EXHIBIT 9.1
UNANIMOUS SHAREHOLDERS AGREEMENT
BETWEEN ALL OF THE SHAREHOLDERS
AND OPTIONHOLDERS
OF ALL CLASSES OF SHARES OF
ImagicTV Inc.
DATED AS OF DECEMBER 17, 1999
UNANIMOUS SHAREHOLDERS AGREEMENT
--------------------------------
THIS AGREEMENT made as of the 17/th/ day of December, 1999
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A M O N G:
ImagicTV Inc.
(hereinafter called the "Corporation")
- and -
NBTEL INC. (hereinafter called "NBTel")
- and -
NEWBRIDGE NETWORKS CORPORATION
(hereinafter called "Newbridge")
- and -
506048 N.B. LTD. (hereinafter called "Celtic")
- and -
WHITECASTLE INVESTMENTS LIMITED (hereinafter called "Castleco")
and those individual investors executing Schedule A-1 hereof (
who, together with Castleco, are hereinafter called the "Castleco
Group")
- and -
The consultants and employees of the Corporation and its
Affiliates and those other persons who are from time to time
listed on Schedule "B" to this Agreement (collectively, the
"Employee Shareholders")
- and -
The holders of options to purchase Non-Voting Shares from time to
time listed on Schedule "C" to this Agreement (collectively, with
the other holders of options specified herein, the
"Optionholders")
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WHEREAS NBTel, Newbridge, Celtic, and the members of the Castleco Group
are Voting Shareholders of the Corporation and have agreed to become parties
hereto by signing Schedules "A" and A-1 hereto;
WHEREAS the Non-Voting Shareholders have agreed to become parties by
signing Schedule "B" hereto;
WHEREAS the Optionholders have agreed to become parties hereto by signing
Schedule "C" hereto;
AND WHEREAS the Shareholders and Optionholders wish to enter into this
Agreement as a unanimous shareholders agreement to provide for certain matters
relating to the conduct of the Business and the ownership of the Shares (both as
hereinafter defined);
NOW THEREFORE THIS AGREEMENT WITNESSETH that, in consideration of the
mutual covenants and promises herein contained and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereby covenant and agree as follows:
ARTICLE 1.00
DEFINITIONS
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1.1 Definitions
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In this Agreement and in all amendments hereto the following words shall have
the following meanings:
"Act" means the Canada Business Corporations Act, as the same may be amended
from time to time.
"Affiliates" has the meaning given to such term in the Act, and in respect of
the Corporation, includes such other Affiliates as may become affiliates of the
Corporation in future.
"Affiliated Person" means:
(a) in respect of each of NBTel, Newbridge and Celtic, a corporation
Controlled, directly or indirectly, by such Shareholder or a
corporation that Controls, directly or indirectly, a Shareholder or a
corporation under common Control, directly or indirectly, with such
Shareholder, provided that Newbridge and
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Celtic shall not be considered "Affiliated Persons" for the purposes
of this Agreement;
(b) in respect of Castleco:
(i) each Diamond Entity;
(ii) a corporation Controlled directly or indirectly by any Diamond
Entity; and
(iii) Centara Investments Inc., ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, management and
employees of Castleco (and corporations Controlled by them) who
have signed a Voting Trust Agreement in favour of Castleco at
the date hereof (provided that, in respect of Section 3.3, such
persons shall not be deemed to be Affiliated Persons of
Castleco); and
(c) in respect of each Shareholder who is an individual, including any
Employee Shareholder:
(i) a corporation Controlled directly or indirectly by that
Shareholder;
(ii) a trustee holding Shares for the benefit of that Shareholder
under a registered retirement savings plan, provided that such
Shareholder retains control and direction over the voting and
transfer of such Shares so as to permit such Shareholder to
fulfil all of his or her obligations under this Agreement; and
(iii) in the event of the death of the Shareholder, a Member of the
Immediate Family of the Shareholder.
"Agreement" means this agreement and any agreement supplementary or ancillary
hereto and any counterpart hereof.
"Annual Plan" means an annual operating plan or budget of the Corporation.
"Board" means the board of directors of the Corporation.
"Business" means the business of the Corporation consisting of the development,
production, marketing, delivery and distribution of an operational suite of
software and hardware products to enable the delivery of various services
solutions, including broadcast television, over any high speed Internet Protocol
network infrastructure including digital subscriber line technologies.
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"Business Day" means any day which is not:
(a) a Saturday or Sunday; or
(b) a day which is a statutory holiday under the laws of Canada or the
Provinces of New Brunswick or Ontario.
"Castleco Parties" means Castleco and the Affiliated Persons of Castleco.
"Control" or "Controls" means:
(a) the right to exercise, directly or indirectly, a majority of the votes
which may be voted at a general meeting of shareholders of the
applicable corporation;
(b) the right to elect or appoint, directly or indirectly, a majority of
the directors of the applicable corporation or other persons who have
the right to manage or supervise the management of the affairs and
business of the applicable corporations;
(c) the possession, directly or indirectly, of the power to direct or
cause the direction of the management and policy of a person; or
(d) control in fact of any person;
and the words "Controlling" and "Controlled" have the corresponding meanings.
"Current Price" means the lowest exercise price of options issued under the ESOP
at the date of the last issuance of any such options approved by the Board
pursuant to the ESOP prior to the date of the closing of a sale or transfer of
Shares to which the Current Price applies in accordance with the terms hereof.
"Diamond Entity" means:
(a) any one or more of A. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, his wife and his sons
(collectively, the "Diamond Family");
(b) a trust or trusts substantially all of the interest in which is held
for the benefit of any one or more members of the Diamond Family and
their issue (collectively, the "Diamond Trusts");
(c) a corporation or corporations all of the voting securities of which is
controlled by any one or more members of the Diamond Family or any one
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or more of the Diamond Trusts, (collectively, the "Diamond
Corporations"); and
(d) any combination of any one or more members of the Diamond Family, any
one or more of the Diamond Trusts and any one or more of the Diamond
Corporations.
"ESOP" means the employee stock option plan established by the Board of the
Corporation for its eligible employees, managers, directors and consultants of
the Corporation pursuant to which such persons may be granted options from time
to time to purchase Class C Non-Voting Shares in such numbers and on such terms
as are provided for therein and in any option agreement entered into pursuant
thereto.
"Executive Management" means an Employee Shareholder who now or in the future
occupies one of the following positions with the Corporation: President and
Chief Executive Officer; Chief Financial Officer; Vice-President, Marketing;
Vice-President, Sales and Customer Services; Vice-President, Technology; and
Controller.
"Members of the Immediate Family" means the husband or wife of an individual and
the individual's grandparents, parents, children, grandchildren, siblings,
nieces, nephews and cousins.
"Non-Voting Shares" means Class B Non-Voting and Class C Non-Voting Shares in
the capital of the Corporation.
"Non-Voting Shareholder" means each person who holds Non-Voting Shares for so
long as such person holds such shares but excluding a Voting Shareholder in
respect of any Non-Voting Shares held by it or its Affiliated Persons.
"Optionholder" means each person, including any employee of the Corporation or
its Affiliates, who holds options to purchase Shares for so long as such person
holds such options; provided that an Optionholder who is an employee of the
Corporation or its Affiliates shall be deemed to also be an Employee Shareholder
for the purposes hereof from and with effect upon the issuance of any Non-Voting
Shares to such Optionholder pursuant to any exercise of such Optionholder's
options.
"person" includes an individual, a sole proprietorship, a firm, a corporation, a
syndicate, a partnership, a trust, an association, a joint venture, an
incorporated or unincorporated association, syndicate or organization, or a body
corporate.
"Permitted Transferees" includes any Affiliates or any Affiliated Person of a
Shareholder.
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"Public Offering" means a transaction whereby the securities of the Corporation
become freely tradeable (subject to applicable hold periods) in accordance with
applicable securities laws and listed and posted for trading on a Recognized
Exchange, including without limitation an initial public offering or the
qualification for trading of the securities of the Corporation by way of a
prospectus or registration statement of the Corporation filed with securities
regulatory authorities in Canada, the United Kingdom or the United States.
"Recognized Exchange" means any of The Toronto Stock Exchange, the New York
Stock Exchange, the London Stock Exchange or NASDAQ, and any combination
thereof.
"security" shall have the meaning set forth in Section 2(1) of the Act.
"Shareholder" means each Voting Shareholder and Non-Voting Shareholder for so
long as such person is a holder of Shares, each person to whom a Shareholder
transfers Shares or to whom the Corporation issues Shares in accordance with
this Agreement, for so long as such transferee or recipient is a holder of
Shares.
"Shares" means Voting Shares and Non-Voting Shares in the capital of the
Corporation, singularly called a "Share".
"Subsidiary" means a corporation which is under the Control of the Corporation.
"Voting Shares" means Class A Common Voting shares in the capital of the
Corporation.
"Voting Shareholder" means each of NBTel, Newbridge, Celtic and the each member
of the Castleco Group and, in each case, their respective Affiliated Persons for
so long as such person is a holder of Voting Shares, and each person to whom a
Shareholder transfers Voting Shares or to whom the Corporation issues Voting
Shares in accordance with this Agreement, for so long as such transferee or
recipient is a holder of Voting Shares.
"Voting Trust Agreement" means an agreement between a Shareholder or proposed
Shareholder and an individual authorized to act as trustee or who shall
otherwise have voting control or direction over the Shares subject to such
agreement, in substantially the form of the agreement attached hereto as
Schedule E.
1.2 Schedules
---------
The following are the Schedules annexed hereto and incorporated by
reference and deemed to be part hereof:
Schedule A - Shareholder Parties to the Agreement;
Schedule A-1- Castleco Group Parties to the Agreement;
Schedule B - Employee Shareholders;
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Schedule C - Optionholders;
Schedule D - Addresses for Notice; and
Schedule E - Form of Voting Trust Agreement
1.3 Notices to Castleco Group
-------------------------
Notwithstanding any other provision in this Agreement to the contrary,
where any notice or report is required to be delivered to any Shareholder or
Voting Shareholder pursuant to the terms of this Agreement, the party delivering
such notice or report shall be deemed to have complied with the applicable
delivery requirements of this Agreement with respect to the members of the
Castleco Group where the notice or report has been delivered to Castleco and to
Centara Investments Inc.
ARTICLE 2.00
MANAGEMENT OF THE CORPORATION
-----------------------------
2.1 Board of Directors - Composition; Quorum; Notice of Meetings
------------------------------------------------------------
Subject to the other provisions of this Agreement, the Board shall consist
of up to nine directors (the "Authorized Number of Board Positions") who shall
be nominated subject to the following:
(a) as long as NBTel and its Affiliated Persons, taken as a group,
hold at least 5% of the issued and outstanding Voting Shares, NBTel
shall be entitled to nominate two directors to the Board.
(b) as long as Newbridge and its Affiliated Persons, taken as a
group, hold at least 5% of the issued and outstanding Voting Shares,
Newbridge shall be entitled to nominate one director to the Board.
(c) as long as Celtic and its Affiliated Persons, taken as a group,
hold at least 5% of the issued and outstanding Voting Shares, Celtic
shall be entitled to nominate one director to the Board.
(d) as long as the members of the Castleco Group and their respective
Affiliated Persons, taken as a group, hold at least 5% of the issued
and outstanding Voting Shares, Castleco shall be entitled to nominate
one director to the Board and to appoint one person to any executive
committee of the Corporation.
(e) The Chief Executive Officer of the Corporation, as appointed from
time to time by the Board, shall occupy one seat on the Board.
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(f) At least three (3) directors of the Corporation shall be
Independent Directors. "Independent Directors" means persons who (A)
have relevant industry experience, (B) hold less than 1% of the issued
and outstanding Shares at the time of their appointment, (C) have no
written or oral contracts with the Corporation, the Shareholders or
their respective Affiliates, and (D) who is not related by blood,
adoption or marriage to any person to which clause (B) or (C) applies.
The three Independent Directors shall be appointed by no later than
April 17, 2000 in accordance with the following conditions:
(i) NBTel shall appoint one Independent Director, provided that so
long as ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ is willing and able to occupy a Board
position, he shall be the Independent Director appointed by NBTel
and will serve in the capacity of Chairman of the Board. In the
event ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ is unable to serve as a director, NBTel
shall appoint his replacement provided that the director to
occupy the position of Chairman of the Board shall, in such
event, be determined by a vote of the Board; and,
(ii) The selection of the remaining two Independent Directors shall
require the approval of Castleco and one of either NBTel or
Newbridge, acting reasonably. Candidates for these positions
shall be put forward by the Chairman and the Chief Executive
Officer for consideration by Castleco and NBTel and/or Newbridge.
2.2 Board of Directors - Quorum; Notice of Meetings
-----------------------------------------------
(a) A quorum for a meeting of the Board shall be the greater of five (5)
or such number of directors as constitute a majority of the Authorized Number of
Board Positions or such other number as is authorized by resolution from time to
time by all of the directors but, in any event, not less than five, either
present in person or participating by conference telephone.
(b) Notwithstanding Section 2.2(a), the presence of one of the nominee
directors of each of Castleco, NBTel and Newbridge (each a "Required Director")
shall be required to constitute a quorum unless expressly waived in writing by
Castleco, NBTel or Newbridge, as applicable. If a Shareholder nominating a
Required Director does not waive such requirement, each such Shareholder agrees
to use its reasonable efforts to see that one of its nominee directors is
present in person or participates by telephone in all meetings of the Board in
order to constitute a quorum. Notwithstanding the foregoing, the presence of a
Required Director shall not be required to constitute a quorum at the second of
any two
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consecutive duly called meetings of the Board of which that Required Director
received proper notice and which such Required Director has not attended in
person or by conference telephone.
(c) All decisions of the Board shall require the affirmative vote of a
majority of the directors present or participating at such meeting, save and
except as otherwise specifically set out in this Agreement. Each meeting of the
Board shall require at least ten (10) days prior written notice unless waived by
all the directors. A Shareholder entitled to nominate a director to the Board
pursuant to Section 2.1, but which has not exercised its right to nominate such
director, shall nevertheless be entitled to receive notice of all meetings of
the directors and shall be entitled to have representatives present and heard at
such meetings.
2.3 Directors' Fees
---------------
The directors of the Corporation who are Independent Directors shall be paid a
directors' fee in an amount determined by the Board from time to time having
regard to the ability of the Corporation to attract qualified directors to the
Board. All reasonable travel, accommodation and ancillary costs and expenses
incurred by the directors to attend meetings of the Board and any committee of
the Corporation referred to in Section 2.7(a) hereof shall be paid by the
Corporation.
2.4 Chairman
--------
The chairman at any meeting of directors or Shareholders shall, subject to the
provisions of Section 2.1(f)(i) hereof, be appointed by all of the directors and
shall not have a second or casting vote.
2.5 Election of Nominees
--------------------
The Voting Shareholders agree to vote, or to cause to be voted, all of their
Shares and to act in all respects to ensure that each of the Shareholder
nominees to the Board referred to in Section 2.1 is elected and appointed and
maintained in office from time to time as a member of the Board, and agree to
vote their Shares to remove from office any director who does not vote in
accordance with the terms of this Agreement and to appoint a substitute nominee
in his or her place.
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2.6 Shareholders - Quorum
---------------------
A quorum for a meeting of Shareholders shall be such number of Voting
Shareholders as hold greater than sixty-six and two-thirds percent (66 2/3%) of
the Voting Shares, present in person or by proxy. Any meeting of shareholders
may be adjourned for lack of a quorum and at any such adjourned shareholders'
meeting, a quorum shall comprise those shareholders (attending in person, by
proxy or by conference call) representing more than 50% of all Voting Shares.
Unless otherwise expressly provided herein, all decisions required by the
Shareholders shall require the affirmative vote of such number of Voting
Shareholders as hold greater than fifty (50%) percent of the Voting Shares,
present in person or represented by proxy at such meeting, or such greater
number as is required by law.
2.7 Committee(s)
------------
(a) If the directors and/or Voting Shareholders of the Corporation establish a
management committee, executive committee or any other committee of like
purpose for the Corporation or any Subsidiary, Castleco shall be entitled
to give written notice to the Corporation and to the directors and Voting
Shareholders that it wishes to appoint a member to such committee(s), and
it shall be entitled to one member of each such committee.
(b) In the event that Castleco has not exercised its right to appoint a member
to any committee referred to in Section 2.7(a), it shall nevertheless be
entitled to receive notice of all meetings of any such committee(s), and to
have a representative attend and be heard at all such meetings.
(c) A quorum for a meeting of such committee(s) shall be such number of members
of such committee(s) as constitutes a majority of the positions then
authorized, including the one that Castleco is entitled to fill, on such
committee(s) (whether such positions are filled or vacant). Any meeting of
such committee(s) may be adjourned for lack of a quorum and at any such
adjourned committee meeting, a quorum shall be such number of members of
such committee(s) as constitutes a majority of the positions then
authorized, on such committee(s) (whether such positions are filled or
vacant).
(d) Within thirty days of the date hereof the Corporation will form a
compensation committee, which will include a Castleco representative and
which will, among other things, provide guidance to the Board on matters
relating to the ESOP and the grant of options thereunder.
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2.8 Decisions Requiring Voting Shareholder Approval
-----------------------------------------------
The following actions of, or relating to, the Corporation or any Subsidiaries
thereof shall, in addition to any other approval required by this Agreement or
by law, also require the approval of Voting Shareholders holding or having
voting direction over greater than sixty-six and two-thirds percent (66 2/3%) of
the Voting Shares (provided that the approval of any such matter at a meeting of
the Board by directors holding, or representing holders of, 66 2/3% or more of
the Voting Shares shall be deemed to constitute such approval for the purposes
hereof in the absence of notice to the contrary from the applicable Voting
Shareholders) prior to the taking of any such action:
(a) any material change or any action which may lead to or result in a material
change in the Business of the Corporation or any Subsidiary;
(b) any steps taken toward the amalgamation, reorganization, merger or
arrangement, winding-up, dissolution, as any such term is defined in the
Act, of or relating to the Corporation or any Subsidiary (provided that,
for clarity, nothing in this subsection 2.8(b) shall in any way affect the
application of the provisions of Section 3.2 hereof);
(c) any sale, attempt to sell, assign, license or otherwise dispose of any
material property (including, without limitation, intangible property,
intellectual property and computer software), assets, or (subject to the
provisions of Section 3.2) shares of the Corporation or any Subsidiary, or
undertaking of the Corporation or any Subsidiary by conveyance, transfer,
assignment, license, share issuance by a Subsidiary or lease or otherwise
or make a sale in bulk or sale of an enterprise other than (i) sale of
inventory and granting of licences in respect to the use of its products by
the Corporation or any Subsidiary in the ordinary course of business on
normal commercial terms, and (ii) the disposal of obsolete machinery and
equipment (provided that, for clarity, nothing in this subsection 2.8(c)
shall in any way affect the application of the provisions of Section 3.2
hereof);
(d) the declaration and/or payment of dividends or other distributions of any
kind to any Shareholder by the Corporation or any Subsidiary or to the
Corporation by any Subsidiary other than as may be contemplated under a
duly approved Annual Plan, provided that the Corporation or applicable
Subsidiary is in substantial compliance with such plan at the time that any
such dividend or distribution is made;
(e) the redemption, surrender, conversion or purchase by the Corporation or any
Subsidiary of any Shares, or shares of any Subsidiary, or options or rights
of any nature to acquire or dispose of Shares or shares of a Subsidiary, or
any other securities of the Corporation or a Subsidiary; and
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(f) entering into any contract, agreement or commitment outside the ordinary
course of business (as defined in Section 2.10 hereof) unless authorized by
an Annual Plan approved by the Board.
2.9 Insurance; Indemnification
--------------------------
(a) The Corporation shall use its best efforts to obtain and maintain directors
and officers liability insurance funded by the Corporation in such amount
and on such terms as would be maintained by a prudent board of directors,
taking into account the type and nature of the Business, and after
consultation with persons knowledgeable in the field.
(b) The Corporation shall, and does hereby, irrevocably and unconditionally,
indemnify and save harmless each Shareholder and each of the directors and
officers of the Corporation and their respective heirs and legal
representatives (the "Indemnified Parties" in this Section 2.9(b)) against
all liabilities, actions, costs, charges, demands and expenses (including
reasonable legal fees), including an amount paid to settle an action or
satisfy a judgment, incurred by an Indemnified Party:
(i) in respect of any civil, criminal or administrative action or
proceedings to which an Indemnified Party is a party by reason of
being or having been an officer or director of the Corporation
if:
(A) the Indemnified Parties acted honestly and in good faith
with a view to the best interests of the Corporation; and
(B) in the case of a criminal or administrative action or
proceeding that is enforced by a monetary penalty, the
Indemnified Parties had reasonable grounds to believe that
their conduct was lawful; and
(ii) as a result of wilful misconduct or gross negligence of the
Board, any committee of the Board, or any officer of the
Corporation, provided that any payment to be made in respect of
such indemnification shall be rateably reduced to the extent that
any Indemnified Party is found to have contributed to such wilful
misconduct or gross negligence.
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2.10 Scope of Powers
---------------
Subject to Section 2.8, and the proviso hereinafter set forth, all decisions
with respect to the Corporation and each Subsidiary shall, to the greatest
extent permitted by law, be made by the Board; provided that, save and except
for any decisions to be made pursuant to Section 2.8 hereof, the Board may, from
time to time, delegate to any person or persons the authority to make any
decision in the ordinary course of business of the Corporation which such person
is permitted by law to make, and, in such event, the Board shall not be liable
to any person or persons, including, without limitation, the Shareholders for
any decision so made. For the purposes of this Section 2.10, "ordinary course of
business" shall mean an ordinary, day-to-day business activity of the
Corporation or a Subsidiary, as the case may be, conducted in a commercially
reasonable and businesslike manner, having no unusual or special features and
having no material impact or effect on the Corporation's or Subsidiary's
Business, condition (financial or otherwise) or prospects, and being such as an
entity of similar size and nature and engaged in a similar business might be
reasonably expected to carry out from time to time. For greater certainty, any
action to be taken by the Corporation or a Subsidiary pursuant to an Annual Plan
duly approved by the Board shall be deemed to be taken in the "ordinary course
of business", provided that the Corporation and/or Subsidiary, as applicable, is
in substantial compliance with the Annual Plan at the time of such action.
2.11 Officers
--------
The Shareholders and the Corporation agree that the senior executive officers
shall, as at the date hereof, be:
▇▇▇▇▇▇ ▇▇▇▇▇▇ President and Chief Executive Officer;
▇▇▇▇▇ ▇▇▇▇▇▇ Vice-President, Finance and Marketing;
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ Vice-President, Sales and Customer Services;
▇▇▇▇▇ ▇▇▇▇▇▇▇ Vice-President, Technology; and
▇▇▇▇ ▇▇▇▇▇ Controller.
ARTICLE 3.00
SHARE OWNERSHIP
---------------
3.1 General Prohibitions
--------------------
(a) Save and except as hereinafter provided in Sections 3.2, 3.3 and 3.4, at
any time prior to the termination of this Agreement pursuant to Section
4.9, no Non-Voting Shareholder or Optionholder shall directly or
indirectly sell, transfer, mortgage, charge, pledge, encumber or otherwise
alienate or dispose of any of the Non-Voting Shares or options to acquire
Shares. Each Shareholder and Optionholder (each being hereinafter referred
to in this Section 3.1 as a "Holder") who holds Shares or options, as
applicable (hereinafter in this Section 3.1 referred to as "Securities"),
as
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of the date hereof hereby represents and warrants to each other Shareholder
and to the Corporation as at the date hereof as follows:
(i) The Securities held by the Holder are directly or beneficially
owned by the Holder and its Affiliated Persons;
(ii) The Holder has all of the requisite power and authority over
such Securities so as to permit the Securities to be governed
by this Agreement in accordance with its terms and to fulfil
all of his obligations under this Agreement; and
(iii) The Securities held by the Holder are not subject to any
mortgage, charge, pledge or other encumbrance as of the date
hereof.
For greater certainty, the entry by a Shareholder into a Voting Trust
Agreement shall not represent a breach of this Section 3.1(a). For greater
certainty, each party hereto, including without limitation each
Optionholder, agrees that the provisions of this Agreement shall apply to
any Shares issued or issuable after the date hereof pursuant to the
exercise of stock options currently outstanding or which may be granted in
future under the ESOP.
(b) Control of any Shareholder which is a corporation may not be changed,
directly or indirectly, whether by operation of law or otherwise, save and
except as hereinafter provided. The parties agree that the foregoing
restriction shall not apply (i) to any Shareholder which is a corporation
whose shares are listed and posted for trading on a Canadian or U.S. stock
exchange or (ii) to a change of Control of a Shareholder to an Affiliated
Person provided that the Corporation shall have first received an agreement
executed by such Shareholder in favour of the other persons who are parties
to this Agreement at such time, in which such Shareholder acknowledges and
confirms that such Affiliated Person meets the definition of "Affiliation
Person" in this "Agreement" and that such Shareholder will at all times
remain an Affiliated Person of such Affiliated Person. In addition, the
Shareholder shall cause all such Affiliated Persons to become a party to,
and comply with the terms of, this Agreement. Notwithstanding the
foregoing, the parties hereto agree that no change of Control of Castleco
or any of its Affiliated Persons which is a Shareholder shall be deemed to
have occurred so long as any one or more Diamond Entities Controls Castleco
and any of its Affiliated Persons which is then a Shareholder, directly or
through one or more Controlled corporations.
(c) Notwithstanding the provisions of Section 3.1(a), each of the Shareholders
shall have the right to transfer all or, from time to time, any of such
person's Shares to a Permitted Transferee of such Shareholder provided that
the Corporation shall have first received:
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(i) an agreement in which the transferee agrees to be bound by this
Agreement in the same manner as if such person had been an original
party hereto and to the same extent as the transferor; and
(ii) an agreement executed by the transferor in favour of the other persons
who are parties to this Agreement at such time, in which the
transferor acknowledges and confirms that the Permitted Transferee
meets the definition of "Permitted Transferee" in this Agreement and
that the transferor will at all times remain a Permitted Transferee of
such transferee.
For greater certainty, such transferee shall have all the rights, powers
and privileges of a Shareholder hereunder in the same manner as if such
party had been an original party hereto and to the same extent as the
transferor but not exceeding the rights of the original parties named in
this Agreement. If such transfer is by way of testamentary disposition or
otherwise arises as a consequence of the death of any Shareholder or by
operation of law, such transfer shall only be effective if the transferee
meets the definition of "Permitted Transferee" in this Agreement ( and
represents and warrants as such to the Corporation) and otherwise complies
with the requirements of this Section 3.1(c) other than clause (ii) hereof.
(d) No Shares of any class or series shall be issued by the Corporation to any
person who is not then a Shareholder, whether pursuant to any presently
outstanding agreements, calls, commitments, options, subscriptions,
warrants or other rights or privileges to acquire any of the Shares or
otherwise, without the allottee first entering into an agreement agreeing
to be bound by this Agreement in the same manner as if such person had been
an original party hereto and the parties hereto do hereby appoint the
Corporation as their trustee with respect to the foregoing. The parties to
this Agreement hereby consent to the addition to this Agreement as parties
from time to time of any recipients of options pursuant to the ESOP,
provided that such recipients comply with the first sentence of this
Section 3.1(d). Each such recipient shall be deemed an "Employee
Shareholder" or "Optionholder" for the purposes of this Agreement, as
applicable.
3.2 Offer for All of the Shares
---------------------------
For any transfer of Shares other than to a Permitted Transferee, the following
applies:
(a) If an offer to purchase all of the Shares of the Corporation (the "Offer")
is accepted by at least fifty-one percent (51%) of the Voting Shareholders,
the Board shall, by notice to the Non-Voting Shareholders (the "Sale
Notice"), require the Non-Voting Shareholders to tender their Shares to the
Offer and the Non-Voting Shareholders, upon issuance of the Sale Notice by
the Corporation, shall be deemed to have
16
accepted the Offer at the same price per Share and on the same terms and
conditions as are contained in the Offer. Subject to the fulfilment of such
conditions as may be imposed by the purchaser under the Offer or by the
Voting Shareholders, the transaction shall close at the offices of the
Corporation's solicitors in accordance with the terms of the Offer.
(b) The parties, including the Optionholders, agree that this Section 3.2
shall, unless otherwise determined by the Board, be applied to all
currently outstanding options held by Optionholders and all options issued
under the ESOP in accordance with the terms thereof. The Board may, in its
sole discretion, deal with the options issued under the ESOP in the manner
it deems fair and reasonable in light of the circumstances of the Offer.
Without limiting the generality of the foregoing, in connection with the
closing of a sale pursuant to an Offer, the Board may, without any action
or consent required on the part of any Optionholder, (i) deem any or all
options (vested or unvested) under the ESOP to have been exercised and the
underlying Shares to have been tendered to the Offer and apply a portion of
the Optionholder's proceeds from the closing of the Offer to the exercise
price payable by that Optionholder for the exercise of his or her options,
(ii) cancel the options and pay to an Optionholder the amount that the
Optionholder would have received, after deducting the exercise price of the
options, had the options been exercised and the underlying Shares sold
pursuant to the Offer, (iii) exchange unvested options, or any portion of
them, for options to purchase shares in the capital of the acquiror or any
corporation which results from an amalgamation, merger or similar
transaction involving the Corporation made in connection with the closing
of a sale pursuant to the Offer or (iv) take such other actions, and
combinations of the foregoing actions, as it deems fair and reasonable
under the circumstances.
(c) The parties covenant and agree that, at the time of closing of any
transaction of purchase and sale contemplated in this Section 3.2, the
vendor of the said Shares shall be the owner thereof and shall have good
and marketable title thereto, free of any lien, charge or encumbrance of
any kind whatsoever and shall have the exclusive right and full power to
sell, transfer and assign the Shares free and clear of all liens, charges
and encumbrances whatsoever; provided that, in the event that at the time
of closing of any such transaction, the said Shares are not free and clear
of all liens, charges and encumbrances whatsoever, the purchaser of the
Shares shall be entitled, at his sole option, to purchase the Shares
subject to such lien, charge or encumbrance and to deduct the amount of, or
cost of removing, such lien, charge or encumbrance from the purchase price
payable by the purchaser for the Shares.
(d) If a Shareholder refuses or neglects to complete a sale contemplated in
this Section 3.2 for any reason, the purchaser shall have the right, upon
payment of the purchase price to the credit of the Shareholder at any
Canadian chartered bank for and on behalf of the Shareholder or his
nominee, to execute and deliver such transfers,
17
resignations and other documents as may be necessary or desirable in order
to complete the transaction, and to that end the Shareholder hereby
irrevocably appoints the Chief Executive Officer of the Corporation as his
true and lawful attorney to complete the transaction and execute on behalf
of the Shareholder every document necessary or desirable in that behalf.
3.3 Improper Transfer
-----------------
(a) (i) Upon the happening of a sale, transfer, mortgage, charge, pledge,
encumbrance, assignment or disposition by a Non-Voting Shareholder of
any Non-Voting Shares or option to acquire Non-Voting Shares of the
Corporation, or
(ii) Upon a change of Control of any Shareholder which is a
corporation
other than in compliance with this Agreement (hereinafter referred to as an
"Event of Default") which has not been cured or remedied within fifteen
(15) Business Days after the date that the Non-Voting Shareholder becomes
aware of the occurrence of the Event of Default (provided that such
opportunity to cure or remedy an Event of Default shall be available only
once in respect of any Non-Voting Shareholder and further provided that
such cure period shall be reasonably extended if such Event of Default has
arisen by operation of law or reasons beyond the control of such Non-Voting
Shareholder and such Shareholder is vigorously proceeding to cure such
Event of Default with some reasonable prospect of success), the Voting
Shareholders (such Voting Shareholders being referred to as the "Remaining
Shareholders" in this Section 3.3 and the Shareholder in respect of whom
the Event of Default has occurred being referred to as the "Vendor" in this
Section 3.3) shall have the option, exercisable at any time by the giving
of written notice to the Vendor (the "Notice" in this Section 3.3) to
require the Vendor to sell all of the Shares subject to the Event of
Default (the "Purchased Shares" in this Section 3.3) to the Remaining
Shareholders upon and subject to the terms and conditions hereinafter set
forth.
(b) The Remaining Shareholders shall be entitled to purchase such portion of
the Purchased Shares as is determined by the fraction having, as its
numerator, the number of Shares held by such Remaining Shareholder and, as
its denominator, the number of Shares held by all of the Remaining
Shareholders. If one or more of the Remaining Shareholders is prepared to
purchase his pro rata portion of the Purchased Shares (the "Accepting
Shareholder" in this Section 3.3) but the other Remaining Shareholder or
Shareholders are not prepared to do so (the "Declining Shareholders" in
this Section 3.3), then each of the Accepting Shareholders shall have the
first right and option to purchase such portion of the Purchased Shares as
is determined by the fraction having, as its numerator, the number of
Shares held by such Accepting Shareholder and, as its denominator, the
number of Shares held by
18
all of the Accepting Shareholders or in such other proportion as may be
agreed to by the Accepting Shareholders. The date of closing (the "Date of
Closing" in this Section 3.3) of the transaction of purchase and sale as
herein contemplated shall be the date which is forty-five (45) days after
the receipt of the Notice by the Vendor.
(c) The purchase price payable for the Purchased Shares shall be an amount
equal to eighty percent (80%) of the Current Price of the Purchased Shares
as at the last day of the month in which the Notice was received by the
Vendor.
(d) The option granted to the Remaining Shareholders pursuant to this Section
3.3, or its exercise, shall be without limitation to any other rights the
Remaining Shareholders or the Corporation have at law or otherwise.
(e) The purchase price for the Purchased Shares shall be paid as follows:
(i) an amount equal to ten percent (10%) of the Purchase Price for the
Purchased Shares shall be paid by cash or certified cheque on the Date
of Closing; and
(ii) the balance of the Purchase Price for the Purchased Shares shall be
payable by cash or certified cheque in two (2) equal annual
instalments on the first and second anniversaries of the Date of
Closing, together with interest thereon at a rate per annum equal to
the prime interest rate from time to time charged by the Corporation's
banker to its largest and best risk commercial borrowers, such rate to
be determined on the bank business day immediately preceding the Date
of Closing and payable at the same times as payments of principal.
3.4 Disposition of Shares of Departing Employee Shareholders
--------------------------------------------------------
If an Employee Shareholder, other than Executive Management and other than those
holders of Non-Voting Shares who have never been employees of the Corporation,
ceases for any reason (including without limitation by reason of death,
disability, retirement, resignation, dismissal with or without cause, or
wrongful dismissal by the Corporation) to be an Employee Shareholder of the
Corporation (hereinafter referred to as a "Departing Employee"), the Corporation
shall have the option, exercisable at any time, to purchase any or all of the
Non-Voting Shares held by the Departing Employee or his or her estate, as
applicable, at the Current Price per Share. Subject to the requisite approval
under Section 2.8 hereof and any constraints imposed by law on the repurchase of
Shares by the Corporation (the "Liquidity Constraints"), the Corporation shall
pay to the Departing Employee or his or her estate, as applicable, the Current
Price per Share in cash at the time, and from time to time when, the Shares are
transferred. If the purchase of the Shares of the Departing Employee as
contemplated herein cannot be completed by the Corporation owing
19
to Liquidity Constraints, the Voting Shareholders shall thereafter have the
option, exercisable at any time, to acquire such Shares at the Current Price per
Share on a pro-rata basis, determined on the basis of the number of Shares held
by them or in any other proportion as may be agreed by the purchasing Voting
Shareholders. The Voting Shareholders shall be entitled, by payment of the
Current Price per Share in cash at the time, and from time to time when, the
Shares are transferred, to purchase such portion of the Purchased Shares as is
determined by the fraction having, as its numerator, the number of Voting Shares
held by such Voting Shareholder and, as its denominator, the number of Voting
Shares held by all of the Voting Shareholders. If the Voting Shareholders
subscribe for less than 100% of the Shares available for purchase from the
Departing Employee, those Non-Voting Shareholders which the Board, in the
exercise of a complete discretion, determines are eligible to acquire any
remaining Shares, shall thereafter have the option to acquire any remaining
Shares at the Current Price per Share on a pro-rata basis. The Non-Voting
Shareholders shall be entitled to purchase, by payment of the Current Price per
Share in cash at the time, and from time to time when, the Shares are
transferred, such portion of the Purchased Shares as is determined by the
fraction having, as its numerator, the number of Non-Voting Shares held by such
Non-Voting Shareholder and, as its denominator, the number of Non-Voting Shares
held by all of the Non-Voting Shareholders. The closing of any sale under this
Section 3.4 shall take place within thirty (30) days of any of the above noted
purchasing parties electing to purchase Shares under this Section 3.4.
3.5 IPO Rights
----------
All Shareholders agree, subject to market conditions, to use their reasonable
commercial efforts to proceed with a Public Offering within 18 months of the
date hereof. Each of the Voting Shareholders hereby agrees and covenants that it
will approve amendments to the ESOP and any outstanding options thereunder to
provide for the issuance to holders of such options of Voting Shares upon the
exercise thereof, it being understood that these agreements and covenants are
being made so as to give the Non-Voting Shareholders the benefit of any market
for Shares of the Corporation created by the Public Offering (subject to
applicable securities law requirements, including applicable hold periods).
20
ARTICLE 4.00
GENERAL CONTRACT PROVISIONS
---------------------------
4.1 General
-------
Time shall be of the essence of this Agreement and of every part hereof. No
waiver by any of the parties hereto of any breach of any condition, covenant or
agreement hereof shall constitute a waiver of such condition, covenant or
agreement except in respect of the particular breach giving rise to such waiver.
If any of the terms or provisions of this Agreement are determined to be invalid
or unenforceable by any Court, it shall not invalidate the rest of the Agreement
which shall remain in full force and effect as if such terms and provisions had
not been made a part of the Agreement. In construing this Agreement, words in
the singular shall include the plural and vice versa, and words importing the
masculine shall include the feminine and the neuter and vice versa, and words
importing persons shall include corporations and vice versa. In this Agreement,
words such as "hereunder", "hereto", "hereof" and "herein", and all other words
commencing with "here" shall, unless the context clearly indicates the contrary,
refer to the whole of this Agreement and not to any particular section or part
thereof. This Agreement shall enure to the benefit of and be binding upon the
parties hereto and their respective heirs, executors, administrators, successors
and permitted assigns. This Agreement may be executed in one or more
counterparts (delivered by facsimile transmission or otherwise), all of which
shall be read and construed as one document and any facsimile signature hereto
shall be deemed to be an original signature. The parties hereby acknowledge that
they have required that this Agreement and all related documentation be drawn up
in the English language. Les parties reconnaissent avoir demande que la presente
convention ainsi que tous les documents qui s'y rattachent soient rediges en
langue anglaise. This Agreement shall be deemed to be made in and construed in
accordance with the laws of the Province of New Brunswick. The parties agree to
attorn to the non-exclusive jurisdiction of the Courts of the Province of New
Brunswick.
4.2 Endorsement of Share Certificates
---------------------------------
All Share certificates of the Corporation shall have the following memorandum
endorsed thereon forthwith after the execution of this Agreement:
"The Shares represented by this certificate are subject to an
Agreement made between all the shareholders of ImagicTV Inc. and may
not be dealt with except in compliance with the terms and conditions
of the said Agreement."
21
4.3 Notices
-------
Any notice, demand or other communication required or permitted to be given to
any party hereunder shall be in writing and shall be personally delivered to
such party; or, except during a period of strike, lockout or other postal
disruption, sent by registered mail, postage prepaid; or sent by telex,
telegraph, telecopier or other form of recorded communication, charges prepaid,
confirmed by prepaid registered mail. Address for notice is as follows:
In the case of the Corporation:
ImagicTV Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇/▇▇/ ▇▇▇▇▇
▇.▇.▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
Attention: President
In the case of NBTel:
NBTel Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
Attention: General Counsel
In the case of Newbridge:
Newbridge Networks Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇
Telephone:
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
Attention: Legal Department
22
In the case of Celtic:
506048 N.B. Ltd.
c/o Celtic House International Corporation
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇ ▇▇▇
Telephone: [_]
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇, General Partner
In the case of Castleco:
Whitecastle Investments Limited
▇▇ ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇ (if to Castleco) and /or ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇
In the case of Centara Investments Inc:
Centara Investments Inc.
▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
In the case of the other Shareholders and Optionholders:
To the address set out below the name of each in Schedule D
hereto.
23
Any notice given by personal delivery shall be deemed to be given and received
on the date of delivery if delivered during normal business hours and, if
delivery is not made on a Business Day, on the next Business Day. Any notice
given by mail shall be deemed to have been given and received on the third (3rd)
Business Day next following the date of its mailing. Any notice transmitted by
facsimile or other form of recorded communication shall be deemed given and
received on the day of its transmission if such day is a Business Day and if
delivery is not made on a Business Day, on the next Business Day.
4.4 Further Assurances
------------------
The parties hereto shall sign such further and other papers, cause such meetings
to be held, resolutions passed and by-laws enacted, exercise their vote and
influence, do and perform and cause to be done and performed such further and
other acts and things as may be necessary or desirable in order to give full
effect to this Agreement and every part hereof including, without limitation,
cause each Subsidiary to make an unanimous shareholders declaration, as
described in the Act, in order to give effect to this Agreement.
4.5 Application of Agreement
------------------------
The provisions of this Agreement shall apply mutatis mutandis to any Shares into
which the Shares of the Corporation may hereafter be converted or changed, or to
any Shares resulting from a reclassification, subdivision or consolidation of
any Shares of the Corporation, or to any shares or other securities of the
Corporation or of a successor company, which are received by the Shareholders on
a reorganization of the Corporation, and also to any Shares of the Corporation
which are received by the holders of Shares as a stock dividend or to any Shares
or other securities of the Corporation on an amalgamation, reorganization or
reconstruction of the Corporation.
4.6 Conflict
--------
If any conflict shall appear between the by-laws or the Articles of
Incorporation or any Articles of Amendment of the Corporation and the provisions
of this Agreement, the provisions of this Agreement shall, to the greatest
extent permitted by law, govern and any such conflict shall be resolved by
appropriate amendment to such Articles, by-laws and/or resolutions as the case
may be.
4.7 Entire Agreement; Amendments
----------------------------
This Agreement contains the entire agreement between the parties hereto relating
to the subject matter hereof and there are no collateral or precedent
representations, agreements, or conditions relating to the subject matter hereof
not specifically set forth herein. No modification, amendment, or variation
hereof shall be of effect or binding upon the parties hereto unless agreed to in
writing by Shareholders holding not less than 90% of the Voting
24
Shares and thereafter such modification, amendment or variation shall have the
same effect as if it has originally formed part of this Agreement.
4.8 Corporate Cooperation
---------------------
The Corporation hereby acknowledges notice of the terms of this Agreement and
hereby agrees to promptly cause its proper officers, accountants, and auditors
at any time and from time to time to do such things and take such steps as may
be necessary to effectually carry out the terms and intent thereof.
4.9 Term of the Agreement
---------------------
This Agreement shall become effective upon the date hereof and shall terminate
upon the closing of a Public Offering or upon the date on which one person holds
all of the Shares of the Corporation.
4.10 Independent Legal Advice
------------------------
By signing this Agreement, each of the parties hereto acknowledges that:
(a) such party has either obtained independent legal advice with respect to the
terms of this Agreement or that such party has, despite having been given
the opportunity to do so and being encouraged to do so, declined to seek
independent legal advice with respect to the terms of this Agreement; and
(b) such party understands the terms of, and such party's rights and
obligations under, this Agreement.
4.11 Unanimous Shareholder Agreement
-------------------------------
To the extent that this Agreement specifies that any matters may only be or
shall be dealt with or approved by or shall require action by the Shareholders,
the discretion and powers of the directors of the Corporation to manage and to
supervise the management of the business and affairs of the Corporation with
respect to such matters are correspondingly restricted.
25
IN WITNESS WHEREOF the parties have duly executed this Agreement and
Schedules A, A-1, B and C hereto as of the date first above written.
ImagicTV Inc.
Per:______________________________
Authorized Signing Officer
Per:______________________________
Authorized Signing Officer
26
FORM OF VOTING TRUST AGREEMENT
THIS AGREEMENT dated as of the ____________ day of _____________, 1999.
B E T W E E N:
IMAGICTV INC.
and
[Shareholders]
WHEREAS the [Shareholder] Parties own the number of Class A Common
shares (the "Shares") in the capital of ImagicTV Inc. ("ImagicTV") set out
below:
Name of [Shareholder] Party Number of Shares
--------------------------- ----------------
entitling the holders thereof to vote at any meeting of the shareholders of
ImagicTV (the "Subject Shares");
AND WHEREAS the parties hereto are also parties to the ImagicTV
Operating Agreement among the parties hereto and ImagicTV, among others, dated
as of the date hereof (the "ImagicTV Operating Agreement");
AND WHEREAS after the date hereof, the [Shareholder] Parties or their
respective Affiliated Persons (as that term is defined in the ImagicTV Operating
Agreement) may acquire further securities in the capital of ImagicTV that
entitle the holder thereof to vote at any meeting of shareholders of ImagicTV
(the "Future Shares");
AND WHEREAS the [Shareholder] Parties and [Shareholder] wish to enter
into this Agreement to provide direction to the [Shareholder] Parties with
respect to voting the Subject Shares and the Future Shares and acknowledge that
this Agreement is intended to be a "Voting Trust Agreement" for the purposes of
the ImagicTV Operating Agreement;
-2-
NOW THEREFORE this Agreement witnesses that in consideration of the
premises and other valuable consideration (the receipt and sufficiency of which
is hereby acknowledged), the parties hereto agree as follows:
5. [Shareholder] will from time to time issue or cause to be issued
to the [Shareholder] Parties directions in writing signed by any
officer or director of [Shareholder] in respect of the Subject Shares,
the Future Shares or both with respect to voting such shares, in such
a form, containing such terms and conditions as may be determined by
[Shareholder], and the [Shareholder] Parties will or will cause to be
voted such shares in accordance with said direction.
6. Without limiting the generality of the foregoing, each of the
[Shareholder] Parties shall deliver to [Shareholder] an irrevocable
power of attorney (the "Power of Attorney") in the form annexed hereto
as Schedule "A", and each of the [Shareholder] Parties shall cause to
be delivered to [Shareholder] by any of their respective Affiliated
Persons that acquires Subject Shares or Future Shares an irrevocable
power of attorney in substantially the same form as that annexed hereto
as Schedule "A".
7. [Shareholder] shall be entitled to deliver to the chairman of
any meeting of shareholders of ImagicTV, a proxy or proxies executed by
[Shareholder] voting the Future Shares, the Subject Shares or both
pursuant to the power of attorney. If [Shareholder] delivers a proxy or
proxies executed in accordance with the power of attorney before the
commencement of any such meeting, such proxy shall revoke any proxies
otherwise executed and delivered by or on behalf of any the
[Shareholder] Party, or any other registered holder of the Future
Shares or Subject Shares in respect of such meeting. [Shareholder]
shall be further entitled, as attorney for each [Shareholder] Party, to
execute written resolutions on behalf of the [Shareholder] Parties in
respect of matters approved in writing by the shareholders of ImagicTV.
-3-
8. The provisions of this Agreement relating to the Future Shares
and the Subject Shares shall apply mutatis mutandis to any shares or
securities into which the Future Shares and the Subject Shares may be
converted, exchanged, changed, reclassified, redesignated, subdivided
or consolidated, to any shares or securities which entitle the holder
thereof to vote at any meeting of the shareholders of ImagicTV which
may be distributed on the Future Shares or the Subject Shares as a
stock dividend or otherwise and to any shares or securities of ImagicTV
or any successor corporation which may be received on or in respect of
the Future Shares or the Subject Shares on a reorganization,
amalgamation, consolidation or merger, statutory or otherwise.
9. Notwithstanding the provisions of Section 3.2 (c) of the
ImagicTV Operating Agreement, no [Shareholder] Party may transfer
voting securities of ImagicTV to an Affiliated Person unless
[Shareholder] shall have first received: (i) an agreement in which the
transferee agrees to be bound by this Agreement in the same manner as
if such person had been an original party hereto and to the same extent
as the transferor; and (ii) an irrevocable power of attorney
substantially in the form of Schedule "A" annexed hereto executed by
such transferee.
10. This Agreement shall terminate upon termination of the ImagicTV
Operating Agreement in accordance with its terms.
11. This Agreement shall extend to, and enure to the benefit of and
be binding upon the successors and assigns of the parties.
12. This Agreement shall be governed by and construed in accordance
with the laws of the Province of New Brunswick.
IN WITNESS WHEREOF the parties hereto have duly executed this
Agreement.