Exhibit 99.2
VOTING AND EXCHANGE TRUST AGREEMENT
This AGREEMENT is made as of the . day of September, 1999
BETWEEN:
▇▇▇▇▇▇▇▇▇.▇▇▇, INC., a corporation incorporated under the laws of
Delaware
("Infospace")
- and -
▇▇▇▇▇▇▇▇▇.▇▇▇ CANADA HOLDINGS INC., a corporation amalgamated under
the laws of Ontario
("Infospace Canada")
MONTREAL TRUST COMPANY OF CANADA,
a trust company incorporated under the laws
of Canada,
(the "Trustee"),
Background:
1. Pursuant to that certain Agreement and Plan of Acquisition and
Arrangement dated as of the 13th day of August, 1999 (the "Arrangement and
Acquisition Agreement"), entered into between Infospace and INEX Corporation
("INEX" and collectively the "Parties'), the Parties have agreed to the
acquisition of INEX Corporation by Infospace, pursuant to a court sanctioned
plan of arrangement.
2. Pursuant to the Arrangement and Acquisition Agreement, shareholders of
INEX will have the option of exchanging common shares of INEX (or preferred
shares of INEX collectively, the "INEX Shares"), exchangeable shares in the
capital of Infospace (Canada) (the "Exchangeable Shares") or common shares in
the capital of Infospace on the basis of .20405 of a Exchangeable Share or
0.20405 of a common share of Infospace for each INEX Share.
3. Pursuant to the Arrangement and Acquisition Agreement, Infospace and
Infospace Canada have agreed to enter into a voting and exchange trust agreement
with a trustee
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appointed by the holders of such Exchangeable Shares substantially in
the form of this agreement.
NOW THEREFORE in consideration of the respective covenants and agreements
provided in this trust agreement 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 trust agreement, the following terms shall have the following
meanings:
"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, directly or indirectly, of the
power to direct or cause the direction of the management and policies of
that first mentioned person, whether through the ownership of voting
securities, by contract or otherwise.
"Automatic Exchange Rights" means the benefit of the obligation of
Infospace to effect the automatic exchange of Infospace Common Shares for
Exchangeable Shares pursuant to section 5.12.
"Beneficiaries" means the registered holders from time to time of
Exchangeable Shares, other than Infospace and its Affiliates.
"Beneficiary Votes" has the meaning ascribed thereto in section 4.2.
"Board of Directors" means the Board of Directors of Infospace Canada.
"Business Day" means any day on which commercial banks are open for
business in ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, other than a
Saturday, a Sunday or a day observed as a holiday in Toronto, Ontario under
the laws of the Province of Ontario or the federal laws of Canada or in
Seattle, Washington under the laws of the State of Washington or the
federal laws of the United States of America.
"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.
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"Current Market Price" means, in respect of an Infospace Common Share on
any date, the Canadian Dollar Equivalent of the average of the closing bid
and asked prices of Infospace Common Shares during a period of 20
consecutive trading days ending not more than three trading days before
such date on the Nasdaq National Market, or, if the Infospace Common Shares
are not then quoted on the Nasdaq National Market, on such other stock
exchange or automated quotation system on which the Infospace 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
Infospace Common Shares during such period does not create a market which
reflects the fair market value of an Infospace Common Share, then the
Current Market Price of an Infospace 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 Right" has the meaning ascribed thereto in section 5.1.
"Exchangeable Shares" means the non-voting exchangeable shares in the
capital of Infospace Canada.
"List" has the meaning ascribed thereto in section 4.6.
"Infospace Common Share" means a share of common stock, par value U.S.
$0.001, in the capital of Infospace.
"Infospace Consent" has the meaning ascribed thereto in section 4.2.
"Infospace Meeting" has the meaning ascribed thereto in section 4.2.
"Infospace Nova Scotia" means ▇▇▇▇▇▇▇▇▇.▇▇▇ Nova Scotia Company.
"Infospace Special Voting Share" means the one share of Special Voting
Stock of Infospace, par value U.S.$.0l, which entitles the holder of record
to a number of votes at meetings of holders of Infospace Common Shares
equal to the number of Exchangeable Shares outstanding from time to time
(other than Exchangeable Shares held by Infospace and Infospace
Affiliates), which share is to be issued to, deposited with, and voted by,
the Trustee as described herein.
"Infospace Successor" has the meaning ascribed thereto in section 11.1(a).
"Insolvency Event" means the institution by Infospace Canada of any
proceeding to be adjudicated a bankrupt or insolvent or to be wound up, or
the consent of Infospace Canada 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 Infospace Canada to contest in
good faith any such proceedings commenced in respect of Infospace Canada
within 30 days of becoming aware thereof, or
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the consent by Infospace Canada to the filing of any such petition or to
the appointment of a receiver, or the making by Infospace Canada of a
general assignment for the benefit of creditors, or the admission in
writing by Infospace Canada of its inability to pay its debts generally as
they become due, or Infospace Canada not being permitted, pursuant to
solvency requirements of applicable law, to redeem any Retracted Shares
pursuant to section [6] of the Share Provisions.
"Liquidation Call Right" has the meaning ascribed thereto in section [7] of
the Share Provisions.
"Liquidation Event" has the meaning ascribed thereto in section 5.12(b).
"Liquidation Event Effective Date" has the meaning ascribed thereto in
section 5.12(c).
"Officer's Certificate" means, with respect to Infospace or Infospace
Canada, as the case may be, a certificate signed by any one of Chief
Executive Office, President or Chief Financial Officer of Infospace or
Infospace Canada, as the case may be.
"Person" includes an individual, partnership, corporation, company,
unincorporated syndicate or person organization, trust, trustee, executor,
administrator and other legal representative.
"Share Provisions" means the rights, privileges, restrictions and
conditions attaching to the Exchangeable Shares.
"Support Agreement" means that certain exchangeable share support agreement
made as of even date herewith between Infospace Canada, Infospace,
Infospace Nova Scotia and the Trustee.
"Trust" means the trust created by this trust agreement.
"Trust Estate" means the Infospace Special Voting Share, any other
securities, the benefit of the Support Agreement and any money or other
property which may be held by the Trustee from time to time pursuant to
this trust agreement.
"Trustee" means Montreal 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 Infospace Special
Voting Share.
1.2 Interpretation Not Affected by Headings, etc.
The division of this trust agreement into Articles, sections and other
portions and the insertion of headings are for convenience of reference only and
should not affect the construction or interpretation of this trust agreement.
Unless otherwise indicated, all references to an "Article" or "section" followed
by a number and/or a letter refer to the specified Article or section of this
trust agreement. The terms "this trust agreement", "hereof" "herein", and
"hereunder" and similar expressions refer to this trust agreement and not to any
particular
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Article, section or other portion hereof and include any agreement or
supplementary or ancillary hereto.
1.3 Number, Gender, etc.
Words in the singular number only shall include the plural and vice versa.
Words in one gender shall include all genders.
1.4 Date for any Action
If any date on which any action is required to be taken under this trust
agreement is not a Business Day, such action shall be required to be taken on
the next succeeding Business Day.
ARTICLE 2
PURPOSE OF AGREEMENT
2.1 Establishment of Trust
The purpose of this trust agreement is to create the Trust for the benefit
of the Beneficiaries, as herein provided. The Trustee will hold the Trust
Estate in order to enable the Trustee to execute the Voting Rights and will hold
the Exchange Right and the Automatic Exchange Rights in order to enable the
Trustee to exercise such rights, in each case as trustee for and on behalf of
the Beneficiaries as provided in this trust agreement.
ARTICLE 3
INFOSPACE SPECIAL VOTING SHARE
3.1 Issue and Ownership of the Infospace Special Voting Share
Infospace hereby issues to and deposits with the Trustee, the Infospace
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 trust agreement. Infospace 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 Infospace Special Voting Share by Infospace to the Trustee.
During the term of the Trust and subject to the terms and conditions of this
trust agreement, the Trustee shall possess and be vested with full legal
ownership of the Infospace Special Voting Share and shall be entitled to
exercise all of the rights and powers of an owner with respect to the Infospace
Special Voting Share provided that the Trustee shall:
(a) hold the Infospace 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 trust agreement; and
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(b) except as specifically authorized by this trust agreement, have no
power or authority to sell, transfer, vote or otherwise deal in or
with the Infospace Special Voting Share and the Infospace 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 trust agreement.
3.2 Legended Share Certificates
Infospace Canada shall 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 of the Beneficiaries.
3.3 Safe Keeping of Certificate
The certificate representing the Infospace 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 Infospace Special Voting Share,
shall be entitled to all of the Voting Rights, including the right to vote in
person or by proxy the Infospace Special Voting Share on any matters, questions,
proposals or propositions whatsoever that may properly come before the
shareholders of Infospace at an Infospace Meeting or in connection with an
Infospace Consent. The Voting Rights shall be and remain vested in and exercised
by the Trustee. Subject to section 7.15:
(a) the Trustee shall exercise the Voting Rights only on the basis of
instructions received pursuant to this Article 4 from Beneficiaries
entitled to instruct the Trustee as to the voting thereof at the time
at which the Infospace Meeting is held; 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 Infospace at which holders
of Infospace Common Shares are entitled to vote (each, an "Infospace Meeting")
and with respect to all written consents sought by Infospace from its
shareholders including the holders of Infospace Common Shares (each, an
"Infospace 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
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Exchangeable Share owned of record by such Beneficiary on the record date
established by Infospace or by applicable law for such Infospace Meeting or
Infospace Consent, as the case may be (the "Beneficiary Votes"), in respect of
each matter, question, proposal or proposition to be voted on at such Infospace
Meeting or in connection with such Infospace Consent.
4.3 Mailings to Shareholders
With respect to each Infospace Meeting and Infospace Consent, the Trustee
will mail or cause to be mailed (or otherwise communicate in the same manner as
Infospace utilizes in communications to holders of Infospace Common Shares) to
each of the Beneficiaries named in the List referred to in section 4.6, such
mailing or communication to commence on the same day as the mailing or notice
(or other communication) with respect thereto is commenced by Infospace to its
shareholders:
(a) a copy of such notice, together with any related materials to be
provided to shareholders of Infospace;
(b) a statement that such Beneficiary is entitled to instruct the Trustee
as to the exercise of the Beneficiary Votes with respect to such
Infospace Meeting or Infospace Consent or, pursuant to section 4.7, to
attend such Infospace 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 Infospace 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 an Infospace Meeting shall not be earlier than the close of
business on the second Business Day prior to such meeting, and of the
method for revoking or amending such instructions.
For the purpose of determining Beneficiary Votes to which a Beneficiary is
entitled in respect of any Infospace Meeting or Infospace 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 Infospace or by
applicable law for purposes of determining shareholders
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entitled to vote at such Infospace Meeting or to execute an Infospace consent.
Infospace will notify the Trustee of any decision of the Board of Directors of
Infospace with respect to the calling of any Infospace Meeting or the seeking of
an Infospace 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
Infospace will deliver to the Trustee copies of all proxy materials
(including notices of Infospace Meetings but excluding proxies to vote Infospace
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
Infospace Common Shares in sufficient quantities and in sufficient time so as to
enable the Trustee to send those materials to each Beneficiary at the same time
as such materials are first sent to holders of Infospace Common Shares. The
Trustee will mail or otherwise send to each Beneficiary, at the expense of
Infospace, copies of all such materials (and all materials specifically directed
to the Beneficiaries or to the Trustee for the benefit of the Beneficiaries by
Infospace) received by the Trustee from Infospace contemporaneously with the
sending of such materials to holders of Infospace Common Shares. The Trustee
will also make available for inspection by any Beneficiary at the Trustee's
principal corporate trust office in the City of Toronto all proxy materials,
information statements, reports and other written communications that are:
(a) received by the Trustee as the registered holder of the Infospace
Special Voting Share and made available by Infospace generally to the
holders of Infospace Common Shares; or
(b) specifically directed to the Beneficiaries or to the Trustee for the
benefit of the Beneficiaries by Infospace.
4.5 Other Materials
As soon as reasonably practicable after receipt by Infospace or
shareholders of Infospace (if such receipt is known by Infospace) of any
material sent or given by or on behalf of a third party to holders of Infospace
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), Infospace 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 such material
(unless the same has been provided directly to Beneficiaries by such third
party) to each Beneficiary as soon as possible thereafter. Immediately upon
receipt thereof, the Trustee will mail or otherwise send to each Beneficiary, at
the expense of Infospace, copies of all such materials received by the Trustee
from Infospace. The Trustee will also make available for inspection by any
Beneficiary at the Trustee's principal corporate trust office in the City of
Toronto copies of all such materials.
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4.6 List of Persons Entitled to Vote
Infospace Canada shall, (a) prior to each annual, general and special
Infospace Meeting or the seeking of any Infospace 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 an Infospace Meeting or an Infospace Consent, at the
close of business on the record date established by Infospace or pursuant to
applicable law for determining the holders of Infospace Common Shares entitled
to receive notice of and/or to vote at such Infospace Meeting or to give consent
in connection with such Infospace Consent. Each such List shall be delivered to
the Trustee promptly after receipt by Infospace Canada of such request or the
record date for such meeting or seeking of consent, as the case may be.
Infospace agrees to give Infospace Canada notice (with a copy to the Trustee) of
the calling of any Infospace Meeting or the seeking of any Infospace Consent,
together with the record dates therefor, sufficiently prior to the record date
in connection with such meeting or seeking of such consent so as to enable
Infospace Canada 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 Infospace
Meeting or Infospace 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 Infospace Meeting and Infospace 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); 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 instructions 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 Infospace Meeting. Upon submission by a Beneficiary (or
its designee) 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
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of any such previous instructions. At such meeting, the Beneficiary
exercising such Beneficiary Votes shall have the same rights as the
Trustee to speak at the meeting in respect 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 trust
agreement shall be sent by mail (or otherwise communicated in the same manner as
Infospace utilizes in communications to holders of Infospace Common Shares) to
each Beneficiary at its address as shown on the books of Infospace Canada
Infospace Canada shall provide or cause to be provided to the Trustee for this
purpose, 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 trust agreement.
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 Infospace, and such Beneficiary Votes and the Voting Rights
represented thereby shall cease immediately upon the redemption of Exchangeable
Shares pursuant to Section 6 or 7 of the Share Provisions, or upon the effective
date of the liquidation, dissolution or winding-up of Infospace Canada pursuant
to Section 5 of the Share Provisions or upon the purchase of the Exchangeable
Shares by Infospace Nova Scotia pursuant to the exercise by Infospace Nova
Scotia of the Liquidation Call Right, Redemption Call Right or Retraction Call
Right.
ARTICLE 5
EXCHANGE RIGHT AND AUTOMATIC EXCHANGE
5.1 Grant and Ownership of the Exchange Right
Infospace hereby grants to the Trustee as trustee for and on behalf of, and
for the use and benefit of, the Beneficiaries the right (the "Exchange Right"),
upon the occurrence and during the continuance of an Insolvency Event, to
require Infospace to purchase from each or any Beneficiary all or any part of
the Exchangeable Shares held by the Beneficiary and the Automatic Exchange
Rights, all in accordance with the provisions of this trust agreement. Infospace
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
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Exchange Right and the Automatic Exchange Rights by Infospace to the Trustee.
During the term of the Trust and subject to the terms and conditions of this
trust agreement, the Trustee shall possess and be vested with full legal
ownership of the Exchange Right and the Automatic Exchange Rights and shall be
entitled to exercise all of the rights and powers of an owner with respect to
the Exchange Right and the Automatic Exchange Rights, provided that the Trustee
shall:
(a) hold the Exchange Right and the Automatic Exchange Rights and the
legal title thereto as trustee solely for the use and benefit of the
Beneficiaries in accordance with the provisions of this trust
agreement; and
(b) except as specifically authorized by this trust agreement, have no
power or authority to exercise or otherwise deal in or with the
Exchange Right or the Automatic Exchange Rights, 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 trust agreement.
5.2 Legended Share Certificates
Infospace Canada 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; and
(b) the Automatic Exchange Rights.
5.3 General Exercise of Exchange Right
The Exchange Right shall be and remain vested in and exercisable by the
Trustee. Subject to section 7.15, 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 Infospace for each Exchangeable Share to be
purchased by Infospace under the Exchange Right shall be an amount per share
equal to (a) the Current Market Price of an Infospace 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, which shall be satisfied in full by
Infospace causing to be sent to such holder one Infospace Common Share, plus (b)
to the extent not paid by Infospace Canada, an additional amount equivalent to
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. The purchase price for each such
Exchangeable Share so purchased may be satisfied only by
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Infospace issuing and delivering or causing to be delivered to the Trustee, on
behalf of the relevant Beneficiary, one Infospace 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).
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 books of Infospace Canada. 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 corporate trust
office in Toronto, Ontario or at such other places in Canada 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
Infospace 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 Business Corporations Act (Ontario) and the by-
laws of Infospace Canada and such additional documents and instruments as the
Trustee 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 Infospace
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 Infospace free and clear of all liens,
claims and encumbrances, (iii) the names in which the certificates representing
Infospace 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, Infospace Canada and Infospace of payment) of the
taxes (if any) payable as contemplated by section 5.8 of this trust agreement.
If only a part of the Exchangeable Shares represented by any certificate or
certificates delivered to the Trustee are to be purchased by Infospace under the
Exchange Right, a new certificate for the balance of such Exchangeable Shares
shall be issued to the holder at the expense of Infospace Canada.
5.6 Delivery of Infospace Common Shares; Effect of Exercise
Promptly after receipt of the certificates representing the Exchangeable
Shares which the Beneficiary desires Infospace 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 Infospace, the Trustee shall notify Infospace and
Infospace Canada of its receipt of the same, which notice to Infospace and
Infospace Canada shall constitute exercise of the Exchange Right by the Trustee
on behalf of the holder of such Exchangeable Shares, and Infospace shall
promptly thereafter deliver or cause to be delivered to the Trustee, for
delivery to the Beneficiary of such Exchangeable Shares (or to such other
persons, if any, properly designated by such Beneficiary) the number of
Infospace Common Shares issuable in connection with the exercise of the Exchange
Right, and on the applicable
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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, Infospace Canada and Infospace of the payment of
the taxes (if any) payable as contemplated by section 5.8 of this trust
agreement. Immediately upon the giving of notice by the Trustee to Infospace and
Infospace Canada 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 holder of such
Exchangeable Shares shall be deemed to have transferred to Infospace all of such
holder's right, title and interest in and to such Exchangeable Shares 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 his proportionate
part of the total purchase price therefor, unless the requisite number of
Infospace Common Shares is not allotted, issued and delivered by Infospace to
the Trustee within five Business Days of the date of the giving of such notice
by the Trustee, in which case the rights of the Beneficiary shall remain
unaffected until such Infospace Common Shares are so allotted, issued and
delivered by Infospace. Upon delivery by Infospace to the Trustee of such
Infospace Common Shares, the Trustee shall deliver such Infospace 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 Infospace Common Shares delivered to it
pursuant to the Exchange Right.
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 Infospace Canada to redeem any or all of the
Exchangeable Shares held by the Beneficiary (the "Retracted Shares") and is
notified by Infospace Canada pursuant to section [6.6] of the Share Provisions
that Infospace Canada will not be permitted as a result of solvency requirements
of applicable law to redeem all such Retracted Shares, and provided that
Infospace Nova Scotia 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 Infospace Canada pursuant to
section [6.7] of the Share Provisions, 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 Infospace Canada is unable to redeem. In any such event,
Infospace Canada 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 Beneficiary to Infospace Canada 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 Infospace Canada is not permitted to redeem and will require Infospace to
purchase such shares in accordance with the provisions of this Article 5.
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5.8 Stamp or Other Transfer Taxes
Upon any sale of Exchangeable Shares to Infospace pursuant to the Exchange
Right or the Automatic Exchange Rights, the share certificate or certificates
representing Infospace Common Shares to be delivered in connection with the
payment of the total purchase price therefor shall be issued in the name of the
Beneficiary 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 Infospace, Infospace Canada 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, Infospace and Infospace Canada 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, Infospace Canada and Infospace shall give written notice
thereof to the Trustee. As soon as practicable following the receipt of notice
from Infospace Canada and Infospace of the occurrence of an Insolvency Event, or
upon the Trustee becoming aware of an Insolvency Event, the Trustee will mail to
each Beneficiary, at the expense of Infospace, a notice of such Insolvency
Event, which notice shall contain a brief statement of the rights of the
Beneficiaries with respect to the Exchange Right.
5.10 Qualification of Infospace Common Shares
Infospace covenants that if any Infospace Common Shares to be issued and
delivered pursuant to the Exchange Right or the Automatic Exchange Rights
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 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 or state legal requirement before such
shares may be issued and delivered by Infospace 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 Infospace for purposes of Canadian provincial securities law
or an "affiliate" of Infospace for purposes of United States federal or state
securities law), Infospace will in good faith expeditiously take all such
actions and do all such things as are necessary or desirable to cause such
Infospace Common Shares to be and remain duly registered, qualified or approved.
Infospace will in good faith expeditiously take all such actions and do all such
things as are reasonably necessary or desirable to cause all Infospace Common
Shares to be delivered pursuant to the Exchange Right or the Automatic Exchange
Rights to be listed, quoted or posted for trading on all stock exchanges and
quotation systems on which outstanding Infospace Common Shares have been listed
by Infospace and remain listed and are quoted or posted for trading at such
time.
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5.11 Infospace Common Shares
Infospace hereby represents, warrants and covenants that the Infospace
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 Infospace
(a) Infospace will give the Trustee 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 of
Infospace to institute voluntary liquidation, dissolution or
winding-up proceedings with respect to Infospace or to effect any
other distribution of assets of Infospace among its shareholders
for the purpose of winding up its affairs, at least 60 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
Infospace of notice of, and (B) Infospace 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 Infospace or to effect any other
distribution of assets of Infospace among its shareholders for
the purpose of winding up its affairs, in each case where
Infospace has failed to contest in good faith any such proceeding
commenced in respect of Infospace within 30 days of becoming
aware thereof.
(b) As soon as practicable following receipt by the Trustee from Infospace
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. Such notice shall include a brief
description of the automatic exchange of Exchangeable Shares for
Infospace 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 Infospace Common Shares in the
distribution of assets of Infospace 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 Infospace Common Shares. To effect such automatic exchange,
Infospace 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 an Infospace Common
Share on the fifth Business Day prior to the Liquidation Event
Effective Date, which shall be satisfied in full by Infospace issuing
to the Beneficiary one Infospace Common Share, and (b) to the extent
not paid by Infospace Canada, an
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additional amount equivalent to 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.
(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 Infospace Common
Shares shall be deemed to have occurred, and each Beneficiary shall be
deemed to have transferred to Infospace 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 and shall cease to
be a holder of such Exchangeable Shares and Infospace shall issue to
the Beneficiary the Infospace Common Shares issuable upon the
automatic exchange of Exchangeable Shares for Infospace 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 Infospace Common Shares issued pursuant to the automatic
exchange of Exchangeable Shares for Infospace Common Shares and the
certificates held by the Beneficiary previously representing the
Exchangeable Shares exchanged by the Beneficiary with Infospace
pursuant to such automatic exchange shall thereafter be deemed to
represent Infospace Common Shares issued to the Beneficiary by
Infospace pursuant to such automatic exchange. Upon the request of a
Beneficiary and the surrender by the Beneficiary of Exchangeable Share
certificates deemed to represent Infospace Common Shares, duly
endorsed in blank and accompanied by such instruments of transfer as
Infospace may reasonably require, Infospace shall deliver or cause to
be delivered to the Beneficiary certificates representing Infospace
Common Shares of which the Beneficiary is the holder.
5.13 Withholding Rights
Infospace, Infospace Canada and the Trustee shall be entitled to deduct and
withhold from any consideration otherwise payable under this trust agreement to
any holder of Exchangeable Shares or Infospace Common Shares such amounts as
Infospace, Infospace Canada or the Trustee is required or permitted 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,
state, local or foreign tax law, in each case as amended or succeeded. 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 or permitted to be deducted or withheld from any payment to a
holder exceeds the cash portion of the consideration otherwise payable to the
holder, Infospace, Infospace Canada 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 Infospace, Infospace Canada or the Trustee, as
the case may be, to
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enable it to comply with such deduction or withholding requirement and
Infospace, Infospace Canada or the Trustee shall notify the holder thereof and
remit to such holder any unapplied balance of the net proceeds of such sale.
Infospace represents and warrants that, based upon facts currently known to it,
it has no current intention, as at the date of this Agreement, to deduct or
withhold from any dividend paid to holders of Exchangeable Shares any amounts
under the United States Internal Revenue Code of 1986.
ARTICLE 6
RESTRICTIONS ON ISSUE OF INFOSPACE SPECIAL VOTING STOCK
6.1 Issue of Additional Shares
During the term of this trust agreement, Infospace shall not, without the
consent of the holders at the relevant time of Exchangeable Shares, given in
accordance with subsection [10.2] of the Share Provisions, issue any Infospace
Special Voting Shares in addition to the Infospace Special Voting Share.
ARTICLE 7
CONCERNING THE TRUSTEE
7.1 Powers and Duties of the Trustee
The rights, powers, duties and authorities of the Trustee under this trust
agreement, in its capacity as Trustee of the Trust, shall include:
(a) receipt and deposit of the Infospace Special Voting Share from
Infospace as Trustee for and on behalf of the Beneficiaries in
accordance with the provisions of this trust agreement;
(b) granting proxies and distributing materials to Beneficiaries as
provided in this trust agreement;
(c) voting the Beneficiary Votes in accordance with the provisions of this
trust agreement;
(d) receiving the grant of the Exchange Right and the Automatic Exchange
Rights from Infospace as Trustee for and on behalf of the
Beneficiaries in accordance with the provisions of this trust
agreement;
(e) exercising the Exchange Right and enforcing the benefit of the
Automatic Exchange Rights, in each case in accordance with the
provisions of this trust agreement, and in connection therewith
receiving from Beneficiaries Exchangeable Shares and other requisite
documents and distributing to such Beneficiaries Infospace Common
Shares and cheques, if any, to which such
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Beneficiaries are entitled upon the exercise of the Exchange Right or
pursuant to the Automatic Exchange Rights, as the case may be;
(f) receiving the benefit of the Support Agreement from Infospace as
Trustee for and on behalf of the Beneficiaries in accordance with the
provisions thereof and of this trust agreement;
(g) enforcing the benefit of the Support Agreement in accordance with the
provisions thereof and of this trust agreement;
(h) holding title to the Trust Estate;
(i) investing any moneys, forming, from time to time, a part of the Trust
Estate as provided in this trust agreement;
(j) distributing any money, forming, from time to time, a part of the
Trust Estate as provided in this Trust and Exchange Agreement;
(k) taking action on its own initiative or at the direction of a
Beneficiary or Beneficiaries to enforce the obligations of Infospace
and Infospace Canada under this trust agreement and the Support
Agreement; and
(l) taking such other actions and doing such other things as are
specifically provided in this trust 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 trust
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 such discretionary rights, powers, duties
and authorities by the Trustee shall be final, conclusive and binding upon all
persons.
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 care, diligence and skill
that a reasonably prudent trustee would exercise in comparable circumstances.
7.2 No Conflict of Interest
The Trustee represents to Infospace and Infospace Canada that at the date
of execution and delivery of this trust agreement there exists no material
conflict of interest in the role of the Trustee as a fiduciary hereunder and the
role of the Trustee in any other capacity. 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 trust 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
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interested party may apply to the Ontario Court of Justice (General Division)
for an order that the Trustee be replaced as Trustee hereunder.
7.3 Dealings with Transfer Agents, Registrars, etc.
Infospace and Infospace Canada 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 Infospace 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 Infospace 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 Rights.
Infospace and Infospace Canada irrevocably authorize their respective
registrars and transfer agents to comply with all such requests. Infospace
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 and the Automatic Exchange Rights.
7.4 Books and Records
The Trustee shall keep available for inspection by Infospace and Infospace
Canada at the Trustee's principal corporate trust office in Toronto, Ontario
correct and complete books and records of account relating to the Trust created
by this trust agreement, including without limitation, all relevant data
relating to mailings and instructions to and from Beneficiaries. On or before
March 31, 2000, and on or before March 31 in every year thereafter, so long as
the Infospace Special Voting Share is on deposit with the Trustee, the Trustee
shall transmit to Infospace and Infospace Canada a brief report, dated as of the
preceding December 31, 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 the Beneficiaries in consideration of the issuance by
Infospace of Infospace Common Shares in connection with the Exchange
Right, during the calendar year ended on such December 31; and
(c) any action taken by the Trustee in the performance of its duties under
this trust agreement which it had not previously reported and which,
in the Trustee's opinion, materially affects the Trust Estate.
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7.5 Income Tax Returns and Reports
The Trustee shall, to the extent necessary, prepare and file 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.
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 trust agreement at the request, order or
direction of any Beneficiary upon such Beneficiary furnishing to the Trustee
reasonable security or 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 Infospace Special Voting
Share pursuant to Article 4, subject to section 7.15.
None of the provisions contained in this trust 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 trust agreement
for the purpose of enforcing any of its rights hereunder or in connection with
the Exchangeable Shares 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 security or
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, 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
The Trustee shall not be considered to be in contravention of any its
rights, powers, duties and authorities hereunder if, when required, it acts and
relies in good faith upon statutory declarations, certificates, opinions or
reports 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 statutory declarations, certificates, opinions or
reports comply with the provisions of section 7.9, if applicable, and with any
other applicable provisions of this trust agreement.
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7.9 Evidence and Authority to Trustee
Infospace and/or Infospace Canada shall furnish to the Trustee evidence of
compliance with the conditions provided for in this trust agreement relating to
any action or step required or permitted to be taken by Infospace and/or
Infospace Canada or the Trustee under this trust agreement or as a result of any
obligation imposed under this trust agreement, including, without limitation, in
respect of the Voting Rights or the Exchange Right or the Automatic Exchange
Rights and the taking of any other action to be taken by the Trustee at the
request of or on the application of Infospace and/or Infospace Canada promptly
if and when:
(a) such evidence is required by any other section of this trust 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 trust agreement, gives Infospace and/or
Infospace Canada written notice requiring it to furnish such evidence
in relation to any particular action or obligation specified in such
notice.
Such evidence shall consist of an Officer's Certificate of Infospace and/or
Infospace Canada 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 trust agreement.
Whenever such evidence relates to a matter other than the Voting Rights or
the Exchange Right or the Automatic Exchange Rights or the taking of any other
action to be taken by the Trustee at the request or on the application of
Infospace and/or Infospace Canada, and except as otherwise specifically provided
herein, such evidence may consist of a report or opinion of any solicitor,
attorney, auditor, accountant, appraiser, valuer, 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 Infospace and/or Infospace Canada 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 trust agreement shall include a statement by the person giving the
evidence:
(a) declaring that he has read and understands the provisions of this
trust 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.
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7.10 Experts, Advisers and Agents
The Trustee may:
(a) in relation to these presents act and rely on the opinion or advice of
or information obtained from any solicitor, attorney, auditor,
accountant, appraiser, valuer, engineer or other expert, whether
retained by the Trustee or by Infospace and/or Infospace Canada or
otherwise, and may employ such assistants as 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; and
(b) employ such agents and other assistants as it may reasonably require
for the proper 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 Investment of Moneys Held by Trustee
Unless otherwise provided in this trust agreement, any moneys held by or on
behalf of the Trustee which under the terms of this trust agreement may or ought
to be invested or which may be on deposit with the Trustee or which may be in
the hands of the Trustee may be invested and reinvested in the name or under the
control of the Trustee in securities in which, under the laws of the Province of
Ontario, trustees are authorized to invest trust moneys, provided that such
securities are stated to mature within two years after their purchase by the
Trustee, and the Trustee shall so invest such moneys on the written direction of
Infospace Canada. Pending the investment of any moneys as hereinbefore provided,
such moneys may be deposited in the name of the Trustee in any chartered bank in
Canada or, with the consent of Infospace Canada, in the deposit department of
the Trustee or any other loan or trust company authorized to accept deposits
under the laws of Canada or any province thereof at the rate of interest then
current on similar deposits.
7.12 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
trust agreement or otherwise in respect of the premises.
7.13 Trustee Not Bound to Act on Request
Except as in this trust agreement otherwise specifically provided, the
Trustee shall not be bound to act in accordance with any direction or request of
Infospace and/or Infospace Canada 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
23
empowered to act upon any such copy purporting to be authenticated and believed
by the Trustee to be genuine.
7.14 Authority to Carry on Business
The Trustee represents to Infospace and Infospace Canada that at the date
of execution and delivery by it of this trust agreement it is authorized to
carry on the business of a trust company in each of the Provinces of Canada but
if, notwithstanding the provisions of this section 7.14, it ceases to be so
authorized to carry on business, the validity and enforceability of this trust
agreement and the Voting Rights, the Exchange Right and the Automatic Exchange
Rights 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 any Province of Canada, either
become so authorized or resign in the manner and with the effect specified in
Article 10.
7.15 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 or Automatic Exchange Rights 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 or Automatic Exchange Rights 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 or
Automatic Exchange Rights 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.
(c) 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.
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7.16 Acceptance of Trust
The Trustee hereby accepts the Trust created and provided for by and in
this trust 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
Infospace and Infospace Canada jointly and severally agree to pay the
Trustee reasonable compensation for all of the services rendered by it under
this trust agreement and will reimburse the Trustee for all reasonable expenses
(including taxes other than taxes based on the net income of the Trustee) 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 trust agreement;
provided that Infospace and Infospace Canada 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
willful misconduct.
ARTICLE 9
INDEMNIFICATION AND LIMITATION OF LIABILITY
9.1 Indemnification of the Trustee
Infospace and Infospace Canada jointly and severally agree to indemnify and
hold harmless the Trustee and each of its directors, officers and agents
appointed and acting in accordance with this trust 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, willful
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 trust agreement, or any written or oral instruction
delivered to the Trustee by Infospace or Infospace Canada pursuant hereto.
In no case shall Infospace or Infospace Canada be liable under this
indemnity for any claim against any of the Indemnified Parties unless Infospace
and Infospace Canada 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, Infospace and Infospace Canada shall be entitled to
participate at their own expense in the defence and, if
25
Infospace and Infospace Canada 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 Infospace or Infospace Canada; or (ii)
the named parties to any such suit include both the Trustee and Infospace or
Infospace Canada, acting reasonably, and the Trustee shall have been advised by
counsel acceptable to Infospace or Infospace Canada that there may be one or
more legal defences available to the Trustee that are different from or in
addition to those available to Infospace or Infospace Canada and that, in the
judgment of such counsel, would present a conflict of interest were a joint
representation to be undertaken (in which case Infospace and Infospace Canada
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).
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 trust agreement, except to
the extent that such loss is attributable to the fraud, negligence,
recklessness, willful 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 Infospace and Infospace Canada
specifying the date on which it desires to resign, provided that such notice
shall not be given less than one month before such desired resignation date
unless Infospace and Infospace Canada 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, Infospace and Infospace
Canada shall, with the approval of a majority of the holders of Exchangeable
Shares in accordance with section 2.10.2 of the Share Provisions, promptly
appoint a successor trustee by written instrument in duplicate, one copy of
which shall be delivered to the resigning trustee and one copy to the successor
trustee.
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 affirmative vote of a majority of holders of Exchangeable Shares in
accordance with section 2.10.2 of the Share Provisions.
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10.3 Successor Trustee
Any successor trustee appointed as provided under this trust agreement
shall execute, acknowledge and deliver to Infospace and Infospace Canada 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 trust agreement, with the like effect as if originally
named as trustee in this trust agreement. However, on the written request of
Infospace and Infospace Canada 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 trust 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, Infospace, Infospace Canada 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,
Infospace and Infospace Canada shall cause to be mailed notice of the succession
of such trustee hereunder to each Beneficiary specified in a List. If Infospace
or Infospace Canada 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 Infospace and Infospace
Canada.
ARTICLE 11
INFOSPACE SUCCESSORS
11.1 Certain Requirements in Respect of Combination, etc.
Infospace and Infospace Canada 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
"Infospace Successor"), by operation of law, becomes, without, bound
by the terms and provisions of this trust 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
Infospace Successor of liability for all moneys payable and property
deliverable hereunder and the covenant of such Infospace Successor to
pay and deliver or cause to be
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delivered the same and its agreement to observe and perform all the
covenants and obligations of Infospace under this trust 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 substantially to preserve and not to
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 and, if required by section 11.1, Infospace Successor and
Infospace Canada or Infospace, as the case may be, shall execute and deliver the
supplemental trust agreement provided for in Article 12 and thereupon Infospace
Successor shall possess and from time to time may exercise each and every right
and power of Infospace Canada or Infospace, as the case may be, under this trust
agreement in the name of Infospace or otherwise any act or proceeding by any
provision of this trust agreement required to be done or performed by the Board
of Directors of Infospace or any officers of Infospace may be done and performed
with like force and effect by the directors or officers of such Infospace
Successor.
11.3 Wholly-Owned Subsidiaries
Nothing herein shall be construed as preventing the amalgamation or merger
of any wholly-owned direct or indirect subsidiary of Infospace, except Infospace
Canada, with or into Infospace or the winding-up, liquidation or dissolution of
any wholly-owned subsidiary of Infospace, other than Infospace Canada, provided
that all of the assets of such subsidiary are transferred to Infospace or
another wholly-owned direct or indirect subsidiary of Infospace, except
Infospace Canada, and any such transactions are expressly permitted by this
Article 11.
ARTICLE 12
AMENDMENTS AND SUPPLEMENTAL TRUST AGREEMENTS
12.1 Amendments, Modifications, etc.
This trust agreement may not be amended or modified except by an agreement
in writing executed by Infospace, Infospace Canada and the Trustee and approved
by the Beneficiaries in accordance with subsection [2.11.2] of the Share
Provisions.
12.2 Ministerial Amendments
Notwithstanding the provisions of section 12.1, the parties to this trust
agreement may in writing, at any time and from time to time, without the
approval of the Beneficiaries, amend or modify this trust 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 Infospace
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Canada and Infospace and the Trustee shall be of the good faith
opinion 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
trust 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 Infospace and Infospace Canada 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 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
Infospace, Infospace Canada 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 and the Board of Directors of each of
Infospace and Infospace Canada 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
Infospace Canada, at the request of Infospace, 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 by-laws of Infospace
Canada, the Share Provisions and all applicable laws.
12.4 Changes in Capital of Infospace and Infospace Canada
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 Infospace Common Shares or the Exchangeable Shares or both are in any way
changed, this trust agreement shall forthwith be amended and modified as
necessary in order that it shall apply with full force and effect, with
appropriate changes to all new securities into which Infospace 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
trust agreement otherwise permitted hereunder shall be effective unless made in
writing and signed by all of the parties hereto. From time to time Infospace
Canada (when authorized by a resolution of its Board of Directors), Infospace
(when authorized by a resolution of its 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:
29
(a) evidencing the succession of Infospace Successors and the covenants of
and obligations assumed by each such Infospace 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 trust agreement or the Voting Rights, the Exchange
Right or the Automatic Exchange Rights which, in the opinion of the
Trustee, 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 Infospace, Infospace
Canada, the Trustee or this trust agreement; and
(c) for any other purposes not inconsistent with the provisions of this
trust agreement, including without limitation, to make or evidence any
amendment or modification to this trust agreement as contemplated
hereby, provided that, in the opinion of the Trustee, the rights of
the Trustee and Beneficiaries will not be prejudiced thereby.
ARTICLE 13
TERMINATION
13.1 Term
The Trust created by this trust agreement shall continue until the earliest
to occur of the following events:
(a) no outstanding Exchangeable Shares are held by a Beneficiary; and
(b) each of Infospace and Infospace Canada elects in writing to terminate
the Trust and such termination is approved by the Beneficiaries in
accordance with subsection [2.11.2] of the Share Provisions.
13.2 Survival of Agreement
This trust 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 trust agreement.
ARTICLE 14
GENERAL
14.1 Severability
If any provision of this trust agreement is held to be invalid, illegal or
unenforceable, the validity, legality or enforceability of the remainder of this
trust agreement shall not in any way
30
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 trust 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 between the parties hereunder shall be
in writing and shall be deemed to have been given if delivered personally or by
confirmed telecopy to the parties at the following addresses (or at such other
address for such party as shall be specified in like notice):
if to
Attention: President
Telecopier No.:
if to Infospace:
Attention: General Counsel
Telecopier No.:
if to the Trustee:
Montreal Trust Company of Canada
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
Attention: Manager, Corporate Trust
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
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
31
received on the date of receipt thereof unless such day is not a Business Day in
which case it shall be deemed to have been given and received upon 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 Infospace Canada 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.
14.5 Counterparts
This trust agreement may be executed in counterparts, each of which shall
be deemed an original, but all of which taken together shall constitute one and
the same instrument.
14.6 Jurisdiction
This trust agreement shall be construed and enforced in accordance with the
laws of the Province of Ontario and the laws of Canada applicable therein.
14.7 Attornment
Each of the Trustee and Infospace and Infospace Canada agrees that any
action or proceeding arising out of or relating to this trust 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 final 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 hereby appoints Infospace Canada at its registered office in
the Province of Ontario as attorney for service of process.
IN WITNESS WHEREOF the parties hereto have caused this trust agreement to
be duly executed as of the date first above written.
▇▇▇▇▇▇▇▇▇.▇▇▇, INC.
By:________________________________
Name:
Title:
▇▇▇▇▇▇▇▇▇.▇▇▇ CANADA HOLDINGS INC.
32
By:________________________________
Name:
Title:
MONTREAL TRUST COMPANY OF CANADA
By:________________________________
Name:
Title:
By:_____________________________C.S.
Name:
Title: