Exhibit 99.1
VOTING TRUST AGREEMENT
THIS AGREEMENT made effective as of the 16th day of July, 1999.
BETWEEN:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, businessman, of ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
(hereinafter referred to as "▇▇▇▇▇▇▇")
OF THE FIRST PART
AND
JEPHCO HOLDINGS, having an office at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇ (hereinafter referred to as "
Jephco")
OF THE SECOND PART
AND
BARNESCO HOLDINGS LTD., a British Columbia company
having an office at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
(hereinafter referred to as" Barnesco")
OF THE THIRD PART
AND
GE INVESTMENT PRIVATE PLACEMENT PARTNERS II, A LIMITED PARTNERSHIP,
a Delaware limited partnership, having an office at c/o GE
Investment Management Incorporated, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇, ▇▇▇▇▇ (hereinafter referred to as "GEIPPPII")
OF THE FOURTH PART
AND
GE INVESTMENT MANAGEMENT INCORPORATED, in its capacity as general
partner of GEIPPPII, having an office at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇, ▇▇▇▇▇ (hereinafter referred to as the
"Trustee")
OF THE FIFTH PART
WHEREAS
▇. ▇▇▇▇▇▇▇ is the registered and beneficial owner of ___________
Common shares of Elephant & Castle Group Inc. ("E&C");
B. E&C and GEIPPPII have entered into the Note Agreement (as defined
below) whereby GEIPPPII agreed to purchase from E&C certain convertible
subordinated debentures of E&C, 111,111 Common shares of E&C, and certain
warrants for the purchase of further Common shares of E&C;
C. E&C is in default of certain covenants in the Note
Agreement; and
D. As partial consideration for the waiver by GEIPPPII of those
defaults under the Note Agreement ▇▇▇▇▇▇▇ has agreed to transfer the shares of
E&C registered in his name to the Trustee to be voted by the Trustee in
accordance with the terms of this Agreement.
PART 1.: DEFINITIONS
1.1 In this Agreement:
(a) "Agreement" means this agreement and any schedule hereto, including
any and all agreements to the extent they amend or supplement this
Agreement;
(b) "arm's length" has the same interpretation as given to it in the
context of the Income Tax Act (Canada);
(c) "Event of Default" means an Event of Default as defined in the
Note Agreement;
(d) "Note Agreement" means the Note, Stock Purchase and Warrant
Agreement dated November 30, 1995 between E&C and GEIPPPII, as
amended or supplemented from time to time;
(e) "Security Agreement" means any security agreement by which E&C
grants or has granted a security interest in any of its assets to
GEIPPPIl;
(f) "Settlement Agreement" means the Settlement Agreement between E&C,
Jephco, Barnesco and ▇▇▇▇▇▇▇ dated as of June 25, 1999;
(g) "Shares" means the approximately 562,000 Common shares in the
capital of E&C (or such other number of securities into which the
Shares may be changed by reason of a reorganization or
recapitalization of E&C or after a consolidation,
reclassification, subdivision or other change in the share
capital of E&C) and which prior to the effective date of this
Agreement were held by ▇▇▇▇▇▇▇, Bamesco or Jephco together with
any other shares in E&C which may, by reason of sections 2.1 or
5.1 or otherwise, become subject to the Voting Trust;
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(h) "Voting Trust" means the obligations of the Trustee under the terms
of this Agreement from time to time to vote the Shares in accordance
with, the terms of this Agreement and to otherwise deal with the
Shares having regard to the beneficial ownership of the Shares by
▇▇▇▇▇▇▇, Barnesco or Jephco and their respective heirs, executors,
administrators, successors and permitted assigns.
PART 2.: TRANSFER OF REGISTRATION OF SHARES TO TRUSTEE
2.1 ▇▇▇▇▇▇▇ will forthwith endorse in blank, assign and deliver to the Trustee
the certificate or certificates for the Shares and will do or cause to be
done all things necessary, within his power, to effect registration in the
Register of Members and Transfers of E&C of the Shares in the name of the
Trustee. If ▇▇▇▇▇▇▇, Barnesco or Jephco, or any corporation controlled (as
that term is defined in the Company Act (British Columbia)) by either of
them, acquire any additional shares in E&C during the term of this
Agreement for whatever reason, including, without limitation, as a result
of the conversion of the promissory note issued by E&C pursuant to the
Settlement Agreement, the exercise of stock options or by purchases on the
open market, such shares, if voting, will become subject to this
Agreement, will be registered in the name of the Trustee and will be
deemed to be included in the Shares, and ▇▇▇▇▇▇▇ and Jephco will, or will
cause, the certificates for such Shares to be endorsed, assigned and
delivered to the Trustee as provided above. With respect to the 100,000
Common shares of E&C which arc the subject of the "▇▇▇▇▇▇▇ Pledge
Agreement" (as defined in the Settlement Agreement), notwithstanding the
other provisions of this Agreement, ▇▇▇▇▇▇▇ and GEIPPPII will use
reasonable efforts to cause the pledgee of those shares to have the pledge
of those shares replaced by a pledge of a trust certificate or
certificates issued hereunder representing those shares and, until that is
done, ▇▇▇▇▇▇▇ covenants and agrees to deliver to the Trustee, each year, a
proxy to exercise the voting rights attached to those shares. ▇▇▇▇▇▇▇ also
covenants and agrees not to revoke any such proxy.
2.2 The Trustee will surrender to the proper officer of E&C for cancellation
all certificates for the Shares which have been endorsed for transfer and
delivered to it pursuant to section 2.1, in exchange for new certificates
in the name of the Trustee evidencing that the Shares have been registered
in its name.
2.3 The Trustee will, on the request of any person transferring any of the
Shares to it, issue one or more trust certificates in the name of that
person, representing those Shares, and will maintain a register of the
holders of trust certificates issued hereunder. The Trustee will determine
the form of trust certificate to be used for this purpose and the
execution of a trust certificate referring to this Agreement by the
Trustee will be conclusive evidence of its determination of that form of
certificate. No transfer, assignment, disposition or other dealing with a
trust certificate will be valid for any purpose unless noted or entered on
the register of the holders of trust certificates. The Trustee may require
proof, to its satisfaction (acting reasonably), of the execution by the
registered holder of a trust certificate of any instrument purporting to
transfer, assign or otherwise deal with that trust certificate.
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PART 3.: POWERS OF THE TRUSTEE
3.1 During the term of this Agreement, while it remains the holder of the
Shares and until the Voting Trust has been terminated, the Trustee will,
subject to the provisions hereinafter set forth, have the sole and
exclusive right to exercise the voting rights attached to the Shares, and
will be entitled in its absolute discretion to exercise the said voting
rights to the same extent as would be the case if it was the absolute
owner of such Shares.
3.2 Without restricting the generality of the foregoing but subject to section
4.1, the Trustee will have the power to vote the Shares at all regular and
special meetings of the members of E&C and may vote for, do or assent or
consent to any act or proceeding which the shareholders or members of E&C
might or could vote for, or assent or consent, or vote against or withhold
its consent or assent, and will have all the powers, rights and privileges
of a shareholder or member of E&C as if the Trustee held the beneficial
interest in the Shares.
3.3 The Trustee may vote the Shares registered in its naive by written proxy
in the form permitted by the Memorandum or Articles of E&C or in such
other form as may be acceptable to the chairman of any meeting of the
members of E&C at which any Shares are to be voted.
3.4 The Trustee will have the power to delegate its discretionary powers by
instrument in writing to another person to act as trustee hereunder, as it
sees fit.
PART 4.: SPECIFIC RESTRICTIONS OF POWERS OF TRUSTEE
4.1 Notwithstanding the provisions of Part 3, the Trustee will exercise the
voting rights attached to the Shares in favour of any resolution to elect
▇▇▇▇▇▇▇ to the board of directors of E&C and, if the estate of ▇▇▇▇▇▇▇
holds in aggregate 10% or more of the Common shares of E&C at the relevant
time (including in that calculation any shares distributed by the executor
to ▇▇▇▇▇▇▇'▇ wife or children from ▇▇▇▇▇▇▇'▇ estate), in favour of any
resolution to elect ▇▇▇▇▇▇▇'▇ executor to the board of directors of E&C.
In the absence of a nomination by any other person of ▇▇▇▇▇▇▇ or his
executor as a director of E&C, the Trustee will, on the written request of
▇▇▇▇▇▇▇ or his executor, make such nomination. The Trustee may otherwise
exercise the voting rights attached to the Shares with respect to an;
resolution to elect directors of E&C as it sees fit, in its discretion. On
all other resolutions to be voted on by the shareholders of E&C the
Trustee will exercise the voting rights attached to the Shares as directed
in writing by the registered holder of any trust certificate with respect
to any Shares represented by that certificate, and otherwise as directed
in writing by ▇▇▇▇▇▇▇.
4.2 The Trustee does not have the power or authority, as such, to sell or
dispose of any Shares which are subject to this Agreement except:
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(a) pursuant to an amalgamation or merger involving E&C, in which case
shares received in exchange for Shares will be deemed to be the
Shares for which they were substituted and will be held on the same
terms and conditions; or
(b) pursuant to a distribution to the person or persons beneficially
entitled to such Shares pursuant to section 6.2.
PART 5.: DIVIDENDS
5.1 Any and all dividends, whether in cash, rights, or stock, declared by E&C
and accruing to the registered holder of any Share are the property of the
person who transferred the Share to the Trustee, if no trust certificate
has been issued, and to the registered holder of the trust certificate
issued by the Trustee with respect to that Share if a trust certificate
has been issued, and may be paid, issued or delivered directly to that
person, or as that person directs in writing, in accordance with its
beneficial entitlement thereto in full satisfaction of E&C's obligations
with regard to payment of dividends; PROVIDED that if such dividends are
in the form of shares, or rights offerings for shares, of E&C, such
shares, if voting, will become subject to this Agreement, will be
registered in the name of the Trustee and will be deemed to be included in
the Shares.
PART 6.: DURATION OF VOTING TRUST
6.1 The term of this Agreement will be from the date hereof until January 1,
2002, unless this Agreement is earlier terminated as provided below.
6.2 Upon the termination of this Agreement, in whole or part, as provided in
sections 6.1 or 7.1, the Trustee shall execute such transfers and
assignments to effectively transfer to each person who transferred a Share
to the Trustee, if no trust certificate has been issued with respect to
that Share, and to the registered holder of the trust certificate issued
by the Trustee with respect to that Share if a trust certificate has been
issued, registration of that Share in the Register of Members and
Transfers of E&C and the Trustee will do and cause to be done all things
required to vest in such person all of the Trustee's interest in that
Share, within forty-five (45) days from the date of termination of this
Agreement.
PART 7.: EARLY TERMINATION OF VOTING TRUST
7.1 This Agreement may be terminated prior to the termination date in section
6.1 by ▇▇▇▇▇▇▇ by notice in writing to the Trustee and to GEIPPPII on the
happening of any of the following events, such termination to be effective
fifteen (15) days after receipt of that notice:
(a) GEIPPPII declares that an Event of Default has occurred under the
Note Agreement or the Security Agreement;
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(b) GEIPPPII sells, assigns, transfers or otherwise disposes of not less
than 90% of the Notes (as defined in the Note Agreement) in a
transaction with an arm's length third party; or
(c) E&C fails to pay any payment due under the Settlement Agreement
within 60 days of the date such payment became due.
7.2 ▇▇▇▇▇▇▇ or the registered holder of a trust certificate may terminate the
Voting Trust with respect to some or all of the Shares of which they are
the beneficial owner during the term of this Agreement if he or such
registered holder, as the case may be, provides evidence satisfactory to
the Trustee, in its discretion, that he or such registered holder has made
a bona fide sale or assignment of the beneficial interest in those Shares
to an arm's length third party who is a Qualified Institutional Buyer, as
that term is defined in Rule 144A of the Rules promulgated by the
Securities and Exchange Commission pursuant to the Securities Act of 1933,
as amended (United States of America), or by a transaction that complies
with Rule 144 of those same Rules. In that event, on the delivery to the
Trustee of the trust certificate for those Shares if one has been issued,
the Trustee shall execute such transfers and assignments to effectively
transfer to the purchaser or assignee registration in the Register of
Members and Transfers of E&C of the portion of the Shares to be released
from the Voting Trust pursuant to this section, and the Trustee will do
and cause to be done all things required to vest in such purchaser or
assignee all of the Trustee's interest in those Shares, within forty-five
(45) days from the date of receipt by the Trustee of the evidence referred
to above and the relevant trust certificate, if any.
PART 8.: POWER TO AMEND THE VOTING TRUST AGREEMENT
8.1 This Agreement may not be amended unless there is unanimous agreement of
the parties hereto or their respective heirs, executors, administrators,
successors and permitted assigns.
PART 9.: COMPENSATION FOR TRUSTEE
9.1 The Trustee shall not be entitled to any remuneration by virtue of acting
as trustee pursuant to this Agreement.
PART 10.: INDEMNITY AND LIABILITY OF TRUSTEE
10.1 GEIPPPII will save and hold the Trustee harmless from any and all
liability and expense arising solely out of the holding by the Trustee of
the Shares as Trustee, save and except any such liability which arises as
a result of the willful misconduct or gross negligence of the Trustee.
10.2 The parties hereto agree that the Trustee shall not be liable for any of
its actions taken pursuant to this Agreement in good faith, save and
except any such liability which arises as a result of the willful
misconduct or gross negligence of the Trustee.
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10.3 The Trustee is permitted to act as general partner of GEIPPPII, or in any
other capacity with respect to GEIPPPII, or to enter into any business
with E&C, ▇▇▇▇▇▇▇ or GEIPPPII, or corporations directly or indirectly
controlled by any of them in the same manner that it could if not a
Trustee, without being liable to account to the Voting Trust for any
profit, remuneration or other financial benefits.
PART 11.: CONCERNING THE TRUSTEE
11.1 The Trustee may at any time resign from the office of Trustee hereof on
giving not less than ten (10) days' notice addressed to the other parties
to this Agreement of its resignation and the appointment of a replacement
trustee by it by notice in writing to the other parties hereto, which
replacement trustee must be a party related to the Trustee.
11.2 Notice of all changes in the trusteeship hereunder shall be endorsed on or
attached to this Agreement and shall be signed by the successor Trustee
and every such notice shall be sufficient evidence to any person having
dealings with the Trustee for the time being of the facts to which it
relates.
11.3 The Trustee may at any time apply to the Supreme Court of British Columbia
for direction on any matter relating to the Voting Trust.
11.4 ▇▇▇▇▇▇▇, E&C, and the Company will furnish to the Trustee such evidence of
compliance with any provision hereof, or evidence of any Event of Default,
and in such form, as the Trustee may reasonably require by written notice
to ▇▇▇▇▇▇▇, E&C or GEIPPPII, as applicable.
11.5 In the exercise of any right or duty hereunder, the Trustee may, if it is
acting in good faith, rely as to the truth of the statements and the
accuracy of any opinion expressed therein, on any statutory declaration,
opinion, report, certificate or other evidence famished to tire Trustee
pursuant to a provision hereof or pursuant to a request of the Trustee, if
the Trustee examines the same and determines that such evidence complies
with the applicable requirements of this Agreement.
11.6 The Trustee may employ or retain such counsel, accountants, appraisers, or
other experts or advisers as it reasonably requires for the purpose of
discharging its duties hereunder and may pay reasonable remuneration for
all services so performed by any of them, without taxation of costs of any
counsel, and will not be responsible for any misconduct or negligence on
the part of any of them who has been selected with due care by the
Trustee.
PART 12.: NOTICE
12.1 Any notice required to be given under this Agreement will be deemed to be
well and sufficiently given by delivery or by telecopy as follows:
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(a) to ▇▇▇▇▇▇▇ or to Jephco or Barnesco at:
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
Telecopy Number: (604)________
with a copy to:
▇▇▇▇▇▇▇▇ Gudmunseth ▇▇▇▇▇▇▇▇▇
The Landing
250 - ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇ Gudmunseth Q.C.
(b) to GE Investment Private Placement Partners, A Limited
Partnership at:
c/o GE Investment Management Incorporated
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇, ▇▇▇▇▇
Telecopy Number:
Attention: Mr.
with a copy to:
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ LLP
1301 Avenue of the Americas
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇, ▇▇▇▇▇
Attention: Telecopy Number:
(c) to the Trustee at:
GE Investment Management Incorporated
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇, ▇▇▇▇▇
Attention: Mr.
Telecopy Number:
8
with a copy to:
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ LLP
1301 Avenue of the Americas
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇, ▇▇▇▇▇
Attention:
Telecopy Number:
and any notice given as aforesaid will be deemed to have been given upon
delivery or transmission, as applicable. Any party may from time to time
by notice in writing change his address for the purpose of this section
12.1.
PART 13.: EXECUTION IN COUNTERPARTS
13.1 This Agreement may be executed in several counterparts, each of which so
executed will be deemed to be the original, and such counterparts will
together constitute one and the same instrument.
PART 14.: ENUREMENT
14.1 This Agreement will be binding upon and shall enure to the benefit of the
parties hereto, and the respective heirs, executors, administrators,
successors and permitted assigns.
PART 15.: ENTIRE AGREEMENT
15.1 This Agreement constitutes the entire agreement between the parties with
respect to the matters set forth herein and replaces and supersedes all
and any prior agreements, memoranda, correspondence, communications,
negotiations, representations and warranties, whether verbal or written,
express or implied, statutory or otherwise between the parties hereto.
PART 16.: GOVERNING LAW
16.1 This Agreement is governed by, and is to be interpreted in accordance
with, the laws of British Columbia and the laws of Canada applicable in
British Columbia.
PART 17.: SUBMISSION TO JURISDICTION
17.1 Each of the parties irrevocably submits to the jurisdiction of the Supreme
Court of British Columbia in any action brought in that Court and each
party to this Agreement waives, and will not assert by way of motion; as a
defense, or otherwise; in any Permitted Action, any claim that:
(a) that party is not subject to the jurisdiction of the courts of
British Columbia;
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(b) the action is brought in an inconvenient form;
(c) the venue of the action is improper; or
(d) any subject matter of the action may not be enforced in or by the
courts of British Columbia.
In any suit or action brought to obtain a judgment for the recognition or
enforcement of any final judgment rendered in the action, no party to this
Agreement will seek any review with respect to the merits of any such action,
whether or not that party appears in or defends any such action. IN WITNESS
WHEREOF the parties have executed this Agreement as of the day and year first.
above written.
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
GE INVESTMENT PRIVATE PLACEMENT PARTNERS II,
A LIMITED PARTNERSHIP, by its general partner
GE INVESTMENT MANAGEMENT INCORPORATED
Per: _________________________________
BARNESCO HOLDINGS LTD.
Per: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------
JEPHCO HOLDINGS
Per: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------
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(a) that party is not subject to the jurisdiction of the courts of
British Columbia;
(b) the action is brought in an inconvenient form;
(c) the venue of the action is improper; or
(d) any subject matter of the action may not be enforced in or by the
courts of British Columbia.
In any suit or action brought to obtain a judgment for the recognition or
enforcement of any final judgment rendered in the action, no party to this
Agreement will seek any review with respect to the merits of any such action,
whether or not that party appears in or defends any such action.
IN WITNESS WHEREOF the parties have executed this Agreement as of the day and
year first above written.
---------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
GE INVESTMENT PRIVATE PLACEMENT PARTNERS II,
A LIMITED PARTNERSHIP, by its general partner
GE INVESTMENT MANAGEMENT INCORPORATED
Per: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Vice President
BARNESCO HOLDINGS LTD.
Per: _________________________
JEPHCO HOLDINGS
Per: _________________________
GE INVESTMENT MANAGEMENT INCORPORATED
Per: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Vice President
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