VOTING, SUPPORT AND EXCHANGE TRUST AGREEMENT
AGREEMENT dated for reference the 30th day of September, 1999
BETWEEN:
VOICE MOBILITY INTERNATIONAL, INC., a corporation existing
under the laws of the State of Nevada (the "Parent"),
AND:
VOICE MOBILITY CANADA LIMITED, a corporation existing under
the laws of Canada (the "Corporation"),
AND:
OWEN, BIRD, barristers and solicitors, a partnership existing
under the laws of the Province of British Columbia (the
"Trustee").
WHEREAS:
A. The Corporation has offered to acquire all of the outstanding Common
Shares of Voice Mobility Inc. in consideration for Preferred Shares
of the Corporation.
B. Holders of Preferred Shares will be entitled to require the Corporation
to redeem such Shares and upon such redemption each Preferred Share
shall be exchanged by the Corporation for one share of Parent Common
Stock (as hereinafter defined).
C. The Parent intends to grant to and in favour of Non-Affiliated Holders
(as hereinafter defined) from time to time of Preferred Shares the
right, in the circumstances set forth herein, to require the Parent or,
at the option of the Parent, VM Sub (as hereinafter defined) to
purchase from each Non-Affiliated Holder all or any part of the
Preferred Shares held by the Non-Affiliated Holder.
D. The parties desire to make appropriate provision and to establish a
procedure whereby certain voting rights in the Parent shall be
exercisable by Non-Affiliated Holders from time to time of Preferred
Shares by and through the Trustee, which will hold legal title to the
Voting Share (as hereinafter defined) to which voting rights attach for
the benefit of Non-Affiliated Holders and whereby the rights to require
the Parent or, at the option of the Parent, VM Sub to purchase
Preferred Shares from the Non-Affiliated Holders shall be exercisable
by Non-Affiliated Holders from time to time of Preferred Shares by and
through the Trustee, which will hold legal title to such rights for the
benefit of Non-Affiliated Holders.
E. The parties desire to make appropriate provision and to establish a
procedure whereby the Parent will take certain actions and make certain
payments and deliveries necessary to ensure that the Corporation and VM
Sub will be able to make certain payments and to deliver or cause to be
delivered shares of Parent Common Stock in satisfaction of the
obligations of the Corporation and/or VM Sub under the Preferred Share
Provisions (as hereinafter defined) and this agreement.
F. These recitals and any statements of fact in this agreement are made by
the Parent and the Corporation and not by the Trustee.
NOW THEREFORE, in consideration of the respective covenants and agreements
provided in this agreement and for other good and valuable consideration (the
receipt and sufficiency of which are hereby acknowledged), the parties agree as
follows:
ARTICLE 1
DEFINITIONS AND INTERPRETATION
1.1 Definitions. In this agreement, unless something in the subject matter
or context is inconsistent therewith:
"Automatic Exchange Rights" means the automatic exchange of shares of
Parent Common Stock for Preferred Shares pursuant to Section 5.3 of the
Preferred Share Provisions.
"Board of Directors" means the board of directors of the Corporation.
"Business Day" means a day other than a Saturday, a Sunday or a day
when banks are not open for business in Vancouver, British Columbia.
"Canadian Dollar Equivalent" means in respect of an amount expressed in
a foreign currency (the "Foreign Currency Amount") at any date the
product obtained by multiplying (a) the Foreign Currency Amount by (b)
the official noon spot exchange rate on such date for such foreign
currency 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 as may be deemed by the Board of Directors to be
appropriate for such purpose.
"Company Redemption Date" has the meaning set out in Section 1.1 of the
Preferred Share Provisions.
"Current Market Price" means, in respect of a share of Parent Common
Stock on any date, the Canadian Dollar Equivalent of the average
closing sales price of shares of Parent Common Stock during a period of
20 consecutive trading days ending not more than five trading days
before such date on Nasdaq or, if the shares of Parent Common Stock are
not then listed on Nasdaq, on such other stock exchange or automated
quotation system on which the shares of Parent Common Stock 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 Parent Common Stock during such period is inadequate to create a
market that reflects the fair market value of the Parent Common Stock,
then the Current Market Price of a share of Parent Common Stock shall
be determined by the Board of Directors based upon the advice of such
qualified independent financial advisors as the Board of Directors may
deem to be appropriate, and provided further that any such selection,
opinion or determination by the Board of Directors shall be conclusive
and binding.
"Dividend Amount" has the meaning set out in Section 1.1 of the Pre-
ferred Share Provisions.
"Effective Date" means the date of closing of the purchase and sale of
the shares of Voice Mobility Inc. under the Offer.
"Exchange Right" has the meaning set out in section 5.1 hereof.
"Insolvency Event" means the institution by the Corporation of any
proceeding to be adjudicated a bankrupt or insolvent or to be dissolved
or wound up, or the consent of the Corporation to the institution of
bankruptcy, insolvency, dissolution or winding-up proceedings against
it, or the filing by the Corporation 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 the Corporation to contest in good faith
any such proceedings commenced by a third party in respect of the
Corporation within 15 days of becoming aware thereof, or the consent by
the Corporation to the filing of any such petition or to the
appointment of a receiver, or the making by the Corporation of a
general assignment for the benefit of creditors, or the admission in
writing by the Corporation of its inability to pay its debts generally
as they become due, or the Corporation not being permitted, pursuant to
solvency requirements or other provisions of applicable law, to redeem
any Retracted Shares pursuant to Section 6.1(4) of the Preferred Share
Provisions.
"Liquidation Amount" has the meaning set out in Section 5.1(1) of the
Preferred Share Provisions.
"Liquidation Call Right" has the meaning set out in Section 5.2(1) of
the Preferred Share Provisions.
"List" has the meaning set out in section 4.6 hereof.
"Nasdaq" means the Nasdaq Small Cap or National Market System, an
electronic securities market operated by The Nasdaq National Market
Stock Market, Inc., a wholly-owned subsidiary of the National
Association of Securities Dealers, Inc.
"Non-Affiliated Holder Votes" has the meaning set out in section 4.2
hereof.
"Non-Affiliated Holders" means the registered holders of Preferred
Shares other than the Parent and its Subsidiaries.
"Offer" means the offer by the Corporation to acquire all of the
outstanding Common Shares of Voice Mobility Inc.
"Officer's Certificate" means, with respect to the Parent or the
Corporation, as the case may be, a certificate signed by any one of the
Chairman of the Board, the President, any Vice-President or any other
executive officer of the Parent or the Corporation, as the case may be.
"Parent Board of Directors" means the board of directors of the Parent.
"Parent Common Stock" means the shares of Common Stock of the Parent,
par value US$0.001 per share, having voting rights of one vote per
share, and any other securities into which such shares may be changed
or for which such shares may be exchanged (whether or not the Parent
shall be the issuer of such other securities) or any other
consideration which may be received by the holders of such shares,
pursuant to a recapitalization, reconstruction, reorganization or
reclassification of, or amalgamation, merger, liquidation or similar
transaction, affecting such shares.
"Parent Consent" has the meaning set out in section 4.2 hereof.
"Parent Meeting" has the meaning set out in section 4.2 hereof.
"Parent Successor" has the meaning set out in section 11.1 hereof.
"Preferred Share Provisions" means the rights, privileges, restrictions
and conditions attaching to the Preferred Shares.
"Preferred Shares" means the Preferred shares to be issued by the
Corporation pursuant to the Offer.
"Redemption Call Right" has the meaning set out in Section 7.2(1) of
the Preferred Share Provisions.
"Redemption Price" has the meaning set out in Section 7.1(1) of the
Preferred Share Provisions.
"Retracted Shares" has the meaning set out in section 5.7 hereof.
"Retraction Call Right" has the meaning set out in Section 6.2(1) of
the Preferred Share Provisions.
"Retraction Price" has the meaning set out in Section 6.1(1) of the
Preferred Share Provisions.
"Subsidiary" of the Parent means any corporation more than 50% of the
outstanding stock of which is owned, directly or indirectly, by the
Parent, by one or more other Subsidiaries of the Parent or by the
Parent and one or more other Subsidiaries of the Parent.
"Tender Offer" has the meaning set out in section 6.8 hereof.
"Trust" means the trust created by this agreement.
"Trust Estate" means the Voting Share, any other securities, the
Exchange Right and any money or other rights or assets that may be held
by the Trustee from time to time pursuant to this agreement.
"Trustee" means Owen, Bird, barristers and solicitors, a partnership
existing under the laws of the Province of British Columbia and,
subject to the provisions of Article 10 hereof, includes any successor
trustee or permitted assigns.
"VM Sub" means VM Sub Limited, a wholly-owned Subsidiary of the Parent
existing under the laws of Canada.
"Voting Rights" means the voting rights attached to the Voting Share.
"Voting Share" means the one share of Series B Special Voting Preferred
Share, par value US$0.001, issued by the Parent to and deposited with
the Trustee, which entitles the holder of record to a number of votes
at meetings of holders of Parent Common Stock equal to the number of
Preferred Shares outstanding from time to time that are held by
Non-Affiliated Holders.
1.2 Interpretation Not Affected by Headings, etc. The division of this agreement
into articles and sections and the insertion of headings are for reference
purposes only and shall not affect the interpretation of this agreement. Unless
otherwise indicated, any reference in this agreement to an article or section
refers to the specified article or section of this agreement.
1.3 Number, Gender and Persons. In this agreement, unless the context otherwise
requires, words importing the singular number include the plural and vice versa,
words importing any gender include all genders and words importing persons
include individuals, corporations, partnerships, companies, associations,
trusts, unincorporated organizations, governmental bodies and other legal or
business entities of any kind.
1.4 Date for Any Action. 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.
1.5 Payments. All payments to be made hereunder will be made without interest
and less any tax required by Canadian law to be deducted and withheld.
1.6 Currency. In this agreement, unless stated otherwise, all dollar amounts are
in Canadian dollars.
ARTICLE 2
TRUST
2.1 Establishment of Trust. One of the purposes of this agreement is to create
the Trust for the benefit of the Non-Affiliated Holders, as herein provided. The
Trustee will hold the Voting Share in order to enable the Trustee to exercise
the Voting Rights and will hold the Exchange Right in order to enable the
Trustee to exercise such right and will hold the other rights granted in or
resulting from the Trustee being a party to this agreement in order to enable
the Trustee to exercise or enforce such rights, in each case as trustee for and
on behalf of the Non-Affiliated Holders as provided in this agreement.
ARTICLE 3
VOTING SHARE
3.1 Issue and Ownership of the Voting Share. Simultaneously with the execution
and delivery of this agreement, the Parent will issue to and deposit with the
Trustee the 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 Non-Affiliated
Holders, in accordance with the provisions of this agreement. The Parent hereby
acknowledges receipt from the Trustee as trustee for and on behalf of the
Non-Affiliated Holders of good and valuable consideration (and the adequacy
thereof) for the issuance of the Voting Share by the Parent 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 Voting Share and shall be entitled to exercise all of the rights and powers
of an owner with respect to the Voting Share, provided that the Trustee shall:
(a) hold the Voting Share and the legal title thereto as trustee solely
for the use and benefit of the Non-Affiliated Holders 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
Voting Share and the Voting Share shall not be used or disposed of by
the Trustee for any purpose other than the purposes for which the
Trust is created pursuant to this agreement.
3.2 Legended Share Certificates. The Corporation will cause each certificate
representing Preferred Shares to bear an appropriate legend notifying the
Non-Affiliated Holders of their right to instruct the Trustee with respect to
the exercise of the Voting Rights with respect to the Preferred Shares held by a
Non-Affiliated Holder.
3.3 Safekeeping of Certificate. The certificate representing the Voting Share
shall at all times be held in safe keeping by the Trustee or its agent.
ARTICLE 4
EXERCISE OF VOTING RIGHTS
4.1 Voting Rights. The Trustee, as the holder of record of the Voting Share,
shall be entitled to all of the Voting Rights, including the right to consent to
or to vote in person or by proxy the Voting Share, on any matter, question or
proposition whatsoever that may come before the shareholders of the Parent at a
Parent Meeting or in connection with a Parent Consent. The Voting Rights shall
be and remain vested in and exercised by the Trustee. Subject to section 7.14
hereof, the Trustee shall exercise the Voting Rights only on the basis of
instructions received pursuant to this Article 4 from Non-Affiliated Holders
entitled to instruct the Trustee as to the voting thereof at the time at which
the Parent Consent is sought or the Parent Meeting is held. To the extent that
no instructions are received from a Non-Affiliated Holder with respect to the
Voting Rights to which such Non-Affiliated Holder is entitled, the Trustee shall
not exercise or permit the exercise of the Voting Rights relating to such
Non-Affiliated Holder's Preferred Shares.
4.2 Number of Votes. With respect to all meetings of shareholders of the Parent
at which holders of shares of Parent Common Stock are entitled to vote (a
"Parent Meeting") and with respect to all written consents sought from the
holders of shares of Parent Common Stock (a "Parent Consent"), each
Non-Affiliated Holder shall be entitled to instruct the Trustee to cast and
exercise, in the manner instructed, one vote for each Preferred Share owned of
record by such Non-Affiliated Holder on the record date established by the
Parent or by applicable law for such Parent Meeting or Parent Consent, as the
case may be (the "Non-Affiliated Holder Votes") in respect of each matter,
question or proposition to be voted on at such Parent Meeting or to be consented
to in connection with such Parent Consent.
4.3 Mailings to Shareholders. With respect to each Parent Meeting and Parent
Consent, Parent will cause to be mailed (or otherwise communicate in the same
manner that the Parent utilizes in communications to holders of Parent Common
Stock) to each of the Non-Affiliated Holders named in the List on the same day
as the initial mailing or notice (or other communication) with respect thereto
is given by the Parent to its shareholders:
(a) a copy of such notice, together with any proxy or information
statement and related materials to be provided to shareholders of the
Parent;
(b) a statement that such Non-Affiliated Holder is entitled, subject to
the provisions of section 4.7 hereof, to instruct the Trustee as to
the exercise of the Non-Affiliated Holder Votes with respect to such
Parent Meeting or Parent Consent, as the case may be, or, pursuant and
subject to section 4.7 hereof, to attend such Parent Meeting and to
exercise personally the Non-Affiliated Holder Votes thereat;
(c) a statement as to the manner in which such instructions may be given
to the Trustee, including, in the case of a Parent Meeting, an express
indication that instructions may be given to the Trustee to give:
(i) a proxy to such Non-Affiliated Holder or its duly
appointed designee to exercise personally such
holder's Non-Affiliated Holder Votes; or
(ii) a proxy to a duly appointed designated agent or other
representative of the management of the Parent to
exercise such Non-Affiliated Holder Votes;
(d) a statement that if no such instructions are received from the
Non-Affiliated Holder, the Non-Affiliated Holder Votes to which such
Non-Affiliated Holder is entitled will not be exercised;
(e) a form of direction whereby the Non-Affiliated Holder may so direct
and instruct the Trustee as contemplated herein; and
(f) a statement of (i) 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 Parent Meeting shall not be earlier than the close of
business on the second Business Day prior to such meeting, and (ii)
the method for revoking or amending such instructions.
The materials referred to above are to be provided by the Parent to the
Non-Affiliated Holders, but shall be subject to prior review and comment by the
Trustee. For the purpose of determining Non-Affiliated Holder Votes to which a
Non-Affiliated Holder is entitled in respect of any such Parent Meeting or
Parent Consent, the number of Preferred Shares owned of record by the
Non-Affiliated Holder shall be determined at the close of business on the record
date established by the Parent or by applicable law for purposes of determining
shareholders entitled to vote at such Parent Meeting or to give written consent
in connection with such Parent Consent. The Parent will notify the Trustee in
writing of any decision of the board of directors of the Parent with respect to
the calling of any such Parent Meeting or the seeking of any such Parent 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
review and comment on such information and materials prior to the Parent
performing its obligations contemplated by this section 4.3.
4.4 Copies of Shareholder Information. The Parent will deliver to the
Non-Affiliated Holders copies of all proxy materials (including notices of
Parent Meetings but excluding proxies to vote shares of Parent Common Stock),
information statements, reports (including without limitation all interim and
annual financial statements) and other written communications that are to be
distributed from time to time to holders of Parent Common Stock at the same time
as such materials are first sent to holders of Parent Common Stock.
4.5 Other Materials. Immediately after receipt by the Parent or any shareholder
of the Parent of any material sent or given generally to the holders of Parent
Common Stock by or on behalf of a third party, including without limitation
dissident proxy and information circulars (and related information and material)
and tender and exchange offer circulars (and related information and material),
the Parent shall use its best efforts to obtain and forward such material
(unless the same has been provided directly to Non-Affiliated Holders by such
third party) to each Non-Affiliated Holder as soon as practicable thereafter.
4.6 List of Persons Entitled to Vote. The Corporation shall, (a) prior to each
annual, general and special Parent Meeting or the seeking of any Parent 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 Non-Affiliated Holders arranged in alphabetical order and showing the number
of Preferred Shares held of record by each such Non-Affiliated Holder, 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 Parent Meeting
or a Parent Consent, at the close of business on the record date established by
the Parent or pursuant to applicable law for determining the holders of Parent
Common Stock entitled to receive notice of and/or to vote at such Parent Meeting
or to give consent in connection with such Parent Consent. Each such List shall
be delivered to the Trustee promptly after receipt by the Corporation of such
request or the record date for such meeting or seeking of consent, as the case
may be. The Parent agrees to give the Corporation written notice (with a copy to
the Trustee) of the calling of any Parent Meeting or the seeking of any Parent
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 the
Corporation to perform its obligations under this section 4.6.
4.7 Entitlement to Direct Votes. Any Non-Affiliated Holder named in a List
prepared in connection with any Parent Meeting or any Parent Consent will be
entitled (a) to instruct the Trustee in the manner described in section 4.3
hereof with respect to the exercise of the Non-Affiliated Holder Votes to which
such Non-Affiliated Holder is entitled or (b) to attend such meeting and
personally to exercise thereat (or to exercise with respect to any written
consent), as the proxy of the Trustee, the Non-Affiliated Holder Votes to which
such Non-Affiliated Holder is entitled or (c) to appoint a third party as the
proxy of the Trustee to attend such meeting and exercise thereat the
Non-Affiliated Holder's voting rights to which such Non-Affiliated Holder is
entitled except, in each case, to the extent that such Non-Affiliated Holder has
transferred the ownership of any Preferred Shares in respect of which such
Non-Affiliated Holder is entitled to Non-Affiliated Holder Votes after the close
of business on the record date for such meeting and the transferee establishes
ownership of the Preferred Shares and demands, not later than ten days before
the Parent Meeting, that the transferee be entitled to the Non-Affiliated Votes
attaching to such Preferred Shares at the Parent Meeting.
4.8 Voting by Trustee and Attendance of Trustee Representative at Meeting.
(1) In connection with each Parent Meeting and Parent Consent, the
Trustee shall exercise, either in person or by proxy, in
accordance with the instructions received from a
Non-Affiliated Holder pursuant to section 4.3 hereof, the
Non-Affiliated Holder Votes as to which such Non-Affiliated
Holder 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 Non-Affiliated Holder prior to the time and
date fixed by it for receipt of such instructions in the
notice given by Parent to the Non-Affiliated Holder pursuant
to section 4.3 hereof.
(2) The Trustee shall cause such representatives as are empowered
by it to sign and deliver, on behalf of the Trustee, proxies
for Voting Rights enabling a Non-Affiliated Holder to attend
each Parent Meeting. Upon submission by a Non-Affiliated
Holder (or its duly appointed designee) of identification
satisfactory to the Trustee or the Trustee's representatives,
and at the Non-Affiliated Holder's request, such
representatives shall sign and deliver to such Non-Affiliated
Holder (or its duly appointed designee) a proxy to exercise
personally the Non-Affiliated Holder Votes as to which such
Non-Affiliated Holder is otherwise entitled hereunder to
direct the vote, if such Non-Affiliated Holder either (i) has
not previously given the Trustee instructions pursuant to
section 4.3 hereof in respect of such meeting, or (ii) submits
to the Trustee's representatives written revocation of any
such previous instructions in accordance with the requirements
specified by the Parent in the materials provided to the
Non-Affiliated Holder pursuant to section 4.3(f)(ii) hereof.
At such meeting, the Non-Affiliated Holder exercising such
Non-Affiliated Holder Votes shall have the same rights as the
Trustee to speak at the meeting in respect of any matter,
question or proposition, to vote by way of ballot at the
meeting in respect of any matter, question 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 to be distributed
by Parent or the Corporation to the Non-Affiliated Holders pursuant to this
agreement shall be delivered or sent by mail (or otherwise communicated in the
same manner as the Parent utilizes in communications to holders of Parent Common
Stock) to each Non-Affiliated Holder at its address as shown on the books of the
Corporation. The Corporation shall provide or cause to be provided to Parent for
this purpose, on a timely basis and without charge or other expense:
(a) current lists of the Non-Affiliated Holders; and
(b) upon the request of the Parent, mailing labels to enable the Parent to
carry out its duties under this agreement.
The materials referred to above which are to be provided by the Parent shall be
subject to prior review and comment by the Trustee.
4.10 Termination of Voting Rights. All the rights of a Non-Affiliated Holder
with respect to the Non-Affiliated Holder Votes exercisable in respect of the
Preferred Shares held by such Non-Affiliated Holder, including the right to
instruct the Trustee as to the voting of or to vote personally such
Non-Affiliated Holder Votes, shall be deemed to be surrendered by the
Non-Affiliated Holder to the Parent and such Non-Affiliated Holder Votes and the
Voting Rights represented thereby shall cease immediately upon the delivery by
such Non-Affiliated Holder to the Trustee of the certificates representing such
Preferred Shares in connection with the exercise by the Non-Affiliated Holder of
the Exchange Right or the occurrence of the automatic exchange of Preferred
Shares for shares of Parent Common Stock, in either case as specified in Article
5 hereof, or upon the redemption of Preferred Shares pursuant to Article 6 or
Article 7 of the Preferred Share Provisions, or upon the effective date of the
liquidation, dissolution or winding-up of the Corporation or any other
distribution of the assets of the Corporation among its shareholders for the
purpose of winding up its affairs pursuant to Article 5 of the Preferred Share
Provisions, or upon the purchase of Preferred Shares from the holder thereof by
the Parent or VM Sub pursuant to the exercise by the Parent or VM Sub of the
Retraction Call Right, the Redemption Call Right or the Liquidation Call Right
(unless in any case the Corporation, the Parent or VM Sub shall not have
delivered the requisite shares of Parent Common Stock and cheque, if any,
deliverable in exchange therefor to the Trustee for delivery to the
Non-Affiliated Holders).
ARTICLE 5
EXCHANGE RIGHT AND PARENT SUPPORT
5.1 Grant and Ownership of the Exchange Right. The Parent hereby grants to the
Trustee as trustee for and on behalf of, and for the use and benefit of, the
Non-Affiliated Holders the right (the "Exchange Right"), upon the occurrence and
during the continuance of an Insolvency Event, to require the Parent to purchase
or to cause VM Sub to purchase from each or any Non-Affiliated Holder all or any
part of the Preferred Shares held by the Non-Affiliated Holder, all in
accordance with the provisions of this agreement. 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 and shall
be entitled to exercise all of the rights and powers of an owner with respect to
the Exchange Right, provided that the Trustee shall:
(1) hold the Exchange Right and the legal title thereto as trustee
solely for the use and benefit of the Non-Affiliated Holders
in accordance with the provisions of this agreement; and
(2) except as specifically authorized by this agreement, have no
power or authority to exercise or otherwise deal in or with
the Exchange Right, and the Trustee shall not exercise such
right for any purpose other than the purposes for which this
Trust is created pursuant to this agreement.
5.2 Legended Share Certificates. The Corporation will cause each certificate
representing Preferred Shares to bear an appropriate legend notifying the
Non-Affiliated Holders of their right to instruct the Trustee with respect to
the exercise of the Exchange Right in respect of the Preferred Shares held by a
Non-Affiliated Holder.
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 hereof, the
Trustee shall exercise the Exchange Right only on the basis of instructions
received pursuant to this Article 5 from Non-Affiliated Holders entitled to
instruct the Trustee as to the exercise thereof. To the extent that no
instructions are received from a Non-Affiliated Holder 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 the Parent or VM Sub for each
Preferred Share to be purchased by the Parent or VM Sub under the Exchange Right
shall be an amount per share equal to (a) the Current Market Price of a share of
Parent Common Stock on the last Business Day prior to the day of closing of the
purchase and sale of such Preferred Share under the Exchange Right, which shall
be satisfied in full by causing to be delivered to such holder one share of
Parent Common Stock, plus (b) the Dividend Amount, if any. The purchase price
for each such Preferred Share so purchased may be satisfied only by the Parent
or VM Sub delivering or causing to be delivered to the Trustee, on behalf of the
relevant Non-Affiliated Holder, one share of Parent Common Stock and a cheque
for the balance, if any, of the purchase price, without interest.
5.5 Exercise Instructions. Subject to the terms and conditions herein set forth,
a Non-Affiliated Holder 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 Preferred Shares
registered in the name of such Non-Affiliated Holder on the books of the
Corporation. To cause the exercise of the Exchange Right by the Trustee, the
Non-Affiliated Holder shall deliver to the Trustee, in person or by certified or
registered mail, at its address set out in section 14.3 or at such other place
as the Trustee may from time to time designate by written notice to the
Non-Affiliated Holders, the certificates representing the Preferred Shares which
such Non-Affiliated Holder desires the Parent to purchase, duly endorsed in
blank, and accompanied by such other documents and instruments as may be
required to effect a transfer of Preferred Shares under the Canada Business
Corporations Act and the by-laws of the Corporation and such additional
documents and instruments as the Trustee, the Parent or the Corporation 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 Preferred
Share certificates, stating (i) that the Non-Affiliated Holder thereby instructs
the Trustee to exercise the Exchange Right so as to require the Parent or VM Sub
to purchase from the Non-Affiliated Holder the number of Preferred Shares
specified therein, (ii) that such Non-Affiliated Holder has good title to and
owns all such Preferred Shares to be acquired by the Parent or VM Sub free and
clear of all liens, claims and encumbrances, (iii) the names in which the
certificates representing Parent Common Stock 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, the Corporation and the Parent of
payment) of the taxes (if any) payable as contemplated by section 5.8 of this
agreement. If only a portion of the Preferred Shares represented by any
certificate delivered to the Trustee are to be purchased by the Parent or VM Sub
under the Exchange Right, a new certificate for the balance of such Preferred
Shares shall be issued to the holder at the expense of the Corporation.
5.6 Delivery of Parent Common Stock; Effect of Exercise. Promptly after receipt
of the certificates representing the Preferred Shares that a Non-Affiliated
Holder desires the Parent or VM Sub 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) duly endorsed for transfer to
the Parent or VM Sub, the Trustee shall notify the Parent and the Corporation of
its receipt of the same, which notice to the Parent and the Corporation shall
constitute exercise of the Exchange Right by the Trustee on behalf of the holder
of such Preferred Shares, and the Parent shall immediately thereafter deliver or
cause VM Sub to deliver to the Trustee, for delivery to the Non-Affiliated
Holder of such Preferred Shares (or to such other persons, if any, properly
designated by such Non-Affiliated Holder), a certificate for the number of
shares of Parent Common Stock deliverable in connection with such exercise of
the Exchange Right (which shares shall be duly issued as fully paid and
non-assessable and shall be free and clear of any lien, claim or encumbrance,
security interest or adverse claim) and a cheque for the balance, if any, of the
purchase price therefor, without interest; provided, however, that no such
delivery shall be made unless and until the Non-Affiliated Holder requesting the
same shall have paid (or provided evidence satisfactory to the Trustee, the
Corporation and the Parent 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 the Parent and the Corporation 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 Non-Affiliated Holder of such Preferred Shares shall be deemed
to have transferred to the Parent (or, at the Parent's option, to VM Sub) all of
its right, title and interest in and to such Preferred Shares and the related
interest in the Trust Estate and shall not be entitled to exercise any of the
rights of a holder in respect thereof, other than the right to receive its
proportionate part of the total purchase price therefor, unless the requisite
number of shares of Parent Common Stock (together with a cheque for the balance,
if any, of the total purchase price therefor, without interest) is not allotted,
issued and delivered by the Parent or VM Sub to the Trustee, for delivery to
such Non-Affiliated Holder (or to such other persons, if any, properly
designated by such Non-Affiliated Holder), within five Business Days of the date
of the giving of such notice by the Trustee, in which case the rights of the
Non-Affiliated Holder shall remain unaffected until such shares of Parent Common
Stock are so allotted, issued and delivered and any such cheque is so delivered
and paid. Concurrently with the closing of the transaction of purchase and sale
contemplated by the Exchange Right, such Non-Affiliated Holder shall be
considered and deemed for all purposes to be the holder of the shares of Parent
Common Stock delivered to it pursuant to the Exchange Right.
5.7 Exercise of Exchange Right Subsequent to Retraction. In the event that a
Non-Affiliated Holder has exercised its right under Article 6 of the Preferred
Share Provisions to require the Corporation to redeem any or all of the
Preferred Shares held by the Non-Affiliated Holder (the "Retracted Shares") and
is notified by the Corporation pursuant to Section 6.1(4) of the Preferred Share
Provisions that the Corporation will not be permitted as a result of solvency
requirements of applicable law to redeem all such Retracted Shares, provided
that neither the Parent nor VM Sub shall have exercised its Retraction Call
Right with respect to the Retracted Shares and that the Non-Affiliated Holder
shall not have revoked the retraction request delivered by the Non-Affiliated
Holder to the Corporation pursuant to Section 6.1(5) of the Preferred Share
Provisions, the retraction request will constitute and will be deemed to
constitute notice from the Non-Affiliated Holder to the Trustee instructing the
Trustee to exercise the Exchange Right with respect to those Retracted Shares
that the Corporation is unable to redeem. In any such event, the Corporation
hereby agrees with the Trustee and in favour of the Non-Affiliated Holder
immediately to forward or cause to be forwarded to the Trustee all relevant
materials delivered by the Non-Affiliated Holder to the Corporation (including
without limitation a copy of the retraction request delivered pursuant to
Section 6.1(1) of the Preferred 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 the
Corporation is not permitted to redeem and will require the Parent or, at the
Parent's option, VM Sub, to purchase such shares in accordance with the
provisions of this Article 5.
5.8 Stamp or Other Transfer Taxes. Upon any sale of Preferred Shares to the
Parent or VM Sub pursuant to the Exchange Right, the share certificate or
certificates representing the Parent Common Stock to be delivered in connection
with the payment of the total purchase price therefor shall be issued in the
name of the Non-Affiliated Holder of the Preferred Shares so sold or in such
names as such Non-Affiliated Holder may otherwise direct in writing without
charge to the holder of the Preferred Shares so sold, provided, however, that
such Non-Affiliated Holder (a) shall pay (and none of the Parent, VM Sub, the
Corporation or the Trustee shall be required to pay) any documentary, stamp,
transfer or other similar 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
Non-Affiliated Holder or (b) shall have established to the satisfaction of the
Trustee, the Parent, VM Sub and the Corporation that such taxes, if any, have
been paid.
5.9 Notice of Insolvency Event. Immediately upon 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, the Corporation and the Parent shall give written
notice thereof to each Non-Affiliated Holder of the Preferred Shares and to the
Trustee, which notice shall contain a brief statement of the rights of the
Non-Affiliated Holders with respect to the Exchange Right.
5.10 Parent Ownership of VM Sub. Notwithstanding any of the other provisions of
this agreement, so long as any Preferred Shares are outstanding, 100% of the
common shares of VM Sub shall be owned, directly or indirectly, by the Parent.
5.11 Call Rights. The Liquidation Call Right, the Redemption Call Right and the
Retraction Call Right are hereby agreed, acknowledged and confirmed, and it is
agreed and acknowledged that such rights are granted as part of the
consideration for the obligations of the Parent under this agreement.
5.12 Grant and Ownership of Automatic Exchange Rights. The Parent hereby grants
the Automatic Exchange Rights to the Trustee as trustee for and on behalf of,
and for the use and benefit of, the Non-Affiliated Holders. The Parent hereby
acknowledges receipt from the Trustee, as trustee for and on behalf of the
Non-Affiliated Holders, of good and valuable consideration (and the adequacy
thereof) for the grant of the Automatic Exchange Rights by the Parent to the
Trustee. During the term of the Trust and subject to the terms and conditions of
this agreement and the Preferred Share Provisions, the Trustee shall possess and
be vested with full legal ownership of the Automatic Exchange Rights and shall
be entitled to exercise all of the rights and powers of an owner with respect to
the Automatic Exchange Rights, provided that the Trustee shall:
(a) hold the Automatic Exchange Rights and the legal title thereto as
trustee solely for the use and benefit of the Non-Affiliated Holders
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 Automatic
Exchange Rights, and the Trustee shall not exercise such rights for
any purpose other than the purposes for which this Trust is created
pursuant to this agreement.
5.13 Parent Common Stock. Parent hereby represents, warrants and covenants that
all such shares of Parent Common Stock issuable as described herein shall be
duly authorized and validly issued as fully paid, non-assessable, free of
pre-emptive rights and shall be free and clear of any lien, claim, encumbrance,
security interest or adverse claim.
ARTICLE 6
COVENANTS, REPRESENTATIONS AND WARRANTIES
6.1 Covenants of Parent Regarding Preferred Shares. So long as any Preferred
Shares owned by Non-Affiliated Holders are outstanding, the Parent will:
(a) not declare or pay any dividend on the Parent Common Stock unless (i)
the Corporation will have sufficient money or other assets or
authorized but unissued securities available to enable the due
declaration and the due and punctual payment in accordance with
applicable law, of an equivalent dividend on the Preferred Shares and
(ii) the Corporation shall simultaneously declare or pay, as the case
may be, an equivalent dividend (as provided for in the Preferred Share
Provisions) on the Preferred Shares;
(b) advise the Corporation sufficiently in advance of the declaration by
the Parent of any dividend on the Parent Common Stock and take all
such other actions as are necessary, in cooperation with the
Corporation, to ensure that the respective declaration date, record
date and payment date for a dividend on the Preferred Shares shall be
the same as the declaration date, record date and payment date for the
corresponding dividend on the Parent Common Stock;
(c) ensure that the record date for determining shareholders entitled to
receive any dividend declared on the Parent Common Stock is not less
than 10 Business Days after the declaration date for such dividend;
(d) take all such actions and do all such things as are necessary or
desirable to enable and permit the Corporation, in accordance with
applicable law, to pay and otherwise perform its obligations with
respect to the satisfaction of the Liquidation Amount in respect of
each issued and outstanding Preferred Share upon the liquidation,
dissolution or winding up of the Corporation or any other distribution
of the assets of the Corporation among its shareholders for the
purpose of winding up its affairs, including without limitation all
such actions and all such things as are necessary or desirable to
enable and permit the Corporation to cause to be delivered shares of
Parent Common Stock to the holders of Preferred Shares in accordance
with the provisions of Article 5 of the Preferred Share Provisions;
(e) take all such actions and do all such things as are necessary or
desirable to enable and permit the Corporation, in accordance with
applicable law, to pay and otherwise perform its obligations with
respect to the satisfaction of the Retraction Price and the Redemption
Price, including without limitation all such actions and all such
things as are necessary or desirable to enable and permit the
Corporation to cause to be delivered shares of Parent Common Stock to
the holders of Preferred Shares, upon the redemption of the Preferred
Shares in accordance with the provisions of Article 6 or Article 7 of
the Preferred Share Provisions, as the case may be;
(f) take all actions and do all such things as are necessary or desirable
to enable and permit VM Sub, in accordance with applicable law, to
perform its obligations and exercise its rights with respect to the
satisfaction of the Liquidation Call Right, the Redemption Call Right
and the Retraction Call Right, including without limitation, all such
actions and all such things as are necessary or desirable to enable
and permit VM Sub to cause to be delivered Parent Common Stock to the
holders of Preferred Shares in accordance with the Preferred Share
Provisions. In furtherance of the foregoing obligations, upon notice
of any event which requires VM Sub to cause to be delivered shares of
Parent Common Stock to any holder of Preferred Shares, the Parent
shall, in any manner deemed appropriate by it, provide such shares or
cause such shares to be provided to VM Sub, which shall forthwith
deliver the requisite shares of Parent Common Stock to or to the order
of the former holder of the surrendered Preferred Shares; and
(g) not exercise its vote as a shareholder to initiate the voluntary
liquidation, dissolution or winding up of the Corporation or any other
distribution of the assets of the Corporation among its shareholders
for the purpose of winding up its affairs nor take any action or omit
to take any action that is designed to result in the liquidation,
dissolution or winding up of the Corporation or any other distribution
of the assets of the Corporation among its shareholders for the
purpose of winding up its affairs.
6.2 Segregation of Funds. The Parent will cause the Corporation to deposit a
sufficient amount of funds in a separate account and segregate a sufficient
amount of such other assets as is necessary to enable the Corporation to pay or
otherwise satisfy the applicable dividends, Liquidation Amount, Retraction Price
or Redemption Price, once such amounts become payable under the terms of this
agreement or the Preferred Share Provisions, in each case for the benefit of
Non-Affiliated Holders from time to time of the Preferred Shares, and to use
such funds and other assets so segregated exclusively for the payment of
dividends and the payment or other satisfaction of the Liquidation Amount, the
Retraction Price or the Redemption Price, as applicable.
6.3 Certain Representations. The Parent hereby represents, warrants and coven-
ants that:
(a) it has irrevocably reserved for issuance and will at all times keep
available, free from pre-emptive and other rights, out of its
authorized and unissued capital stock such number of shares of Parent
Common Stock (or other shares or securities into which the Parent
Common Stock may be reclassified or changed as contemplated by section
6.7 hereof) (i) as is equal to the sum of (x) the number of Preferred
Shares issued and outstanding from time to time and (y) the number of
Preferred Shares issuable upon the exercise of all rights to acquire
Preferred Shares outstanding from time to time and (ii) as is now and
may hereafter be required to enable and permit each of the Corporation
and the Parent and VM Sub to meet its obligations hereunder, under the
Preferred Share Provisions and under any other security or commitment
pursuant to which the Corporation or the Parent or VM Sub may now or
hereafter be required to issue and/or deliver shares of Parent Common
Stock; and
(b) it is not as of the Effective Date, and has not been at any time
within the last year prior to the Effective Date, a "United States
real property holding corporation" within the meaning of Section 897
of the Internal Revenue Code of 1987, as amended.
6.4 Notification of Certain Events. In order to assist the Parent to comply with
its obligations hereunder, the Corporation will give the Parent notice of each
of the following events at the time set forth below:
(a) in the event of any determination by the Board of Directors to
institute voluntary liquidation, dissolution or winding-up proceedings
with respect to the Corporation or to effect any other distribution of
the assets of the Corporation 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;
(b) immediately, upon the earlier of (i) receipt by the Corporation of
notice of, and (ii) the Corporation otherwise becoming aware of, any
threatened or instituted claim, suit, petition or other proceeding
with respect to the involuntary liquidation, dissolution or winding up
of the Corporation or to effect any other distribution of the assets
of the Corporation among its shareholders for the purpose of winding
up its affairs;
(c) immediately, upon receipt by the Corporation of a Retraction Request
(as defined in the Preferred Share Provisions);
(d) at least 130 days prior to any Company Redemption Date determined by
the Board of Directors in accordance with the Preferred Share
Provisions; and
(e) as soon as practicable upon the issuance by the Corporation of any
Preferred Shares or rights to acquire Preferred Shares.
6.5 Delivery of Shares of Parent Common Stock. Upon notice of any event that
requires the Corporation to cause to be delivered shares of Parent Common Stock
to any holder of Preferred Shares, the Parent shall, in any manner deemed
appropriate by it, provide such shares or cause such shares to be provided to
the Corporation, which shall forthwith deliver the requisite shares of Parent
Common Stock to or to the order of the former holder of the surrendered
Preferred Shares, as the Corporation shall direct. All such shares of Parent
Common Stock shall be duly issued as fully paid, non-assessable, free of
pre-emptive rights and shall be free and clear of any lien, claim, encumbrance,
security interest or adverse claim.
6.6 Qualification of Shares of Parent Common Stock. The Parent covenants that it
will make such filings and seek such regulatory consents and approvals as are
necessary so that the shares of Parent Common Stock to be issued on the exchange
of Preferred Shares will be issued in compliance with the applicable securities
laws in Canada and the United States and may be freely traded (other than by
holders who are Affiliates of the Parent within the meaning of U.S. securities
laws) on Nasdaq or on such other United States exchange as such shares may be
listed, quoted or posted for trading from time to time.
6.7 Economic Equivalence.
(1) The Parent will not without the prior approval of the Corporation
and the prior approval of the holders of the Preferred Shares given in
accordance with Section 9.2 of the Preferred Share Provisions:
(a) issue or distribute shares of Parent Common Stock (or securities
Preferred for or convertible into or carrying rights to acquire shares
of Parent Common Stock) to the holders of all or substantially all of
the then outstanding Parent Common Stock by way of stock dividend or
other distribution, other than an issue of shares of Parent Common
Stock (or securities Preferred for or convertible into or carrying
rights to acquire shares of Parent Common Stock) to holders of shares
of Parent Common Stock who exercise an option to receive dividends in
Parent Common Stock (or securities Preferred for or convertible into
or carrying rights to acquire shares of Parent Common Stock) in lieu
of receiving cash dividends;
(b) issue or distribute rights, options or warrants to the holders of all
or substantially all of the then outstanding shares of Parent Common
Stock entitling them to subscribe for or to purchase shares of Parent
Common Stock (or securities Preferred for or convertible into or
carrying rights to acquire shares of Parent Common Stock); or
(c) issue or distribute to the holders of all or substantially all of the
then outstanding shares of Parent Common Stock (i) shares or
securities of the Parent of any class other than Parent Common Stock
(other than shares convertible into or Preferred for or carrying
rights to acquire shares of Parent Common Stock), (ii) rights, options
or warrants other than those referred to in section 6.7(1) (b) above,
(iii) evidences of indebtedness of the Parent or (iv) assets of the
Parent;
unless (x) the Corporation is permitted under applicable law to issue or
distribute the economic equivalent on a per share basis of such rights, options,
securities, shares, evidences of indebtedness or other assets to holders of the
Preferred Shares and (y) the Corporation shall issue or distribute such rights,
options, securities, shares, evidences of indebtedness or other assets
simultaneously to holders of the Preferred Shares.
(2) The Parent will not without the prior approval of the Corporation
and the prior approval of the holders of the Preferred Shares given in
accordance with Section 9.2 of the Preferred Share Provisions:
(a) subdivide, redivide or change the then outstanding shares of Parent
Common Stock into a greater number of shares of Parent Common Stock;
or
(b) reduce, combine or consolidate or change the then outstanding shares
of Parent Common Stock into a lesser number of shares of Parent Common
Stock; or
(c) reclassify or otherwise change the shares of Parent Common Stock or
effect an amalgamation, merger, reorganization or other transaction
affecting the shares of Parent Common Stock;
unless (x) the Corporation is permitted under applicable law to simultaneously
make the same or an economically equivalent change to, or in the rights of
holders of, the Preferred Shares and (y) the same or an economically equivalent
change is made to, or in the rights of the holders of, the Preferred Shares.
(3) The Parent will ensure that the record date for any event referred
to in section 6.7(1) or 6.7(2) above, or (if no record date is applicable for
such event) the effective date for any such event, is not less than 20 Business
Days after the date on which such event is declared or announced by the Parent
(with simultaneous notice thereof to be given by the Parent to the Corporation).
(4) The Board of Directors shall determine, in good faith and in its
sole discretion (with the assistance of such reputable and qualified independent
financial advisors and/or other experts as the board may require), economic
equivalence for the purposes of any event referred to in section 6.7(1) or
6.7(2) and each such determination shall be conclusive and binding on the
Parent. In making each such determination, the following factors shall, without
excluding other factors determined by the board to be relevant, be considered by
the Board of Directors:
(a) in the case of any stock dividend or other distribution payable in
shares of Parent Common Stock, the number of such shares issued in
proportion to the number of shares of Parent Common Stock previously
outstanding;
(b) in the case of the issuance or distribution of any rights, options or
warrants to subscribe for or purchase shares of Parent Common Stock
(or securities Preferred for or convertible into or carrying rights to
acquire shares of Parent Common Stock), the relationship between the
exercise price of each such right, option or warrant and the current
market value (as determined by the Board of Directors in the manner
above contemplated) of a share of Parent Common Stock;
(c) in the case of the issuance or distribution of any other form of
property (including without limitation any shares or securities of the
Parent of any class other than Parent Common Stock, any rights,
options or warrants other than those referred to in section 6.7(4)(b)
above, any evidences of indebtedness of the Parent or any assets of
the Parent), the relationship between the fair market value (as
determined by the Board of Directors in the manner above contemplated)
of such property to be issued or distributed with respect to each
outstanding share of Parent Common Stock and the current market value
(as determined by the Board of Directors in the manner above
contemplated) of a share of Parent Common Stock;
(d) in the case of any subdivision, redivision or change of the then
outstanding shares of Parent Common Stock into a greater number of
shares of Parent Common Stock or the reduction, combination or
consolidation or change of the then outstanding shares of Parent
Common Stock into a lesser number of shares of Parent Common Stock or
any amalgamation, merger, reorganization or other transaction
affecting the Parent Common Stock, the effect thereof upon the then
outstanding shares of Parent Common Stock; and
(e) in all such cases, the general taxation consequences of the relevant
event to holders of Preferred Shares to the extent that such
consequences may differ from the taxation consequences to holders of
shares of Parent Common Stock as a result of differences between
taxation laws of Canada and the United States (except for any
differing consequences arising as a result of differing marginal
taxation rates and without regard to the individual circumstances of
holders of Preferred Shares).
For purposes of the foregoing determinations, the current market value of any
security listed and traded or quoted on a securities exchange shall be the
weighted average of the daily trading prices of such security during a period of
not less than 20 consecutive trading days ending not more than five trading days
before the date of determination on the principal securities exchange on which
such securities are listed and traded or quoted; provided, however, that if in
the opinion of the Board of Directors the public distribution or trading
activity of such securities during such period does not create a market that
reflects the fair market value of such securities, then the current market value
thereof shall be determined by the Board of Directors, in good faith and in its
sole discretion (with the assistance of such reputable and qualified independent
financial advisors and/or other experts as the board may require), and provided
further that any such determination by the Board of Directors shall be
conclusive and binding on the Parent.
6.8 Tender Offers, etc. In the event that a cash offer, share exchange offer,
issuer bid, take-over bid or similar transaction with respect to Parent Common
Stock (each, a "Tender Offer") is proposed by the Parent or is proposed to the
Parent or its shareholders and is recommended by the board of directors of the
Parent or is otherwise effected or to be effected with the consent or approval
of the board of directors of the Parent, the Parent will use reasonable efforts
(to the extent, in the case of a Tender Offer by a third party, within its
control) expeditiously and in good faith to take all such actions and do all
such things as are necessary or desirable to enable and permit holders of
Preferred Shares to participate in such Tender Offer to the same extent and on
an economically equivalent basis as the holders of shares of Parent Common
Stock, without discrimination. Without limiting the generality of the foregoing,
the Parent will use reasonable efforts expeditiously and in good faith to ensure
that holders of Preferred Shares may participate in all such Tender Offers
without being required to retract Preferred Shares as against the Corporation
(or, if so required, to ensure that any such retraction shall be effective only
upon, and shall be conditional upon, the closing of the Tender Offer and only to
the extent necessary to tender or deposit to the Tender Offer).
6.9 Ownership of Common Shares of the Corporation. Without the prior approval of
the Non-Affiliated Holders given in accordance with Section 9.2 of the Preferred
Shares Provisions, Parent covenants and agrees that, as long as any outstanding
Preferred Shares are owned by any Non-Affiliated Holder, Parent will be and
remain the direct or indirect beneficial owner of all the issued and outstanding
securities of the Corporation carrying or otherwise entitled to voting rights in
any circumstances, other than the Preferred Shares.
6.10 Parent Not to Vote Preferred Shares. The Parent covenants and agrees that
it will appoint and cause to be appointed proxyholders with respect to all
Preferred Shares held by the Parent and its Subsidiaries for the sole purpose of
attending each meeting of holders of Preferred Shares in order to be counted as
part of the quorum for each such meeting. The Parent further covenants and
agrees that it will not, and will cause its Subsidiaries not to, exercise any
voting rights that may be exercisable by holders of Preferred Shares from time
to time pursuant to the Preferred Share Provisions or pursuant to the provisions
of the Canada Business Corporations Act (or any successor or other corporate
statute by which the Corporation may in the future be governed) with respect to
any Preferred Shares held by it or by its direct or indirect Subsidiaries in
respect of any matter considered at any meeting of holders of Preferred Shares.
6.11 Due Performance. On and after the Effective Date, the Parent shall, and
shall cause VM Sub to, duly and timely perform all of its obligations provided
for herein and that may arise under the Preferred Share Provisions, and Parent
shall be responsible for the due performance of all of such obligations
hereunder and under the Preferred Share Provisions.
6.12 Issue of Additional Shares. During the term of this agreement, the Parent
will not issue any shares of Parent Series B Special Voting Preferred Shares,
par value US$0.001(the "Special Voting Share") in addition to the one Special
Voting Share to be issued to the Trustee.
ARTICLE 7
CONCERNING THE TRUSTEE
7.1 Powers and Duties of the Trustee. The rights, powers and authorities of the
Trustee under this agreement, in its capacity as trustee of the trust, shall
include:
(a) receipt and deposit of the Voting Share from the Parent as trustee for
and on behalf of the Non-Affiliated Holders in accordance with the
provisions of this agreement;
(b) granting proxies and distributing materials to Non-Affiliated Holders
as provided in this agreement;
(c) voting the Non-Affiliated Holder Votes in accordance with the
provisions of this agreement;
(d) receiving the grant of the Exchange Right and the Automatic Exchange
Rights from the Parent as trustee for and on behalf of the
Non-Affiliated Holders in accordance with the provisions of this
agreement;
(e) exercising the Exchange Right in accordance with the provisions of
this agreement, and in connection therewith receiving from
Non-Affiliated Holders Preferred Shares and other requisite documents
and distributing to such Non-Affiliated Holders the shares of Parent
Common Stock and cheques, if any, to which such Non-Affiliated Holders
are entitled upon the exercise of the Exchange Right;
(f) holding title to the Trust Estate;
(g) investing any money forming, from time to time, a part of the Trust
Estate as provided in this agreement;
(h) taking action at the direction of a Non-Affiliated Holder to enforce
the obligations of the Corporation and/or the Parent under this
agreement and under the Preferred Share Provisions; and
(i) taking such other actions and doing such other things as are
specifically provided in this agreement.
In the exercise of such rights, powers and authorities the Trustee shall have
(and is granted) such incidental and additional rights, powers 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 such discretionary rights, powers and authorities by the Trustee
shall be final, conclusive and binding upon all persons. For greater certainty,
the Trustee shall have only those duties as are set out specifically in this
agreement. The Trustee in exercising its rights, powers, duties and authorities
hereunder shall act honestly and in good faith with a view to the best interests
of the Non-Affiliated Holders and shall exercise the care, diligence and skill
that a reasonably prudent trustee would exercise in comparable circumstances.
The Trustee shall not be bound to give any 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 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 notice
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 the Corporation and the
Parent 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 and the role of the Trustee in any other capacity. The Trustee shall,
within 90 days after it becomes aware that such a 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 hereof. 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 Supreme
Court of British Columbia for an order that the Trustee be replaced as trustee
hereunder.
7.3 Dealing with Trustees, Registrars, etc. The Corporation and the Parent
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 Preferred Shares and the Parent Common Stock;
and
(b) requisition, from time to time, 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. The Parent covenants
that it will supply, and will cause VM Sub to supply, the Trustee in a
timely manner with duly executed share certificates for the purpose of
completing the exercise from time to time of all rights to acquire
Parent Common Stock hereunder, under the Preferred Share Provisions
and under any other security or commitment given to the Non-Affiliated
Holders pursuant thereto, in each case pursuant to the provisions
hereof or of the Preferred Share Provisions or otherwise.
7.4 Books and Records. The Trustee shall keep available for inspection by the
Parent and the Corporation, correct and complete books and records of account
relating to the Trustee's actions under this agreement, including without
limitation all information relating to all transactions pursuant to the Voting
Rights and the Exchange Right for the term of this Agreement.
7.5 Income Tax Returns and Reports. The Trustee shall, to the extent necessary,
prepare and file on behalf of the Trust appropriate Canadian and United States
income tax returns and any other returns or reports as may be required by
applicable law and, in connection therewith, may obtain the advice and
assistance of such experts as the Trustee may consider necessary or advisable.
The Parent shall retain at its expense (and not at the expense of the Trustee)
such experts as may be required by the Trustee for the purposes of providing
such advice and assistance.
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 Non-Affiliated Holder
upon such Non-Affiliated Holder furnishing to the Trustee reasonable funding,
security and indemnity against the costs, expenses and liabilities that may be
incurred by the Trustee therein or thereby, provided that no Non-Affiliated
Holder shall be obligated to furnish to the Trustee any such funding, security
or indemnity in connection with the exercise by the Trustee of any of its
rights, duties, powers and authorities with respect to the Voting Share pursuant
to Article 4 hereof and with respect to the Exchange Right pursuant to Article 5
hereof, subject to the provisions of section 7.14 hereof. 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 given funds, security and
indemnified as aforesaid.
7.7 Actions by Non-Affiliated Holders. No Non-Affiliated Holder 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
Non-Affiliated Holder 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 hereof and the Trustee shall have
failed to act within a reasonable time thereafter. In such case, but not
otherwise, the Non-Affiliated Holder 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 Non-Affiliated Holders 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,
including without limitation, under the Voting Rights or the Exchange 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 Non-Affiliated Holders.
7.8 Reliance upon Declarations. 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, mailing labels,
notices, statutory declarations, certificates, opinions, reports or other papers
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 and such lists, mailing labels, notices, statutory
declarations, certificates, opinions, reports or other papers or documents
comply with the provisions of section 7.9 hereof, if applicable, and with any
other applicable provisions of this agreement.
7.9 Evidence and Authority to Trustee. The Corporation and/or the Parent 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 the Corporation, the Parent, VM Sub 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 and
the taking of any other action to be taken by the Trustee at the request of or
on the application of the Corporation and/or the Parent forthwith 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 the Corporation and/or the
Parent 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 the Corporation
and/or the Parent 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 or the Exchange Right
and except as otherwise specifically provided herein, such evidence may consist
of a report or opinion of any solicitor, auditor, accountant, appraiser, valuer,
engineer or other expert or any other person whose qualifications give authority
to a statement made by such person, provided that if such report or opinion is
furnished by a director, officer or employee of the Corporation and/or the
Parent it shall be in the form of an Officer's Certificate or a statutory
declaration. Each statutory declaration, 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 such person has read and understands the pro- visions
of this agreement relating to the condition in question;
(b) describing the nature and scope of the examination or investigation
upon which such person based the statutory declaration, certificate,
statement or opinion; and
(c) declaring that such person has made such examination or investigation
as such person believes is necessary to enable such person 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 this agreement act and rely on the opinion or advice of
or information obtained from or prepared by any solicitor, auditor,
accountant, appraiser, valuer, engineer or other expert, whether
retained by the Trustee or by the Corporation and/or the Parent or
otherwise, and may employ such assistants as may be necessary to the
proper determination and 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 determination and 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 determination and discharge of
its duties hereunder and in the management of the Trust.
7.11 Investment of Money Held by Trustee. Unless otherwise provided in this
agreement, any money held by or on behalf of the Trustee which under the terms
of this 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 British Columbia, trustees are
authorized to invest trust money, provided that such securities are stated to
mature within two years after their purchase by the Trustee, and the Trustee
shall so invest such money on the written direction of the Corporation. Pending
the investment of any money as herein before provided, such money may be
deposited in the name of the Trustee in any chartered bank in Canada or, with
the consent of the Corporation, in the deposit department of any 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 agreement or otherwise in respect of the
premises.
7.13 Trustee Not Bound to Act on Corporation's 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 the Corporation and/or the Parent
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 and rely upon any such copy
purporting to be authenticated and believed by the Trustee to be genuine.
7.14 Conflicting Claims. If conflicting claims or demands are made or asserted
with respect to any interest of any Non-Affiliated Holder in any Preferred
Shares, including any disagreement between the heirs, representatives,
successors or assigns succeeding to all or any part of the interest of any
Non-Affiliated Holder in any Preferred 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 claim or demand. In so refusing, the Trustee may elect not to exercise any
Voting Rights, the Exchange Right or other 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 other rights subject to such conflicting claims or
demands have been adjudicated by a final judgment of a court of
competent jurisdiction and all rights of appeal have expired; or
(b) all differences with respect to the Voting Rights, Exchange Right or
other 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.
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 fully to 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 Non-Affiliated Holders, subject to all the terms and
conditions herein set forth.
ARTICLE 8
COMPENSATION
8.1 Fees and Expenses of the Trustee. The Trustee will invoice the Parent for
its fees and expenses under this agreement. The Parent and the Corporation
jointly and severally agree to pay to 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,
compensation paid to experts, agents 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 rights and duties under this agreement;
provided that the Parent and the Corporation 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 or wilful misconduct.
ARTICLE 9
INDEMNIFICATION AND LIMITATION OF LIABILITY
9.1 Indemnification of the Trustee. The Parent and the Corporation jointly and
severally agree to indemnify and hold harmless the Trustee and each of its
directors, officers, partners, employees and agents appointed and acting in
accordance with this agreement (collectively, the "Indemnified Parties") against
all claims, losses, damages, costs, penalties, fines and reasonable expenses
(including reasonable expenses of the Trustee's legal counsel) which, without
fraud, negligence, wilful misconduct or bad faith on the part of such
Indemnified Party, may be paid, incurred or suffered by the Indemnified Party by
reason of 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 instructions (when confirmed in writing) delivered to the
Trustee by the Parent or the Corporation pursuant hereto. In no case shall the
Parent or the Corporation be liable under this indemnity for any claim against
any of the Indemnified Parties if such claim is incurred or suffered by reason
of or as a result of the fraud, negligence, wilful misconduct or bad faith of an
Indemnified Party and unless the Parent and the Corporation 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, the Parent and the
Corporation shall be entitled to participate at their own expense in the defence
and, if the Parent or the Corporation so elect at any time after receipt of such
notice, any 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 the Parent or the Corporation, such
authorization not to be unreasonably withheld; or (ii) the named parties to any
such suit include both the Trustee and the Parent or the Corporation and the
Trustee shall have been advised by counsel acceptable to the Parent or the
Corporation that there may be one or more legal defences available to the
Trustee that are different from or in addition to those available to the Parent
or the Corporation and that an actual or potential conflict of interest exists
(in which case the Parent and the Corporation 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). Such indemnification
shall survive the resignation or removal of the Trustee and the termination of
this agreement.
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, 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 the Parent and
the Corporation (with a copy of such notice being given by such resigning
trustee to each Non-Affiliated Holder) specifying the date on which it desires
to resign, provided that such notice shall never be given less than 10 Business
Days before such desired resignation date unless the Parent and the Corporation
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, the Parent and the Corporation shall 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. Failing
acceptance by a successor trustee, a successor trustee may be appointed by an
order of the Supreme Court of British Columbia upon application of one or more
of the parties hereto. If the retiring Trustee applies to the Supreme Court of
British Columbia for the appointment of a successor trustee, the retiring
Trustee's costs of such application shall be at the joint and several expense of
the Parent and the Corporation.
10.2 Removal. The Trustee, or any trustee hereafter appointed, may be removed
with or without cause, at any time on 60 days' prior notice by written
instrument executed by the Parent and the Corporation, in duplicate, one copy of
which shall be delivered to the trustee to be removed (with a copy of such
written instrument being given by such trustee to each Non-Affiliated Holder as
soon as reasonably practicable after receipt) and one copy to the proposed
successor trustee, provided that such removal shall not take effect until the
date of appointment of a successor trustee and the acceptance of such
appointment by the successor trustee.
10.3 Successor Trustee. Any successor trustee appointed as provided under this
agreement shall execute, acknowledge and deliver to the Parent and the
Corporation 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 like effect as if
originally named as trustee in this agreement. However, on the written request
of the Parent and the Corporation 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, the Parent and the
Corporation 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, the Parent and the Corporation shall cause to be
mailed notice of the succession of such trustee hereunder to each Non-Affiliated
Holder specified in a List. If the Parent or the Corporation 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 the Parent and the Corporation.
ARTICLE 11
PARENT SUCCESSORS
11.1 Certain Requirements in Respect of Combination, etc. The Parent shall not
enter into 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:
(a) such other person or continuing corporation (the "Parent 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
agreement supplemental hereto and such other instruments (if any) as
are, in the opinion of the Trustee, necessary or advisable to evidence
the assumption by the Parent Successor of liability for all money
payable and property deliverable hereunder and the covenant of such
Parent 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 the Parent under this agreement; and
(b) such transaction shall, in the opinion of the Trustee, be upon such
terms 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 Non-Affiliated Holders hereunder.
11.2 Vesting of Powers in Successor. Whenever the conditions of section 11.I
hereof have been duly observed and performed, if required by section 11.1
hereof, the Trustee, the Parent Successor and the Corporation shall execute and
deliver the supplemental agreement provided for in Article 12 hereof and
thereupon the Parent Successor shall possess and from time to time may exercise
each and every right and power of the Parent under this agreement in the name of
the Parent 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 the
Parent or any officers of the Parent may be done and performed with like force
and effect by the directors or officers of such Parent Successor.
11.3 Wholly-Owned Subsidiaries. Nothing herein shall be construed as preventing
the amalgamation or merger of any wholly-owned Subsidiary of the Parent with or
into the Parent or the winding up, liquidation or dissolution of any
wholly-owned Subsidiary of the Parent provided that all of the assets of such
Subsidiary are transferred to the Parent or another wholly-owned Subsidiary of
the Parent, and any such transactions are expressly permitted by this Article
11.
ARTICLE 12
AMENDMENTS AND SUPPLEMENTAL AGREEMENTS
12.1 Amendments, Modifications, etc. This agreement may not be amended or
modified except by an agreement in writing executed by the Corporation, the
Parent and the Trustee and, unless the amendment or modification is expressly
authorized or permitted by this agreement, approved by the Non-Affiliated
Holders in accordance with Section 9.2 of the Preferred Share Provisions.
12.2 Amendments with the Approval of Non-Affiliated Holders. Notwithstanding the
provisions of section 12.1 hereof, the parties to this agreement may in writing,
at any time and from time to time, without the approval of the Non-Affiliated
Holders, amend, modify or supplement this agreement for the purposes of:
(a) adding to the covenants of any or all of the parties hereto for the
protection of the Non-Affiliated Holder hereunder;
(b) evidencing the succession of Parent Successors and the covenants of
and obligations assumed by each such Parent Successor in accordance
with the provisions of Article 11 and the succession of any successor
trustee in accordance with Article 10;
(c) 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 opinion of the Board of Directors and the
board of directors of the Parent, having in mind the best interests of
the Non-Affiliated Holders as a whole, it may be expedient to make,
provided that such boards of directors shall be of the opinion that
such amendments and modifications will not be prejudicial in any
material respect to the interests of the Non-Affiliated Holders as a
whole; or
(d) making such changes or corrections which, on the advice of counsel to
the Corporation and the Parent, 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
Board of Directors and the board of directors of the Parent shall be
of the opinion that such changes or corrections will not be
prejudicial in any material respect to the interests of the
Non-Affiliated Holders as a whole.
12.3 Meeting to Consider Amendments. The Corporation, at the request of the
Parent, shall call a meeting or meetings of the Non-Affiliated Holders 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 the Corporation, the Preferred Share Provisions
and all applicable laws.
12.4 Changes in Capital of Parent and the Corporation. At all times after the
occurrence of any event effected pursuant to section 6.7 or section 6.8 of this
agreement, as a result of which either the Parent Common Stock or the Preferred
Shares or both are in any way changed, this agreement shall forthwith be amended
and modified as necessary in order that it shall apply with full force and
effect, mutatis mutandis, to all new securities into which the Parent Common
Stock or the Preferred Shares or both are so changed and the parties hereto
shall execute and deliver a supplemental agreement giving effect to and
evidencing such necessary amendments and modifications.
12.5 Execution of Supplemental 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 the Corporation, the Parent 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, agreements or
other instruments supplemental hereto, which thereafter shall form part hereof.
In executing or accepting the supplemental trusts created by any supplemental
indenture permitted by this Article 12, the Trustee will be entitled to receive
and (subject to Article 7) will be fully protected in relying upon an Officer's
Certificate and opinions of counsel stating that the execution of such
supplemental indenture is authorized or permitted in this agreement.
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 Preferred Shares are held by any Non-Affiliated Holder;
(b) each of the Corporation and the Parent elects in writing to terminate
the Trust and such termination is approved by the Non-Affiliated
Holders of the Preferred Shares in accordance with Section 9.2 of the
Preferred Share Provisions; and
(c) 21 years after the death of the last survivor of the descendants of
His Majesty King ▇▇▇▇▇▇ VI of 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 Preferred Shares outstanding held by
any Non-Affiliated Holder; provided, however, that the provisions of Articles 8
and 9 hereof and the representation contained in section 6.3(b) hereof 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 this 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 Non-Affiliated Holders.
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):
(1 if to the Parent at: ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇.▇.
▇▇▇ ▇▇ 8
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
(2 if to the Corporation at: ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇.▇.
▇▇▇ ▇▇ 8
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
(3 if to the Trustee at: ▇▇▇▇, Bird
Barristers and Solicitors
▇.▇. ▇▇▇ ▇▇▇▇▇
Three Bentall Centre
▇▇▇▇ - ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇.▇.
▇▇▇ ▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
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 in which case it shall be deemed to have been
given and received upon the immediately following Business Day.
14.4 Notice to Non-Affiliated Holders. Any notice, request or other
communication to be given to a Non-Affiliated Holder shall be in writing and
shall be valid and effective if given by mail (postage pre-paid or by delivery
to the address of the holder recorded in the securities register of the
Corporation or, in the event of the address of any such holder not being so
recorded, then at the last known address of such holder. Any such notice,
request or other communication, if given by mail, shall be deemed to have been
given and received on the fifth day following the date of mailing and, if given
by delivery, shall be deemed to have been given and received on the date of
delivery. Accidental failure or omission to give any notice, request or other
communication to one or more holders of Preferred Shares, or any defect in such
notice, shall not invalidate or otherwise alter or affect any action proceeding
to be taken pursuant thereto.
14.5 Risk of Payments by Post. Whenever payments are to be made or certificates
or documents are to be sent to any Non-Affiliated Holder by the Trustee or by
the Corporation, the Parent or by such Non-Affiliated Holder to the Trustee or
to the Parent or the Corporation, the making of such payment or sending of such
certificate or document sent through the post shall be at the risk of the
Corporation, in the case of payments made or documents sent by the Trustee or
the Corporation or the Parent and the Non-Affiliated Holder, in the case of
payments made or documents sent by the Non-Affiliated Holder.
14.6 Effectiveness of Certain Provisions. Notwithstanding anything contained in
this Agreement, Articles 3, 4, 5 and 6 shall not be effective until all required
securities regulatory approvals have been obtained by the Parent and the
Corporation.
14.7 Counterparts. This 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.
14.8 Jurisdiction. This agreement shall be construed and enforced in accordance
with the laws of the Province of British Columbia and the laws of Canada
applicable therein.
14.9 Attornment. The Parent agrees that any action or proceeding arising out of
or relating to this agreement may be instituted in the courts of British
Columbia, 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 agrees 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 the Corporation at its registered office in the Province of British
Columbia as its attorney for service of process.
IN WITNESS WHEREOF, the parties hereto have caused this agreement to be duly
executed as of the date first above written.
Voice Mobility International, Inc.
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: Secretary
Voice Mobility Canada Limited
By: /s/▇▇▇▇▇▇▇ ▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: Secretary
Owen, Bird, a partnership
By: /s/ ▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇ ▇▇▇▇▇▇▇▇
Title: Partner
By: /s/ ▇▇▇▇▇▇▇ ▇.▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Barrister and Solicitor