Exhibit 10.9
VOTING AND EXCHANGE TRUST AGREEMENT
MEMORANDUM OF AGREEMENT made as of the _______ day of _______, 2002,
among Loews Cineplex Entertainment Corporation, a corporation existing under the
laws of Delaware ("LCE"), Loews Cineplex Entertainment Corporation Canada, a
corporation existing under the laws of Ontario (the "CORPORATION") and
_______, a trust company incorporated under the laws of Canada (hereinafter
referred to as "TRUSTEE").
RECITALS:
(a) pursuant to a prospectus dated on or around _______, 2002, the
Corporation is effecting an initial public offering of the
Exchangeable Shares (the "OFFERING");
(b) in connection with the Offering, LCE, the Corporation and the
Trustee have agreed to execute a voting and exchange trust agreement
substantially in the form of this agreement; and
(c) the foregoing recitals are made as representations and statements of
fact by LCE and the Corporation and not by the Trustee.
In consideration of the foregoing and the mutual agreements
contained herein (the receipt and sufficiency of which are acknowledged), the
parties agree as follows:
ARTICLE I
DEFINITIONS AND INTERPRETATION
1.1 DEFINITIONS
In this agreement, each initially capitalized term and the terms
"affiliate", "business day", "holder", "Nullified Shares" and "person" used and
not otherwise defined herein shall have the meaning ascribed thereto in the
rights, privileges, restrictions and conditions (collectively, the "SHARE
PROVISIONS") attaching to the Exchangeable Shares as set out in the articles of
the Corporation and the following terms shall have the following meanings:
"AGENCY" means any domestic or xxxxxxx xxxxx, xxxxxxxx, xxxxxxx,
xxxxx, provincial or local government or governmental agency or
authority or other regulatory authority (including the Toronto Stock
Exchange and the New York Stock Exchange) or administrative agency
or commission (including the Ontario Securities Commission and the
Securities and Exchange Commission) or any elected or appointed
public official.
"AUTHORIZED INVESTMENTS" means short term interest bearing or
discount debt obligations issued or guaranteed by the Government of
Canada or any province thereof or a Canadian chartered bank (which
may include an affiliate or related party of the Trustee), maturing
not more than one year from the date of
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investment, provided that each such obligation is rated at least R1
(middle) by DBRS Inc. or any equivalent rating by Canadian Bond
Rating Service.
"AUTOMATIC EXCHANGE RIGHT" means the benefit of the obligation of
LCE, in the event of a Liquidation Event, to purchase all of the
outstanding Exchangeable Shares (other than Nullified Shares) from
the holders thereof on the fifth business day prior to the effective
date of any such Liquidation Event in exchange for shares of LCE
Stock, plus the aggregate Dividend Amount, pursuant to this
agreement.
"BENEFICIARIES" means the registered holders from time to time of
Exchangeable Shares, other than holders of Nullified Shares.
"BENEFICIARY VOTES" has the meaning ascribed thereto in Section 4.2.
"BOARD OF DIRECTORS" means the board of directors of the
Corporation.
"EXCHANGE RIGHT" means the exchange right, granted by LCE to the
Trustee as trustee for and on behalf of the benefit of the
Beneficiaries pursuant to this agreement, to require LCE to purchase
all or any part of the Exchangeable Shares from the holders thereof
in exchange for shares of LCE Stock, plus an amount per share equal
to the Dividend Amount, upon the occurrence and during the
continuance of an Insolvency Event.
"EXCHANGEABLE SHARES" means the non-voting exchangeable shares in
the capital of the Corporation as more particularly described in the
Share Provisions of the Corporation.
"INCLUDING" means "including without limitation" and "INCLUDES"
means "includes without limitation".
"INDEMNIFIED PARTIES" has the meaning ascribed thereto in Section
9.1.
"INSOLVENCY EVENT" means the consent of the Corporation 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 the Corporation 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 the Corporation to the
filing of any such petition or to the appointment of a receiver, or
the institution by the Corporation of any such proceeding, or the
making by the Corporation of a general assignment for the benefit of
creditors, or the admission in writing by the Corporation of its
inability to pay its debts generally as they become due, or the
Corporation not being permitted, pursuant to solvency requirements
of applicable law, to redeem any Retracted Shares.
"LCE MEETING" has the meaning ascribed thereto in Section 4.2.
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"LCE SPECIAL VOTING SHARE" means the special voting share in the
capital of LCE which entitles the holder of record to a number of
votes at meetings of holders of shares of LCE Stock equal to the
number of Exchangeable Shares outstanding from time to time (other
than Nullified Shares) which share is to be issued to and voted by,
the Trustee as described herein.
"LCE SUCCESSOR" has the meaning ascribed thereto in Section 11.1(a).
"LIQUIDATION EVENT" has the meaning ascribed thereto in Section
5.7(2).
"LIQUIDATION EVENT EFFECTIVE DATE" has the meaning ascribed thereto
in Section 5.7(3).
"LIST" has the meaning ascribed thereto in Section 4.6.
"OFFICER'S CERTIFICATE" means, with respect to LCE or the
Corporation, as the case may be, a certificate signed by any officer
or director of LCE or the Corporation, as the case may be.
"SUPPORT AGREEMENT" means that certain support agreement of even
date herewith between the Corporation, Callco ULC, Callco LLC and
LCE in the form of Appendix A to this Agreement.
"TRUST" means the trust created by this agreement.
"TRUST ESTATE" means the LCE 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.
"TRUSTEE" means ______ and, subject to the provisions of Article 10,
includes any successor trustee.
"VOTING RIGHTS" means the voting rights attached to the LCE Special
Voting Share set forth in Article 4.
1.2 INTERPRETATION NOT AFFECTED BY HEADINGS, ETC.
The division of this agreement into Articles, sections and other
portions and the insertion of headings are for convenience of reference only and
do not affect the construction or interpretation of this agreement. Unless
otherwise specified, references to an "Article" or "section" refer to the
specified Article or section of this agreement. The terms "this agreement",
"hereof", "herein", and "hereunder" and similar expressions refer to this
agreement and not to any particular Article, section or other portion hereof.
1.3 NUMBER, GENDER, ETC.
Words importing the singular number only shall include the plural
and vice versa. Words importing any gender shall include all genders.
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1.4 DATE FOR ANY ACTION
If any date on which any action is required to be taken under this
agreement is not a business day, such action shall be required to be taken on
the next succeeding business day.
1.5 CERTIFICATE OF INCUMBENCY
Each of the other parties to this Agreement shall file with the
Trustee a certificate of incumbency setting forth the names and titles of the
individuals authorized to give instructions, directions or other instruments
(including Officer's Certificates) to the Trustee ("AUTHORIZED PERSONS"),
together with specimen signatures of such persons, and the Trustee shall be
entitled to rely on the latest certificate of incumbency filed with it unless it
receives notice, in accordance with this agreement, of a change in Authorized
Persons with updated specimen signatures.
ARTICLE II
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 LCE 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 or enforce such rights, in each case as trustee for and
on behalf of the Beneficiaries as provided in this agreement.
ARTICLE III
LCE SPECIAL VOTING SHARE
3.1 ISSUE AND OWNERSHIP OF THE LCE SPECIAL VOTING SHARE
Upon the execution of this agreement, LCE shall issue to and deposit
with the Trustee the LCE Special Voting Share (and shall deliver the certificate
representing such share to the Trustee) to be hereafter held of record by the
Trustee as trustee for and on behalf of, and for the use and benefit of, the
Beneficiaries and in accordance with the provisions of this agreement. LCE
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 LCE Special Voting Share by LCE 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 LCE Special
Voting Share and shall be entitled to exercise all of the rights and powers of
an owner with respect to the LCE Special Voting Share provided that the Trustee
shall:
(a) hold the LCE 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
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(b) except as specifically authorized by this agreement, have no power
or authority to sell, transfer, vote or otherwise deal in or with
the LCE Special Voting Share and the LCE Special Voting Share shall
not be used or disposed of by the Trustee for any purpose other than
the purposes for which this Trust is created pursuant to this
agreement.
3.2 LEGENDED SHARE CERTIFICATES
The Corporation 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 LCE Special Voting Share shall at
all times be held in safe keeping by the Trustee or its duly authorized agent.
ARTICLE IV
EXERCISE OF VOTING RIGHTS
4.1 VOTING RIGHTS
The Trustee, as the holder of record of the LCE Special Voting
Share, shall be entitled to all of the Voting Rights, including the right to
vote in person or by proxy attaching to the LCE Special Voting Share on any
matters, questions, proposals or propositions whatsoever that may properly come
before the stockholders of LCE at an LCE Meeting. The Voting Rights shall be and
remain vested in and exercised by the Trustee subject to the terms of this
agreement. Subject to Section 7.15:
(a) the Trustee shall exercise the Voting Rights only on the basis of
instructions received pursuant to this Article 4 from Beneficiaries
on the record date established by LCE or by applicable law who are
entitled to instruct the Trustee as to the voting thereof at the
time at which the LCE Meeting is held; 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
(1) With respect to all meetings of stockholders of LCE at which holders
of shares of LCE Stock are entitled to vote (each, an "LCE
MEETING"), each Beneficiary shall be entitled to instruct the
Trustee to cast and exercise one vote comprised in the Voting Rights
for each Exchangeable Share owned of record by a Beneficiary on the
record date established by LCE or by applicable law for such LCE
Meeting (the "BENEFICIARY VOTES"), in respect of each matter,
question, proposal or proposition to be voted on at such LCE
Meeting. LCE shall provide the Trustee notice by the close of
business on the third business day prior to an LCE Meeting
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that no holders of Nullified Shares have exercised any votes in
respect of the Exchangeable Shares.
(2) The aggregate Voting Rights on a poll at an LCE Meeting shall
consist of a number of votes equal to one vote for each outstanding
Exchangeable Share other than Nullified Shares and for which the
Trustee has received voting instructions from the Beneficiaries. Any
Beneficiary who chooses to attend an LCE Meeting in person, and who
is entitled to vote in accordance with Section 4.8(2), shall be
entitled to one vote by any means available to holders of shares of
LCE Stock including by way of ballot.
The Trustee shall have no duty under this agreement to determine or
ascertain the aggregate number of Voting Rights attached to the
Exchangeable Shares that are issued and outstanding at any relevant time
and the aggregate Voting Rights shall be determined by LCE at or prior to
an LCE Meeting.
4.3 MAILINGS TO STOCKHOLDERS
(1) With respect to each LCE Meeting, the Trustee will mail or cause to
be mailed (or otherwise communicate in the same manner as LCE
utilizes in communications to holders of shares of LCE Stock subject
to applicable regulatory requirements and the Trustee being advised
in writing of such manner and provided that such manner of
communications is available to the Trustee) the following materials
to each of the Beneficiaries named in the List at the Beneficiaries'
respective addresses as set forth in the List, such mailing or
communication to commence wherever practicable on the same day as
the mailing or notice (or other communication) with respect thereto
is commenced by LCE to its stockholders:
(a) a copy of such notice, together with any related materials,
including any circular or information statement or listing
particulars, to be provided to stockholders of LCE but
excluding proxies to vote shares of LCE Stock;
(b) a statement that such Beneficiary is entitled to instruct the
Trustee as to the exercise of the Beneficiary Votes with
respect to such LCE Meeting or, pursuant and subject to
Section 4.7, to attend such LCE Meeting and to exercise
personally the Beneficiary Votes thereat;
(c) a statement as to the manner in which such instructions may be
given to the Trustee, including an express indication that
instructions may be given to the Trustee to give:
(i) a proxy to such Beneficiary or his, her or its designee
to exercise personally the Beneficiary Votes; or
(ii) a proxy to a designated agent or other representative of
LCE to exercise such Beneficiary Votes;
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(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 LCE Meeting shall not be earlier
than the close of business on the fourth business day prior to
such meeting, and of the method for revoking or amending such
instructions.
(2) The materials referred to in this Section 4.3 are to be provided to
the Trustee by LCE and LCE shall ensure that such materials are
provided in sufficient time to permit the Trustee to comment as
aforesaid and to send all materials to each Beneficiary at the same
time as such materials are first sent to holders of shares of LCE
Stock and in compliance with the time limits imposed under Canadian
securities laws. If the methods of communication available to the
Trustee for communications with the Beneficiaries does not conform
with the method of communication LCE employs with holders of shares
of LCE Stock with respect to the materials referred to in this
Section 4.3, then
(a) the Trustee shall use any other available method of
communication permitted by law, provided that communication by
mail shall always be an approved method of communication; and
(b) if the Trustee determines to employ mail as a method of
communication, LCE will provide all materials referred to in
this Section 4.3 to the Trustee in a form permitting them to
be mailed.
(3) For the purpose of determining Beneficiary Votes to which a
Beneficiary is entitled in respect of any LCE Meeting, 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 LCE or by applicable law for purposes of determining stockholders
entitled to vote at such LCE Meeting. LCE will notify the Trustee of
any decision of the board of directors of LCE with respect to the
calling of any LCE Meeting and shall provide all necessary
information and materials to the Trustee in each case promptly and
in any event in sufficient time to enable the Trustee to perform its
obligations contemplated by this Section 4.3.
4.4 COPIES OF STOCKHOLDER INFORMATION
LCE will deliver to the Trustee copies of all proxy materials
(including notices of LCE Meetings but excluding proxies to vote shares of LCE
Stock), information statements, reports (including all interim and annual
financial statements) and other written communications that, in each case, are
to be distributed by LCE from time to time to holders of shares of LCE Stock in
sufficient quantities and in sufficient time so as to enable the Trustee to send
or cause to be sent those materials to each Beneficiary, wherever practicable,
at the same time as such
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materials are first sent to holders of shares of LCE Stock and in compliance
with the time limits imposed under Canadian securities laws. Subject to the
foregoing, the Trustee will mail or otherwise send, or cause to be mailed or
otherwise sent, to each Beneficiary, at the expense of LCE, copies of all such
materials (and all materials specifically directed to the Beneficiaries or to
the Trustee for the benefit of the Beneficiaries by LCE) received by the Trustee
from LCE, wherever practicable, contemporaneously with the sending of such
materials to holders of shares of LCE Stock. The Trustee will also make
available for inspection by any Beneficiary at the Trustee's principal office in
Toronto during its regular business hours all proxy materials, information
statements, reports and other written communications that are:
(a) received by the Trustee as the registered holder of the LCE Special
Voting Share and made available by LCE generally to the holders of
shares of LCE Stock; or
(b) specifically directed to the Beneficiaries or to the Trustee for the
benefit of the Beneficiaries by LCE
4.5 OTHER MATERIALS
As soon as reasonably practicable after receipt by LCE or
stockholders of LCE (if such receipt is known by LCE) of any material sent or
given by or on behalf of a third party to holders of shares of LCE Stock
generally, including dissident proxy and information circulars (and related
information and material) and take-over bid and securities exchange take-over
bid circulars (and related information and material), provided such material has
not been sent to the Beneficiaries by or on behalf of such third party, LCE
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 or cause
to be forwarded such material (unless the same has been provided directly to
Beneficiaries by such third party) to each Beneficiary as soon as possible
thereafter, subject to applicable securities laws. As soon as reasonably
practicable after receipt thereof, the Trustee will mail or otherwise send, or
cause to be mailed or otherwise sent, to each Beneficiary, at the expense of
LCE, copies of all such materials received by the Trustee from LCE. The Trustee
will also make available for inspection by any Beneficiary, at the Trustee's
principal office in Toronto during its regular business hours, copies of all
such materials.
4.6 LIST OF PERSONS ENTITLED TO VOTE
The Corporation shall, (a) prior to each annual, general and
extraordinary LCE Meeting, 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
LCE Meeting, at the close of business on the record date established by LCE or
pursuant to applicable law for determining the holders of shares of LCE Stock
entitled to receive notice of and/or to vote at such LCE Meeting. Each such List
shall be delivered to the Trustee promptly after receipt by the Corporation of
such request or the record date for such meeting and in any event within
sufficient time as to permit the Trustee to perform its obligations under this
agreement. LCE agrees to give the Corporation notice (with a copy to the
Trustee) of the calling of any LCE Meeting together with the record
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date therefor, sufficiently prior to the date of the calling of such meeting so
as to enable the Corporation to perform its obligations under this Section 4.6.
4.7 ENTITLEMENT TO DIRECT VOTES
Subject to Section 4.8 and Section 4.11, any Beneficiary named in a
List prepared in connection with any LCE Meeting will be entitled to (a)
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)
attend such meeting and personally exercise thereat, as the proxy of the
Trustee, the Beneficiary Votes to which such Beneficiary is entitled.
4.8 VOTING BY TRUSTEE AND ATTENDANCE OF TRUSTEE REPRESENTATIVE AT MEETING
(1) In connection with each LCE Meeting, 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) other than any Beneficiary Votes that are the subject
of Section 4.8(2); 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 instruction in the
notice sent or caused to be sent by the Trustee to the Beneficiary
pursuant to Section 4.3.
(2) 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 LCE Meeting. Upon submission by a Beneficiary
(or its designee) named in the List prepared in connection with the
relevant meeting 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 (or
its designee) exercising such Beneficiary Votes in accordance with
such proxy shall have the same rights in respect of such Beneficiary
Votes as the Trustee to speak at the meeting in respect of any
matter, question, proposal or proposition, to vote by any means
available to holders of shares of LCE Stock including by way of
ballot at the meeting in respect of any matter, question, proposal
or proposition.
4.9 DISTRIBUTION OF WRITTEN MATERIALS
Any written materials distributed by the Trustee pursuant to this
agreement shall be sent by mail (or otherwise communicated in the same manner as
LCE utilizes in communications to holders of shares of LCE Stock subject to
applicable regulatory requirements and the Trustee being advised in writing of
such manner and provided such manner of communications is available to the
Trustee) to each Beneficiary at its address as shown on the register of holders
of Exchangeable Shares maintained by the registrar of the Exchangeable
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Shares. If the methods of communication available to the Trustee for
communications with the Beneficiaries does not conform with the method of
communication LCE employs with holders of shares of LCE Stock with respect to
the materials referred to in Section 4.3, then
(a) the Trustee shall use any other available method of communication
permitted by law, provided that communication by mail shall always
be an approved method of communication; and
(b) if the Trustee determines to employ mail as a method of
communication, LCE will provide all materials referred to in Section
4.3 to the Trustee in a form permitting them to be mailed.
The Corporation shall provide or cause to be provided to the Trustee
for purposes of communication, on a timely basis and without charge or other
expense:
(a) a current List; and
(b) upon the request of the Trustee, mailing labels to enable the
Trustee to carry out its duties under this agreement.
4.10 TERMINATION OF VOTING RIGHTS
All of the rights of a Beneficiary with respect to the Beneficiary
Votes exercisable in respect of the Exchangeable Shares held by such
Beneficiary, including the right to instruct the Trustee as to the voting of or
to vote personally such Beneficiary Votes, shall be deemed to be surrendered by
the Beneficiary to LCE, Callco ULC or Callco LLC, as the case may be, and such
Beneficiary Votes and the Voting Rights represented thereby shall cease
immediately upon (i) 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 LCE Stock, as specified
in Article 5 (unless LCE shall not have delivered the requisite shares of LCE
Stock issuable in exchange therefor to the Trustee pending delivery to the
Beneficiaries), or (ii) the retraction or redemption of Exchangeable Shares
pursuant to Section 6 or 7 of the Share Provisions, or (iii) the effective date
of the liquidation, dissolution or winding-up of the Corporation pursuant to
Section 5 of the Share Provisions, or (iv) the purchase of Exchangeable Shares
from the holder thereof by Callco ULC or Callco LLC pursuant to the exercise by
Callco ULC or Callco LLC, as the case may be, of the Retraction Call Right, the
Redemption Call Right or the Liquidation Call Right (unless LCE shall not have
delivered the requisite shares of LCE Stock issuable in exchange therefor to the
Trustee pending delivery to the Beneficiaries).
4.11 DISCLOSURE OF INTEREST IN EXCHANGEABLE SHARES
The Trustee and/or the Corporation shall be entitled (but shall not
be required) to require any Beneficiary or any person who the Trustee and/or the
Corporation know or have reasonable cause to believe to hold any interest
whatsoever in an Exchangeable Share to confirm that fact or to give such details
as to who has an interest in such Exchangeable Share as would be required (if
the Exchangeable Shares were a class of "equity shares" of the Corporation)
under Section 101 of the Securities Act, as amended from time to time, or as
would be required under the articles of LCE or any laws or regulations, or
pursuant to the rules or regulations of any
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Agency, if the Exchangeable Shares were shares of LCE Stock. If a Beneficiary
does not provide the information required to be provided by such Beneficiary
pursuant to this Section 4.11, the board of directors of LCE may take any action
permitted under the certificate of incorporation of LCE or any laws or
regulations, or pursuant to the rules or regulations of any Agency, with respect
to the Voting Rights relating to the Exchangeable Shares held by such
Beneficiary.
4.12 INSTRUMENTS IN WRITING
It is acknowledged that all actions which may be taken and all
powers which may be exercised by holders of the shares of LCE Stock at an LCE
Meeting may also be taken and exercised by such holders by an instrument in
writing. Accordingly, the provisions of this Article 4 also apply in the
circumstances where an instrument in writing is sought, with such adjustments to
procedure as LCE and the Trustee may determine at the time that a particular
instrument in writing is sought.
ARTICLE V
EXCHANGE RIGHT AND AUTOMATIC EXCHANGE RIGHT
5.1 GRANT OF OWNERSHIP OF EXCHANGE RIGHT AND AUTOMATIC EXCHANGE RIGHT
(1) LCE hereby grants to the Trustee as trustee for and on behalf of,
and for the use and benefit of, the Beneficiaries (i) the Exchange
Right, and (ii) the Automatic Exchange Right, all in accordance with
the provisions of this agreement. LCE 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
agreeing with the Trustee (acting on behalf of the Beneficiaries) to
be bound by the Exchange Right and the Automatic Exchange Right.
(2) During the term of the Trust and subject to the terms and conditions
of this agreement, the Trustee shall possess and be vested with full
legal ownership of the Exchange Right and the Automatic Exchange
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.
(3) The obligations of LCE to issue shares of LCE Stock pursuant to the
Exchange Right or the Automatic Exchange Right are subject to all
applicable laws and
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regulatory or stock exchange requirements, in respect of which LCE
hereby covenants and agrees to comply.
5.2 LEGENDED SHARE CERTIFICATES
The Corporation 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 Exchange
Right and containing an acknowledgement of the Beneficiaries of their rights
under 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 EXCHANGE RIGHT
(1) The purchase price payable by LCE for each Exchangeable Share to be
purchased by LCE under the Exchange Right shall be an amount per
share equal to (i) the Current Market Price of a share of LCE 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 LCE causing to be delivered to such
holder one share of LCE Stock, plus (ii) to the extent not paid by
the Corporation on the designated payment date therefor, an
additional amount equal to and in full satisfaction of the full
amount of all declared and unpaid dividends on each such
Exchangeable Share held by such holder on any dividend record date
which occurred prior to the closing of the purchase and sale. In
connection with each exercise of the Exchange Right, LCE shall
provide to the Trustee an Officer's Certificate setting forth the
calculation of the purchase price for each Exchangeable Share. The
purchase price for each such Exchangeable Share so purchased may be
satisfied only by LCE delivering or causing to be delivered to the
Trustee, on behalf of the relevant Beneficiary, one share of LCE
Stock issued to the relevant Beneficiary and on the applicable
payment date a cheque payable to the relevant Beneficiary for the
balance, if any, of the purchase price, in each case less any
amounts withheld pursuant to Section 5.11. Upon payment by LCE of
such purchase price, the relevant Beneficiary shall cease to have
any right to be paid by the Corporation any amount in respect of
declared and unpaid dividends on each such Exchangeable Share.
(2) Subject to the terms and conditions herein set forth, a Beneficiary
shall be entitled, upon the occurrence and during the continuance of
an Insolvency Event, to instruct the Trustee to exercise the
Exchange Right with respect to all or any part of the Exchangeable
Shares registered in the name of such Beneficiary on the books of
the Corporation. To cause the exercise of the Exchange Right by the
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Trustee, the Beneficiary shall deliver to the Trustee, in person or
by certified or registered mail, at its principal office in Toronto
or at such other places in Canada as the Trustee may from time to
time designate by written notice to the Beneficiaries, the
certificates representing the Exchangeable Shares which such
Beneficiary desires LCE to purchase, duly endorsed in blank for
transfer, and accompanied by such other documents and instruments as
may be required to effect a transfer of Exchangeable Shares under
the OBCA and the articles and by-laws of the Corporation and such
additional documents and instruments as the Trustee, LCE or the
Corporation 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 LCE 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 LCE free and
clear of all liens, claims and encumbrances, (iii) the names in
which the certificates representing shares of LCE Stock transferable
in connection with the exercise of the Exchange Right are to be
registered, (iv) the names and addresses of the Persons to whom such
new certificates should be delivered, and (v) whether the
Beneficiary is a resident of Canada within the meaning of the Income
Tax Act (Canada), and (b) payment (or evidence satisfactory to the
Trustee, the Corporation and LCE 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 LCE under the
Exchange Right, a new certificate for the balance of such
Exchangeable Shares shall be issued to the holder at the expense of
the Corporation.
(3) Promptly after the receipt of the certificates representing the
Exchangeable Shares which the Beneficiary desires LCE 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 LCE, the Trustee shall notify LCE and the
Corporation of its receipt of the same, which notice to LCE and the
Corporation shall constitute exercise of the Exchange Right by the
Trustee on behalf of the holder of such Exchangeable Shares, and LCE
shall promptly thereafter deliver or cause to be delivered to the
Trustee, for delivery to the Beneficiary of such Exchangeable Shares
(or to such other persons, if any, properly designated by such
Beneficiary) certificates representing the number of shares of LCE
Stock issuable in connection with the exercise of the Exchange
Right, and on the applicable payment date cheques payable at par at
any branch of the bankers of LCE for the balance, if any, of the
total purchase price therefor without interest (but in each case
less any amounts withheld pursuant to Section 5.11); 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, the Corporation and LCE of the
payment of) the taxes (if any) payable as contemplated by Section
5.8 of this agreement. Immediately upon the giving of notice by the
Trustee to LCE and the Corporation of the exercise of the Exchange
Right as provided in this Section 5.4,
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the closing of the transaction of purchase and sale contemplated by
the Exchange Right shall have and be deemed to have occurred and the
holder of such Exchangeable Shares shall be deemed to have
transferred to LCE all of such holder's right, title and interest in
and to such Exchangeable Shares and the related interest in the
Trust Estate free and clear of any lien, claim or encumbrance and
shall cease to be a holder of such Exchangeable Shares and shall not
be entitled to exercise any of the rights of a holder in respect
thereof, other than the right to receive his proportionate part of
the total purchase price therefor, unless the requisite number of
shares of LCE Stock is not delivered by, or on behalf of, LCE to the
Trustee within five business days of the date of the giving of such
notice by the Trustee or the balance of the purchase price, if any,
is not paid by LCE on the applicable payment date therefor (in both
cases net of any withholding described in Section 5.11), in which
case the rights of the Beneficiary shall remain unaffected until
such shares of LCE Stock are so delivered, and the balance of the
purchase price, if any, has been paid, by LCE. Upon delivery by LCE
to the Trustee of such shares of LCE Stock, and the balance of the
purchase price, if any (net of any withholding described in Section
5.11), the Trustee shall deliver such shares of LCE Stock and the
balance of the purchase price, if any, to such Beneficiary (or to
such other persons, if any, properly designated by such
Beneficiary). Concurrently with such Beneficiary ceasing to be a
holder of Exchangeable Shares, the Beneficiary shall be considered
and deemed for all purposes to be the holder of the shares of LCE
Stock delivered to it pursuant to the Exchange Right.
5.5 EXERCISE OF EXCHANGE RIGHT SUBSEQUENT TO RETRACTION
In the event that a Beneficiary has exercised its right under
Article 6 of the Share Provisions to require the Corporation to redeem any or
all of the Exchangeable Shares held by the Beneficiary (the "RETRACTED SHARES")
and is notified by the Corporation pursuant to Section 6(6) of the Share
Provisions that the Corporation will not be permitted as a result of solvency
requirements of applicable law to redeem all such Retracted Shares, and provided
that Callco ULC or Callco LLC 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 the Corporation pursuant
to Section 6(7) of the Share Provisions, then the Corporation shall provide
written notice of same to the Trustee and 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 the Corporation is unable to redeem. In any such event,
the Corporation hereby agrees with the Trustee and in favour of the Beneficiary
to promptly notify the Trustee of such prohibition against the Corporation
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
the Corporation or to the Transfer Agent (including without limitation, a copy
of the retraction request delivered pursuant to Section 6(1) of the Share
Provisions) in connection with such proposed redemption of the Retracted Shares
and the Trustee will thereupon exercise the Exchange Right with respect to the
Retracted Shares that the Corporation is not permitted to redeem and in respect
of which Callco ULC or Callco LLC has not exercised its Retraction Call Right
and will require LCE to purchase such shares in accordance with the provisions
of this Article 5.
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5.6 NOTICE OF INSOLVENCY EVENT
As soon as practicable following the occurrence of an Insolvency
Event or any event that with the giving of notice or the passage of time or both
would be an Insolvency Event, the Corporation or LCE shall give written notice
thereof to the Trustee. As soon as practicable following the receipt of notice
from the Corporation and LCE of the occurrence of an Insolvency Event, or upon
the Trustee becoming aware of an Insolvency Event, the Trustee will mail to each
Beneficiary, at the expense of LCE, a notice of such Insolvency Event in the
form provided by LCE, which notice shall contain a brief statement of the rights
of the Beneficiaries with respect to the Exchange Right.
5.7 AUTOMATIC EXCHANGE ON LIQUIDATION OF LCE
(1) LCE will give the Trustee written notice of each of the following
events at the time set forth below:
(a) in the event of any determination by the board of directors of
LCE to institute voluntary liquidation, dissolution or
winding-up proceedings with respect to LCE or to effect any
other distribution of assets of LCE among its stockholders for
the purpose of winding up its affairs, at least 60 days prior
to the proposed effective date of such liquidation,
dissolution, winding-up or other distribution; and
(b) as soon as practicable following the earlier of (A) receipt by
LCE of notice of, and (B) LCE otherwise becoming aware of any
instituted claim, suit, petition or other proceedings with
respect to the involuntary liquidation, dissolution or
winding-up of LCE or to effect any other distribution of
assets of LCE among its stockholders for the purpose of
winding up its affairs, in each case where LCE has failed to
contest in good faith any such proceeding commenced in respect
of LCE within 30 days of becoming aware thereof.
(2) As soon as practicable following receipt by the Trustee from LCE of
notice of any event (a "LIQUIDATION EVENT") contemplated by Section
5.7(1)(a) or Section 5.7(1)(b), the Trustee will give notice thereof
to the Beneficiaries at the expense of LCE. Such notice shall be
provided to the Trustee by LCE and shall include a brief description
of the automatic exchange of Exchangeable Shares for shares of LCE
Stock provided for in Section 5.7(3).
(3) In order that the Beneficiaries will be able to participate on a pro
rata basis with the holders of shares of LCE Stock in the
distribution of assets of LCE in connection with a Liquidation
Event, on the fifth business day prior to the effective date (the
"LIQUIDATION EVENT EFFECTIVE DATE") of a Liquidation Event, all of
the then outstanding Exchangeable Shares (other than the Nullified
Shares) shall be automatically exchanged for shares of LCE Stock. To
effect such automatic exchange, LCE shall purchase on the fifth
business day prior to the Liquidation Event Effective Date each
Exchangeable Share then outstanding and held by Beneficiaries, and
each Beneficiary shall sell the Exchangeable Shares
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held by it at such time, free and clear of any lien, claim or
encumbrance, for a purchase price per share equal to (i) the Current
Market Price of a share of LCE Stock on the fifth business day prior
to the Liquidation Event Effective Date, which shall be satisfied in
full by LCE issuing to the Beneficiary one share of LCE Stock, plus
(ii) to the extent not paid by the Corporation on the designated
payment date therefor, an additional amount equal to and in full
satisfaction of the full amount of all declared and unpaid dividends
on each such Exchangeable Share held by such holder on any dividend
record date which occurred prior to the date of the exchange. LCE
shall provide the Trustee with an Officer's Certificate in
connection with each automatic exchange occurring pursuant to the
Automatic Exchange Right, setting forth the calculation of the
purchase price for each Exchangeable Share.
(4) On the fifth business day prior to the Liquidation Event Effective
Date, the closing of the transaction of purchase and sale
contemplated by the automatic exchange of Exchangeable Shares for
shares of LCE Stock pursuant to the Automatic Exchange Right shall
be deemed to have occurred, and each Beneficiary shall have and be
deemed to have transferred to LCE all of the Beneficiary's right,
title and interest in and to such Beneficiary's Exchangeable Shares
free and clear of any lien, claim or encumbrance and the related
interest in the Trust Estate, any right of each such Beneficiary to
receive declared and unpaid dividends from the Corporation shall be
deemed to be satisfied and discharged, and each such Beneficiary
shall cease to be a holder of such Exchangeable Shares and LCE shall
issue to the Beneficiary the shares of LCE Stock issuable upon the
automatic exchange of Exchangeable Shares for shares of LCE Stock
and on the applicable payment date shall deliver to the Trustee for
delivery to the Beneficiary a cheque payable to the Beneficiary for
the balance, if any, of the purchase price for such Exchangeable
Shares, without interest, in each case less any amounts withheld
pursuant to Section 5.11. Concurrently with such Beneficiary ceasing
to be a holder of Exchangeable Shares, the Beneficiary shall become
the holder of the shares of LCE Stock issued pursuant to the
automatic exchange of such Beneficiary's Exchangeable Shares for
shares of LCE Stock pursuant to the Automatic Exchange Right and the
certificates held by the Beneficiary previously representing the
Exchangeable Shares exchanged by the Beneficiary with LCE pursuant
to such automatic exchange shall thereafter be deemed to represent
shares of LCE Stock issued to the Beneficiary by LCE pursuant to
such automatic exchange. Upon the request of a Beneficiary and the
surrender to LCE by the Beneficiary of Exchangeable Share
certificates deemed to represent shares of LCE Stock, duly endorsed
in blank and accompanied by such instruments of transfer as the
Transfer Agent or LCE may reasonably require, LCE shall deliver or
cause to be delivered to the Beneficiary certificates representing
the shares of LCE Stock of which the Beneficiary is the holder.
5.8 TAXES
Upon any sale of Exchangeable Shares to LCE pursuant to the Exchange
Right or the Automatic Exchange Right, the share certificate or certificates
representing shares of LCE Stock to be delivered in connection with the payment
of the total purchase price therefor shall be
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issued in the name of the Beneficiary of the Exchangeable Shares so sold or in
such names as such Beneficiary may otherwise direct in writing, provided such
direction is received by LCE prior to the time such shares are issued, without
charge to the holder of the Exchangeable Shares so sold; provided, however, that
such Beneficiary (a) shall pay (and none of LCE, the Corporation or the Trustee
shall be required to pay) any documentary, stamp, transfer or other taxes that
may be payable in respect of any transfer of such Exchangeable Shares to LCE or
in respect of the issuance or delivery of such shares of LCE Stock to such
Beneficiary or any other person including, without limitation, in the event that
shares of LCE Stock are being issued or transferred in the name of a clearing
service or depositary or a nominee thereof, or (b) shall have evidenced to the
satisfaction of the Trustee, LCE and the Corporation that such taxes, if any,
have been paid.
5.9 LISTING OF SHARES OF LCE STOCK
LCE covenants that if any shares of LCE 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 Agency under any
United States or Canadian federal, provincial or territorial law or regulation
or pursuant to the rules and regulations of any Agency or the fulfilment of any
other United States or Canadian legal requirement before such shares may be
issued and delivered by LCE to the initial holder thereof or in order that such
shares may be freely traded thereafter (other than any restrictions of general
application on transfer by reason of a holder being a "control person" or the
equivalent of LCE for purposes of Canadian securities law or any United States
equivalent), LCE will expeditiously and in good faith take all such actions and
do all such things as are reasonably necessary or desirable to cause such shares
of LCE Stock to be and remain duly registered, qualified or approved. LCE will
expeditiously and in good faith take all such actions and do all such things as
are reasonably necessary or desirable to cause all shares of LCE 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 issued shares of LCE Stock have been listed by LCE and remain
listed and are quoted or posted for trading at such time.
5.10 SHARES OF LCE STOCK
LCE hereby represents, warrants and covenants that the shares of LCE
Stock issuable as described herein will be duly authorized and validly issued as
fully paid and shall be free and clear of any lien, claim or encumbrance other
than any lien, claim or encumbrance imposed as a result of the actions of a
Beneficiary or any of its affiliates.
5.11 WITHHOLDING RIGHTS
(1) LCE, the Corporation, 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 shares of LCE
Stock such amounts as LCE, the Corporation or the Trustee is
required to deduct and withhold with respect to such payment under
the Income Tax Act (Canada) or United States tax laws or any
provision of provincial, state, local or foreign tax law, in each
case as amended or
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succeeded. The Trustee may act and rely on the advice of counsel
with respect to such matters. To the extent that amounts are so
withheld, such withheld amounts shall be treated for all purposes as
having been paid to the holder of the shares in respect of which
such deduction and withholding was made, provided that such withheld
amounts are actually remitted to the appropriate taxing Agency. To
the extent that the amount so required to be deducted or withheld
from any payment to a holder exceeds the cash portion of the
consideration otherwise payable to the holder, LCE, the Corporation
and the Trustee are hereby authorized to sell or otherwise dispose
of such portion of the consideration as is necessary to provide
sufficient funds, net of expenses, to LCE, the Corporation or the
Trustee, as the case may be, to enable it to comply with such
deduction or withholding requirement and LCE, the Corporation or the
Trustee, as applicable, shall notify the holder thereof and remit to
such holder any unapplied balance of the net proceeds of such sale.
If LCE intends to withhold any tax in connection with any dividend
paid on Exchangeable Shares to non-U.S. holders, it will disclose
this fact at least five business days before the record date set for
the dividend.
(2) Any other provision of this agreement notwithstanding, the Trustee
shall not be responsible for determining and shall have no duty to
determine or verify whether any taxes are payable or, if any taxes
are payable, the amount thereof to be deducted and remitted to any
taxing authority or Agency in any jurisdiction, in respect of any
consideration or the amount otherwise payable under this agreement
to any person (including any holder or former holder of Exchangeable
Shares or shares of LCE Stock) at any time. The Trustee shall not be
responsible for determining the adequacy of or otherwise examining
any evidence of the payment of any taxes which any Beneficiary or
other party may at any time submit to the Trustee. The making of
such determinations is the responsibility solely of LCE and the
Corporation and the Trustee shall be entitled to rely and act upon
any written instructions which it may receive from either LCE or the
Corporation or their respective counsel with regard to the
withholding and remittance of tax and/or the retention of sufficient
funds by the Trustee to enable it to comply with any applicable
withholding taxes. If no written instructions to withhold have been
received by the Trustee from LCE or the Corporation or their counsel
by the date when the Trustee is required to make or forward payment
to a given party, the Trustee may proceed to make or forward such
payment without deduction or withholding or retention of funds on
account of taxes on the assumption that no deduction or withholding
or retention of funds on account of taxes is required. Prior to the
making of any distributions to holders or former holders of
Exchangeable Shares, LCE and/or the Corporation shall ensure that
the Trustee has access to sufficient funds (by directly providing,
if necessary, such funds to the Trustee) to enable the Trustee to
comply with any applicable withholding taxes in connection with such
distribution.
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ARTICLE VI
RESTRICTIONS ON ISSUE OF LCE SPECIAL VOTING SHARES
6.1 ISSUE OF ADDITIONAL SHARES
During the term of this agreement, LCE will not, without the consent
of the holders at the relevant time of Exchangeable Shares, given in accordance
with Section 10(2) of the Share Provisions, issue any additional LCE Special
Voting Shares.
ARTICLE VII
CONCERNING THE TRUSTEE
7.1 POWERS AND DUTIES OF THE TRUSTEE
(1) 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 LCE Special Voting Share from LCE
as trustee for and on behalf of the Beneficiaries in
accordance with the provisions of this agreement;
(b) granting proxies and distributing materials to Beneficiaries
as provided in this agreement;
(c) voting the Beneficiary Votes in accordance with the provisions
of this agreement;
(d) receiving the grant of the Exchange Right and the Automatic
Exchange Right from LCE as Trustee for and on behalf of the
Beneficiaries in accordance with the provisions of this
agreement;
(e) enforcing the benefit of the Exchange Right and the Automatic
Exchange Right, in each case in accordance with the provisions
of this agreement, and in connection therewith receiving from
Beneficiaries any requisite documents and distributing to such
Beneficiaries shares of LCE Stock and cheques, if any, to
which such Beneficiaries are entitled pursuant to the Exchange
Right or 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 written direction of a Beneficiary or
Beneficiaries to enforce the obligations of LCE and the
Corporation under this agreement;
(i) signing written consents in lieu of an LCE Meeting as
contemplated by Section 4.12; and
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(j) taking such other actions and doing such other things as are
specifically provided in this agreement to be carried out by
the Trustee whether alone, jointly or in the alternative.
(2) In the exercise of such rights, powers, duties and authorities the
Trustee shall have (and is granted) such incidental and additional
rights, powers and authority not in conflict with any of the
provisions of this agreement as the Trustee, acting in good faith
and in the reasonable exercise of its discretion, may deem
necessary, appropriate or desirable to effect the purpose of the
Trust. Any exercise of duties or of discretionary rights, powers and
authorities by the Trustee shall be final, conclusive and binding
upon all persons. For greater certainty, and anything else herein
notwithstanding, the Trustee shall have only those duties as set out
specifically in this agreement.
(3) 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.
(4) The Trustee shall not be bound to give notice or do or take any act,
action or proceeding by virtue of the powers, rights, duties or
authorities 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 be deemed to have
actual or constructive notice or knowledge of, any matter under this
agreement (including any notice of an LCE Meeting or any prohibition
against the Corporation redeeming any Retracted Shares or of any
Insolvency Event or any Liquidation Event (collectively, a "NOTICE
EVENT")) or be required to do or to take any act, action or
proceeding as a result of any default or breach of any provision
hereunder or in connection with any Notice Event, unless and until
notified in writing of such default or breach or Notice Event in
accordance with the provisions of this Agreement, which notices
shall distinctly specify the default or breach or Notice Event
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 Notice Event has occurred and
no default or breach has been made in the observance or performance
of any of the representations, warranties, covenants, agreements or
conditions contained herein.
7.2 NO CONFLICT OF INTEREST
The Trustee represents to LCE and the Corporation 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
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party may apply to the Superior Court of Justice (Ontario) for an order that the
Trustee be replaced as trustee hereunder.
7.3 DEALINGS WITH TRANSFER AGENTS, REGISTRARS, ETC.
(1) Each of LCE and the Corporation irrevocably authorizes 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
shares of LCE 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
shares of LCE 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.
(2) LCE and the Corporation shall irrevocably authorize their respective
registrars and transfer agents to comply with all such requests. LCE
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 LCE and the
Corporation at the Trustee's principal office in Toronto correct and complete
books and records of account relating to the Trust created by this agreement,
including 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, for the term of this Agreement. On or before _______,
2003, and on or before _______ in every year thereafter, so long as the LCE
Special Voting Share is registered in the name of the Trustee, the Trustee shall
transmit to LCE and the Corporation a brief report, dated as of the preceding
December 31st, with respect to:
(a) the property and funds comprising the Trust Estate as of that date;
(b) the number of exercises of the Exchange Right, if any, and the
aggregate number of Exchangeable Shares received by the Trustee on
behalf of Beneficiaries in consideration of the issuance by LCE of
shares of LCE Stock in connection with the Exchange Right, during
the calendar year ended on such December 31st; and
(c) any action taken by the Trustee in the performance of its duties
under this agreement which it had not previously reported.
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7.5 INCOME TAX RETURNS AND REPORTS
The Trustee shall, to the extent necessary and as advised by
counsel, prepare and file, or cause to be prepared and filed, on behalf of the
Trust appropriate United States and Canadian income tax returns and any other
returns or reports as may be required by applicable law or pursuant to the rules
and regulations of any other Agency, including any securities exchange or other
trading system through which the Exchangeable Shares are traded. In connection
therewith, the Trustee may obtain the advice and assistance of such experts or
advisors as the Trustee considers necessary or advisable (who may be experts or
advisors to LCE or the Corporation). If requested by the Trustee, LCE or the
Corporation shall retain qualified experts or advisors for the purpose of
providing such tax advice or assistance.
7.6 INDEMNIFICATION PRIOR TO CERTAIN ACTIONS BY TRUSTEE
(1) 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 and 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 LCE Special
Voting Share pursuant to Article 4, subject to Section 7.15, and
with respect to the Exchange Right and the Automatic Exchange Right
pursuant to Article 5 and subject to Section 7.15.
(2) None of the provisions contained in this agreement shall require the
Trustee to expend or risk its own funds or otherwise incur financial
liability in the exercise of any of its rights, powers, duties, or
authorities unless funded, given security and indemnified as
aforesaid.
7.7 ACTION OF BENEFICIARIES
No Beneficiary shall have the right to institute any action, suit or
proceeding or to exercise any other remedy authorized by this agreement for the
purpose of enforcing any of its rights or for the execution of any trust or
power hereunder unless the Beneficiary has requested the Trustee to take or
institute such action, suit or proceeding and furnished the Trustee with the
funding, security and indemnity referred to in Section 7.6 and the Trustee shall
have failed to act within a reasonable time thereafter. In such case, but not
otherwise, the Beneficiary shall be entitled to take proceedings in any court of
competent jurisdiction such as the Trustee might have taken; it being understood
and intended that no one or more Beneficiaries shall have any right in any
manner whatsoever to affect, disturb or prejudice the rights hereby created by
any such action, or to enforce any right hereunder or the Voting Rights, the
Exchange Right or the Automatic Exchange 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.
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7.8 RELIANCE BY TRUSTEE UPON DECLARATIONS
(1) The Trustee shall not be considered to be in contravention of any of
its rights, powers, duties and authorities hereunder if, when
required, it acts and relies in good faith upon lists (including any
Lists), notices, statutory declarations, certificates, (including
share certificate and officers certificates), opinions or 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 lists (including any Lists), notices, statutory declarations,
certificates, opinions or reports comply with the provisions of
Section 7.9, if applicable, and with any other applicable provisions
of this agreement.
(2) Any other provision of this Agreement notwithstanding, the Trustee
as trustee under this Agreement shall have no obligation to ensure
or verify compliance with any applicable laws or rules or regulatory
requirements (including those of any securities commission or
securities exchange or other relevant trading system), or articles
or by-laws of LCE or the Corporation, on the issuance or delivery of
shares of LCE Stock or the transfer of any Exchangeable Shares,
occurring in connection with or upon any exercise of the Exchange
Right or Automatic Exchange Right. Except to the extent it may be
specifically advised in writing to the contrary by legal counsel,
the Trustee as trustee under this Agreement shall be entitled to
regard all transfers of Exchangeable Shares and the issuance and
delivery of all shares of LCE Stock related to the exercise of the
Exchange Right or Automatic Exchange Right, upon the presumption
that such transfers and issuances and deliveries are permissible
pursuant to all applicable laws and rules and regulatory
requirements (including those of any securities commission or
securities exchange or other relevant trading system), and the
articles and by-laws of LCE or the Corporation, as applicable, and
the terms of this Agreement and the Share Provisions. Except to the
extent it may be specifically advised in writing to the contrary by
legal counsel or LCE or the Corporation in the case of specifically
identified Beneficiaries, the Trustee may assume for all purposes of
this Agreement that the address of any Beneficiary as shown on the
register of holders of Exchangeable Shares maintained by the
registrar or transfer agent of the Exchangeable Shares is the
Beneficiary's actual address for the time being and is also
determinative of the Beneficiary's residency for the time being. Any
other provision of this Agreement notwithstanding, the Trustee shall
not be responsible for verifying or determining at any time (a)
whether an Insolvency Event or any event which, with the giving of
notice or the passage of time or both would be an Insolvency Event,
has in fact occurred; (b) whether the solvency requirements of any
applicable law will or will not permit the Corporation to redeem all
Retracted Shares or, if less than all, how many, (and shall be
entitled to rely on any notification given by the Corporation in
this regard); (c) whether applicable law establishes a record date
for any LCE Meeting, or, if applicable law does establish any such
record date, what the date so established is, and the Trustee shall
be entitled to accept as valid and lawful for all purposes any
record date established or stated by LCE for any LCE Meeting, unless
advised in writing by legal counsel of a different record date
established by applicable law.
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7.9 EVIDENCE AND AUTHORITY TO TRUSTEE
(1) LCE and/or the Corporation 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
LCE and/or the Corporation or the Trustee under this agreement or as
a result of any obligation imposed under this agreement, including
in respect of the Voting Rights or 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 LCE
and/or the Corporation 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 LCE and/or the
Corporation written notice requiring it to furnish such
evidence in relation to any particular action or obligation or
matter specified in such notice.
(2) Such evidence shall consist of an Officer's Certificate of LCE
and/or the Corporation 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.
(3) Whenever such evidence relates to a matter other than the Voting
Rights or 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 LCE and/or the Corporation, and except as
otherwise specifically provided herein, such evidence may consist of
a report or opinion of any solicitor, attorney, auditor, accountant,
appraiser, valuer or other expert or any other person whose
qualifications give authority to a statement made by him, provided
that if such report or opinion is furnished by a director, officer
or employee of LCE and/or the Corporation it shall be in the form of
an Officer's Certificate or a statutory declaration.
(4) Each statutory declaration, Officer's Certificate, opinion or report
furnished to the Trustee as evidence of compliance with a condition
provided for in this agreement shall include a statement by the
person giving the evidence:
(a) declaring that he has read and understands the provisions of
this agreement relating to the condition in question;
(b) describing the nature and scope of the examination or
investigation upon which he based the statutory declaration,
certificate, statement or opinion; and
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(c) declaring that he has made such examination or investigation
as he believes is necessary to enable him to make the
statements or give the opinions contained or expressed
therein.
7.10 EXPERTS, ADVISERS AND AGENTS
The Trustee may:
(a) in relation to these presents act and rely on the opinion or advice
of or information obtained from any solicitor, attorney, auditor,
accountant, appraiser, valuer or other expert, whether retained by
the Trustee or by LCE and/or the Corporation or otherwise, and may
retain or employ such assistants as in its reasonable opinion may be
necessary to the proper discharge of its powers and duties and
determination of its rights or duties hereunder and may pay proper
and reasonable compensation for all such legal and other advice or
assistance as aforesaid;
(b) employ such agents and other assistants as it may reasonably require
for the proper determination and/or discharge of its powers and
duties hereunder; and
(c) pay reasonable remuneration for all services performed for it (and
shall be entitled to receive reasonable remuneration for all
services performed by it) in the discharge of the trusts hereof and
compensation for all reasonable 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 shall, upon the receipt by the Trustee of the written
direction of the Corporation, be invested or 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, or in Authorized Investments. Any direction of the Corporation to the
Trustee as to investment or reinvestment of funds shall be in writing and shall
be provided to the Trustee no later than 9:00 a.m. (local Toronto time) or if
received on a day which is not a business day, shall be deemed to have been
given prior to 9:00 a.m. (local time) on the immediately following business day.
If no such direction is received, the Trustee shall not have any obligation to
invest the monies and pending receipt of such a direction all interest or other
income and such moneys may be deposited in the name of the Trustee in any
chartered bank in Canada or, with the consent of the Corporation, in the deposit
department of the Trustee or any other specified loan or trust company
authorized to accept deposits under the laws of Canada or any province thereof
at the rate of interest then current on similar deposits. The Trustee shall not
be held liable for any losses incurred in the investment of any funds as herein
provided.
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7.12 TRUSTEE NOT REQUIRED TO GIVE SECURITY
The Trustee shall not be required to give any bond or security in
respect of the execution of the trusts, rights, duties, powers and authorities
of this agreement or otherwise in respect of the premises.
7.13 TRUSTEE NOT BOUND TO ACT ON REQUEST
Except as in this agreement otherwise specifically provided, the
Trustee shall not be bound to act in accordance with any direction or request of
LCE and/or the Corporation or of the respective directors thereof until a duly
authenticated copy of the instrument or resolution containing such direction or
request shall have been delivered to the Trustee, and the Trustee shall be
empowered to act upon any such copy purporting to be authenticated and believed
by the Trustee to be genuine.
7.14 AUTHORITY TO CARRY ON BUSINESS
The Trustee represents to LCE and the Corporation 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
(1) If conflicting claims or demands are made or asserted with respect
to any interest of any Beneficiary in any Exchangeable Shares,
including any disagreement between the heirs, representatives,
successors or assigns succeeding to all or any part of the interest
of any Beneficiary in any Exchangeable Shares, resulting in
conflicting claims or demands being made in connection with such
interest, then the Trustee shall be entitled, in its sole
discretion, to refuse to recognize or to comply with any such claims
or demands. In so refusing, the Trustee may elect not to exercise
any Voting Rights, Exchange Right or Automatic Exchange 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, Exchange Right or Automatic Exchange Right subject to
such conflicting claims or demands have been adjudicated by a
final judgement of a court of competent jurisdiction; or
(b) all differences with respect to the Voting Rights, Exchange
Right or Automatic Exchange Right subject to such conflicting
claims or demands
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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.
(2) If the Trustee elects to recognize any claim or comply with any
demand made by any such adverse claimant, it may in its discretion
require such claimant to furnish such surety bond or other security
satisfactory to the Trustee as it shall deem appropriate to fully
indemnify it as between all conflicting claims or demands.
7.16 ACCEPTANCE OF TRUST
The Trustee hereby accepts the Trust created and provided for, by
and in this agreement and agrees to perform the same upon the terms and
conditions herein set forth and to hold all rights, privileges and benefits
conferred hereby and by law in trust for the various persons who shall from time
to time be Beneficiaries, subject to all the terms and conditions herein set
forth.
ARTICLE VIII
COMPENSATION
8.1 FEES AND EXPENSES OF THE TRUSTEE
LCE and the Corporation jointly and severally agree to pay the
Trustee reasonable compensation for all of the services rendered by it under
this agreement and will reimburse the Trustee for all reasonable expenses
(including, but not limited to, taxes other than taxes based on the net income
or capital of the Trustee, fees paid and disbursements reimbursed to legal
counsel and other experts and advisors and agents and assistants, and travel
expenses) and disbursements, including the cost and expense of any suit or
litigation of any character and any proceedings before any Agency, and including
fees and expenses for attendance at any LCE Meeting, reasonably incurred by the
Trustee in connection with its duties under this agreement; provided that LCE
and the Corporation 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 or any such proceedings in which the Trustee is determined to have
acted in bad faith or with fraud, negligence, recklessness or wilful misconduct.
Any amount owing under this section or otherwise under this Agreement and unpaid
thirty (30) days after request for such payment with appropriate supporting
documentation, shall bear interest from the expiration of such thirty (30) day
period at a rate per annum equal to the then current reasonable rate charged by
the Trustee. The obligation in this section shall survive the resignation or
removal of the Trustee and the termination of the trusts created by this
Agreement.
ARTICLE IX
INDEMNIFICATION AND LIMITATION OF LIABILITY
9.1 INDEMNIFICATION OF THE TRUSTEE
(1) LCE and the Corporation 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
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"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 delivered to the Trustee by LCE or the
Corporation pursuant hereto.
(2) In no case shall LCE or the Corporation be liable under this
indemnity for any claim against any of the Indemnified Parties
unless LCE and the Corporation 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, LCE and the Corporation shall be entitled to
participate at their own expense in the defence and, if LCE and the
Corporation 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 LCE or the Corporation; or (ii) the named parties to
any such suit include both the Trustee and LCE or the Corporation
and the Trustee shall have been advised by counsel acceptable to LCE
or the Corporation that there may be one or more legal defences
available to the Trustee that are different from or in addition to
those available to LCE or the Corporation and that, in the judgement
of such counsel, would present a conflict of interest were a joint
representation to be undertaken (in which case LCE and the
Corporation 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). The
indemnities contained in this Article 9 shall survive the
termination of the Trust and the resignation or removal of the
Trustee.
9.2 LIMITATION OF LIABILITY
The Trustee shall not be held liable for any loss which may occur by
reason of depreciation of the value of any part of the Trust Estate or any loss
incurred on any investment of funds pursuant to this agreement, except to the
extent that such loss is attributable to the fraud, negligence, recklessness,
wilful misconduct or bad faith on the part of the Trustee.
ARTICLE X
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 LCE and the Corporation
specifying the date on which it
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desires to resign, provided that such notice shall not be given less than thirty
(30) days before such desired resignation date unless LCE and the Corporation
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, LCE and the Corporation 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 the
appointment and acceptance of a successor trustee, a successor trustee may be
appointed by order of a court of competent jurisdiction upon application of one
or more of the parties to this agreement. If the retiring trustee is the party
initiating an application for the appointment of a successor trustee by order of
a court of competent jurisdiction, LCE and the Corporation shall be jointly and
severally liable to reimburse the retiring trustee for its legal costs and
expenses in connection with same.
10.2 REMOVAL
The Trustee, or any trustee hereafter appointed, may (provided a
successor trustee is appointed) be removed at any time on not less than 30 days'
prior notice by written instrument executed by LCE and the Corporation, in
duplicate, one copy of which shall be delivered to the trustee so removed and
one copy to the successor trustee, provided that such removal shall not take
effect until the date of acceptance of appointment by the successor trustee.
10.3 SUCCESSOR TRUSTEE
Any successor trustee appointed as provided under this agreement
shall execute, acknowledge and deliver to LCE and the Corporation 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 LCE and the
Corporation 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, LCE, the Corporation 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, LCE and the Corporation shall cause to be mailed notice of the
succession of such trustee hereunder to each Beneficiary specified in a List. If
LCE or the Corporation 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 LCE and the
Corporation.
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ARTICLE XI
LCE SUCCESSORS
11.1 CERTAIN REQUIREMENTS IN RESPECT OF COMBINATION, ETC.
As long as any outstanding Exchangeable Shares (excluding Nullified
Shares) are owned of record by any person, LCE shall not consummate any
transaction (whether by way of reconstruction, reorganization, consolidation,
arrangement, merger, transfer, sale, lease or otherwise) whereby all or
substantially all of its undertaking, property and assets would become the
property of any other person or, in the case of a merger, of the continuing
corporation resulting therefrom unless:
(a) such other person or continuing corporation (the "LCE SUCCESSOR"),
by operation of law, becomes, without more, bound by the terms and
provisions of this agreement or, if not so bound, executes, prior to
or contemporaneously with the consummation of such transaction, a
trust 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 LCE Successor of
liability for all moneys payable and property deliverable hereunder
and the covenant of such LCE 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 LCE 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, LCE Successor and the Corporation shall, if required by
Section 11.1, execute and deliver the supplemental trust agreement provided for
in Article 12 and thereupon LCE Successor and such other person that may then be
the issuer of the shares of LCE Stock shall possess and from time to time may
exercise each and every right and power of LCE under this agreement in the name
of LCE or otherwise and any act or proceeding by any provision of this agreement
required to be done or performed by the board of directors of LCE or any
officers of LCE may be done and performed with like force and effect by the
directors or officers of such LCE Successor.
11.3 WHOLLY-OWNED SUBSIDIARIES
Nothing herein shall be construed as preventing (i) the amalgamation
or merger of any wholly-owned direct or indirect subsidiary of LCE with or into
LCE, (ii) the winding-up, liquidation or dissolution of any wholly-owned direct
or indirect subsidiary of LCE (other than the Corporation or Callco ULC),
provided that all of the assets of such subsidiary are transferred to LCE or
another wholly-owned direct or indirect subsidiary of LCE, or (iii) any other
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distribution of the assets of any wholly-owned direct or indirect subsidiary of
LCE (other than the Corporation or Callco ULC) among the stockholders of such
subsidiary for the purpose of winding up its affairs, and any such transactions
are expressly permitted by this Article 11.
ARTICLE XII
AMENDMENTS AND SUPPLEMENTAL TRUST AGREEMENTS
12.1 AMENDMENTS, MODIFICATIONS, ETC.
Subject to Section 12.2 and Section 12.4, this agreement may not be
amended or modified except by an agreement in writing executed by LCE, the
Corporation and the Trustee and approved by the Beneficiaries in accordance with
Section 10(2) of the 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 the Corporation and LCE shall be of the good
faith opinion (confirmed in writing by each to the Trustee) 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 confirmed in writing by the Corporation which may be
relied upon by the Trustee), 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 LCE and the Corporation (confirmed
in writing by each to the Trustee) and in the opinion of the
Trustee, in reliance upon a certificate of the Corporation, having
in mind the best interests of the Beneficiaries, it may be expedient
to make, provided that such boards of directors (confirmed in
writing by each to the Trustee) and the Trustee, acting in reliance
upon a certificate of the Corporation, shall be of the opinion that
such amendments and modifications will not be prejudicial to the
rights or interests of the Beneficiaries; or
(c) making such changes or corrections which, on the advice of counsel
to LCE, the Corporation 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 in the opinion of the Trustee (which may, for
this purpose, rely on the opinion of counsel) and the board of
directors of each of the Corporation and LCE 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
The Corporation, at the request of LCE, shall call a meeting or
meetings of the Beneficiaries for the purpose of considering any proposed
amendment or modification requiring approval pursuant hereto. Any such meeting
or meetings shall be called and held in accordance with the by-laws of the
Corporation, the Share Provisions and all applicable laws.
12.4 CHANGES IN CAPITAL OF LCE AND THE CORPORATION
At all times after the occurrence of any event contemplated pursuant
to Section 2.7 or 2.8 of the Support Agreement or otherwise, as a result of
which either shares of LCE Stock or the Exchangeable Shares or both are in any
way changed, and after the Trustee has been notified in writing of what has
occurred in reasonable detail by LCE or the Corporation, as the case may be,
this agreement shall forthwith be amended and modified as is necessary, in the
opinion of counsel, in order that it shall apply with full force and effect,
mutatis mutandis, to all new securities into which shares of LCE Stock or the
Exchangeable Shares or both are so changed and the parties hereto shall execute
and deliver a supplemental trust agreement giving effect to and evidencing such
necessary amendments and modifications.
12.5 EXECUTION OF SUPPLEMENTAL TRUST AGREEMENTS
Notwithstanding Section 12.1, from time to time the Corporation
(when authorized by a resolution of its Board of Directors), LCE (when
authorized by a resolution of its board of directors) and the Trustee may,
subject to the provisions of these presents, and they shall, when so directed by
these presents, execute and deliver by their proper officers, trust agreements
or other instruments supplemental hereto, which thereafter shall form part
hereof, for any one or more of the following purposes:
(a) evidencing the succession of LCE Successors and the covenants of and
obligations assumed by each such LCE Successor in accordance with
the provisions of Article 11 and the successors of the Trustee or
any successor trustee in accordance with the provisions of Article
10;
(b) making any additions to, deletions from or alterations of the
provisions of this agreement or the Voting Rights, the Exchange
Right or the Automatic Exchange Right which, in the opinion of the
Trustee, in reliance upon a certificate of the Corporation, 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 LCE, the Corporation, the Trustee or
this agreement; and
(c) for any other purposes not inconsistent, as confirmed in writing by
the Corporation which may be relied upon by the Trustee, with the
provisions of this agreement, including to make or evidence any
amendment or modification to this agreement as contemplated hereby;
provided that, in the opinion of the Trustee, in reliance upon a
certificate of the Corporation, the rights of the Trustee and
Beneficiaries will not be prejudiced thereby.
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ARTICLE XIII
TERMINATION
13.1 TERM
The Trust created by this agreement shall continue until the
earliest to occur of the following events:
(a) no outstanding Exchangeable Shares are held by a Beneficiary;
(b) each of LCE and the Corporation elects in writing to terminate the
Trust and such termination is approved by the Beneficiaries in
accordance with Section 10(2) of the Share Provisions; and
(c) 21 years after the death of the last survivor of the descendants of
His Majesty King Xxxxxx VI of Canada and the United Kingdom of Great
Britain and Northern Ireland living on the date of the creation of
the Trust.
13.2 SURVIVAL OF AGREEMENT
This agreement shall survive any termination of the Trust and shall
continue until there are no Exchangeable Shares outstanding held by a
Beneficiary; provided, however, that the provisions of Article 8 and Article 9
shall survive any termination of this agreement.
ARTICLE XIV
GENERAL
14.1 SEVERABILITY
If any term or other provision of this agreement is invalid, illegal
or incapable of being enforced by any rule or law, or public policy, all other
conditions and provisions of this agreement shall nevertheless remain in full
force and effect so long as the economic or legal substance of the transactions
contemplated hereby is not affected in any manner materially adverse to any
party. Upon such determination that any term or other provision is invalid,
illegal or incapable of being enforced, the parties hereto shall negotiate in
good faith to modify this agreement so as to effect the original intent of the
parties as closely as possible in an acceptable manner to the end that the
transactions contemplated hereby are fulfilled to the fullest extent possible.
14.2 ENUREMENT
This agreement shall be binding upon and enure to the benefit of the
parties hereto and their respective successors and permitted assigns and,
subject to the terms hereof, to the benefit of the Beneficiaries.
14.3 NOTICES TO PARTIES
Any notice and other communications required or permitted to be given
pursuant to this agreement shall be in writing and shall be deemed sufficiently
given if delivered in person or if
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sent by facsimile transmission (provided such transmission is recorded as being
transmitted successfully) at or to the address or facsimile telephone number set
forth beneath the name of such party below:
If to the Corporation:
0000 Xxxxx Xxxxxx,
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: -
Fax: -
with a copy to:
000 Xxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx
00000
Attention: General Counsel
Fax: (000) 000-0000
and with a further copy to:
Goodmans LLP
000 Xxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, XX X0X 0X0
Xxxxxx
Attention: Xxx Xxxxxx/Xxxxxxx Xxxxxxx
Fax: (000) 000-0000
If to LCE:
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx
00000
Attention: General Counsel
Fax: (000) 000-0000
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with a copy to:
Xxxx Xxxxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx
00000
Attention: Xxxx X. Xxxxxxxxx
Fax: (000) 000-0000
If to the Trustee:
-
Attention: -
Fax: -
or at such other address as the party to which such notice or other
communication is to be given has last notified the party giving the same in the
manner provided in this section. Any notice given shall be deemed to have been
received on the date of such delivery or sending. Provided that if any notice or
other communication to which this section applies is given or delivered by
facsimile transmission and is recorded as having been transmitted successfully
after 5:00 pm (local time of recipient) on a business day or at any time on a
day that is not a business day, such notice or other communication shall be
deemed to have been given or delivered and received on the following business
day.
14.4 NOTICE TO BENEFICIARIES
Any and all notices to be given and any documents to be sent or delivered
to any Beneficiaries by LCE or the Corporation may be given or sent to the
address of such Beneficiary shown on the register of holders of Exchangeable
Shares in any manner permitted by the by-laws of the Corporation from time to
time in force in respect of notices to stockholders and shall be deemed to be
received (if given or sent in such manner) at the time specified in such
by-laws, the provisions of which by-laws shall apply mutatis mutandis to notices
or documents as aforesaid sent to such Beneficiaries.
14.5 COUNTERPARTS
This agreement may be executed in counterparts, each of which shall
be deemed an original, but all of which taken together shall constitute one and
the same instrument.
14.6 JURISDICTION
This agreement shall be construed and enforced in accordance with
the laws of the Province of Ontario and the laws of Canada applicable therein.
-36-
14.7 ATTORNMENT
Each of the Trustee, LCE and the Corporation agrees that any action
or proceeding arising out of or relating to this agreement or any of the
transactions contemplated by 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 non-exclusive
jurisdiction of the said courts in any such action or proceeding, agrees to be
bound by any judgement of the said courts and not to seek, and hereby waives,
any review of the merits of any such judgement by the courts of any other
jurisdiction, and LCE hereby appoints the Corporation at its registered office
in the Province of Ontario as attorney for service of process.
IN WITNESS WHEREOF the parties hereto have caused this agreement to
be duly executed as of the date first above written.
LOEWS CINEPLEX ENTERTAINMENT
CORPORATION
By:
--------------------------
Name:
Title:
LOEWS CINEPLEX ENTERTAINMENT
CORPORATION CANADA
By:
--------------------------
Name:
Title:
[TRUSTEE]
By:
--------------------------
Name:
Title:
APPENDIX "A"
SUPPORT AGREEMENT
