SCHEDULE "B"
EXCHANGE AND VOTING AGREEMENT
MEMORANDUM OF AGREEMENT made as of the 22 day of April 1999.
AMONG:
WARWICK ACQUISITION CORPORATION, a corporation
subsisting under the laws of the State of Delaware
(hereinafter referred to as the "Parent")
AND:
THINWEB SOFTWARE, INC., a corporation incorporated
under the laws of Nova Scotia
(hereinafter referred to as the "Purchaser"),
AND:
STOCKTRANS, INC., having a business address at ▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
(hereinafter referred to as the "Trustee").
AND:
EACH OF THOSE PERSONS holding shares of the
purchaser, as listed in Appendix "A" hereto
(hereinafter referred to as the "Shareholders")
W H E R E A S:
A. The Purchaser is the wholly owned subsidiary of the
Parent;
B. Pursuant to a share exchange and share purchase agreement
dated as of April 22, 1999 (the "Purchase Agreement") by and
among the Parent, the Purchaser, Thinweb Software, Inc..
("Thinweb Inc.") and, the Shareholders, the Purchaser
acquired all of the 16,916,344 issued and outstanding common
shares of Thinweb Inc. from the Shareholders in
consideration of among other things: (i) the Purchaser
issuing to the Shareholders 16,916,344 Exchangeable
Non-Voting Shares (as herein defined), and (ii) the Parent,
granting to each Shareholder Voting Rights (as herein
defined) in the Parent on the basis of each Shareholder
having an equivalent number of votes in the Parent as the
number of Exchangeable Non-Voting Shares held by such
Shareholder;
C. As security for the Parent's covenant to issue common shares
in its capital stock in exchange for Exchangeable Non-Voting
Shares, the Parent agreed to issue 16,916,344 common shares
(as herein defined as the "Parent Common Shares") to the
Trustee; and
D. In accordance with the Purchase Agreement, this Agreement
stipulates the means by which: (i) the Shareholders have
voting rights in the Parent; ii) the Trustee holds the
Parent Common Shares for the Shareholders; and (iii) the
Shareholders exercise their rights of conversion of the
Exchangeable Non-Voting Shares,
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
DEFINITIONS. In this Agreement, the following terms shall have the
following meanings:
"AFFILIATE" of any person means any other person directly or
indirectly controlled by, or under common control of, that person.
For the purposes of this definition, "control" (including, with
correlative meanings, the terms "controlled by" and "under common
control of"), as applied to any person, means the possession by
another person, directly or indirectly, of the power to direct or
cause the direction of the management and policies of that first
mentioned person, whether through the ownership of voting
securities, by contract or otherwise.
"AUTOMATIC EXCHANGE RIGHTS" means the benefit of the obligation of
Parent to effect the automatic exchange of Exchangeable Non-Voting
Shares for Parent Common Shares pursuant to Section 4.12 hereof.
"BOARD OF DIRECTORS" means the Board of Directors of the Purchaser.
"BUSINESS DAY" means a day other than a Saturday, Sunday or a day
when banks are not open for business in Nova Scotia;
"CANADIAN DOLLAR EQUIVALENT" means in respect of an amount expressed
in a foreign currency (the "Foreign Currency Amount") at any date
the product obtained by multiplying (a) the Foreign Currency Amount
by (b) the exchange rate on such date for such foreign currency
expressed in Canadian dollars as reported in The Wall Street Journal
under "Currency Trading; Exchange Rates" or, in the event such
exchange rate is not available, such exchange rate on such date for
such foreign currency expressed in Canadian dollars as may be deemed
by the Board of Directors to be appropriate for such purpose.
"CURRENT MARKET PRICE" means, in respect of a Parent Common Share on
any date, the Canadian Dollar Equivalent of closing price of Parent
Common Shares on the day before such date, on such stock exchange
or automated quotation system on which the Parent Common Shares are
listed or quoted, as the case may be, as may be selected by the
Board of Directors for such purpose; provided, however, that if
there is no public distribution or trading activity of Parent Common
Shares during such period, then the Current Market Price of a Parent
Common Share shall be determined by the Board of Directors based
upon the advice of such qualified independent financial advisors as
the Board of Directors may deem to be appropriate, and provided
further that any such selection, opinion or determination by the
Board of Directors shall be conclusive and binding.
"EXCHANGEABLE NON-VOTING SHARES" means the Class "A" exchangeable,
non-voting, participating common shares without par value in the
capital stock of the Purchaser, including the 16,916,344 shares
issuable under the Purchase Agreement.
"EXCHANGEABLE SHARE PROVISIONS" means the rights, privileges,
restrictions and conditions attached to the Exchangeable Non-Voting
Shares as set forth in Schedule "G" to the Purchase Agreement.
"INSOLVENCY EVENT" means the institution by the Purchaser of any
proceeding to be adjudicated bankrupt or insolvent or to be
dissolved or wound up, or the consent of the Purchaser 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 Purchaser to contest
in good faith any such proceedings commenced in respect of the
Purchaser within fifteen (15) days of becoming aware thereof, or the
consent by the Purchaser to the filing of any such petition or to
the appointment of a receiver, or the making by the Purchaser of a
general assignment for the benefit of creditors, or the admission in
writing by the Purchaser of its inability to pay its debts generally
as they become due, or the Purchaser not being permitted, pursuant
to solvency requirements of applicable law, to redeem any Retracted
Shares pursuant to section 27.6 (e) of the Exchangeable Share
Provisions.
"INSOLVENCY EXCHANGE RIGHT" has the meaning ascribed thereto in
Section 4.1.
"LIQUIDATION EVENT" has the meaning ascribed thereto in Section 4.12.
"LIQUIDATION EVENT EFFECTIVE DATE" has the meaning ascribed thereto
in Section 4.12(c).
"LIST" has the meaning ascribed thereto in Section 3.8.
"OFFICER'S CERTIFICATE" means, with respect to the Parent or the
Purchaser, as the case may be, a certificate signed by any one of
the Chairman of the Board, the Vice-Chairman of the Board, the
President, any Vice-President or any other officer of the Parent or
the Purchaser, as the case may be.
"PARENT COMMON SHARES" means the shares of common stock of the
Parent, without par value, having voting rights of one vote per
share, and any other securities into which such shares may be changed.
"PARENT CONSENT" has the meaning ascribed thereto in Section 3.2.
"PARENT MEETING" has the meaning ascribed in Section 3.2.
"PARENT SUCCESSOR" has the meaning ascribed thereto in Section 11.1(a).
"PURCHASE AGREEMENT" means the Purchase Agreement between the Parent
, the Purchaser, Thinweb Inc., and the Shareholders named therein,
dated as of the same date hereof.
"PERSON" includes an individual, partnership, corporation, company,
unincorporated syndicate or organization, trust, trustee, executor,
administrator and other legal representative.
"RETRACTED SHARES" has the meaning ascribed thereto in Section 4.7.
"SHAREHOLDERS" means the registered holders from time to time of
Exchangeable Non-Voting Shares, other than the Parent and its
Affiliates, as listed in Appendix "A" hereto.
"SHAREHOLDER VOTES" has the meaning ascribed thereto in Section 3.2.
"SUPPORT AGREEMENT" means that certain support agreement made as of
the same date hereof between the Purchaser and the Parent, which
agreement is attached as Schedule "I" to the Purchase Agreement.
"TRUST" means the trust created by this Agreement.
"TRUST ESTATE" means the Trust Shares and any other securities,
money or other property which may be held by the Trustee from time
to time pursuant to this Agreement.
"TRUST SHARES" has the meaning ascribed thereto in Section 2.2.
"TRUSTEE" means Stocktrans, Inc., and subject to the provisions of
Article 9, includes any successor trustee.
"VOTING RIGHTS" has the meaning ascribed thereto in Section 3.1.
INTERPRETATION NOT AFFECTED BY HEADINGS, ETC. The division of this
Agreement into articles, sections and paragraphs and the insertion
of headings are for convenience of reference only and shall not
affect the construction or interpretation of this Agreement.
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.
DATE FOR ANY ACTION. If any date on which any action is required to
be taken under this Agreement is not a Business Day, such action
shall be required to be taken on the next succeeding Business Day.
ARTICLE 2
TRUST SHARES
2.1 ESTABLISHMENT OF TRUST. One purpose of this Agreement is to
create the Trust for the benefit of the Shareholders, as herein
provided. The Trustee will hold the Parent Common Shares acquired
pursuant to the requirements of the Purchase Agreement, Exchangeable
Share Provisions and Support Agreement both to support the Parent's
and the Purchaser's obligations thereunder in the event of default
and, only if required by applicable law, to provide a mechanism for
Shareholders of each Exchangeable Non-Voting Share to direct the
voting of a corresponding Parent Common Share held by the Trustee.
2.2 ISSUE AND OWNERSHIP OF THE PARENT COMMON SHARES. Upon
execution of this Agreement, the Parent shall transfer to the
Trustee a number of Parent Common Shares equal to the number of
Exchangeable Non-Voting Shares issued to Shareholders under the
Purchase Agreement, such shares to be hereafter held of record by
the Trustee as trustee for and on behalf of, and for the use and
benefit of, the Shareholders and in accordance with the provisions
of this Agreement. From time to time, the Parent shall transfer
additional shares of Parent Common Shares to the Trustee as required
under the Purchase Agreement, Exchangeable Share Provisions and
Support Agreement, also to be held of record by the Trustee as
trustee for and on behalf of, and for the use and benefit of, the
Shareholders and in accordance with the provisions of this
Agreement. All Parent Common Shares so transferred by the Parent to
the Trustee pursuant to this Section 3.1 shall hereafter be referred
to as the "Trust Shares". The Parent hereby acknowledges receipt
from the Trustee as trustee for and on behalf of the Shareholders of
good and valuable consideration (and the adequacy thereof) for the
issuance of the Trust Shares by the Parent 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 Trust Shares and, subject to the terms
hereof, shall be entitled to exercise all of the rights and powers
of an owner with respect to the Trust Shares, provided that the
Trustee shall:
(a) hold the Trust Shares and the rights associated therewith as
conveyed by this Agreement as trustee solely for the use and
benefit of the Shareholders 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 Trust Shares and the Trust 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.
ARTICLE 3
VOTING
3.1 VOTING RIGHTS. The Parent will grant to the Shareholders,
by requisite shareholder or director resolutions, the right for each
Shareholder to receive notice and attend each Parent Meeting and to
consent to or to vote in person or by proxy, on any matter, question
or proposition whatsoever that may properly come before the
stockholders of the Parent at a Parent Meeting or in connection with
a Parent Consent (in each case, as hereinafter defined) (the "Voting
Rights") on the basis of one Voting Right for every one Exchangeable
Non-Voting Share held by a Shareholder, as if and to the same extent
and effect as if the Shareholder held an equivalent number of Parent
Common Shares. The Voting Rights shall be and remain vested in and
exercised by the Shareholders.
3.2 NUMBER OF VOTES. With respect to all meetings of
stockholders of the Parent at which holders of shares of Parent
Common Shares are entitled to vote (a "Parent Meeting") and with
respect to all written consents sought by the Parent from its
stockholders including the holders of shares of Parent Common Shares
(a "Parent Consent"), each Shareholder shall be entitled to cast and
exercise, in the manner instructed, the Voting Rights ordinarily
attributable to one Parent Common Share for each Exchangeable
Non-Voting Share owned of record by such Shareholder on the record
date established by the Parent or by applicable law for such Parent
Meeting or Parent Consent, as the case may be (the "Shareholder
Votes") in respect of each matter, question or proposition to be
voted on at such Parent Meeting or to be consented to in connection
with such Parent Consent.
3.3 LEGENDED SHARES CERTIFICATES. The Purchaser will cause each
certificate representing Exchangeable Non-Voting Shares to bear an
appropriate legend notifying the Shareholders of their right to a
number of votes in the Parent as is equal to the number of shares
represented by the Exchangeable Non-Voting Share certificates.
3.4 SAFEKEEPING OF CERTIFICATES. The certificate(s)
representing the Trust Shares shall at all times be held in safe
keeping by the Trustee or its agent.
3.5 MAILINGS TO SHAREHOLDERS OF EXCHANGEABLE NON-VOTING SHARES.
With respect to each Parent Meeting and Parent Consent, the Parent
will mail or cause to be mailed (or otherwise communicate in the
same manner as the Parent utilizes in communications to holders of
Parent Common Shares, to each of the Shareholders named in the List
(as defined below) on the same day as the initial mailing or notice
(or other communication) with respect thereto is given by the Parent
to its stockholders:
(a) a copy of such notice, together with any proxy or
information statement and related materials to be provided
to stockholders of the Parent;
(b) a statement that such Shareholder is entitled to the
exercise of the Shareholder Votes with respect to such
Parent Meeting or Parent Consent, as the case may be, and
to attend such Parent Meeting and to exercise personally the
Shareholder Votes thereat;
(c) a statement as to the manner in which to give a proxy to a
designated agent or other representative of the management
of the Parent to exercise such Shareholder Votes; and
(d) a statement of (i) the time and date by which such must be
received by the Parent in order to be binding upon it, which
in the case of a Parent Meeting shall not be earlier than
the close of business on the second Business Day prior to
such meeting, and (ii) the method for revoking or amending
such proxies.
For the purpose of determining Shareholder Votes to which a
Shareholder is entitled in respect of any such Parent Meeting or
Parent Consent, the number of Exchangeable Non-Voting Shares owned
of record by the Shareholder shall be determined at the close of
business on the record date established by the Parent or by
applicable law for purposes of determining stockholders entitled to
vote at such Parent Meeting or to give written consent in connection
with such Parent Consent.
3.6 COPIES OF STOCKHOLDER INFORMATION. The Parent will deliver
to the Shareholders copies of all proxy materials (including notices
of Parent Meetings), information statements, reports (including
without limitation all interim and annual financial statements) and
other written communications that are to be distributed from time to
time to holders of Parent Common Shares.
3.7 OTHER MATERIALS. Immediately after receipt by the Parent or
any stockholder of the Parent of any material sent or given
generally to the holders of Parent Common Shares by or on behalf of
a third party, including without limitation dissident proxy and
information circulars (and related information and material) and
tender and exchange offer circulars (and related information and
material), the Parent shall use its best efforts to obtain and
deliver copies thereof to each Shareholder as soon as possible
thereafter.
3.8 LIST OF PERSONS ENTITLED TO VOTE. The Purchaser shall (a)
prior to each annual, general and special Parent Meeting or the
seeking of any Parent Consents and (b) forthwith upon each request
made at any time by the Trustee or the Parent in writing, prepare or
cause to be prepared a list (a "List") of the names and addresses of
the Shareholders arranged in alphabetical order and showing the
number of Exchangeable Non-Voting Shares held of record by each such
Shareholder, in each case at the close of business on the date
specified by the Trustee in such request or, in the case of a List
prepared in connection with a Parent Meeting or a Parent Consent, at
the close of business on the record date established by the Parent
or pursuant to applicable law for determining the holders of Parent
Common Shares entitled to receive notice of and/or to vote at such
Parent Meeting or to give consent in connection with such Parent
Consent. Each such List shall be delivered to the Parent promptly
after receipt by the Purchaser 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 Parent to perform
its obligations under this Agreement. The Parent agrees to give the
Purchaser written notice (with a copy to the Trustee) of the calling
of any Parent Meeting or the seeking of any Parent Consent, together
with the record dates therefor, sufficiently prior to the date of
the calling of such meeting or seeking of such consent so as to
enable the Purchaser to perform its obligations under this Section 3.8.
3.9 DISTRIBUTION OF WRITTEN MATERIALS. Any written materials to
be distributed by the Parent to the Shareholders pursuant to this
Agreement shall be delivered or sent by mail (or otherwise
communicated in the same manner as the Parent utilizes in
communications to holders of Parent Common Shares) to each
Shareholder at its address as shown on the books of the Purchaser.
The Purchaser shall provide or cause to be provided to the Parent
for this purpose, on a timely basis and without charge or other
expense current lists of the Shareholders.
3.10 TERMINATION OF VOTING RIGHTS. All of the rights of a
Shareholder with respect to the Shareholder Vote exercisable in
respect of each Exchangeable Non-Voting Share held by such
Shareholder shall be deemed to be surrendered by the Shareholder to
the Parent and such Shareholder Votes and the Voting Rights
represented thereby shall cease immediately upon the exchange,
retraction or redemption of the Exchangeable Non-Voting Shares by or
from the Shareholder.
3.11 ALTERNATIVE VOTING RIGHTS. In the event it is alleged or
determined by any chairman at a shareholders' meeting, the board of
directors of the Parent, a shareholder, or by any corporate or third
party action or securities or judicial authority having jurisdiction
that the Shareholders are not properly entitled to vote the
Shareholder Votes or the Voting Rights, for whatever reason, then at
the sole discretion and judgment of a Shareholder, such Shareholder
may elect to suspend such Shareholder's exercise of the Shareholder
Votes or the Voting Rights and direct the Trustee, as the holder of
record of the Trust Shares, to be entitled to all of the Voting
Rights attributable to such Trust Shares. The Trustee shall
exercise the Voting Rights only on the basis of instructions
received pursuant to this section 3.11 from Shareholders entitled to
instruct the Trustee as to the voting thereof at the time at which
the Parent Consent is sought or the Parent Meeting is held. To the
extent that no instructions are received from a Shareholder with
respect to the Voting Rights to which such Shareholder is entitled,
the Trustee shall not exercise or permit the exercise of such
Shareholder's Voting Rights.
Any Shareholder named in a List prepared in connection with any
Parent Meeting or any Parent Consent will be entitled (a) to
instruct the Trustee with respect to the exercise of the Shareholder
Votes to which such Shareholder is entitled or (b) to attend such
meeting and personally to exercise thereat (or to exercise with
respect to any written consent), as the proxy of the Trustee, the
Shareholder Votes to which such Shareholder is entitled except, in
each case, to the extent that such Shareholder has transferred the
ownership of any Exchangeable Non-Voting Shares in respect of which
such Shareholder is entitled to Shareholder Votes after the close of
business on the record date for such meeting or seeking of consent.
In connection with each Parent Meeting and Parent Consent, the
Trustee shall exercise, either in person or by proxy, in accordance
with the instructions received from a Shareholder , the Shareholder
Votes as to which such Shareholder is entitled to direct the Voting
Rights (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 Shareholder prior to the time and
date fixed by it for receipt of such instructions in the notice
given by the Trustee to the Shareholder.
The Trustee shall cause such representatives as are empowered by it
to sign and deliver, on behalf of the Trustee, proxies for Voting
Rights to attend each Parent Meeting. Upon submission by a
Shareholder (or its designee) of identification satisfactory to the
Trustee's representatives, and at the Shareholder's request, such
representatives shall sign and deliver to such Shareholder (or its
designee) a proxy to exercise personally the Shareholder Votes as to
which such Shareholder is otherwise entitled hereunder to direct the
vote, if such Shareholder either (i) has not previously given the
Trustee instructions in respect of such meeting, or (ii) submits to
the Trustee's representatives written revocation of any such
previous instructions. At such meeting, the Shareholder exercising
such Shareholder 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.
ARTICLE 4
EXCHANGE RIGHT AND AUTOMATIC EXCHANGE
4.1 GRANT AND OWNERSHIP OF THE EXCHANGE RIGHT. The Parent
hereby grants to the Shareholders the right, upon the occurrence and
during the continuance of an Insolvency Event, to require the Parent
to purchase from each or any Shareholder all or any part of the
Exchangeable Non-Voting Shares held by the Shareholder in accordance
with the provisions of this Agreement (the "Insolvency Exchange
Right"). The Parent hereby acknowledges receipt from the
Shareholders of good and valuable consideration (and the adequacy
thereof) for the issuance of the Insolvency Exchange Right to them.
4.2 LEGENDED SHARE CERTIFICATES. The Purchaser will cause each
certificate representing Exchangeable Non-Voting Shares to bear an
appropriate legend notifying the Shareholders of:
(a) their right with respect to the exercise of the Insolvency
Exchange Right in respect of the Exchangeable Non-Voting
Shares held by a Shareholder; and
(b) the Automatic Exchange Rights.
4.3 PURCHASE PRICE. The purchase price payable by the Parent
for each Exchangeable Non-Voting Share to be purchased by the Parent
under the Insolvency Exchange Right shall be an amount per share
equal to (a) the Current Market Price of a Parent Common Share on
the last Business Day prior to the day of closing of the purchase
and sale of such Exchangeable Non-Voting Share under the Insolvency
Exchange Right plus (b) an additional amount equivalent to the full
amount of all dividends declared and unpaid on each such
Exchangeable Non-Voting Share and all dividends declared on Parent
Common Shares which have not been declared on such Exchangeable
Non-Voting Shares in accordance with section 27.3 of the
Exchangeable Share Provisions (provided that if the record date for
any such declared and unpaid dividends occurs on or after the day of
closing of such purchase and sale the purchase price shall not
include such additional amount equivalent to such declared and
unpaid dividends). In connection with each exercise of the
Insolvency Exchange Right, the Parent will provide to the
Shareholders an Officer's Certificate setting forth the calculation
of the purchase price for each Exchangeable Non-Voting Share. The
purchase price for each such Exchangeable Non-Voting Share so
purchased may be satisfied only by delivering or causing to be
delivered to the relevant Shareholder, one Parent Common Share and a
check for the balance, if any, of the purchase price without interest.
4.4 EXERCISE INSTRUCTIONS. Subject to the terms and conditions
set forth herein, a Shareholder shall be entitled, upon the
occurrence and during the continuance of an Insolvency Event, to
exercise the Insolvency Exchange Right with respect to all or any
part of the Exchangeable Non-Voting Shares registered in the name of
such Shareholder on the books of the Purchaser. To cause the
exercise of the Insolvency Exchange Right, the Shareholder shall
deliver to the Parent, in person or by certified or registered mail
the certificates representing the Exchangeable Non-Voting Shares
which such Shareholder desires the Parent to purchase, duly endorsed
in blank, and accompanied by such other documents and instruments as
may be required to effect a transfer of Exchangeable Non-Voting
Shares under the Company Act (Nova Scotia), and the articles of the
Purchaser and such additional documents and instruments as the
Parent may reasonably require together with (a) a duly completed
form of notice of exercise of the Insolvency Exchange Right,
contained on the reverse of or attached to the Exchangeable
Non-Voting Share certificates, stating (i) that the Shareholder
elects to exercise the Insolvency Exchange Right so as to require
the Parent to purchase from the Shareholder the number of
Exchangeable Non-Voting Shares specified therein, (ii) that such
Shareholder has good title to and owns all such Exchangeable
Non-Voting Shares to be acquired by Parent free and clear of all
liens, claims and encumbrances, (iii) the name in which the
certificates representing Parent Common Shares deliverable in
connection with the exercise of the Insolvency Exchange Right are to
be issued and (iv) the names and addresses of the persons to whom
such new certificates should be delivered, and (b) payment (or
evidence satisfactory to the Purchaser and the Parent of payment) of
the taxes (if any) payable as contemplated by Section 4.7 of this
Agreement. If only a part of the Exchangeable Non-Voting Shares
represented by any certificate or certificates delivered to the
Trustee are to be purchased by the Parent under the Insolvency
Exchange Right, a new certificate for the balance of such
Exchangeable Non-Voting Shares shall be issued to the Shareholder at
the expense of the Purchaser.
4.5 DELIVERY OF PARENT COMMON SHARES; EFFECT OF EXERCISE.
Promptly, and as soon as reasonably practicable after receipt of the
certificates representing the Exchangeable Non-Voting Shares which
the Shareholder desires the Parent to purchase under the Insolvency
Exchange Right, together with such documents and instruments of
transfer and a duly completed form of notice of exercise of the
Insolvency Exchange Right (and payment of taxes, if any, or evidence
thereof), duly endorsed for transfer to the Parent, the Parent shall
immediately thereafter upon receipt of such notice deliver or cause
to be delivered to the Shareholder of such Exchangeable Non-Voting
Shares (or to such other persons, if any, properly designated by
such Shareholder), the certificates for the number of Parent Common
Shares deliverable in connection with the exercise of the Insolvency
Exchange Right, which shares shall be duly issued as fully paid and
non-assessable and shall be free and clear of any lien, claim or
encumbrance, and checks for the balance, if any, of the total
purchase price therefor. The Parent may instruct the Trustee to use
the Trust Shares it holds for delivery to the Shareholder under the
previous sentence. The Parent shall, immediately upon receipt of
such certificates representing the Exchangeable Non-Voting Shares
from the Shareholder, deliver the certificates to the registered
office of the Purchaser for cancellation. Immediately upon the
giving of notice by the Shareholder to the Parent of the exercise
of the Insolvency Exchange Right, as provided in this Section 4.5,
the closing of the transaction of purchase and sale contemplated by
the Insolvency Exchange Right shall be deemed to have occurred, and
the Shareholder of such Exchangeable Non-Voting Shares shall be
deemed to have transferred to the Parent its right, title and
interest in and to such Exchangeable Non-Voting Shares and shall
cease to be a Shareholder of such Exchangeable Non-Voting Shares and
shall not be entitled to exercise any of the rights of a Shareholder
in respect thereof, other than the right to receive his
proportionate part of the total purchase price therefor, unless the
requisite number of Parent Common Shares (together with a check for
the balance, if any, of the total purchase price therefor) is not
allotted, issued and delivered by the Parent to such Shareholder
(or to such other persons, if any, properly designated by such
Shareholder), within five (5) Business Days of the date of the
giving of such notice by the Shareholder, in which case the rights
of the Shareholder shall remain unaffected until such Parent Common
Shares are so allotted, issued and delivered by the Parent and any
such check is so delivered and paid. Concurrently with such
Shareholder ceasing to be a Shareholder of Exchangeable Non-Voting
Shares, the Shareholder shall be considered and deemed for all
purposes to be the holder of Parent Common Shares delivered to it
pursuant to the Insolvency Exchange Right.
4.6 EXERCISE OF INSOLVENCY EXCHANGE RIGHT SUBSEQUENT TO
RETRACTION. In the event that a Shareholder has exercised its right
under Article 27.6 of the Exchangeable Share Provisions to require
the Purchaser to redeem any or all of the Exchangeable Non-Voting
Shares held by the Shareholder (the "Retracted Shares") and is
notified by the Purchaser pursuant to section 27.6 (a) of the
Exchangeable Share Provisions that the Purchaser will not be
permitted as a result of solvency requirements of applicable law to
redeem all such Retracted Shares, and the Shareholder has not
revoked the retraction request delivered by the Shareholder to the
Purchaser pursuant to section 27.6 (a) of the Exchangeable Share
Provisions, the retraction request will constitute and will be
deemed to constitute notice from the Shareholder to the Parent to
exercise the Insolvency Exchange Right with respect to those
Retracted Shares which the Purchaser is unable to redeem. In any
such event, the Purchaser hereby agrees with the Shareholder
immediately to notify the Parent of such prohibition against the
Purchaser redeeming all of the Retracted Shares and immediately to
forward or cause to be forwarded to the Parent all relevant
materials delivered by the Shareholder to the Purchaser of the
Exchangeable Non-Voting Shares (including without limitation a copy
of the retraction request delivered pursuant to section 27.6 (a) of
the Exchangeable Share Provisions) in connection with such proposed
redemption of the Retracted Shares and the Parent will thereupon
exercise the Insolvency Exchange Right with respect to the Retracted
Shares that the Purchaser is not permitted to redeem and will
purchase such shares in accordance with the provisions of this
Article 4.
4.7 STAMP OR OTHER TRANSFER TAXES. Upon any sale of
Exchangeable Non-Voting Shares to the Parent pursuant to the
Insolvency Exchange Right or the Automatic Exchange Rights, the
share certificate or certificates representing Parent Common Shares
to be delivered in connection with the payment of the total purchase
price therefor shall be issued in the name of the Shareholder of the
Exchangeable Non-Voting Shares so sold without charge to the
Shareholder of the Exchangeable Non-Voting Shares so sold; provided,
however that such Shareholder (a) shall pay (and neither the Parent,
the Purchaser nor the Trustee shall be required to pay) any
documentary, stamp, transfer, withholding or other taxes that may be
payable in respect of any transfer involved in the issuance or
delivery of such shares to a person other than such Shareholder, or
(b) shall have established to the satisfaction of the Trustee, the
Parent and the Purchaser that such taxes, if any, have been paid.
4.8 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
Purchaser and the Parent shall give written notice thereof to the
Trustee and the Shareholders, which notice shall contain a brief
statement of the right of the Shareholders with respect to the
Insolvency Exchange Right.
4.9 QUALIFICATION OF PARENT COMMON SHARES. The Parent
represents and warrants that it has taken all actions and done all
things as are necessary under any United States or Canadian federal,
provincial or state law or regulation or pursuant to the rules and
regulations of any regulatory authority or the fulfilment of any
other legal requirement (collectively, the "Applicable Laws") as
they exist on the date hereof and will in good faith expeditiously
take all such actions and do all such things as are necessary under
Applicable Laws as they may exist in the future to cause the Parent
Common Shares to be issued and delivered pursuant to the
Exchangeable Share Provisions, the Insolvency Exchange Right or the
Automatic Exchange Rights; provided that all Parent Common Shares
will be subject to such resale restrictions as imposed by applicable
securities legislation.
4.10 RESERVATION OF PARENT COMMON SHARES. The Parent hereby
represents, warrants and covenants that it has irrevocably reserved
for issuance and will at all times keep available, free from
preemptive and other rights, out of its authorized and unissued
capital stock such number of Parent Common Shares (a) as is equal to
the sum of (i) the number of Exchangeable Non-Voting Shares issued
and outstanding from time to time and (ii) the number of
Exchangeable Non-Voting Shares issuable upon the exercise of all
rights to acquire Exchangeable Non-Voting Shares outstanding from
time to time and (b) as are now and may hereafter be required to
enable and permit the Purchaser and the Parent to meet their
respective obligations hereunder, under the Support Agreement, under
the Exchangeable Share Provisions and under any other security or
commitment pursuant to which the Parent may now or hereafter be
required to issue Parent Common Shares. To the extent permitted
under Article 5 hereof, the Trust Shares may be used to satisfy the
Parent's obligations under this Section 4.10.
4.11 AUTOMATIC EXCHANGE ON LIQUIDATION OF THE PARENT
(a) The Parent will give the Trustee and the Shareholders notice
of each of the following events (each a "Liquidation
Event") at the time set forth below:
(i) in the event of any determination by the
board of directors of the Parent to
institute voluntary liquidation, dissolution
or winding-up proceedings with respect to
the Parent or to effect any other
distribution of assets of the Parent among
its shareholders for the purpose of winding
up its affairs, at least sixty (60) days
prior to the proposed effective date of such
liquidation, dissolution, winding-up or
other distribution; or
(ii) immediately, upon the earlier of (A) receipt
by the Parent of notice of or (B) the Parent
otherwise becoming aware of any threatened
or instituted claim, suit, petition or other
proceedings with respect to the involuntary
liquidation, dissolution or winding-up of
the Parent or to effect any other
distribution of assets of the Parent
notifying its shareholders for the purpose
of winding up its affairs.
(b) Such notice shall include a brief description of the
automatic exchange of Exchangeable Non-Voting Shares for
Parent Common Shares provided for in Section 4.12(c) and the
ability of a Shareholder not to participate in such
automatic exchange.
(c) In order that the Shareholders will be able to participate
on a pro rata basis with the holders of Parent Common Shares
in the distribution of assets of the Parent in connection
with a Liquidation Event, on the fifth Business Day prior to
the effective date of a Liquidation Event (the "Liquidation
Event Effective Date") all of the then outstanding
Exchangeable Non-Voting Shares shall be automatically
exchanged for Parent Common Shares in the absence of an
affirmative written election from a Shareholder not to
participate in the automatic exchange received by the Parent
before the fifth Business Day before the Liquidation Event
Effective Date. To effect such automatic exchange the
Parent shall purchase each Exchangeable Non-Voting Share
outstanding on the fifth Business Day prior to the
Liquidation Event Effective Date and held by Shareholders,
and each Shareholder shall sell the Exchangeable Non-Voting
Shares held by it at such time, for a purchase price per
share equal to (a) the Current Market Price of one (1)
Parent Common Share on the fifth Business Day prior to the
Liquidation Event Effective Date, which shall be satisfied
in full by the Parent delivering or causing to be delivered
to the Shareholder one Parent Common Share, plus (b) an
additional amount equivalent to the full amount of all
dividends declared and unpaid on each such Exchangeable
Non-Voting Share and all dividends declared on Parent Common
Shares which have not been declared on such Exchangeable
Non-Voting Shares in accordance with section 27.3 of the
Exchangeable Share Provisions (provided that if the record
date for any such declared and unpaid dividends occurs on or
after the day of closing of such purchase and sale the
purchase price shall not include such additional amount
equivalent to such declared and unpaid dividends). In
connection with such automatic exchange, the Parent will
provide to the Shareholders an Officer's Certificate setting
forth the calculation of the purchase price for each
Exchangeable Non-Voting Share, together with a notice of the
anticipated Liquidation Event Effective Date.
(d) On the fifth Business Day prior to the Liquidation Event
Effective Date, the closing of the transaction of purchase
and sale contemplated by the automatic exchange of
Exchangeable Non-Voting Shares for Parent Common Shares
shall be deemed to have occurred, and each Shareholder shall
be deemed to have transferred to the Parent all of the
Shareholder's right, title and interest in and to its
Exchangeable Non-Voting Shares and shall cease to be a
Shareholder of such Exchangeable Non-Voting Shares and the
Parent shall deliver or cause to be delivered to the
Shareholder Parent Common Shares deliverable upon the
automatic exchange of Exchangeable Non-Voting Shares for
Parent Common Shares and shall deliver to the Shareholder a
check for the balance, if any, of the total purchase price
for such Exchangeable Non-Voting Shares. Concurrently with
such Shareholder ceasing to be a Shareholder, the
Shareholder shall be considered and deemed for all purposes
to be the holder of Parent Common Shares issued to it
pursuant to the automatic exchange of Exchangeable
Non-Voting Shares for Parent Common Shares and the
certificates held by the Shareholder previously representing
the Exchangeable Non-Voting Shares exchanged by the
Shareholder with the Parent pursuant to such automatic
exchange shall thereafter be deemed to represent Parent
Common Shares delivered to the Shareholder by the Parent
pursuant to such automatic exchange prior to the surrender
by the Shareholder of the Exchangeable Non-Voting Share
certificates. Upon the request of a Shareholder and the
surrender by the Shareholder of Exchangeable Non-Voting
Share certificates deemed to represent Parent Common Shares,
duly endorsed in blank and accompanied by such instruments
of transfer as the Parent may reasonably require, the Parent
shall deliver or cause to be delivered to the Shareholder
certificates representing Parent Common Shares of which the
Shareholder is the holder.
4.12 WITHHOLDING RIGHTS. The Parent will retain tax counsel to
advise the Parent and the Trustee on all income tax and withholding
obligations of the Parent, the Trust and the Trustee. The Parent and
the Trustee shall be entitled to deduct and withhold from the
consideration otherwise payable pursuant to this Agreement to any
Shareholder such amounts as the Parent or the Trustee is required or
permitted to deduct and withhold with respect to the making of such
payment under the United States Internal Revenue Code of 1986 as
amended (the "Code"), the Income Tax Act (Canada) or any provision
of state, local, provincial or foreign tax law. To the extent that
amounts are so withheld, such withheld amounts shall be treated for
all purposes of this Agreement as having been paid to the
Shareholder of the shares in respect of which such deduction and
withholding was made, provided that such withheld amounts are
actually remitted to the appropriate taxing authority. To the
extent that the amount so required or permitted to be deducted or
withheld from any payment to a Shareholder exceeds the cash portion
of the consideration otherwise payable to the Shareholder, the
Parent or the Trustee is hereby authorized to sell or otherwise
dispose of at fair market value such portion of the consideration as
is necessary to provide sufficient funds to the Parent or the
Trustee, as the case may be, in order to enable it to comply with
such deduction or withholding requirement and shall account to the
relevant Shareholder for any balance of such sale proceeds.
ARTICLE 5
DIVIDENDS
5.1 The holders of Exchangeable Non-Voting Shares will be
entitled to participate in all dividends declared by the Purchaser,
in accordance with the provisions of the Exchangeable Share
Provisions and the Support Agreement.
5.2 The Trustee hereby expressly waives, for and on its own
behalf and on behalf of all Shareholders, all rights to receive
dividends of every nature as may be payable to it as holder of the
Trust Shares, and the parties acknowledge that the Parent need not
include the Trust Shares in its calculations for purposes of
determining the payment of dividends, and need not pay or distribute
any dividends (either in cash, shares or otherwise) to the Trustee
as holder of the Trust Shares, provided however that such waiver may
be rescinded by the Trustee upon receipt of notice from a
Shareholder that the Purchaser has omitted to pay any dividends
otherwise payable or that either the Parent or the Purchaser
contests the right of the holders of Exchangeable Non-Voting Shares
to receive dividends, or the right to receive dividends on the
Exchangeable Non-Voting Shares that are otherwise in doubt whereupon
the Parent will pay and the Trustee shall collect all dividends paid
on the Trust Shares from time to time until the Trustee receives an
Officer's Certificate from the Purchaser certifying that the
Purchaser is in compliance with its obligations to pay dividends in
accordance with the Exchangeable Share Provisions. Any dividends
received by the Trustee on the Trust Shares shall be paid to the
Shareholders in the same manner as dividends would have been paid by
the Purchaser to the holders of Exchangeable Non-Voting Shares.
5.3 For clarity, the Voting Rights and exchange rights granted
by the Parent to the Shareholders hereunder do not in any manner
confer any additional rights to the Shareholders, including, but
subject to the provisions of the Support Agreement, any rights to
receive or participate in dividends declared or paid by the Parent.
ARTICLE 6
SUPPORT PROVISIONS
6.1 USE OF TRUST SHARES IN CONNECTION WITH SUPPORT AGREEMENT.
Pursuant to section 2.11 of the Support Agreement, the Trust Shares
provide additional security for the Parent's and the Purchaser's
obligations under the Purchase Agreement, the Exchangeable Share
Provisions and the Support Agreement. In the event that the
Purchaser and the Parent both default on their obligations to
acquire the Exchangeable Non-Voting Shares pursuant to the
Exchangeable Share Provisions, the Support Agreement, or Article 4
of this Agreement, a Shareholder may provide written notice to the
Parent, the Purchaser and the Trustee of such default. If such
default is not cured within ten (10) Business Days, the Shareholder
may provide written notice to the Trustee of such failure to cure.
The Trustee shall then use the Trust Shares to satisfy the Parent's
obligation to acquire the Exchangeable Non-Voting Shares as if the
Parent had instructed the Trustee to use the Trust Shares for such
purpose pursuant to section 4.5 hereof. The Exchangeable Non-Voting
Shares acquired by the Trustee in such transaction shall be
distributed to the Parent. In the event that the Trustee uses the
Trust Shares to so acquire Exchangeable Non-Voting Shares, and if
the Parent is obligated to pay any declared but unpaid dividends (or
dividends declared on Parent Common Shares which have not been
declared on such Exchangeable Non-Voting Shares in accordance with
section 27.3 of the Exchangeable Share Provisions), the Parent shall
remain obligated to pay such amount to the Shareholder.
6.2 APPLICATION OF TRUST SHARES. At such time as either the
Purchaser or the Parent acquires Exchangeable Non-Voting Shares from
a Shareholder, it shall provide the Trustee with an Officer's
Certificate specifying (i) the former Shareholder, (ii) the number
of Exchangeable Non-Voting Shares acquired, (iii) the form of the
acquisition, designated by the provision of the applicable agreement
(Exchangeable Share Provisions, Support Agreement or this Agreement)
and (iv) the date of such acquisition. If such certification is
made, the Trustee shall distribute to the Parent a number of Trust
Shares equal to the number of Exchangeable Non-Voting Shares so
acquired by the Parent (or, if so requested by the Parent,
distributed such Parent Common Shares to the former Shareholder on
behalf of the Parent).
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) receiving and depositing the Trust Shares from the Parent as
trustee for and on behalf of the Shareholders in accordance
with the provisions of this Agreement;
(b) distributing materials to Shareholders as provided in this
Agreement;
(c) holding title to the Trust Estate;
(d) investing any moneys forming, from time to time, a part of
the Trust Estate as provided in this Agreement; and
(e) taking such other actions and doing such other things as are
specifically provided in this Agreement.
In the exercise of such rights, powers and authorities the Trustee
shall have (and is granted) such incidental and additional rights,
powers and authority not in conflict with any of the provisions of
this Agreement as the Trustee, acting in good faith and in the
reasonable exercise of its discretion, may deem necessary or
appropriate 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.
Notwithstanding anything to the contrary herein, the Trustee shall
have no obligation to exercise any discretion in the performance of
its obligations hereunder and shall only be required to act upon the
express written instructions of the Parent, the Purchaser or the
Shareholders. 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 and in accordance
with its fiduciary duties to the Shareholders and shall exercise the
care, diligence and skill that a reasonably prudent trustee would
exercise in comparable circumstances. The Trustee shall not 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 notice 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 NO CONFLICT OF INTEREST. The Trustee represents to the
Purchaser and the Parent that at the date of execution and delivery
of this Agreement there exists no material conflict of interest in
the role of the Trustee as a fiduciary hereunder and the role of the
Trustee in any other capacity. The Trustee shall, within ninety
(90) days after it becomes aware that such a material conflict of
interest exists, either eliminate such material conflict of interest
or resign in the manner and with the effect specified in Article 9.
7.3 DEALINGS WITH THIRD PARTIES. The Purchaser and the Parent
irrevocably authorize the Trustee, from time to time, to:
(a) consult, communicate and otherwise deal with any respective
registrars, transfer agents, payment agents or any other
person or entity appointed from time to time by the Parent
in connection with any matter relating to the Exchangeable
Non-Voting Shares and Parent Common Shares; and
(b) requisition, from time to time, (i) from any such registrar,
transfer agent payment agent or other person or entity,
appointed from time to time by the Parent, as applicable,
any information readily available from the records
maintained by it which the Trustee may reasonably require
for the discharge of its duties and responsibilities under
this Agreement; and (ii) from the Purchaser, the holder of
Parent Common Shares, and any subsequent holder or agent of
such shares, the share certificates issuable upon the
exercise from time to time of the Insolvency Exchange Right
and pursuant to the Automatic Exchange Rights in the manner
specified in Article 4 hereof. The Purchaser and the Parent
irrevocably authorize their respective payment agent, or any
other authorized agent appointed from time to time by the
Parent to comply with all such requests.
7.4 BOOKS AND RECORDS. The Trustee shall keep available for
inspection, during normal business hours, by the Parent and the
Purchaser, at the Trustee's principal office in Pennsylvania,
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
Shareholders.
7.5 INCOME TAX RETURNS AND REPORTS. The Trustee will allocate
and distribute all income and losses of the Trust to the
Shareholders in each year such that the Trust is not in a position
to pay any tax or file any tax returns. Shareholders will be
individually and personally responsible for all income and losses
incurred by the Trust. In this regard, the Parent will retain tax
counsel on behalf of the Trust, and agrees to prepare and distribute
to each Shareholder all necessary tax forms for them to complete
their United States and Canadian tax returns. The Shareholders may
obtain the advice and assistance of such experts as they may
consider necessary or advisable.
7.6 INDEMNIFICATION PRIOR TO CERTAIN ACTIONS BY TRUSTEE. The
Trustee shall exercise any or all of the rights, duties, powers or
authorities vested in it by this Agreement at the request, order or
direction of any Shareholder upon such Shareholder 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.
The Trustee shall not be required to expend any of its own funds or
otherwise incur any financial liability in the exercise of any of
its rights, powers, duties or authorities, but instead shall be
entitled to be fully funded, given security and indemnity in advance
as aforesaid.
7.7 ACTIONS BY SHAREHOLDERS. Shareholders shall be entitled to
take proceedings in any court of competent jurisdiction to enforce
any of their rights hereunder as against the Purchaser and the Parent.
7.8 RELIANCE UPON DECLARATIONS. The Trustee shall not be
considered to be in contravention of any of its rights, powers,
duties and authorities hereunder if, when required, it acts and
relies in good faith upon lists, mailing labels, notices, statutory
declarations, certificates, opinions, reports or other papers or
documents furnished pursuant to the provisions hereof or required by
the Trustee to be furnished to it in the exercise of its rights,
powers, duties and authorities hereunder.
7.9 EVIDENCE AND AUTHORITY TO TRUSTEE. The Purchaser and the
Parent 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 Purchaser and/or the
Parent for the Trustee under this Agreement or as a result of any
obligation imposed under this Agreement including, without
limitation, in respect of the Insolvency 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
Purchaser and the Parent 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 7.9; or
(b) the Trustee, in the exercise of its rights, powers, duties
and authorities under this Agreement, gives the Purchaser
and/or the Parent written notice requiring it to furnish
such evidence in relation to any particular action or
obligation specified in such notice.
Such evidence shall consist of an Officer's Certificate of the
Purchaser and/or the Parent, 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 Insolvency 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 Purchaser and/or the Parent
shall be in the form of an Officer's Certificate or a statutory
declaration.
Each statutory declaration, certificate, opinion, report or other
paper or document 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:
(a) declaring that he has read and understands the provisions of
this Agreement relating to the condition in question;
(b) describing the nature and scope of the examination or
investigation upon which he based the statutory declaration,
certificate, statement or opinion; and
(c) declaring that he has made such examination or investigation
as he believes is necessary to enable him to make the
statements or give the opinions contained or expressed therein.
7.10 EXPERTS, ADVISORS AND AGENTS. The Trustee may:
(a) in relation to these presents, act and rely on the opinion
or advice of or information obtained from any solicitor,
auditor, accountant, appraiser, valuer, engineer or other
expert, whether retained by the Trustee or by the Purchaser
and/or the Parent or otherwise, and may employ such
assistants as may be necessary to the proper discharge of
its powers and duties and determination of its rights
hereunder and may pay proper and reasonable compensation for
all such legal and other advice or assistance as aforesaid
without taxation for costs and fees; and
(b) employ such agents and other assistants as it may reasonably
require for the proper discharge of its powers and duties
hereunder, and may pay reasonable remuneration for all
services performed for it,
(and shall be entitled to receive reasonable remuneration for all
services performed by it) in the discharge of the trusts hereof and
compensation for all disbursements, costs and expenses made or
incurred by it in the discharge of its duties hereunder and in the
management of the Trust without taxation for costs and fees, which
compensation reimbursement may be requested to be received in
advance prior to undertaking any actions hereunder.
7.11 INVESTMENT OF MONEYS HELD BY THE 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 State of Pennsylvania, trustees are authorized
to invest trust moneys, provided that such securities are stated to
mature within two (2) years after their purchase by the Trustee, and
the Trustee shall so invest such moneys on the written direction of
the Purchaser. Pending the investment of any moneys as hereinbefore
provided, such moneys may be deposited in the name of the Trustee in
any bank, loan or trust company authorized to accept deposits under
the laws of the United States, Canada or any state or province
thereof, at the rate of interest then current on similar deposits.
7.12 TRUSTEE NOT REQUIRED TO GIVE SECURITY. The Trustee shall
not be required to give any bond or security in respect of the
execution of the trusts, rights, duties, powers and authorities of
this Agreement or otherwise in respect of the premises.
7.13 TRUSTEE NOT BOUND TO ACT ON CORPORATION'S REQUEST. Except
as in this Agreement or otherwise specifically provided, the Trustee
shall not be bound to act in accordance with any direction or
request of the Purchaser and/or the Parent or the directors thereof
until a duly authenticated copy of the instrument or resolution
containing such direction or request shall have been delivered to
the Trustee and the Trustee shall be empowered to act and rely upon
any such copy purporting to be authenticated and believed by the
Trustee to be genuine.
7.14 CONFLICTING CLAIMS. If conflicting claims or demands are
made or asserted with respect to any interest of any Shareholder in
any Exchangeable Non-Voting Shares, including any disagreement
between the heirs, representatives, successors or assigns succeeding
to all or any part of the interest of any Shareholder in any
Exchangeable Non-Voting 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 Insolvency
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
Insolvency Exchange Right or Automatic Exchange Rights
subject to such conflicting claims or demands have been
adjudicated by a final judgment of a court of competent
jurisdiction; or
(b) all differences with respect to the Insolvency Exchange
Right or Automatic Exchange Rights subject to such
conflicting claims or demands have been conclusively settled
by a valid written agreement binding on all such adverse
claimants, and the Trustee shall have been furnished with an
executed copy of such agreement. If the Trustee elects to
recognize any claim or comply with any demand made by any
such adverse claimant, it may in its discretion require such
claimant to furnish such surety bond or other security
satisfactory to the Trustee as it shall deem appropriate
fully to indemnify it as between all conflicting claims or
demands.
7.15 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 set forth herein 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
Shareholders, subject to all the terms and conditions set forth herein.
7.16 VALIDITY OF CERTIFICATES. If at any time in the performance
of its duties under this Agreement, it shall be necessary for the
Trustee to receive, accept, act or rely upon any certificate,
notice, request, waiver, consent, receipt, direction, affidavit or
other paper, writing or document furnished to it and purporting to
have been executed or issued by the Purchaser, the Parent or the
Shareholders or their authorized officers or attorneys, the Trustee
shall be entitled to rely and act upon the genuineness and
authenticity of any such writing submitted to it. It shall not be
necessary for the Trustee to ascertain whether or not the persons
who have executed, signed or otherwise issued, authenticated or
receipted such papers, writings or documents have authority to do so
or that they are the same persons named therein or otherwise to pass
upon any requirement of such papers, writing or documents that may
be essential for their validity or effectiveness or upon the truth
and acceptability of any information contained therein which the
Trustee in good faith believes to be genuine
ARTICLE 8
COMPENSATION
8.1 FEES AND EXPENSES OF THE TRUSTEE. The Parent, Purchaser and
the Shareholders jointly and severally agree to pay to the Trustee
reasonable compensation for all of the services rendered by it under
this Agreement and will reimburse the Trustee for all reasonable
expenses and disbursements, including, without limitation, legal
fees and expenses and the reasonable compensation and disbursements
of all other advisors, agents and assistants not regularly in its
employ and 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 the Parent and the
Purchaser shall have no obligation to reimburse the Trustee for any
expenses or disbursements paid, incurred or suffered by the Trustee
in any suit or litigation in which the Trustee is determined to have
acted fraudulently or in bad faith or with gross negligence or
willful misconduct. The Trustee shall be obliged to provide only
one account or invoice to the Parent from time to time during this
Agreement in connection with any services rendered by it under this
Agreement on behalf of any of the parties.
ARTICLE 9
INDEMNIFICATION AND LIMITATION OF LIABILITY
9.1 INDEMNIFICATION OF THE TRUSTEE. The Parent, Purchaser and
the Shareholders jointly and severally agree to indemnify and hold
harmless the Trustee and each of its directors, officers, partners,
employees and agents appointed and acting in accordance with this
Agreement (collectively, the "Indemnified Parties") against all
claims, losses, damages, costs, penalties, fines and reasonable
expenses (including reasonable expenses of the Trustee's legal
counsel) which, without fraud, gross negligence, willful 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 its duties set forth in this Agreement, or any
written or oral instructions delivered to the Trustee by the Parent
or the Purchaser pursuant hereto. Subject to (ii), below, the
Parent and the Purchaser shall be entitled to participate at their
own expense in the defence and, if the Parent and the Purchaser so
elect at any time after receipt of such notice, either of them may
assume the defence of any suit brought to enforce any such claim.
In the event the Parent and/or the Purchaser assume the defence of
the Trustee, no settlement of any claim shall be entered into
without the prior approval of the Trustee; and the Trustee shall
have the right to re-assume the defence of any suit if the Parent or
Purchaser fail to actively continue such defence so assumed. The
Trustee shall have the right to employ separate counsel in any such
suit and participate in the defence thereof but the fees and
expenses of such counsel shall be at the expense of the Trustee
unless: (i) the employment of such counsel has been authorized by
the Parent or the Purchaser; or (ii) the named parties to any such
suit include both the Trustee and the Parent; or (iii) the Purchaser
and the Trustee shall have been advised by counsel acceptable to the
Parent or the Purchaser that there may be one or more legal defences
available to the Trustee which are different from or in addition to
those available to the Parent or the Purchaser (in which case the
Purchaser shall not have the right to assume the defence of such
suit on behalf of the Trustee but shall be liable to pay the
reasonable fees and expenses of counsel for the Trustee).
9.2 LIMITATION OF LIABILITY. The Trustee shall not be liable
for any act or omission by it except where such act or omission
occurs as a result of the Trustee's gross negligence or willful
misconduct. The Trustee shall not be liable for any losses or
damages due to the acts or omissions of third parties, including
without limitation, the failure by the Parent and/or the Purchaser
to comply with its obligations under this Agreement, as the case may
be. Under no circumstances shall the Trustee be liable for any
special, indirect or consequential losses or damages (including
without limitation loss of profits and penalties) whether caused by
the Trustee's negligence or that of its employees, agents or
otherwise. 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, gross negligence, willful misconduct or
bad faith on the part of the Trustee.
ARTICLE 10
CHANGE OF TRUSTEE
10.1 RESIGNATION. The Trustee, or any trustee hereafter
appointed, may at any time resign by giving written notice of such
resignation to the Parent and the Purchaser specifying the date on
which it desires to resign, provided that such notice shall never be
given less than thirty (30) days before such desired resignation
date unless the Parent and the Purchaser otherwise agree and
provided further that such resignation shall not take effect until
the date of the appointment of a successor trustee and the
acceptance of such appointment by the successor trustee. Upon
receiving such notice of resignation, the Parent and the Purchaser
shall promptly appoint a successor trustee by written instrument in
duplicate, one copy of which shall be delivered to the resigning
trustee and one copy to the successor trustee.
10.2 REMOVAL. The Trustee, or any trustee hereafter appointed at
any time on thirty (30) days' prior notice by written instrument
executed by the Parent and the Purchaser, in duplicate, one copy of
which shall be delivered to the trustee so removed and one copy to
the successor trustee. Any successor trustee to be appointed upon
the removal of the Trustee shall be appointed in accordance with the
provisions as provided under Section 10.3 of this Agreement.
10.3 SUCCESSOR TRUSTEE. Any successor trustee appointed as
provided under this Agreement shall execute, acknowledge and deliver
to the Parent and the Purchaser 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 the Parent and the Purchaser or of the
successor trustee, the trustee ceasing to act shall, upon payment of
any amounts then due it pursuant to the provisions of this
Agreement, execute and deliver an instrument transferring to such
successor trustee all of the rights and powers of the trustee so
ceasing to act. Upon the request of any such successor trustee, the
Parent and the Purchaser and such predecessor trustee shall execute
any and all instruments in writing for more fully and certainly
vesting in and confirming to such successor trustee all such rights
and powers.
10.4 NOTICE OF SUCCESSOR TRUSTEE. Upon acceptance of appointment
by a successor trustee as provided herein the Parent and the
Purchaser shall cause to be mailed notice of the succession of such
trustee hereunder to each Shareholder at the address of such
Shareholder shown on the register of Shareholders of Exchangeable
Non-Voting Shares. If the Parent or the Purchaser shall fail to
cause such notice to be mailed within ten (10) days after acceptance
of appointment by the successor trustee, the successor trustee shall
cause such notice to be mailed at the expense of the Parent and the
Purchaser.
ARTICLE 11
THE PARENT SUCCESSORS
11.1 CERTAIN REQUIREMENTS IN RESPECT OF COMBINATION, ETC. The
Parent shall not enter into any transaction (whether by way of
reconstruction, reorganization, consolidation, merger, transfer,
sale, lease or otherwise) whereby all or substantially all of its
undertaking, property and assets would become the property of any
other person or, in the case of a merger, of the continuing
corporation resulting therefrom unless:
(a) such other person or continuing corporation is a corporation
(herein called the "Parent Successor") incorporated under
the laws of any state of the United States or the laws of
Canada or any province thereof; and
(b) the Parent 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 a Agreement
supplemental hereto and such other instruments (if any) as
are satisfactory to the Trustee and in the opinion of legal
counsel to the Trustee are necessary or advisable to
evidence the assumption by the Parent Successor of liability
for all moneys payable and property deliverable hereunder
and the covenant of such Parent Successor to pay and deliver
or cause to be delivered the same and its agreement to
observe and perform all of the covenants and obligations of
the Parent under this Agreement.
11.2 VESTING OF POWERS IN SUCCESSOR. Whenever the conditions of
Section 11.1 hereof have been duly observed and performed, the
Trustee, if required by Section 11.1 hereof, the Parent Successor
and the Purchaser shall execute and deliver the supplemental
Agreement provided for in Article 12 and thereupon the Parent
Successor shall possess and from time to time may exercise each and
every right and power of the Parent under this Agreement in the name
of the Parent 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 Parent or any officers of the Parent may be
done and performed with like force and effect by the directors or
officers of such the Parent Successor.
11.3 WHOLLY-OWNED SUBSIDIARIES. Nothing herein shall be
construed as preventing the amalgamation, merger or sale of any
wholly-owned subsidiary of the Parent with or into the Parent, the
winding-up or merger of any wholly-owned subsidiary of the Parent
with or into the Parent, or the winding-up, liquidation or
dissolution of any wholly-owned subsidiary of the Parent, and
nothing herein shall prohibit the Parent in any manner whatsoever
from selling, transferring or otherwise disposing of any and all of
the assets of the Parent including, without limitation, any and all
of the assets of such subsidiary provided that all of the assets of
such subsidiary are transferred to the Parent or another
wholly-owned subsidiary of the Parent.
ARTICLE 12
AMENDMENTS AND SUPPLEMENTAL TRUST AGREEMENTS
12.1 AMENDMENTS, MODIFICATIONS, ETC. This Agreement may
not be amended or modified except by an agreement in writing
executed by the Purchaser, the Parent and the Shareholders in
accordance with section 27.10 of the Exchangeable Share Provisions.
12.2 MEETING TO CONSIDER AMENDMENTS. The Purchaser, at the
request of the Parent shall call a meeting or meetings of the
Shareholders 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 Purchaser, the Exchangeable Share Provisions and all
applicable laws.
12.3 CHANGES IN CAPITAL OF PARENT OR THE PURCHASER. At all times
after the occurrence of any event effected pursuant to section 2.7
or 2.8 of the Support Agreement, as a result of which either Parent
Common Shares or the Exchangeable Non-Voting Shares or both are in
any way changed, this Agreement shall forthwith be amended and
modified as necessary in order that it shall apply with full force
and effect, mutatis mutandis, to all new securities into which
Parent Common Shares or the Exchangeable Non-Voting Shares or both
are so changed and the parties hereto shall execute and deliver a
supplemental Agreement giving effect to and evidencing such
necessary amendments and modifications.
12.4 EXECUTION OF SUPPLEMENTAL AGREEMENTS. No amendment to or
modification or waiver of any of the provisions of this Agreement
otherwise than as permitted hereunder shall be effective unless made
in writing and signed by all of the parties hereto. From time to
time the parties 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 Parent Successors to the Parent
and the covenants of and obligations assumed by each such
Parent Successor in accordance with the provisions of
Article 11 and the successor of any successor trustee in
accordance with the provisions of Article 10;
(b) making any additions to, deletions from or alterations of
the provisions of this Agreement or the Insolvency Exchange
Right or the Automatic Exchange Rights which, in the opinion
of the Parent and its counsel, will not be prejudicial to
the interests of the Shareholders as a whole or are in the
opinion of counsel to the Parent necessary or advisable in
order to incorporate, reflect or comply with any legislation
the provisions of which apply to the parties or this
Agreement; and
(c) for any other purposes not inconsistent with the provisions
of this Agreement, including without limitation to make or
evidence any amendment or modification to this Agreement as
contemplated
hereby, provided that, in the opinion of the Parent and its
counsel, the rights of the Trustee and the Shareholders as a
whole will not be prejudiced thereby.
ARTICLE 13
TERMINATION
13.1 TERM. The Trust created by this Agreement shall continue
until the earliest to occur of the following events:
(a) no outstanding Exchangeable Non-Voting Shares are held by
any Shareholder;
(b) each of the Purchaser and the Parent acts in writing to
terminate the Trust and such termination is approved by the
Shareholders of the Exchangeable Non-Voting Shares in
accordance with section 27.10 of the Exchangeable Share
Provisions; and
(c) December 31, 2098.
13.2 SURVIVAL OF AGREEMENT. Subject to the provisions of Section
13.1(b) hereof, this Agreement shall survive any termination of the
Trust and shall continue until there are no Exchangeable Non-Voting
Shares outstanding held by any Shareholder; and for clarity, that
the provisions of Articles 8 and 9 shall survive any such
termination of the Trust or this Agreement.
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 INUREMENT. This Agreement shall be binding upon and endure
to the benefit of the parties hereto and their respective successors
and permitted assigns and to the benefit of the Shareholders.
14.3 NOTICES TO PARTIES. All notices and other communications
between the parties hereunder shall be in writing and shall be
deemed to have been given if delivered personally or by confirmed
facsimile to the parties at the following addresses (or at such
other address for such party as shall be specified in like notice):
if to the Parent or the Purchaser:
Suite 1405 - ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
if to the Trustee at:
Stocktrans, Inc.
▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇
Ardmore,
if to the Shareholders:
Suite 1405 - 1959 ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇
Any notice or other communication given personally shall be deemed
to have been given and received upon delivery thereof and if given
by telecopy shall be deemed to have been given and received on the
date of receipt thereof unless such day is not a Business Day in
which case it shall be deemed to have been given and received upon
the immediately following Business Day.
14.4 NOTICE OF SHAREHOLDERS. Any and all notices to be given and
any documents to be sent to any Shareholders may be given or sent to
the address of such Shareholder shown on the register of
Shareholders in any manner permitted by the by-laws of the Purchaser
from time to time in force in respect of notices to shareholders and
shall be deemed to be received (if given or sent in such manner) at
the time specified in such by-laws, the provisions of which by-laws
shall apply mutatis mutandis to notices or documents as aforesaid
sent to such Shareholders.
14.5 RISK OF PAYMENTS BY MAIL. Whenever payments are to be made
or documents are to be sent to any Shareholder by the Trustee or by
the Purchaser, or by such Shareholder to the Trustee or to the
Parent or the Purchaser, the making of such payment or sending of
such document sent through the mail shall be at the risk of the
Purchaser, in the case of payments made or documents sent by the
Trustee or the Purchaser, and the Shareholder, in the case of
payments made or documents sent by the Shareholder.
14.6 COUNTERPARTS. This Agreement may be executed in
counterparts, each of which shall be deemed an original, but all of
which taken together shall constitute one and the same instrument.
14.7 JURISDICTION. This Agreement shall be construed and
enforced in accordance with the laws of the State of Pennsylvania
and the laws of the United States applicable therein, except insofar
as it relates to internal governance of the Purchaser, which is to
be construed and enforced in accordance with the laws of the
Province of Nova Scotia and the laws of Canada applicable therein.
14.8 ATTORNMENT. The Parent and the Purchaser each agree that
any action or proceeding arising out of or relating to this
Agreement may be instituted in the courts of the State of Delaware,
each waives any objection which it may have now or hereafter to the
venue of any such action or proceeding, irrevocably submits to the
non-exclusive jurisdiction of the said courts in any such action or
proceeding, agrees to be bound by any judgment of the said courts
and not to seek, and hereby waives, any review of the merits of any
such judgment by the courts of any other jurisdiction.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the date first above written.
WARWICK ACQUISITION CORPORATION
By:
Name:
Title:
▇▇▇▇▇▇▇.▇▇▇ INC.
By:
Name:
Title:
STOCKTRANS, INC.
By:
Name:
Title:
BUTTERNUT CAPITAL LIMITED
By:
Name:
Title:
INTERNATIONAL SHAREHOLDINGS CORP.
By:
Name:
Title:
SEISMIC INVESTMENTS LTD.
By:
Name:
Title:
AMERY ASSOCIATES INC.
By:
Name:
Title:
▇▇▇▇▇▇ EQUITY LIMITED
By:
Name:
Title:
ANTIGHONISH LIMITED
By:
Name:
Title:
STRATHGLEN CAPITAL LIMITED
By:
Name:
Title:
GREENSTED EQUITIES LIMITED
By:
Name:
Title:
ARRENDADORA SOLARSA S.A.
By:
Name:
Title:
TRANSATLANTIC CO., S.A.
By:
Name:
Title:
CHEETAH SYSTEMS LTD.
By:
Name:
Title:
SHAFTESBURY GLOBAL LIMITED
By:
Name:
Title:
MIDLAND SHAREHOLDINGS LIMITED
By:
Name:
Title:
▇. ▇▇▇▇▇▇▇ FAMILY TRUST
By:
Name:
Title:
▇. ▇▇▇▇ FAMILY TRUST
By:
Name:
Title:
▇▇▇▇▇ FAMILY INVESTMENT TRUST
By:
Name:
Title:
▇. ▇▇▇▇▇ FAMILY TRUST
By:
Name:
Title:
▇. ▇▇▇▇▇▇▇ FAMILY TRUST
By:
Name:
Title:
3024704 NOVA SCOTIA LIMITED
By:
Name:
Title:
EVERGREEN (PRIVATE) TRUST COMPANY
By:
Name:
Title:
SIGNED, SEALED AND DELIVERED
BY ▇▇▇▇▇▇ ▇▇▇▇ in the presence of:
___________________________
___________________________________ ▇▇▇▇▇▇ ▇▇▇▇
Signature of Witness
___________________________________
Name of Witness
___________________________________
Address of Witness
___________________________________
SIGNED, SEALED AND DELIVERED
BY ▇▇▇▇ ▇▇▇▇▇▇ in the presence of:
___________________________
___________________________________ ▇▇▇▇ ▇▇▇▇▇▇
Signature of Witness
___________________________________
Name of Witness
___________________________________
Address of Witness
___________________________________
SIGNED, SEALED AND DELIVERED
BY ▇▇▇▇ ▇▇▇▇▇▇ SR. in the presence of:
___________________________
___________________________________ ▇▇▇▇ ▇▇▇▇▇▇
SR.
Signature of Witness
___________________________________
Name of Witness
___________________________________
Address of Witness
___________________________________
SIGNED, SEALED AND DELIVERED
BY ▇▇▇▇ ▇▇▇▇▇▇ JR. in the presence of:
___________________________
___________________________________ ▇▇▇▇ ▇▇▇▇▇▇
JR.
Signature of Witness
___________________________________
Name of Witness
___________________________________
Address of Witness
___________________________________