EXCHANGE AGREEMENT
This Exchange Agreement (this "Agreement"), dated as of May 13, 1999, is entered
into by and among Homebase Work Solutions Ltd., on behalf of each of the parties
set out on Schedule "A" attached hereto (each such person or entity is referred
to herein as a "Shareholder" and such individuals or entities are referred to
herein collectively as the "Shareholders"), InfoCast Canada Corporation, an
Ontario corporation (the "Corporation") and InfoCast Corporation, a Nevada
corporation ("InfoCast");
WITNESSETH:
WHEREAS pursuant to a share purchase agreement and related letters of
transmittal contemplated thereby (collectively, the "Purchase Agreement") dated
as of the 13th day of May, 1999 by and among the Shareholders, the Corporation
and InfoCast, the parties agreed that they would execute and deliver this
Exchange Agreement;
AND WHEREAS pursuant to the Purchase Agreement, as consideration for the
purchase of all of the issued and outstanding securities of Homebase Work
Solutions Ltd., the Corporation issued 3,400,000 exchangeable shares of the
Corporation (each an "Exchangeable Share" and collectively the "Exchangeable
Shares");
AND WHEREAS the articles of incorporation of the Corporation set forth the
rights, privileges, restrictions and conditions (collectively, the "Exchangeable
Share Provisions") attaching to the Exchangeable Shares;
AND WHEREAS InfoCast is the registered and beneficial owner of 10,000,000 common
shares of the Corporation, being all OF THE issued and outstanding common shares
of the Corporation as of the date hereof;
AND WHEREAS the Shareholders are the registered and beneficial owners of
3,400,000 Exchangeable Shares;
AND WHEREAS Homebase has full power and authority to execute and deliver this
Agreement by and on behalf of each of the Shareholders;
AND WHEREAS the Shareholders have agreed to grant InfoCast the right to purchase
the Exchangeable Shares on the terms and subject to the conditions set out
herein;
NOW THEREFORE in consideration of the premises and mutual agreements and
covenants herein contained (the receipt and adequacy of which consideration as
to each of the parties hereto are hereby mutually acknowledged), the parties
hereto hereby covenant and agree as follows:
ARTICLE 1
DEFINITIONS AND INTERPRETATION
1.1 Defined Terms. All capitalized terms used in this Agreement shall, unless
otherwise defined herein, have the meanings given to them in the Exchangeable
Share Provisions. In addition, the following terms shall have the following
meanings:
"Automatic Exchange Right" means the benefit of the obligation of InfoCast to
effect the automatic exchange of Exchangeable Shares for InfoCast Common Shares
pursuant to section 2.10.
"Insolvency Event" means the institution by the Corporation of any proceeding to
be adjudicated a bankrupt or insolvent or to be dissolved or wound up, or the
consent of the Corporation to the institution of bankruptcy, insolvency,
dissolution, restructuring or winding up proceedings against it, or the filing
of a petition, answer or consent seeking dissolution or winding up under any
bankruptcy, insolvency or analogous laws, including without limitation the
Companies Creditors' Arrangement Act (Canada) and the Bankruptcy and Insolvency
Act (Canada), and the failure by the Corporation to contest in good faith any
such proceedings commenced in respect of the Corporation within 15 days of
becoming aware thereof, or the consent by the Corporation to the filing of any
such petition or to the appointment of a receiver, or the making by the
Corporation of a general assignment for the benefit of creditors, or the
admission in writing by the Corporation of its inability to pay its debts
generally as they become due, or the Corporation not being permitted, pursuant
to solvency requirements of applicable law, to redeem any Retracted Shares
pursuant to Section 5.1 of the Exchangeable Share Provisions.
1.2 Interpretation not Affected by Headings, etc. The division of this Agreement
into articles, sections and paragraphs and the insertion of headings are for
convenience of reference only and shall not affect the construction or
interpretation of this Agreement.
1.3 Number, Gender, etc. Words importing the singular number only shall include
the plural and vice versa. Words importing the use of any gender shall include
all genders.
1.4 Date for any Action. In the event that any date on or by which any action as
required or permitted to be taken under this Agreement is not a Business Day,
such action shall be required or permitted to be taken on or by the next
succeeding Business Day. For the purposes of this Agreement, a "Business Day"
means any day other than a Saturday, Sunday or a day when banks are not open for
business in either or both of Xxx Xxxx, Xxx Xxxx xx Xxxxxxx, Xxxxxxx.
-2-
ARTICLE 2
EXCHANGE RIGHT AND AUTOMATIC EXCHANGE
2.1 Grant and Ownership of the Exchange Right. InfoCast hereby grants to
the Shareholders, subject to the provisions of applicable law (including
applicable securities laws), the right (the "Exchange Right"), upon the
occurrence and during the continuance of an Insolvency Event or in the case of a
Triggering Event (such term having the meaning ascribed thereto in Section 3.3
hereof), to require InfoCast to purchase from each or any Shareholder all but
not less than all of the Exchangeable Shares held by the Shareholder and hereby
grants to the Shareholders the Automatic Exchange Right, all in accordance with
the provisions of this Agreement.
2.2 Legended Share Certificates. The Corporation will cause each
certificate representing the Exchangeable Shares to bear a legend as follows:
The shares represented by this Certificate:
(i) are subject to the terms and conditions of an Exchange Agreement (the
"Agreement") and Support Agreement, both of which are dated May 13,
1999, and are between the Corporation, InfoCast and various other
parties;
(ii) provide the holder with an Exchange Right and Automatic Exchange Right,
as defined in the Agreement (collectively the "Rights"), which Rights
may be exercised in accordance with the Agreement;
(iii) have been issued pursuant to exemptions from the registration and
prospectus requirements of each of the Securities Act (Ontario) and
Securities Act (Alberta) and are therefore subject to resale
restrictions; and
(iv) have not been registered under the Securities Act of 1933, as amended,
and may not be resold or otherwise transferred unless they are either
registered under said Act or sold or otherwise transferred pursuant to
an exemption from such registration requirements.
2.3 Purchase Price. The purchase price payable by InfoCast for each Exchangeable
Share to be purchased by InfoCast under the Exchange Right shall be one (1)
InfoCast Common Share plus that additional consideration set out below. The
purchase of such Exchangeable Share may be satisfied only by InfoCast delivering
to the relevant Shareholder that number of InfoCast Common Shares equal to the
number of Exchangeable Shares so purchased plus (i) an additional amount equal
to the full amount of all cash dividends declared, payable and unpaid on such
Exchangeable Share and all undeclared but payable cash dividends payable on such
Exchangeable Share, plus (ii) an additional amount equal to all dividends
declared and paid on the InfoCast Common Stock which have not been declared on
the Exchangeable Shares in accordance herewith or with the Exchangeable Share
Provisions, plus (iii) an additional amount representing any non-cash dividends
declared, payable and unpaid on such Exchangeable Share ("Additional
Consideration"). In connection with the foregoing, notwithstanding the terms of
the Exchangeable Share Provisions, InfoCast hereby waives
-3-
its right to participate pari passu with the Exchangeable Shares with respect to
the payment of dividends and the distribution of assets in the event of the
liquidation, dissolution or wind-up of the Corporation, whether voluntary or
involuntary, or any other distribution of the assets of the Corporation among
its shareholders for the purpose of winding-up its affairs, and hereby
irrevocably acknowledges and agrees that the Exchangeable Shares held by the
Shareholders shall be entitled to a preference over the Common Shares and any
other shares ranking junior to the Exchangeable Shares with respect to the
payment of dividends and the distribution of assets in the event of the
liquidation, dissolution or winding-up of the Corporation, whether voluntary or
involuntary, or any other distribution of the assets of the Corporation, among
its shareholders for kite purpose of winding-up its affairs. The foregoing
priority shall also apply between the parties with respect to any Liquidation
Amount, Redemption Price and Retraction Price, notwithstanding any provisions in
the Exchangeable Share Provisions to the contrary.
2.4 Exercise Instructions. Subject to the terms and conditions herein set forth,
a Shareholder shall be entitled, upon the occurrence and during the continuance
of an Insolvency Event or Triggering Event, to exercise the Exchange Right with
respect to all but not less than all of the Exchangeable Shares registered in
the name of such Shareholder on the books of the Corporation, subject to
applicable securities laws. To exercise the Exchange Right, the Shareholder
shall deliver to InfoCast in person, by courier service or by certified or
registered mail, the certificates representing all of the Exchangeable Shares
registered in the name of such Shareholder, duly endorsed in blank, and
accompanied by such other documents and instruments as may be required to effect
a transfer of Exchangeable Shares under the Business Corporations Act (Ontario)
and the by-laws of the Corporation and such additional documents and instruments
as InfoCast may reasonably require (including evidence reasonably satisfactory
to InfoCast that the holder of Exchangeable Shares is not a non-resident of
Canada within the meaning of the Income Tax Act (Canada) or a Section 1 16
certificate with a certificate limit in the payment amount) 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 Shareholder thereby exercises the Exchange Right so as to require
InfoCast to purchase from the Shareholder the Exchangeable Shares specified
therein, (ii) that such Shareholder has good title to and owns all such
Exchangeable Shares to be acquired by InfoCast free and clear of all liens,
claims and encumbrances, (iii) the names in which the certificates representing
InfoCast Common Shares deliverable in connection with the exercise of the
Exchange Right are to be issued and (iv) the names and addresses of the persons
to whom such new certificates should be delivered and (b) payment (or evidence
satisfactory to the Corporation and InfoCast of payment) of the taxes (if any)
payable as contemplated by section 2.7 of this Agreement.
2.5 Delivery of InfoCast Common Shares; Effect of Exercise. Promptly after
receipt of the certificates representing all of the Exchangeable Shares
registered in the name of the Shareholder together with such documents and
instruments of transfer and a duly completed form of notice of exercise of the
Exchange Right (and payment of taxes, if any, or evidence thereto), duly
endorsed
-4-
for transfer to InfoCast, InfoCast shall as soon as practicable thereafter, and
in any event within four business days, deliver to the Shareholder (or to such
other persons, if any, properly designated by such Shareholder), the
certificates for the number of InfoCast Common Shares deliverable in connection
with the exercise of the Exchange Right, which shares shall be duly issued as
fully paid and non-assessable and free and clear of any lien, claim,
encumbrance, security interest or adverse claim (other any such lien, claim,
encumbrance, security interest or adverse claim arising as a result of any
action or inaction by a Shareholder), and the Additional Consideration, if any,
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 InfoCast all of its right, title
and interest in and to such Exchangeable Shares 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 InfoCast Common Shares is not allotted, issued and delivered by
InfoCast to such Shareholder (or to such other persons, if any, properly
designated by such Shareholder), within twenty Business Days of the date of
exercise, in which case the rights of the Shareholder shall remain unaffected
until such InfoCast Common Shares are so allotted, issued and delivered by
InfoCast. Concurrently with such Shareholder ceasing to be a holder of
Exchangeable Shares, the Shareholder shall be considered and deemed for all
purposes to be the holder of InfoCast Common Shares to which it is entitled
pursuant to the Exchange Right.
2.6 Exercise of Exchange Right Subsequent to Retraction. In the event that a
Shareholder has exercised its right under Article 5 of the Exchangeable Share
Provisions to require the Corporation to redeem any or all of the Exchangeable
Shares held by the Shareholder (the "Retracted Shares") and provided that the
Shareholder has not revoked the Retraction Request delivered by the Shareholder
to the Corporation pursuant to Section 5.1 of the Exchangeable Share Provisions,
the Corporation hereby agrees with the Shareholder to forward or cause to be
forwarded within 2 business days to InfoCast all relevant materials delivered by
the Shareholder to the Corporation (including without limitation a copy of the
Retraction Request delivered pursuant to Section 5.1 of the Exchangeable Share
Provisions) in connection with such proposed redemption of the Retracted Shares
and, subject to the provisions of applicable law (including applicable
securities laws) and the Retraction Call Right, InfoCast will purchase such
shares in accordance with the provisions of this Article 2.
2.7 Stamp or Other Transfer Taxes. Upon any sale of Exchangeable Shares to
InfoCast pursuant to the Exchange Right, the Automatic Exchange Right, the
Redemption Call Right, the Liquidation Call Right and the Retraction Call Right,
the share certificate or certificates representing InfoCast Common Shares to be
delivered in connection with the payment of the total purchase price therefor
shall be issued in the name of the Shareholder of the Exchangeable Shares so
sold or in such name as such Shareholder may otherwise direct in writing without
charge to the holder of the Exchangeable Shares so sold; provided, however, that
such Shareholder (a) shall pay (and neither InfoCast nor the Corporation shall
be required to pay) any documentary stamp, transfer or other
-5-
taxes that may be payable in respect of any transfer involved in the issuance or
delivery of such shares to a person other than such Shareholder or (b) shall
have established to the satisfaction of InfoCast and the Corporation that such
taxes, if any, have been paid.
2.8 Notice of Insolvency Event and Triggering Event. As soon as practicably
possible upon the occurrence of a Triggering Event or Insolvency Event or any
event which with the giving of notice or the passage of time or both would be an
Insolvency Event or Triggering Event, the Corporation and InfoCast shall give
written notice thereof to the Shareholder, which notice shall include a brief
description of the Exchange Right.
2.9 Reservation of InfoCast Common Shares. InfoCast hereby represents, warrants
and covenants that it has irrevocably reserved for issuance and will at all
times keep available, out of its authorized and unissued capital stock, such
number of InfoCast Common Shares equal to the number of Exchangeable Shares
issued and outstanding from time to time and InfoCast further represents,
warrants and covenants that such number of InfoCast Common Shares shall be
issuable free and clear of any lien, claim, encumbrance, security interest or
adverse claim (other any such lien, claim, encumbrance, security interest or
adverse claim arising as a result of any action or inaction by a Shareholder)
notwithstanding that the issuance of such InfoCast Common Shares may give rise
to certain rights of third parties against InfoCast pursuant to pre-emptive or
other rights granted by InfoCast to such third parties.
2.10 Automatic Exchange on Liquidation of InfoCast.
(a) InfoCast will give each Shareholder notice (in the identical form and
at the same time given by InfoCast to its stockholders) of each of the
following events at the time set forth below:
(i) in the event of any determination by the Board of Directors of
InfoCast to institute voluntary liquidation, dissolution or
winding up proceedings with respect to InfoCast or to effect
any other distribution of assets of InfoCast among its
shareholders for the purpose of winding up its affairs at
least 30 days prior to the proposed effective date of such
liquidation, dissolution, winding-up or other distribution;
and
(ii) immediately, upon receipt by InfoCast of notice of or InfoCast
otherwise becoming aware of any threatened or instituted
claim, suit, petition or other proceedings with respect to the
involuntary liquidation, dissolution or winding-up of InfoCast
or to effect any other distribution of assets of InfoCast
among its shareholders for the purpose of winding up its
affairs;
(any such event being hereinafter referred to as a "Liquidation Event").
-6-
(b) In order that the Shareholders will be able to participate on
a pro rata basis with the holders of InfoCast Common Shares in
the distribution of assets of InfoCast 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 shall be automatically exchanged for InfoCast Common
Shares, subject to the provisions of applicable law (including
applicable securities law). To effect such automatic exchange,
InfoCast shall purchase each Exchangeable Share outstanding as
soon as practicable prior to the Liquidation Event Effective
Date and held by a Shareholder, and each Shareholder shall
sell the Exchangeable Shares held by it at such time, for a
purchase price per Exchangeable Share equal to one InfoCast
Common Share plus the Additional
Consideration, if any, which shall be satisfied in full by InfoCast delivering
to the Shareholder such number of InfoCast Common Shares equal to the number of
Exchangeable Shares so purchased plus the Additional Consideration, if any.
(c) The closing of the transaction of purchase and sale
contemplated by the automatic exchange of Exchangeable Shares
for InfoCast Common Shares shall be deemed to have occurred,
and each Shareholder shall be deemed to have transferred to
InfoCast all of the Shareholder's right, title and interest in
and to its Exchangeable Shares and shall cease to be a holder
of such Exchangeable Shares upon InfoCast delivering to the
Shareholder InfoCast Common Shares deliverable upon the
automatic exchange of Exchangeable Shares for InfoCast Common
Shares and the Additional Consideration, if any. Concurrently
with such Shareholder ceasing to be a holder of Exchangeable
Shares, the Shareholder shall be considered and deemed for all
purposes to be the holder of InfoCast Common Shares issued to
it pursuant to the automatic exchange of Exchangeable Shares
for InfoCast Common Shares and the certificates held by the
Shareholder previously representing the Exchangeable Shares
exchanged by the Shareholder with InfoCast pursuant to such
automatic exchange shall thereafter be deemed to represent
InfoCast Common Shares delivered to the Shareholder by
InfoCast pursuant to such automatic exchange. Upon the request
of a Shareholder and the surrender by the Shareholder of
Exchangeable Share certificates deemed to represent InfoCast
Common Shares, duly endorsed in blank and accompanied by such
instruments of transfer as InfoCast may reasonably require,
InfoCast shall deliver to the Shareholder certificates
representing InfoCast Common Shares of which the Shareholder
is the holder.
-7-
ARTICLE 3
CERTAIN RIGHTS OF INFOCAST
TO ACQUIRE EXCHANGEABLE SHARES
3.1 InfoCast Liquidation Call Right.
(a) Upon the occurrence and during the continuation of an Insolvency Event,
InfoCast shall have the overriding right (the "Liquidation Call
Right"), in the event of and notwithstanding the proposed liquidation,
dissolution or winding-up of the Corporation pursuant to Article 4 of
the Exchangeable Share Provisions to purchase from all but not less
than all of the holders of Exchangeable Shares on the Liquidation Date
(as defined in the Exchangeable Share Provisions) all but not less than
all of the Exchangeable Shares held by each such holder on payment by
InfoCast of an amount per Exchangeable Share equal to one InfoCast
Common Share plus the Additional Consideration per share, if any, which
shall be satisfied in full by delivering to each such holder for each
Exchangeable Share an equivalent number of InfoCast Common Shares plus
the Additional Consideration per share, if any, (the "Liquidation Call
Purchase Price"), provided that if the record date for any declared and
unpaid dividends occurs on or after the Liquidation Date, the
Liquidation Call Purchase Price shall not include such additional
amount equivalent to such dividends. In the event of the exercise of
the Liquidation Call Right by InfoCast, each holder shall be obligated
to sell all the Exchangeable Shares held by the holder to InfoCast on
the Liquidation Date on payment by InfoCast to the holder of the
Liquidation Call Purchase Price for each such Exchangeable Share.
(b) To exercise the Liquidation Call Right, InfoCast must notify the
Corporation as agent for the holders of Exchangeable Shares of
InfoCast's intention to exercise such right at least 30 days before the
Liquidation Date in the case of a voluntary liquidation, dissolution or
winding up of the Corporation and at least five Business Days before
the Liquidation Date in the case of an involuntary liquidation,
dissolution or winding up of the Corporation; provided, however, that
if it is impractical for InfoCast to give such notice, such lesser
amount of notice as practicable shall be given. The Corporation will
notify the holders of Exchangeable Shares as to whether or not InfoCast
has exercised the Liquidation Call Right forthwith after the expiry of
the period during which the same may be exercised by InfoCast. If
InfoCast exercises the Liquidation Call Right, on the Liquidation Date
InfoCast will purchase and the holders will sell all of the
Exchangeable Shares then outstanding for a price per Exchangeable Share
equal to the Liquidation Call Purchase Price.
(c) For the purposes of completing the purchase of the Exchangeable Shares
pursuant to the Liquidation Call Right, InfoCast shall deposit with the
Corporation (as agent for the holders of Exchangeable Shares) on or
before the Liquidation Date, certificates representing the aggregate
number of InfoCast Common Shares and the Additional Consideration, if
any, deliverable by InfoCast in payment of the total Liquidation Call
Purchase Price. Provided that the total Liquidation Call Purchase Price
has been so deposited with the Corporation, on and after the
Liquidation Date the rights of each holder of Exchangeable Shares will
be limited to receiving such holder's proportionate part of the total
Liquidation Call Purchase
-8-
Price payable by InfoCast upon presentation and surrender by the holder
of certificates representing the Exchangeable Shares held by such
holder and the holder shall on and after the Liquidation Date be
considered and deemed for all purposes to be the holder of the InfoCast
Common Shares to which it is entitled. Upon surrender to the
Corporation of a certificate or certificates representing Exchangeable
Shares, together with such other documents and instruments as may be
required to effect a transfer of Exchangeable Shares under the Business
Corporations Act (Ontario) and the by-laws of the Corporation and such
additional documents and instruments as the Corporation may reasonably
require (including evidence reasonably satisfactory to the Corporation
that the holder of Exchangeable Shares is not a non-resident of Canada
within the meaning of the Income Tax Act (Canada) or a Section 1 16
certificate with a certificate limit in the payment amount) the holder
of such surrendered certificate or certificates shall be entitled to
receive in exchange therefor, and the Corporation shall deliver to such
holder, certificates representing the InfoCast Common Shares to which
the holder is entitled. If InfoCast does not exercise the Liquidation
Call Right in the manner described above, on the Liquidation Date the
holders of the Exchangeable Shares will be entitled to receive in
exchange therefor the liquidation price otherwise payable by the
Corporation in connection with the liquidation, dissolution or
winding-up of the Corporation pursuant to Article 4 of the Exchangeable
Share Provisions.
3.2 InfoCast Redemption Call Right.
(a) InfoCast shall have the overriding right (the "Redemption Call Right"),
notwithstanding the proposed redemption of Exchangeable Shares by the
Corporation pursuant to Article 6 of the Exchangeable Share Provisions,
to purchase from all but not less than all of the holders of
Exchangeable Shares to be redeemed on the Redemption Date (as defined
in the Exchangeable Share Provisions) all but not less than all of the
Exchangeable Shares held by each such holder on payment by InfoCast to
the holder of an amount per Exchangeable Share equal to one (1)
InfoCast Common Share which shall be satisfied in full by delivering to
such holder such number of InfoCast Common Shares equal to the number
Exchangeable Shares so purchased plus the Additional Consideration, if
any, (the "Redemption Call Purchase Price"). In the event of the
exercise of the Redemption Call Right by InfoCast, each holder shall be
obligated to sell all the Exchangeable Shares held by the holder and
otherwise to be redeemed to InfoCast on the Redemption Date on payment
by InfoCast to the holder of the Redemption Call Purchase Price for
each such Exchangeable Share.
(b) To exercise the Redemption Call Right, InfoCast must notify the
Corporation (as agent for the holders of Exchangeable Shares) of
InfoCast's intention to exercise such right at least 30 days before the
Redemption Date (as defined in the Exchangeable Share Provisions);
provided, however, that if it is impracticable for InfoCast to give
such notice, such lesser amount of notice as practicable shall be
given. The Corporation will notify the holders of the Exchangeable
Shares as to whether or not InfoCast has exercised the Redemption Call
Right
-9-
forthwith after the expiry of the period during which the same may be
exercised by InfoCast. If InfoCast exercises the Redemption Call Right,
on the Redemption Date InfoCast will purchase and the holders will sell
all of the Exchangeable Shares to be redeemed for a price per
Exchangeable Share equal to the Redemption Call Purchase Price.
(c) For the purposes of completing the purchase of Exchangeable Shares
pursuant to the Redemption Call Right, InfoCast shall deposit with the
Corporation (as agent for the holders of Exchangeable Shares) on or
before the Redemption Date, certificates representing the aggregate
number of InfoCast Common Shares plus the Additional Consideration, if
any, deliverable by InfoCast in payment of the total Redemption Call
Purchase Price. Provided that the total Redemption Call Purchase Price
has been so deposited with the Corporation, on and after the Redemption
Date the rights of each holder of Exchangeable Shares so purchased will
be limited to receiving such holder's proportionate part of the total
Redemption Call Purchase Price payable by InfoCast upon presentation
and surrender by the holder of certificates representing the
Exchangeable Shares purchased by InfoCast from such holder and the
holder shall on and after the Redemption Date be considered and deemed
for all purposes to be the holder of the InfoCast Common Shares to
which it is entitled. Upon surrender to the Corporation of a
certificate or certificates representing Exchangeable Shares, together
with such other documents and instruments as may be required to effect
a transfer of Exchangeable Shares under the Business Corporations Act
(Ontario) and the by-laws of the Corporation and such additional
documents and instruments as the Corporation may reasonably require
(including evidence reasonably satisfactory to the Corporation that the
holder of Exchangeable Shares is not a non-resident of Canada within
the meaning of the Income Tax Act (Canada) or ~ Section 1 16
certificate with a certificate limit in the payment amount) the holder
of such surrendered certificate or certificates shall be entitled to
receive in exchange therefor, and the Corporation shall deliver to such
holder, certificates representing the InfoCast Common Shares to which
the holder is entitled. If InfoCast does not exercise the Redemption
Call Right in the manner described above, on the Redemption Date the
holders of the Exchangeable Shares will be entitled to receive in
exchange therefor the Redemption Price (subject to Section 2.3 hereof)
otherwise payable by the Corporation in connection with the redemption
of Exchangeable Shares pursuant to Article 6 of the Exchangeable Share
Provisions.
3.3 Tender Offers, Etc. In the event that:
(i) a tender offer, share exchange offer, issuer bid, take-over
bid or similar transaction with respect to InfoCast Common
Shares is proposed by InfoCast or its shareholders and is
recommended for acceptance by the Board of Directors of
InfoCast;
(ii) less than fifty percent (50%) of the outstanding shares of
InfoCast are held of record by InfoCast's stockholders as of
the date hereof; or
-10-
(iii) InfoCast elects to initiate the voluntary liquidation,
dissolution or winding-up of InfoCast Canada (each a
"Triggering Event" and collectively the "Triggering Events"),
InfoCast shall have the right to purchase all of the Exchangeable Shares then
outstanding in accordance with the provisions of Article 6 of the Exchangeable
Share Provisions.
ARTICLE 4
MISCELLANEOUS
4.1 Withholding Rights. InfoCast shall be entitled to deduct and withhold from
the consideration otherwise payable to the Shareholder pursuant to this
Agreement such amounts as InfoCast is required or permitted to deduct and
withhold with respect to such payment under the United States Internal Revenue
Code of 1986, as amended, the Income Tax Act (Canada), as amended, or any
provision of state, provincial, local or foreign tax law. To the extent that
amounts are so withheld, such withheld amounts shall be treated for all purposes
hereof as having been paid to the Shareholder in respect of which such deduction
and withholding was made, provided that such withheld amounts are actually
remitted to the appropriate taxing authority. To the extent that the amount so
required or permitted to be deducted or withheld from any payment to the
Shareholder exceeds the cash portion of the consideration otherwise payable to
the Shareholder, InfoCast is hereby authorized to sell or otherwise dispose of
at fair market value such portion of such consideration as is necessary to
provide sufficient funds to InfoCast, in order to enable it to comply with such
deduction or withholding requirement and InfoCast shall give an accounting to
the Shareholder with respect thereto and any balance of such proceeds of sale.
4.2 Time of the Essence. Time shall be of the essence of this Agreement and all
of the provisions of this Agreement.
4.3 No Assignment. The Shareholder may not assign, transfer or otherwise convey
the whole or any part of such Shareholder's rights or obligations under this
Agreement to any person without the express written consent of InfoCast.
InfoCast may assign, transfer or otherwise convey its rights and obligations
under this Agreement to any affiliate of InfoCast without the prior written
consent of any other party provided that such affiliate agrees to be bound by
the terms of this Agreement and provided that InfoCast shall not be relieved of
its obligations under this Agreement.
4.4 Successors. This Agreement shall be binding upon and shall enure to the
benefit of the parties hereto, their heirs, legal representatives, successors
and permitted assigns.
4.5 Further Assurances. Each of the parties shall do all such things and provide
all such reasonable assurances as may be required to consummate the agreements
and transactions contemplated hereby and each party shall execute and deliver
such further documents or instruments
-11-
required by any other party as may be reasonably necessary or desirable to
effect the purpose of this Agreement and to carry out its provisions.
4.6 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the Province of Ontario and the laws of Canada
applicable therein.
4.7 Attornment. InfoCast hereby irrevocably attorns and submits to, and agrees
to take all further steps necessary to submit to, the non-exclusive jurisdiction
of the Ontario Court of Justice (General Division) in any action or proceeding
arising out of or related to this Agreement and irrevocably agrees that all
claims in respect of any such action or proceeding shall be heard and determined
in such Ontario court. InfoCast hereby irrevocably waives, to the fullest extent
it may effectively do so, the defence of an inconvenient forum to the
maintenance of such action or proceeding. InfoCast hereby agrees that a final
judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. InfoCast hereby irrevocably designates and appoints Xxxx &
Berlis, Attention: M. Xxxxx X. Xxxxx as its authorized agent to accept and
acknowledge on its behalf service of any and all process that may be served in
any such action or proceeding in any such court and agrees that service of
process upon such agent, and written notice of such service to InfoCast
delivered to such agent, shall be deemed in every respect effective service of
process upon InfoCast in any such suit, action, or proceeding and shall be taken
and held to be valid personal service upon InfoCast.
4.8 Ontario Securities Law. The rights of the Shareholders pursuant to this
Agreement are subject to Section 1 1.15 of the Purchase Agreement.
4.9 Interpretation. Subject to Section 2.3 hereof, in the event that any
provisions of this Agreement are inconsistent with or conflict with the
Exchangeable Share Provisions, the Exchangeable Share Provisions shall govern
and be paramount.
-12-
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly signed, sealed and delivered as of the date first above
written.
INFOCAST CANADA CORPORATION
By: /s/ (signature is illegible
---------------------------
INFOCAST CORPORATION
By:/s/ A.T. Xxxxxxx
---------------------------
HOMEBASE WORK SOLUTIONS LTD., as duly
authorized signatory for each of the
SHAREHOLDERS
By:
-13-
