HOLLINGER INC.
Exhibit
99.1
EXECUTION
COPY
–
and –
WESTWIND
PARTNERS INC.
–
and –
COMPUTERSHARE
TRUST COMPANY OF CANADA
April
7,
2004
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TABLE
OF CONTENTS
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Article 1.
Principles of Interpretation
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2
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1.1
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Definitions
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2
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1.2
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Schedules
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4
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1.3
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Headings
and Sections
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5
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1.4
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Gender
and Number
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5
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1.5
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Currency
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5
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1.6
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Severability
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5
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1.7
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Entire
Agreement
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5
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1.8
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Governing
Law
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5
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1.9
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Calculation
of Time
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6
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1.1
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Conflict
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6
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1.11
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Successor
Legislation
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6
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Article 2.
THE ESCROW
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6
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2.1
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Appointment
of Escrow Agent
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6
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2.2
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Delivery
of Deposited Shares
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6
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2.3
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Acceptance
of Escrow
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6
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2.4
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Voting
of Escrowed Shares
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7
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2.5
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Care
and Custody of the Escrowed Shares
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7
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Article 3.
RETRACTION OF SERIES II PREFERENCE SHARES
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7
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3.1
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Right
of Retraction
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7
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3.2
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Exercise
of Retraction Right
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7
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3.3
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Fractions
of International A Shares
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9
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3.4
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Payments
by the Escrow Agent
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9
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3.5
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Legends
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9
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3.6
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Cancellation
of Series II Preference Share Certificates
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10
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3.7
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Acknowledgements
by the Escrow Agent
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10
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3.8
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Covenant
of the Corporation with Respect to Escrowed Shares
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11
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Article 4.
RELEASE OF ESCROWED SHARES TO THE CORPORATION
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11
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4.1
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Release
of Escrowed Shares in Connection with an Offer
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11
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4.2
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Release
of Escrowed Shares in Connection with a Sale
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12
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4.3
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Release
of Escrowed Shares in Connection with Purchases of Series II Preference
Shares by the Corporation
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12
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Article 5.
INVESTMENT OF ESCROWED FUNDS
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12
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5.1
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Investment
of Escrowed Funds
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12
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5.2
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Segregation
of Escrowed Funds
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13
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Article 6.
COVENANTS OF THE CORPORATION
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13
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6.1
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Escrow
Agent's Remuneration, Expenses and Indemnification
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13
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6.2
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Accounting
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13
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6.3
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Payments
by Escrow Agent
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14
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Article 7.
SUPPLEMENTAL AGREEMENTS
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14
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7.1
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Provision
for Supplemental Agreements for Certain Purposes
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14
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Article 8.
CONCERNING THE ESCROW AGENT
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15
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8.1
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Rights
and Duties of the Escrow Agent
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15
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8.2
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Evidence,
Experts and Advisers
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16
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8.3
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Documents,
Monies, etc. Held by Escrow Agent
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16
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ii
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8.4
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Actions
by Escrow Agent to Protect Interest
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16
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8.5
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Escrow
Agent Not Required to Give Security
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17
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8.6
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Protection
of Escrow Agent
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17
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8.7
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Replacement
of Escrow Agent; Successor by Merger
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17
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8.8
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Conflict
of Interest
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18
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8.9
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Acceptance
of Appointment
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18
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8.1
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Escrow
Agent Not to be Appointed Receiver
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18
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Article 9.
GENERAL
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18
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9.1
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Notice
to the Corporation, the Agent or the Escrow Agent
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18
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9.2
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Ownership
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20
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9.3
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Satisfaction
and Discharge of Agreement
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20
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9.4
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Time
of the Essence
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21
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9.5
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Counterparts
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21
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THIS
AGREEMENT is made this 7th day of April, 2004
AMONG:
XXXXXXXXX
INC., a company existing under the laws of Canada.
(the
"Corporation")
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and
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WESTWIND
PARTNERS INC., a company existing under the laws of the Province of
Ontario
(the
"Agent")
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and
COMPUTERSHARE
TRUST COMPANY OF CANADA, a trust company incorporated under the laws of
Canada and authorized to carry on business as a trust company in all provinces
of Canada
(the
"Escrow Agent")
RECITALS
WHEREAS:
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A.
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As
at the date hereof: (i) there are 3,775,990 Series II Preference
Shares
(as defined below) issued and outstanding; and (ii) the Corporation
has
created, issued and sold 20,096,919 Subscription Receipts (as defined
below) to the purchasers arranged by the Agent, such Subscription
Receipts
representing the right to receive 20,096,919 Series II Preference
Shares
in accordance with the terms and conditions of the Subscription Receipt
Agreement (as defined below);
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B.
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The
holders of the Series II Preference Shares are entitled, subject
to the
provisions and procedures set out in the Articles (as defined below),
to
make an irrevocable election to require the Corporation to redeem
all or
any of the Series II Preference Shares registered in the name of
a holder
in consideration for, at the Corporation's option: (i) the transfer
to
such holder of: (x) subject to adjustment from time to time in accordance
with Sections 5.8 and 5.9 of the Articles, 0.46 (the
"Exchange Number") of an International A Share (as
defined below) for each Series II Preference Share to be redeemed;
and (y)
such number or fraction of an International A Share as is equal to
the
value of the amount of any dividends or distributions declared and
unpaid
on the Series II Preference Shares; or (ii) cash of an equivalent
value therefor;
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C.
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In
connection with the purchase and sale of the Subscription Receipts,
the
Corporation has agreed that as soon as practicable following the
Automatic
Exercise Date (as defined below), it would deposit or cause to be
deposited into escrow with the Escrow Agent 10,981,538 International
A
Shares (not subject to any pledge, lien, hypothecation or other security
interest) (the "Deposited Shares") to be held in escrow
and released by the Escrow Agent from time to time in order to satisfy
retraction requests from the holders of all of the issued and outstanding
Series II
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Preference
Shares where the Corporation elects to satisfy such requests by way
of a
transfer of International A Shares, subject to all or a portion of
the
Escrowed Shares being. released from escrow upon the terms and conditions
set forth herein;
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D.
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The
Escrow Agent is the duly appointed registrar and transfer agent for
the
Series II Preference Shares and the International A
Shares;
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E.
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The
Escrow Agent has agreed with the consent of the parties, to act as
escrow
agent and exchange agent on behalf of the Corporation to effect the
exchange of Series II Preference Shares for Escrowed Shares, cash
and/or
other property pursuant to the rights, privileges, restrictions and
conditions attaching to the Series II Preference Shares, all in accordance
with this Agreement; and
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F.
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The
foregoing recitals are made solely by the Corporation and the Agent,
as
the context requires, and not by the Escrow
Agent;
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NOW
THEREFORE, in consideration of the mutual covenants and agreements
contained in this Agreement and other good and valuable consideration (the
receipt and sufficiency of which are hereby acknowledged), the parties hereto
covenant, agree and declare as follows:
ARTICLE 1.
PRINCIPLES
OF INTERPRETATION
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1.1
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Definitions
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In
this
Agreement and the recitals, unless there is something in the subject matter
or
context inconsistent therewith or unless otherwise expressly provided, the
following terms shall have the respective meanings set out below and grammatical
variations of such terms shall have corresponding meanings:
"Affiliate"
shall have the meaning ascribed thereto in the Canada Business Corporations
Act;
"Agreement"
means this escrow and custodial agreement and all schedules attached to this
escrow and custodial agreement, in each case as they may be amended or
supplemented from time to time, and the expressions "hereof",
"herein", "hereto",
"hereunder", "hereby" and similar expressions
refer to this Agreement;
"Articles"
means the articles of amalgamation of the Corporation, as amended from time
to
time, setting out the rights, privileges, restrictions and conditions attaching
to the Series II Preference Shares;
"Automatic
Exercise Date" shall have the meaning ascribed thereto in the
Subscription Receipt Agreement;
"Business
Day" means a day other than a Saturday, Sunday or any other day that
is
treated as a statutory holiday in the jurisdiction in which the Corporation's
registered office is located;
"Cash
Redemption Notice" means a notice evidencing the exercise by the
Corporation of its right to redeem the number of Retracted Shares specified
in
such notice for cash pursuant to Section 4.2 of the Articles, substantially
in
the form annexed hereto as Schedule "B";
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2 -
"Cash
Redemption Payment" shall have the meaning ascribed thereto in
subsection 3.2(b);
"Current
Class A Market Price" shall have the meaning ascribed thereto in the
Articles;
"Deadline"
means 5:00 p.m. (Toronto time) on June 15, 2004;
"Deposited
Shares" shall have the meaning ascribed thereto in the recitals to this
Agreement;
"Designated
Office" means the principal stock transfer office of the Escrow Agent
from time to time in the City of Toronto;
"Disbursement
Notice" shall have the meaning ascribed thereto in subsection 3.2(b),
substantially in the form annexed hereto as Schedule "C";
"Escrowed
Funds" means, collectively, all monies or other property received by
the Escrow Agent from or as directed by the Corporation pursuant to subsection
3.2(d), Section 3.3 and Article 4 of this Agreement and all proceeds of
investment and reinvestment thereof from time to time;
"Escrowed
Shares" means such Deposited Shares as remain in escrow with the Escrow
Agent hereunder from time to time pursuant to the terms and conditions of this
Agreement, as the same may be reorganized or reclassified from time to
time;
"Exchange
Number" shall have the meaning ascribed thereto in the recitals to this
Agreement;
"Fractional
Cash Payment" shall have the meaning ascribed thereto in Section
3.3;
"including"
means including without limitation and shall not be construed to limit any
general statement which it follows to the specific or similar items or matters
immediately following it;
"Indenture"
shall have the meaning ascribed thereto in the Subscription Receipt
Agreement;
"International"
means Xxxxxxxxx International Inc., a corporation existing under the laws of
the
State of Delaware;
"International
A Shares" means shares of Class A Common Stock of
International;
"Offer"
means a formal tender offer, exchange offer, issuer bid, takeover bid or similar
transaction commenced in accordance with applicable securities laws (including
the U.S. Securities Act);
"person"
includes any individual, corporation, limited partnership, general partnership,
joint stock company or association, joint venture association, company, trust,
bank, trust company, land trust, investment trust society or other entity,
organization, syndicate, whether incorporated or not, trustee, executor or
other
legal personal representative, and governments and agencies and political
subdivisions thereof;
"Qualified
Investments" means those investments in which the Escrowed Funds may be
invested and reinvested in accordance with this Agreement, being short term
interest bearing or discount debt obligations issued or guaranteed by the
Government of Canada or a Province or a Canadian chartered bank or trust
company, provided that each such obligation is rated, as applicable, in one
of
the highest
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3 -
three
sub-categories of short-term debt of R1 (high), R1 (mid) or R1 (low) or for
long-term debt of AA- or greater by DBRS Inc. or an equivalent rating by CBRS
Inc.;
"Regulation
S" means Regulation S promulgated under the U.S. Securities
Act;
"Retracted
Shares" shall have the meaning ascribed thereto in subsection
3.2(a);
"Retraction
Notice" means an irrevocable request in writing by a Shareholder to
retract any or all of the Series II Preference Shares registered in the name
of
such Shareholder in accordance with the Articles, substantially in the form
annexed hereto as Schedule "A";
"Retraction
Date" means any Business Day on which the documents specified in
subsection 3.2(a) are duly tendered by or on behalf of a Shareholder to the
Escrow Agent in respect of the exercise of his, her or its retraction right
pursuant to Article 5 of the Articles;
"Sale"
means the sale of all or substantially all of the assets of the Corporation
as
an entirety or substantially as an entirety to any person under circumstances
such that, following the completion of such sale, the Corporation will cease
to
own, directly or indirectly, any shares of capital stock of International,
other
than by way of an Offer made in respect of the International A Shares and the
shares of Class B Capital Stock of International;
"Series
II Preference Shares" means the exchangeable non-voting preference
shares Series II in the capital of the Corporation;
"Shareholders"
means persons who are registered owners of the Series II Preference Shares
from
time to time and "Shareholder" means any one of
them;
"Subscription
Receipt Agreement" means the subscription receipt agreement dated the
date hereof among the Corporation, the Agent and Computershare Trust Company
of
Canada relating to, among other things, the creation, issue and sale of the
Subscription Receipts, as the same be hereinafter amended from time to
time;
"Subscription
Receipts" means the subscription receipts created, issued and
certificated under the terms and conditions of the Subscription Receipt
Agreement and from time to time outstanding;
"United
States" means the United States of America, its territories and
possessions, any state of the United States, and the District of
Columbia;
"U.S.
Person" means U.S. Person as that term is defined in Regulation
S;
"U.S.
Securities Act" means the United States Securities Act of
1933, as amended; and
"Written
Request of the Corporation" and "Certificate of the
Corporation" mean, respectively, a written request or certificate
signed in the name of the Corporation by any one director or officer of the
Corporation, and may consist of one or more instruments so
executed.
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1.2
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Schedules
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The
following are the schedules attached to this Agreement, which schedules are
deemed to be a part hereof and are hereby incorporated by reference
herein:
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4 -
"A" - Form
of Retraction Notice
"B" - Form
of Cash Redemption
"C" - Form
of Disbursement Notice
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1.3
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Headings
and Sections
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The
division of this Agreement into articles, sections and subsections and the
insertion of headings and a table of contents are for convenience of reference
only and shall not affect the construction or interpretation hereof. Unless
otherwise indicated, any reference in this Agreement to an article, section,
subsection or schedule refers to the specified article, section, subsection
of
or schedule to this Agreement.
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1.4
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Gender
and Number
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In
this
Agreement, unless the context otherwise requires, words importing the singular
include the plural and vice versa and words importing gender include all
genders.
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1.5
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Currency
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Except
where otherwise expressly provided, all amounts expressed in this Agreement
in
terms of money are references to the lawful currency of Canada and all payments
required to be made hereunder shall be made in Canadian dollars.
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1.6
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Severability
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The
provisions of this Agreement are severable and, in the event that any court
or
officials of any regulatory agency of competent jurisdiction shall determine
that any one or more of the provisions or part of the provisions contained
in
this Agreement shall, for any reason, be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provision or part of a provision of this Agreement
and this Agreement shall be reformed and construed as if such invalid or illegal
or unenforceable provision, or part of such provision, had never been contained
herein, so that such provisions would be valid, legal and enforceable to the
maximum extent possible.
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1.7
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Entire
Agreement
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Except
as
expressly provided in this Agreement, this Agreement and the Subscription
Receipt Agreement constitute the entire agreement among all or some of the
parties pertaining to the subject matter hereof and supersede all prior
agreements, understandings, negotiations and discussions, whether oral or
written.
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1.8
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Governing
Law
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This
Agreement shall be governed by and construed in accordance with the laws of
the
Province of Ontario and the federal laws of the Canada applicable therein,
regardless of the laws that might otherwise govern under applicable principles
of conflicts of laws thereof, except to the extent mandatorily governed by
the
law of another jurisdiction. In connection with the foregoing, each of the
parties hereto: (i) irrevocably attorns to the exclusive jurisdiction and venue
of the Courts of the Province of Ontario in connection with any matter or
dispute based upon or arising out of this Agreement or matters contemplated
herein; (ii) agrees that process may be served upon them in any manner
authorized by the
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5 -
laws
of
the Province of Ontario for such persons; and (iii) waives and covenants not
to
assert or plead any objection which they might otherwise have to such
jurisdiction, venue and such process.
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1.9
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Calculation
of Time
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Unless
otherwise specified, time periods within or following which any payment is
to be
made or act is to be done shall be calculated by extending the period to the
requisite time on the next Business Day following such day if the last day
of
the period is not a Business Day.
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1.10
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Conflict
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In
the
event of a conflict or inconsistency between a provision in the body of this,
Agreement and the Articles, the provision in the Articles shall prevail to
the
extent of the inconsistency.
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1.11
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Successor
Legislation
|
All
references herein to any law, by-law, rule, regulation, order or act of any
government, governmental body or other regulatory body or authority shall be
construed as a reference thereto as amended or re-enacted from time to time
or
as a reference to any successor thereto.
ARTICLE 2.
THE
ESCROW
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2.1
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Appointment
of Escrow Agent
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The
Corporation hereby appoints the Escrow Agent to act as: (a) escrow agent with
respect to the Escrowed Shares and the Escrowed Funds and to disburse and deal
with the same as provided herein; and (b) exchange agent on behalf of the
Corporation to effect the exchange of Series II Preference Shares for Escrowed
Shares, cash and/or other property pursuant to the rights, privileges,
restrictions and conditions attaching to the Series II Preference Shares as
provided herein. The Escrow Agent hereby accepts such appointments on the terms
and conditions herein. No trust is intended to be, or is or will be, created
hereby and the Escrow Agent shall owe no duties hereunder as
trustee.
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2.2
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Delivery
of Deposited Shares
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On
or
before the Automatic Exercise Date, the Corporation shall give an irrevocable
direction to the appropriate party or parties under the Indenture to deliver
the
Deposited Shares to the Escrow Agent and, as soon as practicable on or following
the Automatic Exercise Date, the Corporation shall cause such party or parties
to, subject to Article 4 hereof, irrevocably deposit or cause to be deposited
into escrow with the Escrow Agent the Deposited Shares to be retained and held
by the Escrow Agent in escrow for the benefit of the Shareholders in accordance
with the terms and conditions of this Agreement. Except to the extent
contemplated hereunder (including Sections 4.1 and 4.2), from and after delivery
of the Escrowed Shares to the Escrow Agent, the Corporation covenants that
it
will not encumber, pledge, charge or otherwise create a security interest in
or
over all or any the Escrowed Shares.
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2.3
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Acceptance
of Escrow
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The
Escrow Agent hereby agrees to accept and to hold and retain the Escrowed Shares
and the Escrowed Funds in escrow for and on behalf of the persons who have
an
interest therein pursuant hereto,
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6 -
shall
disburse and deal with the Escrowed Shares and the Escrowed Funds, and at all
times shall keep the Escrowed Shares and the Escrowed Funds segregated and
in
separate accounts in the name of the Corporation or as otherwise directed by
the
Corporation, all on the terms and subject to the conditions hereof.
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2.4
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Voting
of Escrowed Shares
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Notwithstanding
anything herein contained, the Corporation retains and shall at all times have
the sole right to vote (whether in person or by proxy) and exercise all voting
rights attached to the Escrowed Shares on any matters, questions, proposals
or
propositions whatsoever that may properly come before the shareholders of
International or otherwise. Except to the extent contemplated hereunder
(including Sections 4.1 and 4.2), the Corporation covenants that it will not
exercise the voting rights attached to the Escrowed Shares in a manner which
impairs any of the rights, privileges, restrictions and conditions attaching
to
the Series II Preference Shares. The Escrow Agent shall not be responsible
for
the voting rights attached to the Escrowed Shares.
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2.5
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Care
and Custody of the Escrowed
Shares
|
The
Escrow Agent need not see to the collection of cash or stock dividends on,
or
exercise any option or right in connection with, the Escrowed Shares and need
not protect or preserve them from depreciating in value or becoming worthless
and is released from all responsibility for any loss of value. The Escrow Agent
shall be bound to exercise in the physical keeping of the Escrowed Shares only
the same degree of care as it would exercise with respect to its own securities,
kept at the same place.
ARTICLE 3.
RETRACTION
OF SERIES II PREFERENCE SHARES
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3.1
|
Right
of Retraction
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Each
Shareholder has the right to retract all or any of the Series IT Preference
Shares registered in the name of such Shareholder in accordance with the rights,
privileges, restrictions and conditions attaching to the Series II Preference
Shares contained in the Articles. The Escrow Agent will from time to time
provide a form of Retraction Notice to any Shareholder or financia1 agent
thereof who requests the same.
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3.2
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Exercise
of Retraction Right
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(a)
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After
due receipt by the Escrow Agent at its Designated Office of any
certificate or certificates representing Series II Preference Shares
to be
retracted, duly completed and endorsed for transfer by the Shareholder
in
the manner prescribed therein and in accordance with such reasonable
requirements as the Escrow Agent may prescribe, together with a duly
completed Retraction Notice specifying the number of Series II Preference
Shares to be retracted (the "Retracted Shares"), the
Escrow Agent shall, within one (1) Business Day thereof, notify the
Corporation in writing as to: (i) the number of Retracted Shares
tendered
for retraction; and (ii) the Retraction Date for such Retracted Shares.
If
the Corporation shall receive a Retraction Notice and/or any certificate
or certificates representing series II Preference Shares to be retracted
and/or, any other documents in respect of a retraction of Series
II
Preference Shares, it shall forthwith forward same to the Escrow
Agent.
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7 -
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(b)
|
Upon
receipt of the notice from the Escrow Agent contemplated in subsection
3.2(a), the Corporation shall notify and direct the Escrow Agent
in
writing (the "Disbursement Notice") within three (3) days
of the Retraction Date as to: (a) the number of Escrowed Shares and
the
amount of the Fractional Payment, if any, to be delivered to the
Shareholder in respect of the Retracted Shares specified in the notice
of
the Escrow Agent; and/or (b) the election by the Corporation of its
right
to redeem the number of Retracted Shares specified in the Disbursement
Notice for cash (the "Cash Redemption Payment") pursuant
to Section 4.2 of the Articles. If the Corporation so directs in
the
Disbursement Notice, within three (3) days of the Retraction Date,
the
Escrow Agent shall send by prepaid first class mail or deliver to
each
registered holder of the Retracted Shares at the address specified
in its
Retraction Notice a Cash Redemption Notice evidencing the exercise
of the
Corporation's right to redeem the number of Retracted Shares specified
in
such Cash Redemption Notice for the Cash Redemption Payment pursuant
to
Section 4.2 of the Articles. Notwithstanding anything to the contrary
herein contained or in Section 4.2 of the Articles, the Corporation
covenants that it shall not exercise its right to redeem any or all
of the
Retracted Shares from time to time for cash pursuant to Section 4.2
of the
Articles for a period of six (6)months from the date
hereof.
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(c)
|
Upon
receipt of the Disbursement Notice and, if applicable, subject to
the
Escrow Agent first sending the Cash Redemption Notice as contemplated
in
subsection 3.2(b), the Escrow Agent shall send or cause to be sent
via
regular mail to or to the order of the applicable registered holder
of the
Retracted Shares at its address on the register of Series II
Preference Shares not later than five (5) Business Days after the
Retraction Date: (i) a certificate or certificates registered in
the name
of the registered holder of the Retracted Shares representing that
number
of Escrowed Shares to which such holder is entitled as specified
in the
Disbursement Notice, subject to Section 3.5 hereof; (ii) a cheque
payable
to or to the order of such holder in the amount of the Cash Redemption
Payment; (iii) a cheque payable to or to the order of such holder
in the
amount of the Fractional Cash Payment; and/or (iv) a certificate
representing the requisite number of Series II Preference Shares
if less
than all of the Shareholder's Series II Preference Shares are being
retracted.
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(d)
|
In
the event that Corporation elects to redeem in cash all or any of
the
Retracted Shares specified in the Disbursement Notice for the Cash
Redemption Payment, the Escrow Agent shall, as soon as practicable
after
first sending the Cash Redemption Notice as contemplated in subsection
3.2(b), realize on the Qualified Investments in which the Escrowed
Funds,
if any, have been invested and/or take such steps as will allow it
to
disburse to the registered holder of Retracted Shares an amount equal
to
the Cash Redemption Payment in accordance with subsection 3.2(c).
In the
event that the Escrowed Funds, if any, are less than the Cash Redemption
Payment, subject to Section 5.6 of the Articles, the Corporation
shall forthwith deliver to the Escrow Agent the amount of cash necessary
in order that the Escrow Agent shall be able to make the Cash Redemption
Payment as contemplated in subsection
3.2(c).
|
|
(e)
|
The
Escrow Agent is authorized to request from any person tendering
certificates for retraction such additional documents as the Escrow
Agent
may consider appropriate under the circumstances. The Escrow Agent
will
promptly refer all questions concerning retractions or certificates
to the
Corporation. Subject to any directions received from the Corporation,
the
Escrow Agent is authorized to pass upon the adequacy of the items
received
by it in its capacity as registrar and transfer agent of the Corporation,
and where inadequacies exist as to any matter, to take such action
as the
Escrow Agent may deem appropriate in seeking to cause such inadequacies
to
be remedied.
|
-
8 -
|
3.3
|
Fractions
of International A Shares
|
Notwithstanding
anything herein contained, the Escrow Agent shall not deliver a fraction of
an
International A Share on a retraction of Series II Preference Shares. In lieu
thereof, the Corporation shall instruct the Escrow Agent to realize on the
Qualified Investments in which the Escrowed Funds, if any, have been invested
and/or take such steps as will allow it make a cash payment equal to the amount
which would have been satisfied by the fraction of an International A Share
in accordance with the Articles (the "Fractional Cash
Payment"). In the event that the Escrowed Funds, if any, are less than
the Fractional Cash Payment, the Corporation shall forthwith deliver to the
Escrow Agent the amount of cash necessary in order that the Escrow Agent shall
be able to make the Fractional Cash Payment as contemplated in subsection
3.2(c).
|
3.4
|
Payments
by the Escrow Agent
|
The
Escrow Agent shall only make payments under subsections 3.2(c) and (d) and
Section 3.3 to the extent that the Escrowed Funds are sufficient or the
necessary funds have been provided to the Escrow Agent by the Corporation as
contemplated in Sections 3.2 and 3.3.
|
3.5
|
Legends
|
|
(a)
|
The
Escrow Agent understands and acknowledges that appropriate legends,
as
follows, will be placed upon the Escrowed Shares delivered upon retraction
of Series II Preference Shares and each certificate representing
Escrowed
Shares delivered in exchange therefor or in substitution or replacement
thereof as required under the applicable requirements of Canadian
securities laws until such time as it is no longer required under
such
requirements:
|
"UNLESS
PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THE SECURITIES SHALL
NOT
TRADE THE SECURITIES BEFORE AUGUST 8, 2004.
WITHOUT
PRIOR WRITTEN APPROVAL OF THE TORONTO STOCK EXCHANGE AND COMPLIANCE WITH ALL
APPLICABLE SECURITIES LEGISLATION, THE SECURITIES REPRESENTED BY THIS
CERTIFICATE MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNTIL
AUGUST 8, 2004."
|
(b)
|
The
Escrow Agent understands and acknowledges that the Escrowed Shares
have
not been registered under the U.S. Securities Act or state securities
laws.
|
|
(c)
|
Each
certificate representing Escrowed Shares delivered upon retraction
of
Series II Preference Shares to a person other than a U.S. Person
or a
person outside the United States and each certificate representing
Escrowed Shares issued in exchange therefor or in substitution or
replacement thereof shall bear the following legend required under
the
U.S. Securities Act, or applicable state securities laws, until such
time
as it is no longer required under the applicable requirements
thereof.
|
"THIS
SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS
AMENDED (THE "U.S. SECURITIES ACT") OR THE SECURITIES LAWS OF ANY STATE OR
OTHER
JURISDICTION, AND, ACCORDINGLY, NEITHER THIS SECURITY NOR ANY INTEREST OR
PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED,
ENCUMBERED OR OTHERWISE
-
9 -
DISPOSED
OF WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S.
PERSONS EXCEPT: (I) IN ACCORDANCE WITH THE PROVISIONS OF REGULATION S (RULE
901
THROUGH RULE 905, AND PRELIMINARY NOTES) OF THE U.S. SECURITIES ACT; (II)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE U.S. SECURITIES ACT;
OR (III) PURSUANT TO AN AVAILABLE EXEMPTION FROM REGISTRATION, AND HEDGING
TRANSACTIONS WITH REGARD TO SUCH SECURITIES MAY NOT BE CONDUCTED UNLESS IN
COMPLIANCE WITH THE SECURITIES ACT."
|
(d)
|
Each
certificate representing Escrowed Shares delivered upon retraction
of
Series II Preference Shares to a U.S. Person or a person in the United
States and each certificate representing Escrowed Shares issued in
exchange therefor or in substitution or replacement thereof shall
bear the
following legend required under the U.S. Securities Act, or applicable
state securities laws, until such time as it is no longer required
under
the applicable requirements
thereof:
|
"THE
SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "U.S. SECURITIES ACT") OR STATE
SECURITIES LAWS. THE HOLDER HEREOF, BY PURCHASING SUCH SECURITIES, AGREES THAT
SUCH SECURITIES MAY BE OFFERED, SOLD OR OTHERWISE TRANSFERRED ONLY: (A) TO
XXXXXXXXX INC.; (B) OUTSIDE THE UNITED STATES IN ACCORDANCE WITH RULE 904 OF
REGULATION S UNDER THE SECURITIES ACT; (C) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT IN A MANNER CONTEMPLATED BY SUCH REGISTRATION STATEMENT; OR
(D) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE U.S. SECURITIES
ACT PROVIDED BY RULE 144 THEREUNDER OR IN A TRANSACTION OTHERWISE EXEMPT FROM
REGISTRATION UNDER U.S. SECURITIES LAWS AND IN ANY SUCH CASE, IN COMPLIANCE
WITH
ANY APPLICABLE STATE SECURITIES LAWS OF THE UNITED STATES AFTER PROVIDING,
AT
XXXXXXXXX INC.'S REQUEST, A LEGAL OPINION OR OTHER EVIDENCE SATISFACTORY TO
XXXXXXXXX INC."
|
3.6
|
Cancellation
of Series II Preference Share
Certificates
|
The
Escrow Agent is authorized and directed to cancel, in accordance with its normal
procedures, all certificates representing Series II Preference Shares received
by the Escrow Agent forthwith upon making delivery of the appropriate
certificates evidencing the Escrowed Shares, cash and/or other property, as
applicable, as provided herein.
|
3.7
|
Acknowledgements
by the Escrow Agent
|
The
Escrow Agent is aware that none of the Subscription Receipts, the Series II
Preference Shares or the International A Shares deliverable upon retractions
of
the Series II Preference Shares have been or will be registered under the U.S.
Securities Act, or the securities laws of any state and that the Subscription
Receipts and the Series II Preference Shares are being offered and sold (i)
in
the United States to a limited number of institutional "accredited investors"
as
defined in Rule 501(a)(l), (2), (3) or (7) of Regulation D under the U.S.
Securities Act or (ii) outside the United States, in offshore transactions
(as
defined in Regulations S under the U.S. Securities Act) complying with
Regulations S, to non-U.S. persons (as defined in Regulation S), in each case
(i) and (ii) that execute and deliver certain representations and warranties
to
the Corporation in transactions not requiring registration under the
U.S.
-
10 -
Securities
Act; accordingly, there are substantial restrictions on the transferability
of
the Subscription Receipts, the Series II Preference Shares and the International
A Shares to U.S. Persons or persons in the United States. The Escrow Agent
acknowledges that neither the Corporation nor International has any present
intention of filing or causing to be filed a registration statement under the
U.S. Securities Act in respect of the Subscription Receipts, the Series II
Preference Shares and the International A Shares. The Escrow Agent acknowledges
the Corporation has covenanted in the agency agreement dated April 2, 2004
between the Corporation and the Agent that, subject to all applicable laws
(including, without limitation, having regard to the fiduciary duties of the
directors of International at the relevant time), rules, regulations and
policies and orders, for a period of two years following the date hereof, it
will use its commercially reasonable efforts to cause International to file
a
registration statement under the U.S. Securities Act providing for the resale
of
the International A Shares underlying the Subscription Receipts in the United
States, provided that: (A) the Corporation shall not be required to use its
commercially reasonable best efforts to cause International to do so: (i) unless
and until, in the opinion of the Corporation, there has been a resumption of
effective control of International by the Corporation, without restraint in
any
respect by any court of competent jurisdiction, agency, governmental authority,
regulatory body, stock exchange or other entity (including, without limitation,
the United States Securities and Exchange Commission or any state securities
commission) having jurisdiction; and (ii) such action does not in any respect,
in the opinion of the Corporation: (x) impair, impede or limit the
Strategic Process (as publicly disclosed and currently ongoing at
International); or (y) result in a breach, directly or indirectly, of the
letter dated November 15, 2003 among Xxxx Xxxxx, the Chairman of the Audit
Committee of the board of directors of International and the Chairman of the
Special Committee of the board of directors of International (commonly known
as
the Restructuring Proposal).
|
3.8
|
Covenant
of the Corporation with Respect to Escrowed
Shares
|
The
Corporation agrees that it will use its commercially reasonable efforts to
cause
International and/or the transfer agent and registrar for the International
A
Shares to prevent any transfer on the books of the Corporation of Escrowed
Shares that are delivered upon retractions of Series II Preference Shares except
transfers that comply with the transfer restrictions set forth in Section 3.7
and otherwise comply with U.S. securities laws, including by requiring
appropriate representations and undertakings from a proposed transferee of
such
International A Shares. Without limiting the generality of the foregoing, prior
to the first release of any Escrowed Shares in respect of any Retracted Shares,
the Corporation will send a notice to International and the transfer agent
and
registrar for the International A Shares informing them of the transfer
restrictions under the U.S. Securities Act to which the Escrowed Shares are
subject and instructing them that the legends on any such released Escrowed
Shares should be removed only upon satisfactory evidence that such transfer
restrictions have lapsed or an exemption for such transfer is available under
the U.S. Securities Act and applicable regulations thereunder.
ARTICLE 4.
RELEASE
OF ESCROWED SHARES TO THE CORPORATION
|
4.1
|
Release
of Escrowed Shares in Connection with an
Offer
|
In
the
event that an Offer is made for the outstanding International A Shares, the
Corporation may, at any time on or following the date that is five (5) Business
Days prior to the expiry thereof (without accounting for any extensions to
the
Offer), send a Written Request of the Corporation to the Escrow Agent to
release, and the Escrow Agent shall release to the Corporation, all of the
Escrowed Shares so requested by the Corporation, provided that the Escrow Agent
shall only release that portion of the Escrowed Shares then held by the Escrow
Agent and not necessary in order to satisfy Retraction
-
11 -
Notices
received by the Escrow Agent on or prior to the date of such notice for which
the Corporation ultimately provides a Disbursement Notice to the Escrow Agent
pursuant to which Escrowed Shares are to be delivered to Shareholders and upon
receiving from the Corporation an irrevocable direction of the Corporation
to
the offeror and/or its designees, to the extent permitted under the terms of
such Offer and applicable laws, directing the offeror and/or its designees
to
deliver the cash or other property payable in connection with the Offer in
respect of such Escrowed Shares so released (based on the price or effective
price per International A Share under the Offer) to the Escrow Agent to be
held
by the Escrow Agent in accordance with the terms and conditions hereof.
Notwithstanding the foregoing, if the Offer does not proceed to completion,
the
Corporation shall redeposit the Escrowed Shares so released with the Escrow
Agent within five (5) Business Days of a determination by the Corporation,
in
its sole discretion, that the Offer will not proceed to completion.
|
4.2
|
Release
of Escrowed Shares in Connection with a
Sale
|
In
the
event that the Corporation shall enter into an agreement providing for a Sale,
the Corporation may, at any time on or following the date that is ten (10)
days
prior to the completion of the Sale, send a Written Request of the Corporation
to the Escrow Agent to release, and the Escrow Agent shall release to the
Corporation, all of the Escrowed Shares so requested by the Corporation,
provided that the Escrow Agent shall only release that portion of the Escrowed
Shares then held by the Escrow Agent and not necessary in order to satisfy
Retraction Notices received by the Escrow Agent on or prior to the date of
such
notice for which the Corporation ultimately provides a Disbursement Notice
to
the Escrow Agent pursuant to which Escrowed Shares are to be delivered to
Shareholders and upon receiving from the Corporation an irrevocable direction
of
the Corporation to the purchaser and/or its designees directing the purchaser
and/or its designees to deliver the cash or other property payable in connection
with the Sale in respect of such Escrowed Shares so released (based on the
price
or effective price per International A Share under the Sale) to the Escrow
Agent
to be held by the Escrow Agent in accordance with the terms and conditions
hereof. Notwithstanding the foregoing, if the Sale does not proceed to
completion, the Corporation shall redeposit the Escrowed Shares so released
with
the Escrow Agent within five (5) Business Days of a determination by the
Corporation, in its sole discretion, that the Sale will not proceed to
completion;
|
4.3
|
Release
of Escrowed Shares in Connection with Purchases of Series II Preference
Shares by the Corporation
|
In
the
event that the Corporation shall, directly or indirectly, purchase for
cancellation Series II Preference Shares, the Corporation may send a Written
Request of the Corporation to the Escrow Agent to release, and the Escrow Agent
shall release to the Corporation, such number of Escrowed Shares specified
in
such Written Request as is equal to the product obtained by multiplying the
Exchange Number of an International A Share by the number of Series II
Preference Shares so purchased for cancellation.
ARTICLE 5.
INVESTMENT
OF ESCROWED FUNDS
|
5.1
|
Investment
of Escrowed Funds
|
Pending
distribution of the Escrowed Funds pursuant to Article 3 hereof, the Escrow
Agent shall hold, invest and reinvest the same in Qualified Investments at
the
Written Request of the Corporation. Pending receipt by the Escrow Agent of
such
written request, the Escrow Agent shall place, as soon as
-
12 -
reasonably
practicable, the Escrowed Funds in an interest bearing account with the Escrow
Agent at the prevailing rate of interest on similar deposits. Such written
request shall specify the maturity dates of such Qualified Investments so as
to
allow the Escrow Agent to comply with its obligations under Article 3
hereof. Such written request, to be effective, shall be given on a
Business Day, provided that if such direction is given after 9:00 a.m. (Toronto
time) on any Business Day, it shall be effective on the next succeeding Business
Day. Such written request may also direct the Escrow Agent to realize on all
the
Qualified Investments in anticipation of the distribution of the Escrowed Fund
pursuant to Article 3 hereof. All Qualified Investments shall be registered
in
the name of the Escrow Agent and shall be deposited by the Escrow Agent for
safekeeping in the City of Toronto and, for such purpose, may be placed in
the
vaults of the Escrow Agent or any Canadian chartered bank or trust company
or
deposited for safekeeping with such bank or trust company.
|
5.2
|
Segregation
of Escrowed Funds
|
The
Escrowed Funds received by the Escrow Agent and any securities or other
instruments received by the Escrow Agent upon the investment or reinvestment
of
such Escrowed Funds shall be received as agent for, and shall be segregated
and
kept apart by the Escrow Agent in escrow for, the Corporation.
ARTICLE 6.
COVENANTS
OF THE CORPORATION
|
6.1
|
Escrow
Agent's Remuneration, Expenses and
Indemnification
|
|
(a)
|
The
Corporation covenants that it will pay to the Escrow Agent from time
to
time reasonable remuneration for its services hereunder and will
pay or
reimburse the Escrow Agent upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Escrow Agent in
the
administration or execution of this Agreement (including the reasonable
compensation and the disbursements of one outside counsel and all
other
advisers and assistants not regularly in its employ) both before
any
default hereunder and thereafter until all duties of the Escrow Agent
hereunder shall be finally and fully performed, except any such expense,
disbursement or advance as may arise out of or result from the Escrow
Agent's negligence, willful misconduct or bad faith. Any amount owing
hereunder and remaining unpaid after thirty (30) days from the invoice
date will bear interest at the then current rate charged by the Escrow
Agent against unpaid invoices and shall be payable on
demand.
|
|
(b)
|
The
Corporation hereby indemnifies and saves harmless the Escrow Agent
and its
officers, directors, employees and agents from and against any and
all
liabilities, losses, costs, claims, actions or demands whatsoever
which
may be brought against the Escrow Agent or which it may suffer or
incur as
a result or arising out of the performance of its duties and obligations
under this Agreement, save only in the event of the negligence, willful
misconduct or bad faith of the Escrow Agent. It is understood and
agreed
that this indemnification shall survive the termination or the discharge
of this Agreement or the resignation or replacement of the Escrow
Agent.
|
|
6.2
|
Accounting
|
The
Escrow Agent shall maintain accurate books, records and accounts of the
transactions effected or controlled by the Escrow Agent hereunder and the
receipt, investment, reinvestment and disbursement of the Escrowed Shares and
the Escrowed Funds, if any, and shall provide to the
-
13 -
Corporation
records and statements thereof periodically upon Written Request of the
Corporation. The Corporation shall have the right to audit any such books,
records, accounts and statements. Upon written request of any Shareholder to
the
Corporation to review any such books, records, accounts and statements, the
Corporation shall provide such Shareholder with access thereto and, if necessary
shall obtain same for such purpose from the Escrow Agent in accordance with
this
Section 6.2 provided that the provision thereof does not or will not breach
or
result in a breach of any applicable laws.
|
6.3
|
Payments
by Escrow Agent
|
In
the
event that any funds to be disbursed by the Escrow Agent in accordance herewith
are received by the Escrow Agent in the form of an uncertified cheque or
cheques, the Escrow Agent shall be entitled to delay the time for disbursement
of such funds hereunder until such uncertified cheque or cheques have cleared
in
the ordinary course the financial institution upon which the same are drawn.
The
Escrow Agent will disburse monies according to this Agreement only to the extent
that monies have been deposited with it.
ARTICLE 7.
SUPPLEMENTAL
AGREEMENTS
|
7.1
|
Provision
for Supplemental Agreements for Certain
Purposes
|
From
time
to time the Corporation, the Agent and the Escrow Agent may, subject to the
provisions hereof and regulatory or exchange approval, if required, and they
shall, when so directed in accordance with the provisions hereof, execute and
deliver by their proper officers, agreements supplemental hereto, which
thereafter shall form part hereof, for any one or more or all of the following
purposes:
|
(a)
|
making
such provisions not inconsistent with this Agreement as may be necessary
or desirable with respect to matters or questions arising hereunder,
provided that such are not, in the reasonable opinion of the Escrow
Agent
on the advice of its counsel, prejudicial to the interests of the
Shareholders or the holders of the Subscription
Receipts;
|
|
(b)
|
modifying
any of the provisions of this Agreement, including relieving the
Corporation from any of the obligations, conditions or restrictions
herein
contained, provided that such modification or relief shall be or
become
operative or effective only if, in the reasonable opinion of the
Escrow
Agent on the advice of its counsel, such modification or relief in
no way
prejudices any of the rights of the Shareholders, the holders of
the
Subscription Receipts or of the Escrow Agent, and provided further
that
the Escrow Agent may in its sole discretion decline to enter into
any such
supplemental agreement which in its reasonable opinion may not afford
adequate protection to the Escrow Agent when the same shall become
operative; and
|
|
(c)
|
for
any other purpose not inconsistent with the terms of this Agreement,
including the correction or rectification of any ambiguities, defective
or
inconsistent provisions, errors, mistakes or omissions herein, provided
that, in the reasonable opinion of the Escrow Agent on the advice
of its
counsel, the rights of the Escrow Agent, the Shareholders and the
holders
of the Subscription Receipts are in no way prejudiced
thereby.
|
-
14 -
ARTICLE 8.
CONCERNING
THE ESCROW AGENT
|
8.1
|
Rights
and Duties of the Escrow
Agent
|
|
(a)
|
In
the exercise of the rights and duties prescribed or conferred by
the terms
of this Agreement, the Escrow Agent shall exercise that degree of
care,
diligence and skill that a reasonably prudent escrow agent would
exercise
in comparable circumstances. No provision of this Agreement shall
be
construed to relieve the Escrow Agent from liability for its own
negligent
action, its own negligent failure to act, or its own willful misconduct
or
bad faith.
|
|
(b)
|
None
of the provisions contained in this Agreement shall require the Escrow
Agent to expend or to risk its own funds or otherwise to incur financial
liability in the performance of any of its duties or in the exercise
of
any of its rights or powers unless indemnified
therefor.
|
|
(c)
|
Every
provision of this Agreement that by its terms relieves the Escrow
Agent of
liability or entitles it to rely upon any evidence submitted to it
is
subject to the provisions of this Section 8.1 and of Section
8.2.
|
|
(d)
|
The
Escrow Agent shall have no duties except those expressly set forth
herein,
and it shall not be bound by any notice of a claim or demand with
respect
to, or any waiver, modification, amendment, termination or rescission
of,
this Agreement, unless received by it in writing and signed by the
other
parties hereto and, if its duties herein are affected, unless it
shall
have given its prior written consent
thereto.
|
|
(e)
|
The
Escrow Agent shall retain the right not to act and shall not be held
liable for refusing to act unless it has received clear and reasonable
documentation which complies with the terms of this Agreement, which
documentation does not require the exercise of any discretion or
independent judgment.
|
|
(f)
|
The
Escrow Agent shall incur no liability whatsoever with respect to
the
delivery or non-delivery of any certificates whether delivered by
hand,
mail or any other means.
|
|
(g)
|
The
Escrow Agent shall not be responsible or liable in any manner whatsoever
for the deficiency, correctness, genuineness or validity of any securities
deposited with it.
|
|
(h)
|
The
Escrow Agent shall not be required to make any determination or decision
with respect to the validity of any claim made by any party in respect
of
the Escrowed Shares funds and/or other property in escrow, or of
any
denial thereof, but shall be entitled to rely conclusively on the
terms
hereof and the documents tendered to it in accordance with the terms
hereof.
|
|
(i)
|
The
Escrow Agent shall have no responsibility at any time to ascertain
whether
or not a security interest exists in the Escrowed Shares, funds and/or
other property in escrow, or any part thereof, or to file any financing
statement under any applicable Canadian, provincial, or federal law,
with
respect to the Escrowed Shares funds and/or other property in escrow,
or
any part thereof.
|
-
15 -
|
8.2
|
Evidence,
Experts and Advisers
|
|
(a)
|
In
addition to the reports, certificates, opinions and other evidence
required by this Agreement, the Corporation shall furnish to the
Escrow
Agent such additional evidence of compliance with any provision hereof,
and in such form, as the Escrow Agent may reasonably require by written
notice to the Corporation.
|
|
(b)
|
In
the exercise of its rights and duties hereunder, the Escrow Agent
may, if
it is acting in good faith, rely as to the truth of the statements
and the
accuracy of the opinions expressed in statutory declarations, opinions,
reports, written requests, consents, or orders of the Corporation,
Certificates of the Corporation or other evidence furnished to the
Escrow
Agent pursuant to any provision hereof or pursuant to a request of
the
Escrow Agent.
|
|
(c)
|
Whenever
it is provided in this Agreement that the Corporation shall deposit
with
the Escrow Agent resolutions, certificates, reports, opinions, requests,
orders or other documents, it is intended that the truth, accuracy
and
good faith on the effective date thereof and the facts and opinions
stated
in all such documents so deposited shall, in each and every such
case, be
conditions precedent to the right of the Corporation to have the
Escrow
Agent take the action to be based
thereon.
|
|
(d)
|
The
Escrow Agent may employ or retain such counsel, accountants, appraisers
or
other experts or advisers as it may reasonably require for the purpose
of
discharging its duties hereunder and may pay reasonable remuneration
for
all services so performed by any of them, and shall not be responsible
for
any misconduct or negligence, on the part of any such experts or
advisers
who have been appointed with due care by the Escrow Agent. The Escrow
Agent, its officers, directors, employees and agents shall incur
no
liability and shall be fully protected in acting or not acting in
accordance with any opinion or instruction of counsel or such expert
so
long as, in all cases, they act in good faith in accordance with
any
opinions, instructions or advice. The cost of such services shall
be added
to and be part of the Escrow Agent's fees hereunder or shall be paid
by
the Corporation on the Escrow Agent's demand at the sole direction
of the
Escrow Agent.
|
|
8.3
|
Documents,
Monies, etc. Held by Escrow
Agent
|
Any
securities, documents of title or other instruments that may at any time be
held
by the Escrow Agent pursuant to this Agreement may be placed in the deposit
vaults of the Escrow Agent or of any Canadian chartered bank or deposited for
safekeeping with any such bank. If the Escrow Agent has not received a Written
Request of the Corporation under Section 5.1, any monies so held pending the
application or withdrawal thereof under any provisions of this Agreement may
be
deposited in the name of the Escrow Agent in any Canadian chartered bank, with
the Escrow Agent or any other loan or trust company authorized to accept
deposits under the laws of Canada or a province thereof, in an interest bearing
account at the then current rate of interest on similar deposits.
|
8.4
|
Actions
by Escrow Agent to Protect
Interest
|
The
Escrow Agent shall have power to institute and to maintain such actions and
proceedings as it may consider necessary or expedient to preserve, protect
or
enforce its interests and the interests of the Shareholders.
-
16 -
|
8.5
|
Escrow
Agent Not Required to Give
Security
|
The
Escrow Agent shall not be required to give any bond or security in respect
of
the execution of this Agreement or otherwise in respect of the
premises.
|
8.6
|
Protection
of Escrow Agent
|
By
way of
supplement to the provisions of any law for the time being relating to trustees,
it is expressly declared and agreed as follows:
|
(a)
|
the
Escrow Agent shall not be liable for or by reason of any statements
of
fact or recitals in this Agreement (except the representation contained
in
Section 8.8) or be required to verify the same, but all such statements
or
recitals are and shall be deemed to be made by the Corporation or
the
Agent, as applicable;
|
|
(b)
|
nothing
herein contained shall impose any obligation on the Escrow Agent
to see to
or to require evidence of the registration or filing (or renewal
thereof)
of this Agreement or any instrument ancillary or supplemental
hereto;
|
|
(c)
|
the
Escrow Agent shall not be bound to give notice to any person or persons
of
the execution hereof; and
|
|
(d)
|
the
Escrow Agent shall not incur any liability or responsibility whatever
or
be in any way responsible for the consequence of any breach on the
part of
the Corporation of any of the covenants herein contained or of any
acts of
any directors, officers, employees, agents or servants of the
Corporation.
|
|
8.7
|
Replacement
of Escrow Agent; Successor by
Merger
|
|
(a)
|
The
Escrow Agent may resign its appointment and be discharged from all
other
duties and liabilities hereunder, subject to this Section 8.7, by
giving
to the Corporation not less than sixty (60) days prior notice in
writing
or such shorter prior notice as the Corporation may accept as sufficient.
The Corporation and the Agent, acting together, shall have power
at any
time to remove the existing Escrow Agent and to appoint a new escrow
agent.
|
|
(b)
|
In
the event of the Escrow Agent resigning or being removed as aforesaid
or
being dissolved, becoming bankrupt, going into liquidation or otherwise
becoming incapable of acting hereunder, the Corporation shall forthwith
appoint a new escrow agent unless a new escrow agent has already
been
appointed by the Corporation and the Agent, acting together; failing
such
appointment by the Corporation, the retiring Escrow Agent or the
Agent,
acting alone; may apply (in the case of the Escrow Agent, at the
expense
of the Corporation) to a justice of the Ontario Superior Court of
Justice
on such notice as such justice may direct, for the appointment of
a new
escrow agent; but any new escrow agent so appointed by the Court
shall be
subject to removal as aforesaid by the Agent and the Corporation,
acting
together.
|
|
(c)
|
Any
new escrow agent appointed under any provision of this Section 8.7
shall
be a corporation authorized to carry on the business of a trust company
in
the Province of Ontario and, if required by the applicable legislation
for
any other provinces, in such other provinces. On any such appointment,
the
new escrow agent shall be vested with the same powers, rights, duties
and
|
-
17 -
|
|
responsibilities
as if it had been originally named herein as Escrow Agent hereunder.
At
the request of the Corporation or the new escrow agent, the retiring
Escrow Agent, upon payment of the amounts, if any, due to it pursuant
to
Section 6.1, shall duly assign, transfer and deliver to the new escrow
agent all property and money held and all records kept by the retiring
Escrow Agent hereunder or in connection
herewith.
|
|
(d)
|
Any
corporation into or with which the Escrow Agent may be merged or
consolidated or amalgamated, or any corporation resulting therefrom
to
which the Escrow Agent shall be a party, or any corporation succeeding
to
the corporate trust business of the Escrow Agent shall be the successor
to
the Escrow Agent hereunder without any further act on its part or
any of
the parties hereto, provided that such corporation would be eligible
for
appointment as a successor escrow agent
hereunder.
|
|
8.8
|
Conflict
of Interest
|
|
(a)
|
The
Escrow Agent represents to the Corporation and the Agent that, at
the time
of execution and delivery hereof, no material conflict of interest
exists
between its role as a Escrow Agent hereunder and its role in any
other
capacity and agrees that in the event of a material conflict of interest
arising hereafter it will, within thirty (30) days after ascertaining
that
it has such material conflict of interest, either eliminate the same
or
assign its appointment as escrow agent hereunder to a successor escrow
agent approved by the Corporation and meeting the requirements set
forth
in subsection 8.7(c). Notwithstanding the foregoing provisions of
this
subsection 8.8(a), if any such material conflict of interest exists
or
hereafter shall exist, the validity and enforceability of this Agreement
shall not be affected in any manner whatsoever by reason
thereof.
|
|
(b)
|
Subject
to subsection 8.8(a), the Escrow Agent, in its personal or any other
capacity, may buy, lend upon and deal in securities of the Corporation
and
generally may contract and enter into financial transactions with
the
Corporation or any Affiliate of the Corporation without being liable
to
account for any profit made
thereby.
|
|
8.9
|
Acceptance
of Appointment
|
The
Escrow Agent hereby accepts the appointment as escrow agent in this Agreement
and agrees to perform its duties hereunder upon the terms and conditions herein
set forth.
|
8.10
|
Escrow
Agent Not to be Appointed
Receiver
|
The
Escrow Agent and any person related to the Escrow Agent shall not be appointed
a
receiver, a receiver and manager or liquidator of all or any part of the assets
or undertaking of the Corporation.
ARTICLE 9.
GENERAL
|
9.1
|
Notice
to the Corporation, the Agent or the Escrow
Agent
|
|
(a)
|
Unless
herein otherwise expressly provided, any notice or other communication
to
be given hereunder to the Corporation, the Agent or the Escrow Agent
shall
be deemed to be validly given if delivered by hand courier or if
transmitted by telecopier as
follows:
|
-
18 -
|
(i)
|
if
to the Corporation:
|
Xxxxxxxxx
Inc.
00
Xxxxxxx Xxxxxx
Xxxxxxx,
Xxxxxxx
XXX
0X0
Attention: Xxxxx
X. Xxxxx
Telecopier
No.: (000) 000-0000
with
a
copy (which shall not constitute notice) to:
Fogler,
Xxxxxxxx XXX
Xxxxx
0000, X.X. Xxx 00
Xxxxx
Trust Tower, Toronto-Dominion Centre
Xxxxxxx,
Xxxxxxx
X0X
0X0
Attention: Avi
X. Xxxxxxxxxx
Telecopier
No.: (000) 000-0000
|
|
(ii)
|
if
to the Agent:
|
Westwind
Partners Inc.
00
Xxxx
Xxxxxx
00xx
Xxxxx
Xxxxxxx,
Xxxxxxx
X0X
IS9
Attention: Xxxxxx
X. Xxxxxxxx
Telecopier
No.: (000) 000-0000
with
a
copy (which shall not constitute notice) to:
Stikeman
Elliott LLP
0000
Xxxxxxxx Xxxxx Xxxx
000
Xxx
Xxxxxx
Xxxxxxx,
Xxxxxxx
X0X
0X0
Attention: Xxxxxxx
X. Xxxx
Telecopier
No.: (000) 000-0000
|
|
(iii)
|
if
to the Escrow Agent:
|
Computershare
Trust Company of Canada
000
Xxxxxxxxxx Xxxxxx
9th
Floor, North Tower
-
19 -
Xxxxxxx,
Xxxxxxx
X0X
0X0
Attention: General
Manager, Corporate Trust Services
Telecopier
No.: (000) 000-0000
and
any
such notice or other communication delivered in accordance with the foregoing
shall be deemed to have been received on the date of delivery or, if telecopied
on the day of transmission or, if such day is not a Business Day, on the first
Business Day following the day of transmission.
|
(b)
|
The
Corporation, the Agent or the Escrow Agent, as the case may be, may
from
time to time notify the others in the manner provided in subsection
9.l(a)
of a change of address and/or telecopier number which, from the effective
date of such notice and until changed by like notice, shall be the
address
and/or telecopier number of the Corporation, the Agent or the Escrow
Agent, as the case may be, for all purposes of this
Agreement.
|
|
9.2
|
Ownership
|
The
Corporation and the Escrow Agent may deem and treat the registered owner of
any
certificate evidencing Series II Preference Shares as the absolute owner of
the
Series II Preference Shares represented thereby for all purposes, and the
Corporation and the Escrow Agent shall not be affected by any notice or
acknowledge to the contrary except where the Corporation or the Escrow Agent
is
required to take notice by statute or by order of a court of competent
jurisdiction.
|
9.3
|
Satisfaction
and Discharge of Agreement
|
Upon
the
earliest of:
|
(a)
|
the
date by which there shall have been delivered to the Escrow Agent
for
retraction all certificates representing Series II Preference Shares
theretofore issued by the
Corporation;
|
|
(b)
|
no
Series II Preference Shares remain issued and
outstanding;
|
|
(c)
|
there
being no Escrowed Shares and Escrowed Funds remaining with the Escrow
Agent hereunder as a result of having been delivered and/or paid
in
accordance with the terms and conditions
hereof;
|
|
(d)
|
the
Corporation obtaining the consent of Shareholders holding sixty-six
and
two-thirds percent (66 2/3%) or more of the then issued and outstanding
Series II Preference Shares to the termination of this Agreement;
or
|
|
(e)
|
if
the Automatic Exercise Date does not occur on or before the
Deadline,
|
this
Agreement shall cease to be of further effect and the Escrow Agent, on demand
of
and at the cost and expense of the Corporation and upon delivery to the Escrow
Agent of a Certificate of the Corporation stating that all conditions precedent
to the satisfaction and discharge of this Agreement have been complied with,
shall execute proper instruments acknowledging satisfaction of and discharging
this Agreement. Immediately following the satisfaction and discharge of this
Agreement, the Escrow Agent shall forthwith release to the Corporation all
Escrowed Shares and/or Escrowed Funds, if any, then
-
20 -
remaining
in the possession of the Escrow Agent. Notwithstanding the foregoing, the
indemnities provided to the Escrow Agent by the Corporation hereunder shall
remain in full force and effect and survive the termination of this
Agreement.
|
9.4
|
Time
of the Essence
|
Time
is
and shall remain of the essence of this Agreement.
|
9.5
|
Counterparts
|
This
Agreement may be executed by facsimile and in any number of counterparts, all
of
which taken together shall constitute one and the same instrument and an
original copy hereof and notwithstanding their date of execution they shall
be
deemed to be dated as of the date hereof and shall become effective when
counterparts have been signed by each party hereto and delivered to the other
parties hereto, it being understood that all parties need not sign the same
counterpart.
[THE
REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK.]
-
21 -
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above.
|
XXXXXXXXX
INC.
|
|||
|
|
Per:
|
/s/
Xxxxx X. Xxxxx
|
|
|
Authorized
Signing Officer
|
|||
|
WESTWIND
PARTNERS INC.
|
|||
|
|
By:
|
/s/
Nick Pocrnic
|
|
|
Authorized
Signing Officer
|
|||
|
COMPUTERSHARE
TRUST
COMPANY
OF CANADA
|
|||
|
|
Per:
|
/s/
Xxxxxx Xxxxx
|
|
|
Authorized
Signing Officer
|
|||
|
|
|
/s/
Xxxx Xxxxxx
|
|
|
Authorized
Signing Officer
|
-
22 -
SCHEDULE
"A"
Form
of Retraction Notice
|
TO:
|
XXXXXXXXX
INC.
00
Xxxxxxx Xxxxxx
Xxxxxxx,
Xxxxxxx
X0X
0X0
|
|
Attention: Secretary
|
|
|
AND
TO:
|
COMPUTERSHARE
TRUST COMPANY OF CANADA
000
Xxxxxxxxxx Xxxxxx, 0xx
Xxxxx, Xxxxx
Xxxxx
Xxxxxxx,
Xxxxxxx
X0X
0X0
|
|
Attention: General
Manager, Corporate Trust Services
|
The
undersigned registered holder of exchangeable non-voting preference shares
Series I (the "Series II Preference Shares") in the capital of
Xxxxxxxxx Inc. (the "Corporation") hereby irrevocably elects to
retract Series II Preference Shares (the "Retracted Shares") in
accordance with the rights, privileges, restrictions and conditions attaching
to
the Series II Preference Shares contained in the articles of amalgamation of
the
Corporation, as amended from time to time (the "Articles").
Enclosed herewith are the certificate or certificates representing the Retracted
Shares, duly completed and endorsed for transfer in the manner prescribed
therein.
In
accordance with the Articles, the Retracted Shares are to be redeemed in
consideration for, at the Corporation's option: (A) the transfer to the
undersigned of (i) a fixed fraction of a share of Xxxxxxxxx International Inc.
(an "International A Share") for each Retracted Share; and (ii)
such number or fraction of an International A Share as is equal to the value
of
the amount of any dividends or distributions declared and unpaid on the Series
II Preference Shares; or (B) cash of an equivalent value therefor.
The
undersigned acknowledges and agrees that:
|
|
(a)
|
AN
INVESTMENT IN THE INTERNATIONAL A SHARES THAT MAY BE DELIVERED UPON
RETRACTION OF THE RETRACTED SHARES IS NOT WITHOUT RISK AND THE UNDERSIGNED
(AM) ANY DISCLOSED PRINCIPAL) MAY LOSE HIS; HER OR ITS ENTIRE INVESTMENT;
it (and if the undersigned is acting as agent for a disclosed principal,
such disclosed principal) has such knowledge and experience in financial
and business matters as to be capable of evaluating the merits and
risks
of its investment in the International A Shares and it, or, where
it is
not taking such shares as principal, its disclosed principal, is
able to
bear the economic risk of loss of its
investment;
|
|
|
(b)
|
it
(and if the undersigned is acting as agent for a disclosed principal,
such
disclosed principal) is aware that the International A Shares which
may be
delivered upon retraction of the Retracted Shares in certain circumstances
have not been and will not be registered under the United States
Securities Act of 1933, as amended (the "U.S. Securities
Act"), or the securities laws of any state; accordingly, there
are substantial
|
|
|
restrictions
on the transferability of such International A Shares; it acknowledges
that neither the Corporation nor Xxxxxxxxx International Inc. has
any
present intention of filing or causing to be filed a registration
statement under the U.S. Securities Act in respect of the
International A Shares; and it acknowledges that such International A
Shares will contain a legend in respect of such
restrictions;
|
|
|
(c)
|
the
purchase of the International A Shares which may be delivered upon
retraction of the Retracted Shares in certain circumstances has not
been
made through, or as a result of, and the distribution of such
International A Shares is not being accompanied by, a general solicitation
or advertisement including articles, notices or other communications
published in any newspaper, magazine or similar media or broadcast
over
radio or television, or any seminar or meeting whose attendees have
been
invited by general solicitation or general
advertising;
|
|
|
(d)
|
Xxxxxxxxx
International Inc., the issuer of the International A Shares, may
not, as
of the date hereof or any time thereafter, have filed all of its
reports
required to be filed under the U.S. Securities Exchange Act of 1934
during
the twelve months preceding the date hereof within the meaning of
Rule
144(c)(l) under the U.S. Securities
Act;
|
|
|
(e)
|
if
it decides to offer, sell or otherwise transfer any of the International
A
Shares which may be delivered upon retraction of the Retracted Shares
in
certain circumstances, it will not offer, sell or otherwise transfer
any
of such International A Shares, directly or indirectly, except: (A)
to the
Corporation, (b) outside the United States in accordance with Rule
904 of
Regulation S under the U.S. Securities Act, and in compliance with
applicable local laws and regulations, (C) pursuant to an exemption
from registration under the U.S. Securities Act provided by Rule
144
thereunder, (D) pursuant to an effective registration statement in
a
manner contemplated by such registration statement or (E) inside
the
United States in a transaction exempt from registration under the
U.S.
Securities Act and, in any event, in compliance with any applicable
state
securities laws of the United States; provided that prior to any
transfer
pursuant to the foregoing clauses (C) or (E), the Corporation may
require
a legal opinion or other evidence reasonably satisfactory to the
Corporation that such transfix is exempt from registration under
the U.S.
Securities Act and applicable state securities laws, and, in each
instance, in compliance with any applicable state securities laws
of the
United States; and
|
|
|
(f)
|
upon
the original issuance thereof, and until such time as the same is
no
longer required under applicable requirements of the U.S. Securities
Act
or state securities laws, the certificates representing the International
A Shares, and all certificates issued in exchange therefor or in
substitution thereof, unless the Corporation determines otherwise
consistent with applicable law, shall bear on the face of such
certificates one of the following
legends:
|
If
the
undersigned is not a U.S. person and is not acquiring the International A Shares
for the account or benefit of a U.S. person (as defined in Regulation S under
the U.S. Securities Act):
"THIS
SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS
AMENDED (THE "U.S. SECURITIES ACT") OR THE SECURITIES LAWS OF ANY STATE OR
OTHER
JURISDICTION, AND, ACCORDINGLY, NEITHER THIS SECURITY NOR ANY INTEREST OR
PARTICIPATION
-
2 -
HEREIN
MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE
DISPOSED OF WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF,
U.S. PERSONS EXCEPT: (I) IN ACCORDANCE WITH THE PROVISIONS OF REGULATION S
(RULE
901 THROUGH RULE 905, AND PRELIMINARY NOTES) OF THE U.S. SECURITIES ACT, (II)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE U.S. SECURITIES ACT
OR
(III) PURSUANT TO AN AVAILABLE EXEMPTION FROM REGISTRATION."
If
the
undersigned is a U.S. person or is acquiring the Intemationa1 A Shares for
the
account or benefit of any U.S. person (as defined in Regulation S under the
U.S.
Securities Act):
"THE
SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "U.S. SECURITIES ACT") OR STATE
SECURITIES LAWS. THE HOLDER HEREOF, BY PURCHASING SUCH SECURITIES, AGREES THAT
SUCH SECURITIES MAY BE OFFERED, SOLD OR OTHERWISE TRANSFERRED ONLY: (A) TO
XXXXXXXXX INC.; (B) OUTSIDE THE UNITED STATES IN ACCORDANCE WITH RULE 904 OF
REGULATION S UNDER THE SECURITIES ACT; (C) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT IN A MANNER CONTEMPLATED BY SUCH REGISTRATION STATEMENT; OR (D)
PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE U.S. SECURITIES ACT
PROVIDED BY RULE 144 THEREUNDER OR IN A TRANSACTION OTHERWISE EXEMPT FROM
REGISTRATION UNDER U.S. SECURITIES LAWS AND IN ANY SUCH CASE, IN COMPLIANCE
WITH
ANY APPLICABLE STATE SECURITIES LAWS OF THE UNITED STATES AFTER PROVIDING,
AT
XXXXXXXXX INC.'S REQUEST, A LEGAL OPINION OR OTHER EVIDENCE SATISFACTORY TO
XXXXXXXXX INC.
DATED
this _________ day of __________________________, ____________.
The
undersigned hereby directs that any International A Shares that may be issued
in
connection with this retraction notice be registered as follows:
|
|
|
(Name
of Registered Shareholder – please print)
|
|
(Address
of Registered Shareholder)
|
-
3 -
|
(Signature
of Registered Shareholder or Authorized Signatory, as
applicable)
|
|
(If
applicable, print name of Authorized Signatory and
Office)
|
|
o
|
Please
check box if the certificate(s) evidencing the International A Shares
or
cheque(s) are to be delivered to the address set out above, failing
which
the certificate(s) or cheque(s) will be mailed to the address noted
in the
register for the Series II Preference Shares maintained by Computershare
Trust Company of Canada.
|
-
4 -
SCHEDULE
"B"
Form
of Cash Redemption Notice
[Date]
[Name
of
Shareholder]
[Address
of Shareholder]
Dear
Sirs/Mesdames:
|
Re:
|
Xxxxxxxxx
Inc. - Retraction Notice for Series I1 Preference Shares dated ● (the
"Retraction Notice")
|
On
behalf
of Xxxxxxxxx Inc. (the "Corporation"), we hereby acknowledge
receipt of the Retraction Notice and notify you that the Corporation will redeem
___________________________ of the exchangeable non-voting preference shares
Series II (the "Series II Preference Shares") in the capital of
the Corporation noted in the Retraction Notice for cash in accordance with
subsection 4.2 of the rights, privileges, restrictions and conditions attaching
to the Series II Preference Shares contained in the articles of amalgamation
of
the Corporation, as amended from time to time. A cheque in the amount of
C$_________________ will be mailed to you not later than ● [insert date
that is not later than five business days from the Retraction
Date].
|
COMPUTERSHARE
TRUST
COMPANY
OF CANADA
|
|||
|
|
Per:
|
/s/ | |
|
Authorized
Signing Officer
|
|||
cc: Secretary,
Xxxxxxxxx Inc.
SCHEDULE
"C"
Form
of Disbursement Notice
|
TO:
|
COMPUTERSHARE
TRUST COMPANY OF CANADA
000
Xxxxxxxxxx Xxxxxx, 0xx Xxxxx, Xxxxx Xxxxx
Xxxxxxx,
Xxxxxxx
X0X
0X0
|
|
Attention: General
Manager, Corporate Trust
Services
|
_____________________________________________________________________________________
Reference
is made to escrow and custodial agreement (the "Agreement")
dated as of April 7, 2004 among Xxxxxxxxx Inc. (the
"Corporation"), Computershare Trust Company of Canada (the
"Escrow Agent") and Westwind Partners Inc. Capitalized terms
used in the Agreement have the same meanings herein as therein, unless otherwise
defined.
The
undersigned acknowledges receipt of notice from the Escrow Agent that an
aggregate of ________________ Series II Shares have been tendered for retraction
with Retraction Date(s) as follows: (a) ________________ Retracted Shares by
________________, ________________; (b) ________________ Retracted Shares by
________________, ________________; and (c) ________________ Retracted Shares
by
________________, ________________.
The
undersigned hereby notifies and directs the Escrow Agent, with respect to the
foregoing Retracted Shares, as follows:
|
|
(a)
|
an
aggregate of ________________ Escrowed Shares and $________________
Fractional Payments shall be delivered by the Escrow Agent to those
entitled thereto in accordance with the terms and conditions of the
Agreement as follows:
|
_____________
Escrowed Shares and $_____________ to _____________;
_____________
Escrowed Shares and $_____________ to _____________; and
_____________
Escrowed Shares and $_____________ to _____________;
and/or
|
|
(b)
|
the
undersigned elects to exercise its right to redeem ________________
of the
aggregate Retracted Shares for cash in the aggregate amount of C$
________________ pursuant to Section 4.2 of the Articles as
follows:
|
C$________________
to ________________;
C$________________
to ________________; and
C$________________
to ________________.
Please
forward a Cash Redemption Notice to each holder of the Retracted Shares by
prepaid first class mail or delivery at the address specified in the respective
Retraction Notices within three (3) Business Days of the applicable Retraction
Dates notifying each such holder that the Corporation will be redeeming the
Retracted Shares noted above for cash pursuant to Section 4.2 of the
Articles.
DATED
at Toronto, Ontario this ______ day of ________________,
__________.
|
XXXXXXXXX
INC.
|
|||
|
|
Per:
|
/s/ | |
|
Authorized
Signing Officer
|
|||
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