VOTING AND EXCHANGE TRUST AGREEMENT
MEMORANDUM OF AGREEMENT made as of the 15th day of June, 1995.
BETWEEN:
SILICON GRAPHICS, INC.,
a corporation subsisting under the laws
of the State of Delaware,
(hereinafter referred to as the "Parent"),
OF THE FIRST PART,
-and-
SILICON GRAPHICS CANADA LIMITED,
a corporation subsisting under the laws
of the Province of Ontario,
(hereinafter referred to as the "Corporation"),
OF THE SECOND PART,
-and-
SILICON GRAPHICS MANUFACTURING S.A.
a corporation subsisting under the laws
of Switzerland,
(hereinafter referred to as "Swissco"),
OF THE THIRD PART,
-and-
MONTREAL TRUST COMPANY OF CANADA,
a trust company incorporated under the
laws of Canada,
(hereinafter referred to as the "Trustee"),
OF THE FOURTH PART.
WHEREAS pursuant to an agreement and plan of acquisition and arrangement
dated as of February 6, 1995, by and among the Parent, Alias Research Inc.
("Alias"), Swissco and 1103707 Ontario Inc. (such agreement, as amended, is
hereinafter referred to as the "Combination Agreement"), the parties agreed that
on the Effective Date (as such term is defined in the Combination Agreement),
the Parent, Swissco, the Corporation and a Canadian trust company would execute
and deliver a Voting and Exchange Trust Agreement containing the terms and
conditions set forth in Exhibit D 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;
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AND WHEREAS pursuant to the arrangement effected by articles of arrangement
dated June 15, 1995 (the "Arrangement") filed pursuant to the BUSINESS
CORPORATIONS ACT (Ontario), Alias, Silicon Graphics Canada, Inc. and 1103707
Ontario Inc. amalgamated to continue as the Corporation;
AND WHEREAS pursuant to the Arrangement and immediately following the
above-mentioned amalgamation each issued and outstanding unit consisting of one
Class E voting preferred share of the Corporation and one Class F voting
preferred share of the Corporation, other than those held by the Parent, Swissco
and affiliates of the Parent, was exchanged by the holder thereof with Swissco
for 0.90 issued and outstanding shares of Common Stock of the Parent (the
"Parent Common Shares") and each issued and outstanding Class B non-voting
common share of the Corporation was converted into 0.90 issued and outstanding
Exchangeable Non-Voting Shares of the Corporation (the "Exchangeable Shares");
AND WHEREAS the above-mentioned articles of arrangement set forth the
rights, privileges, restrictions and conditions (collectively the "Exchangeable
Share Provisions") attaching to the Exchangeable Shares;
AND WHEREAS Swissco is the registered and beneficial owner of all of the
issued and outstanding Class A voting common shares of the Corporation, Class E
voting preferred shares of the Corporation and Class F voting preferred shares
of the Corporation, Swissco is a subsidiary of the Parent, and the Parent is the
registered and beneficial owner of all of the issued and outstanding Class C
voting preferred shares of the Corporation;
AND WHEREAS pursuant to the Arrangement and the terms and conditions of the
Exchangeable Shares the Parent is to provide voting rights in the Parent to each
holder (other than the Parent, its subsidiaries and Affiliates) from time to
time of Exchangeable Shares, such voting rights per Exchangeable Share to be
equivalent to the voting rights per Parent Common Share;
AND WHEREAS pursuant to the Arrangement and the terms and conditions of the
Exchangeable Shares Swissco is to grant to and in favour of the holders (other
than the Parent, its subsidiaries and Affiliates) from time to time of
Exchangeable Shares the right, in the circumstances set forth herein, to require
Swissco 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 the Parent shall be exercisable
by holders (other than the Parent, its subsidiaries and Affiliates) from time to
time of Exchangeable Shares by and through the Trustee, which will hold legal
title to one share of Parent Series E Preferred Stock to which voting rights
attach for the benefit of such holders, and whereby the right to require Swissco
to purchase Exchangeable Shares from the holders thereof (other than the Parent,
its subsidiaries and 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 trust
agreement are made by the Parent, Swissco and the Corporation and not by the
Trustee;
Now THEREFORE in consideration of the respective covenants and agreements
provided in this trust agreement and for other good and valuable consideration
(the receipt and sufficiency of which are hereby acknowledged), the parties
agree as follows:
ARTICLE 1
DEFINITIONS AND INTERPRETATION
1.1 DEFINITIONS. In this trust agreement, the following terms shall have the
following meanings:
"AFFILIATE" of any person means any other person directly or
indirectly controlled by, or under common control of, that person. For
the purposes of this definition, "control" (including, with correlative
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meanings, the terms "controlled by" and "under common control of"), as
applied to any person, means the possession by another person, directly or
indirectly, of the power to direct or cause the direction of the management
and policies of that first mentioned person, whether through the ownership
of voting securities, by contract or otherwise.
"AUTOMATIC EXCHANGE RIGHTS" means the benefit of the obligation of
Swissco to effect the automatic exchange of Parent Common Shares for
Exchangeable Shares pursuant to section 5.12.
"BENEFICIARIES" means the registered holders from time to time of
Exchangeable Shares, other than the Parent, its subsidiaries and
Affiliates.
"BENEFICIARY VOTES" has the meaning ascribed thereto in section 4.2.
"BOARD OF DIRECTORS" means the Board of Directors of the
Corporation.
"BUSINESS DAY" means a day other than a Saturday, Sunday or a day
when banks are not open for business in either or both of ▇▇▇ ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇.
"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.
"CURRENT MARKET PRICE" means, in respect of a Parent Common Share on
any date, the Canadian Dollar Equivalent of the average of the closing
prices of Parent Common Shares on the New York Stock Exchange on each of
the thirty (30) consecutive trading days ending not more than five
trading days before such date, or, if the Parent Common Shares are not
then quoted on the New York Stock Exchange, on such other stock exchange
or automated quotation system on which the Parent Common Shares are
listed or quoted, as the case may be, as may be selected by the Board of
Directors for such purpose; provided, however, that if there is no public
distribution or trading activity of Parent Common Shares during such
period then the Current Market Price of a Parent Common Share shall be
determined by the Board of Directors based upon the advice of such
qualified independent financial advisors as the Board of Directors may
deem to be appropriate, and provided further that any such selection,
opinion or determination by the Board of Directors shall be conclusive
and binding.
"EXCHANGE RIGHT" has the meaning ascribed thereto in Section 5.1.
"INSOLVENCY EVENT" means the institution by the Corporation of any
proceeding to be adjudicated a bankrupt or insolvent or to be dissolved
or wound up, or the consent of the Corporation to the institution of
bankruptcy, insolvency, dissolution or winding up proceedings against it,
or the filing of a petition, answer or consent seeking dissolution or
winding up under any bankruptcy, insolvency or analogous laws, including
without limitation the Companies Creditors' Arrangement Act (Canada) and
the Bankruptcy and Insolvency Act (Canada), and the failure by the
Corporation to contest in good faith any such proceedings commenced in
respect of the Corporation within 15 days of becoming aware thereof, or
the consent by the Corporation to the filing of any such petition or to
the appointment of a receiver, or the making by the Corporation of a
general assignment for the benefit of creditors, or the admission in
writing by the Corporation of its inability to pay its debts generally as
they become due, or the Corporation not being permitted, pursuant to
solvency requirements of applicable law, to redeem any Retracted Shares
pursuant to Section 6.6 of the Exchangeable Share Provisions.
"LIQUIDATION CALL RIGHT" has the meaning ascribed thereto in the
Plan of Arrangement.
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"LIQUIDATION EVENT" has the meaning ascribed thereto in section
5.13(b).
"LIQUIDATION EVENT EFFECTIVE DATE" has the meaning ascribed thereto
in section 5.13(c).
"LIST" has the meaning ascribed thereto in section 4.6.
"OFFICER'S CERTIFICATE" means, with respect to the Parent, Swissco
or the Corporation, as the case may be, a certificate signed by any one
of the Chairman of the Board, the Vice-Chairman of the Board, the
President, any Vice-President or any other senior officer of the Parent,
Swissco or the Corporation, as the case may be.
"PARENT CONSENT" has the meaning ascribed thereto in section 4.2.
"PARENT MEETING" has the meaning ascribed thereto in section 4.2.
"PARENT SUCCESSOR" has the meaning ascribed thereto in section
11.1(a).
"PERSON" includes an individual, partnership, corporation, company,
unincorporated syndicate or organization, trust, trustee, executor,
administrator and other legal representative.
"PLAN OF ARRANGEMENT" means the plan of arrangement of Alias
Research Inc. providing for the Arrangement.
"REDEMPTION CALL RIGHT" has the meaning ascribed thereto in the Plan
of Arrangement.
"RETRACTED SHARES" has the meaning ascribed thereto in section 5.7.
"RETRACTION CALL RIGHT" has the meaning ascribed thereto in the
Exchangeable Share Provisions.
"SUPPORT AGREEMENT" means that certain support agreement made as of
even date hereof between the Corporation, Swissco and the Parent.
"TRUST" means the trust created by this agreement.
"TRUST ESTATE" means the Voting Share, any other securities, the
Exchange Right, the Automatic Exchange Rights and any money or other
property which may be held by the Trustee from time to time pursuant to
this trust agreement.
"TRUSTEE" means Montreal Trust Company of Canada and, subject to the
provisions of Article 10, includes any successor trustee.
"VOTING RIGHTS" means the voting rights attached to the Voting
Share.
"VOTING SHARE" means the one share of Parent Series E Preferred
Stock, U.S.$0.001 par value, issued by the Parent to and deposited with
the Trustee, which entitles the holder of record to a number of votes at
meetings of holders of Parent Common Shares equal to that number of votes
that the holders of the Exchangeable Shares outstanding from time to time
other than Exchangeable Shares held by the Parent, its subsidiaries and
Affiliates would be entitled to if such Exchangeable Shares were
exchanged for Parent Common Shares.
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1.2 INTERPRETATION NOT AFFECTED BY HEADINGS, ETC. The division of this
trust 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 trust agreement.
1.3 NUMBER, GENDER, ETC. Words importing the singular number only shall
include the plural and vice versa. Words importing the use of any gender shall
include all genders.
1.4 DATE FOR ANY ACTION. If any date on which any action is required to
be taken under this trust agreement is not a Business Day, such action shall be
required to be taken on the next succeeding Business Day.
ARTICLE 2
PURPOSE OF AGREEMENT
2.1 ESTABLISHMENT OF TRUST. The purpose of this trust agreement is to
create the Trust for the benefit of the Beneficiaries, as herein provided. The
Trustee will hold the Voting Share 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 trust
agreement.
ARTICLE 3
VOTING SHARE
3.1 ISSUE AND OWNERSHIP OF THE VOTING SHARE. The Parent hereby issues to
and deposits with the Trustee the Voting Share to be hereafter held of record by
the Trustee as trustee for and on behalf of, and for the use and benefit of, the
Beneficiaries and in accordance with the provisions of this trust agreement.
During the term of the Trust and subject to the terms and conditions of this
trust agreement, the Trustee shall possess and be vested with full legal
ownership of the Voting Share and shall be entitled to exercise all of the
rights and powers of an owner with respect to the Voting Share, provided that
the Trustee shall:
(a) hold the Voting Share and the legal title thereto as trustee
solely for the use and benefit of the Beneficiaries in accordance with
the provisions of this trust agreement; and
(b) except as specifically authorized by this trust agreement, have
no power or authority to sell, transfer, vote or otherwise deal in or
with the Voting Share and the Voting Share shall not be used or disposed
of by the Trustee for any purpose other than the purposes for which this
Trust is created pursuant to this trust agreement.
3.2 LEGENDED SHARE CERTIFICATES. The Corporation 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 SAFE KEEPING OF CERTIFICATE. The certificate representing the Voting
Share shall at all times be held in safe keeping by the Trustee.
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ARTICLE 4
EXERCISE OF VOTING SHARE
4.1 VOTING SHARE. The Trustee, as the holder of record of the Voting
Share, shall be entitled to all of the Voting Rights, including the right to
consent to or to vote in person or by proxy the Voting Share, on any matter,
question or proposition whatsoever that may properly come before the
shareholders of the Parent at a Parent Meeting or in connection with a Parent
Consent (in each case, as hereinafter defined). The Voting Rights shall be and
remain vested in and exercised by the Trustee. Subject to section 7.15 hereof,
the Trustee shall exercise the Voting Rights only:
(a) 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 Parent Consent is effective or the
Parent Meeting is held; or
(b) to the extent that no instructions are received from a
Beneficiary with respect to the Voting Rights to which such Beneficiary
is entitled, the Trustee shall not exercise or permit the exercise of
such Voting Rights.
4.2 NUMBER OF VOTES. With respect to all meetings of shareholders of the
Parent at which holders of Parent Common Shares are entitled to vote (a "Parent
Meeting") and with respect to all written consents sought by the Parent from its
shareholders including the holders of Parent Common Shares (a "Parent Consent"),
each Beneficiary shall be entitled to instruct the Trustee to cast and exercise
one of the votes comprised in the Voting Rights for each Exchangeable Share
owned of record by such Beneficiary on the record date established by the Parent
or by applicable law for such Parent Meeting or Parent Consent, as the case may
be (the "Beneficiary Votes") in respect of each matter, question or proposition
to be voted on at such Parent Meeting or to be consented to in connection with
such Parent Consent.
4.3 MAILINGS TO SHAREHOLDERS. With respect to each Parent Meeting and
Parent Consent, the Trustee will mail or cause to be mailed (or otherwise
communicate in the same manner as the Parent utilizes in communications to
holders of Parent Common Shares) to each of the Beneficiaries named in the List
on the same day as the initial mailing or notice (or other communication) with
respect thereto is given by the Parent to its shareholders:
(a) a copy of such notice, together with any related materials to be
provided to shareholders of the Parent;
(b) a statement that such Beneficiary is entitled to instruct the
Trustee as to the exercise of the Beneficiary Votes with respect to such
Parent Meeting or Parent Consent, as the case may be, or, pursuant to
section 4.7, to attend such Parent Meeting and to exercise personally the
Beneficiary Votes thereat;
(c) a statement as to the manner in which such instructions may be
given to the Trustee, including an express indication that instructions
may be given to the Trustee to give:
(i) a proxy to such Beneficiary or his designee to exercise
personally the Beneficiary Votes; or
(ii) a proxy to a designated agent or other representative of
the management of the Parent to exercise such Beneficiary Votes;
(d) a statement that if no such instructions are received from the
Beneficiary, the Beneficiary Votes to which such Beneficiary is entitled
will not be exercised;
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(e) a form of direction whereby the Beneficiary may so direct and
instruct the Trustee as contemplated herein; and
(f) a statement of the time and date by which such instructions must
be received by the Trustee in order to be binding upon it, which in the
case of a Parent Meeting shall not be earlier than the close of business
on the second Business Day prior to such meeting, and of the method for
revoking or amending such instructions.
For the purpose of determining the Beneficiary Votes to which a Beneficiary
is entitled in respect of any such Parent Meeting or Parent Consent, the number
of Exchangeable Shares owned of record by the Beneficiary shall be determined at
the close of business on the record date established by the Parent or by
applicable law for purposes of determining shareholders entitled to vote at such
Parent Meeting or to give written consent in connection with such Parent
Consent. The Parent will notify the Trustee of any decision of the Board of
Directors of the Parent with respect to the calling of any such Parent Meeting
or the seeking of any such Parent Consent and shall provide all necessary
information and materials to the Trustee in each case promptly and in any event
in sufficient time to enable the Trustee to perform its obligations contemplated
by this section 4.3.
4.4 COPIES OF SHAREHOLDER INFORMATION. The Parent will deliver to the
Trustee copies of all proxy materials, (including notices of Parent Meetings but
excluding proxies to vote Parent Common 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 Parent Common Shares in sufficient quantities and in sufficient time
so as to enable the Trustee to send or cause to be sent those materials to each
Beneficiary at the same time as such materials are first sent to holders of
Parent Common Shares. The Trustee will mail or otherwise send to each
Beneficiary, at the expense of the Parent, copies of all such materials (and all
materials specifically directed to the Beneficiaries or to the Trustee for the
benefit of the Beneficiaries by the Parent) received by the Trustee from the
Parent at the same time as such materials are first sent to holders of Parent
Common Shares. The Trustee will also make available for inspection by any
Beneficiary at the Trustee's principal corporate trust office in the city of
Toronto all proxy materials, information statements, reports and other written
communications that are:
(a) received by the Trustee as the registered holder of the Voting
Share and made available by the Parent to the holders of Parent Common
Shares; or
(b) specifically directed to the Beneficiaries or to the Trustee for
the benefit of the Beneficiaries by the Parent.
4.5 OTHER MATERIALS. Immediately after receipt by the Parent or any
shareholder of the Parent of any material sent or given to the holders of Parent
Common 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),
the Parent 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 Beneficiaries by
such third party) to each Beneficiary as soon as possible thereafter. As soon as
practicable after receipt thereof, the Trustee will mail or otherwise send to
each Beneficiary, at the expense of the Parent, copies of all such materials
received by theTrustee from the Parent. The Trustee will also make available for
inspection by any Beneficiary at the Trustee'sprincipal corporate trust office
in the city of Toronto copies of all such materials.
4.6 LIST OF PERSONS ENTITLED TO VOTE. The Corporation shall, (a) prior to
each annual, general and
special Parent Meeting or the seeking of any Parent Consent and (b) forthwith
upon each request made at any time by the Trustee in writing, prepare or cause
to be prepared a list (a "List") of the names and addresses of the Beneficiaries
arranged in alphabetical order and showing the number of Exchangeable Shares
held of record by each such Beneficiary, in each case at the close of business
on the date specified by the Trustee in such request or, in the case of a List
prepared in connection with a Parent Meeting or a Parent Consent, at the close
of business on the
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record date established by the Parent or pursuant to applicable law for
determining the holders of Parent Common Shares entitled to receive notice of
and/or to vote at such Parent Meeting or to give consent in connection with such
Parent Consent. Each such List shall be delivered to the Trustee promptly after
receipt by the Corporation of such request or the record date for such meeting
or seeking of consent, as the case may be, and in any event within sufficient
time as to enable the Trustee to perform its obligations under this Agreement.
The Parent agrees to give the Corporation notice (with a copy to the Trustee) of
the calling of any Parent Meeting or the seeking of any Parent Consent, together
with the record dates therefor, sufficiently prior to the date of the calling of
such meeting or seeking of such consent so as to enable the Corporation to
perform its obligations under this section 4.6.
4.7 ENTITLEMENT TO DIRECT VOTES. Any Beneficiary named in a List prepared
in connection with any Parent Meeting or any Parent Consent will be entitled (a)
to instruct the Trustee in the manner described in section 4.3 with respect to
the exercise of the Beneficiary Votes to which such Beneficiary is entitled or
(b) to attend such meeting and personally to exercise thereat (or to exercise
with respect to any written consent), as the proxy of the Trustee, the
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 BY TRUSTEE, AND ATTENDANCE OF TRUSTEE REPRESENTATIVE, AT
MEETING.
(a) In connection with each Parent Meeting and Parent Consent, the
Trustee shall exercise, either in person or by proxy, in accordance with
the instructions received from a Beneficiary pursuant to section 4.3, the
Beneficiary Votes as to which such Beneficiary is entitled to direct the
vote (or any lesser number thereof as may be set forth in the
instructions); provided, however, that such written instructions are
received by the Trustee from the Beneficiary prior to the time and date
fixed by it for receipt of such instructions in the notice given by the
Trustee to the Beneficiary pursuant to section 4.3.
(b) The Trustee shall cause such representatives as are empowered by
it to sign and deliver, on behalf of the Trustee, proxies for Voting
Rights to attend each Parent Meeting. Upon submission by a Beneficiary
(or its designee) of identification satisfactory to the Trustee's
representatives, and at the Beneficiary's request, such representatives
shall sign and deliver to such Beneficiary (or its designee) a proxy to
exercise personally the Beneficiary Votes as to which such Beneficiary is
otherwise entitled hereunder to direct the vote, if such Beneficiary
either (i) has not previously given the Trustee instructions pursuant to
section 4.3 in respect of such meeting, or (ii) submits to the Trustee's
representatives written revocation of any such previous instructions. At
such meeting, the Beneficiary exercising such Beneficiary Votes shall
have the same rights as the Trustee to speak at the meeting in respect of
any matter, question 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 trust agreement shall be delivered or sent by
mail (or otherwise communicated in the same manner as the Parent utilizes in
communications to holders of Parent Common Share) to each Beneficiary at its
address as shown on the books of the Corporation. The Corporation 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 the registered holders of
Exchangeable Shares; and
(b) upon the request of the Trustee, mailing labels to enable the
Trustee to carry out its duties under this trust agreement.
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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 the Parent and such Beneficiary Votes
and the Voting Rights represented thereby shall cease immediately upon the
delivery by such holder to the Trustee of the certificates representing such
Exchangeable Shares in connection with the exercise by the Beneficiary of the
Exchange Right or the occurrence of the automatic exchange of Exchangeable
Shares for Parent Common Shares, as specified in Article 5 hereof (unless in
either case Swissco shall not have delivered the requisite Parent Common Shares
issuable in exchange therefor to the Trustee for delivery to the Beneficiaries),
or upon the retraction or redemption of Exchangeable Shares pursuant to Article
6 or Article 7 of the Exchangeable Share Provisions, respectively, or upon the
effective date of the liquidation, dissolution or winding-up of the Corporation
pursuant to Article 5 of the Exchangeable Share Provisions, or upon the purchase
of Exchangeable Shares from the holder thereof by Swissco pursuant to the
exercise by Swissco 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. Swissco hereby grants to
the Trustee as trustee for and on behalf of, and for the use and benefit of, the
Beneficiaries the right (the "Exchange Right"), upon the occurrence and during
the continuance of an Insolvency Event, to require Swissco to purchase from each
or any Beneficiary all or any part of the Exchangeable Shares held by the
Beneficiary and the Automatic Exchange Rights, all in accordance with the
provisions of this agreement. During the term of the Trust and subject to the
terms and conditions of this trust agreement, the Trustee shall possess and be
vested with full legal ownership of the Exchange Right and the Automatic
Exchange Rights and shall be entitled to exercise all of the rights and powers
of an owner with respect to the Exchange Right and the Automatic Exchange
Rights, provided that the Trustee shall:
(a) hold the Exchange Right and the Automatic Exchange Rights and
the legal title thereto as trustee solely for the use and benefit of the
Beneficiaries in accordance with the provisions of this trust agreement;
and
(b) except as specifically authorized by this trust agreement, have
no power or authority to exercise or otherwise deal in or with the
Exchange Right or the Automatic Exchange Rights, and the Trustee shall
not exercise any such rights for any purpose other than the purposes for
which this Trust is created pursuant to this trust agreement.
5.2 LEGENDED SHARE CERTIFICATES. The Corporation will cause each
certificate representing Exchangeable Shares to bear an appropriate legend
notifying the Beneficiaries of:
(a) their right to instruct the Trustee with respect to the
exercise of the Exchange Right in respect of the Exchangeable Shares held
by a Beneficiary; and
(b) the Automatic Exchange Rights.
5.3 GENERAL EXERCISE OF EXCHANGE RIGHT. The Exchange Right shall be and
remain vested in and exercised by the Trustee. Subject to section 7.15, the
Trustee shall exercise the Exchange Right only:
(a) on the basis of instructions received pursuant to this Article
5 from Beneficiaries entitled to instruct the Trustee as to the exercise
thereof; or
(b) to the extent that no instructions are received from a
Beneficiary with respect to the Exchange Right, the Trustee shall not
exercise or permit the exercise of the Exchange Right.
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5.4 PURCHASE PRICE. The purchase price payable by Swissco for each
Exchangeable Share to be purchased by Swissco under the Exchange Right shall be
an amount per share equal to (a) the Current Market Price of a Parent Common
Share on the last Business Day prior to the day of closing of the purchase and
sale of such Exchangeable Share under the Exchange Right 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 Parent Common 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 each exercise of the Exchange Right, Swissco will provide to the
Trustee an Officer's Certificate setting forth the calculation of the purchase
price for each Exchangeable Share. The purchase price for each such Exchangeable
Share so purchased may be satisfied only by Swissco delivering or causing to be
delivered to the Trustee, on behalf of the relevant Beneficiary, one Parent
Common Share and a cheque for the balance, if any, of the purchase price.
5.5 EXERCISE INSTRUCTIONS. Subject to the terms and conditions herein set
forth, a Beneficiary shall be entitled, upon the occurrence and during the
continuance of an Insolvency Event, to instruct the Trustee to exercise the
Exchange Right with respect to all or any part of the Exchangeable Shares
registered in the name of such Beneficiary on the books of the Corporation. To
cause the exercise of the Exchange Right by the Trustee, the Beneficiary shall
deliver to the Trustee, in person or by certified or registered mail, at its
principal corporate trust office in Toronto, Ontario or at such other places in
Canada as the Trustee may from time to time designate by written notice to the
Beneficiaries, the certificates representing the Exchangeable Shares which such
Beneficiary desires Swissco 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 OBCA and such additional documents and
instruments as the Trustee may reasonably require together with (a) a duly
completed form of notice of exercise of the Exchange Right, contained on the
reverse of or attached to the Exchangeable Share certificates, stating (i) that
the Beneficiary thereby instructs the Trustee to exercise the Exchange Right so
as to require Swissco to purchase from the Beneficiary the number of
Exchangeable Shares specified therein, (ii) that such Beneficiary has good title
to and owns all such Exchangeable Shares to be acquired by Swissco free and
clear of all liens, claims and encumbrances, (iii) the names and addresses in
which the certificates representing the Parent Common Shares 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, the Corporation and Swissco of payment) of the
taxes (if any) payable as contemplated by section 5.8 of this trust agreement.
If only a part of the Exchangeable Shares represented by any certificate or
certificates delivered to the Trustee are to be purchased by Swissco under the
Exchange Right, a new certificate for the balance of such Exchangeable Shares
shall be issued to the holder at the expense of the Corporation.
5.6 DELIVERY OF PARENT COMMON SHARES; EFFECT OF EXERCISE. Promptly after
receipt of the certificates representing the Exchangeable Shares which the
Beneficiary desires Swissco to purchase under the Exchange Right together with
such documents and instruments of transfer and a duly completed form of notice
of exercise of the Exchange Right (and payment of taxes, if any, or evidence
thereof), duly endorsed for transfer to Swissco, the Trustee shall notify the
Parent, Swissco and the Corporation of its receipt of the same, which notice to
the Parent, Swissco and the Corporation shall constitute exercise of the
Exchange Right by the Trustee on behalf of the holder of such Exchangeable
Shares, and Swissco 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), the certificates for the number of Parent Common Shares
deliverable in connection with the exercise of the Exchange Right, which shares
shall be duly issued as fully paid and non-assessable and shall be free and
clear of any lien, claim or encumbrance, and cheques for the balance, if any, of
the total purchase price therefor. Immediately upon the giving of notice by the
Trustee to the Parent, Swissco and the Corporation of the exercise of the
Exchange Right, as provided in this section 5.6, the closing of the transaction
of purchase and sale contemplated by the Exchange Right shall be deemed to have
occurred, and the Beneficiary of such Exchangeable Shares shall be deemed to
have transferred to Swissco 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
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entitled to exercise any of the rights of a holder in respect thereof, other
than the right to receive his proportionate part of the total purchase price
therefor, unless the requisite number of Parent Common Shares (together with a
cheque for the balance, if any, of the total purchase price therefor) is not
allotted, issued and delivered by Swissco 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, in which case the rights of the Beneficiary shall remain
unaffected until such Parent Common Shares are so allotted, issued and delivered
by Swissco and any such cheque is so delivered and paid. Concurrently with such
Beneficiary ceasing to be a holder of Exchangeable Shares, the Beneficiary shall
be considered and deemed for all purposes to be the holder of the Parent Common
Shares delivered to it pursuant to the Exchange Right.
5.7 EXERCISE OF EXCHANGE RIGHT SUBSEQUENT TO RETRACTION. In the event
that a Beneficiary has exercised its right under Article 6 of the Exchangeable
Share Provisions to require the Corporation to redeem any or all of the
Exchangeable Shares held by the Beneficiary (the "Retracted Shares") and is
notified by the Corporation pursuant to Section 6.6 of the Exchangeable Shares
Provisions that the Corporation will not be permitted as a result of solvency
requirements of applicable law to redeem all such Retracted Shares, and provided
that Swissco 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 the Corporation pursuant to Section 6.7
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 the Corporation is unable to redeem. In any such event,
the Corporation hereby agrees with the Trustee and in favour of the Beneficiary
immediately to notify the Trustee of such prohibition against the Corporation
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
the Corporation or to the transfer agent of the Exchangeable Shares (including
without limitation a copy of the retraction request delivered pursuant to
Section 6.1 of the 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 the
Corporation is not permitted to redeem and will require the Parent 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 Swissco pursuant to the Exchange Right or the Automatic Exchange Rights, the
share certificate or certificates representing the Parent Common Shares to be
delivered in connection with the payment of the total purchase price therefor
shall be issued in the name of the Beneficiary of the Exchangeable Shares so
sold or in such names as such Beneficiary may otherwise direct in writing
without charge to the holder of the Exchangeable Shares so sold; provided,
however, that such Beneficiary (a) shall pay (and neither the Parent, Swissco,
the Corporation 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,
the Parent, Swissco and the Corporation that such taxes, if any, have been paid.
5.9 NOTICE OF INSOLVENCY EVENT. Immediately upon the occurrence of an
Insolvency Event or any event which with the giving of notice or the passage of
time or both would be an Insolvency Event, the Corporation, Swissco and/or the
Parent, as the case may be, shall give written notice thereof to the Trustee.
As soon as practicable after receiving notice from the Corporation, Swissco
and/or the Parent, as the case may be, or from any other person of the
occurrence of an Insolvency Event, the Trustee will mail to each Beneficiary, at
the expense of Swissco, and/or the parent, a notice of such Insolvency Event,
which notice shall contain a brief statement of the right of the Beneficiaries
with respect to the Exchange Right.
5.10 QUALIFICATION OF PARENT COMMON SHARES. The Parent represents and
warrants that it has taken all actions and done all things as are necessary or
desirable to cause the Parent Common Shares to be issued and delivered pursuant
to the Exchangeable Share Provisions, Exchange Right or the Automatic Exchange
Rights to be freely tradeable thereafter (other than any restrictions on
transfers by reason of a holder being a "control person" of the Parent for
purposes of Canadian federal or provincial securities law or an "affiliate" of
the Parent or, prior to the Effective Date, Alias Research Inc. for purposes of
United States federal or state securities law). The Parent will in
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good faith expeditiously take all such actions and do all such things as are
necessary or desirable to cause all Parent Common Shares to be delivered
pursuant to the Exchangeable Share Provisions, Exchange Right or the Automatic
Exchange Rights to be listed, quoted or posted for trading on all stock
exchanges and quotation systems on which outstanding Parent Common Shares are
listed, quoted or posted for trading at such time.
5.11 RESERVATION OF PARENT COMMON SHARES.
The Parent hereby represents, warrants and covenants that it has
irrevocably reserved for issuance and will at all times keep available, free
from preemptive and other rights, out of its authorized and unissued capital
stock such number of Parent 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 the Corporation and Swissco 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 the Parent may now or hereafter be required to issue Parent
Common Shares.
5.12 AUTOMATIC EXCHANGE ON LIQUIDATION OF PARENT.
(a) The Parent 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 the Parent to institute voluntary liquidation,
dissolution or winding-up proceedings with respect to the Parent or
to effect any other distribution of assets of the Parent among its
shareholders for the purpose of winding up its affairs, at least 60
days prior to the proposed effective date of such liquidation,
dissolution, winding-up or other distribution; and
(ii) immediately, upon the earlier of (A) receipt by the
Parent of notice of and (B) the Parent 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 the Parent or to effect any other distribution of
assets of the Parent among its shareholders for the purpose of
winding up its affairs.
(b) immediately following receipt by the Trustee from the Parent of
notice of any event (a "Liquidation Event") contemplated by section
5.12(a)(i) or 5.12(a)(ii) above, the Trustee will give notice thereof to
the Beneficiaries. Such notice shall include a brief description of the
automatic exchange of Exchangeable Shares for Parent Common Shares
provided for in section 5.12(c).
(c) In order that the Beneficiaries will be able to participate on a
pro rata basis with the holders of Parent Common Shares in the
distribution of assets of the Parent 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
Parent Common Shares. To effect such automatic exchange, Swissco 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 share equal to (a) the Current Market
Price of a Parent Common Share on the fifth Business Day prior to the
Liquidation Event Effective Date, which shall be satisfied in full by
Swissco delivering or causing to be delivered to the Beneficiary one
Parent Common Share, 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 Parent Common 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
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dividends). In connection with such automatic exchange, the Parent will
provide to the Trustee an Officer's Certificate setting forth the
calculation of the purchase price for each Exchangeable Share.
(d) On the fifth Business Day prior to the Liquidation Event
Effective Date, the closing of the transaction of purchase and sale
contemplated by the automatic exchange of Exchangeable Shares for Parent
Common Shares shall be deemed to have occurred, and each Beneficiary
shall be deemed to have transferred to Swissco 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 Swissco shall deliver or cause to be
delivered to the Beneficiary the Parent Common Shares deliverable upon
the automatic exchange of Exchangeable Shares for Parent Common 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. Concurrently with such Beneficiary ceasing to be a
holder of Exchangeable Shares, the Beneficiary shall be considered and
deemed for all purposes to be the holder of the Parent Common Shares
issued to it pursuant to the automatic exchange of Exchangeable Shares
for Parent Common Shares and the certificates held by the Beneficiary
previously representing the Exchangeable Shares exchanged by the
Beneficiary with Swissco pursuant to such automatic exchange shall
thereafter be deemed to represent the Parent Common Shares delivered to
the Beneficiary by Swissco pursuant to such automatic exchange. Upon the
request of a Beneficiary and the surrender by the Beneficiary of
Exchangeable Share certificates deemed to represent Parent Common Shares,
duly endorsed in blank and accompanied by such instruments of transfer as
Swissco may reasonably require, Swissco shall deliver or cause to be
delivered to the Beneficiary certificates representing the Parent Common
Shares of which the Beneficiary is the holder.
5.13 WITHHOLDING RIGHTS. Parent, Swissco 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 Parent, Swissco
or the Trustee is required or permitted to deduct and withhold with respect to
the making of such payment under the United States Internal Revenue Code of
1986, as amended (the "Code"), the Income Tax Act (Canada) (the "Canadian Code")
or any provision of state, local, provincial or foreign 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 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, the Parent, Swissco or the Trustee 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 the Parent,
Swissco 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.
ARTICLE 6
RESTRICTIONS ON ISSUE OF PARENT SPECIAL VOTING STOCK
6.1 ISSUE OF ADDITIONAL SHARES. During the term of this trust agreement,
the Parent will not create, issue or allot (or make any agreement to so do) any
shares of Parent Series E Preferred Stock in addition to the Voting Share.
ARTICLE 7
CONCERNING THE TRUSTEE
7.1 POWERS AND DUTIES OF THE TRUSTEE. The rights, powers and authorities
of the Trustee under this trust agreement, in its capacity as trustee of the
Trust, shall include:
(a) purchasing the Voting Share from the Parent 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 trust agreement;
(c) voting the Beneficiary Votes in accordance with the provisions
of this trust agreement;
(d) receiving the grant of the Exchange Right and the Automatic
Exchange Rights from Swissco as trustee for and on behalf of the
Beneficiaries in accordance with the provisions of this trust agreement;
(e) exercising the Exchange Right and enforcing the benefit of the
Automatic Exchange Rights, in each case in accordance with the provisions
of this trust agreement, and in connection therewith receiving from
Beneficiaries Exchangeable Shares and other requisite documents and
distributing to such Beneficiaries the Parent Common Shares and cheques,
if any, to which such Beneficiaries are entitled upon the exercise of the
Exchange Right or pursuant to the Automatic Exchange 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 this trust agreement;
(h) taking action on its own initiative or at the direction of a
Beneficiary or Beneficiaries to enforce the obligations of the Parent and
Swissco under this trust agreement; and
(i) taking such other actions and doing such other things as are
specifically provided in this trust 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 trust agreement as
the Trustee, acting in good faith and in the reasonable exercise of its
discretion, may deem necessary, appropriate or desirable to effect the purpose
of the Trust. Any exercise of such discretionary rights, powers and authorities
by the Trustee shall be final, conclusive and binding upon all persons affected
thereunder, including the Parties hereto and the Beneficiaries. For greater
certainty, the Trustee shall have only those duties as are set out specifically
in this trust agreement.
The Trustee in exercising its rights, powers, duties and authorities
hereunder shall act honestly and in good faith with a view to the best interests
of the Beneficiaries and shall exercise the care, diligence and skill that a
reasonably prudent trustee would exercise in comparable circumstances.
7.2 NO CONFLICT OF INTEREST. The Trustee represents to the Corporation,
Swissco and the Parent that at the date of execution and delivery of this trust
agreement there exists no material conflict of interest in the role of the
Trustee as a fiduciary hereunder and the role of the Trustee in any other
capacity. The Trustee shall, within 90 days after it becomes aware that such 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.
If, notwithstanding the foregoing provisions of this section 7.2, the Trustee
has such a material conflict of interest, the validity and enforceability of
this trust agreement shall not be affected in any manner whatsoever by reason
only of the existence of such material conflict of interest. If the Trustee
contravenes the foregoing provisions of this section 7.2, any interested party
may apply to the Ontario Court of Justice (General Division) for an order that
the Trustee be replaced as trustee hereunder.
7.3 DEALINGS WITH TRANSFER AGENTS, REGISTRARS, ETC. The Corporation,
Swissco and the Parent irrevocably authorize the Trustee, from time to time, to:
(a) consult, communicate and otherwise deal with the respective
registrars and transfer agents, and with any such subsequent registrar or
transfer agent, of the Exchangeable Shares and the Parent Common Shares;
and
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(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 trust agreement
and (ii) from the registrar or transfer agent of the Parent Common
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 of Exchangeable
Shares for Parent Common Shares in the manner specified in Article 5
hereof.
The Corporation, Swissco and the Parent irrevocably authorize their respective
registrars and transfer agents to comply with all such requests. The Parent and
Swissco covenant that they will supply the Parent'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 of Exchangeable Shares
for Parent Common Shares, in each case pursuant to Article 5 hereof.
7.4 BOOKS AND RECORDS. The Trustee shall keep available for inspection by
the Parent, Swissco and the Corporation, at the Trustee's principal corporate
trust office in Toronto, Ontario, correct and complete books and records of
account relating to the Trustee's actions under this trust 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 March 31, 1996, and on or before March
31 in every year thereafter, so long as the Voting Share is on deposit with the
Trustee, the Trustee shall transmit to the Parent, Swissco and the Corporation a
brief report, dated as of the preceding December 31, with respect to:
(a) the property and funds comprising the Trust Estate as of that
date;
(b) the number of exercises of the Exchange Right, if any, and the
aggregate number of Exchangeable Shares received by the Trustee on behalf
of Beneficiaries in consideration of delivery by Swissco of Parent Common
Shares and any other consideration in connection with the Exchange Right,
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 trust agreement which it had not previously reported.
7.5 INCOME TAX RETURNS AND REPORTS. The Trustee shall, to the extent
necessary, prepare and file on behalf of the Trust appropriate United States and
Canadian income tax returns and any other returns or reports as may be required
by applicable law or pursuant to the rules and regulations of any securities
exchange or trading system through which the Exchangeable Shares are traded and,
in connection therewith and without limiting the generality of section 7.10
hereof, may obtain the advice and assistance of such experts as the Trustee may
consider necessary or advisable.
7.6 INDEMNIFICATION PRIOR TO CERTAIN ACTIONS BY TRUSTEE. The Trustee
shall exercise any or all of the rights, duties, powers or authorities vested in
it by this trust agreement at the request, order or direction of any Beneficiary
upon such Beneficiary furnishing to the Trustee reasonable funding, security and
indemnity against the costs, expenses and liabilities which may be incurred by
the Trustee therein or thereby, provided that no Beneficiary shall be obligated
to furnish to the Trustee any such funding, security or indemnity in connection
with the exercise by the Trustee of any of its rights, duties, powers and
authorities with respect to the Voting Share pursuant to Article 4 hereof,
subject to section 7. l 5, and with respect to the Exchange Right pursuant to
Article 5 hereof, subject to section 7.15, and with respect to the Automatic
Exchange Rights pursuant to Article 5 hereof.
None of the provisions contained in this trust agreement shall require the
Trustee to expend or risk its own funds or otherwise incur financial liability
in the exercise of any of its rights, powers, duties or authorities unless
funded, given security and indemnified as aforesaid.
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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 trust agreement for the purpose of enforcing any of its
rights or for the execution of any trust or power hereunder unless the
Beneficiary has requested the Trustee to take or institute such action, suit or
proceeding and furnished the Trustee with the funding, security and indemnity
referred to in section 7.6 and the Trustee shall have failed to act within a
reasonable time thereafter. In such case, but not otherwise, the Beneficiary
shall be entitled to take proceedings in any court of competent jurisdiction
such as the Trustee might have taken; it being understood and intended that no
one or more Beneficiaries shall have any right in any manner whatsoever to
affect, disturb or prejudice the rights hereby created by any such action, or to
enforce any right hereunder or under the Voting Rights, the Exchange Rights or
the Automatic Exchange Rights except subject to the conditions and in the manner
herein provided, and that all powers and trusts hereunder shall be exercised and
all proceedings at law shall be instituted, had and maintained by the Trustee,
except only as herein provided, and in any event for the equal benefit of all
Beneficiaries.
7.8 RELIANCE UPON DECLARATIONS. The Trustee shall not be considered to be
in contravention of any of its rights, powers, duties and authorities hereunder
if, when required, it acts and relies in good faith upon lists, mailing labels,
notices, statutory declarations, certificates, opinions, reports or other papers
or documents furnished pursuant to the provisions hereof or required by the
Trustee to be furnished to it in the exercise of its rights, powers, duties and
authorities hereunder if such lists, mailing labels, notices, statutory
declarations, certificates, opinions, reports or other papers or documents
comply with the provisions of section 7.9 hereof, if applicable, and with any
other applicable provisions of this trust agreement.
7.9 EVIDENCE AND AUTHORITY TO TRUSTEE. The Corporation, Swissco and/or
the Parent shall furnish to the Trustee evidence of compliance with the
conditions provided for in this trust agreement relating to any action or step
required or permitted to be taken by the Corporation, Swissco and/or the Parent
or the Trustee under this trust agreement or as a result of any obligation
imposed under this trust agreement, including, without limitation, in respect of
the Voting Rights or the Exchange Right or the Automatic Exchange Rights and the
taking of any other action to be taken by the Trustee at the request of or on
the application of the Corporation, Swissco and/or the Parent forthwith if and
when:
(a) such evidence is required by any other section of this trust
agreement to be furnished to the Trustee in accordance with the terms of
this section 7.9; or
(b) the Trustee, in the exercise of its rights, powers, duties and
authorities under this trust agreement, gives the Corporation, Swissco
and/or the Parent written notice requiring it to furnish such evidence in
relation to any particular action or obligation specified in such notice.
Such evidence shall consist of an Officer's Certificate of the Corporation,
Swissco and/or the Parent or a statutory declaration or a certificate made by
persons entitled to sign an Officer's Certificate stating that any such
condition has been complied with in accordance with the terms of this trust
agreement.
Whenever such evidence relates to a matter other than the Voting Rights or
the Exchange Right or the automatic exchange of Exchangeable Shares for Parent
Common Shares pursuant to section 5.12, 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 the Corporation, Swissco and/or the Parent it shall be in the form
of an Officer's Certificate or a statutory declaration.
Each statutory declaration, certificate, opinion or report furnished to the
Trustee as evidence of compliance with a condition provided for in this trust
agreement shall include a statement by the person giving the evidence:
(a) declaring that he has read and understands the provisions of
this trust agreement relating to the condition in question;
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(b) describing the nature and scope of the examination or
investigation upon which he based the statutory declaration, certificate,
statement or opinion; and
(c) declaring that he has made such examination or investigation as
he believes is necessary to enable him to make the statements or give the
opinions contained or expressed therein.
7.10 EXPERTS, ADVISERS AND AGENTS. The Trustee may:
(a) in relation to these presents act 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 the Corporation, Swissco and/or the Parent or
otherwise, and may employ such assistants as may be necessary to the
proper discharge of its powers and duties and determination of its rights
hereunder and may pay proper and reasonable compensation for all such
legal and other advice or assistance as aforesaid; and
(b) employ such agents and other assistants as it may reasonably
require for the proper discharge of its powers and duties hereunder, and
may pay reasonable remuneration for all services performed for it (and
shall be entitled to receive reasonable remuneration for all services
performed by it) in the discharge of the trusts hereof and compensation
for all disbursements, costs and expenses made or incurred by it in the
discharge of its duties hereunder and in the management of the Trust.
7.11 INVESTMENT OF MONEYS HELD BY TRUSTEE. Unless otherwise provided in
this trust agreement, any moneys held by or on behalf of the Trustee which under
the terms of this trust agreement may or ought to be invested or which may be on
deposit with the Trustee or which may be in the hands of the Trustee may be
invested and reinvested in the name or under the control of the Trustee in
securities in which, under the laws of the Province of Ontario, trustees are
authorized to invest trust moneys, provided that such securities are stated to
mature within two years after their purchase by the Trustee, and the Trustee
shall so invest such moneys on the written direction of the Corporation. Pending
the investment of any moneys as hereinbefore provided, such moneys may be
deposited in the name of the Trustee in any chartered bank in Canada or, with
the consent of the Corporation, in the deposit department of the Trustee or any
other loan or trust company authorized to accept deposits under the laws of
Canada or any province thereof at the rate of interest then current on similar
deposits.
7.12 TRUSTEE NOT REQUIRED TO GIVE SECURITY. The Trustee shall not be
required to give any bond or security in respect of the execution of the trusts,
rights, duties, powers and authorities of this trust agreement or otherwise in
respect of the premises.
7.13 TRUSTEE NOT BOUND TO ACT ON CORPORATION'S REQUEST. Except as in this
trust agreement otherwise specifically provided, the Trustee shall not be bound
to act in accordance with any direction or request of the Corporation and/or the
Parent or of the directors thereof until a duly authenticated copy of the
instrument or resolution containing such direction or request shall have been
delivered to the Trustee, and the Trustee shall be empowered to act and rely
upon any such copy purporting to be authenticated and believed by the Trustee to
be genuine.
7.14 AUTHORITY TO CARRY ON BUSINESS. The Trustee represents to the
Corporation, Swissco and the Parent that at the date of execution and delivery
by it of this trust agreement it is authorized to carry on the business of a
trust company in 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
validly and enforceability of this trust agreement and the Voting Rights, the
Exchange Right and the Automatic Exchange Rights shall not be affected in any
manner whatsoever by reason only of such event but the Trustee shall, within 90
days after ceasing to be authorized to carry on the business of a trust company
in the Province of Ontario, either become so authorized or resign in the manner
and with the effect specified in Article 10.
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7.15 CONFLICTING CLAIMS. If conflicting claims or demands are made or
asserted with respect to any interest of any Beneficiary in any Exchangeable
Shares, including any disagreement between the heirs, representatives,
successors or assigns succeeding to all or any part of the interest of any
Beneficiary in any Exchangeable Shares resulting in conflicting claims or
demands being made in connection with such interest, then the Trustee shall be
entitled, at its sole discretion, to refuse to recognize or to comply with any
such claim or demand. In so refusing, the Trustee may elect not to exercise any
Voting Rights, Exchange Right or Automatic Exchange Rights subject to such
conflicting claims or demands and, in so doing, the Trustee shall not be or
become liable to any person on account of such election or its failure or
refusal to comply with any such conflicting claims or demands. The Trustee shall
be entitled to continue to refrain from acting and to refuse to act until:
(a) the rights of all adverse claimants with respect to the Voting
Rights, Exchange Right or Automatic Exchange Rights subject to such
conflicting claims or demands have been adjudicated by a final judgment
of a court of competent jurisdiction; or
(b) all differences with respect to the Voting Rights, Exchange
Right or Automatic Exchange Rights subject to such conflicting claims or
demands have been conclusively settled by a valid written agreement
binding on all such adverse claimants, and the Trustee shall have been
furnished with an executed copy of such agreement.
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 trust agreement and agrees to perform the same
upon the terms and conditions herein set forth and to hold all rights,
privileges and benefits conferred hereby and by law in trust for the various
persons who shall from time to time be Beneficiaries, subject to all the terms
and conditions herein set forth.
ARTICLE 8
COMPENSATION
8.1 FEES AND EXPENSES OF THE TRUSTEE. The Parent, Swissco and the
Corporation jointly and severally agree to pay to the Trustee reasonable
compensation for all of the services rendered by it under this trust agreement
and will reimburse the Trustee for all reasonable expenses (including taxes) and
disbursements, including the fees paid or to be paid by the Trustee in
connection with section 7.10 and including 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 trust agreement; provided that the Parent, Swissco and the
Corporation shall have no obligation to reimburse the Trustee for any expenses
or disbursements paid, incurred or suffered by the Trustee in any suit or
litigation in which the Trustee is determined to have acted in bad faith or with
negligence or wilful misconduct.
ARTICLE 9
INDEMNIFICATION AND LIMITATION OF LIABILITY
9.1 INDEMNIFICATION OF THE TRUSTEE. The Parent, Swissco and the
Corporation 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 trust agreement (collectively, the "Indemnified
Parties") against all claims, losses, damages, costs, penalties, fines and
reasonable expenses (including reasonable expenses of the Trustee's legal
counsel) which, without fraud, negligence, wilful misconduct or bad faith on the
part of such Indemnified Party, may be paid, incurred or suffered by the
Indemnified Party by reason of or as a result of the Trustee's acceptance or
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administration of the Trust, its compliance with its duties set forth in this
trust agreement, or any written or oral instructions delivered to the Trustee by
the Parent, Swissco or the Corporation pursuant hereto. In no case shall the
Parent, Swissco or the Corporation be liable under this indemnity for any claim
against any of the Indemnified Parties unless the Parent, Swissco and the
Corporation shall be notified by the Trustee of the written assertion of a claim
or of any action commenced against the Indemnified Parties, promptly after any
of the Indemnified Parties shall have received any such written assertion of a
claim or shall have been served with a summons or other first legal process
giving information as to the nature and basis of the claim. Subject to (ii),
below, the Parent, Swissco and the Corporation shall be entitled to participate
at their own expense in the defence and, if the Parent, Swissco or the
Corporation 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 the Parent, Swissco or the Corporation; or (ii)
the named parties to any such suit include both the Trustee and the Parent,
Swissco or the Corporation and the Trustee shall have been advised by counsel
acceptable to the Parent or the Corporation that there may be one or more legal
defenses available to the Trustee which are different from or in addition to
those available to the Parent or the Corporation (in which case the Parent,
Swissco and the Corporation shall not have the right to assume the defence of
such suit on behalf of the Trustee but shall be liable to pay the reasonable
fees and expenses of counsel for the Trustee).
9.2 LIMITATION OF LIABILITY. The Trustee shall not be held liable for any
loss which may occur by reason of depreciation of the value of any part of the
Trust Estate or any loss incurred on any investment of funds pursuant to this
trust agreement, except to the extent that such loss is attributable to the
fraud, negligence, wilful misconduct or bad faith on the part of the Trustee.
ARTICLE 10
CHANGE OF TRUSTEE
10.1 RESIGNATION. The Trustee, or any trustee hereafter appointed, may at
any time resign by giving written notice of such resignation to the Parent,
Swissco and the Corporation specifying the date on which it desires to resign,
provided that such notice shall never be given less than 60 days before such
desired resignation date unless the Parent, Swissco and the Corporation
otherwise agree and provided further that such resignation shall not take effect
until the date of the appointment of a successor trustee and the acceptance of
such appointment by the successor trustee. Upon receiving such notice of
resignation, the Parent, Swissco and the Corporation shall promptly appoint a
successor trustee by written instrument in duplicate, one copy of which shall be
delivered to the resigning trustee and one copy to the successor trustee.
Failing acceptance by a successor trustee, a successor trustee may be appointed
by an order of the Ontario Court of Justice (General Division) upon application
of one or more of the parties hereto.
10.2 REMOVAL. The Trustee, or any trustee hereafter appointed, may be
removed at any time on 60 days' prior notice by written instrument executed by
the Parent, Swissco and the Corporation, in duplicate, one copy of which shall
be delivered to the trustee so removed and one copy to the successor trustee.
10.3 SUCCESSOR TRUSTEE. Any successor trustee appointed as provided under
this trust agreement shall execute, acknowledge and deliver to the Parent,
Swissco and the Corporation and to its predecessor trustee an instrument
accepting such appointment. Thereupon the resignation or removal of the
predecessor trustee shall become effective and such successor trustee, without
any further act, deed or conveyance, shall become vested with all the rights,
powers, duties and obligations of its predecessor under this trust agreement,
with like effect as if originally named as trustee in this trust agreement.
However, on the written request of the Parent, Swissco and the Corporation or of
the successor trustee, the trustee ceasing to act shall, upon payment of any
amounts then due it pursuant to the provisions of this trust agreement, execute
and deliver an instrument transferring to such successor trustee all the rights
and powers of the trustee so ceasing to act. Upon the request of any such
successor trustee, the
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Parent, Swissco, the Corporation and such predecessor trustee shall execute any
and all instruments in writing for more fully and certainly vesting in and
confirming to such successor trustee all such rights and powers.
10.4 NOTICE OF SUCCESSOR TRUSTEE. Upon acceptance of appointment by a
successor trustee as provided herein, the Parent, Swissco and the Corporation
shall cause to be mailed notice of the succession of such trustee hereunder to
each Beneficiary specified in a List. If the Parent, Swissco or the Corporation
shall fail to cause such notice to be mailed within 10 days after acceptance of
appointment by the successor trustee, the successor trustee shall cause such
notice to be mailed at the expense of the Parent, Swissco and the Corporation.
ARTICLE 11
PARENT SUCCESSORS
11.1 CERTAIN REQUIREMENTS IN RESPECT OF COMBINATION, ETC. The Parent shall
not enter into any transaction (whether by way of reconstruction,
reorganization, consolidation, merger, transfer, sale, lease or otherwise)
whereby all or substantially all of its undertaking, property and assets would
become the property of any other person or, in the case of a merger, of the
continuing corporation resulting therefrom unless, but may do so if:
(a) such other person or continuing corporation is a corporation
(herein called the "Parent Successor") incorporated under the laws of any
state of the United States or the laws of Canada or any province thereof;
(b) the Parent Successor, by operation of law, becomes, without
more, bound by the terms and provisions of this trust agreement or, if
not so bound, executes, prior to or contemporaneously with the
consummation of such transaction a trust agreement supplemental hereto
and such other instruments (if any) as are satisfactory to the Trustee
and in the opinion of legal counsel to the Trustee are necessary or
advisable to evidence the assumption by the Parent Successor of liability
for all moneys payable and property deliverable hereunder and the
covenant of such Parent Successor to pay and deliver or cause to be
delivered the same and its agreement to observe and perform all the
covenants and obligations of the Parent under this trust agreement; and
(c) such transaction shall, to the satisfaction of the Trustee and
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 hereunder
11.2 VESTING OF POWERS IN SUCCESSOR. Whenever the conditions of section
11.1 hereof have been duly observed and performed, the Trustee, if required, by
section 11.1 hereof, the Parent Successor, Swissco and the Corporation shall
execute and deliver the supplemental trust agreement provided for in Article 12
and thereupon the Parent Successor shall possess and from time to time may
exercise each and every right and power of the Parent under this trust agreement
in the name of the Parent or otherwise and any act or proceeding by any
provision of this trust agreement required to be done or performed by the Board
of Directors of the Parent or any officers of the Parent may be done and
performed with like force and effect by the directors or officers of such Parent
Successor
11.3. WHOLLY-OWNED SUBSIDIARIES. Nothing herein shall be construed as
preventing the amalgamation or merger of any wholly-owned subsidiary of the
Parent with or into the Parent or the winding-up, liquidation or dissolution of
any wholly-owned subsidiary of the Parent provided that all of the assets of
such subsidiary are transferred to the Parent or another wholly-owned subsidiary
of the Parent and any such transactions are expressly permitted by this Article
11.
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ARTICLE 12
AMENDMENTS AND SUPPLEMENTAL TRUST AGREEMENTS
12.1 AMENDMENTS, MODIFICATIONS, ETC. This trust agreement may not be
amended or modified except by an agreement in writing executed by the
Corporation, the Parent, Swissco 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 hereof, the parties to this trust agreement may in writing, at any time and
from time to time, without the approval of the Beneficiaries, amend or modify
this trust agreement for the purposes of:
(a) adding to the covenants of either or both parties hereto for the
protection of the Beneficiaries hereunder;
(b) making such amendments or modifications not inconsistent with
this trust agreement as may be necessary or desirable with respect to
matters or questions which, in the opinion of the Board of Directors of
each of the Parent, Swissco 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 will not be prejudicial to
the interests of the Beneficiaries as a whole; or
(c) making such changes or corrections which, on the advice of
counsel to the Corporation, the Parent, Swissco 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 the Corporation, Swissco and the Parent shall be of
the opinion that such changes or corrections will not be prejudicial to
the interests of the Beneficiaries as a whole.
12.3 MEETING TO CONSIDER AMENDMENTS. The Corporation, at the request of
the Parent, shall call a meeting or meetings of the Beneficiaries for the
purpose of considering any proposed amendment or modification requiring approval
pursuant hereto. Any such meeting or meetings shall be called and held in
accordance with the by-laws of the Corporation, the Exchangeable Share
Provisions and all applicable laws.
12.4 CHANGES IN CAPITAL OF PARENT AND THE CORPORATION. At all times after
the occurrence of any event effected pursuant to section 2.7 or section 2.8 of
the Support Agreement, as a result of which either the Parent Common Shares or
the Exchangeable Shares or both are in any way changed, this trust agreement
shall forthwith be amended and modified as necessary in order that it shall
apply with full force and effect, mutatis mutandis, to all new securities into
which the Parent Common Shares or the Exchangeable Shares or both are so changed
and the parties hereto shall execute and deliver a supplemental trust agreement
giving effect to and evidencing such necessary amendments and modifications.
12.5 EXECUTION OF SUPPLEMENTAL TRUST AGREEMENTS. No amendment to or
modification or waiver of any of the provisions of this trust agreement
otherwise permitted hereunder shall be effective unless made in writing and
signed by all of the parties hereto. From time to time the Corporation (when
authorized by a resolution of the Board of Directors), Swissco (when authorized
by a resolution of its Board of Directors) the Parent (when authorized by a
resolution of its Board of Directors) and the Trustee may, subject to the
provisions of these presents, and they shall, when so directed by these
presents, execute and deliver by their proper officers, trust agreements or
other instruments supplemental hereto, which thereafter shall form part hereof,
for any one or more of the following purposes:
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(a) evidencing the succession of Parent Successors to the Parent and
the covenants of and obligations assumed by each such Parent Successor in
accordance with the provisions of Article 11 and the successor of any
successor trustee in accordance with the provisions of Article 10;
(b) making any additions to, deletions from or alterations of the
provisions of this trust agreement or the Voting Rights, the Exchange
Right or the Automatic Exchange Rights which, in the opinion of the
Trustee and its counsel, will not be prejudicial to the 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 the Parent, Swissco, the
Corporation, the Trustee or this trust agreement; and
(c) for any other purposes not inconsistent with the provisions of
this trust agreement, including without limitation to make or evidence
any amendment or modification to this 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 trust agreement shall be effective
upon the issuance by the Corporation of Exchangeable Shares under the
Arrangement and shall continue until the earliest to occur of the following
events:
(a) no outstanding Exchangeable Shares are held by a Beneficiary;
(b) each of the Corporation, Swissco and the Parent elects in
writing to terminate the Trust and such termination is approved by the
Beneficiaries of the Exchangeable Shares in accordance with Section 10.2
of the Exchangeable Share Provisions; and
(c) 21 years after the death of the last survivor of the
descendants of His Majesty King ▇▇▇▇▇▇ VI of the United Kingdom of Great
Britain and Northern Ireland living on the date of the creation of the
Trust.
13.2 SURVIVAL OF AGREEMENT. This trust agreement shall be effective upon
the issuance by the Corporation of Exchangeable Shares under the Arrangement and
shall survive any termination of the Trust and shall continue until there are no
Exchangeable Shares outstanding held by a Beneficiary; provided, however, that
the provisions of Articles 8 and 9 shall survive any such termination of this
trust agreement.
ARTICLE 14
GENERAL
14.1 SEVERABILITY. If any provision of this agreement is held invalid,
such invalidity shall not affect the other provisions hereof which can be given
effect without the invalid provision, and to this end the provisions of this
agreement are intended to be and shall be deemed severable; provided, however,
that if the provision or provisions so held to be invalid, in the reasonable
judgment of the parties hereto, is or are so fundamental to the intent of the
parties hereto and the operation of this agreement that the enforcement of the
other provisions hereof, in the absence of such invalid 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 trust agreement shall be binding upon and enure to
the benefit of the parties hereto and their respective successors and permitted
assigns and to the benefit of the Beneficiaries.
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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 the Parent or Swissco at:
Silicon Graphics, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Mail Stop 710
Mountain View, CA 94043-1389
Attention: Legal Services
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
(b) if to the Corporation at:
Silicon Graphics Canada Limited
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Attention: President
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
(c) if to the Trustee at:
Montreal Trust Company of Canada
Corporate Trust Services
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Attention: Manager, Corporate Trust Department
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Any notice or other communication given personally shall be deemed to have been
given and received upon delivery thereof and if given by telecopy shall be
deemed to have been given and received on the date of receipt thereof unless
such day is not a Business Day in which case it shall be deemed to have been
given and received upon the immediately following Business Day.
14.4 NOTICE 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 the Corporation from time to time in force in
respect of notices to shareholders and the provisions of the then prevailing law
and shall be deemed to be received (if given or sent in such manner) at the time
specified in such by-laws and the provisions of the then prevailing law, the
provisions of which by-laws shall apply mutatis mutandis to notices or documents
as aforesaid 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 the
Corporation, or by such Beneficiary to the Trustee or to the Parent, Swissco or
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the Corporation, the making of such payment or sending of such document sent
through the post shall be at the risk of the Corporation, in the case of
payments made or documents sent by the Trustee or the Corporation, and the
Beneficiary, in the case of payments made or documents sent by the Beneficiary.
14.6 COUNTERPARTS. This trust agreement may be executed in counterparts,
each of which shall be deemed an original, but all of which taken together shall
constitute one and the same instrument.
14.7 JURISDICTION. This trust agreement shall be construed and enforced in
accordance with the laws of the Province of Ontario and the laws of Canada
applicable therein.
14.8 ATTORNMENT. Each of the Parent and Swissco agree that any action or
proceeding arising out of or relating to this trust agreement may be instituted
in the courts of Ontario, waive any objection which it may have now or hereafter
to the venue of any such action or proceeding, irrevocably submits to the
jurisdiction of the said courts in any such action or proceeding, agrees to be
bound by any judgment of the said courts and not to seek, and hereby waives, any
review of the merits of any such judgment by the courts of any other
jurisdiction and hereby appoints the Corporation at its registered office in the
Province of Ontario as the Parent's and Swissco's attorney for service of
process.
14.9 GUARANTY/ASSIGNMENT. Parent hereby unconditionally and irrevocably
guarantees the prompt and full performance by Swissco of its obligations
hereunder. Swissco, upon prior notice to the Trustee, may assign all or a
portion of its rights and obligations hereunder to Parent, which shall thereupon
assume such assigned rights and obligations, without the consent of the Trustee,
the Beneficiary, or the Corporation subject to the Trustee, the Corporation and
the Parent entering into a supplemental trust agreement pursuant to section
12.5(c) reflecting such assignment and assumption. This agreement may not be
assigned by the Parent without the prior written consent of Swissco, the Trustee
and the Corporation approved by the holders of the Exchangeable Shares in
accordance with section 10.2 of the Exchangeable Share Provision.
[THIS SPACE INTENTIONALLY LEFT BLANK.]
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IN WITNESS WHEREOF, the parties hereto have caused this trust agreement to
be duly executed as of the date first above written.
SILICON GRAPHICS, INC.
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: President and Chief Operating Officer
SILICON GRAPHICS MANUFACTURING S.A.
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Authorized Signatory
SILICON GRAPHICS CANADA LIMITED
By /s/ ▇▇▇▇ ▇. ▇▇▇▇
------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: Director
MONTREAL TRUST COMPANY OF CANADA
By /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Senior Trust Officer
By /s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: Trust Officer
Corporate Trust Services
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