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EXHIBIT 9.1
VOTING AND EXCHANGE TRUST AGREEMENT
MEMORANDUM OF AGREEMENT (the "Agreement") made as of the 12th day of
February, 1999.
BETWEEN:
SERVICESOFT TECHNOLOGIES, INC., a
corporation organized under the laws of
the State of Delaware ("ServiceSoft")
- and -
SERVICESOFT CANADA INC., a corporation
amalgamated under the laws of the Province
of Ontario ("ServiceSoft Canada")
- and -
CIBC MELLON TRUST COMPANY, a trust company
incorporated under the laws of Canada (the
"Trustee")
WHEREAS pursuant to a Combination Agreement dated as of February 1,
1999, by and among ServiceSoft, ServiceSoft Canada Inc. ("Old ServiceSoft
Canada"), and Balisoft Technologies Inc. ("Balisoft") (the "Combination
Agreement"), the parties agreed that on the Closing Date (as such term is
defined in the Combination Agreement), ServiceSoft, ServiceSoft Canada and the
Trustee would execute and deliver a Voting and Exchange Trust Agreement
substantially in the form set forth in Exhibit E to the Combination Agreement
together with such other terms and conditions as may be agreed to by the parties
to the Combination Agreement acting reasonably;
AND WHEREAS pursuant to the amalgamation effected by articles of
amalgamation dated the date hereof (the "Amalgamation") filed pursuant to the
Business Corporations Act (Ontario), Balisoft and Old ServiceSoft Canada
amalgamated to continue as ServiceSoft Canada;
AND WHEREAS pursuant to the amalgamation, (i) the issued and
outstanding common shares of Balisoft were changed into Class A Preferred shares
of ServiceSoft Canada (in the manner set out in the Combination Agreement) ;
(ii) the issued and outstanding preferred shares
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of Balisoft were changed into Class B Preferred shares of ServiceSoft Canada (in
the manner set out in the Combination Agreement); and (iii) and each issued and
outstanding common share of Old ServiceSoft Canada was changed into one common
share of ServiceSoft Canada.
AND WHEREAS pursuant to and immediately following the above-mentioned
Amalgamation, articles of amendment were filed pursuant to the Business
Corporations Act (Ontario) on February 11, 1999 pursuant to which each issued
and outstanding Class A Preferred share of ServiceSoft Canada was exchanged for
one issued and outstanding Series C Exchangeable share of ServiceSoft Canada
(collectively, the "Exchangeable Common Shares"), and each issued and
outstanding Class B Preferred share was exchanged for one issued and outstanding
Series D Exchangeable share of ServiceSoft Canada (collectively, the
"Exchangeable Preferred Shares", and, together with the Exchangeable Common
Shares, the "Exchangeable Shares");
AND WHEREAS the above-mentioned articles of amendment set forth the
rights, privileges, restrictions and conditions (collectively, the "Exchangeable
Share Provisions") attaching to the Exchangeable Shares;
AND WHEREAS ServiceSoft is the registered and beneficial owner of all
of the issued and outstanding common shares of ServiceSoft Canada;
AND WHEREAS pursuant to the Combination Agreement and the Exchangeable
Share Provisions, ServiceSoft is to provide voting rights in ServiceSoft to each
holder (other than ServiceSoft and its Affiliates) from time to time of
Exchangeable Shares, such voting rights per Exchangeable Common Share and
Exchangeable Preferred Share to be equivalent to the voting rights per share of
Common Shares of ServiceSoft ("ServiceSoft Common Shares") and Series H
Preferred Shares ("ServiceSoft Series H Shares", and together with the
ServiceSoft Common Shares, the "ServiceSoft Shares"), respectively;
AND WHEREAS pursuant to the Combination Agreement and the terms and
conditions of the Exchangeable Shares, ServiceSoft is to grant to and in favour
of the holders (other than its Affiliates) from time to time of Exchangeable
Shares the right, in the circumstances set forth herein, to require ServiceSoft
to purchase from each such holder all or any part of the Exchangeable Shares
held by the holder;
AND WHEREAS the parties desire to make appropriate provision and to
establish a procedure whereby voting rights in ServiceSoft shall be exercisable
by holders (other than ServiceSoft and its Affiliates) from time to time of
Exchangeable Shares by and through the Trustee, which will hold legal title to
one share of ServiceSoft Special Non-Equity Preferred Stock to which voting
rights attach for the benefit of the holders of the Exchangeable Common Shares,
and to one share of ServiceSoft Special NON-EQUITY Preferred Stock to which
voting rights attach for the benefit of the holders of the Exchangeable
Preferred Shares and whereby the right to require ServiceSoft to
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purchase Exchangeable Shares from the holders thereof (other than its
Affiliates) shall be exercisable by such holders from time to time of
Exchangeable Shares by and through the Trustee, which will hold legal title to
such right for the benefit of such holders;
AND WHEREAS these recitals and any statements of fact in this Agreement
are made by ServiceSoft and ServiceSoft Canada 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, the following terms shall have the
following meanings:
"AFFILIATE" of any person means any other person directly or
indirectly controlled by, or under common control of, that
person. For the purposes of this definition, control"
(including, with correlative meanings, the terms "controlled
by" and "under common control of"), as applied to any person,
means the possession by another person, directly or
indirectly, of the power to direct or cause the direction of
the management and policies of that first mentioned person,
whether through the ownership of voting securities, by
contract or otherwise.
"AGREEMENT" means this Voting and Exchange Trust Agreement
dated -, 1999.
"AMALGAMATION AGREEMENT" means the amalgamation agreement
dated the date hereof providing for the Amalgamation.
"APPLICABLE LAWS" has the meaning given to such term in
section 5.10 of this Agreement.
"AUTOMATIC EXCHANGE RIGHTS" means the benefit of the
obligation of ServiceSoft to effect the automatic exchange of
Exchangeable Common Shares and Exchangeable Preferred Shares
for ServiceSoft Common Shares and ServiceSoft Series H Shares,
respectively, pursuant to section 5.12 of this Agreement.
"BENEFICIARIES" means the registered holders from time to time
of Exchangeable Shares, other than ServiceSoft and its
Affiliates.
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"BENEFICIARY VOTES" has the meaning given to such term in
section 4.2 of this Agreement.
"BOARD OF DIRECTORS" means the board of directors of
ServiceSoft Canada.
"BUSINESS DAY" means a day other than a Saturday, Sunday or a
day when banks are not open for business in ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇.
"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 noon spot exchange rate
on such date for such foreign currency expressed in Canadian
dollars as reported by the Bank of Canada or, in the event
such spot exchange rate is not available, such exchange rate
on such date for such foreign currency expressed in Canadian
dollars as may be deemed by the Board of Directors to be
appropriate for such purpose.
"CORRESPONDING BENEFICIARIES" means, with respect to the
ServiceSoft Common Shares, the Beneficiaries of the
Exchangeable Common Shares, and with respect to the
ServiceSoft Series H Shares, the Beneficiaries of the
Exchangeable Preferred Shares.
"CURRENT MARKET PRICE" means, in respect of a ServiceSoft
Common Share or a ServiceSoft Series H Share on any date: (a)
if the relevant class of ServiceSoft Shares are listed or
quoted on a stock exchange or automated quotation system, the
Canadian Dollar Equivalent of the average of the closing
prices of that class of ServiceSoft Shares on each of the 30
consecutive trading days ending not more than five trading
days before such date, or (b) if there is no public market for
the relevant class of ServiceSoft Shares, then the Current
Market Price of a ServiceSoft Common Share or ServiceSoft
Series H Share on such date shall be determined by the
independent auditors of ServiceSoft, and any such
determination shall be conclusive and binding.
"EXCHANGE RIGHT" has the meaning given to such term in section
5.1 of this Agreement.
"INDEMNIFIED PARTIES" has the meaning given to such term in
section 9. 1.
"INSOLVENCY EVENT" means the institution by ServiceSoft Canada
of any proceeding to be adjudicated a bankrupt or insolvent or
to be dissolved or wound up, or the consent of ServiceSoft
Canada to the institution of bankruptcy, insolvency,
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dissolution or winding up proceedings against it, or the
filing of a petition, answer or consent seeking dissolution or
winding up under any bankruptcy, insolvency or analogous laws,
including without limitation the Companies Creditors'
Arrangement Act (Canada) and the Bankruptcy and Insolvency Act
(Canada), and the failure by ServiceSoft Canada to contest in
good faith any such proceedings commenced in respect of
ServiceSoft Canada within 15 days of becoming aware of such
proceedings, or the consent by ServiceSoft Canada to the
filing of any such petition or to the appointment of a
receiver, or the making by ServiceSoft Canada of a general
assignment for the benefit of creditors, or the admission in
writing by ServiceSoft Canada of its inability to pay its
debts generally as they become due, or ServiceSoft Canada not
being permitted, pursuant to solvency requirements of
applicable law, to redeem any Retracted Shares pursuant to
Section 6.6 of the Exchangeable Share Provisions.
"LIQUIDATION CALL RIGHT" has the meaning given to such term in
the Combination Agreement.
"LIQUIDATION EVENT" has the meaning given to such term in
section 5 12(b) of this Agreement.
"LIQUIDATION EVENT EFFECTIVE DATE" has the meaning given to
such term in section 5.12(c) of this Agreement.
"LIST" has the meaning given to such term in section 4.6 of
this Agreement.
"NOTICE EVENT" has the meaning given to such term in section
7.17 of this Agreement.
"OFFICER'S CERTIFICATE" means, with respect to ServiceSoft or
ServiceSoft Canada, as the case may be, a certificate signed
by any one of the Chairman of the Board, any Vice-Chairman of
the Board, the President, any Vice-President or any other
senior officer of ServiceSoft or ServiceSoft Canada, as the
case may be.
"PERSON" includes an individual, partnership, corporation,
company, unincorporated syndicate or organization, trust,
trustee, executor, administrator and other legal
representative.
"REDEMPTION CALL RIGHT" has the meaning given to such term in
the Combination Agreement.
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"RETRACTED SHARES" has the meaning given to such term in
section 5.7 of this Agreement.
"RETRACTION CALL RIGHT" has the meaning given to such term in
the Exchangeable Share Provisions.
"SERVICESOFT CONSENT" has the meaning given to such term in
section 4.2 of this Agreement.
"SERVICESOFT MEETING" has the meaning given to such term in
section 4.2 of this Agreement.
"SERVICESOFT SUCCESSOR" has the meaning given to such term in
section 11. 1 (a) of this Agreement.
"SUPPORT AGREEMENT" means the support agreement made as of the
date hereof between ServiceSoft Canada and ServiceSoft.
"TRUST" means the trust created by this Agreement.
"TRUST ESTATE" means the Voting Shares, the Exchange Right,
the Automatic Exchange Rights and any money other securities
or other property which may be held by the Trustee from time
to time pursuant to this Agreement.
"TRUSTEE" means the CIBC Mellon Trust Company and, subject to
the provisions of Article 10 of this Agreement, includes any
successor trustee.
"VOTING RIGHTS" means the voting rights attached to each of
the Voting Shares.
"VOTING SHARE (COMMON)" means the one share of ServiceSoft
Special Non-Equity Voting Stock with a par value of $.01,
issued by ServiceSoft to and deposited with the Trustee, which
entitles the holder of record to a number of votes at meetings
of holders of ServiceSoft Common Shares equal to that number
of votes that holders of the Exchangeable Common Shares
outstanding from time to time (other than Exchangeable Common
Shares held by ServiceSoft and its Affiliates) would be
entitled to if such Exchangeable Common Shares were all
exchanged for ServiceSoft Common Shares.
"VOTING SHARE (PREFERRED)" means the one share of ServiceSoft
Special Non-Equity Voting Stock with a par value of $.01,
issued by ServiceSoft to and deposited with the Trustee, which
entitles the holder of record to a number of votes at all
meetings
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of ServiceSoft shareholders at which holders of ServiceSoft
Series H Shares are entitled to vote equal to that number of
votes that holders of the Exchangeable Preferred Shares
outstanding from time to time (other than Exchangeable
Preferred Shares held by ServiceSoft and its Affiliates) would
be entitled to if such Exchangeable Preferred Shares were all
exchanged for ServiceSoft Series H Shares.
[DRAFT NOTE: UNDER THE PROPOSED ESCROW ARRANGEMENTS, SHARES
HELD IN THE BALISOFT ESCROW FUND COULD BE VOTED BUT SHARES
HELD IN THE SERVICESOFT ESCROW FUND COULD NOT BE VOTED (UNLESS
AND UNTIL RELEASED TO SHAREHOLDERS).]
"VOTING SHARES" means collectively, each of the Voting Share
(Common) and the Voting Share (Preferred).
1.2. INTERPRETATION NOT AFFECTED BY HEADINGS, ETC. The division of this
Agreement into articles, sections and paragraphs and the insertion of
headings are for convenience of reference only and shall not affect the
construction or interpretation of this Agreement.
1.3. 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.
ARTICLE 2
PURPOSE OF AGREEMENT
2.1. ESTABLISHMENT OF TRUST. The Trust is hereby created and constituted for
the benefit of the Beneficiaries, as provided in this Agreement. The
Trustee will hold the Voting Shares in order to enable the Trustee to
exercise the Voting Rights and will hold the Exchange Right and the
Automatic Exchange Rights in order to enable the Trustee to exercise
such rights, in each case as trustee for and on behalf of the
Beneficiaries as provided in this Agreement.
ARTICLE 3
VOTING SHARES
3.1. ISSUE AND OWNERSHIP OF THE VOTING SHARES. ServiceSoft hereby issues to
and deposits with the Trustee certificates representing each of the
Voting Shares to be held by the Trustee as trustee for and on behalf
of, and for the use and benefit of, the Beneficiaries and in accordance
with the provisions of this Agreement. ServiceSoft hereby acknowledges
receipt from the Trustee, as trustee for and on behalf of the
Beneficiaries, of good and valuable consideration (and the adequacy
thereof) for the issuance of each of the Voting Shares by ServiceSoft
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
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ownership of each of the Voting Shares and shall be entitled to
exercise all of the rights and powers of an owner with respect to each
of the Voting Shares, provided that the Trustee shall:
(a) hold each of the Voting Shares and the legal title
thereto as trustee solely for the use and benefit of
the Beneficiaries in accordance with the provisions
of this Agreement; and
(b) except as specifically authorized by this Agreement,
have no power or authority to sell, transfer, vote or
otherwise deal in or with each of the Voting Shares
and neither of the Voting Shares shall be used or
disposed of by the Trustee for any purpose other than
the purposes for which this Trust is created pursuant
to this Agreement.
3.2. LEGENDED SHARE CERTIFICATES. ServiceSoft Canada will cause each
certificate representing Exchangeable Shares to bear an appropriate
legend notifying the Beneficiaries of their right to instruct the
Trustee with respect to the exercise of the Beneficiary Votes.
3.3. SAFEKEEPING OF CERTIFICATES. The certificates representing each of the
Voting Shares shall at all times be held in safekeeping by the Trustee
or its agent, which may be an Affiliate of the Trustee.
ARTICLE 4
EXERCISE OF VOTING RIGHTS
4.1. VOTING RIGHTS. The Trustee, as the holder of record of each of the
Voting Shares, 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
properly come before the shareholders of ServiceSoft at a ServiceSoft
Meeting or in connection with a ServiceSoft Consent (in each case, as
defined in section 4.2 of this Agreement). The Voting Rights shall be
and remain vested in and exercised by the Trustee. Subject to section
7.15 of this Agreement, the Trustee shall exercise the Voting Rights
only on the basis of instructions received pursuant to this Article 4
from Beneficiaries entitled to instruct the Trustee as to the voting
thereof at the time at which the ServiceSoft Consent is sought or the
ServiceSoft Meeting is held. To the extent that no instructions are
received from a Beneficiary with respect to the Voting Rights to which
such Beneficiary is entitled, the Trustee shall not exercise or permit
the exercise of such Beneficiary's Voting Rights.
4.2. NUMBER OF VOTES. With respect to all meetings of shareholders of
ServiceSoft at which holders of any class of ServiceSoft Shares arc
entitled to vote (a "SERVICESOFT MEETING") and with respect to all
written consents sought by ServiceSoft from its shareholders including
the
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holders of any class of ServiceSoft Shares (a "SERVICESOFT CONSENT"),
each Corresponding Beneficiary shall be entitled to instruct the
Trustee to cast and exercise one of the votes comprised in the Voting
Rights for each Exchangeable Share of a class possessed of Voting
Rights for such meeting owned of record by such Corresponding
Beneficiary on the record date established by ServiceSoft or by
applicable law for such ServiceSoft Meeting or ServiceSoft Consent, as
the case may be (the "BENEFICIARY VOTES") in respect of each matter,
question or proposition to be voted on at such ServiceSoft Meeting or
to be consented to in connection with such ServiceSoft Consent.
4.3. MAILINGS TO SHAREHOLDERS. With respect to each ServiceSoft Meeting and
ServiceSoft Consent, the Trustee will mail or cause to be mailed (or
otherwise communicate in the same manner as ServiceSoft utilizes in
communications to holders of ServiceSoft Shares of the relevant class,
subject to the Trustee being advised in writing of such method and its
ability to provide this method of communication) to each of the
Corresponding Beneficiaries named in the List on the same day as the
initial mailing of notice (or other communication) with respect to such
ServiceSoft Meeting or ServiceSoft Consent is given by ServiceSoft to
its shareholders:
(a) a copy of such notice, together with any related
materials to be provided to shareholders of
ServiceSoft;
(b) a statement that such Corresponding Beneficiary is
entitled to instruct the Trustee as to the exercise
of the Beneficiary Votes with respect to such
ServiceSoft Meeting or ServiceSoft Consent, as the
case may be, or, pursuant to section 4.7 of this
Agreement, to attend such ServiceSoft Meeting and to
exercise personally the Beneficiary Votes at such
meeting;
(c) a statement as to the manner in which such
instructions may be given to the Trustee, including
an express indication that instructions may be given
to the Trustee to give:
(i) a proxy to such Corresponding Beneficiary or
such Beneficiary's designee to exercise
personally the Beneficiary Votes; or
(ii) a proxy to a designated agent or other
representative of the management of
ServiceSoft to exercise such Beneficiary
Votes;
(d) a statement that if no such instructions are received
from the Corresponding Beneficiary, the Beneficiary
Votes to which such Corresponding Beneficiary is
entitled will not be exercised;
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(e) a form of direction whereby the Corresponding
Beneficiary may so direct and instruct the Trustee as
contemplated herein; and
(f) a statement of the time and date by which such
instructions must be received by the Trustee in order
to be binding upon it, which in the case of a
ServiceSoft Meeting shall not be earlier than the
close of business on the second Business Day prior to
such meeting, and of the method for revoking or
amending such instructions.
The materials referred to above are to be provided to the Trustee by
ServiceSoft, but shall be subject to review and comment by the Trustee.
For the purpose of determining the Beneficiary Votes to which a
Beneficiary is entitled in respect of any such ServiceSoft Meeting or
ServiceSoft Consent, the number of Exchangeable Shares of the relevant
class owned of record by the Beneficiary shall be determined by
ServiceSoft Canada at the close of business on the record date
established by ServiceSoft or by applicable law for purposes of
determining shareholders entitled to vote at such ServiceSoft Meeting
or to give written consent in connection with such ServiceSoft Consent.
ServiceSoft will notify the Trustee of any decision of the Board of
Directors of ServiceSoft with respect to the calling of any such
ServiceSoft Meeting or the seeking of any such ServiceSoft Consent and
shall provide all necessary information and materials to the Trustee in
each case promptly and in any event in sufficient time to enable the
Trustee to perform its obligations contemplated by this section 4.3.
4.4. COPIES OF SHAREHOLDER INFORMATION. ServiceSoft will deliver to the
Trustee copies of all proxy materials, (including notices of
ServiceSoft Meetings but excluding proxies to vote ServiceSoft Common
Shares or ServiceSoft Series H Shares), 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 ServiceSoft Common Shares or
ServiceSoft Series H Shares in sufficient quantities and in sufficient
time so as to enable the Trustee to send or cause to be sent those
materials to each Corresponding Beneficiary at the same time as such
materials are first sent to holders of ServiceSoft Shares of the
relevant class (but in any event, no later than 3 Business Days before
the day on which materials are first sent to holders of ServiceSoft
Shares of the relevant class). The Trustee will mail or cause to be
mailed or otherwise send or cause to be sent to each Corresponding
Beneficiary, at the expense of ServiceSoft, copies of all such
materials (and all materials specifically directed to the Beneficiaries
or to the Trustee for the benefit of the Beneficiaries by ServiceSoft)
received by the Trustee from ServiceSoft at the same time as such
materials are first sent to holders of a class of ServiceSoft Shares.
The Trustee will also make available for inspection by any
Corresponding Beneficiary at the Trustee's principal office in the city
of Toronto all proxy materials, information statements, reports and
other written communications that are:
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(a) received by the Trustee as the registered holder of
each of the Voting Shares and made available by
ServiceSoft to the holders of the ServiceSoft Common
Shares or ServiceSoft Series H Shares; or
(b) specifically directed to either or both classes of
Beneficiaries or to the Trustee for the benefit of
either or both classes of Beneficiaries by
ServiceSoft.
4.5. OTHER MATERIALS. Immediately after receipt by ServiceSoft or any
shareholder of ServiceSoft of any material sent or given to the holders
of either the ServiceSoft Common Shares or the ServiceSoft Series H
Shares 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), ServiceSoft shall use its best efforts to
obtain and deliver to the Trustee copies thereof in sufficient
quantities so as to enable the Trustee to forward such material (unless
the same has been provided directly to the Corresponding Beneficiaries
by such third party) to each Corresponding Beneficiary as soon as
possible thereafter. As soon as practicable after receipt of such
material, the Trustee will mail or cause to be mailed or otherwise send
or cause to be sent to each Corresponding Beneficiary, at the expense
of ServiceSoft, copies of all such materials received by the Trustee
from ServiceSoft. The Trustee will also make available for inspection
by any Corresponding Beneficiary at the Trustee's principal office in
the city of Toronto copies of all such materials. It shall be a
condition precedent to the Trustee's obligations under this Agreement
including, in particular, under sections 4.3, 4.4, 4.9, 5.9 and 5.12,
that ServiceSoft Canada or ServiceSoft, as the case may be, prepare the
applicable material, List and mailing labels and to provide the Trustee
with a sufficient quantity thereof in a timely fashion.
4.6. LIST OF PERSONS ENTITLED TO VOTE. ServiceSoft Canada shall, (a) prior
to each annual, general and special ServiceSoft Meeting or the seeking
of any ServiceSoft Consent and (b) forthwith upon each request made at
any time by the Trustee in writing, prepare or cause to be prepared
through the registrar and transfer agent a list (a "List") of the names
and addresses of the Beneficiaries of both classes arranged in
alphabetical order and showing the number of Exchangeable Shares of
each class held of record by each such Beneficiary, in each case at the
close of business on the date specified by the Trustee in such request
or, in the case of a List prepared in connection with a ServiceSoft
Meeting or a ServiceSoft Consent, at the close of business on the
record date established by ServiceSoft or pursuant to applicable law
for determining the holders of ServiceSoft Shares entitled to receive
notice of and/or to vote at such ServiceSoft Meeting or to give consent
in connection with such ServiceSoft Consent. Each such List shall be
delivered to the Trustee promptly after receipt by ServiceSoft Canada
of such request or the record date for such meeting or seeking of
consent, as the case may be, and in any event within sufficient time as
to enable the Trustee to perform its obligations under this Agreement.
ServiceSoft agrees to give ServiceSoft Canada notice (with a copy
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to the Trustee) of the calling of any ServiceSoft Meeting or the
seeking of any ServiceSoft 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 ServiceSoft Canada to
perform its obligations under this section 4.6.
4.7. ENTITLEMENT TO DIRECT VOTES. Any Corresponding Beneficiary named in a
List prepared in connection with any ServiceSoft Meeting or any
ServiceSoft Consent where the relevant class of ServiceSoft Shares are
to be voted will be entitled (a) to instruct the Trustee in the manner
described in section 4.3 of this Agreement with respect to the exercise
of the Beneficiary Votes to which such Beneficiary is entitled or (b)
to attend such meeting and to personally exercise (or to exercise with
respect to any written consent), as the proxy of the Trustee, the
Beneficiary Votes to which such Beneficiary is entitled except, in each
case, to the extent that such Beneficiary has transferred the ownership
of any Exchangeable Shares in respect of which such Beneficiary is
entitled to Beneficiary Votes after the close of business on the record
date for such meeting or seeking of consent.
4.8. VOTING RIGHTS DELIVERED BY PROXY AT MEETING.
(a) In connection with each ServiceSoft Meeting and
ServiceSoft Consent, the Trustee shall exercise in
accordance with the instructions received from a
Corresponding Beneficiary pursuant to section 4.3 of
this Agreement, the Beneficiary Votes as to which
such Corresponding Beneficiary is entitled to direct
the vote (or any lesser number thereof as may be set
forth in the instructions); provided, however, that
such written instructions are received by the Trustee
from the Corresponding Beneficiary prior to the time
and date fixed by it for receipt of such instructions
in the notice given by the Trustee to the
Corresponding Beneficiary pursuant to section 4.3 of
this Agreement.
(b) For each ServiceSoft Meeting, the Trustee shall sign
and deliver to ServiceSoft proxies for the relevant
Voting Rights to be exercised at such meeting. At a
Corresponding Beneficiary's request, the Trustee
shall sign and deliver to such Corresponding
Beneficiary (or such person as it designates in
writing) a proxy to exercise personally (at such
Corresponding Beneficiary's expense) the Beneficiary
Votes as to which such Corresponding Beneficiary is
otherwise entitled hereunder to direct the vote, if
such Corresponding Beneficiary either (i) has not
previously given the Trustee instructions pursuant to
section 4.3 of this Agreement in respect of such
meeting, or (ii) submits to the Trustee written
revocation of any such previous instructions. At such
meeting, the Corresponding Beneficiary exercising
such Beneficiary Votes shall have the same rights as
a shareholder of the relevant class of ServiceSoft
Shares to speak at the meeting in respect
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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 distributed by
the Trustee pursuant to this Agreement shall be delivered or sent by
mail to each Corresponding Beneficiary at its address as shown on the
books of ServiceSoft Canada. ServiceSoft Canada shall provide or cause
to be provided to the Trustee for this purpose, on a timely basis and
without charge or other expense:
(a) current Lists of the Beneficiaries; and
(b) mailing labels to enable the Trustee to carry out its
duties under this Agreement.
4.10. TERMINATION OF VOTING RIGHTS. All of the rights of a Beneficiary with
respect to the Beneficiary Votes exercisable in respect of the
Exchangeable Shares held by such Beneficiary, including the right to
instruct the Trustee as to the voting of or to vote personally such
Beneficiary Votes, shall be deemed to be surrendered by the Beneficiary
to ServiceSoft and such Beneficiary Votes and the Voting Rights
represented thereby shall cease immediately upon the delivery by such
holder to ServiceSoft Canada (and ServiceSoft Canada shall forthwith
notify the Trustee in writing of such delivery) of the certificates
representing such Exchangeable Shares in connection with the exercise
by the Beneficiary of the Exchange Right or the occurrence of the
automatic exchange of Exchangeable Shares for the relevant class of
ServiceSoft Shares, as specified in Article 5 hereof (unless in either
case ServiceSoft shall not have delivered the requisite ServiceSoft
Shares of the relevant class issuable in exchange therefor, or any cash
consideration payable in lieu thereof shall not have been paid, to the
Trustee for delivery to the Beneficiaries), or upon the retraction,
redemption or purchase for cancellation of Exchangeable Shares pursuant
to [ARTICLE 6, ARTICLE 7 OR ARTICLE 8] of the Exchangeable Share
Provisions, respectively, or upon the effective date of the
liquidation, dissolution or winding-up of ServiceSoft Canada pursuant
to [ARTICLE 5] of the Exchangeable Share Provisions, or upon the
purchase of Exchangeable Shares from the holder thereof by ServiceSoft
pursuant to the exercise by ServiceSoft of the Retraction Call Right,
the Redemption Call Right or the Liquidation Call Right.
ARTICLE 5
EXCHANGE RIGHT AND AUTOMATIC EXCHANGE
5.1. GRANT AND OWNERSHIP OF THE EXCHANGE RIGHT. ServiceSoft hereby grants to
the Trustee as trustee for and on behalf of, and for the use and
benefit of, each of the classes of Beneficiaries the right (the
"EXCHANGE RIGHTS"), upon the occurrence and during the
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continuance of an Insolvency Event, to require ServiceSoft (subject to
compliance with applicable securities laws) to purchase from each or
any Beneficiary all or any part of each class of the Exchangeable
Shares held by the Beneficiary and the Automatic Exchange Rights, all
in accordance with the provisions of this Agreement. ServiceSoft hereby
acknowledges receipt from the Trustee, as trustee for and on behalf of
the Beneficiaries, of good and valuable consideration (and the adequacy
thereof) for the issuance of the Exchange Rights and the Automatic
Exchange Rights to the Trustee. During the term of the Trust and
subject to the terms and conditions of this Agreement, the Trustee
shall possess and be vested with full legal ownership of the Exchange
Rights and the Automatic Exchange Rights and shall be entitled to
exercise all of the rights and powers of an owner with respect to the
Exchange Rights and the Automatic Exchange Rights, provided that the
Trustee shall:
(a) hold the Exchange Rights and the Automatic Exchange
Rights and the legal title thereto as trustee solely
for the use and benefit of the Beneficiaries in
accordance with the provisions of this Agreement; and
(b) except as specifically authorized by this Agreement,
have no power or authority to exercise or otherwise
deal in or with the Exchange Rights or the Automatic
Exchange Rights, and the Trustee shall not exercise
any such rights for any purpose other than the
purposes for which this Trust is created pursuant to
this Agreement.
5.2. LEGENDED SHARE CERTIFICATES. ServiceSoft Canada will cause each
certificate representing Exchangeable Shares to bear an appropriate
legend notifying the Beneficiaries of:
(a) their right to instruct the Trustee with respect to
the exercise of the Exchange Rights in respect of the
Exchangeable Shares held by a Beneficiary; and
(b) the Automatic Exchange Rights.
5.3. GENERAL EXERCISE OF EXCHANGE RIGHTS. The Exchange Rights shall be and
remain vested in and exercisable by the Trustee. Subject to section
7.15 of this Agreement, the Trustee shall exercise the Exchange Rights
only on the basis of written instructions received pursuant to this
Article 5 from Beneficiaries entitled to instruct the Trustee as to the
exercise thereof. If requested by ServiceSoft, the Trustee shall
provide a copy of such instructions to ServiceSoft. To the extent that
no instructions are received from a Beneficiary with respect to the
Exchange Rights, the Trustee shall not exercise or permit the exercise
of the Exchange Rights.
5.4. PURCHASE PRICE. The purchase price payable by ServiceSoft for each
Exchangeable Common Share or Exchangeable Preferred Share to be
purchased by ServiceSoft under the
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Exchange Right shall be an amount per share equal to (a) the Current
Market Price of a ServiceSoft Common Share or ServiceSoft Series H
Share, as the case may be, on the last Business Day prior to the day of
closing of the purchase and sale of such Exchangeable Share under the
Exchange Right plus (b) an additional amount equivalent to the full
amount of all dividends declared and unpaid on each such Exchangeable
Share of the relevant class and all dividends declared on ServiceSoft
Shares of the relevant class which have not been declared on the
corresponding class of Exchangeable Shares in accordance with [SECTION
3.1] of the Exchangeable Share Provisions (provided that if the record
date for any such declared and unpaid dividends occurs on or after the
day of closing of such purchase and sale the purchase price shall not
include such additional amount equivalent to such declared and unpaid
dividends). In connection with each exercise of the Exchange Rights,
ServiceSoft will provide to the Trustee an Officer's Certificate
setting forth the calculation of the purchase price for each class of
Exchangeable Share. The purchase price for each such Exchangeable Share
so purchased may be satisfied only by ServiceSoft delivering or causing
to be delivered to the Trustee, on behalf of the relevant Beneficiary,
(subject to compliance with applicable securities laws), one
ServiceSoft Share of the relevant class and a cheque for the amount of
the purchase price (less any part thereof satisfied by the issuance of
a ServiceSoft Share of the relevant class) without interest. The
Trustee shall be entitled to rely and be fully protected in so relying
and acting upon such Officer's Certificate.
5.5. EXERCISE INSTRUCTIONS. Subject to the terms and conditions herein set
forth, a Beneficiary shall be entitled, upon the occurrence and during
the continuance of an Insolvency Event, to instruct the Trustee to
exercise the Exchange Rights with respect to all or any part of the
Exchangeable Shares of either class registered in the name of such
Beneficiary on the books of ServiceSoft Canada. To cause the exercise
of the Exchange Right by the Trustee, the Beneficiary shall deliver to
the Trustee, in person or by certified or registered mail, at its
principal office in Toronto, Ontario or at such other places in Canada
as the Trustee may from time to time designate by written notice to the
Beneficiaries, the certificates representing the Exchangeable Shares of
the relevant class or classes which such Beneficiary desires
ServiceSoft to purchase, duly endorsed in blank, and accompanied by
such other documents and instruments as may be required to effect a
transfer of Exchangeable Shares under the Business Corporations Act
(Ontario) and the by-laws of ServiceSoft Canada and such additional
documents and instruments as the Trustee, ServiceSoft and ServiceSoft
Canada may reasonably require together with (a) a duly completed form
of notice of exercise of the Exchange Right (in the form attached as
Schedule "A" to this Agreement), contained on the reverse of or
attached to the Exchangeable Share certificates, stating (i) that the
Beneficiary thereby instructs the Trustee to exercise the Exchange
Right so as to require ServiceSoft to purchase from the Beneficiary the
number and class of Exchangeable Shares specified therein, (ii) that
such Beneficiary has good title to and owns all such Exchangeable
Shares to be acquired by ServiceSoft free and clear of all liens,
claims, security interests, adverse claims and encumbrances, (iii) the
names in which the certificates representing
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ServiceSoft Shares of the relevant class deliverable in connection with
the exercise of the Exchange Right and cheques for the balance of the
purchase price, if any, are to be issued, and (iv) the names and
addresses of the persons to whom such new certificates and cheques for
the balance of the purchase price, if any, should be delivered and (b)
payment (or evidence satisfactory to the Trustee, ServiceSoft Canada
and ServiceSoft of payment) of the taxes (if any) payable as
contemplated by section 5.8 of this Agreement. If only a part of the
Exchangeable Shares represented by any certificate or certificates
delivered to the Trustee are to be purchased by ServiceSoft under the
Exchange Right, a new certificate for the balance of such Exchangeable
Shares shall be issued by ServiceSoft Canada to the holder at the
expense of ServiceSoft Canada.
5.6. DELIVERY OF SERVICESOFT SHARES; EFFECT OF EXERCISE.
(a) Promptly after receipt of the certificates representing the
Exchangeable Shares which the Beneficiary desires ServiceSoft
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 Rights (and payment
of taxes, if any, or evidence thereof), duly endorsed for
transfer to ServiceSoft, the Trustee shall provide notice
(substantially in the form of Schedule "B" to this Agreement)
to ServiceSoft and ServiceSoft Canada of its receipt of the
same, which notice to ServiceSoft and ServiceSoft Canada shall
constitute exercise of the Exchange Right by the Trustee on
behalf of the holder of such Exchangeable Shares, and
ServiceSoft shall immediately thereafter deliver or cause to
be delivered to the Trustee, for delivery to the Beneficiary
of such Exchangeable Shares (or to such other persons, if any,
properly designated by such Beneficiary), (subject to
compliance with applicable securities laws) the certificates
for the number of ServiceSoft Shares of the relevant class
deliverable in connection with the exercise of the Exchange
Rights, which shares shall be duly issued as fully paid and
non-assessable and shall be free and clear of any lien, claim
or encumbrance, and cheques for the total purchase price
therefor (less any part thereof satisfied by the issuance of
ServiceSoft Shares of the relevant class) without interest.
(b) Immediately upon the giving of notice by the Trustee to
ServiceSoft and ServiceSoft Canada of the exercise of the
Exchange Right, as provided in this section 5.6 but subject to
section 5.13 of this Agreement regarding withholding tax, the
closing of the transaction of purchase and sale contemplated
by the Exchange Right shall be deemed to have occurred, and
the Beneficiary of such Exchangeable Shares shall be deemed to
have transferred to ServiceSoft all of its right, title and
interest in and to such Exchangeable Shares and in the related
interest in the Trust Estate and shall cease to be a holder of
such Exchangeable Shares and shall not be entitled to exercise
any of the rights of a holder in respect thereof, other than
the right to receive his
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proportionate part of the total purchase price therefor,
provided that if the requisite number of ServiceSoft Shares of
the relevant class (together with a cheque for the total
purchase price therefor (less any part thereof satisfied by
the issuance of ServiceSoft Shares) is not allotted, issued
and delivered by ServiceSoft to the Trustee for delivery to
such Beneficiary (or to such other persons, if any, properly
designated by such Beneficiary), within five Business Days of
the date of the giving of such notice by the Trustee, the
rights of the Beneficiary shall remain unaffected until such
ServiceSoft Shares of the relevant class are so allotted,
issued and delivered by ServiceSoft and/or any such cheque is
so delivered and paid, as applicable. Concurrently with such
Beneficiary ceasing to be a holder of Exchangeable Shares, the
Beneficiary shall be considered and deemed for all purposes to
be the holder of ServiceSoft Shares delivered to it pursuant
to the Exchange Rights.
5.7. EXERCISE OF EXCHANGE RIGHTS SUBSEQUENT TO RETRACTION. In the event that
a Beneficiary has exercised its right under Article 6 of the
Exchangeable Share Provisions to require ServiceSoft Canada to redeem
any or all of the Exchangeable Shares held by the Beneficiary (the
"RETRACTED SHARES") and is notified by ServiceSoft Canada pursuant to
Section 6.6 of the Exchangeable Shares Provisions that ServiceSoft
Canada will not be permitted as a result of solvency requirements of
applicable law to redeem all such Retracted Shares, subject to receipt
by the Trustee of written notice to that effect from ServiceSoft
Canada, and provided that ServiceSoft shall not have exercised the
Retraction Call Right with respect to the Retracted Shares and that the
Beneficiary has not revoked the retraction request delivered by the
Beneficiary to ServiceSoft Canada pursuant to [SECTION 6.1] of the
Exchangeable Share Provisions, the retraction request will constitute
and will be deemed to constitute notice from the Beneficiary to the
Trustee instructing the Trustee to exercise the Exchange Right with
respect to those Retracted Shares which ServiceSoft Canada is unable to
redeem. In any such event, ServiceSoft Canada hereby agrees with the
Trustee and in favour of the Beneficiary immediately to notify the
Trustee of such prohibition against ServiceSoft Canada redeeming all of
the Retracted Shares and immediately to forward or cause to be
forwarded to the Trustee all relevant materials delivered by the
Beneficiary to ServiceSoft Canada (including without limitation a copy
of the retraction request delivered pursuant to [SECTION 6.1] of the
Exchangeable 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
ServiceSoft Canada is not permitted to redeem and will require
ServiceSoft to purchase such shares in accordance with the provisions
of this Article 5.
5.8. STAMP OR OTHER TRANSFER TAXES. Upon any sale of Exchangeable Shares to
ServiceSoft pursuant to the Exchange Right or the Automatic Exchange
Rights, the share certificate or certificates representing ServiceSoft
Shares of the relevant class to be delivered in connection with the
payment of the total purchase price therefor shall be issued in the
name
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of the Beneficiary of the Exchangeable Shares so sold or in such name
as such Beneficiary may otherwise direct in writing without charge to
the holder of the Exchangeable Shares so sold; provided, however, that
such Beneficiary (a) shall pay (and neither ServiceSoft, ServiceSoft
Canada nor the Trustee shall be required to pay) any documentary,
stamp, transfer or other taxes that may be payable in respect of any
transfer involved in the issuance or delivery of such shares to a
person other than such Beneficiary or (b) shall have established to the
satisfaction of the Trustee, ServiceSoft and ServiceSoft Canada 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 which with the giving of notice or the
passage of time or both would be an Insolvency Event, ServiceSoft
Canada and ServiceSoft shall give written notice thereof to the
Trustee. As soon as practicable after receiving notice from ServiceSoft
Canada and ServiceSoft or from any other person of the occurrence of an
Insolvency Event, the Trustee will mail or cause to be mailed to each
Beneficiary, at the expense of ServiceSoft, a notice of such Insolvency
Event in the form provided by ServiceSoft, which notice shall contain a
brief statement of the right of the Beneficiaries with respect to the
Exchange Rights. It shall be a condition precedent to the Trustee's
obligation to mail a Beneficiary a notice of Insolvency Event that
ServiceSoft Canada prepare such notice and provide the Trustee with a
sufficient quantity in a timely fashion.
5.10. QUALIFICATION OF SERVICESOFT SHARES. ServiceSoft represents and
warrants that it has taken all actions and done all things as are
necessary or desirable under any Canadian or United States federal,
provincial or state law or regulation or pursuant to the rules and
regulations of any regulatory authority or any other legal requirement
(collectively, the "APPLICABLE LAWS") as they exist on the date hereof
and will in good faith expeditiously take all such actions and do all
such things as are necessary or desirable under Applicable Laws as they
may exist in the future to cause the ServiceSoft Common Shares and the
ServiceSoft Series H Shares to be issued and delivered pursuant to the
Exchangeable Share Provisions, the Exchange Rights or the Automatic
Exchange Rights (other than compliance with Applicable Laws relating to
the ability of holders to freely trade the ServiceSoft Shares, as to
which no representation is given). To the extent that holders of
Exchangeable Shares have exercised registration rights in respect of
ServiceSoft Shares issuable in accordance with the Exchangeable Share
Provisions, ServiceSoft will in good faith expeditiously take all such
actions and do all things as are necessary or desirable to cause all
ServiceSoft Shares of the relevant class to be delivered pursuant to
the Exchangeable Share Provisions, the Exchange Right or the Automatic
Exchange Rights to be listed, quoted or posted for trading on all stock
exchanges and quotation systems, if any, on which outstanding
ServiceSoft Shares of that class are listed, quoted or posted for
trading at such time.
5.11. RESERVATION OF SERVICESOFT SHARES.
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(a) ServiceSoft hereby represents, warrants and covenants that 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
ServiceSoft Common Shares (a) as is equal to the sum of (i)
the number of Exchangeable Shares issued and outstanding from
time to time and (ii) the number of Exchangeable Shares
issuable upon the exercise of all rights to acquire
Exchangeable Shares outstanding from time to time and (b) as
are now and may hereafter be required to enable and permit
ServiceSoft Canada and ServiceSoft to meet their respective
obligations hereunder, under the Support Agreement, under the
Exchangeable Share Provisions and under any other security or
commitment pursuant to which ServiceSoft may now or hereafter
be required to issue ServiceSoft Common Shares.
(b) ServiceSoft hereby represents, warrants and covenants that 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
ServiceSoft Series H Shares (a) as is equal to the sum of (i)
the number of Exchangeable Preferred Shares issued and
outstanding from time to time and (ii) the number of
Exchangeable Preferred Shares issuable upon the exercise of
all rights to acquire Exchangeable Preferred Shares
outstanding from time to time and (b) as are now and may
hereafter be required to enable and permit ServiceSoft Canada
and ServiceSoft to meet their respective obligations
hereunder, under the Support Agreement, under the Exchangeable
Share Provisions and under any other security or commitment
pursuant to which ServiceSoft may now or hereafter be required
to issue ServiceSoft Series H Shares.
5.12. AUTOMATIC EXCHANGE ON LIQUIDATION OF SERVICESOFT.
(a) ServiceSoft will give the Trustee notice of each of
the following events at the time set forth below:
(i) in the event of any determination by the
Board of Directors of ServiceSoft to
institute voluntary liquidation, dissolution
or winding up proceedings with respect to
ServiceSoft or to effect any other
distribution of assets of ServiceSoft among
its shareholders for the purpose of winding
up its affairs, at least 60 days prior to
the proposed effective date of such
liquidation, dissolution, winding up or
other distribution; and
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(ii) immediately, upon the earlier of (A) receipt
by ServiceSoft of notice of and (B)
ServiceSoft otherwise becoming aware of any
threatened or instituted claim, suit,
petition or other proceedings with respect
to the involuntary liquidation, dissolution
or winding-up of ServiceSoft or to effect
any other distribution of assets of
ServiceSoft among its shareholders for the
purpose of winding up its affairs.
(b) immediately following receipt by the Trustee from
ServiceSoft of notice of any event (a "LIQUIDATION
EVENT") contemplated by section 5.12(a)(i) or
5.12(a)(ii) above, the Trustee will give notice
thereof to the Beneficiaries. Such notice shall be
provided by ServiceSoft to the Trustee and shall
include a brief description of the automatic exchange
of Exchangeable Shares for ServiceSoft Common Shares
and ServiceSoft Series H Shares provided for in
section 5.12(c).
(c) In order that the Beneficiaries will be able to
participate on a pro rata basis with the holders of
ServiceSoft Shares in the distribution of assets of
ServiceSoft in connection with a Liquidation Event,
on the fifth Business Day prior to the effective date
(the "LIQUIDATION EVENT EFFECTIVE DATE") of a
Liquidation Event all of the then outstanding
Exchangeable Shares shall be automatically exchanged
for the relevant ServiceSoft Shares. To effect such
automatic exchange, ServiceSoft shall purchase each
Exchangeable Share outstanding on the fifth Business
Day prior to the Liquidation Event Effective Date and
held by Beneficiaries, and each Beneficiary shall
sell the Exchangeable Shares held by it at such time,
for a purchase price per Exchangeable Share equal to
(a) the Current Market Price of a ServiceSoft Common
Share or ServiceSoft Series H Share, as the case may
be, on the fifth Business Day prior to the
Liquidation Event Effective Date, which shall be
satisfied in full by ServiceSoft delivering or
causing to be delivered to the Beneficiary one
ServiceSoft Common Share or ServiceSoft Series H
Share, as the case may be, plus (b) an additional
amount equivalent to the full amount of all dividends
declared and unpaid on each such Exchangeable Share
and all dividends declared on the relevant class of
ServiceSoft Shares which have not been declared on
such Exchangeable Shares in accordance with Section
3.1 of the Exchangeable Share Provisions (provided
that if the record date for any such declared and
unpaid dividends occurs on or after the day of
closing of such purchase and sale the purchase price
shall not include such additional amount equivalent
to such declared and unpaid dividends). In connection
with such automatic exchange, ServiceSoft will
provide to the Trustee an Officer's Certificate
setting forth the calculation of the purchase
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price for each Exchangeable Share. The Trustee shall
be entitled to rely and be fully protected in so
relying and acting upon such Officer's Certificate.
(d) On the fifth Business Day prior to the Liquidation
Event Effective Date, the closing of the transaction
of purchase and sale contemplated by the automatic
exchange of Exchangeable Common Shares for
ServiceSoft Common Shares and the automatic exchange
of Exchangeable Preferred Shares for ServiceSoft
Series H Shares shall be deemed to have occurred, and
each Beneficiary shall be deemed to have transferred
to ServiceSoft all of the Beneficiary's right, title
and interest in and to its Exchangeable Shares and
the related interest in the Trust Estate and shall
cease to be a holder of such Exchangeable Shares and
ServiceSoft shall deliver or cause to be delivered to
the Beneficiary ServiceSoft Shares of the relevant
class deliverable upon the automatic exchange of
Exchangeable Shares for ServiceSoft Shares and shall
deliver to the Trustee for delivery to the
Beneficiary a cheque for the balance, if any, of the
total purchase price for such Exchangeable Shares
without interest. Concurrently with such Beneficiary
ceasing to be a holder of Exchangeable Shares, the
Beneficiary shall be considered and deemed for all
purposes to be the holder of ServiceSoft Shares of
the relevant class issued to it pursuant to the
automatic exchange of Exchangeable Shares for
ServiceSoft Shares and the certificates held by the
Beneficiary previously representing the Exchangeable
Shares exchanged by the Beneficiary with ServiceSoft
pursuant to such automatic exchange shall thereafter
be deemed to represent ServiceSoft Common Shares or
ServiceSoft Series H Shares, as the case may be,
delivered to the Beneficiary by ServiceSoft pursuant
to such automatic exchange. Upon the request of a
Beneficiary and the surrender by the Beneficiary of
Exchangeable Share certificates deemed to represent
ServiceSoft Shares, duly endorsed in blank and
accompanied by such instruments of transfer as
ServiceSoft may reasonably require, ServiceSoft shall
deliver or cause to be delivered to the Beneficiary
certificates representing ServiceSoft Shares of the
relevant class of which the Beneficiary is the
holder.
5.13. WITHHOLDING RIGHTS. ServiceSoft and the Trustee shall be entitled to
deduct and withhold from the consideration otherwise payable pursuant
to this Agreement to any holder of Exchangeable Shares such amounts as
ServiceSoft or the Trustee is required or permitted to deduct and
withhold with respect to the making of such payment under the Income
Tax Act (Canada) or any provision of provincial tax law. To the extent
that amounts are so withheld, such withheld amounts shall be treated
for all purposes of this Agreement as having been paid to the holder of
the shares in respect of which such deduction and withholding was made,
provided that such withheld amounts are actually remitted to the
appropriate taxing
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authority. To the extent that the amount so required or permitted to be
deducted or withheld from any payment to a holder exceeds the cash
portion of the consideration otherwise payable to the holder,
ServiceSoft is hereby authorized to sell or otherwise dispose of at
fair market value such portion of the consideration as is necessary to
provide sufficient funds to ServiceSoft or the Trustee, as the case may
be, in order to enable it to comply with such deduction or withholding
requirement and shall account to the relevant holder for any balance of
such sale proceeds.
If, upon the occurrence of an Insolvency Event, a non-Canadian resident
Beneficiary instructs the Trustee to exercise the Exchange Right,
ServiceSoft shall provide the Trustee, in cash, with sufficient funds
to satisfy any withholding taxes applicable in connection with the sale
of such Beneficiary's Exchangeable Shares to ServiceSoft otherwise such
exchange shall not have occurred or be deemed to have occurred. The
"fair market value" of any class of ServiceSoft Shares at a particular
date shall, for the purposes of calculating any such applicable
withholding taxes, shall be the Current Market Price of that class of
ServiceSoft Shares or shall be determined by such other method of
valuation which has been recommended or suggested by Revenue Canada as
providing a satisfactory assessment of such fair market value. Prior to
making any distribution to holders of Exchangeable Shares, ServiceSoft
or ServiceSoft Canada, as the case may be, shall ensure that the
Trustee has access to sufficient funds (by directly providing, if
necessary, such funds to the Trustee) to enable the Trustee to comply
with any applicable withholding taxes in connection with such
distribution.
ARTICLE 6
RESTRICTIONS ON ISSUE OR AMENDMENT
OF SERVICESOFT SPECIAL VOTING STOCK
6.1. AMENDMENT/ISSUE OF ADDITIONAL SHARES. During the term of this
Agreement, ServiceSoft will not issue any shares of ServiceSoft Special
Non-Equity Voting Stock in addition to the Voting Shares, and, for
greater certainty will not amend the terms of either class of Voting
Shares without obtaining the prior written consent of 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) the receipt and holding of the Voting Shares from
ServiceSoft as trustee for and on behalf of the
Beneficiaries in accordance with the provisions of
this Agreement;
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(b) granting proxies and distributing materials to
Beneficiaries as provided in this Agreement;
(c) voting the Beneficiary Votes in accordance with the
provisions of this Agreement;
(d) receiving the grant of the Exchange Rights and the
Automatic Exchange Rights from ServiceSoft as trustee
for and on behalf of the Beneficiaries in accordance
with the provisions of this Agreement;
(e) exercising the Exchange Rights and enforcing the
benefit of the Automatic Exchange Rights, in each
case in accordance with the provisions of this
Agreement, and in connection therewith receiving from
Beneficiaries Exchangeable Shares and other requisite
documents and distributing to such Beneficiaries
ServiceSoft Shares and cheques, if any, to which such
Beneficiaries are entitled upon the exercise of the
Exchange Right or pursuant to the Automatic Exchange
Rights, as the case may be;
(f) holding title to the Trust Estate;
(g) investing any moneys forming, from time to time, a
part of the Trust Estate as provided in section 7.11
of this Agreement;
(h) taking action at the direction of a Beneficiary or
Beneficiaries to enforce the obligations of
ServiceSoft under this Agreement; 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 may be necessary, appropriate or desirable to effect the
purpose of the Trust. Any exercise of such rights, powers and
authorities by the Trustee shall be final, conclusive and binding upon
all persons affected thereby including the parties to this Agreement
and the Beneficiaries. For greater certainty, the Trustee shall have no
duties or liabilities except those which are expressly set forth in
this Agreement. In particular, the Trustee will have no liability or
responsibility arising under any agreement or instrument, including the
Combination Agreement, the Exchangeable Share Provisions or any other
agreement or instrument referred to in this Agreement, to which the
Trustee is not a party and shall not be bound by any notice of a claim
or demand with respect thereto.
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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 Beneficiaries and shall exercise the care, diligence
and skill that a reasonably prudent person would exercise in comparable
circumstances.
7.2. NO CONFLICT OF INTEREST. The Trustee represents to ServiceSoft Canada
and ServiceSoft that at the date of execution and delivery of this
Agreement there exists no material conflict of interest between its
role as Trustee under this Agreement and its role 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 of this Agreement. 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 Ontario Court for an order that the
Trustee be replaced as trustee under this Agreement.
7.3. DEALINGS WITH TRANSFER AGENTS, REGISTRARS, ETC. ServiceSoft Canada and
ServiceSoft irrevocably authorize the Trustee, from time to time, to:
(a) consult, communicate and otherwise deal with the
respective registrars and transfer agents, and with
any such subsequent registrar or transfer agent, of
the Exchangeable Common Shares, Exchangeable
Preferred Shares, ServiceSoft Common Shares and the
ServiceSoft Series H Shares; and
(b) requisition, from time to time, (i) from any such
registrar or transfer agent any information readily
available from the records maintained by it which the
Trustee may reasonably require for the discharge of
its duties and responsibilities under this Agreement,
and (ii) from the registrar or transfer agent of
ServiceSoft Common Shares and ServiceSoft Series H
Shares, and any subsequent registrar or transfer
agent of such shares, the share certificates issuable
upon the exercise from time to time of the Exchange
Right and pursuant to the Automatic Exchange Rights
in the manner specified in Article 5 of this
Agreement.
ServiceSoft Canada and ServiceSoft irrevocably authorize their
respective registrars and transfer agents to comply with all such
requests. ServiceSoft covenants that it will supply ServiceSoft's
transfer agent with duly executed share certificates for the purpose of
completing the exercise from time to time of the Exchange Right and the
Automatic Exchange Rights, in each case pursuant to Article 5 of this
Agreement.
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7.4. BOOKS AND RECORDS. The Trustee shall keep available for inspection by
ServiceSoft and ServiceSoft Canada, at the Trustee's principal office
in ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, correct and complete books and records of account
relating to the Trustee's actions under this Agreement, including
without limitation all information relating to mailings and
instructions to and from Beneficiaries and all transactions pursuant to
the Exchange Right and the Automatic Exchange Rights on or before
February 12, 2000, and on or before February 12 in every year
thereafter, so long as the Voting Shares are on deposit with the
Trustee, the Trustee shall transmit to ServiceSoft and ServiceSoft
Canada a brief report, dated as of the preceding December 31, with
respect to:
(a) the property and funds comprising the Trust Estate as
of that date;
(b) the number of exercises of the Exchange Rights, if
any, and the aggregate number of Exchangeable Shares
of each class received by the Trustee on behalf of
the Beneficiaries in consideration of the issue and
delivery by ServiceSoft of ServiceSoft Shares of each
class in connection with the Exchange Rights, during
the calendar year ended on such date; and
(c) all other actions taken by the Trustee in the
performance of its duties under this Agreement which
it had not previously reported.
7.5. INCOME TAX RETURNS AND REPORTS. The Trustee shall, if required under
the Income Tax Act (Canada) or any provincial law or if advised by
ServiceSoft or ServiceSoft Canada, prepare and file on behalf of the
Trust the appropriate income tax returns and any other returns or
reports as may be required by applicable law or pursuant to the rules
and regulations of any securities exchange or other trading system
through which the Exchangeable Shares are traded and, in connection
therewith and, without limiting the generality of section 7.10 of this
Agreement, may obtain the advice and assistance of such experts as the
Trustee may consider necessary or advisable. If requested by the
Trustee, ServiceSoft shall retain such experts for 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
Beneficiary upon such Beneficiary furnishing to the Trustee reasonable
funding, security and indemnity against the costs, expenses and
liabilities which may be incurred by the Trustee, provided that no
Beneficiary 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 Shares pursuant to Article 4 of this Agreement,
subject to section 7.15 of this Agreement, and with respect to the
Exchange Rights pursuant to Article 5 of this Agreement, subject to
section 7.15 of this Agreement, and with respect to the Automatic
Exchange Rights pursuant to
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Article 5 of this Agreement. None of the provisions contained in this
Agreement shall require the Trustee to expend or risk its own funds or
otherwise incur financial liability in the exercise of any of its
rights, powers, duties or authorities unless funded, given security and
indemnified as provided in this Agreement.
7.7. ACTIONS BY BENEFICIARIES. No Beneficiary shall have the right to
institute any action, suit or proceeding or to exercise any other
remedy authorized by this Agreement for the purpose of enforcing any of
its rights or for the execution of any trust or power hereunder unless
the Beneficiary has requested the Trustee to take or institute such
action, suit or proceeding and furnished the Trustee with the funding,
security and indemnity referred to in section 7.6 of this Agreement and
the Trustee shall have failed to act within a reasonable time
thereafter. In such case, but not otherwise, the Beneficiary shall be
entitled to take proceedings in any court of competent jurisdiction
such as the Trustee might have taken; it being understood and intended
that no one or more Beneficiaries shall have any right in any manner
whatsoever to affect, disturb or prejudice the rights hereby created by
any such action, or to enforce any right hereunder or under the Voting
Rights, the Exchange Rights or the Automatic Exchange Rights except
subject to the conditions and in the manner provided of this Agreement,
and that all powers and trusts under this Agreement shall be exercised
and all proceedings at law shall be instituted, had and maintained by
the Trustee, except only as provided of this Agreement, and in any
event for the equal benefit of all Beneficiaries.
7.8. RELIANCE UPON DECLARATIONS. The Trustee shall not be considered to be
in contravention of any of its rights, powers, duties and authorities
hereunder if 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.
7.9. EVIDENCE AND AUTHORITY TO TRUSTEE. To the extent ServiceSoft Canada
and/or ServiceSoft are required to 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 ServiceSoft
Canada and/or ServiceSoft or the Trustee under this Agreement or as a
result of any obligation imposed under this Agreement, including,
without limitation, in respect of the Voting Rights or the Exchange
Right or the Automatic Exchange Rights, and the taking of any other
action to be taken by the Trustee at the request of or on the
application of ServiceSoft Canada and/or ServiceSoft, such evidence
shall consist of an Officer's Certificate of ServiceSoft Canada and/or
ServiceSoft, as the case may be, 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.
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Whenever such evidence relates to a matter other than the Voting Rights
or the Exchange Rights or the Automatic Exchange Rights 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 him, provided that
if such report or opinion is furnished by a director, officer or
employee of ServiceSoft Canada and/or ServiceSoft 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 or as the Trustee may otherwise request shall include a
statement by the person giving the evidence:
(a) declaring that he has read and understands the
provisions of this Agreement relating to the
condition in question;
(b) describing the nature and scope of the examination or
investigation upon which he based the statutory
declaration, certificate, statement or opinion; and
(c) declaring the he has made such examination or
investigation as he believes is necessary to enable
him to make the statements or give the opinions
contained or expressed therein.
7.10. EXPERTS, ADVISORS AND AGENTS. The Trustee may:
(a) in relation to these presents, act and rely on the
opinion or advice of or information obtained from any
solicitor, auditor, accountant, appraiser, valuer,
engineer or other expert, whether retained by the
Trustee or by ServiceSoft Canada and/or ServiceSoft
or otherwise, and may retain or employ such
assistants as may be necessary to the proper
discharge of its powers and duties and determination
of its rights under this Agreement and may pay proper
and reasonable compensation for all such legal and
other advice or assistance; and
(b) retain or employ such agents and other assistants as
it may reasonably require for the proper
determination and discharge of its powers and duties
under this Agreement, 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) and compensation
for all disbursements, costs and expenses made or
incurred by it in the discharge of its duties under
this Agreement and in the management of the Trust.
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7.11. INVESTMENT OF MONEYS HELD BY TRUSTEE. Unless otherwise provided in this
Agreement, any moneys held by or on behalf of the Trustee shall, unless
otherwise directed in writing by ServiceSoft Canada, be deposited in an
interest bearing account at any chartered bank in Canada. At the end of
each calendar year during which the Trustee shall have held monies in
trust in accordance with this section 7.11, the Trustee shall file on
behalf of the Trust or, if required by law, shall issue to the
Beneficiaries of the Trust, all appropriate forms under the Income Tax
Act (Canada) in respect of any interest earned on such monies and to
the extent such income is allocated to the Beneficiaries, it shall be
allocated in proportions equivalent to the Beneficiaries' respective
percentage ownership of the Exchangeable Shares (treated as a single
class) outstanding at the relevant allocation date. ServiceSoft Canada
shall provide or cause to be provided such information as the Trustee
may require in respect of the Beneficiaries' ownership of Exchangeable
Shares.
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 ServiceSoft
Canada and/or ServiceSoft 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 and be protected in so
acting and relying upon any such copy purporting to be authenticated
and believed by the Trustee to be genuine.
7.14. AUTHORITY TO CARRY ON BUSINESS. The Trustee represents to ServiceSoft
Canada and ServiceSoft that at the date of execution and delivery by it
of this Agreement it is authorized to carry on the business of a trust
company in the Province of Ontario but if, notwithstanding the
provisions of this section 7.14, it ceases to be so authorized to carry
on business, the validity and enforceability of this Agreement and the
Voting Rights, the Exchange Rights and the Automatic Exchange Rights
shall not be affected in any manner whatsoever by reason only of such
event but the Trustee shall, within 90 days after ceasing to be
authorized to carry on the business of a trust company in the Province
of Ontario, either become so authorized or resign in the manner and
with the effect specified in Article 10 of this Agreement.
7.15. CONFLICTING CLAIMS. If conflicting claims or demands are made or
asserted with respect to any interest of any Beneficiary in any
Exchangeable Shares, including any disagreement between the heirs,
representatives, successors or assigns succeeding to all or any part of
the interest of any Beneficiary in any Exchangeable Shares resulting in
conflicting claims or demands being made in connection with such
interest, then the Trustee shall be entitled, a
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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, Exchange Rights or Automatic Exchange Rights subject
to such conflicting claims or demands and, in so doing, the Trustee
shall not be or become liable to any person on account of such election
or its failure or refusal to comply with any such conflicting claims or
demands. The Trustee shall be entitled to continue to refrain from
acting and to refuse to act until:
(a) the rights of all adverse claimants with respect to
the Voting Rights, Exchange Right or Automatic
Exchange Rights subject to such conflicting claims or
demands have been adjudicated by a final judgment of
a court of competent jurisdiction and all rights of
appeal have expired; or
(b) all differences with respect to the Voting Rights,
Exchange Rights or Automatic Exchange Rights subject
to such conflicting claims or demands have been
conclusively settled by a valid written agreement
binding on all such adverse claimants, and the
Trustee shall have been furnished with an executed
copy of such agreement.
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.
7.16. ACCEPTANCE OF TRUST. The Trustee hereby accepts the Trust created and
provided for by and in this Agreement and agrees to perform the same
upon the terms and conditions herein set forth and to hold all rights,
privileges and benefits conferred hereby and by law in trust for the
various persons who shall from time to time be Beneficiaries, subject
to all the terms and conditions set forth in this Agreement.
7.17. NOTICE TO TRUSTEE. 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 have been required so
to do under the terms of this Agreement; nor shall the Trustee be
required to take notice of, be deemed to have actual or constructive
notice or knowledge of any matter under this Agreement, or take any
action in connection with any notice of any ServiceSoft Meeting or the
seeking of any ServiceSoft Consent or any prohibition of ServiceSoft
Canada against redeeming any Retracted Shares as set out in section 5.7
of this Agreement or of any Insolvency Event or Liquidation Event as
set out in sections 5.9 and 5.12 of this Agreement, respectively,
(collectively, a "NOTICE EVENT"), unless and until notified in writing
of such Notice Event in accordance with section 14.3, which notice
shall distinctly specify the Notice Event desired to be brought to the
attention of the Trustee and
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in the absence of any such notice the Trustee may for all purposes of
this Agreement conclusively assume that no such Notice Event has
occurred.
7.18. MERGER OR CONSOLIDATION OF TRUSTEE. Any corporation into or with which
the Trustee may be merged or consolidated or amalgamated, or any
corporation resulting therefrom to which the Trustee shall be a party,
or any corporation succeeding to the trust business of the Trustee
shall be the successor to the Trustee under this Agreement without any
further act on its part or any of the parties hereto, provided that
such corporation would be eligible for appointment as a successor
trustee under the provisions of this Agreement.
7.19. NO PERSONAL LIABILITY. In the exercise of the powers, authorities or
discretion conferred upon the Trustee under this Agreement, the Trustee
is and shall be conclusively deemed to be acting as trustee of the
Trust and shall not be subject to any personal liability for any of the
liabilities, obligations, claims, demands, judgements, costs or
expenses against or with respect to the Trust.
7.20. INCUMBENCY CERTIFICATE. Each of ServiceSoft Canada and ServiceSoft
shall file with the Trustee a certificate of incumbency setting forth
the names of the individuals authorized to give instructions,
directions or other instruments to the Trustee ("AUTHORIZED PERSONS"),
together with specimen signatures of such persons, and the Trustee
shall be entitled to rely on the latest certificate of incumbency filed
with it unless it receives notice, in accordance with section 7.11, of
a change in Authorized Persons with updated specimen signatures.
ARTICLE 8
COMPENSATION
8.1. FEES AND EXPENSES OF THE TRUSTEE. ServiceSoft and ServiceSoft Canada
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 and the fees paid or to be paid by
the Trustee pursuant to section 7.10) and disbursements, including
counsel fees and disbursements, 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 ServiceSoft and
ServiceSoft Canada shall have no obligation to reimburse the Trustee
for any expenses or disbursements paid, incurred or suffered by the
Trustee in any suit or litigation in which the Trustee is determined to
have acted fraudulently or with gross negligence or wilful misconduct.
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ARTICLE 9
INDEMNIFICATION AND LIMITATION OF LIABILITY
9.1. INDEMNIFICATION OF THE TRUSTEE. ServiceSoft and ServiceSoft Canada
jointly and severally agree to indemnify and hold harmless the Trustee
and each of its directors, officers, employees and agents appointed and
acting in accordance with this Agreement (collectively, the
"INDEMNIFIED PARTIES") against all claims, losses, damages, costs,
taxes, penalties, interest, fines and reasonable expenses (including
expenses of the Trustee's legal counsel on a solicitor and its own
client basis) which, without fraud, gross negligence or wilful
misconduct 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, any act, error or
omission by the Trustee in carrying out its duties and responsibilities
set forth in this Agreement, the exercise or any power, authority or
discretion pertaining thereto, or any written or oral instructions
delivered to the Trustee by ServiceSoft or ServiceSoft Canada (such
authorization not to be unreasonably withheld) pursuant hereto
including, for greater certainty, any obligations or liability under
applicable income tax legislation arising as a result of the Trustee
being the owner of the Voting Share, Exchange Right and Automatic
Exchange Right. In no case shall ServiceSoft or ServiceSoft Canada be
liable under this indemnity for any claim against any of the
Indemnified Parties unless ServiceSoft and ServiceSoft Canada shall be
notified by the Trustee of the written assertion of a claim or of any
action commenced against the Indemnified Parties, promptly after any of
the Indemnified Parties shall have received any such written assertion
of a claim or shall have been served with a summons or other first
legal process giving information as to the nature and basis of the
claim. Subject to (ii), below, ServiceSoft and ServiceSoft Canada shall
be entitled to participate at their own expense in the defence and, if
ServiceSoft or ServiceSoft Canada so elect at any time after receipt of
such notice, either of them may assume the defence of any suit brought
to enforce any such claim. The Trustee shall have the right to employ
separate counsel in any such suit and participate in the defence
thereof but the fees and expenses of such counsel shall be at the
expense of the Trustee unless: (i) the employment of such counsel has
been authorized by ServiceSoft or ServiceSoft Canada; or (ii) the named
parties to any such suit include both the Trustee and ServiceSoft or
ServiceSoft Canada and the Trustee shall have been advised by counsel
acceptable to ServiceSoft or ServiceSoft Canada that there may be one
or more legal defences available to the Trustee which are different
from or in addition to those available to ServiceSoft or ServiceSoft
Canada (in which case ServiceSoft and ServiceSoft Canada shall not have
the right to assume the defence of such suit on behalf of the Trustee
but shall be liable to pay the reasonable fees and expenses of counsel
for the Trustee). This indemnity shall survive the termination of this
Agreement or the resignation or replacement of the Trustee.
9.2. LIMITATION OF LIABILITY. The Trustee shall not be held liable for any
loss which may occur by reason of depreciation of the value of any part
of the Trust Estate or any loss incurred as
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an investment of funds pursuant to this Agreement, except to the
extent that such loss is attributable to the fraud, gross negligence or
wilful misconduct 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
ServiceSoft and ServiceSoft Canada specifying the date on which it
desires to resign, provided that such notice shall never be given less
than 30 days before such desired resignation date unless ServiceSoft
and ServiceSoft Canada otherwise agree and provided further that such
resignation shall not take effect until the date of the appointment of
a successor trustee and the acceptance of such appointment by the
successor trustee. Upon receiving such notice of resignation,
ServiceSoft and ServiceSoft Canada 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.
10.2. REMOVAL. The Trustee, or any trustee hereafter appointed, may be
removed at any time on 30 days' prior notice by written instrument
executed by ServiceSoft and ServiceSoft Canada, in duplicate, one copy
of which shall be delivered to the trustee so removed and one copy to
the successor trustee.
In the event that a successor trustee has not been appointed at the
time the notice period for the Trustee's resignation or removal
expires, the Trustee, ServiceSoft Canada, ServiceSoft or any
Beneficiary may apply to a court of competent jurisdiction for the
appointment of a successor to the Trustee and such appointment of a
successor by such court shall not require the approval of the
Beneficiaries. Should the retiring Trustee apply for the appointment of
a successor trustee by order of a court of competent jurisdiction it
shall be at the joint and several expense of ServiceSoft and
ServiceSoft Canada.
10.3. SUCCESSOR TRUSTEE. Any successor trustee appointed as provided under
this Agreement shall execute, acknowledge and deliver to ServiceSoft
and ServiceSoft Canada and to its predecessor trustee an instrument
accepting such appointment. Thereupon the resignation or removal of the
predecessor trustee shall become effective and such successor trustee,
without any further act, deed or conveyance, shall become vested with
all the rights, powers, duties and obligations of its predecessor under
this Agreement, with like effect as if originally named as trustee in
this Agreement. However, on the written request of ServiceSoft and
ServiceSoft Canada or of the successor trustee, the trustee ceasing to
act shall, upon payment of any amounts then due it pursuant to the
provisions of this Agreement, execute and deliver an instrument
transferring to such successor trustee all the rights and powers of the
trustee ceasing to act. Upon the request of any such successor trustee,
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ServiceSoft, ServiceSoft Canada and such predecessor trustee shall
execute any and all instruments in writing for more fully and certainly
vesting in and confirming to such successor trustee all such rights and
powers.
10.4. NOTICE OF SUCCESSOR TRUSTEE. Upon acceptance of appointment by a
successor trustee as provided in this Agreement, ServiceSoft and
ServiceSoft Canada shall cause to be mailed notice of the succession of
such trustee under this Agreement to each Beneficiary specified in the
List. If ServiceSoft or ServiceSoft Canada shall fail to cause such
notice to be mailed within 10 days after acceptance of appointment by
the successor trustee, the successor trustee shall cause such notice to
be mailed at the expense of ServiceSoft and ServiceSoft Canada.
ARTICLE 11
SERVICESOFT SUCCESSORS
11.1. CERTAIN REQUIREMENTS IN RESPECT OF COMBINATION, ETC. ServiceSoft 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, but may do so if.
(a) such other person or continuing corporation is a duly
incorporated corporation (a "SERVICESOFT SUCCESSOR");
(b) ServiceSoft 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 an Agreement supplemental to this
Agreement and such other instruments (if any) as are
satisfactory in the opinion of legal counsel to the
Trustee are necessary or advisable to evidence the
assumption by ServiceSoft Successor of liability for
all moneys payable and property deliverable under
this Agreement and the covenant of such ServiceSoft
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 ServiceSoft under
this perform Agreement; and
(c) such transaction shall, in the opinion of legal
counsel to 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
Beneficiaries under this Agreement.
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11.2. VESTING OF POWERS IN SUCCESSOR. Whenever the conditions of section 11.1
of this Agreement have been duly observed and performed, the Trustee,
if required, by section 11.1 of this Agreement, ServiceSoft Successor
and ServiceSoft Canada shall execute and deliver the supplemental
Agreement provided for in Article 12 and thereupon ServiceSoft
Successor shall possess and from time to time may exercise each and
every right and power of ServiceSoft under this Agreement in the name
of ServiceSoft 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 ServiceSoft or any officers of ServiceSoft may be done and
performed with like force and effect by the directors or officers of
such ServiceSoft Successor.
11.3. WHOLLY-OWNED SUBSIDIARIES. Nothing in this Agreement shall be construed
as preventing the amalgamation or merger of any wholly-owned subsidiary
of ServiceSoft with or into ServiceSoft or the winding-up, liquidation
or dissolution of any wholly-owned subsidiary of ServiceSoft provided
that all of the assets of such subsidiary are transferred to
ServiceSoft or another wholly owned subsidiary of ServiceSoft and any
such transactions are expressly permitted by this Article 11.
ARTICLE 12
AMENDMENTS AND SUPPLEMENTAL TRUST AGREEMENTS
12.1. AMENDMENTS, MODIFICATIONS, ETC. This Agreement may not be amended or
modified except by an agreement in writing executed by ServiceSoft
Canada, ServiceSoft and the Trustee and approved by the Beneficiaries
in accordance with section 10.2 of the Exchangeable Share Provisions.
12.2. MINISTERIAL AMENDMENTS. Notwithstanding the provisions of section 12.1
of this Agreement, the parties to this Agreement may in writing, at any
time and from time to time, without the approval of the Beneficiaries,
amend or modify this Agreement for the purposes of:
(a) adding to the covenants of the parties to this
Agreement for the protection of the Beneficiaries
hereunder;
(b) making such amendments or modifications not
inconsistent with this Agreement as may be necessary
or desirable with respect to matters or questions
which, in the opinion of the board of directors of
each of ServiceSoft and Corporation and in the
opinion of the Trustee and its counsel, having in
mind the best interests of the Beneficiaries as a
whole, it may be expedient to make, provided that
such boards of directors and the Trustee and its
counsel shall be of the opinion that such amendments
and modifications
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will not be prejudicial to the rights of the Trustee
or interests of the Beneficiaries as a whole; or
(c) making such changes or corrections which, on the
advice of counsel to ServiceSoft Canada, ServiceSoft
and the Trustee, are required for the purpose of
curing or correcting any ambiguity or defect or
inconsistent provision or clerical omission or
mistake or manifest error, provided that the Trustee
and its counsel and the Board of Directors of each of
ServiceSoft Canada and ServiceSoft shall be of the
opinion that such changes or corrections will not be
prejudicial to the rights of the Trustee or interests
of the Beneficiaries as a whole.
12.3. MEETING TO CONSIDER AMENDMENTS. ServiceSoft Canada, at the request of
ServiceSoft, shall call a meeting or meetings of the Beneficiaries for
the purpose of considering any proposed amendment or modification
requiring approval pursuant to this Agreement. Any such meeting or
meetings shall be called and held in accordance with the by-laws of
ServiceSoft Canada, the Exchangeable Share Provisions and all
applicable laws.
12.4. CHANGES IN CAPITAL OF SERVICESOFT AND SERVICESOFT CANADA. At all times
after the occurrence of any event, as a result of which either
ServiceSoft Shares or the Exchangeable 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 any class of
ServiceSoft Shares or of the Exchangeable 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 TRUST AGREEMENTS. No amendment to or
modification or waiver of any of the provisions of this Agreement
otherwise permitted hereunder shall be effective unless made in writing
and signed by all of the parties hereto. From time to time ServiceSoft
Canada (when authorized by a resolution of the Board of Directors),
ServiceSoft (when authorized by a resolution of its board of directors)
and the Trustee may, subject to the provisions of these presents, and
they shall, when so directed by these presents, execute and deliver by
their proper officers, Agreements or other instruments supplemental
hereto, which thereafter shall form part hereof, for any one or more of
the following purposes:
(a) evidencing the succession of ServiceSoft Successors
to ServiceSoft and the covenants of and obligations
assumed by each such ServiceSoft Successor in
accordance with the provisions of Article 11 and the
successor of any successor trustee in accordance with
the provisions of Article 10;
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(b) making any additions to, deletions from or
alterations of the provisions of this Agreement or
the Voting Rights, the Exchange Rights or the
Automatic Exchange Rights which, in the opinion of
the Trustee and its counsel, will not be prejudicial
to the rights of the Trustee or interests of the
Beneficiaries as a whole or are in the opinion of
counsel to the Trustee necessary or advisable in
order to incorporate, reflect or comply with any
legislation the provisions of which apply to
ServiceSoft, ServiceSoft Canada, the Trustee or this
Agreement; and
(c) for any other purposes not inconsistent with the
provisions of this Agreement, including without
limitation to make or evidence any amendment or
modification to this agreement as contemplated
hereby, provided that, in the opinion of the Trustee
and its counsel, the rights of the Trustee and the
Beneficiaries as a whole will not be prejudiced
thereby.
ARTICLE 13
TERMINATION
13.1. TERM. The Trust created by this Agreement shall continue until the
earliest to occur of the following events:
(a) no outstanding Exchangeable Shares of any class are held by a
Beneficiary;
(b) each of ServiceSoft Canada and ServiceSoft send the Trustee a
notice confirming that it elects in writing to terminate the
Trust and such termination has been approved by the
Beneficiaries of Exchangeable Shares voting together as a
single class in accordance with section 10.2 of the
Exchangeable Share Provisions; and
(c) the agreement between the CIBC Mellon Trust Company and
ServiceSoft Canada in respect to registrar and transfer agency
services for ServiceSoft Canada is terminated.
13.2. SURVIVAL OF AGREEMENT. The provisions of Articles 8 and 9 shall survive
any termination of this Agreement or the resignation or removal of the
Trustee.
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;
provided, however,
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that if the provision or provisions so held to be invalid, illegal or
unenforceable, in the reasonable judgment of the parties to this
Agreement, is or are so fundamental to the intent of the parties to
this Agreement and the operation of this Agreement that the enforcement
of the other provisions hereof, in the absence of such invalid, illegal
or unenforceable provision or provisions, would damage irreparably the
intent of the parties in entering into this Agreement, the parties
hereto shall agree (i) to terminate this Agreement, or (ii) to amend or
otherwise modify this Agreement so as to carry out the intent and
purposes hereof and the transactions contemplated hereby.
14.2. ENUREMENT. This Agreement shall be binding upon and enure to the
benefit of the parties to this Agreement and their respective
successors and permitted assigns and to the benefit of the
Beneficiaries.
14.3. NOTICES TO PARTIES. All notices and other communications between the
parties hereunder shall be in writing and shall be deemed to have been
given if delivered personally or by confirmed telecopy to the parties
at the following addresses (or at such other address for such party as
shall be specified in like notice):
(a) if to ServiceSoft or ServiceSoft Canada at:
ServiceSoft Technologies, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
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▇.▇.▇. ▇▇▇▇▇
ATTENTION: President
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
Telephone No. ▇▇▇-▇▇▇-▇▇▇▇
with a copy to:
Land & ▇▇▇▇▇
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇.▇.
▇.▇.▇. ▇▇▇▇▇-▇▇▇▇
ATTENTION: ▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
Telephone No.: ▇▇▇-▇▇▇-▇▇▇▇
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and a copy to:
Osler, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇
1 First Canadian Place, Suite 6600
Toronto, Ontario
Canada M5X IB8
ATTENTION: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
Telephone No.: ▇▇▇-▇▇▇-▇▇▇▇
(b) if to the Trustee at:
CIBC Mellon Trust Company
▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
Attn: Regional Manager, Ontario
Facsimile No: ▇▇▇-▇▇▇-▇▇▇▇
Telephone No.:▇▇▇-▇▇▇-▇▇▇▇
Any notice or other communication given personally shall be deemed to
have been given and received upon delivery thereof (provided the day
upon which delivery is made is a Business Day, otherwise on the next
Business Day) and if given by telecopy shall be deemed to have been
given and received on the date of receipt thereof provided it is
received by 3:00 p.m. (local time in the jurisdiction of the recipient)
on a Business Day, otherwise it shall be deemed to have been given and
received at 10:00 a.m. (local time in the jurisdiction of the
recipient) upon the immediately following Business Day.
14.4. NOTICE OF BENEFICIARIES. Any and all notices to be given and any
documents to be sent to any Beneficiaries may be given or sent to the
address of such Beneficiary shown on the register of holders of
Exchangeable Shares in any manner permitted by the by-laws of
ServiceSoft Canada from time to time in force in respect of notices to
shareholders and shall be deemed to be received (if given or sent in
such manner) at the time specified in such by-
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laws, the provisions of which by-laws shall apply mutatis mutandis to
notices or documents sent to such holders.
14.5. RISK OF PAYMENTS BY POST. Whenever payments are to be made or documents
are to be sent to any Beneficiary by the Trustee or by ServiceSoft
Canada, or by such Beneficiary to the Trustee or to ServiceSoft or
ServiceSoft Canada, the making of such payment or sending of such
document sent through the post shall be at the risk of ServiceSoft
Canada, in the case of payments made or documents sent by the Trustee
or ServiceSoft Canada, and the Beneficiary, in the case of payments
made or documents sent by the Beneficiary.
14.6. 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.
14.7. JURISDICTION. This Agreement shall be governed by and construed in
accordance with the laws of Ontario, Canada, and the laws of Canada
applicable in Ontario, regardless of the laws that might otherwise
govern under applicable conflicts of laws thereof.
14.8. ATTORNMENT. ServiceSoft agrees that any action or proceeding arising
out of or relating to this Agreement may be instituted in the courts of
Ontario, waives any objection which it may have now or hereafter to the
venue of any such action or proceeding, irrevocably submits to the
non-exclusive jurisdiction of the said courts in any such action or
proceeding, agrees to be bound by any judgment of the said courts and
not to seek, and hereby waives, any review of the merits of any such
judgment by the courts of any other jurisdiction and hereby appoints
ServiceSoft Canada at its registered office in the Province of Ontario
as ServiceSoft's attorney for service of process.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
SERVICESOFT TECHNOLOGIES, INC.
By: /s/ Signature Illegible
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By: /s/ Signature Illegible
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SERVICESOFT CANADA INC.
By: /s/ Signature Illegible
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By: /s/ Signature Illegible
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CIBC MELLON TRUST COMPANY
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
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▇▇▇▇▇▇ ▇▇▇▇▇
Authorized Signature
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇
Authorized Signature