EXHIBIT 99.4
VOTING AND EXCHANGE TRUST AGREEMENT
MEMORANDUM OF AGREEMENT made as of the 12th day of March, 2002, by and
among divine, Inc., a corporation existing under the laws of Delaware
(hereinafter referred to as "PARENT"), Delano Technology Corporation, a
corporation existing under the laws of Ontario (hereinafter referred to as
"COMPANY"), and [- ], a trust company incorporated under the laws of Canada
(hereinafter referred to as "TRUSTEE").
RECITALS:
(a) In connection with a combination agreement ("COMBINATION AGREEMENT")
dated as of March 12, 2002 by and between Parent and Company as
further amended, supplemented and/or restated, the common shares of
Company held by certain persons are to be exchanged for exchangeable
shares of Company upon a reorganization of Company's share capital
pursuant to the plan of arrangement contemplated in the Combination
Agreement; and
(b) Pursuant to the Combination Agreement, Parent and Company are
required to execute a voting and exchange trust agreement
substantially in the form of this Agreement.
In consideration of the foregoing and the mutual agreements contained
herein (the receipt and adequacy of which are acknowledged), the parties agree
as follows:
ARTICLE 1
DEFINITIONS AND INTERPRETATION
1.1 DEFINITIONS
In this Agreement, the following terms shall have the following meanings:
"AFFILIATE" has the meaning ascribed thereto in the OBCA.
"ARRANGEMENT" means the arrangement under section 182 of the OBCA on the
terms and subject to the conditions set out in the Plan of Arrangement,
subject to any amendments or variations thereto made in accordance with
the Combination Agreement, the Plan of Arrangement or made at the
direction of the Court.
"AUTOMATIC EXCHANGE RIGHTS" means the benefit of the obligation of Parent
to effect the automatic exchange of Exchangeable Shares for Parent Common
Shares pursuant to section 5.12.
"BENEFICIARIES" means the registered holders from time to time of
Exchangeable Shares, other than Parent and Parent's Affiliates.
"BENEFICIARY VOTES" has the meaning ascribed thereto in section 4.2.
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"BOARD OF DIRECTORS" means the Board of Directors of Company.
"BUSINESS DAY" means any day on which commercial banks are open for
business in Toronto, Ontario and New York, New York other than a Saturday,
a Sunday or a day observed as a holiday in Toronto, Ontario under
applicable laws or in New York, New York under applicable laws.
"CANADIAN DOLLAR EQUIVALENT" means, in respect of an amount expressed in a
currency other than Canadian dollars (the "FOREIGN CURRENCY AMOUNT") at
any date, the product obtained by multiplying (a) the Foreign Currency
Amount by (b) the noon spot exchange rate on such date for such foreign
currency expressed in Canadian dollars as reported by the Bank of Canada
or, in the event such spot exchange rate is not available, such exchange
rate on such date for such foreign currency expressed in Canadian dollars
as may be determined by the Board of Directors to be appropriate for such
purpose.
"COURT" means the ONTARIO SUPERIOR COURT OF JUSTICE.
"CURRENT MARKET PRICE" means, in respect of a Parent Common Share on any
date, the Canadian Dollar Equivalent of the average of the closing prices
of Parent Common Shares during a period of 20 consecutive trading days
ending not more than three trading days before such date on the Nasdaq,
or, if the Parent Common Shares are not then quoted on the Nasdaq, on such
other 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 in
the opinion of the Board of Directors the public distribution or trading
activity of Parent Common Shares during such period does not create a
market which reflects the fair market value of a Parent Common Share, then
the Current Market Price of a Parent Common Share shall be determined by
the Board of Directors, in good faith and in its sole discretion, and
provided further that any such selection, opinion or determination by the
Board of Directors shall be conclusive and binding.
"EXCHANGE RIGHT" has the meaning ascribed thereto in section 5.1.
"EXCHANGEABLE SHARES" means the non-voting exchangeable shares in the
capital of Company, having the rights, privileges, restrictions and
conditions set out in Appendix 1 to the Plan of Arrangement.
"EXCHANGEABLE SHARE SUPPORT AGREEMENT" means the Exchangeable Share
Support Agreement made between Company and Parent substantially in the
form and content of Exhibit D to the Combination Agreement, as amended
pursuant to the terms of the Exchangeable Share Support Agreement.
"GOVERNMENTAL ENTITY" means any court, administrative agency, tribunal,
bureau, board, commission, public authority, governmental or regulatory
authority, agency, ministry, crown corporation or other law, rule-or
regulation-making entity, domestic or foreign, or any quasi-governmental
body, self-regulatory organization or stock exchange.
"INDEMNIFIED PARTIES" has the meaning ascribed thereto in section 9.1.
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"INSOLVENCY EVENT" means (i) the institution by Company of any proceeding
to be adjudicated a bankrupt or insolvent or to be wound up, or the
consent of Company to the institution of bankruptcy, insolvency or
winding-up proceedings against it, or (ii) 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 Company to contest in good faith any such
proceedings commenced in respect of Company within 30 days of becoming
aware thereof, or the consent by Company to the filing of any such
petition or to the appointment of a receiver, or (iii) the making by
Company of a general assignment for the benefit of creditors, or the
admission in writing by Company of its inability to pay its debts
generally as they become due, or (iv) Company not being permitted,
pursuant to solvency requirements of applicable law, to redeem any
Retracted Shares pursuant to section 6.6 of the Share Provisions.
"ITA" means the INCOME TAX ACT (Canada), as amended.
"LIQUIDATION CALL RIGHT" has the meaning ascribed thereto in the Plan of
Arrangement.
"LIQUIDATION EVENT" has the meaning ascribed thereto in section 5.12.
"LIQUIDATION EVENT EFFECTIVE DATE" has the meaning ascribed thereto in
section 5.12.
"LIST" has the meaning ascribed thereto in section 4.6.
"NASDAQ" means the Nasdaq National Market or its successor.
"OBCA" means the BUSINESS CORPORATIONS ACT (Ontario), as amended from time
to time.
"OFFICER'S CERTIFICATE" means, with respect to Parent or Company, as the
case may be, a certificate signed by any officer or director of Parent or
Company, as the case may be.
"PARENT CALL RIGHT" has the meaning ascribed thereto in the Plan of
Arrangement.
"PARENT COMMON SHARE" means a share of Class A common stock in the capital
of Parent and any other securities into which such shares may be changed
and, in the event of any transaction described in Section 11.1, the
corresponding shares in the capital of Parent Successor.
"PARENT CONSENT" has the meaning ascribed thereto in section 4.2.
"PARENT MEETING" has the meaning ascribed thereto in section 4.2.
"PARENT SUCCESSOR" has the meaning ascribed thereto in section 11.1(a).
"PERSON" means any individual, corporation (including any non-profit
corporation), general partnership, limited partnership, limited liability
partnership, joint venture, estate, trust, company (including any limited
liability company or joint stock company), firm or other enterprise,
association, organization, entity or Governmental Entity.
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"PLAN OF ARRANGEMENT" means the plan of arrangement relating to the
arrangement of Company under section 182 of the OBCA and any amendments or
variations thereto made in accordance with the Plan of Arrangement or made
at the direction of the Court.
"REDEMPTION CALL RIGHT" has the meaning ascribed thereto in the Plan of
Arrangement.
"RETRACTED SHARES" has the meaning ascribed thereto in section 5.7.
"RETRACTION CALL RIGHT" has the meaning ascribed thereto in the Share
Provisions.
"SHARE PROVISIONS" means the rights, privileges, restrictions and
conditions attaching to the Exchangeable Shares set forth in Appendix 1 to
the Plan of Arrangement.
"SPECIAL VOTING SHARE" means the share of Preferred Stock of Parent which
entitles the holder of record of such share to a number of votes at
meetings of holders of Parent Common Shares equal to the number of votes
that the holders of Exchangeable Shares outstanding from time to time
(other than Exchangeable Shares held by Parent or subsidiaries of Parent
or held by Persons directly or indirectly controlled by or under common
control with Parent, all as set out in the share provisions attaching to
such share of Preferred Stock would be entitled to if all such
Exchangeable Shares were exchanged by the holders thereof for Parent
Common Shares pursuant to the terms of the Exchangeable Shares, which
share is to be issued to, deposited with and voted by the Trustee as
described herein.
"TRUST" means the bare trust created by this Agreement under the laws of
the Province of Ontario.
"TRUST ESTATE" means the Special Voting Share, any other securities, the
Exchange Right, the Automatic Exchange Rights and any money or other
property which may be held by the Trustee from time to time pursuant to
this Agreement.
"TRUSTEE" means [- ] and, subject to the provisions of Article 10,
includes any successor trustee.
"VOTING RIGHTS" means the voting rights attached to the Special Voting
Share.
1.2 INTERPRETATION NOT AFFECTED BY HEADINGS, ETC.
The division of this Agreement into Articles, Sections and other portions
and the insertion of headings are for convenience of reference only and should
not affect the construction or interpretation of this Agreement. Unless
otherwise indicated, all references to an "ARTICLE" or "SECTION" followed by a
number or a letter refer to the specified Article or section of this Agreement.
The terms "THIS AGREEMENT", "HEREOF", "HEREIN" and "HEREUNDER" and similar
expressions refer to this Agreement and not to any particular Article, section
or other portion hereof and include any agreement or instrument supplementary or
ancillary hereto.
1.3 NUMBER, GENDER, ETC.
Words importing the singular number only shall include the plural and VICE
VERSA. Words importing any gender shall include all genders.
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1.4 DATE FOR ANY ACTION
If any date on which any action is required to be taken under this
Agreement is not a Business Day, such action shall be required to be taken on
the next succeeding Business Day.
ARTICLE 2
PURPOSE OF AGREEMENT
2.1 ESTABLISHMENT OF TRUST
The purpose of this Agreement is to create the Trust for the benefit of
the Beneficiaries, as herein provided. The Trustee will hold the Special Voting
Share in order to enable the Trustee to exercise the Voting Rights and will hold
the Exchange Right and the Automatic Exchange Rights in order to enable the
Trustee to exercise such rights, in each case as trustee for and on behalf of
the Beneficiaries as provided in this Agreement.
ARTICLE 3
SPECIAL VOTING SHARE
3.1 ISSUE AND OWNERSHIP OF THE SPECIAL VOTING SHARE
Immediately following execution of this Agreement, Parent shall issue to
and deposit with the Trustee the Special Voting Share (and shall deliver the
certificate representing such share to the Trustee) to be hereafter held of
record by the Trustee as trustee for and on behalf of, and for the use and
benefit of, the Beneficiaries and in accordance with the provisions of this
Agreement. Parent hereby acknowledges receipt from the Trustee as trustee for
and on behalf of the Beneficiaries of U.S.$1.00 and other good and valuable
consideration (and the adequacy thereof) for the issuance of the Special Voting
Share by 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 Special Voting Share and shall be entitled to
exercise all of the rights and powers of an owner with respect to the Special
Voting Share, provided that the Trustee shall:
(a) hold the Special Voting Share and the legal title thereto as trustee
solely for the use and benefit of the Beneficiaries 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 Special Voting Share and the Special Voting Share shall not be
used or disposed of by the Trustee for any purpose (including for
exercising dissent or appraisal rights relating to the Special
Voting Share) other than the purposes for which this Trust is
created pursuant to this Agreement.
3.2 LEGENDED SHARE CERTIFICATES
Company will cause each certificate representing Exchangeable Shares to
bear an appropriate legend notifying the Beneficiaries of their right to
instruct the Trustee with respect to
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the exercise of the Voting Rights in respect of the Exchangeable Shares of the
Beneficiaries and the Automatic Exchange Rights.
3.3 SAFE KEEPING OF CERTIFICATE
The certificate representing the Special Voting Share shall at all times
be held in safe keeping by the Trustee.
ARTICLE 4
EXERCISE OF VOTING RIGHTS
4.1 VOTING RIGHTS
The Trustee, as the holder of record of the Special Voting Share, shall be
entitled to all of the Voting Rights, including the right to vote in person or
by proxy the Special Voting Share on any matters, questions, proposals or
propositions whatsoever that may properly come before the stockholders of Parent
at a Parent Meeting or in connection with a Parent Consent. The Voting Rights
shall be and remain vested in and exercised by the Trustee subject to the terms
of this Agreement. Subject to section 7.15:
(a) the Trustee shall exercise the Voting Rights only on the basis of
instructions received pursuant to this Article 4 from Beneficiaries
on the record date established by Parent or by applicable law for
such Parent Meeting or Parent Consent who are entitled to instruct
the Trustee as to the voting thereof; and
(b) to the extent that no instructions are received from a Beneficiary
with respect to the Voting Rights to which such Beneficiary is
entitled, the Trustee shall not exercise or permit the exercise of
such Voting Rights.
4.2 NUMBER OF VOTES
With respect to all meetings of stockholders of Parent at which holders of
Parent Common Shares are entitled to vote (each, a "PARENT MEETING") and with
respect to all written consents sought by Parent from its stockholders including
the holders of Parent Common Shares (each, a "PARENT CONSENT"), each Beneficiary
shall be entitled to instruct the Trustee to cast and exercise the votes
comprised in the Voting Rights for each Exchangeable Share owned of record by
such Beneficiary on the record date established by Parent or by applicable law
for such Parent Meeting or Parent Consent, as the case may be (the "BENEFICIARY
VOTES"), in respect of each matter, question, proposal or proposition to be
voted on at such Parent Meeting or in connection with such Parent Consent.
4.3 MAILINGS TO STOCKHOLDERS
With respect to each Parent Meeting and Parent Consent, the Trustee will
promptly mail or cause to be mailed at the expense of Parent (or otherwise
communicate in the same manner as Parent utilizes in communications to holders
of Parent Common Shares, subject to applicable regulatory requirements and the
Trustee being advised in writing as to that manner of communications, and
provided that such manner of communications is reasonably available to the
Trustee) to each of the Beneficiaries named in the List, such mailing or
communication to
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commence wherever practicable on the same day as the mailing or notice (or other
communication) with respect thereto is commenced by Parent to its stockholders:
(a) a copy of such notice, together with any related materials,
including, without limitation, any circular or information statement
or listing particulars, to be provided to stockholders of Parent in
connection with the Parent Meeting or Parent Consent;
(b) a statement that such Beneficiary is entitled to instruct the
Trustee as to the exercise of the Beneficiary Votes with respect to
such Parent Meeting or Parent Consent or, pursuant to section 4.7,
to attend such Parent Meeting and to exercise personally the
Beneficiary Votes thereat;
(c) a statement as to the manner in which such instructions may be given
to the Trustee, including an express indication that instructions
may be given to the Trustee to give:
(i) a proxy to such Beneficiary or his designee to exercise
personally the Beneficiary Votes; or
(ii) a proxy to a designated agent or other representative of the
management of Parent to exercise such Beneficiary Votes;
(d) a statement that if no such instructions are received from the
Beneficiary, the Beneficiary Votes to which such Beneficiary is
entitled will not be exercised;
(e) a form of direction whereby the Beneficiary may instruct the Trustee
as to voting and as otherwise contemplated herein; and
(f) a statement of the time and date by which such instructions must be
received by the Trustee 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 of
the method for revoking or amending such instructions.
The materials referred to in this section 4.3 are to be provided to the
Trustee by Parent, and the materials referred to in section 4.3(c), section
4.3(e) and section 4.3(f) shall be subject to reasonable comment by the Trustee
in a timely manner. Parent shall ensure that the materials to be provided to the
Trustee are provided in sufficient time to permit the Trustee to comment as
aforesaid and to send all materials to each Beneficiary at the same time as such
materials are first sent to holders of Parent Common Shares. Parent agrees not
to communicate with holders of Parent Common Shares with respect to the
materials referred to in this section 4.3 otherwise than by mail unless such
method of communication is also reasonably available to the Trustee for
communication with the Beneficiaries.
For the purpose of determining Beneficiary Votes to which a Beneficiary is
entitled in respect of any Parent Meeting or Parent Consent, the number of
Exchangeable Shares owned of record by the Beneficiary shall be determined at
the close of business on the record date established by Parent or by applicable
law for purposes of determining shareholders entitled to vote at such Parent
Meeting or in respect of such Parent Consent. Parent will notify the Trustee
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of any decision of the Board of Directors of Parent with respect to the calling
of any Parent Meeting and shall provide all necessary information and materials
to the Trustee in each case promptly and in any event in sufficient time to
enable the Trustee to perform its obligations contemplated by this section 4.3.
4.4 COPIES OF SHAREHOLDER INFORMATION
Parent will deliver to the Trustee copies of all proxy materials
(including notices of Parent Meetings but excluding proxies to vote Parent
Common Shares), information statements, reports (including without limitation,
all interim and annual financial statements) and other written communications
that, in each case, are to be distributed by Parent from time to time to holders
of Parent Common Shares in sufficient quantities and in sufficient time so as to
enable the Trustee to send those materials to each Beneficiary at the same time
as such materials are first sent to holders of Parent Common Shares. The Trustee
will mail or otherwise send to each Beneficiary, at the expense of Parent,
copies of all such materials (and all materials specifically directed to the
Beneficiaries or to the Trustee for the benefit of the Beneficiaries by Parent)
received by the Trustee from Parent contemporaneously with the sending of such
materials to holders of Parent Common Shares. The Trustee will also make
available for inspection by any Beneficiary at the Trustee's principal office in
Toronto all proxy materials, information statements, reports and other written
communications that are:
(a) received by the Trustee as the registered holder of the Special
Voting Share and made available by Parent generally to the holders
of Parent Common Shares; or
(b) specifically directed to the Beneficiaries or to the Trustee for the
benefit of the Beneficiaries by Parent.
4.5 OTHER MATERIALS
As soon as reasonably practicable after receipt by Parent or shareholders
of Parent (if such receipt is known by Parent) of any material sent or given by
or on behalf of a third party to holders of Parent Common Shares generally,
including without limitation, dissident proxy and information circulars (and
related information and material) and take-over bid and securities exchange
take-over bid circulars (and related information and material), provided such
material has not been sent to the Beneficiaries by or on behalf of such third
party, Parent shall use its reasonable efforts to obtain and deliver to the
Trustee copies thereof in sufficient quantities so as to enable the Trustee to
forward such material (unless the same has been provided directly to
Beneficiaries by such third party) to each Beneficiary as soon as possible
thereafter. As soon as reasonably practicable after receipt thereof, the Trustee
will mail or otherwise send to each Beneficiary, at the expense of Parent,
copies of all such materials received by the Trustee from Parent. The Trustee
will also make available for inspection during regular business hours by any
Beneficiary at the Trustee's principal office in Toronto copies of all such
materials.
4.6 LIST OF PERSONS ENTITLED TO VOTE
Company shall, (a) prior to each annual, general and special Parent
Meeting or the seeking of any Parent Consent and (b) forthwith upon each request
made at any time by the Trustee in writing, prepare or cause to be prepared a
list (a "LIST") of the names and addresses of the Beneficiaries arranged in
alphabetical order and showing the number of Exchangeable Shares
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held of record by each such Beneficiary, 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 Parent or pursuant to applicable
law for determining the holders of Parent Common Shares entitled to receive
notice of 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 Trustee
promptly after receipt by Company 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 permit the Trustee to perform its obligations under this
Agreement. Parent agrees to give Company 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 Company to perform its
obligations under this section 4.6.
4.7 ENTITLEMENT TO DIRECT VOTES
Subject to sections 4.8 and 4.11, any Beneficiary named in a List prepared
in connection with any Parent Meeting or Parent Consent will be entitled (a) to
instruct the Trustee in the manner described in section 4.3 with respect to the
exercise of the Beneficiary Votes to which such Beneficiary is entitled or (b)
to attend such meeting and personally exercise thereat, as the proxy of the
Trustee, the Beneficiary Votes to which such Beneficiary is entitled.
4.8 VOTING BY TRUSTEE AND ATTENDANCE OF TRUSTEE REPRESENTATIVE AT MEETING
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 Beneficiary pursuant to section 4.3, the
Beneficiary Votes as to which such Beneficiary is entitled to direct the vote
(or any lesser number thereof as may be set forth in the instructions);
provided, however, that such written instructions are received by the Trustee
from the Beneficiary prior to the time and date fixed by the Trustee for receipt
of such instructions in the notice given by the Trustee to the Beneficiary
pursuant to section 4.3.
The Trustee shall cause a representative who is 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 Beneficiary (or its designee) of
identification satisfactory to the Trustee's representative, and at the
Beneficiary's request, such representative shall sign and deliver to such
Beneficiary (or its designee) a proxy to exercise personally the Beneficiary
Votes as to which such Beneficiary is otherwise entitled hereunder to direct the
vote, if such Beneficiary either (i) has not previously given the Trustee
instructions pursuant to section 4.3 in respect of such meeting or (ii) submits
to such representative written revocation of any such previous instructions. At
such meeting, the Beneficiary exercising such Beneficiary Votes shall have the
same rights as the Trustee to speak at the meeting in favour of any matter,
question, proposal or proposition, to vote by way of ballot at the meeting in
respect of any matter, question, proposal or proposition, and to vote at such
meeting by way of a show of hands in respect of any matter, question or
proposition.
4.9 DISTRIBUTION OF WRITTEN MATERIALS
Any written materials distributed by the Trustee pursuant to this
Agreement shall be sent by mail (or otherwise communicated in the same manner as
Parent utilizes in communications to holders of Parent Common Shares, subject to
applicable regulatory requirements and the Trustee
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being advised in writing as to that manner of communications, and provided such
manner of communications is reasonably available to the Trustee) to each
Beneficiary at its address as shown on the books of Company. Company shall
provide or cause to be provided to the Trustee for purposes of communication, on
a timely basis and without charge or other expense:
(a) a current List; and
(b) upon the request of the Trustee, mailing labels to enable the
Trustee to carry out its duties under this Agreement.
4.10 TERMINATION OF VOTING RIGHTS
All of the rights of a Beneficiary with respect to the Beneficiary Votes
exercisable in respect of the Exchangeable Shares held by such Beneficiary,
including the right to instruct the Trustee as to the voting of or to vote
personally such Beneficiary Votes, shall be deemed to be surrendered by the
Beneficiary to Parent or Company, as the case may be, and such Beneficiary Votes
and the Voting Rights represented thereby shall cease immediately upon (i) the
valid exercise by the Beneficiary of the Exchange Right, or the occurrence of
the automatic exchange of Exchangeable Shares for Parent Common Shares as
specified in Article 5 (unless, in either case, Parent shall not have delivered
or caused to be delivered the requisite Parent Common Shares issuable in
exchange therefor to the Trustee pending delivery to the Beneficiaries), or (ii)
the retraction or redemption of Exchangeable Shares pursuant to Article 6 or 7
of the Share Provisions, or (iii) the effective date of the liquidation,
dissolution or winding-up of Company pursuant to Article 5 of the Share
Provisions, or (iv) the purchase of Exchangeable Shares from the holder thereof
by Parent pursuant to the exercise of the Retraction Call Right, the Redemption
Call Right, the Liquidation Call Right or the Parent Call Right.
4.11 DISCLOSURE OF INTEREST IN EXCHANGEABLE SHARES
The Trustee or Company shall be entitled to require any Beneficiary or any
Person who the Trustee or Company know or have reasonable cause to believe to
hold any interest whatsoever in an Exchangeable Share to confirm that fact or to
give such details as to who has an interest in such Exchangeable Share as would
be required (if the Exchangeable Shares were a class of "equity shares" of
Company) under section 101 of the SECURITIES ACT (Ontario), as may be amended
from time to time, or as would be required under the charter or certificate of
incorporation of Parent or any laws or regulations, or pursuant to the rules or
regulations of any regulatory authority, of the United States if the
Exchangeable Shares were Parent Common Shares.
ARTICLE 5
EXCHANGE RIGHT AND AUTOMATIC EXCHANGE RIGHTS
5.1 GRANT AND OWNERSHIP OF EXCHANGE RIGHTS
Parent hereby grants to the Trustee as trustee for and on behalf of, and
for the use and benefit of, the Beneficiaries, (1) the right (the "EXCHANGE
RIGHT"), upon the occurrence and during the continuance of an Insolvency Event,
to require Parent to purchase from each or any Beneficiary all or any part of
the Exchangeable Shares held by the Beneficiary, and (2) the Automatic Exchange
Rights, all in accordance with the provisions of this Agreement. Parent
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hereby acknowledges receipt from the Trustee as trustee for and on behalf of the
Beneficiaries of good and valuable consideration (and the adequacy thereof) for
the grant of the Exchange Right and the Automatic Exchange Rights by 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 Exchange Right and the Automatic Exchange Rights and
shall be entitled to exercise all of the rights and powers of an owner with
respect to the Exchange Right and the Automatic Exchange Rights, provided that
the Trustee shall:
(a) hold the Exchange Right and the Automatic Exchange Rights and the
legal title thereto as trustee solely for the use and benefit of the
Beneficiaries in accordance with the provisions of this Agreement;
and
(b) except as specifically authorized by this Agreement, have no power
or authority to exercise or otherwise deal in or with the Exchange
Right or the Automatic Exchange Rights, and the Trustee shall not
exercise any such rights for any purpose other than the purposes for
which the Trust is created pursuant to this Agreement.
The obligations of Parent to issue Parent Common Shares pursuant to the
Exchange Right or the Automatic Exchange Rights are subject to all applicable
laws and regulatory and stock exchange requirements.
5.2 LEGENDED SHARE CERTIFICATES
Company will cause each certificate representing Exchangeable Shares to
bear an appropriate legend notifying the Beneficiaries of:
(a) their right to instruct the Trustee with respect to the exercise of
the Exchange Right in respect of the Exchangeable Shares held by a
Beneficiary;
(b) the Automatic Exchange Rights; and
(c) the notification and payment obligations applicable to non-residents
of Canada, for purposes of the ITA, under section 116 of the ITA, in
respect of a disposition of the Exchangeable Shares.
5.3 GENERAL EXERCISE OF EXCHANGE RIGHT
The Exchange Right shall be and remain vested in and exercisable by the
Trustee. Subject to section 7.15, the Trustee shall exercise the Exchange Right
only on the basis of instructions received pursuant to this Article 5 from
Beneficiaries entitled to instruct the Trustee as to the exercise thereof. To
the extent that no instructions are received from a Beneficiary with respect to
the Exchange Right, the Trustee shall not exercise or permit the exercise of the
Exchange Right.
5.4 PURCHASE PRICE
The purchase price payable by Parent for each Exchangeable Share to be
purchased by Parent under the Exchange Right shall be an amount per share equal
to the sum of (i) the Current Market Price of a Parent Common Share on the last
Business Day prior to the day of closing of
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the purchase and sale of such Exchangeable Share under the Exchange Right, which
shall be satisfied in full by Parent delivering or causing to be delivered to
the Trustee on behalf of such holder one Parent Common Share, plus (ii) to the
extent not paid by Company on the designated payment date therefor, an
additional amount equal to the full amount of all declared and unpaid dividends
on each such Exchangeable Share held by such holder on any dividend record date
which occurred prior to the closing of the purchase and sale. In connection with
each exercise of the Exchange Right, Parent shall provide to the Trustee an
Officer's Certificate setting forth the calculation of the purchase price for
each Exchangeable Share. The total purchase price for each such Exchangeable
Share so purchased may be satisfied only by Parent delivering or causing to be
delivered to the Trustee, on behalf of the relevant Beneficiary, one Parent
Common Share and on the applicable payment date a cheque for the balance, if
any, of the purchase price without interest, less any amounts withheld pursuant
to section 5.13. Upon payment by Parent of such purchase price the relevant
Beneficiary shall cease to have any right to be paid by Company any amount in
respect of declared and unpaid dividends on each such Exchangeable Share and
Company shall cease to be obligated to pay any amount in respect of such
dividends.
5.5 EXERCISE INSTRUCTIONS
Subject to the terms and conditions herein set forth, a Beneficiary shall
be entitled, upon the occurrence and during the continuance of an Insolvency
Event, to instruct the Trustee to exercise the Exchange Right with respect to
all or any part of the Exchangeable Shares registered in the name of such
Beneficiary on the books of Company. To cause the exercise of the Exchange Right
by the Trustee, the Beneficiary shall deliver to the Trustee, in person or by
certified or registered mail, at its principal office in Toronto or at such
other places in Canada as the Trustee may from time to time designate by written
notice to the Beneficiaries, the certificates representing the Exchangeable
Shares which such Beneficiary desires Parent to purchase, duly endorsed in blank
for transfer, and accompanied by such other documents and instruments as may be
required to effect a transfer of Exchangeable Shares under the OBCA and the
by-laws of Company and such additional documents and instruments as the Trustee,
Parent and Company may reasonably require together with (a) a duly completed
form of notice of exercise of the Exchange Right, contained on the reverse of or
attached to the Exchangeable Share certificates, stating (i) that the
Beneficiary thereby instructs the Trustee to exercise the Exchange Right so as
to require Parent to purchase from the Beneficiary the number of Exchangeable
Shares specified therein, (ii) that such Beneficiary has good title to and owns
all such Exchangeable Shares to be acquired by Parent free and clear of all
liens, claims and encumbrances, (iii) the names in which the certificates
representing Parent Common Shares transferable in connection with the exercise
of the Exchange Right are to be registered, (iv) the names and addresses of the
Persons to whom such new certificates should be delivered, and (v) whether the
Beneficiary is a resident of Canada within the meaning of the ITA, and (b)
payment (or evidence satisfactory to the Trustee, Company and Parent of payment)
of the taxes (if any) payable as contemplated by section 5.8. If only a part of
the Exchangeable Shares represented by any certificate or certificates delivered
to the Trustee are to be purchased by Parent under the Exchange Right, a new
certificate for the balance of such Exchangeable Shares shall be issued to the
holder at the expense of Company.
5.6 DELIVERY OF PARENT COMMON SHARES
Promptly after the receipt of the certificates representing the
Exchangeable Shares which the Beneficiary desires Parent to purchase under the
Exchange Right, together with such
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documents and instruments of transfer and a duly completed form of notice of
exercise of the Exchange Right (and payment of taxes, if any, payable as
contemplated by section 5.8 or evidence thereof), duly endorsed for transfer to
Parent, the Trustee shall notify Parent and Company of its receipt of the same,
which notice to Parent and Company shall constitute exercise of the Exchange
Right by the Trustee on behalf of the holder of such Exchangeable Shares, and
Parent shall promptly thereafter deliver or cause to be delivered to the
Trustee, for delivery to the Beneficiary of such Exchangeable Shares (or to such
other Persons, if any, properly designated by such Beneficiary) certificates
representing the number of Parent Common Shares issuable in connection with the
exercise of the Exchange Right, and on the applicable payment date cheques
payable at par at any branch of the bankers of Parent for the balance, if any,
of the total purchase price therefor without interest (but in each case less any
amounts withheld pursuant to section 5.13); provided, however, that no such
delivery shall be made unless and until the Beneficiary requesting the same
shall have paid (or provided evidence satisfactory to the Trustee, Company and
Parent of the payment of) the taxes (if any) payable as contemplated by section
5.8 of this Agreement. Immediately upon the giving of notice by the Trustee to
Parent and Company of the exercise of the Exchange Right as provided in this
section 5.6, the closing of the transaction of purchase and sale contemplated by
the Exchange Right shall be deemed to have occurred and the holder of such
Exchangeable Shares shall be deemed to have transferred to Parent all of such
holder's right, title and interest in and to such Exchangeable Shares and the
related interest in the Trust Estate free and clear of any lien, claim or
encumbrance and shall cease to be a holder of such Exchangeable Shares and shall
not be entitled to exercise any of the rights of a holder in respect thereof,
other than the right to receive his proportionate part of the total purchase
price therefor, unless the requisite number of Parent Common Shares is not
delivered by, or on behalf of, Parent to the Trustee within five Business Days
of the date of the giving of such notice by the Trustee or the balance of the
purchase price, if any, is not paid by Parent on the applicable payment date
therefor (in both cases net of any withholding described in section 5.13), in
which case the rights of the Beneficiary shall remain unaffected until such
Parent Common Shares are so delivered, and the balance of the purchase price, if
any, has been paid, by Parent. Upon delivery by Parent to the Trustee of such
Parent Common Shares, and the balance of the purchase price, if any, (net of any
withholding described in section 5.13) the Trustee shall deliver such Parent
Common Shares and the balance of the purchase price, if any, to such Beneficiary
(or to such other Persons, if any, properly designated by such Beneficiary).
Concurrently with such Beneficiary ceasing to be a holder of Exchangeable
Shares, the Beneficiary shall be considered and deemed for all purposes to be
the holder of the Parent Common Shares delivered to it pursuant to the Exchange
Right.
5.7 EXERCISE OF EXCHANGE RIGHT SUBSEQUENT TO RETRACTION
In the event that a Beneficiary has exercised its right under Article 6 of
the Share Provisions to require Company to redeem any or all of the Exchangeable
Shares held by the Beneficiary (the "RETRACTED SHARES") and is notified by
Company pursuant to section 6.6 of the Share Provisions that Company will not be
permitted as a result of solvency requirements of applicable law to redeem all
such Retracted Shares, and provided that Parent shall not have exercised the
Retraction Call Right with respect to the Retracted Shares and that the
Beneficiary has not revoked the retraction request delivered by the Beneficiary
to Company pursuant to section 6.7 of the Share Provisions and provided further
that the Trustee has received written notice of same from Company or Parent, the
retraction request will constitute and will be deemed to constitute notice from
the Beneficiary to the Trustee instructing the Trustee to exercise the
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Exchange Right with respect to those Retracted Shares that Company is unable to
redeem. In any such event, Company hereby agrees with the Trustee and in favour
of the Beneficiary to promptly notify the Trustee of such prohibition against
Company redeeming all of the Retracted Shares and to promptly forward or cause
to be forwarded to the Trustee all relevant materials delivered by the
Beneficiary to Company or to the transfer agent of the Exchangeable Shares
(including without limitation, a copy of the retraction request delivered
pursuant to section 6.1 of the Share Provisions) in connection with such
proposed redemption of the Retracted Shares and the Trustee will thereupon
exercise the Exchange Right with respect to the Retracted Shares that Company is
not permitted to redeem and in respect of which Parent has not exercised its
Retraction Call Right and will require Parent to purchase such shares in
accordance with the provisions of this Article 5.
5.8 TAXES
Upon any sale of Exchangeable Shares to Parent pursuant to the 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
Beneficiary of the Exchangeable Shares so sold or in such names as such
Beneficiary may otherwise direct in writing, provided such direction is received
by Parent prior to the time such shares are issued, without charge to the holder
of the Exchangeable Shares so sold; provided, however, that such Beneficiary (a)
shall pay (and none of Parent, Company or the Trustee shall be required to pay)
any documentary, stamp, transfer or other taxes that may be payable in respect
of any transfer of such Exchangeable Shares to Parent or in respect of the
issuance or delivery of such Parent Common Shares to such Beneficiary or any
other Person including, without limitation, in the event that Parent Common
Shares are being issued or transferred in the name of a clearing service or
depositary or a nominee thereof, or (b) shall have evidenced to the satisfaction
of the Trustee, Parent and Company that such taxes, if any, have been paid.
5.9 NOTICE OF INSOLVENCY EVENT
As soon as practicable following the occurrence of an Insolvency Event or
any event that with the giving of notice or the passage of time or both would be
an Insolvency Event, Company and Parent shall give written notice thereof to the
Trustee. As soon as practicable following the receipt of notice from Company or
Parent of the occurrence of an Insolvency Event, or upon the Trustee becoming
aware of an Insolvency Event, the Trustee will mail to each Beneficiary, at the
expense of Parent (such funds to be received in advance), a notice of such
Insolvency Event in the form provided by Parent, which notice shall contain a
brief statement of the rights of the Beneficiaries with respect to the Exchange
Right.
5.10 QUALIFICATION OF PARENT COMMON SHARES
Parent covenants that if any Parent Common Shares to be issued and
delivered pursuant to the Exchange Right or the Automatic Exchange Rights
require registration or qualification with or approval of or the filing of any
document, including any prospectus or similar document, or the taking of any
proceeding with or the obtaining of any order, ruling or consent from any
governmental or regulatory authority or stock exchange under any Canadian or
United States federal, provincial or state law or regulation or pursuant to the
rules and regulations of any regulatory authority or the fulfillment of any
other Canadian or United States federal, provincial
15
or state legal requirement before such shares may be issued and delivered by
Parent to the initial holder thereof or in order that such shares may be freely
traded thereafter (other than any restrictions of general application on
transfer by reason of a holder being a "control person" of Parent for purposes
of Canadian provincial securities law or an "affiliate" of Parent for purposes
of United States federal or state securities law), Parent will in good faith
expeditiously take all such actions and do all such things as are reasonably
necessary or desirable to cause such Parent Common Shares to be and remain duly
registered, qualified or approved. Parent will in good faith expeditiously take
all such actions and do all such things as are reasonably necessary or desirable
to cause all Parent Common Shares to be delivered pursuant to the Exchange Right
or the Automatic Exchange Rights to be listed, quoted or posted for trading on
all stock exchanges and quotation systems on which issued Parent Common Shares
have been listed by Parent and remain listed and are quoted or posted for
trading at such time.
5.11 PARENT COMMON SHARES
Parent hereby represents, warrants and covenants that the Parent Common
Shares issuable as described herein will be duly authorized and validly issued
as fully paid and non-assessable and shall be free and clear of any lien, claim
or encumbrance.
5.12 AUTOMATIC EXCHANGE ON LIQUIDATION OF PARENT
Parent will give the Trustee written notice of each of the following
events at the time set forth below:
(a) in the event of any determination by the Board of Directors of
Parent to institute voluntary liquidation, dissolution or winding-up
proceedings with respect to Parent or to effect any other
distribution of assets of Parent among its stockholders for the
purpose of winding up its affairs, at least 60 days prior to the
proposed effective date of such liquidation, dissolution, winding-up
or other distribution; and
(b) as soon as practicable following the earlier of (A) receipt by
Parent of notice of, and (B) Parent otherwise becoming aware of, any
instituted claim, suit, petition or other proceedings with respect
to the involuntary liquidation, dissolution or winding-up of Parent
or to effect any other distribution of assets of Parent among its
stockholders for the purpose of winding up its affairs, in each case
where Parent has failed to contest in good faith any such proceeding
commenced in respect of Parent within 30 days of becoming aware
thereof.
As soon as practicable following receipt by the Trustee from Parent of
notice of any event (a "LIQUIDATION EVENT") contemplated by section 5.12(a) or
5.12(b), the Trustee will give notice thereof to the Beneficiaries. Such notice
shall be provided to the Trustee by Parent and shall include a brief description
of the automatic exchange of Exchangeable Shares for Parent Common Shares
provided for in this section 5.12.
In order that the Beneficiaries will be able to participate on a PRO RATA
basis with the holders of Parent Common Shares in the distribution of assets of
Parent in connection with a Liquidation Event, on the fifth Business Day prior
to the effective date (the "LIQUIDATION EVENT EFFECTIVE DATE") of a Liquidation
Event, all of the then outstanding Exchangeable Shares (other
16
than those owned by Parent and its Affiliates) shall be automatically exchanged
for Parent Common Shares. To effect such automatic exchange, Parent shall
purchase on the fifth Business Day prior to the Liquidation Event Effective Date
each Exchangeable Share then outstanding and held by Beneficiaries, and each
Beneficiary shall sell the Exchangeable Shares held by it at such time, free and
clear of any lien, claim or encumbrance, for a purchase price per share equal to
the sum of: (i) the Current Market Price of a Parent Common Share on the fifth
Business Day prior to the Liquidation Event Effective Date, which shall be
satisfied in full by Parent delivering to the Beneficiary (net of any
withholding described in section 5.13) one Parent Common Share, and (ii) to the
extent not paid by Company on the designated payment date therefor, an
additional amount equal to the full amount of all declared and unpaid dividends
on each such Exchangeable Share held by such holder on any dividend record date
which occurred prior to the date of the exchange. Parent shall provide the
Trustee with an Officer's Certificate in connection with each automatic exchange
setting forth the calculation of the purchase price for each Exchangeable Share.
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 Shares for Parent Common Shares shall be
deemed to have occurred, and each Beneficiary shall be deemed to have
transferred to Parent all of the Beneficiary's right, title and interest in and
to such Beneficiary's Exchangeable Shares free and clear of any lien, claim or
encumbrance and the related interest in the Trust Estate, Company shall have no
liability to pay an amount in respect of declared and unpaid dividends to any
Beneficiary and each such Beneficiary shall cease to be a holder of such
Exchangeable Shares and Parent shall deliver or cause to be delivered to the
Beneficiary the Parent Common Shares deliverable upon the automatic exchange of
Exchangeable Shares for Parent Common Shares and on the applicable payment date
shall deliver to the Trustee for delivery to the Beneficiary a cheque for the
balance, if any, of the total purchase price for such Exchangeable Shares,
without interest, in each case less any amounts withheld pursuant to section
5.13. Concurrently with such Beneficiary ceasing to be a holder of Exchangeable
Shares, the Beneficiary shall be considered and deemed for all purposes to be
the holder of the Parent Common Shares issued pursuant to the automatic exchange
of such Beneficiary's Exchangeable Shares for Parent Common Shares and the
certificates held by the Beneficiary previously representing the Exchangeable
Shares exchanged by the Beneficiary with Parent pursuant to such automatic
exchange shall thereafter be deemed to represent Parent Common Shares issued to
the Beneficiary by Parent pursuant to such automatic exchange. Upon the request
of a Beneficiary and the surrender by the Beneficiary of Exchangeable Share
certificates deemed to represent Parent Common Shares, duly endorsed in blank
and accompanied by such instruments of transfer as Parent may reasonably
require, Parent shall deliver or cause to be delivered to the Beneficiary
certificates representing the Parent Common Shares of which the Beneficiary is
the holder.
5.13 WITHHOLDING RIGHTS
Parent, Company and the Trustee shall be entitled to deduct and withhold
from any purchase price, dividend or consideration otherwise payable under this
Agreement to any holder of Exchangeable Shares or Parent Common Shares such
amounts as Parent, Company or the Trustee (i) is required to deduct and withhold
with respect to such payment under the ITA, the United States INTERNAL REVENUE
CODE OF 1986 or any provision of federal, provincial, territorial, state, local
or foreign tax law, in each case as amended or succeeded, (ii) may be liable to
pay in
17
accordance with section 116 of the ITA or any corresponding provisions of
provincial law; or (iii) may reasonably incur as costs or expenses in connection
with such withholding. The Trustee may act on the advice of counsel with respect
to such matters. To the extent that amounts are so withheld, such withheld
amounts shall be treated for all purposes as having been paid to the holder of
the shares in respect of which such deduction and withholding was made, provided
(in the case of amounts withheld under (i) or (ii) above) that such withheld
amounts are actually remitted to the appropriate taxing authority. To the extent
that the amount to be withheld hereunder from any payment to a holder exceeds
the cash portion of the consideration otherwise payable to the holder, Parent,
Company and the Trustee are hereby authorized to sell or otherwise dispose of
such portion of the consideration as is necessary to provide sufficient funds to
Parent, Company or the Trustee, as the case may be, to enable it to effect such
withholding in cash and Parent, Company or the Trustee shall notify the holder
thereof and remit to such holder any unapplied balance of the net proceeds of
such sale.
5.14 NO FRACTIONAL SHARES
A holder of an Exchangeable Share shall not be entitled to any fraction of
a Parent Common Share upon the exercise of the Exchange Right or Automatic
Exchange Rights hereunder and no certificates representing any such fractional
interest shall be issued and such holder otherwise entitled to a fractional
interest will receive for such fractional interest from Parent on the designated
payment date to the extent not paid by Company a cash payment equal to such
fractional interest multiplied by the Current Market Price.
5.15 PROHIBITION ON VOLUNTARY LIQUIDATION
Parent covenants that it shall not take any action relating to a voluntary
liquidation, dissolution or winding-up of Company or its successors prior to the
Redemption Date (as defined in the Share Provisions) that results in the
recognition under the INCOME TAX ACT (Canada) of any accrued gain on a holder's
Exchangeable Shares, recognition of which was deferred on the consummation of
the transactions contemplated by the Combination Agreement.
ARTICLE 6
RESTRICTIONS ON ISSUE OF SPECIAL VOTING SHARES
6.1 ISSUE OF ADDITIONAL SHARES
During the term of this Agreement, Parent will not, without the consent of
the holders at the relevant time of Exchangeable Shares, given in accordance
with section 10.2 of the Share Provisions, issue any additional Special Voting
Shares with respect to any shares in the capital of or otherwise with respect to
Company.
ARTICLE 7
CONCERNING THE TRUSTEE
7.1 POWERS AND DUTIES OF THE TRUSTEE
The rights, powers, duties and authorities of the Trustee under this
Agreement, in its capacity as Trustee of the Trust, shall include:
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(a) receipt and deposit of the Special Voting Share from Parent as
Trustee for and on behalf of the Beneficiaries in accordance with
the provisions of this Agreement;
(b) granting proxies and distributing materials to Beneficiaries as
provided in this Agreement;
(c) voting the Beneficiary Votes in accordance with the provisions of
this Agreement;
(d) receiving the grant of the Exchange Right and the Automatic Exchange
Rights from Parent as Trustee for and on behalf of the Beneficiaries
in accordance with the provisions of this Agreement;
(e) exercising the Exchange Right and enforcing the benefit of the
Automatic Exchange Rights, in each case in accordance with the
provisions of this Agreement, and in connection therewith receiving
from Beneficiaries Exchangeable Shares and other requisite documents
and distributing to such Beneficiaries (net of any withholding
described in section 5.13) Parent Common Shares and cheques, if any,
to which such Beneficiaries are entitled upon the exercise of the
Exchange Right or pursuant to the Automatic Exchange Rights, as the
case may be;
(f) holding title to the Trust Estate;
(g) investing any moneys forming, from time to time, a part of the Trust
Estate as provided in this Agreement;
(h) taking action on its own initiative or at the direction of a
Beneficiary or Beneficiaries to enforce the obligations of Parent
and Company under this Agreement; and
(i) taking such other actions and doing such other things as are
specifically provided in this Agreement.
In the exercise of such rights, powers, duties and authorities the Trustee
shall have (and is granted) such incidental and additional rights, powers,
duties and authority not in conflict with any of the provisions of this
Agreement as the Trustee, acting in good faith and in the reasonable exercise of
its discretion, may deem necessary, appropriate or desirable to effect the
purpose of the Trust. Any exercise of such discretionary rights, powers, duties
and authorities by the Trustee shall be final, conclusive and binding upon all
Persons.
The Trustee in exercising its rights, powers, duties and authorities
hereunder shall act honestly and in good faith and with a view to the best
interests of the Beneficiaries and shall exercise the care, diligence and skill
that a reasonably prudent trustee would exercise in comparable circumstances.
The Trustee shall not be bound to give notice or do or take any act,
action or proceeding by virtue of the powers conferred on it hereby unless and
until it shall be specifically required to do so under the terms hereof; nor
shall the Trustee be required to take any notice of, or to do, or to take any
act, action or proceeding as a result of any default or breach of any provision
19
hereunder, unless and until notified in writing of such default or breach, which
notices shall distinctly specify the default or breach desired to be brought to
the attention of the Trustee, and in the absence of such notice the Trustee may
for all purposes of this Agreement conclusively assume that no default or breach
has been made in the observance or performance of any of the representations,
warranties, covenants, agreements or conditions contained herein.
7.2 NO CONFLICT OF INTEREST
The Trustee represents to Parent and Company 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 30 days after it becomes aware
that such material conflict of interest exists, either eliminate such material
conflict of interest or resign in the manner and with the effect specified in
Article 10. If, notwithstanding the foregoing provisions of this section 7.2,
the Trustee has such a material conflict of interest, the validity and
enforceability of this Agreement shall not be affected in any manner whatsoever
by reason only of the existence of such material conflict of interest. If the
Trustee contravenes the foregoing provisions of this section 7.2, any interested
party may apply to the Court for an order that the Trustee be replaced as
Trustee hereunder.
7.3 DEALINGS WITH TRANSFER AGENTS, REGISTRARS, ETC.
Parent and Company irrevocably authorize the Trustee, from time to time,
to:
(a) consult, communicate and otherwise deal with the respective
registrars and transfer agents, and with any such subsequent
registrar or transfer agent, of the Exchangeable Shares and Parent
Common Shares; and
(b) requisition, from time to time, (i) from any such registrar or
transfer agent 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 transfer agent of Parent Common Shares, and any
subsequent transfer agent of such shares, the share certificates
issuable upon the exercise from time to time of the Exchange Right
and pursuant to the Automatic Exchange Rights in the manner
specified in Article 5.
Parent and Company irrevocably authorize their respective registrars and
transfer agents to comply with all such requests. Parent covenants that it will
supply its transfer agent with duly executed share certificates for the purpose
of completing the exercise from time to time of the Exchange Right and the
Automatic Exchange Rights, in each case pursuant to Article 5.
7.4 BOOKS AND RECORDS
The Trustee shall keep available for inspection by Parent and Company at
the Trustee's principal offices in Toronto correct and complete books and
records of account relating to the Trust created by this Agreement, including
without limitation, all relevant data relating to mailings and instructions to
and from Beneficiaries and all transactions pursuant to the Exchange Right and
the Automatic Exchange Rights. From time to time, Parent may request in writing
that the Trustee transmit to Parent a brief report, dated as of a given date,
with respect to the details provided below. Within five (5) Business Days of
receiving such written request, the Trustee
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shall transmit such report to Parent. In addition, on or before January 15,
2002, and on or before January 15th in every year thereafter, so long as the
Special Voting Share is registered in the name of the Trustee, the Trustee shall
transmit to Parent and Company a brief report, dated as of the preceding
December 31st, with respect to:
(a) the property and funds comprising the Trust Estate as of that date;
(b) the number of exercises of the Exchange Right, if any, and the
aggregate number of Exchangeable Shares received by the Trustee on
behalf of Beneficiaries in consideration of the delivery by or on
behalf of Parent of Parent Common Shares in connection with the
Exchange Right, during the fiscal year of Parent ended on such
December 31st; and
(c) any action taken by the Trustee in the performance of its duties
under this Agreement which it had not previously reported and which,
in the Trustee's opinion, materially affects the Trust Estate.
7.5 INCOME TAX RETURNS AND REPORTS
The Trustee shall, to the extent necessary, prepare and file on behalf of
the Trust appropriate United States and Canadian income tax returns and any
other returns or reports as may be required by applicable law. In connection
therewith, the Trustee may obtain the advice and assistance of such experts or
advisors as the Trustee considers necessary or advisable (who may be experts or
advisors to Parent or Company). If requested by the Trustee, Parent or Company
shall retain qualified experts or advisors for the purpose of providing such tax
advice or assistance.
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 Beneficiary upon such Beneficiary furnishing to the Trustee reasonable
funding, security or indemnity against the costs, expenses and liabilities which
may be incurred by the Trustee therein or thereby, provided that no Beneficiary
shall be obligated to furnish to the Trustee any such security or indemnity in
connection with the exercise by the Trustee of any of its rights, duties, powers
and authorities with respect to the Special Voting Share pursuant to Article 4,
subject to section 7.15, and with respect to the Exchange Right pursuant to
Article 5, subject to section 7.15, and with respect to the Automatic Exchange
Rights pursuant to Article 5, subject to section 7.15.
None of the provisions contained in this Agreement shall require the
Trustee to expend or risk its own funds or otherwise incur financial liability
in the exercise of any of its rights, powers, duties, or authorities unless
funded, given security and indemnified as aforesaid.
7.7 ACTION OF BENEFICIARIES
No Beneficiary shall have the right to institute any action, suit or
proceeding or to exercise any other remedy authorized by this Agreement for the
purpose of enforcing any of its rights or for the execution of any trust or
power hereunder unless the Beneficiary has requested the Trustee to take or
institute such action, suit or proceeding and furnished the Trustee with the
21
funding, security or indemnity referred to in section 7.6 and the Trustee shall
have failed to act within a reasonable time thereafter. In such case, but not
otherwise, the Beneficiary shall be entitled to take proceedings in any court of
competent jurisdiction such as the Trustee might have taken; it being understood
and intended that no one or more Beneficiaries shall have any right in any
manner whatsoever to affect, disturb or prejudice the rights hereby created by
any such action, or to enforce any right hereunder or the Voting Rights, the
Exchange Right or the Automatic Exchange Rights, except subject to the
conditions and in the manner herein provided, and that all powers and trusts
hereunder shall be exercised and all proceedings at law shall be instituted, had
and maintained by the Trustee, except only as herein provided, and in any event
for the equal benefit of all Beneficiaries.
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 statutory declarations, certificates, opinions or
reports 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 if such statutory declarations, certificates, opinions or
reports comply with the provisions of section 7.9, if applicable, and with any
other applicable provisions of this Agreement.
7.9 EVIDENCE AND AUTHORITY TO TRUSTEE
Parent or Company 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 Parent or Company or the Trustee under this
Agreement or as a result of any obligation imposed under this Agreement,
including, without limitation, in respect of the Voting Rights or the Exchange
Right or the Automatic Exchange Rights and the taking of any other action to be
taken by the Trustee at the request of or on the application of Parent and/or
Company promptly 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 Parent or Company 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 Parent or
Company or a statutory declaration or a certificate made by Persons entitled to
sign an Officer's Certificate stating that any such condition has been complied
with in accordance with the terms of this Agreement.
Whenever such evidence relates to a matter other than the Voting Rights or
the Exchange Right or the Automatic Exchange Rights or the taking of any other
action to be taken by the Trustee at the request or on the application of Parent
or Company, and except as otherwise specifically provided herein, such evidence
may consist of a report or opinion of any solicitor, attorney, 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
22
opinion is furnished by a director, officer or employee of Parent or Company it
shall be in the form of an Officer's Certificate or a statutory declaration.
Each statutory declaration, Officer's Certificate, opinion or report
furnished to the Trustee as evidence of compliance with a condition provided for
in this Agreement shall include a statement by the Person giving the evidence:
(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, attorney, auditor,
accountant, appraiser, valuer, engineer or other expert, whether
retained by the Trustee or by Parent or Company or otherwise, and
may retain or 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;
(b) retain or employ such agents and other assistants as it may
reasonably require for the proper determination and discharge of its
powers and duties hereunder; and
(c) 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.
7.11 INVESTMENT OF MONEYS HELD BY TRUSTEE
Unless otherwise provided in this Agreement, any moneys held by or on
behalf of the Trustee which under the terms of this Agreement may or ought to be
invested or which may be on deposit with the Trustee or which may be in the
hands of the Trustee may be invested and reinvested in the name or under the
control of the Trustee in securities in which, under the laws of the Province of
Ontario, trustees are authorized to invest trust moneys, provided that such
securities are stated to mature within two years after their purchase by the
Trustee, and the Trustee shall so invest such moneys on the written direction of
Company. Pending the investment of any moneys as hereinbefore provided, such
moneys may be deposited in the name of the Trustee in any chartered bank in
Canada or, with the consent of Company, in the deposit
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department of the Trustee or any other specified loan or trust company
authorized to accept deposits under the laws of Canada or any province thereof
at the rate of interest then current on similar deposits.
7.12 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 REQUEST
Except as in this Agreement otherwise specifically provided, the Trustee
shall not be bound to act in accordance with any direction or request of Parent
or Company or of the directors thereof until a duly authenticated copy of the
instrument or resolution containing such direction or request shall have been
delivered to the Trustee, and the Trustee shall be empowered to act upon any
such copy purporting to be authenticated and believed by the Trustee to be
genuine.
7.14 AUTHORITY TO CARRY ON BUSINESS
The Trustee represents to Parent and Company that at the date of execution
and delivery by it of this Agreement it is authorized to carry on the business
of a trust company in each of the provinces of Canada but if, notwithstanding
the provisions of this section 7.14, it ceases to be so authorized to carry on
business, the validity and enforceability of this Agreement and the Voting
Rights, the Exchange Right and the Automatic Exchange Rights shall not be
affected in any manner whatsoever by reason only of such event but the Trustee
shall, within 90 days after ceasing to be authorized to carry on the business of
a trust company in any province of Canada, either become so authorized or resign
in the manner and with the effect specified in Article 10.
7.15 CONFLICTING CLAIMS
If conflicting claims or demands are made or asserted with respect to any
interest of any Beneficiary in any Exchangeable Shares, including any
disagreement between the heirs, representatives, successors or assigns
succeeding to all or any part of the interest of any Beneficiary in any
Exchangeable Shares, resulting in conflicting claims or demands being made in
connection with such interest, then the Trustee shall be entitled, in its sole
discretion, to refuse to recognize or to comply with any such claims or demands.
In so refusing, the Trustee may elect not to exercise any Voting Rights,
Exchange Right or Automatic Exchange Rights subject to such conflicting claims
or demands and, in so doing, the Trustee shall not be or become liable to any
Person on account of such election or its failure or refusal to comply with any
such conflicting claims or demands. The Trustee shall be entitled to continue to
refrain from acting and to refuse to act until:
(a) the rights of all adverse claimants with respect to the Voting
Rights, Exchange Right or Automatic Exchange Rights subject to such
conflicting claims or demands have been adjudicated by a final
judgment of a court of competent jurisdiction and all rights of
appeal have expired; or
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(b) all differences with respect to the Voting Rights, Exchange Right or
Automatic Exchange Rights subject to such conflicting claims or
demands have been conclusively settled by a valid written agreement
binding on all such adverse claimants, and the Trustee shall have
been furnished with an executed copy of such agreement certified to
be in full force and effect.
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 to fully indemnify it as between all
conflicting claims or demands.
7.16 ACCEPTANCE OF TRUST
The Trustee hereby accepts the Trust created and provided for by and in
this Agreement and agrees to perform the same upon the terms and conditions
herein set forth and to hold all rights, privileges and benefits conferred
hereby and by law in trust for the various Persons who shall from time to time
be Beneficiaries, subject to all the terms and conditions herein set forth.
ARTICLE 8
COMPENSATION
8.1 FEES AND EXPENSES OF THE TRUSTEE
Parent and Company jointly and severally agree to pay the Trustee
reasonable compensation for all of the services rendered by it under this
Agreement and will reimburse the Trustee for all reasonable expenses (including,
but not limited to, taxes other than taxes based on the net income or capital of
the Trustee, fees paid to legal counsel and other experts and advisors and
travel expenses) and disbursements, including the cost and expense of any suit
or litigation of any character and any proceedings before any governmental
agency, reasonably incurred by the Trustee in connection with its duties under
this Agreement; provided that Parent and Company shall have no obligation to
reimburse the Trustee for any expenses or disbursements paid, incurred or
suffered by the Trustee in any suit or litigation in which the Trustee is
determined to have acted in bad faith or with fraud, gross negligence,
recklessness or wilful misconduct.
ARTICLE 9
INDEMNIFICATION AND LIMITATION OF LIABILITY
9.1 INDEMNIFICATION OF THE TRUSTEE
Parent and Company jointly and severally agree to indemnify and hold
harmless the Trustee and each of its directors, officers and agents appointed
and acting in accordance with this Agreement (collectively, the "INDEMNIFIED
PARTIES") against all claims, losses, damages, reasonable costs, penalties,
fines and reasonable expenses (including reasonable expenses of the Trustee's
legal counsel) which, without fraud, gross negligence, wilful misconduct or bad
faith on the part of such Indemnified Party, may be paid, incurred or suffered
by the Indemnified Party by reason 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 instruction delivered to the Trustee by Parent
or Company pursuant hereto.
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In no case shall Parent or Company be liable under this indemnity for any
claim against any of the Indemnified Parties unless Parent and Company shall be
notified by the Trustee of the written assertion of a claim or of any action
commenced against the Indemnified Parties, promptly after any of the Indemnified
Parties shall have received any such written assertion of a claim or shall have
been served with a summons or other first legal process giving information as to
the nature and basis of the claim. Subject to (ii) below, Parent and Company
shall be entitled to participate at their own expense in the defence and, if
Parent and Company 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. 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 Parent or Company; or (ii) the named parties to
any such suit include both the Trustee and Parent or Company and the Trustee
shall have been advised by counsel acceptable to Parent or Company that there
may be one or more legal defences available to the Trustee that are different
from or in addition to those available to Parent or Company and that, in the
judgment of such counsel, would present a conflict of interest were a joint
representation to be undertaken (in which case Parent and Company 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).
This indemnity shall survive the termination of this Agreement and the
resignation or removal of the Trustee.
9.2 LIMITATION OF LIABILITY
The Trustee shall not be held liable for any loss which may occur by
reason of depreciation of the value of any part of the Trust Estate or any loss
incurred on any investment of funds pursuant to this Agreement, except to the
extent that such loss is attributable to the fraud, gross negligence,
recklessness, wilful misconduct or bad faith on the part of the Trustee.
ARTICLE 10
CHANGE OF TRUSTEE
10.1 RESIGNATION
The Trustee, or any trustee hereafter appointed, may at any time resign by
giving written notice of such resignation to Parent and Company specifying the
date on which it desires to resign, provided that such notice shall not be given
less than thirty (30) days before such desired resignation date unless Parent
and Company 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, Parent and Company shall promptly appoint a successor
trustee, which shall be a corporation organized and existing under the laws of
Canada or a province thereof and authorized to carry on the business of a trust
company in all provinces of Canada, by written instrument in duplicate, one copy
of which shall be delivered to the resigning trustee and one copy to the
successor trustee. Failing the appointment and acceptance of a successor
trustee, a successor trustee may be appointed by order of the Court upon
application of one or more of the parties to this Agreement. If the retiring
trustee is the party initiating an application for the appointment of a
successor trustee by order of the Court, Parent and Company shall be jointly and
severally liable to reimburse the retiring trustee for its legal costs and
expenses in connection with same.
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10.2 REMOVAL
The Trustee, or any trustee hereafter appointed, may (provided a successor
trustee is appointed) be removed at any time on not less than 30 days' prior
notice by written instrument executed by Parent and Company, in duplicate, one
copy of which shall be delivered to the trustee so removed and one copy to the
successor trustee.
10.3 SUCCESSOR TRUSTEE
Any successor trustee appointed as provided under this Agreement shall
execute, acknowledge and deliver to Parent and Company 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 the like effect as if originally named as trustee in this
Agreement. However, on the written request of Parent and Company 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 the rights and powers of
the trustee so ceasing to act. Upon the request of any such successor trustee,
Parent, Company 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,
Parent and Company shall cause to be mailed notice of the succession of such
trustee hereunder to each Beneficiary specified in a List. If Parent or Company
shall fail to cause such notice to be mailed within 10 days after acceptance of
appointment by the successor trustee, the successor trustee shall cause such
notice to be mailed at the expense of Parent and Company.
ARTICLE 11
PARENT SUCCESSORS
11.1 CERTAIN REQUIREMENTS IN RESPECT OF COMBINATION, ETC.
As long as any outstanding Exchangeable Shares are owned by any Person
other than Parent or any of its Affiliates, Parent shall not consummate any
transaction (whether by way of reconstruction, reorganization, consolidation,
arrangement, 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 or other entity resulting therefrom unless, but may do so if:
(a) such other Person or continuing corporation or, in the event of any
merger, amalgamation or similar transaction pursuant to which
holders of shares in Parent are entitled to receive shares in the
capital of any corporation or other legal entity other than such
other Person or continuing corporation, then such corporation or
legal entity (in each case, 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
27
transaction, an agreement supplemental hereto or otherwise agrees to
become bound by the terms and provisions of this Agreement, in
either case together with such other instruments (if any) as are
reasonably 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 the covenants and obligations of Parent
under this Agreement; and
(b) such transaction shall, to the satisfaction of the Trustee, acting
reasonably, and in the opinion of legal counsel to the Trustee, be
upon such terms and conditions as substantially to preserve and not
to impair in any material respect any of the rights, duties, powers
and authorities of the Trustee or of the Beneficiaries hereunder.
11.2 VESTING OF POWERS IN SUCCESSOR
Whenever the conditions of section 11.1 have been duly observed and
performed, the Trustee, Parent Successor, Company and Parent, as applicable,
shall, if required by section 11.1, execute and deliver the supplemental trust
agreement provided for in Article 12 and thereupon Parent Successor shall
possess and from time to time may exercise each and every right and power of
Parent under this Agreement in the name of 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 Parent, may be done and
performed with like force and effect by the directors or officers of such Parent
Successor.
11.3 WHOLLY-OWNED SUBSIDIARIES
Nothing herein shall be construed as preventing the amalgamation or merger
of any wholly-owned direct or indirect subsidiary of Parent with or into Parent
or the winding-up, liquidation or dissolution of any wholly-owned direct or
indirect subsidiary of Parent (if all of the assets of such subsidiary are
transferred to Parent or another wholly-owned direct or indirect subsidiary of
Parent) or any other distribution of the assets of any wholly-owned direct or
indirect subsidiary of Parent among the shareholders of such subsidiary for the
purpose of winding up its affairs, and any such transactions are expressly
permitted by this Article 11.
ARTICLE 12
AMENDMENTS AND SUPPLEMENTAL TRUST AGREEMENTS
12.1 AMENDMENTS, MODIFICATIONS, ETC.
Subject to Sections 12.2, 12.4 and 14.1, this Agreement may not be amended
or modified except by an agreement in writing executed by Parent, Company and
the Trustee and approved by the Beneficiaries in accordance with section 12.3
and section 10.2 of the Share Provisions. No amendment or modification or waiver
of any of the provisions of this Agreement otherwise permitted hereunder shall
be effective unless made in writing and signed by all of the parties hereto.
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12.2 MINISTERIAL AMENDMENTS
Notwithstanding the provisions of section 12.1, the parties to this
Agreement may in writing, at any time and from time to time, without the
approval of the Beneficiaries, amend or modify this Agreement for the purposes
of:
(a) adding to the covenants of any or all parties hereto for the
protection of the Beneficiaries hereunder provided that the Board of
Directors of each of Parent and Company shall be of the good faith
opinion that such additions will not be prejudicial to the rights or
interests of the Beneficiaries;
(b) making such amendments or modifications not inconsistent with this
Agreement as may be necessary or desirable with respect to matters
or questions which, in the good faith opinion of the Board of
Directors of each of Parent and Company and in the opinion of the
Trustee, having in mind the best interests of the Beneficiaries, it
may be expedient to make, provided that such Boards of Directors and
the Trustee, acting on the advice of counsel, shall be of the
opinion that such amendments and modifications will not be
prejudicial to the interests of the Beneficiaries; or
(c) making such changes or corrections which, on the advice of counsel
to Parent, Company and the Trustee, are required for the purpose of
curing or correcting any ambiguity or defect or inconsistent
provision or clerical omission or mistake or manifest error,
provided that the Trustee, acting on the advice of counsel, and the
Board of Directors of each of Parent and Company shall be of the
opinion that such changes or corrections will not be prejudicial to
the rights and interests of the Beneficiaries.
12.3 MEETING TO CONSIDER AMENDMENTS
Company, at the request of Parent, shall call a meeting or meetings of the
Beneficiaries 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 Company, the Share
Provisions and all applicable laws.
12.4 CHANGES IN CAPITAL OF PARENT AND COMPANY
At all times after the occurrence of any event contemplated pursuant to
section 2.7 or 2.8 of the Exchangeable Share Support Agreement or otherwise, as
a result of which either Parent Common Shares or the Exchangeable 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 Shares or both are so changed and the parties hereto shall execute
and deliver a supplemental trust agreement giving effect to and evidencing such
necessary amendments and modifications.
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12.5 EXECUTION OF SUPPLEMENTAL TRUST AGREEMENTS
From time to time Company (when authorized by a resolution of its Board of
Directors), Parent (when authorized by a resolution of its Board of Directors),
and the Trustee may, subject to the provisions of these presents, and they
shall, when so directed by these presents, execute and deliver by their proper
officers, trust 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 and the covenants of
and obligations assumed by each such Parent Successor in accordance
with the provisions of Article 11 and the successors of the Trustee
or any successor trustee in accordance with the provisions of
Article 10;
(b) making any additions to, deletions from or alterations of the
provisions of this Agreement or the Voting Rights, the Exchange
Right or the Automatic Exchange Rights which, in the opinion of the
Trustee, will not be prejudicial to the interests of the
Beneficiaries or are, in the opinion of counsel to the Trustee,
necessary or advisable in order to incorporate, reflect or comply
with any legislation the provisions of which apply to Parent,
Company, the Trustee 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 Trustee, the rights of the
Trustee and Beneficiaries 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 Shares are held by a Beneficiary;
(b) each of Parent and Company elects in writing to terminate the Trust
and such termination is approved by the Beneficiaries in accordance
with section 10.2 of the Share Provisions; and
(c) 21 years after the death of the last survivor of the descendants of
His Majesty King Xxxxxx VI of Canada and the United Kingdom of Great
Britain and Northern Ireland living on the date of the creation of
the Trust.
13.2 SURVIVAL OF AGREEMENT
This Agreement shall survive any termination of the Trust and shall
continue until there are no Exchangeable Shares outstanding held by a
Beneficiary; provided, however, that the provisions of Articles 8 and 9 shall
survive any such termination of this Agreement.
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ARTICLE 14
GENERAL
14.1 SEVERABILITY
If any term or other provision of this Agreement is invalid, illegal or
incapable of being enforced by any rule or law, or public policy, all other
conditions and provisions of this Agreement shall nevertheless remain in full
force and effect so long as the economic or legal substance of the transactions
contemplated hereby is not affected in any manner materially adverse to any
party. Upon such determination that any term or other provision is invalid,
illegal or incapable of being enforced, the parties hereto shall negotiate in
good faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible in an acceptable manner to the end that the
transactions contemplated hereby are fulfilled to the fullest extent possible.
14.2 ENUREMENT
This Agreement shall be binding upon and enure to the benefit of the
parties hereto and their respective successors and assigns and, subject to the
terms hereof, to the benefit of the Beneficiaries and is specifically assignable
to any Affiliate of Parent that is a wholly-owned entity disregarded for United
States federal income tax purposes without the consent of the Beneficiaries or
the Trustee.
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 telecopy to the parties at the following addresses (or at such
other address for such party as shall be specified in like notice):
(a) To Parent or Company at:
0000 X. Xxxxxx Xxxxxx
Xxxxxxx, XX 00000
XXX
Attention: General Counsel
with a copy (which shall not constitute notice) to:
Xxxx, Xxxx & Xxxxx LLC
00 Xxxx Xxxxxxx Xxxxxx
Three First Xxxxxxxx Xxxxx
Xxxxxxx, XX 00000-0000
XXX
Attention: D. Xxxx XxXxxxxx
Osler, Xxxxxx & Harcourt, LLP
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1 First Xxxxxxxx Xxxxx
Xxx 00
Xxxxxxx, Xxxxxxx X0X 0X0
Attention: Xxxxx Xxxxxxxx
Goodmans LLP
000 Xxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, XX X0X 0X0
Attention: Xxxxxxx Xxxxxxxx
(b) To the Trustee at:
-
Any notice or other communication given personally shall be deemed to have
been given and received upon delivery thereof and if given by telecopy shall be
deemed to have been given and received on the date of receipt thereof unless
such day is not a Business Day, in which case it shall be deemed to have been
given and received upon the immediately following Business Day.
14.4 NOTICE TO BENEFICIARIES
Any and all notices to be given and any documents to be sent to any
Beneficiary may be given or sent to the address of such Beneficiary shown on the
register of holders of Exchangeable Shares in any manner permitted by the
by-laws of Company 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
Beneficiary.
14.5 RISK OF PAYMENTS BY POST
Whenever payments are to be made or documents are to be sent to any
Beneficiary by the Trustee or by a Beneficiary to the Trustee, the making of
such payment or sending of such document sent through the post shall be at the
risk of Parent and Company, in the case of payments made or documents sent by
the Trustee, and at the risk of the Beneficiary, in the case of payments made or
documents sent by the Beneficiary.
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 Province of Ontario and the laws of Canada applicable therein.
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14.8 ATTORNMENT
Each of the Trustee, Parent and Company agrees that any action or
proceeding arising out of or relating to this Agreement may be instituted in the
Court, waives any objection which it may have now or hereafter to the venue of
any such action or proceeding, irrevocably submits to the 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, and Parent hereby
appoints Company at its registered office in the Province of Ontario as attorney
for service of process.
IN WITNESS WHEREOF the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
divine, Inc.
By:
--------------------------------
Name:
Title:
Delano Technology Corporation
By:
--------------------------------
Name:
Title:
-
By:
--------------------------------
Name:
Title:
