EXHIBIT 4.9
FORM OF
VOTING AND EXCHANGE TRUST AGREEMENT
MEMORANDUM OF AGREEMENT made as of the day of , 2000.
AMONG:
SMTC MANUFACTURING CORPORATION OF CANADA,
a corporation existing under the laws of the Province of Ontario
(hereinafter referred to as "SMTC Canada"),
OF THE FIRST PART,
- and -
SMTC CORPORATION,
a corporation existing under the laws of the State of Delaware
(hereinafter referred to as "SMTC"),
OF THE SECOND PART,
- and -
SMTC NOVA SCOTIA COMPANY,
an unlimited company existing under the laws of
the Province of Nova Scotia
(hereinafter referred to as "SMTC Nova Scotia"),
OF THE THIRD PART,
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CIBC MELLON TRUST COMPANY,
a trust company incorporated under the laws of Canada
(hereinafter referred to as the "Trustee"),
OF THE FOURTH PART.
WHEREAS, pursuant to an underwriting agreement dated as of , 2000
and a prospectus dated as of , 2000 filed with the securities regulatory
authorities in each of the provinces of Canada (the "Prospectus"), SMTC Canada
has agreed to issue non-voting exchangeable shares of SMTC Canada
("Exchangeable Shares") to the public in an initial public offering (the
"Initial Public Offering") and may, from time to time, issue additional
Exchangeable Shares or securities exchangeable for or convertible into or
carrying rights to acquire Exchangeable Shares;
AND WHEREAS SMTC Canada will, on the date of this agreement,
issue Exchangeable Shares to certain SMTC Canada shareholders on the
conversion of previously issued SMTC Canada Class L exchangeable shares;
AND WHEREAS each Exchangeable Share is exchangeable at the holder's option
at any time, without further payment, for one share of common stock of SMTC (the
"SMTC Common Stock");
AND WHEREAS coincident with and as part of the issue of Exchangeable Shares
pursuant to the Initial Public Offering, SMTC, SMTC Nova Scotia and SMTC Canada
are to execute a voting and exchange trust agreement substantially in the form
of this agreement;
NOW THEREFORE in consideration of the respective covenants and agreements
provided in this agreement and for other good and valuable consideration (the
receipt and sufficiency of which are hereby acknowledged), the parties hereto
covenant and agree as follows:
ARTICLE 1
DEFINITIONS AND INTERPRETATION
1.1 Definitions
In this agreement, the following terms shall have the following meanings:
"Affiliate" of any Person means any other Person directly or indirectly
controlling, controlled by, or under common control of, that Person. For
the purposes of this definition, "control" (including, with correlative
meanings, the terms "controlled by" and "under common control of"), as
applied to any Person, means the possession by another Person, directly or
indirectly, of the power to direct or cause the direction of the management
and policies of that first-mentioned Person, whether through the ownership
of voting securities, by contract or otherwise.
"Automatic Exchange Right" means the benefit of the obligation of SMTC, in
the event of an SMTC Liquidation Event, to purchase all of the outstanding
Exchangeable Shares (other than Exchangeable Shares held by SMTC or its
Affiliates) from the holders thereof on the fifth Business Day prior to the
effective date of any such SMTC Liquidation Event in exchange for shares of
SMTC Common Stock, plus the aggregate Dividend Amount, pursuant to Section
5.11.
"Beneficiaries" means the registered holders from time to time of
Exchangeable Shares, other than SMTC and its Affiliates.
"Beneficiary Votes" has the meaning ascribed thereto in Section 4.2.
"Board of Directors" means the board of directors of SMTC Canada.
"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
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observed as a holiday in Toronto, Ontario under the laws of the Province of
Ontario or the federal laws of Canada or in New York, New York under the
laws of the State of New York or the federal laws of the United States of
America.
"Call Rights" means the Liquidation Call Right, the Redemption Call Right
and the Retraction Call Right, collectively.
"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 (i) the Foreign Currency Amount
and (ii) the noon spot exchange rate on such date for such foreign currency
expressed in Canadian dollars as reported by the Bank of Canada or, if such
noon spot exchange rate is not available, such spot exchange rate on such
date for such foreign currency expressed in Canadian dollars as may be
deemed by the Board of Directors to be appropriate for such purpose.
"Code" means the United States Internal Revenue Code of 1986, as amended.
"Company Insolvency Event" means the consent of SMTC Canada to the
institution of bankruptcy, insolvency 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), where SMTC Canada fails to
contest in good faith any such proceedings commenced in respect of it
within 30 days of becoming aware thereof, or the consent by SMTC Canada to
the filing of any such petition or to the appointment of a receiver, or the
institution by SMTC Canada of any such proceeding, or the making by SMTC
Canada of a general assignment for the benefit of creditors, or the
admission in writing by SMTC Canada of its inability to pay its debts
generally as they become due, or SMTC Canada not being permitted, pursuant
to solvency requirements of applicable law, to redeem any Retracted Shares
in accordance with the Exchangeable Share Provisions.
"Current Market Price" means, in respect of a share of SMTC Common Stock on
any date, the Canadian Dollar Equivalent of the average of the closing bid
and ask prices of the SMTC Common Stock during a period of 20 consecutive
trading days ending not more than three trading days before such date on
Nasdaq, or, if the shares of SMTC Common Stock are not then quoted on
Nasdaq, on such other stock exchange or automated quotation system on which
shares of SMTC Common Stock 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 SMTC Common Stock during such period
does not create a market that reflects the fair market value of SMTC Common
Stock, then the Current Market Price of a share of SMTC Common Stock 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.
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"Dividend Amount" means, at any date with respect to any Exchangeable
Share, the full amount of all dividends, if any, declared and unpaid on
each such Exchangeable Share held by a holder on any dividend record date
which occurred prior to such date.
"Exchange Right" has the meaning ascribed thereto in Section 5.1.
"Exchangeable Shares" means the non-voting exchangeable shares in the
capital of SMTC Canada having the rights, privileges, restrictions and
conditions set forth in the Exchangeable Share Provisions.
"Exchangeable Share Provisions" means the rights, privileges, restrictions
and conditions attached to the Exchangeable Shares as set out in the
articles of SMTC Canada.
"Exchangeable Share Support Agreement" means that certain exchangeable
share support agreement made as of ., 0000 xxxxxxx XXXX Xxxxxx, XXXX Xxxx
Xxxxxx and SMTC.
"Indemnified Parties" has the meaning ascribed thereto in Section 9.1.
"Liquidation Call Right" has the meaning ascribed thereto in the
Exchangeable Share Provisions.
"List" has the meaning ascribed thereto in Section 4.6.
"Nasdaq" means the Nasdaq National Market.
"Officer's Certificate" means, with respect to SMTC or SMTC Canada, as the
case may be, a certificate signed by any one director or officer of such
corporation.
"Person" includes any individual, firm, partnership, joint venture, venture
capital fund, limited liability company, unlimited liability company,
association, trust, trustee, executor, administrator, legal personal
representative, estate, group, body corporate, corporation, unincorporated
association or organization, syndicate or other entity, whether or not
having legal status.
"Redemption Call Right" has the meaning ascribed thereto in the
Exchangeable Share Provisions.
"Retracted Shares" has the meaning ascribed thereto in Section 5.7.
"Retraction Call Right" has the meaning ascribed thereto in the
Exchangeable Share Provisions.
"Retraction Request" has the meaning ascribed thereto in the Exchangeable
Share Provisions.
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"SMTC Common Stock" means the shares of common stock, par value US$0.01, in
the capital of SMTC, and any other securities into which such shares may be
changed, including shares into which SMTC Common Stock may be changed
consequent upon an amalgamation, merger, reorganization or other
transaction affecting the SMTC Common Stock.
"SMTC Consent" means a written consent sought by SMTC from its
stockholders, including SMTC Stockholders.
"SMTC Liquidation Date" has the meaning ascribed thereto in Section
5.11(c).
"SMTC Liquidation Event" has the meaning ascribed thereto in Section
5.11(b).
"SMTC Meeting" means a meeting of stockholders of SMTC at which SMTC
Stockholders are entitled to vote.
"SMTC Stockholders" means holders of SMTC Common Stock.
"SMTC Successor" has the meaning ascribed thereto in Section 11.1(a).
"Special Voting Share" means the one share of special voting stock of SMTC,
par value US$0.01, which entitles the holder of record of such share to a
number of votes at meetings of SMTC Stockholders equal to the number of
Exchangeable Shares outstanding from time to time (other than Exchangeable
Shares held by SMTC and its Affiliates), which share is to be issued to,
deposited with, and voted by, the Trustee as described herein.
"Trust" means the trust created by this agreement.
"Trustee" means CIBC Mellon Trust Company, a trust company organized and
existing under the laws of Canada and authorized to carry on the business
of a trust company in all the provinces of Canada, and any successor
trustee thereto appointed under this agreement.
"Trust Estate" means the Special Voting Share, any other securities, the
Exchange Right, the Automatic Exchange Right and any money or other
property which may be held by the Trustee from time to time pursuant to
this agreement.
"Voting Rights" means the rights of the holders of Exchangeable Shares to
direct the voting of the Special Voting Share in accordance with this
agreement.
1.2 Interpretation Not Affected by Headings
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 and/or a letter refer to the specified Article or Section of this
agreement. The terms "this agreement", "hereof", "herein" and "hereunder" and
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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
In this agreement, unless the context otherwise requires, words importing
the singular number only shall include the plural and vice versa, and words
importing any gender shall include all genders.
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 Right 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
SMTC hereby issues to and deposits with the Trustee, the Special Voting
Share 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. SMTC 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 issuance of the Special Voting
Share by SMTC 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
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purpose other than the purposes for which this Trust is created
pursuant to this agreement.
3.2 Legended Share Certificates
SMTC Canada 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 the exercise of the Voting Rights in
respect of the Exchangeable Shares of the Beneficiaries.
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 or its duly authorized agent.
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 SMTC Stockholders at
an SMTC Meeting or in connection with an SMTC Consent. The Voting Rights shall
be and remain vested in and exercised by the Trustee. 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
entitled to instruct the Trustee as to the voting thereof at the time
at which the SMTC Meeting is held or an SMTC Consent is sought; 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 SMTC Meetings and all SMTC Consents, each Beneficiary
shall be entitled to instruct the Trustee to cast and exercise one of the votes
comprised in the Voting Rights for each Exchangeable Share owned of record by
such Beneficiary on the record date established by SMTC or by applicable law for
such SMTC Meeting or SMTC Consent, as the case may be (the "Beneficiary Votes"),
in respect of each matter, question, proposal or proposition to be voted on at
such SMTC Meeting or in connection with such SMTC Consent.
4.3 Mailings to Shareholders
With respect to each SMTC Meeting and SMTC Consent, the Trustee shall use
its reasonable efforts promptly to mail or cause to be mailed (or otherwise
communicate in the
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same manner as SMTC utilizes in communications to SMTC Stockholders, subject to
applicable regulatory requirements, the Trustee being advised in writing of that
method and it being able to provide that method of communication) to each of the
Beneficiaries named in the List referred to in Section 4.6, such mailing or
communication to commence on the same day as the mailing or notice (or other
communication) with respect thereto is commenced by SMTC to SMTC Stockholders:
(a) a copy of such notice, together with any related meeting materials to
be provided to SMTC Stockholders;
(b) a statement that such Beneficiary is entitled to instruct the Trustee
as to the exercise of the Beneficiary Votes with respect to such SMTC
Meeting or SMTC Consent or, pursuant to Section 4.7, to attend such
SMTC 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 to exercise the votes attaching to the Special Voting
Share, 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 SMTC 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 so direct and instruct
the Trustee as 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 an SMTC 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.
Unless otherwise agreed to by SMTC and the Trustee, the materials referred to
above are to be provided to the Trustee by SMTC.
For the purposes of determining Beneficiary Votes to which a Beneficiary is
entitled in respect of any SMTC Meeting or SMTC 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 SMTC or by applicable
law for purposes of determining SMTC Stockholders entitled to vote at such SMTC
Meeting. SMTC will notify the Trustee of any decision of the board of directors
of SMTC with respect to the calling of any SMTC 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.
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4.4 Copies of Shareholder Information
SMTC will deliver to the Trustee copies of all proxy materials (including
notices of SMTC Meetings but excluding proxies to vote shares of SMTC Common
Stock), information statements, reports (including without limitation, all
interim and annual financial statements) and other written materials that, in
each case, are to be distributed from time to time to SMTC Stockholders 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 sent
to SMTC Stockholders. The Trustee will mail or otherwise send to each
Beneficiary, at the expense of SMTC, copies of all such materials (and all
materials specifically directed to the Beneficiaries or to the Trustee for the
benefit of the Beneficiaries by SMTC) received by the Trustee from SMTC
contemporaneously with the sending of such materials to SMTC Stockholders. The
Trustee will also make available for inspection by any Beneficiary at the
Trustee's principal office in the City of 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 SMTC generally to SMTC Stockholders; or
(b) specifically directed to the Beneficiaries or to the Trustee for the
benefit of the Beneficiaries by SMTC.
4.5 Other Materials
As soon as reasonably practicable after receipt by SMTC or SMTC
Stockholders (if such receipt is known by SMTC) of any material sent or given by
or on behalf of a third party to SMTC Stockholders generally, including without
limitation, dissident proxy circulars (and related information and material) and
tender and exchange offer circulars (and related information and material), SMTC
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 SMTC, copies of all such materials
received by the Trustee from SMTC. The Trustee will also make available for
inspection by any Beneficiary at the Trustee's principal office in the City of
Toronto copies of all such materials.
4.6 List of Persons Entitled to Vote
SMTC Canada shall, (a) prior to each annual, general and special SMTC
Meeting or the seeking of any SMTC 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 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 an SMTC Meeting or an SMTC Consent, at the close of business on
the record date established by SMTC or pursuant to applicable law for
determining the SMTC Stockholders entitled to
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receive notice of and/or to vote at such SMTC Meeting or to give consent in
connection with such SMTC Consent. Each such List shall be delivered to the
Trustee promptly after receipt by SMTC Canada 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 to enable the Trustee to perform its obligations under
this agreement. SMTC agrees to give SMTC Canada written notice (with a copy to
the Trustee) of the calling of any SMTC Meeting or the seeking of any SMTC
Consent, together with the record dates therefor, sufficiently prior to the date
of the calling of such SMTC Meeting or the seeking of such consent so as to
enable SMTC Canada to perform its obligations under this Section 4.6.
4.7 Entitlement to Direct Votes
Any Beneficiary named in a List prepared in connection with any SMTC
Meeting or SMTC 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 (or to exercise with respect to any written
consent), 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
(a) In connection with each SMTC Meeting and SMTC 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.
(b) 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 SMTC 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.
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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 SMTC
utilizes in communications to SMTC Stockholders, subject to applicable
regulatory requirements, the Trustee being advised in writing of that method of
communication and it being able to provide that method of communication) to each
Beneficiary at its address as shown on the books of SMTC Canada. SMTC Canada
shall provide or cause to be provided to the Trustee for this purpose, 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 SMTC or SMTC Nova Scotia, as the case may be, and such
Beneficiary Votes and the Voting Rights represented thereby shall cease
immediately upon the delivery by such holder to the Trustee of the certificates
representing such Exchangeable Shares in connection with the exercise by the
Beneficiary of the Exchange Right or the occurrence of the automatic exchange of
Exchangeable Shares for shares of SMTC Common Stock, as specified in Article 5
(unless, in either case, SMTC shall not have delivered the requisite shares of
SMTC Common Stock issuable in exchange therefor to the Trustee for delivery to
the Beneficiaries), or upon the redemption of Exchangeable Shares pursuant to
Article 6 or 7 of the Exchangeable Share Provisions, or upon the effective date
of the liquidation, dissolution or winding-up of SMTC Canada pursuant to Article
5 of the Exchangeable Share Provisions, or upon the purchase of Exchangeable
Shares from the holder thereof by SMTC Nova Scotia pursuant to the exercise by
SMTC Nova Scotia of any Call Right.
ARTICLE 5
EXCHANGE RIGHT, AUTOMATIC EXCHANGE RIGHT AND CALL RIGHTS
5.1 Grant and Ownership of the Exchange Right
SMTC hereby grants to the Trustee as trustee for and on behalf of, and for
the use and benefit of, the Beneficiaries the right (the "Exchange Right"), upon
the occurrence and during the continuance of a Company Insolvency Event, to
require SMTC to purchase from each or any Beneficiary all or any part of the
Exchangeable Shares held by the Beneficiary and the Automatic Exchange Right,
all in accordance with the provisions of this agreement. SMTC 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 Right by SMTC to the
Trustee. During the term of the Trust and subject to the terms and conditions of
this agreement, the Trustee shall possess and
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be vested with full legal ownership of the Exchange Right and the Automatic
Exchange Right 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 Right,
provided that the Trustee shall:
(a) hold the Exchange Right and the Automatic Exchange Right 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 Right, 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.
5.2 Legended Share Certificates
SMTC Canada 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; and
(b) the Automatic Exchange Right.
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 total purchase price payable by SMTC for each Exchangeable Share to be
purchased by SMTC under the Exchange Right shall be an amount per share equal to
(a) the Current Market Price of a share of SMTC Common Stock on the last
Business Day prior to the day of closing of the purchase and sale of such
Exchangeable Share under the Exchange Right, which shall be satisfied in full by
SMTC causing to be sent to such holder one share of SMTC Common Stock, plus (b)
to the extent not paid by SMTC Canada, an additional amount equivalent to the
Dividend Amount. In connection with each exercise of the Exchange Right, SMTC
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 SMTC issuing and delivering or causing to be delivered to the Trustee,
on behalf of the relevant Beneficiary, one share of SMTC Common Stock and, on
the applicable payment date, a cheque for the balance, if any, of the purchase
price without interest (but less any amounts withheld pursuant to Section 5.13).
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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 a Company
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 SMTC Canada. 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,
Ontario, 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 SMTC 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 Business Corporations Act (Ontario) and the articles and bylaws of SMTC
Canada and such additional documents and instruments as the Trustee, SMTC or
SMTC Canada 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 SMTC 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 SMTC free and clear of all liens,
claims and encumbrances, (iii) the name or names in which the certificates
representing shares of SMTC Common Stock issuable 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 Trustee, SMTC Canada and SMTC 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 SMTC under the Exchange Right, a
new certificate for the balance of such Exchangeable Shares shall be issued to
the holder at the expense of SMTC Canada.
5.6 Delivery of SMTC Common Stock; Effect of Exercise
Promptly after receipt by the Trustee of the certificates representing the
Exchangeable Shares which the Beneficiary desires SMTC to purchase under the
Exchange Right, 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, payable as contemplated by Section 5.8 or evidence thereof), duly
endorsed for transfer to SMTC, the Trustee shall notify SMTC and SMTC Canada of
its receipt of the same, which notice to SMTC and to SMTC Canada shall
constitute exercise of the Exchange Right by the Trustee on behalf of the holder
of such Exchangeable Shares, and SMTC 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) the number of shares of SMTC Common Stock issuable in
connection with the exercise of the Exchange Right, and on the applicable
payment date, cheques for the balance, if any, of the total purchase price
therefor without interest (but 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, SMTC Canada and SMTC of the payment of) the taxes
(if any) payable as contemplated by Section 5.8. Immediately upon the
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giving of notice by the Trustee to SMTC and to SMTC Canada 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 SMTC all of such holder's right, title and
interest in and to such Exchangeable Shares and the related interest in the
Trust Estate 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 its proportionate part of the total
purchase price therefor (together with a cheque for the balance, if any, of the
total purchase price therefor without interest), unless the requisite number of
shares of SMTC Common Stock is not allotted, issued and delivered by SMTC to the
Trustee within five Business Days of the date of the giving of such notice by
the Trustee, in which case the rights of the Beneficiary shall remain unaffected
until such shares of SMTC Common Stock are so allotted, issued and delivered by
SMTC and any such cheque is delivered and paid. Upon delivery by SMTC to the
Trustee of such shares of SMTC Common Stock and any such cheque, the Trustee
shall deliver such shares of SMTC Common Stock and such cheque 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 shares of SMTC Common Stock delivered to it
pursuant to the exercise of 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 Exchangeable Share Provisions to require SMTC Canada to redeem any or all of
the Exchangeable Shares held by the Beneficiary (the "Retracted Shares") and is
notified by SMTC Canada pursuant to Section 6.6 of the Exchangeable Share
Provisions that SMTC Canada will not be permitted as a result of solvency
requirements of applicable law to redeem all such Retracted Shares, subject to
receipt by the Trustee of written notice to that effect from SMTC Canada, and
provided that SMTC Nova Scotia 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 SMTC Canada
pursuant to Section 6.1 of the Exchangeable Share Provisions, the Retraction
Request will constitute and will be deemed to constitute notice from the
Beneficiary to the Trustee instructing the Trustee to exercise the Exchange
Right with respect to those Retracted Shares that SMTC Canada is unable to
redeem. In any such event, SMTC Canada hereby agrees with the Trustee and in
favour of the Beneficiary to immediately notify the Trustee of such prohibition
against SMTC Canada 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 SMTC Canada 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 Exchangeable 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 SMTC
Canada is not permitted to redeem and will require SMTC to purchase such shares
in accordance with the provisions of this Article 5.
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5.8 Stamp or Other Transfer Taxes
Upon any sale of Exchangeable Shares to SMTC pursuant to the Exchange Right
or the Automatic Exchange Right, the share certificate or certificates
representing shares of SMTC Common Stock 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 name or names as such
Beneficiary may otherwise direct in writing without charge to the holder of the
Exchangeable Shares so sold; provided, however, that such Beneficiary (a) shall
pay (and none of SMTC, SMTC Canada or the Trustee shall be required to pay) any
documentary, stamp, transfer or other taxes that may be payable in respect of
any transfer involved in the issuance or delivery of such shares to a person
other than such Beneficiary or (b) shall have evidenced to the satisfaction of
the Trustee, SMTC and SMTC Canada that such taxes, if any, have been paid.
5.9 Notice of Company Insolvency Event
As soon as practicable following the occurrence of a Company Insolvency
Event or any event that, with the giving of notice or the passage of time or
both, would be a Company Insolvency Event, SMTC Canada and SMTC shall give
written notice thereof to the Trustee. As soon as practicable following the
receipt of notice from SMTC Canada or SMTC of the occurrence of a Company
Insolvency Event, or upon the Trustee becoming aware of a Company Insolvency
Event, the Trustee will mail to each Beneficiary, at the expense of SMTC, a
notice of such Company Insolvency Event in the form provided by SMTC, which
notice shall contain a brief statement of the rights of the Beneficiaries with
respect to the Exchange Right.
5.10 Qualification of SMTC Common Stock
SMTC covenants that if any shares of SMTC Common Stock to be issued and
delivered pursuant to the Exchange Right or the Automatic Exchange Right 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 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 fulfilment of any other Canadian or United States
federal, provincial or state legal requirement before such shares may be issued
and delivered by SMTC 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 of securities of an issuer that is not a "reporting
issuer" or equivalent within the meaning of Canadian provincial securities laws,
or by reason of a holder being a "control person" of SMTC for purposes of
Canadian provincial securities law or an "affiliate" of SMTC for purposes of
United States federal or state securities law), SMTC will, in good faith,
expeditiously take all such actions and do all such things as are necessary or
desirable to cause such shares of SMTC Common Stock to be and remain duly
registered, qualified or approved. SMTC will, in good faith, expeditiously take
all such actions and do all such things as are reasonably necessary or desirable
to cause all shares of SMTC Common Stock to be delivered pursuant to the
Exchange Right or the Automatic Exchange Right, to be listed, quoted or posted
for trading on all stock exchanges and quotation systems on which
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outstanding shares of SMTC Common Stock have been listed by SMTC and remain
listed and are quoted or posted for trading at such time.
5.11 Automatic Exchange on Liquidation of SMTC
(a) SMTC will give the Trustee written notice 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
SMTC to institute voluntary liquidation, dissolution or
winding-up proceedings with respect to SMTC or to effect any
other distribution of assets of SMTC among its shareholders 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
(ii) as soon as practicable following the earlier of (A) receipt by
SMTC of notice of, and (B) SMTC 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 SMTC or to effect any other
distribution of assets of SMTC among its shareholders for the
purpose of winding-up its affairs, in each case where SMTC has
failed to contest in good faith any such proceeding commenced in
respect of SMTC within 30 days of becoming aware thereof.
(b) As soon as practicable following receipt by the Trustee from SMTC of
notice of any event (an "SMTC Liquidation Event") contemplated by
Section 5.11(a)(i) or 5.11(a)(ii) above, the Trustee will give notice
thereof to the Beneficiaries. Such notice shall be provided by SMTC to
the Trustee and shall include a brief description of the automatic
exchange of Exchangeable Shares for shares of SMTC Common Stock
provided for in Section 5.11(c).
(c) In order that the Beneficiaries will be able to participate on a pro
rata basis with SMTC Stockholders in the distribution of assets of
SMTC in connection with an SMTC Liquidation Event, on the fifth
Business Day prior to the effective date (the "SMTC Liquidation Date")
of an SMTC Liquidation Event, all of the then outstanding Exchangeable
Shares (other than those held by SMTC and its Affiliates) shall be
automatically exchanged for shares of SMTC Common Stock. To effect
such automatic exchange, SMTC shall purchase on the fifth Business Day
prior to the SMTC Liquidation Date each Exchangeable Share then
outstanding and held by Beneficiaries, and each Beneficiary shall sell
the Exchangeable Shares held by it at such time, for a total purchase
price per share equal to (a) the Current Market Price of a share of
SMTC Common Stock on the fifth Business Day prior to the SMTC
Liquidation Date, which shall be satisfied in full by SMTC issuing to
the Beneficiary one share of SMTC Common Stock, and (b) to the extent
not paid by SMTC Canada, an additional amount equivalent to the
Dividend Amount. In connection with such automatic exchange, SMTC
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shall provide to the Trustee an Officer's Certificate setting forth
the calculation of the purchase price for each Exchangeable Share.
(d) On the fifth Business Day prior to the SMTC Liquidation Date, the
closing of the transaction of purchase and sale contemplated by the
automatic exchange of Exchangeable Shares for shares of SMTC Common
Stock shall be deemed to have occurred, and each Beneficiary shall be
deemed to have transferred to SMTC all of the Beneficiary's right,
title and interest in such Beneficiary's Exchangeable Shares and the
related interest in the Trust Estate and shall cease to be a holder of
such Exchangeable Shares. On such date, SMTC shall issue to the
Beneficiary the shares of SMTC Common Stock issuable upon the
automatic exchange of Exchangeable Shares for shares of SMTC Common
Stock 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
but 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 shares of SMTC Common Stock issued pursuant to the
automatic exchange of Exchangeable Shares for shares of SMTC Common
Stock and the certificates held by the Beneficiary previously
representing the Exchangeable Shares exchanged by the Beneficiary with
SMTC pursuant to such automatic exchange shall thereafter be deemed to
represent shares of SMTC Common Stock issued to the Beneficiary by
SMTC pursuant to such automatic exchange. Upon the request of a
Beneficiary and the surrender by the Beneficiary of Exchangeable Share
certificates deemed to represent shares of SMTC Common Stock, duly
endorsed in blank and accompanied by such instruments of transfer as
SMTC may reasonably require, SMTC shall deliver or cause to be
delivered to the Beneficiary certificates representing shares of SMTC
Common Stock of which the Beneficiary is the holder.
5.12 Call Rights
The Trustee, on behalf of each holder of an Exchangeable Share from time to
time, whether of record or beneficial, agrees to, acknowledges and confirms each
of the Liquidation Call Right, the Redemption Call Right and the Retraction Call
Right, in each case, in favour of SMTC Nova Scotia, and the overriding nature
thereof in connection with the liquidation, dissolution or winding-up of SMTC
Canada or the retraction or redemption of Exchangeable Shares, as the case may
be, and to be bound thereby in favour of SMTC Nova Scotia as therein provided,
and it is agreed and acknowledged that such Call Rights are granted as part of
the consideration for the obligations of SMTC under this agreement.
5.13 Withholding Rights
SMTC, SMTC Canada and the Trustee shall be entitled to deduct and withhold
from any consideration otherwise payable under this agreement to any holder of
Exchangeable Shares or SMTC Common Stock such amounts as SMTC, SMTC Canada or
the Trustee is required or permitted to deduct and withhold with respect to such
payment under the Income
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Tax Act (Canada), the Code or any provision of provincial, state, local or
foreign tax law, in each case as amended or succeeded. 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 that such withheld amounts are
actually remitted to the appropriate taxing authority. To the extent that the
amounts so required or permitted to be deducted or withheld from any payment to
a holder exceeds the cash portion of the consideration otherwise payable to the
holder, SMTC, SMTC Canada 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 SMTC, SMTC Canada or the Trustee, as the case may
be, to enable it to comply with such deduction or withholding requirements and
SMTC, SMTC Canada or the Trustee shall notify the holder thereof and remit to
such holder any unapplied balance of the net proceeds of such sale. SMTC
represents and warrants that, based upon facts currently known to it, it has no
current intention, as at the date of this agreement, to deduct or withhold from
any dividend paid to holders of Exchangeable Shares any amounts under the Code.
5.14 SMTC Common Stock
SMTC hereby represents, warrants and covenants that the shares of SMTC
Common Stock 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.
ARTICLE 6
RESTRICTIONS ON ISSUE OF SPECIAL VOTING SHARES
6.1 Issue of Additional Shares
During the term of this agreement, SMTC will not, without the consent of
the holders at the relevant time of Exchangeable Shares, given in accordance
with Section 10.2 of the Exchangeable Share Provisions, issue any shares of its
special voting stock in addition to the Special Voting Share.
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:
(a) receipt and deposit of the Special Voting Share from SMTC 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;
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(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
Right from SMTC 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 Right, 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 shares of SMTC Common Stock and
cheques, if any, to which such Beneficiaries are entitled upon the
exercise of the Exchange Right or pursuant to the Automatic Exchange
Right, 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 at the direction of a Beneficiary or Beneficiaries to
enforce the obligations of SMTC and SMTC Canada 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 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.
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7.2 No Conflict of Interest
The Trustee represents to SMTC and to SMTC Canada 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 90 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 Ontario Superior Court of Justice for
an order that the Trustee be replaced as Trustee hereunder.
7.3 Dealings with Transfer Agents, Registrars, etc.
SMTC and SMTC Canada 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 the shares of SMTC
Common Stock; 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 the shares of SMTC Common Stock, 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 Right in the manner specified in
Article 5.
SMTC and SMTC Canada irrevocably authorize their respective registrars and
transfer agents to comply with all such requests. SMTC 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 Right in each case pursuant to Article 5.
7.4 Books and Records
The Trustee shall keep available for inspection by SMTC and SMTC Canada at
the Trustee's principal office in Xxxxxxx, Xxxxxxx, correct and complete books
and records of accounts 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 Right. On or before March 31, 2001 and
on or before March 31 in every year thereafter, so long as the Special Voting
Share is on deposit with the Trustee, the Trustee shall transmit to SMTC and to
SMTC Canada a brief report, dated as of the preceding December 31, with respect
to:
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(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 issuance by SMTC of
shares of SMTC Common Stock in connection with the Exchange Right,
during the fiscal year ended on such December 31; and
(c) any action taken by the Trustee in the performance of its duties under
this agreement which it had not previously reported.
7.5 Income Tax Returns and Reports
The Trustee shall, to the extent necessary, prepare and file or cause to be
prepared and filed on behalf of the Trust appropriate Canadian income tax
returns and any other returns or reports as may be required by applicable law or
pursuant to the rules and regulations of any securities exchange or other
trading system through which the Exchangeable Shares are traded, and in
connection therewith may obtain the advice of and assistance from such experts
as the Trustee may reasonably consider necessary or advisable. If requested by
the Trustee, SMTC shall retain such experts to provide such advice or assistance
to the Trustee.
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 funding, 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 Right 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 or 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 has furnished the Trustee with the
funds, 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
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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 Right, 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 its
rights, powers, duties and authorities hereunder if, when required, it acts and
relies in good faith upon statutory declarations, certificates, opinions, Lists,
mailing labels, reports or other papers or documents furnished pursuant to the
provisions hereof or required by the Trustee to be furnished to it in the
exercise of its rights, powers, duties and authorities hereunder if such
statutory declarations, certificates, opinions, Lists, mailing labels, reports
or other papers or documents 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
SMTC and/or SMTC Canada 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 SMTC and/or SMTC Canada 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, the
Exchange Right or the Automatic Exchange Right and the taking of any other
action to be taken by the Trustee at the request of or on the application of
SMTC and/or SMTC Canada 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 SMTC and/or SMTC Canada
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 SMTC and/or SMTC
Canada 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,
the Exchange Right or the Automatic Exchange Right or the taking of any other
action to be taken by the Trustee at the request or on the application of SMTC
and/or SMTC Canada, 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 it, provided that if
such
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report or opinion is furnished by a director, officer or employee of SMTC and/or
SMTC Canada, 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 the person 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 the person based the statutory declaration, certificate,
statement or opinion; and
(c) declaring that the person has made such examination or investigation
as the person believes is necessary to enable the person 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 or prepared by any solicitor, attorney,
auditor, accountant, appraiser, valuer, engineer or other expert,
whether retained by the Trustee or by SMTC and/or SMTC Canada 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; and
(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 may pay reasonable remuneration for all services
performed for it (and shall be entitled to receive reasonable
remuneration for all services performed by it) in the discharge of the
trusts hereof and compensation for all disbursements, costs and
expenses made or incurred by it in the discharge of its duties
hereunder and in the management of the Trust.
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
SMTC Canada. Any direction by SMTC Canada to the Trustee as to the investment of
the funds shall be in writing and shall
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be provided to the Trustee no later than 9:00 a.m. (Toronto time) on the day on
which the investment is to be made. Any such direction received by the Trustee
after 9:00 a.m. (Toronto time) or received on a day other than a Business Day,
shall be deemed to have been given prior to 9:00 a.m. (Toronto time) on the next
Business Day. 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 SMTC Canada, in the deposit department of the
Trustee or any other chartered bank, 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.
The Trustee shall maintain accurate books, records and accounts of the
transactions effected or controlled by the Trustee hereunder and the receipt,
investment, re-investment and disbursement of any funds held by the Trustee and
shall provide to SMTC and SMTC Canada records and statements thereof
periodically upon request.
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 otherwise specifically provided in this agreement, the Trustee
shall not be bound to act in accordance with any direction or request of SMTC
and/or SMTC Canada 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 and
rely 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 SMTC and to SMTC Canada 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
Right 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
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made in connection with such interest, then the Trustee shall be entitled, at
its sole discretion, to refuse to recognize or to comply with any such claims or
demands. In so refusing, the Trustee may elect not to exercise any Voting
Rights, the Exchange Right or the Automatic Exchange Right 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,
the Exchange Right or the Automatic Exchange Right 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
(b) all differences with respect to the Voting Rights, the Exchange Right
or the Automatic Exchange Right 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 bylaw 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
SMTC and SMTC Canada jointly and severally agree to pay the Trustee
reasonable compensation for all of the services tendered 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 of the
Trustee, compensation paid to experts and advisers, 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
SMTC and SMTC Canada 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 negligence, recklessness or wilful misconduct.
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ARTICLE 9
INDEMNIFICATION AND LIMITATION OF LIABILITY
9.1 Indemnification of the Trustee
SMTC and SMTC Canada jointly and severally agree to indemnify and hold
harmless the Trustee and each of its directors, officers, employees 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, negligence, recklessness, 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 (to be
confirmed in writing) delivered to the Trustee by SMTC or SMTC Canada pursuant
hereto.
In no case shall SMTC or SMTC Canada be liable under this indemnity for any
claim against any of the Indemnified Parties unless SMTC and SMTC Canada 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, SMTC and SMTC Canada
shall be entitled to participate at their own expense in the defence and, if
SMTC and SMTC Canada 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 SMTC or SMTC Canada, such authorization not to be
unreasonably withheld; or (ii) the named parties to any such suit include both
the Trustee and SMTC or SMTC Canada and the Trustee shall have been advised by
counsel acceptable to SMTC or SMTC Canada that there may be one or more legal
defences available to the Trustee that are different from or in addition to
those available to SMTC or SMTC Canada and that, in the judgment of such
counsel, would present a conflict of interest were a joint representation to be
undertaken (in which case SMTC and SMTC Canada shall not have the right to
assume the defence of such suit on behalf of the Trustee but shall be liable to
pay the reasonable fees and expenses of counsel for the Trustee).
9.2 Limitation of Liability
The Trustee shall not be 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, negligence, recklessness,
wilful misconduct or bad faith on the part of the Trustee.
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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 SMTC and to SMTC Canada specifying
the date on which it desires to resign, provided that such notice shall not be
given less than one month before such desired resignation date unless SMTC and
SMTC Canada 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, SMTC and SMTC Canada shall promptly appoint a successor
trustee, which shall be a corporation organized and existing under the laws of
Canada 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 appointment of a successor trustee by SMTC and SMTC Canada, a successor
trustee may be appointed by an order of the Ontario Superior Court of Justice
upon application by one or more parties hereto. Should the retiring trustee
apply for the appointment of a successor trustee by an order of the Ontario
Superior Court of Justice, it shall be at the joint and several expense of SMTC
and SMTC Canada.
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
written notice by SMTC and SMTC Canada, 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 SMTC and to SMTC Canada 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 SMTC and SMTC
Canada or of the successor trustee, the trustee ceasing to act shall, upon
payment of any amounts then due to 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, SMTC, SMTC Canada 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,
SMTC and SMTC Canada shall cause to be mailed notice of the succession of such
trustee hereunder to
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each Beneficiary specified in a List. If SMTC or SMTC Canada 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 SMTC and SMTC Canada.
ARTICLE 11
SMTC SUCCESSORS
11.1 Certain Requirements in Respect of Combination
Subject to Section 11.3, SMTC shall not consummate any transaction (whether
by way of reconstruction, reorganization, consolidation, merger, transfer, sale,
lease or otherwise) whereby all or substantially all of its undertakings,
property and assets would become the property of any other person or, in the
case of a merger, of the continuing corporation resulting therefrom unless, but
may do so if:
(a) such other person or continuing corporation (the "SMTC Successor"), by
operation of law, becomes, without more, bound by the terms and
provisions of this agreement or, if not so bound, executes, prior to
or contemporaneously with the consummation of such transaction, an
agreement supplemental hereto and such other instruments (if any) as
are satisfactory to the Trustee, acting reasonably, and in the opinion
of legal counsel to the Trustee are reasonably necessary or advisable
to evidence the assumption by the SMTC Successor of liability for all
moneys payable and property deliverable hereunder and the covenant of
such SMTC 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 SMTC 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 and, if required by Xxxxxxx 00.0, XXXX Xxxxxxxxx xxx XXXX
Xxxxxx shall execute and deliver the supplemental agreement provided for in
Article 12 and thereupon the SMTC Successor shall possess and from time to time
may exercise each and every right and power of SMTC under this agreement in the
name of SMTC or otherwise and any act or proceeding under any provision of this
agreement required to be done or performed by the board of directors of SMTC or
any officers of SMTC may be done and performed with like force and effect by the
directors or officers of such SMTC Successor.
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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 SMTC with or into SMTC or
the winding-up, liquidation or dissolution of any wholly-owned subsidiary of
SMTC provided that all of the assets of such subsidiary are transferred to SMTC
or another wholly-owned direct or indirect subsidiary of SMTC and any such
transactions are expressly permitted by this Article 11.
ARTICLE 12
AMENDMENTS AND SUPPLEMENTAL AGREEMENTS
12.1 Amendments, Modifications
This agreement may not be amended or modified except by an agreement in
writing executed by XXXX, XXXX Xxxx Xxxxxx, XXXX Xxxxxx and the Trustee and
approved by the Beneficiaries in accordance with Section 10.2 of the
Exchangeable Share Provisions.
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 SMTC Canada, SMTC Nova Scotia and SMTC 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 SMTC, SMTC Nova Scotia and SMTC Canada and on the advice of
counsel to the Trustee, having in mind the best interests of the
Beneficiaries, it may be expedient to make, provided that such boards
of directors 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
XXXX, XXXX Xxxx Xxxxxx, XXXX Xxxxxx 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 board of directors of each of SMTC, SMTC Nova
Scotia and SMTC Canada shall be of the opinion that such changes or
corrections will not be prejudicial to the rights and interests of the
Beneficiaries.
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12.3 Meeting to Consider Amendments
SMTC Canada, at the request of SMTC or SMTC Nova Scotia, 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 bylaws of
SMTC Canada, the Exchangeable Share Provisions and all applicable laws.
12.4 Changes in Capital of SMTC and SMTC Canada
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 the shares of SMTC Common Stock 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 the shares of SMTC
Common Stock or the Exchangeable Shares or both are so changed and the parties
hereto shall execute and deliver a supplemental agreement giving effect to and
evidencing such necessary amendments and modifications.
12.5 Execution of Supplemental Agreements
No amendment to 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. From time to time, SMTC Canada
(when authorized by a resolution of its board of directors), SMTC (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, 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 SMTC Successors and the covenants of and
obligations assumed by each such SMTC Successor in accordance with the
provisions of Article 11 and the successors of any successor trustee
in accordance with the provisions of Article 10;
(b) making any additions to, deletions from or alterations of the
provisions of this agreement or the Voting Rights, the Exchange Right
or the Automatic Exchange Right which, in the opinion of the Trustee
relying on the advice of counsel, 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 SMTC,
SMTC Canada, 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 relying on the advice of
counsel, the rights of the Trustee and Beneficiaries will not be
prejudiced thereby.
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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 (other than Exchangeable Shares in
respect of which a holder is deemed, under this agreement or the
Exchangeable Share Provisions, to be a holder of shares of SMTC Common
Stock) are held by a Beneficiary;
(b) each of SMTC and SMTC Canada elects in writing to terminate the Trust
and such termination is approved by the Beneficiaries in accordance
with Section 10.2 of the Exchangeable Share Provisions; and
(c) 21 years from the date of the death of the last surviving issue of Her
Majesty Queen Xxxxxxxxx XX alive on the date of this agreement.
13.2 Survival of Agreement
This agreement shall survive any termination of the Trust and shall
continue until there are no Exchangeable Shares (other than Exchangeable Shares
in respect of which a holder is deemed, under this agreement or the Exchangeable
Share Provisions, to be a holder of shares of SMTC Common Stock) outstanding
held by a Beneficiary; provided, however, that the provisions of Articles 8 and
9 shall survive any such termination of this agreement.
ARTICLE 14
GENERAL
14.1 Assignment
This agreement shall not be assignable by any party hereto.
14.2 Time
Time shall be of the essence of this agreement.
14.3 Governing Law
This agreement and the rights and obligations of the parties hereto shall
be governed by and construed and interpreted in accordance with the laws of the
Province of Ontario and the federal laws of Canada applicable therein.
14.4 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
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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.
14.5 Enurement
This agreement shall be binding upon and enure to the benefit of the
parties hereto and their respective successors and permitted assigns and to the
benefit of the Beneficiaries.
14.6 Notices to Parties
All notices and other communications hereunder shall be in writing and
shall be given and shall be deemed to have been duly given at the time of
receipt, if delivered in person or sent by facsimile transmission on a Business
Day at the place of receipt (or, if given on a non-Business Day at the place of
receipt, shall be deemed to have been duly given on the next succeeding Business
Day at such place) to the parties as follows:
(a) if to SMTC:
SMTC Corporation
000 Xxxx Xxxx
Xxxxxxx, Xxxxxxx
Xxxxxx X0X 0X0
Attention: Xxxxxxx X. Xxxxx, C.A.
Vice-President, Finance and Administration
Fax: (000) 000-0000
with a copy to:
Ropes & Xxxx
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx
00000-0000 U.S.A.
Attention: Xxxxxx Xxxx
Fax: (000) 000-0000
(b) if to SMTC Canada or SMTC Nova Scotia:
SMTC Manufacturing Corporation of Canada
000 Xxxx Xxxx
-00-
Xxxxxxx, Xxxxxxx
Xxxxxx X0X 0X0
Attention: Xxxxxxx X. Xxxxx, C.A.
Vice-President, Finance and Administration
Fax: (000) 000-0000
with a copy to:
XxXxxxxx Xxxxx
Xxxxx 0000, Xxxxx Xxxxx
Xxxxx Bank Plaza
Toronto, Ontario
Canada M5J 2J7
Attention: Xxxx-Xxx Xxxxx
Fax: (000) 000-0000
(c) if to the Trustee:
CIBC Mellon Trust Company
000 Xxx Xxxxxx, X.X. Xxx 0
Xxxxxxx, Xxxxxxx
Xxxxxx X0X 0X0
Attention: Assistant Vice-President, Client Services
Fax: (000) 000-0000
or to such other address as a party may have furnished to the others in writing
in accordance herewith, except that notices of change of address shall be
effective only upon receipt.
14.7 Notice to Beneficiaries
Any and all notices to be given and any documents to be sent to any
Beneficiaries 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
bylaws of SMTC Canada 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 bylaws, the provisions of which bylaws
shall apply mutatis mutandis to notices or documents as aforesaid sent to such
Beneficiaries.
14.8 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 document.
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14.9 Attornment
Each of SMTC and SMTC Nova Scotia agrees that any action or proceeding
arising out of or relating to this agreement may be instituted in the courts of
Ontario, 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 agrees not to seek, and hereby waives, any review of the
merits of any such judgment by the court of any other jurisdiction and hereby
appoints SMTC Canada at its registered office in the Province of Ontario as its
attorney for service of process.
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IN WITNESS WHEREOF the parties hereto have caused this agreement to be duly
executed as of the date first above written.
SMTC MANUFACTURING CORPORATION OF CANADA
By:
--------------------------------------
Name:
Title:
SMTC CORPORATION
By:
--------------------------------------
Name:
Title:
SMTC NOVA SCOTIA COMPANY
By:
--------------------------------------
Name:
Title:
CIBC MELLON TRUST COMPANY
By:
--------------------------------------
Name:
Title:
By:
--------------------------------------
Name:
Title:
