and modifications will not be
prejudicial to the interests of the Beneficiaries; or
(c) making such changes or corrections which, on the advice of
counsel to WSI, CERI and the Trustee, are required for the
purpose of curing or correcting any ambiguity or defect or
inconsistent provision or clerical omission or mistake or
manifest error, provided that the Trustee, acting on the advice
of counsel, and the board of directors of each of WSI and CERI
shall be of the opinion that such changes or corrections will
not be prejudicial to the rights and interests of the
Beneficiaries.
12.3 MEETING TO CONSIDER AMENDMENTS
CERI, at the request of WSI, shall call a meeting or meetings of
the Beneficiaries for the purpose of considering any proposed amendment or
modification requiring approval pursuant hereto. Any such meeting or meetings
shall be called and held in accordance with the articles and by-laws of CERI,
the Share Provisions and all applicable laws. The Trustee shall have no duty
under this Agreement to monitor or enforce compliance by CERI with the
requirements of this section 12.3.
12.4 CHANGES IN CAPITAL OF WSI AND CERI
At all times after the occurrence of any event contemplated
pursuant to section 2.7 or 2.8 of the Support Agreement or otherwise, as a
result of which either WSI Common Shares or the Exchangeable Shares or both are
in any way changed, and after the Trustee has been notified in writing of such
occurrence in reasonable detail by WSI or CERI, this Agreement shall forthwith
be amended and modified as necessary in the opinion of counsel in order that it
shall apply with full force and effect, mutatis mutandis, to all new securities
into which WSI Common Shares or the Exchangeable Shares or both are so changed
and the parties hereto shall execute and deliver a supplemental trust agreement
giving effect to and evidencing such necessary amendments and modifications.
12.5 EXECUTION OF SUPPLEMENTAL TRUST AGREEMENTS
No amendment to or modification or waiver of any of the
provisions of this Agreement otherwise permitted hereunder shall be effective
unless made in writing and signed by all of the parties hereto. From time to
time CERI (when authorized by a resolution of its board of directors), WSI (when
authorized by a resolution of the Board of Directors) and the Trustee may,
subject to the provisions of these presents, and they shall, when so directed by
these presents, execute and deliver by their proper officers, trust agreements
or other instruments supplemental hereto, which thereafter shall form part
hereof, for any one or more of the following purposes:
(a) evidencing the succession of WSI Successors and the covenants of
and obligations assumed by each such WSI Successor in accordance
with the provisions of Article 11 and the successors of any
successor trustee in accordance with the provisions of Article
10;
(b) making any additions to, deletions from or alterations of the
provisions of this Agreement or the Voting Rights, the Exchange
Right, the Automatic Exchange Right or the Exchange Put Right
which, in the opinion of the Trustee, in reliance on a
certificate of
CERI, will not be prejudicial to the interests of the
Beneficiaries or are, in the opinion of counsel to the Trustee,
necessary or advisable in order to incorporate, reflect or
comply with any legislation, the provisions of which apply to
WSI, CERI, the Trustee or this Agreement; and
(c) for any other purposes not inconsistent with the provisions of
this Agreement, including without limitation, to make or
evidence any amendment or modification to this Agreement as
contemplated hereby, provided that, in the opinion of the
Trustee, in reliance on a certificate of CERI, the rights of the
Trustee and Beneficiaries will not be prejudiced thereby.
ARTICLE 13
TERMINATION
13.1 TERM
The Trust created by this Agreement shall continue until the
earliest to occur of the following events:
(a) no outstanding Exchangeable Shares are held by a Beneficiary;
(b) each of WSI and CERI elects in writing to terminate the Trust
and such termination is approved by the Beneficiaries in
accordance with section 10.2 of the Share Provisions; and
(c) 21 years after the death of the last survivor of the descendants
of His Majesty King ▇▇▇▇▇▇ VI of Canada and the United Kingdom
of Great Britain and Northern Ireland living on the date of the
creation of the Trust.
13.2 SURVIVAL OF AGREEMENT
This Agreement shall survive any termination of the Trust and
shall continue until there are no Exchangeable Shares outstanding held by a
Beneficiary; provided, however, that the provisions of Articles 8 and 9 shall
survive any such termination of this Agreement.
ARTICLE 14
GENERAL
14.1 SEVERABILITY
If any provision of this Agreement is held to be invalid,
illegal or unenforceable, the validity, legality or enforceability of the
remainder of this Agreement shall not in any way be affected or impaired thereby
and the agreement shall be carried out as nearly as possible in accordance with
its original terms and conditions.
14.2 ENUREMENT
This Agreement shall be binding upon and enure to the benefit of
the parties hereto and their respective successors and permitted assigns and to
the benefit of the Beneficiaries.
14.3 NOTICES TO PARTIES
All notices and other communications required or permitted to be
given pursuant to any provision of this Agreement shall be given or made in
writing and shall be deemed to be validly given if served personally, including
by prepaid courier delivery, or by telecopy, in each case addressed to the
particular party at:
(a) if to WSI or CERI, at:
Waste Services, Inc.
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Attention: General Counsel
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
(b) if to the Trustee, at:
Computershare Trust Company of Canada
9th Floor, North Tower
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Attention: Manager, Corporate Trust Services
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
or at such other address of which any party may, from time to time, advise the
other parties by notice in writing given in accordance with the foregoing. Any
notice or other communication given personally shall be deemed to have been
given and received upon delivery thereof and if given by telecopy shall be
deemed to have been given and received on the date of receipt thereof, unless
such day is not a Business Day or unless such delivery occurs after 5:00 p.m.
(local time) in which case it shall be deemed to have been given and received on
the immediately following Business Day.
14.4 NOTICE TO BENEFICIARIES
Any and all notices to be given and any documents to be sent to
any Beneficiaries may be given or sent to the address of such Beneficiary shown
on the register of holders of Exchangeable Shares in any manner permitted by the
by-laws of CERI from time to time in force in respect of notices to shareholders
and shall be deemed to be received (if given or sent in such manner) at the time
specified in such by-laws, the provisions of which by-laws shall apply mutatis
mutandis to notices or documents as aforesaid sent to such Beneficiaries. The
Trustee shall have no duty under this Agreement to monitor or enforce compliance
by any of WSI or CERI with the requirements of this section. Any and all notices
to be given and any documents to be sent or delivered to any Beneficiaries by
the Trustee may be given or sent to the address of such Beneficiary shown on the
register of holders of Exchangeable Shares maintained by the registrar or
transfer agent of the Exchangeable Shares and shall be delivered or sent by mail
(or otherwise communicated in the same manner as WSI utilized in communications
to holders of WSI Common Shares, subject to the Trustee being advised in writing
of such method and such method being reasonably available to the Trustee).
14.5 JURISDICTION
This Agreement shall be construed and enforced in accordance
with the laws of the Province of Ontario and the laws of Canada applicable
therein.
14.6 ATTORNMENT
Each of the Trustee, WSI and CERI agrees that any action or
proceeding arising out of or relating to this Agreement may be instituted in the
courts of Ontario, waives any objection which it may have now or hereafter to
the venue of any such action or proceeding, irrevocably submits to the
jurisdiction of the said courts in any such action or proceeding, agrees to be
bound by any judgment of the said courts and not to seek, and hereby waives, any
review of the merits of any such judgment by the courts of any other
jurisdiction and WSI hereby appoints CERI at its registered office in the
Province of Ontario as attorney for service of process.
14.7 COUNTERPARTS
This Agreement may be executed in counterparts, each of which
shall be deemed an original, and all of which taken together shall constitute
one and the same instrument.
IN WITNESS WHEREOF the parties hereto have caused this Agreement
to be duly executed as of the date first above written.
WASTE SERVICES, INC.
By:
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Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Executive Vice-President and General Counsel
WASTE SERVICES (CA) INC.
By:
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Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Executive Vice-President and General Counsel
COMPUTERSHARE TRUST COMPANY OF CANADA
By:
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Name:
Title:
By:
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Name:
Title: