AMENDED & RESTATED VOTING AND EXCHANGE TRUST AGREEMENT BETWEEN DIALOG GROUP, INC. AND ADVALIANT INC. AND ADVALIANT USA, INC. AND EMPIRE MEDIA, INC. AND JIVAN MANHAS AND MATTHEW WISE EXECUTED AUGUST 11TH, 2005 NUNC PRO TUNC AS OF JUNE 30, 2005
AMENDED
& RESTATED
BETWEEN
DIALOG
GROUP, INC.
AND
ADVALIANT
INC.
AND
ADVALIANT
USA, INC.
AND
EMPIRE
MEDIA, INC.
AND
▇▇▇▇▇
▇▇▇▇▇▇
AND
▇▇▇▇▇▇▇
▇▇▇▇
EXECUTED
AUGUST 11TH,
2005
NUNC
PRO TUNC
AS OF
JUNE
30, 2005
AMENDED
& RESTATED
THIS
AMENDED & RESTATED VOTING AND EXCHANGE TRUST AGREEMENT
is
entered into on August 11th,
2005
nunc
pro tunc
as of,
June 30, 2005, by and between ADVALIANT USA, INC., a corporation existing
under
the laws of Delaware (“AdValiant USA), ADVALIANT INC., a corporation
incorporated under the laws of Ontario (the “Corporation”), DIALOG GROUP, INC.,
a corporation existing under the laws of Delaware (“DGI”), EMPIRE MEDIA, INC., a
corporation existing under the laws of Delaware (“Empire” or “Trustee”), ▇▇▇▇▇
▇▇▇▇▇▇, of the City of Toronto, in the Province of Ontario and ▇▇▇▇▇▇▇ ▇▇▇▇,
of
the City of Toronto, in the Province of Ontario.
WHEREAS
pursuant
to a Merger Agreement dated as of June 30, 2005, made between DGI, AdValiant
USA, AdValiant Acquisition Corp., the Corporation, and Empire, ▇▇▇▇▇▇▇ ▇▇▇▇
and
▇▇▇▇▇ ▇▇▇▇▇▇ (the “Shareholders”) (such agreement as it may be amended or
restated is hereinafter referred to as the “Merger Agreement”) the parties
thereto agreed that prior to the Merger (as defined below), the parties hereto
would execute and deliver a Voting and Exchange Trust Agreement containing
the
terms and conditions set forth in an Exhibit to the Merger Agreement, together
with such other terms and conditions as may be agreed to by the parties to
the
Merger Agreement.
WHEREAS
pursuant
to a reorganization of the capital of the Corporation (the “Reorganization”)
contemplated in the Merger Agreement, the Corporation and Shareholders agreed
that all of the outstanding Common Shares of the Corporation were reclassified
as exchangeable shares (the “Exchangeable Shares”) having the rights,
privileges, restrictions and conditions attached hereto as Schedule A
(collectively, the “Exchangeable Share Provisions”) and the Corporation would
issue a specified number of Exchangeable Shares to each
Shareholder.
WHEREAS
pursuant
to the Merger Agreement, AdValiant USA and AdValiant Acquisition Corp., a
wholly-owned subsidiary of DGI, shall merge (the “Merger”) and, upon the merger,
outstanding shares of common stock of AdValiant USA will be cancelled and
each
of the 100 outstanding shares of Class A common stock of AdValiant USA will
be
changed into four shares of Class F Preferred Stock of DGI.
WHEREAS
prior to
the effective time of the Merger, Exchangeable Shares shall be exercisable
for
common stock of AdValiant USA and on and after the effective time of the
Merger,
Exchangeable Shares shall be exercisable for common stock of DGI.
WHEREAS
all
references to “ParentCo” in this Agreement shall mean AdValiant USA if the
reference is made to any action to be taken by or in respect of ParentCo
prior
to the effective time of the Merger and shall mean DGI on and after the
effective time of the Merger if the reference is made to any action to be
taken
by or in respect of ParentCo.
WHEREAS
the
parties desire to make appropriate provision and to establish a procedure
whereby (i) voting rights in common stock of AdValiant USA, prior to the
Merger,
and voting rights in common stock of DGI, on and after the Merger, shall
be
exercisable by holders (other than AdValiant USA and DGI and their Subsidiaries)
from time to time of Exchangeable Shares by and through the Trustee, which
will
hold
legal title to and share certificates in respect of Class A Common Stock
in the
capital of AdValiant USA prior to the effective time of the Merger and Class
F
Voting Preferred Stock in the capital of DGI on and after the effective time
of
the Merger, to which, in each case, voting rights are intended to be granted
for
the benefit of the holders of Exchangeable Shares in such number as is equal
to
the number of Exchangeable Shares from time to time issued and outstanding,
excluding Exchangeable Shares held by AdValiant USA or DGI and their respective
Subsidiaries, and (ii) the rights to require ParentCo or, at the option of
ParentCo, ParentCo Sub (as hereinafter defined) to purchase Exchangeable
Shares
from the holders thereof (other than AdValiant USA and DGI and their
Subsidiaries) shall be exercisable by such holders of Exchangeable Shares
by and
through the Trustee, which will hold the covenant of ParentCo to purchase,
or
cause ParentCo Sub to purchase, the Exchangeable Shares for the benefit of
such
holders;
WHEREAS
the
Merger Agreement requires that the shareholders of the Corporation on the
date
hereof deposit with the Escrow Agent 75% of the 336,685,584 issued and
outstanding Exchangeable Shares and the Trustee will deposit with the Escrow
Agent 75% of the 400 issued and outstanding DGI Preferred Voting Shares (the
“Escrowed Shares”) issued on the date hereof;
WHEREAS
the
Escrowed Shares will be held by the Escrow Agent in escrow in accordance
with
Article 5 hereof and the terms of the Escrow Agreement, pending determination
of
the number of Exchangeable Shares and DGI Preferred Voting Shares to be released
from escrow on each Supplemental Closing pursuant to the Merger Agreement;
AND
WHEREAS the
parties desire to amend and restate the Trust Agreement,
NOW,
THEREFORE,
in
consideration of the respective covenants and agreements provided in this
agreement and for other good and valuable consideration (the receipt and
sufficiency of which are hereby acknowledged), the parties agree as
follows:
ARTICLE
1 - DEFINITIONS
AND INTERPRETATION
| 1.1 |
Definitions.
|
In
this
agreement, the following terms shall have the following meanings:
“AdValiant
USA Preferred Voting Shares”
means
the Class A Common Stock in the capital of AdValiant USA, Inc. having the
attributes provided in Schedule D hereof;
“Automatic
Exchange Rights” means
the
obligation of ParentCo to effect the automatic exchange of ParentCo Common
Shares for Exchangeable Shares pursuant to Section 6.11 hereof;
“Board
of Directors”
means
the Board of Directors of the Corporation;
“Business
Day”
has the
meaning provided in the Exchangeable Share Provisions;
“Canadian
Dollar Equivalent”
means in
respect of any amount expressed in a foreign currency (the “Foreign Currency
Amount”) at any date, the product obtained by multiplying the Foreign Currency
Amount by the official noon spot rate of exchange on such date for such foreign
currency, as reported by the Bank of Canada;
-2-
“DGI
Preferred Voting Shares”
means
the Class F Voting Preferred Stock in the capital of Dialog Group, Inc. having
the attributes provided in Schedule E hereof;
“Equivalent
Vote Amount”
means,
with respect to any matter, proposition or question on which holders of ParentCo
Common Shares are entitled to vote, consent or otherwise act, the number
of
votes to which a holder of one share of ParentCo Common Shares is entitled
with
respect to such matter, proposition or question;
“Escrow
Agent”means
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ as escrow agent pursuant to the terms of the Escrow
Agreement;
“Escrow
Agreement”means
an
agreement dated as of June 30, 2005 among Dialog Group, Inc., AdValiant
Acquisition Corp., AdValiant Inc., AdValiant USA, Inc., Empire Media, Inc,
▇▇▇▇▇▇▇ ▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇, and ▇▇▇▇ ▇▇▇▇▇▇ as escrow agent;
“Escrowed
Shares”
has the
meaning provided in the recitals hereto;
“Exchange
Right”
has the
meaning provided in Section 6.1(a) hereof;
“Exchangeable
Share Consideration”
has the
meaning provided in the Exchangeable Share Provisions;
“Exchangeable
Share Price”
has the
meaning provided in the Exchangeable Share Provisions;
“Exchangeable
Share Provisions”
has the
meaning provided in the recitals hereto;
“Exchangeable
Shares”
has the
meaning provided in the recitals hereto;
“Holder
Votes”
has the
meaning provided in Section 4.2 hereof;
“Holders”
means
the registered holders from time to time of Exchangeable Shares, other than
ParentCo and its Subsidiaries;
“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's not being permitted, pursuant to liquidity or solvency
requirements of applicable law, to redeem any Retracted Shares pursuant to
Section 6.6 of the Exchangeable Share Provisions;
-3-
“Liquidation
Call Right”
has the
meaning provided in the Exchangeable Share Provisions;
“Liquidation
Event”
has the
meaning provided in subsection 6.11(a) hereof;
“Liquidation
Event Effective Time”
has the
meaning provided in subsection 6.11(c) hereof;
“Merger
Agreement”
has the
meaning provided in the recitals hereto and a copy thereof is attached hereto
as
Schedule B.
“Officer's
Certificate”
means,
with respect to ParentCo 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
(if there be one), the President or any Vice-President of ParentCo or the
Corporation, as the case may be;
“ParentCo”has
the
meaning provided in the recitals hereto;
“ParentCo
Common Share”
has the
meaning provided in the Exchangeable Share Provisions;
“ParentCo
Consent”
means
any written consent sought by ParentCo from holders of its common
stock;
“ParentCo
Meeting”
means
any meeting of shareholders of AdValiant USA at which the holders of AdValiant
Common Shares or AdValiant USA Preferred Voting Shares is entitled to vote
and
any meeting of shareholders of DGI at which holders of DGI Common Shares
or DGI
Preferred Voting Stock is entitled to vote;
“ParentCo
Preferred Shares”
means,
collectively, the AdValiant USA Preferred Voting Shares and the DGI Preferred
Voting Shares;
“ParentCo
Sub”
means
any Subsidiary of AdValiant USA or DGI incorporated under the Business
Corporations Act
(Ontario) for
the
purpose of delivering ParentCo Common Shares as provided in this agreement,
the
Exchangeable Share Provisions or the Support Agreement;
“Person”
includes
an individual, body corporate, partnership, company, unincorporated syndicate
or
organization, trust, trustee, executor, administrator and other legal
representative;
“Redemption
Call Right”
has the
meaning provided in the Exchangeable Share Provisions;
“Reorganization”
has the
meaning provided in the recitals hereto;
“Retracted
Shares”
has the
meaning provided in Section 6.7 hereof;
“Retraction
Call Right”
has the
meaning provided in the Exchangeable Share Provisions;
“Subsidiary”
has the
meaning provided in the Exchangeable Share Provisions;
-4-
“Successor”
has the
meaning provided in Section 11.1 hereof;
“Supplemental
Closings”
mean the
release from escrow of Escrowed Shares in accordance with Section 7.04 of
the
Merger Agreement and the terms of the Escrow Agreement on December 15, 2005,
March 15, 2006, June 16, 2006 and September 15, 2006;
“Support
Agreement”
means
that certain amended and restated support agreement made as of the date hereof
by and between AdValiant USA, Inc., Dialog Group, Inc. and the
Corporation;
“Trust”
means
the trust created by this agreement;
“Trust
Estate”
means
the ParentCo Preferred Shares, 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 agreement;
“Trustee”
means
Empire Media, Inc. and, subject to the provisions of Article 10 hereof, includes
any successor trustee or permitted assigns;
“US$”means
the
lawful currency of the United States of America; and
“Voting
Rights”
means
the voting rights with respect to AdValiant USA, Inc. prior to the effective
time of the Merger attached to the AdValiant USA Preferred Voting Shares
held by
the Trustee and the voting rights with respect to Dialog Group, Inc. on and
after the effective time of the Merger attached to the DGI Preferred Voting
Shares held by the Trustee.
| 1.2 |
Integration
Not Affected by Headings,
Etc.
|
The
division of this agreement into articles, sections and paragraphs and the
insertion of headings are for convenience of reference only and shall not
affect
the construction or interpretation of this agreement.
| 1.3 |
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 agreement is
not a
Business Day, such action shall be required to be taken on the next succeeding
Business Day.
| 1.5 |
Exhibits
and Schedules.
|
The
following are the Exhibits and Schedules annexed hereto and incorporated
by
reference in this agreement:
Exhibit
A
- List of Escrowed Shares
-5-
Schedule
A - Exchangeable Share Provisions
Schedule
B - Merger Agreement (excluding schedules and exhibits)
Schedule
C - Support Agreement
Schedule
D - AdValiant USA Preferred Voting Share Provisions
Schedule
E - DGI Preferred Voting Share Provisions
ARTICLE
2 - PURPOSE
OF AGREEMENT
The
purpose of this agreement is to create the Trust for the benefit of the Holders,
as herein provided. The Trustee will hold the AdValiant USA Preferred Voting
Shares and the DGI Preferred Voting Shares (other than such shares held by
the
Escrow Agent) 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 Holders as provided in this agreement. DGI Preferred Voting
Shares
held by the Escrow Agent shall be held pursuant to the provisions of the
Merger
Agreement and the Escrow Agreement for the benefit of the Holders or the
Corporation as therein provided.
ARTICLE
3 - PARENTCO
PREFERRED SHARES
| 3.1 |
Issuance
and Ownership of the ParentCo Preferred
Shares.
|
Prior
to
the Merger, AdValiant USA shall issue to and deposit with the Trustee, 100
AdValiant USA Preferred Voting Shares and upon the Merger becoming effective,
the AdValiant USA Preferred Voting Shares shall be changed into a total of
400
DGI Preferred Voting Shares of which DGI shall issue and deposit certificates
representing (i) 100 DGI Preferred Voting Shares with the Trustee to be
thereafter held of record by the Trustee as trustee for and on behalf of
the
Holders in accordance with the provisions of this agreement and (ii) 300
DGI
Preferred Voting Shares with the Escrow Agent to be held by the Escrow Agent
and
delivered from time to time at Supplemental Closings to the Trustee in
accordance with the terms of the Merger Agreement and the Escrow Agreement.
AdValiant USA and DGI hereby acknowledge receipt from the Trustee as trustee
for
and on behalf of the Holders of good and valuable consideration (and acknowledge
the sufficiency or adequacy thereof) for the issuance of the ParentCo Preferred
Shares deposited by each of them with the Trustee and the Escrow Agent. During
the term of the Trust and subject to the terms and conditions of this agreement,
the Trustee shall possess and be vested with full legal ownership of the
ParentCo Preferred Shares not held by the Escrow Agent pursuant to the terms
of
the Escrow Agreement and the Merger Agreement and the Trustee shall be entitled
to exercise all of the rights and powers of an owner with respect to such
ParentCo Preferred Shares, provided that the Trustee shall:
| (a) |
hold
the ParentCo Preferred Shares and the legal title thereto as trustee
solely for the use and benefit of the Holders in accordance with
the
provisions of this agreement; and
|
| (b) |
except
as specifically authorized by this agreement, have no power or
authority
to sell, transfer, vote or otherwise deal in or with the ParentCo
Preferred Shares, and the ParentCo Preferred Shares 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
agreement.
|
-6-
| 3.2 |
Safe
Keeping of
Certificate.
|
The
certificates representing the ParentCo Preferred Shares outstanding from
time to
time, other than such certificates held by the Escrow Agent, shall at all
times
be held in safe keeping by the Trustee or its agent. The Trustee shall store
the
certificates in its vault or in the vault of a Schedule I Canadian chartered
bank.
| 3.3 |
Holders’
Benefit.
|
For
greater certainty, the Trustee holds the benefit of the Voting Rights for
the
Holders but all other rights in respect of the ParentCo Preferred Shares,
including without limitation any right to dividends on the AdValiant USA
Preferred Voting Shares and the DGI Preferred Voting Shares are for the benefit
of AdValiant USA and DGI, respectively.
ARTICLE
4 - EXERCISE
OF VOTING RIGHTS
| 4.1 |
Voting
Rights.
|
The
Trustee, as the holder of record of the ParentCo Preferred Shares not held
by
the Escrow Agent, shall be entitled to all of the Voting Rights, including
the
right to consent to or to vote in person or by proxy the ParentCo Preferred
Shares held by it, on any matter, question or proposition whatsoever that
may
properly come before the holders of ParentCo Common Shares at a ParentCo
Meeting
or in connection with a ParentCo Consent. The Voting Rights shall be and
remain
vested in and exercised by the Trustee. Subject to Section 7.12 hereof, the
Trustee shall exercise the Voting Rights only on the basis of instructions
received pursuant to this Article 4 from Holders entitled to instruct the
Trustee as to the voting thereof in connection with which a ParentCo Consent
is
sought or a ParentCo Meeting is held. To the extent that no instructions
are
received from a Holder with respect to the Voting Rights to which such Holder
is
entitled, the Trustee shall not exercise or permit the exercise of such Holder's
Voting Rights.
| 4.2 |
Number
of Votes.
|
With
respect to all ParentCo Meetings and with respect to all ParentCo Consents,
each
Holder shall be entitled to instruct the Trustee to cast and exercise, in
the
manner instructed, a number of votes equal to the Equivalent Vote Amount
for
each Exchangeable Share owned of record by such Holder on the record date
established by ParentCo or by applicable law for such ParentCo Meeting or
ParentCo Consent, as the case may be, (the “Holder Votes”) in respect of each
matter, question or proposition to be voted on at such ParentCo Meeting or
to be
consented to in connection with such ParentCo Consent.
| 4.3 |
Mailings
to Shareholders.
|
With
respect to each ParentCo Meeting and ParentCo Consent, the Trustee will mail
or
cause to be mailed (or otherwise communicate in the same manner as ParentCo
uses
in communications to holders of ParentCo Common Shares, subject to the Trustee's
ability to provide such other method of communication and upon being advised
in
writing of such method) to each of the Holders named in the Voting List on
the
same day as the initial mailing or notice (or other communication) with respect
thereto is given by ParentCo to holders of ParentCo Common Shares:
| (a) |
a
copy of such notice, together with any proxy or information statement
and
related materials to be provided to holders of ParentCo Common
Shares;
|
| (b) |
a
statement as to the number of Holder Votes which the Holder is
entitled to
exercise;
|
-7-
| (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 Holder or his designee to exercise personally the
Holder
Votes; or
|
| (ii) |
a
proxy to a designated agent or other representative of the management
of
ParentCo to exercise such Holder
Votes;
|
| (d) |
a
statement that if no voting instructions are received from the
Holder, the
Holder Votes to which such Holder is entitled will not be
exercised;
|
| (e) |
a
form of direction whereby the Holder may so direct and instruct
the
Trustee as contemplated herein; and
|
| (f) |
a
statement of (i) the time and date by which voting instructions
must be
received by the Trustee in order to be binding upon it, which in
the case
of a ParentCo Meeting shall not be earlier than the close of business
on
the Business Day prior to such voting meeting, and (ii) the method
for
revoking or amending such voting
instructions.
|
ParentCo
hereby covenants to provide to the Trustee, in a timely manner and for the
benefit of the Holders, the shareholder materials and a form of the accompanying
documents referred to above.
For
the
purpose of determining Holder Votes to which a Holder is entitled in respect
of
any such ParentCo Meeting or ParentCo Consent, the number of Exchangeable
Shares
owned of record by the Holder shall be determined at the close of business
on
the record date established by ParentCo or by applicable law for purposes
of
determining shareholders entitled to vote at such ParentCo Meeting or to
give
written consent in connection with such ParentCo Consent. ParentCo will notify
the Trustee in writing of any decision of the board of directors of ParentCo
with respect to the calling of any such ParentCo Meeting or the seeking of
any
such ParentCo Consent and, together with the Corporation, 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. The Corporation shall provide to the Trustee,
in a timely manner, a current list of the Holders, and the number of
Exchangeable Shares held of record by each Holder, in order to make such
calculation of Holder Votes and give the information required by Section
4.3(b).
-8-
| 4.4 |
Copies
of Shareholder
Information.
|
ParentCo
will deliver to the Trustee copies of all proxy materials, (including notices
of
ParentCo Meetings, but excluding proxies to vote ParentCo 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 ParentCo Common Shares in sufficient
quantities and in sufficient time, to the extent possible, so as to enable
the
Trustee to send those materials to each Holder at the same time as such
materials are first sent to holders of ParentCo Common Shares. The Trustee
will
mail or otherwise send to each Holder, at the expense of ParentCo, copies
of all
such materials (and all materials specifically directed to the Holders or
to the
Trustee for the benefit of the Holders by ParentCo) received by the Trustee
from
ParentCo, to the extent possible, at the same time as such materials are
first
sent to holders of ParentCo Common Shares. The Trustee will make copies of
all
such materials available for inspection by any Holder at the Trustee's principal
office.
| 4.5 |
Other
Materials.
|
Immediately
after receipt by ParentCo of any material sent or given generally to the
holders
of ParentCo 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 or exchange offer circulars (and related information
and material), ParentCo shall 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 Holders by such third party)
to
each Holder as soon as possible thereafter. As soon as practicable after
receipt
thereof, the Trustee will mail or otherwise send to each Holder, at the expense
of ParentCo, copies of all such materials received by the Trustee from ParentCo.
The Trustee will also make copies of all such materials available for inspection
by any Holder at the Trustee's principal office.
| 4.6 |
List
of Persons Entitled to
Vote.
|
The
Corporation shall, (i) prior to each annual, general and special ParentCo
Meeting or the seeking of any ParentCo Consent and (ii) forthwith upon each
request made at any time by the Trustee in writing, prepare or cause to be
prepared a list (a “Voting List”) of the names and addresses of the Holders
arranged in alphabetical order and showing the number of Exchangeable Shares
held of record by each such Holder, in each case at the close of business
on the
date specified by the Trustee in such request or, in the case of a Voting
List
prepared in connection with a ParentCo Meeting or a ParentCo Consent, at
the
close of business on the record date established by ParentCo or pursuant
to
applicable law for determining the holders of ParentCo Common Shares entitled
to
receive notice of and/or to vote at such ParentCo Meeting or to give consent
in
connection with such ParentCo 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. ParentCo agrees to give the Corporation written notice
(with a copy to the Trustee) of the calling of any ParentCo Meeting or the
seeking of any ParentCo 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.
-9-
| 4.7 |
Entitlement
to Direct Votes.
|
Any
Holder named in a Voting List prepared in connection with any ParentCo Meeting
or any ParentCo Consent will be entitled (i) to instruct the Trustee in the
manner described in Section 4.3 hereof with respect to the exercise of the
Holder Votes to which such Holder is entitled or (ii) 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 Holder Votes to which such Holder
is
entitled.
| 4.8 |
Voting
by Trustee and Attendance of Trustee Representatives at
Meeting.
|
| (a) |
In
connection with each ParentCo Meeting and ParentCo Consent, the
Trustee
shall exercise, either in person or by proxy, in accordance with
the
instructions received from a Holder pursuant to Section 4.3 hereof,
the
Holder Votes as to which such Holder is entitled to direct the
vote (or
any lesser number thereof as may be set forth in the instructions);
provided, however, that such written instructions are received
by the
Trustee from the Holder prior to the time and date fixed by it
for receipt
of such instructions in the notice given by the Trustee to the
Holder
pursuant to Section 4.3 hereof.
|
| (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 ParentCo Meeting. Upon submission by a Holder (or its designee)
of
identification satisfactory to the Trustee's representatives, and
at the
Holder's request, such representatives shall sign and deliver to
such
Holder (or its designee) a proxy to exercise personally the Holder
Votes
as to which such Holder is otherwise entitled hereunder to direct
the
vote, if such Holder either:
|
| (i) |
has
not previously given the Trustee instructions pursuant to Section
4.3
hereof in respect of such meeting,
or
|
| (ii) |
submits
to the Trustee's representatives written revocation of any such
previous
instructions.
|
At
such
meeting, the Holder exercising such Holder Votes shall have the same rights
as
the Trustee to speak at the meeting in respect of any matter, question or
proposition, to vote by way of ballot at the meeting in respect of any matter,
question or proposition and to vote at such meeting by way of a show of hands
in
respect of any matter, question or proposition.
| 4.9 |
Distribution
of Written Materials.
|
Any
written materials to be distributed by the Trustee to the Holders pursuant
to
this agreement shall be delivered or sent by mail (or otherwise communicated
in
the same manner as ParentCo uses in communications to holders of ParentCo
Common
Shares), and shall be delivered or sent to each Holder 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 Holders; and
|
| (b) |
on
the request of the Trustee, mailing labels to enable the Trustee
to carry
out its duties under this
agreement.
|
-10-
| 4.10 |
Termination
of Voting Rights.
|
Except
as
otherwise provided herein, all of the rights of a Holder and the Trustee
with
respect to the Holder Votes exercisable on the basis of the number of
Exchangeable Shares held by such Holder, including the right to instruct
the
Trustee as to the voting of or to vote personally such Holder Votes, shall
be
deemed to be surrendered by the Holder to ParentCo, the Trustee’s right to
exercise the Holder Votes in respect of such Holder shall terminate
automatically and such Holder 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 Holder of the Exchange Right or the occurrence of the automatic
exchange of Exchangeable Shares for ParentCo Common Shares, as described
in
Article 6 hereof (unless in either case ParentCo shall not have delivered
the
Exchangeable Share Consideration deliverable in exchange therefor to the
Holders), or upon the redemption of Exchangeable Shares pursuant to Article
6 or
Article 7 of the Exchangeable Share Provisions, or upon the effective date
of
the liquidation, dissolution or winding-up of the Corporation or any other
distribution of the assets of the Corporation among its shareholders for
the
purpose of winding up its affairs pursuant to Article 5 of the Exchangeable
Share Provisions, or upon the purchase of Exchangeable Shares from the holder
thereof by ParentCo or ParentCo Sub pursuant to the exercise by ParentCo
or
ParentCo Sub of the Retraction Call Right, the Redemption Call Right or the
Liquidation Call Right.
ARTICLE
5 - ESCROWED
SHARES
| 5.1 |
Issuance
and Ownership of Escrowed
Shares.
|
As
provided in the Merger Agreement, the Holders have deposited certificates
representing all of the Escrowed Shares with the Escrow Agent. Such share
certificates are registered in the name of the Escrow Agent as escrow agent
pursuant to the terms of the Escrow Agreement. The Escrowed Shares shall
be held
by the Escrow Agent and released by the Escrow Agent to the Trustee, in the
case
of DGI Preferred Voting Shares and to Holders or to ParentCo in the case
of the
Exchangeable Shares in accordance with the provisions of the Escrow Agreement.
-11-
ARTICLE
6 - EXCHANGE
RIGHT AND AUTOMATIC EXCHANGE
| 6.1 |
Grant
and Ownership of the Exchange
Right.
|
ParentCo
hereby grants to the Trustee as trustee for and on behalf of, and for the
use
and benefit of, the Holders:
| (a) |
the
right (the “Exchange Right”), upon the occurrence and during the
continuance of an Insolvency Event, to require ParentCo to purchase
or to
cause ParentCo Sub to purchase from each or any Holder all or any
part of
the Exchangeable Shares held by the Holders,
and
|
| (b) |
the
Automatic Exchange Rights,
|
all
in
accordance with the provisions of this agreement and the Exchangeable Share
Provisions, as the case may be. ParentCo hereby acknowledges receipt from
the
Trustee as trustee for and on behalf of the Holders of good and valuable
consideration (and the sufficiency and adequacy thereof) for the grant of
the
Exchange Right and the Automatic Exchange Rights by ParentCo to the Trustee.
During the term of the Trust and subject to the terms and conditions of this
agreement, the Trustee shall possess and be vested with full legal ownership
of
the Exchange Right and the Automatic Exchange Rights and shall be entitled
to
exercise and enforce for the benefit of the Holders 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:
| (c) |
hold
the Exchange Right and the Automatic Exchange Rights and the legal
title
thereto as trustee solely for the use and benefit of the Holders
in
accordance with the provisions of this agreement;
and
|
| (d) |
except
as specifically authorized by this 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 agreement.
|
| 6.2 |
Legended
Share Certificates.
|
The
Corporation will cause each certificate representing Exchangeable Shares
to bear
an appropriate legend notifying the Holders 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 Holder;
and
|
| (b) |
the
Automatic Exchange Rights.
|
-12-
| 6.3 |
General
Exercise of Exchange
Right.
|
The
Exchange Right shall be and remain vested in and exercised by the Trustee.
Subject to Section 7.12 hereof, the Trustee shall exercise the Exchange Right
only on the basis of instructions received pursuant to this Article 6 from
Holders entitled to instruct the Trustee as to the exercise thereof. To the
extent that no instructions are received from a Holder with respect to the
Exchange Right, the Trustee shall not exercise or permit the exercise of
the
Exchange Right.
| 6.4 |
Purchase
Price.
|
The
purchase price payable by ParentCo or ParentCo Sub for each Exchangeable
Share
to be purchased by ParentCo or ParentCo Sub under the Exchange Right shall
be an
amount equal to the Exchangeable Share Price on the last Business Day prior
to
the day of closing of the purchase and sale of such Exchangeable Share under
the
Exchange Right. In connection with each exercise of the Exchange Right, ParentCo
will provide to the Trustee an Officer's Certificate setting forth the
calculation of the applicable Exchangeable Share Price for each Exchangeable
Share. The applicable Exchangeable Share Price for each such Exchangeable
Share
so purchased may be satisfied only by ParentCo or ParentCo Sub delivering
or
causing to be delivered to the Trustee, on behalf of the relevant Holder,
the
applicable Exchangeable Share Consideration representing the total applicable
Exchangeable Share Price.
| 6.5 |
Exercise
Instructions.
|
Subject
to the terms and conditions herein set forth, a Holder shall be entitled,
upon
the occurrence and during the continuance of an Insolvency Event, to instruct
the Trustee to exercise the Exchange Right with respect to all or any part
of
the Exchangeable Shares registered in the name of such Holder on the books
of
the Corporation. To cause the exercise of the Exchange Right by the Trustee,
the
Holder shall deliver to the Trustee, in person or by certified or registered
mail, at its principal office or at such other places in Canada as the Trustee
may from time to time designate by written notice to the Holders, the
certificates representing the Exchangeable Shares which such Holder desires
ParentCo to purchase, duly endorsed in blank with a medallion guarantee affixed,
and accompanied by such other documents and instruments as may be required
to
effect a transfer of Exchangeable Shares under the Business
Corporations Act
(Ontario) and the by-laws of the Corporation 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 Holder thereby instructs the Trustee to exercise the Exchange
Right so
as to require ParentCo to purchase from the Holder the number of
Exchangeable Shares specified
therein,
|
| (ii) |
that
such Holder has good title to and owns all such Exchangeable Share
to be
acquired by ParentCo free and clear of all liens, claims, encumbrances,
security interests and adverse claims or
interests,
|
-13-
| (iii) |
the
names in which the certificates representing ParentCo Common Shares
issuable in connection with the exercise of the Exchange Right
are to be
issued, and
|
| (iv) |
the
names and addresses of the persons to whom the Exchangeable Share
Consideration should be delivered;
and
|
| (b) |
a
certificate evidencing one (1) share of Class F Voting Preferred
Stock for
each 841,714 Exchangeable Shares presented for
exchange.
|
| (c) |
payment
(or evidence satisfactory to the Trustee, the Corporation and ParentCo
of
payment) of the taxes (if any) payable as contemplated by Section
6.8 of
this agreement.
|
If
only a
part of the Exchangeable Shares represented by any certificate or certificates
delivered to the Trustee are to be purchased by ParentCo or ParentCo Sub
under
the Exchange Right, the Corporation shall issue a new certificate for the
balance of such Exchangeable Shares to the Holder at the expense of the
Corporation.
| 6.6 |
Delivery
of Exchangeable Share Consideration; Effect of
Exercise.
|
Promptly
after receipt of the certificates representing the Exchangeable Shares which
the
Holder desires ParentCo to purchase under the Exchange Right (together with
such
documents and instruments of transfer and a duly completed form of notice
of
exercise of the Exchange Right), duly endorsed for transfer to ParentCo,
the
Trustee shall notify ParentCo and the Corporation of its receipt of the same,
which notice to ParentCo and the Corporation shall constitute exercise of
the
Exchange Right by the Trustee on behalf of the Holder of such Exchangeable
Shares, and ParentCo shall immediately thereafter deliver or cause ParentCo
Sub
to deliver to the Trustee, for delivery to the Holder of such Exchangeable
Shares (or to such other persons, if any, properly designated by such Holder),
the Exchangeable Share Consideration deliverable in connection with the exercise
of the Exchange Right; provided, however, that no such delivery shall be
made
unless and until the Holder requesting the same shall have paid (or provided
evidence satisfactory to the Trustee, the Corporation and ParentCo of the
payment of) the taxes (if any) payable as contemplated by Section 6.8 of
this
agreement. Immediately upon the giving of notice by the Trustee to ParentCo
and
the Corporation of the exercise of the Exchange Right, as provided in this
Section 6.6, the closing of the transaction of purchase and sale contemplated
by
the Exchange Right shall be deemed to have occurred, and the Holder of such
Exchangeable Shares shall be deemed to have transferred to ParentCo (or at
ParentCo’s option, to ParentCo Sub) all of its right, title and interest in and
to such Exchangeable Shares and the related interest in the Trust Estate,
shall
cease to be a holder of such Exchangeable Shares and shall not be entitled
to
exercise any of the rights of a holder in respect thereof, other than the
right
to receive his proportionate part of the total purchase price therefor, unless
such Exchangeable Share Consideration is not delivered by ParentCo or ParentCo
Sub to the Trustee, for delivery to such Holder (or to such other persons,
if
any, properly designated by such Holder), within five Business Days of the
date
of the giving of such notice by the Trustee, in which case the rights of
the
Holder shall remain unaffected until such Exchangeable Share Consideration
is
delivered by ParentCo or ParentCo Sub and any cheque included therein is
paid.
Concurrently with such Holder ceasing to be a holder of Exchangeable Shares,
the
Holder shall be considered and deemed for all purposes to be the holder of
the
ParentCo Common Shares delivered to it pursuant to the Exchange Right and
no
longer to be the holder of the sold Exchangeable Shares for purposes of having
voting rights with respect to the ParentCo Preferred Shares pursuant to Article
4 hereof. Notwithstanding the foregoing until the Exchangeable Share
Consideration is delivered to the Holder, the Holder shall be deemed to still
be
a holder of the sold Exchangeable Shares for purposes of voting rights with
respect to the ParentCo Preferred Shares pursuant to Article 4 hereof.
-14-
| 6.7 |
Exercise
of Exchange Right Subsequent to
Retraction.
|
In
the
event that a Holder 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 Holder (the “Retracted Shares”) and is notified
by the Corporation pursuant to Section 6.6 of the Exchangeable Share Provisions
that the Corporation will not be permitted as a result of liquidity or solvency
requirements of applicable law to redeem all such Retracted Shares, subject
to
receipt by the Trustee of written notice to that effect from the Corporation
and
provided that neither ParentCo nor ParentCo Sub shall have exercised the
Retraction Call Right with respect to the Retracted Shares and that the Holder
has not revoked the retraction request delivered by the Holder 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 Holder 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 Holder immediately to notify the Trustee of such prohibition
against the Corporation's redeeming all of the Retracted Shares and immediately
to forward or cause to be forwarded to the Trustee all relevant materials
delivered by the Holder to the Corporation (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 which the Corporation is not permitted to redeem
and
will require ParentCo or ParentCo Sub to purchase such shares in accordance
with
the provisions of this Article 6.
| 6.8 |
Stamp
or Other Transfer
Taxes.
|
Upon
any
sale of Exchangeable Shares to ParentCo or ParentCo Sub pursuant to the Exchange
Right or the Automatic Exchange Rights, the share certificate or certificates
representing ParentCo Common Shares to be delivered in connection with the
payment of the total purchase price therefor shall be issued in the name
of the
Holder of the Exchangeable Shares so sold or in such names as such Holder
may
otherwise direct in writing without charge to the holder of the Exchangeable
Shares so sold, provided, however, that such Holder:
| (a) |
shall
pay (and none of ParentCo, ParentCo Sub, the Corporation or the
Trustee
shall be required to pay) any documentary, stamp, transfer or other
similar taxes that may be payable in respect of any transfer involved
in
the issuance or delivery of such shares to a person other than
such
Holder; or
|
| (b) |
shall
have established to the satisfaction of the Trustee, ParentCo and
the
Corporation that such taxes, if any, have been
paid.
|
-15-
The
Corporation and the Trustee (as directed in writing by the Corporation) shall
be
entitled to deduct and withhold from any consideration otherwise payable
under
this Agreement to any Holder such amounts as the Corporation or the Trustee
is
required or permitted to deduct and withhold with respect to such payment
under
the Income
Tax Act
(Canada), the United States Internal Revenue Code of 1986 or any provision
of
provincial, state, local or foreign tax law, in each case as amended or
succeeded unless such Holder provides to the Corporation certificates or
such
other assurances as are provided for under the Income
Tax Act
(Canada)
, the United States Internal Revenue Code of 1986 or such other applicable
taxation provisions. To the extent that amounts are so withheld, such withheld
amounts shall be treated for all purposes as having been paid to the Holder
in
respect of which such deduction and withholding was made, provided that such
withheld amounts are actually remitted to the appropriate taxing authority
as
and when required. 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,
if
any, of the consideration otherwise payable to the Holder, the Corporation
and
the Trustee are hereby authorized to sell or otherwise dispose of such portion
of the consideration as is necessary to provide sufficient funds to the
Corporation or the Trustee, as the case may be, to enable it to comply with
such
deduction or withholding requirement and the Corporation or the Trustee shall
notify the Holder and remit to such Holder any unapplied balance of the net
proceeds of such sale.
| 6.9 |
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 shall give written notice thereof to the Trustee and ParentCo.
As
soon as practicable after receiving notice from the Corporation of the
occurrence of an Insolvency Event, the Trustee will mail to each Holder,
at the
expense of ParentCo, a notice of such Insolvency Event in the form provided
by
ParentCo, which notice shall contain a brief statement of the right of the
Holders with respect to the Exchange Right.
| 6.10 |
{Intentionally
omitted}
|
| 6.11 |
Automatic
Exchange on Liquidation of
ParentCo.
|
| (a) |
ParentCo
will give the Trustee written notice of each of the following events
(a
“Liquidation Event”) at the time set forth
below:
|
| (i) |
in
the event of any determination by the board of directors of the
ParentCo
to institute voluntary liquidation, dissolution or winding-up proceedings
with respect to ParentCo or to effect any other distribution of
assets of
ParentCo 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
|
-16-
| A. |
receipt
by ParentCo of notice of; and
|
| B. |
ParentCo's
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 ParentCo or
to
effect any other distribution of assets of ParentCo among its shareholders
for
the purpose of winding up its affairs.
| (b) |
Immediately
following receipt by the Trustee from ParentCo of notice of any
event (a
“Liquidation Event”) contemplated by Section 6.11(a) above, the Trustee
will give notice thereof to the Holders. Such notice will be provided
by
ParentCo to the Trustee and shall include a brief description of
the
automatic exchange of Exchangeable Shares for ParentCo Common Shares
provided for in Section 6.11(c)
below.
|
| (c) |
In
order that the Holders will be able to participate on a pro rata
basis
with the holders of ParentCo Common Shares in the distribution
of assets
of ParentCo in connection with a Liquidation Event, immediately
prior to
the effective time (the “Liquidation Event Effective Time”) of a
Liquidation Event, all of the then outstanding Exchangeable Shares
shall
be automatically exchanged for ParentCo Common Shares. To effect
such
automatic exchange, ParentCo shall be deemed to have purchased
each
Exchangeable Share held by Holders outstanding immediately prior
to the
Liquidation Event Effective Time, and each Holder shall be deemed
to have
sold the Exchangeable Shares held by it at such time, for a purchase
price
per share equal to the Exchangeable Share Price applicable at such
time.
In connection with such automatic exchange, ParentCo will provide
to the
Trustee an Officer's Certificate setting forth the calculation
of the
purchase price for each Exchangeable
Share.
|
| (d) |
The
closing of the transaction of purchase and sale contemplated by
Section
6.11(c) above shall be deemed to have occurred immediately prior
to the
Liquidation Event Effective Time, and each Holder of Exchangeable
Shares
shall be deemed to have transferred to ParentCo all of the Holder's
right,
title and interest in and to such Exchangeable Shares and shall
cease to
be a holder of such Exchangeable Shares, and ParentCo shall deliver
to the
Holder the Exchangeable Share Consideration deliverable upon the
automatic
exchange of Exchangeable Shares. Concurrently with such Holder's
ceasing
to be a holder of Exchangeable Shares, the Holder shall be considered
and
deemed for all purposes to be the holder of the right to receive
ParentCo
Common Shares to be issued to it pursuant to the automatic exchange
of
Exchangeable Shares for ParentCo Common Shares, and the certificates
held
by the Holder previously representing the Exchangeable Shares exchanged
by
the Holder with ParentCo pursuant to such automatic exchange shall
thereafter be deemed to represent a right to receive the ParentCo
Common
Shares to be issued to the Holder by ParentCo pursuant to such
automatic
exchange. Upon the request of a Holder and the surrender by the
Holder of
Exchangeable Share certificates deemed to represent ParentCo Common
Shares, duly endorsed in blank and accompanied by such instruments
of
transfer as ParentCo may reasonably require, ParentCo shall deliver
or
cause to be delivered to the Holder certificates representing the
ParentCo
Common Shares of which the Holder is the holder. Notwithstanding
the
foregoing, until each Holder is actually entered on the register
of
holders of ParentCo Common Shares, such Holder shall be deemed
to still be
a holder of the transferred Exchangeable Shares for purposes of
having
voting rights with respect to ParentCo Preferred Shares pursuant
to
Article 4 hereof.
|
-17-
ARTICLE
7 - CONCERNING
THE TRUSTEE
| 7.1 |
Powers
and Duties of the
Trustee.
|
The
rights, powers and authorities of the Trustee under this agreement, in its
capacity as trustee of the Trust, shall include:
| (a) |
receipt
and deposit of the ParentCo Preferred Shares from AdValiant USA,
DGI and
the Escrow Agent as trustee for and on behalf of the Holders in accordance
with the provisions of this agreement;
|
| (b) |
granting
proxies and distributing materials in relation to the ParentCo Preferred
Shares to Holders as provided in this
agreement;
|
| (c) |
voting
the Holder Votes in relation to the ParentCo Preferred Shares in
accordance with the provisions of this
agreement;
|
| (d) |
receiving
the grant of the Exchange Right and the Automatic Exchange Rights
from
ParentCo as trustee for and on behalf of the Holders in accordance
with
the provisions of this 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 agreement,
and in connection therewith receiving from Holders certificates
representing Exchangeable Shares and other requisite documents, and
distributing to such Holders the ParentCo Common Shares and cheques,
if
any, to which such Holders 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 agreement;
|
| (h) |
taking
action at the direction of a Holder or Holders to enforce the obligations
of ParentCo under this agreement; and
|
| (i) |
taking
such other actions and doing such other things as are specifically
provided in this agreement.
|
-18-
In
the
exercise of such rights, powers and authorities the Trustee shall have (and
is
granted) such incidental and additional rights, powers and authority not
in
conflict with any of the provisions of this agreement as the Trustee, acting
in
good faith and in the reasonable exercise of its discretion, may deem necessary,
appropriate or desirable to effect the purpose of the Trust. Any exercise
of
such discretionary rights, powers and authorities by the Trustee shall be
final,
conclusive and binding upon all persons. For greater certainty, the Trustee
shall have only those duties as are set out specifically in this agreement.
The
Trustee in exercising its rights, powers, duties and authorities hereunder
shall
act honestly and in good faith with a view to the best interests of the Holders
and the terms of this agreement and shall exercise the care, diligence and
skill
that a reasonably prudent trustee would exercise in comparable circumstances.
The Trustee shall not be bound to give any notice or do or take any act,
action
or proceeding by virtue of the powers conferred on it hereby unless and until
it
shall be specifically required to do so under the terms hereof; nor shall
the
Trustee be required to take any notice of, or to do or to take any act, action
or proceeding as a result of, any default or breach of any provision hereunder,
unless and until notified in writing of such default or breach, which notices
shall distinctly specify the default or breach desired to be brought to the
attention of the Trustee and in the absence of such notice the Trustee may
for
all purposes of this agreement conclusively assume that no default or breach
has
been made in the observance or performance of any of the representations,
warranties, covenants, agreements or conditions contained herein.
| 7.2 |
Dealings
with Transfer Agents, Registrars,
Etc.
|
The
Corporation and ParentCo 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
ParentCo Common Shares; and
|
| (b) |
requisition,
from time to time,
|
| (i) |
from
the Corporation or any such registrar or transfer agent of the
Exchangeable Shares any information readily available from the records
maintained by it and any certificates representing the Exchangeable
Shares
which the Trustee may reasonably require for the discharge of its
duties
and responsibilities under this agreement;
and
|
| (ii) |
from
the transfer agent of ParentCo Common Shares, and any subsequent
transfer
agent of such shares, to complete the exercise from time to time
of the
Exchange Right and the Automatic Exchange Rights in the manner specified
in Article 6 hereof, the share certificates issuable upon such
exercise.
|
-19-
The
Corporation and ParentCo irrevocably authorize their respective registrars
and
transfer agents to comply with all such requests. ParentCo covenants that
it
will supply its transfer agent with duly executed share certificates for
the
purpose of completing the exercise from time to time of the Exchange Right
and
the Automatic Exchange Rights, in each case pursuant to Article 7
hereof.
| 7.3 |
Books
and Records.
|
The
Trustee shall keep available for inspection by ParentCo and the Corporation,
at
the Trustee's principal office correct and complete books and records of
account
relating to the Trustee's actions under this agreement, including without
limitation all information relating to mailings and instructions to and from
Holders and all transactions pursuant to the Voting Rights, the Escrowed
Shares,
the Exchange Right and the Automatic Exchange Rights for the term of this
agreement. On or before March 31 in every year after the date hereof, so
long as
the ParentCo Preferred Shares are on deposit with the Trustee, the Trustee
shall, on request by ParentCo, transmit to ParentCo and the Corporation a
brief
report, dated as of the preceding December 31, with respect to:
| (a) |
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
Holders
in consideration of the issue and delivery by ParentCo of ParentCo
Common
Shares 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 agreement which it had not previously
reported.
|
| 7.4 |
Income
Tax Returns and Reports.
|
The
Corporation shall, to the extent necessary, prepare and file on behalf of
the
Trust appropriate United States and Canadian income tax returns and any other
returns or reports as may be required by applicable law or pursuant to the
rules
and regulations of any securities exchange or other trading system through
which
the ParentCo Shares are traded and, in connection therewith, may obtain the
advice and assistance of such experts as the Trustee may consider necessary
or
advisable. If requested by the Trustee, ParentCo shall retain such experts
for
purposes of providing such advice and assistance.
| 7.5 |
Indemnification
Prior to Certain Actions by Trustee.
|
The
Trustee shall exercise any or all of the rights, duties, powers or authorities
vested in it by this agreement at the written request, order or direction
of any
Holder upon such Holder's 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 Holder shall be obligated
to
furnish to the Trustee any such funding, security or indemnity in connection
with the exercise by the Trustee of any of its rights, duties, powers and
authorities with respect to the ParentCo Preferred Shares pursuant to Article
3
hereof, subject to Section 7.12 hereof, and with respect to the Exchange
Right
as specifically provided for in Article 6 hereof, subject to Section 7.12
hereof, and with respect to the Automatic Exchange Rights pursuant to Article
6
hereof. None of the provisions contained in this agreement shall require
the
Trustee to expend or risk its own funds or otherwise incur financial liability
in the exercise of any of its rights, powers, duties or authorities unless
funded, given funds, security and indemnified as aforesaid.
-20-
| 7.6 |
Actions
by Holders.
|
No
Holder
shall have the right to institute any action, suit or proceeding or to exercise
any other remedy authorized by this agreement for the purpose of enforcing
any
of its rights or for the execution of any trust or power hereunder unless
the
Holder has requested the Trustee to take or institute such action, suit or
proceeding and furnished the Trustee with the funding, security and indemnity
referred to in Section 7.5 hereof and the Trustee shall have failed to act
within a reasonable time thereafter. In such case, but not otherwise, the
Holder
shall be entitled to take proceedings in any court of competent jurisdiction
such as the Trustee might have taken; it being understood and intended that
no
one or more Holders shall have any right in any manner whatsoever to affect,
disturb or prejudice the rights hereby created by any such action, or to
enforce
any right hereunder or under the Voting Rights, the escrow provisions, the
Exchange Right 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 Holders.
| 7.7 |
Reliance
Upon Declarations.
|
The
Trustee shall not be considered to be in contravention of any of its rights,
powers, duties and authorities hereunder if, when required, it acts and relies
in good faith upon lists, mailing labels, notices, statutory declarations,
certificates, opinions, reports or other papers or documents furnished pursuant
to the provisions hereof or required by the Trustee to be furnished to it
in the
exercise of its rights, powers, duties and authorities hereunder, and such
lists, mailing labels, notices, statutory declarations, certificates, opinions,
reports or other papers or documents comply with the provisions of Section
7.8
hereof, if applicable, and with any other applicable provisions of this
agreement.
| 7.8 |
Evidence
and Authority to Trustee.
|
The
Corporation and/or ParentCo shall furnish to the Trustee evidence of compliance
with the conditions provided for in this agreement relating to any action
or
step required or permitted to be taken by the Corporation and/or ParentCo
or the
Trustee under this agreement or as a result of any obligation imposed under
this
agreement, including, without limitation, in respect of the Voting Rights,
the
escrow provisions 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 and/or ParentCo forthwith if and
when:
| (a) |
such
evidence is required by any other section of this agreement to be
furnished to the Trustee in accordance with the terms of this Section
7.8;
or
|
| (b) |
the
Trustee, in the exercise of its rights, powers, duties and authorities
under this agreement, gives the Corporation and/or ParentCo written
notice
requiring it to furnish such evidence in relation to any particular
action
or obligation specified in such notice.
|
-21-
Such
evidence shall consist of an Officer's Certificate of the Corporation and/or
ParentCo or a statutory declaration or a certificate made by persons entitled
to
sign an Officer's Certificate stating that any such condition has been complied
with in accordance with the terms of this agreement.
Whenever
such evidence relates to a matter other than the Voting Rights, the escrow
provisions or the Exchange Right or the Automatic Exchange Rights, and except
as
otherwise specifically provided herein, such evidence may consist of a report
or
opinion of any solicitor, auditor, accountant, appraiser, valuer, engineer
or
other expert or any other person whose qualifications give authority to a
statement made by him, provided that if such report or opinion is furnished
by a
director, officer or employee of the Corporation and/or ParentCo it shall
be in
the form of an Officer's Certificate or a statutory declaration.
Each
statutory declaration, certificate, opinion or report furnished to the Trustee
as evidence of compliance with a condition provided for in this agreement
shall
include a statement by the person giving the evidence:
| (i) |
declaring
that he has read and understands the provisions of this agreement
relating
to the condition in question;
|
| (ii) |
describing
the nature and scope of the examination or investigation upon which
he
based the statutory declaration, certificate, statement or opinion;
and
|
| (iii) |
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.
|
| 7.9 |
Experts,
Advisers and Agents.
|
The
Trustee may:
| (a) |
in
relation to these presents act and rely, and shall be protected in
acting
and relying, on the opinion or advice of or information obtained
from or
prepared by any solicitor, auditor, accountant, appraiser, valuer,
engineer or other expert, whether retained by the Trustee or by the
Corporation and/or ParentCo or otherwise, and may employ such assistants
as may be necessary to the proper determination and discharge of
its
powers and duties and determination of its rights hereunder and may
pay
proper and reasonable compensation for all such legal and other advice
or
assistance as aforesaid; and
|
| (b) |
employ
such agents and other assistants as it may reasonably require for
the
proper determination and discharge of its powers and duties hereunder,
and
may pay reasonable remuneration for all services performed for it
(and
shall be entitled to receive reasonable remuneration for all services
performed by it) in the discharge of the trusts hereof and compensation
for all disbursements, costs and expenses made or incurred by it
in the
determination and discharge of its duties hereunder and in the management
of the Trust.
|
-22-
| 7.10 |
Investment
of Moneys Held by Trustee.
|
Unless
otherwise provided in this agreement, any moneys held by or on behalf of
the
Trustee which under the terms of this agreement may or ought to be invested
or
which may be on deposit with the Trustee or which may be in the hands of
the
Trustee, may be invested and reinvested in the name or under the control
of the
Trustee in securities in which, under the laws of the Province of 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 timely 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.
| 7.11 |
Trustee
Not Bound to Act on Request.
|
Except
as
in this agreement otherwise specifically provided, the Trustee shall not
be
bound to act in accordance with any direction or request of the Corporation
and/or ParentCo 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.
| 7.12 |
Conflicting
Claims
|
If
conflicting claims or demands are made or asserted with respect to any interest
of any Holder 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 Holder 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) |
the
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.
|
-23-
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.
| 7.13 |
Acceptance
of Trust.
|
The
Trustee hereby accepts the Trust created and provided for by and in this
agreement and agrees to perform the same upon the terms and conditions herein
set forth and to hold all rights, privileges and benefits conferred hereby
and
by law in trust for the various persons who shall from time to time be Holders,
subject to all the terms and conditions herein set forth.
ARTICLE
8 - COMPENSATION
ParentCo
agrees to reimburse the Trustee for all reasonable expenses (including but
not
limited to taxes, compensation paid to experts, agents and advisors and travel
expenses) and disbursements, including the cost and expense of any suit or
litigation of any character and any proceedings before any governmental agency,
reasonably incurred by the Trustee in connection with its rights and duties
under this agreement; provided that ParentCo 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.
|
ParentCo
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 agreement (for whom it is expressly agreed
that the Trustee is holding the benefit of this indemnity and rights of
enforcement thereof in trust) (collectively, the “Indemnified Parties”) against
all claims, losses, damages, costs, penalties, fines and reasonable expenses
(including reasonable expenses of the Trustee's legal counsel) which, without
fraud, negligence, wilful misconduct or bad faith on the part of such
Indemnified Party, may be paid, incurred or suffered by the Indemnified Party
by
reason of or as a result of the Trustee's acceptance or administration of
the
Trust, its compliance with and completion of its duties set forth in this
agreement, or any written or oral instructions delivered to the Trustee by
ParentCo or the Corporation pursuant hereto. In no case shall ParentCo or
the
Corporation be liable under this indemnity for any claim against any of the
Indemnified Parties unless
-24-
ParentCo
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
and
such failure prejudices the ability of the ParentCo or the Corporation to
respond to any such claim or action. Subject to (i) below, ParentCo and the
Corporation shall be entitled to participate at their own expense in the
defense
and, if ParentCo or the Corporation so elect at any time after receipt of
such
notice, either of them may assume the defense 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 defense 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 ParentCo or the Corporation, such
authorization not to be unreasonably withheld; or (ii) the named parties
to any
such suit include both the Trustee and ParentCo or the Corporation and the
Trustee shall have been advised by counsel acceptable to ParentCo or the
Corporation that there may be one or more legal defenses available to the
Trustee that are different from or in addition to those available to ParentCo
or
the Corporation and that an actual or potential conflict of interest exists
(in
which case ParentCo and the Corporation shall not have the right to assume
the
defense 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 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 ParentCo 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 ParentCo
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, ParentCo 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 superior court of the province in which the Corporation
has
its registered office upon application of one or more of the parties hereto
at
the Corporation's expense.
| 10.2 |
Removal.
|
The
Trustee, or any trustee hereafter appointed, may be removed with or without
cause, at any time on 60 days' prior notice by written instrument executed
by
ParentCo and the Corporation, in duplicate, one copy of which shall be delivered
to the trustee so removed and one copy to the successor trustee, provided
that,
in connection with such removal, provision is made for a replacement trustee
similar to that contemplated in Section 10.1.
-25-
| 10.3 |
Successor
Trustee.
|
Any
successor trustee appointed as provided under this agreement shall execute,
acknowledge and deliver to ParentCo and the Corporation and to its predecessor
trustee an instrument accepting such appointment. Thereupon the resignation
or
removal of the predecessor trustee shall become effective and such successor
trustee, without any further act, deed or conveyance, shall become vested
with
all the rights, powers, duties and obligations of its predecessor under this
agreement, with like effect as if originally named as trustee in this agreement.
However, on the written request of ParentCo 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 the 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,
ParentCo, 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, ParentCo
and the Corporation shall cause to be mailed notice of the succession of
such
trustee hereunder to each Holder specified in a List. If ParentCo 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 ParentCo and the
Corporation.
ARTICLE
11 - SUCCESSORS
TO PARENTCO OR THE CORPORATION
| 11.1 |
Certain
Requirements in Respect of Combination, Etc.
|
If
either
ParentCo or the Corporation shall 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, it shall ensure
that:
| (a) |
such
other Person or continuing corporation (the “Successor”), by operation of
law, becomes, without more, bound by the terms and provisions of
this
agreement or, if not so bound, executes, prior to or contemporaneously
with the consummation of such transaction an agreement supplemental
hereto
and such other instruments (if any) are necessary or advisable to
evidence
the assumption by the Successor of liability for all moneys payable
and
property deliverable hereunder, the covenant of such 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 ParentCo under this
agreement; and
|
| (b) |
such
transaction shall be upon such terms which substantially preserve
and do
not impair in any material respect any of the rights, duties, powers
and
authorities of the Trustee or of the Holders
hereunder.
|
-26-
| 11.2 |
Vesting
of Powers in Successor.
|
In
the
event that Section 11.1 applies, the Trustee, the Successor and the Corporation
shall execute and deliver the supplemental agreement provided for in Article
12
hereof, and thereupon the Successor shall possess and from time to time may
exercise each and every right and power of ParentCo under this agreement
in the
name of ParentCo or otherwise and any act or proceeding by any provision
of this
agreement required to be done or performed by the board of directors of ParentCo
or any officers of ParentCo may be done and performed with like force and
effect
by the directors or officers of such Successor.
| 11.3 |
Wholly-owned
Subsidiaries.
|
Nothing
herein shall be construed as preventing the amalgamation or merger of any
wholly-owned subsidiary of ParentCo with or into ParentCo or the winding-up,
liquidation or dissolution of any wholly-owned subsidiary of ParentCo provided
that all of the assets of such subsidiary are transferred to ParentCo or
another
wholly-owned subsidiary of ParentCo, and any such transactions are expressly
permitted by this Article 11.
ARTICLE
12 - AMENDMENTS
AND SUPPLEMENTAL AGREEMENTS
| 12.1 |
Amendments,
Modifications, Etc.
|
Subject
to Section 12.4, this agreement may not be amended, modified or waived except
by
an agreement in writing executed by the Corporation, ParentCo and the Trustee
and approved by the Holders in accordance with Article 9 of the Exchangeable
Share Provisions. No amendment to or modification or waiver of any of the
provisions of this agreement otherwise permitted hereunder shall be effective
unless made in writing and signed by all of the parties hereto.
| 12.2 |
Ministerial
Amendments.
|
Notwithstanding
the provisions of Section 12.1 hereof, the parties to this agreement may
in
writing, at any time and from time to time, without the approval of the Holders,
amend or modify this agreement for the purposes of:
| (a) |
adding
to the covenants of any or all of the parties hereto for the protection
of
the Holders hereunder;
|
| (b) |
making
such amendments or modifications not inconsistent with this agreement
as
may be necessary or desirable with respect to matters or questions
which,
in the opinion of the board of directors of each of ParentCo and
the
Corporation and in the opinion of the Trustee, relying upon its counsel,
having in mind the best interests of the Holders as a whole, it may
be
expedient to make, provided that such boards of directors and the
Trustee,
relying on its counsel, shall be of the opinion that such amendments
and
modifications will not be prejudicial to the interests of the Holders
as a
whole;
|
-27-
| (c) |
making
such changes or corrections which, on the advice of counsel to the
Corporation, ParentCo 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, relying on its counsel, and the board of directors of each of
the
Corporation and ParentCo shall be of the opinion that such changes
or
corrections will not be prejudicial to the interests of the Holders
as a
whole; or
|
| (d) |
making
such changes as may be necessary or appropriate to implement or give
effect to any assignment or assumption made pursuant to Section 14.8
hereof.
|
| 12.3 |
Meeting
to Consider Amendments.
|
The
Corporation, at the request of ParentCo, shall call a meeting or meetings
of the
Holders for the purpose of considering any proposed amendment or modification
requiring approval pursuant hereto. Any such meeting or meetings shall be
called
and held in accordance with the by-laws of the Corporation, the Exchangeable
Share Provisions and all applicable laws.
| 12.4 |
Changes
in Capital of ParentCo and the Corporation.
|
At
all
times after the occurrence of any event effected pursuant to Section 2.5
or
Section 2.6 of the Support Agreement, as a result of which either
ParentCo
Common Shares, the ParentCo Preferred Shares or the Exchangeable Shares or
any
of them are in any way changed, this agreement shall forthwith be amended
and
modified as necessary in order that it shall apply with full force and effect,
mutatis mutandis, to all new securities into which ParentCo Common Shares,
the
ParentCo Preferred Shares or the Exchangeable Shares or any of them are so
changed, and the parties hereto shall execute and deliver a supplemental
agreement giving effect to and evidencing such necessary amendments and
modifications.
| 12.5 |
Execution
of Supplemental Agreements.
|
From
time
to time the Corporation (when authorized by a resolution of its Board of
Directors), ParentCo (when authorized by a resolution of its board of directors)
and the Trustee may, subject to the provisions of these presents, and they
shall, when so directed by these presents, execute and deliver by their proper
officers, agreements or other instruments supplemental hereto, which thereafter
shall form part hereof, for any one or more of the following
purposes:
| (a) |
evidencing
the succession of any Successors to ParentCo and the covenants of
and
obligations assumed by each such Successor in accordance with the
provisions of Article 12 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
agreement or the Voting Rights, the escrow provisions, 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 Holders
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 ParentCo, the Corporation, the Trustee
or
this agreement; and
|
-28-
| (c) |
for
any other purposes not inconsistent with the provisions of this agreement,
including without limitation to make or evidence any amendment or
modification to this agreement as contemplated hereby, provided that,
in
the opinion of the Trustee and its counsel, the rights of the Trustee
and
the Holders as a whole will not be prejudiced
thereby.
|
| 12.6 |
Equivalence.
|
ParentCo
hereby covenants and agrees to forthwith effect necessary amendments to its
constating documents, this agreement, the Support Agreement or the Escrow
Agreement to ensure that the number of DGI Preferred Voting Shares are adjusted
to fully reflect the effect of any change in the number of issued and
outstanding Exchangeable Shares so that the Voting Rights shall in the aggregate
equal at least one vote for each outstanding Exchangeable Share that is not
held
by the Escrow Agent.
ARTICLE
13 - TERMINATION
| 13.1 |
Term.
|
The
Trust
created by this agreement shall continue until the earliest to occur of the
following events:
| (a) |
no
outstanding Exchangeable Shares are held by a Holder and no Escrowed
Shares are held by the Escrow Agent;
|
| (b) |
each
of the Corporation and ParentCo elects in writing to terminate the
Trust
and such termination is approved by the Holders of the Exchangeable
Shares
in accordance with Article 9 of the Exchangeable Share Provisions;
and
|
| (c) |
21
years after the death of the last survivor of the descendants of
Her
Majesty Queen ▇▇▇▇▇▇▇▇▇ ▇▇ of the United Kingdom of Great Britain
and
Northern Ireland living on the date of the creation of the
Trust.
|
| 13.2 |
Survival
of Agreement.
|
This
agreement shall survive any termination of the Trust and shall continue until
there are no Exchangeable Shares outstanding held by a Holder and no Escrowed
Shares are held by the Escrow Agent; provided, however, that the provisions
of
Articles 9 and 10 hereof shall survive any such termination of this
agreement.
-29-
ARTICLE
14 - GENERAL
| 14.1 |
Severability.
|
If
any
provision of this agreement is held to be invalid, illegal or unenforceable,
the
validity, legality or enforceability of the remainder of this agreement shall
not in any way be affected or impaired thereby, and the agreement shall be
carried out as nearly as possible in accordance with its original terms and
conditions.
| 14.2 |
Enurement.
|
This
agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and permitted assigns and to the benefit
of the
Holders.
| 14.3 |
Notices
to Parties.
|
|
(a)
|
if
to ParentCo to:
|
|
Dialog
Group, Inc.
Twelfth
Floor
▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇
▇▇▇▇, ▇.▇. ▇.▇.▇.
▇▇▇▇▇
|
|
|
Attention: ▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇▇▇▇
|
|
|
Fax: (▇▇▇)
▇▇▇-▇▇▇▇
|
|
|
Tel: (▇▇▇)
▇▇▇-▇▇▇▇
|
|
-30-
|
with
copies to:
|
|
|
▇▇▇▇
▇▇▇▇▇▇
Suite
400E
▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇.▇.▇.
▇▇▇▇▇
|
|
|
Fax: (▇▇▇)
▇▇▇-▇▇▇▇
|
|
|
Tel: (▇▇▇)
▇▇▇-▇▇▇▇
|
|
|
(b)
|
if
to the Corporation to:
|
|
AdValiant
Inc.
▇
▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇
▇▇▇
▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇
▇▇▇
|
|
|
Attention: ▇▇▇▇▇
▇▇▇▇▇▇
|
|
|
Fax: (▇▇▇)
▇▇▇-▇▇▇▇
|
|
|
Tel: (▇▇▇)
▇▇▇-▇▇▇▇
|
|
|
(c)
|
if
to AdValiant USA to:
|
|
AdValiant
USA, Inc.
▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇
▇▇▇▇
▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇
|
|
|
Attention: ▇▇▇▇▇
▇▇▇▇▇▇
|
|
|
Fax: (▇▇▇)
▇▇▇-▇▇▇▇
|
|
|
Tel: (▇▇▇)
▇▇▇-▇▇▇▇
|
|
-31-
|
with
copies to:
|
|
|
▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇
▇▇▇▇
▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇
▇▇▇
▇▇▇
|
|
|
Attention: ▇▇▇
▇. ▇▇▇▇▇▇▇
|
|
|
Fax: (▇▇▇)
▇▇▇-▇▇▇▇
|
|
|
Tel: (▇▇▇)
▇▇▇-▇▇▇▇
|
|
|
(d)
|
if
to Empire to:
|
|
Empire
Media, Inc.
▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇
▇▇▇▇
▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇
|
|
|
Attention: ▇▇▇▇▇
▇▇▇▇▇▇
|
|
|
Fax: (▇▇▇)
▇▇▇-▇▇▇▇
|
|
|
Tel: (▇▇▇)
▇▇▇-▇▇▇▇
|
|
|
(e)
|
if
to ▇▇▇▇▇ ▇▇▇▇▇▇
|
|
▇
▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇
▇▇▇
▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇
▇▇▇
|
|
|
Fax: (▇▇▇)
▇▇▇-▇▇▇▇
|
|
|
Tel: (▇▇▇)
▇▇▇-▇▇▇▇
|
|
-32-
|
(f)
|
if
to ▇▇▇▇▇▇▇ ▇▇▇▇
|
|
▇
▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇
▇▇▇
▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇
▇▇▇
|
|
|
Fax: (▇▇▇)
▇▇▇-▇▇▇▇
|
|
|
Tel: (▇▇▇)
▇▇▇-▇▇▇▇
|
|
|
(g)
|
if
to the Trustee to:
|
|
Empire
Media, Inc.
▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇
▇▇▇▇
▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇
|
|
|
Attention: ▇▇▇▇▇
▇▇▇▇▇▇
|
|
|
Facsimile
No. (▇▇▇)
▇▇▇-▇▇▇▇
|
|
|
Tel: (▇▇▇)
▇▇▇-▇▇▇▇
|
|
Any
notice or other communication given personally shall be deemed to have been
given and received upon delivery thereof, and if given by telecopy shall
be
deemed to have been given and received on the date of receipt thereof unless
such day is not a Business Day in which case it shall be deemed to have been
given and received upon the immediately following Business Day.
| 14.4 |
Notice
to Holders.
|
Any
and
all notices to be given and any documents to be sent to any Holders may be
given
or sent to the address of such Holder shown on the register of Holders of
Exchangeable Shares in any manner permitted by the Exchangeable Share Provisions
and shall be deemed to be received (if given or sent in such manner) at the
time
specified in such Exchangeable Share Provisions, the provisions of which
Exchangeable Share Provisions shall apply mutatis mutandis to notices or
documents as aforesaid sent to such Holders.
-33-
| 14.5 |
Risk
of Payments by Post.
|
Whenever
payments are to be made or documents are to be sent to any Holder by the
Trustee, by the Corporation or by ParentCo or by such Holder to the Trustee
or
to ParentCo or the Corporation, the making of such payment or sending of
such
document sent through the post shall be at the risk of the Corporation or
ParentCo, in the case of payments made or documents sent by the Trustee or
the
Corporation or ParentCo, and the Holder, in the case of payments made or
documents sent by the Holder.
| 14.6 |
Counterparts.
|
This
agreement may be executed in counterparts, each of which shall be deemed
an
original, but all of which taken together shall constitute one and the same
instrument.
| 14.7 |
Governing
Law.
|
This
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 |
Permitted
Assignment.
|
ParentCo
may assign any or all of its rights and obligations under this agreement
to any
Subsidiary of ParentCo, organized under the laws of Canada or any province
thereof, provided that each of ParentCo and such Subsidiary shall thereafter
be
jointly and severally liable for the performance by such Subsidiary of the
obligations of ParentCo pursuant to this Agreement. Any and all of the
obligations of ParentCo may be performed and satisfied by any such Subsidiary
of
ParentCo, except that nothing in this Section 14.8 shall permit any change
to
the rights, privileges, restrictions and conditions attaching to the ParentCo
Preferred Shares, the ParentCo Common Shares or the Exchangeable
Shares.
-34-
IN
WITNESS WHEREOF, the parties hereby have caused this agreement to be duly
executed as of the date first above written.
|
ADVALIANT
INC.
|
|||
|
By:
|
/s/
▇▇▇▇▇ ▇▇▇▇▇▇
|
||
|
Name:
▇▇▇▇▇ ▇▇▇▇▇▇
|
|||
|
Title:
President
|
|||
|
ADVALIANT
USA, INC.
|
|||
|
By:
|
/s/
▇▇▇▇▇ ▇▇▇▇▇▇
|
||
|
Name: ▇▇▇▇▇
▇▇▇▇▇▇
|
|||
|
Title:
President
|
|||
|
DIALOG
GROUP, INC.
|
|||
|
By:
|
/s/
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
|
||
|
Name:
▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇▇▇▇
|
|||
|
Title:
President
|
|||
-35-
|
EMPIRE
MEDIA, INC.
|
|||
|
By:
|
/s/
▇▇▇▇▇ ▇▇▇▇▇▇
|
||
|
Name:
▇▇▇▇▇
▇▇▇▇▇▇
|
|||
|
Title:
President
|
|||
|
/s/
▇▇▇▇▇ ▇▇▇▇▇▇
|
|||
|
Witness
|
)
|
▇▇▇▇▇
▇▇▇▇▇▇
|
|
|
)
|
|||
|
)
|
|||
|
)
|
|||
|
)
|
|||
|
)
|
/s/
▇▇▇▇▇▇▇ ▇▇▇▇
|
||
|
Witness
|
)
|
▇▇▇▇▇▇▇
▇▇▇▇
|
|
|
)
|
|||
|
)
|
|||
-36-
EXHIBIT
A
List
of Escrowed Shares
Depositing
Shareholders
Empire
Media, Inc.
▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇▇▇▇
▇▇▇▇
Number
of Exchangeable Shares
Deposited
in Escrow
252,514,188
Number
of DGI Preferred Voting Shares
Deposited
in Escrow
300
-37-
TABLE
OF
CONTENTS
|
ARTICLE
1 - DEFINITIONS AND INTERPRETATION
|
2
|
|
|
1.1
|
Definitions
|
2
|
|
1.2
|
Integration
Not Affected by Headings, Etc
|
5
|
|
1.3
|
Number,
Gender, Etc
|
5
|
|
1.4
|
Date
for Any Action
|
5
|
|
1.5
|
Exhibits
and Schedules
|
5
|
|
ARTICLE
2 - PURPOSE OF AGREEMENT
|
6
|
|
|
ARTICLE
3 - PARENTCO PREFERRED SHARES
|
6
|
|
|
3.1
|
Issuance
and Ownership of the ParentCo Preferred Shares
|
6
|
|
3.2
|
Safe
Keeping of Certificate
|
7
|
|
3.3
|
Holders’
Benefit
|
7
|
|
ARTICLE
4 - EXERCISE OF VOTING RIGHTS
|
7
|
|
|
4.1
|
Voting
Rights
|
7
|
|
4.2
|
Number
of Votes
|
7
|
|
4.3
|
Mailings
to Shareholders
|
7
|
|
4.4
|
Copies
of Shareholder Information
|
9
|
|
4.5
|
Other
Materials
|
9
|
|
4.6
|
List
of Persons Entitled to Vote
|
9
|
|
4.7
|
Entitlement
to Direct Votes
|
10
|
|
4.8
|
Voting
by Trustee and Attendance of Trustee Representatives at
Meeting
|
10
|
|
4.9
|
Distribution
of Written Materials
|
10
|
|
4.10
|
Termination
of Voting Rights
|
11
|
|
ARTICLE
5 - ESCROWED SHARES
|
11
|
|
|
5.1
|
Issuance
and Ownership of Escrowed Shares
|
11
|
|
ARTICLE
6 - EXCHANGE RIGHT AND AUTOMATIC EXCHANGE
|
12
|
|
|
6.1
|
Grant
and Ownership of the Exchange Right
|
12
|
|
6.2
|
Legended
Share Certificates
|
12
|
|
6.3
|
General
Exercise of Exchange Right
|
13
|
|
6.4
|
Purchase
Price
|
13
|
|
6.5
|
Exercise
Instructions
|
13
|
|
6.6
|
Delivery
of Exchangeable Share Consideration; Effect of Exercise
|
14
|
|
6.7
|
Exercise
of Exchange Right Subsequent to Retraction
|
15
|
|
6.8
|
Stamp
or Other Transfer Taxes
|
15
|
|
6.9
|
Notice
of Insolvency Event
|
16
|
|
6.10
|
{Intentionally
omitted}
|
16
|
|
6.11
|
Automatic
Exchange on Liquidation of ParentCo
|
16
|
|
ARTICLE
7 - CONCERNING THE TRUSTEE
|
18
|
|
|
7.1
|
Powers
and Duties of the Trustee
|
18
|
|
7.2
|
Dealings
with Transfer Agents, Registrars, Etc
|
19
|
|
7.3
|
Books
and Records
|
20
|
|
7.4
|
Income
Tax Returns and Reports
|
20
|
|
7.5
|
Indemnification
Prior to Certain Actions by Trustee
|
20
|
|
7.6
|
Actions
by Holders
|
21
|
|
7.7
|
Reliance
Upon Declarations
|
21
|
|
7.8
|
Evidence
and Authority to Trustee
|
21
|
|
7.9
|
Experts,
Advisers and Agents
|
22
|
|
7.10
|
Investment
of Moneys Held by Trustee
|
23
|
|
7.11
|
Trustee
Not Bound to Act on Request
|
23
|
|
7.12
|
Conflicting
Claims
|
23
|
|
7.13
|
Acceptance
of Trust
|
24
|
|
ARTICLE
8 - COMPENSATION
|
24
|
|
|
ARTICLE
9 - INDEMNIFICATION AND LIMITATION OF LIABILITY
|
24
|
|
|
9.1
|
Indemnification
of the Trustee
|
24
|
|
9.2
|
Limitation
of Liability
|
25
|
|
ARTICLE
10 - CHANGE OF TRUSTEE
|
25
|
|
|
10.1
|
Resignation
|
25
|
|
10.2
|
Removal
|
25
|
|
10.3
|
Successor
Trustee
|
26
|
|
10.4
|
Notice
of Successor Trustee
|
26
|
|
ARTICLE
11 - SUCCESSORS TO PARENTCO OR THE CORPORATION
|
26
|
|
|
11.1
|
Certain
Requirements in Respect of Combination, Etc
|
26
|
|
11.2
|
Vesting
of Powers in Successor
|
27
|
|
11.3
|
Wholly-owned
Subsidiaries
|
27
|
|
ARTICLE
12 - AMENDMENTS AND SUPPLEMENTAL AGREEMENTS
|
27
|
|
|
12.1
|
Amendments,
Modifications, Etc
|
27
|
|
12.2
|
Ministerial
Amendments
|
27
|
|
12.3
|
Meeting
to Consider Amendments
|
28
|
|
12.4
|
Changes
in Capital of ParentCo and the Corporation
|
28
|
|
12.5
|
Execution
of Supplemental Agreements
|
28
|
|
12.6
|
Equivalence.
|
29
|
|
ARTICLE
13 - TERMINATION
|
29
|
|
|
13.1
|
Term
|
29
|
|
13.2
|
Survival
of Agreement
|
29
|
|
ARTICLE
14 - GENERAL
|
30
|
|
|
14.1
|
Severability
|
30
|
|
14.2
|
Enurement
|
30
|
|
14.3
|
Notices
to Parties
|
30
|
|
14.4
|
Notice
to Holders
|
33
|
|
14.5
|
Risk
of Payments by Post
|
34
|
|
14.6
|
Counterparts.
|
34
|
|
14.7
|
Governing
Law
|
34
|
|
14.8
|
Permitted
Assignment
|
34
|