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EXHIBIT 99.2
VOTING AND EXCHANGE TRUST AGREEMENT
MEMORANDUM OF AGREEMENT made as of the 31st day of August, 1999.
B E T W E E N:
BROADCOM CORPORATION, a company incorporated pursuant to the laws of
California and having its office at 00000 Xxxxx Xxxxxxx, X.X. Xxx 00000,
Xxxxxx, Xxxxxxxxxx, 00000-0000
(hereinafter referred to as "Parent"),
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HH ACQUISITION INC., a company incorporated pursuant to the laws of
British Columbia and having its registered office at 2600 - 000 Xxxx
Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxx Xxxxxxxx, X0X 0X0
(hereinafter referred to as "Acquisition Sub"),
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HH ACQUISITION ULC, a company incorporated pursuant to the laws of Nova
Scotia and having its registered office at 800 - 1959 Xxxxx Xxxxx
Xxxxxx, Xxxxxxx, Xxxx Xxxxxx, X0X 0X0
(hereinafter referred to as "CDN2"),
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BROADCOM (BVI) LIMITED, a company incorporated pursuant to the laws of
the British Virgin Islands and having its registered office at Citco
Building, Wickhams Cay, P.O. Box 662, Road Town, Tortola, British Virgin
Islands
(hereinafter referred to as "BVI"),
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US TRUST COMPANY, NATIONAL ASSOCIATION, a national banking association
organized pursuant to the laws of the United States of America and
having its office at 000 Xxxxx Xxxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxxxxx,
Xxxxxxxxxx 00000
(hereinafter referred to as "Trustee").
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WHEREAS pursuant to an acquisition agreement dated as of July 15, 1999
(the "Acquisition Agreement"), by and between Xxxxxx, XXX, XXX0, Acquisition Sub
and HotHaus Technologies Inc. ("Target"), the parties agreed that inter alia on
the Effective Time (as defined in the Acquisition Agreement), Parent, BVI, CDN2
and Acquisition Sub would execute and deliver a Voting and Exchange Trust
Agreement containing the terms and conditions set forth in Exhibit C to the
Acquisition Agreement;
AND WHEREAS pursuant to an arrangement (the "Arrangement") effected by
plan of arrangement filed pursuant to the B.C. Company Act, each issued and
outstanding common share of Target (a "Target Common Share") was exchanged, at
the option of the Holder, for an Exchangeable Non-Voting Share of the
Acquisition Sub (the "Exchangeable Shares") or for a share of the Class B common
stock, par value of U.S. $0.0001 per share, of Parent (the "Parent Common
Shares");
AND WHEREAS the plan of arrangement sets forth the special rights and
restrictions (collectively the "Exchangeable Share Provisions") attaching to the
Exchangeable Shares;
AND WHEREAS Parent is to deposit the number of Parent Common Shares
equal to the number of Exchangeable Shares to secure the voting rights granted
for the benefit of the holders of the Exchangeable Shares, such voting rights
per Exchangeable Share to be equivalent to the voting rights per Parent Common
Share;
AND WHEREAS CDN2 is to grant to and in favour of the holders (other than
Parent and its Affiliates) from time to time of Exchangeable Shares the right,
in the circumstances set forth herein, to require CDN2 to purchase from each
such holder all or any part of the Exchangeable Shares held by the holder;
AND WHEREAS the parties desire to make appropriate provision and to
establish a procedure whereby voting rights in Parent shall be exercisable by
holders (other than Parent and its Affiliates) from time to time of Exchangeable
Shares by and through the Trustee, which will hold legal title to such number of
Parent Common Shares (the "Deposited Shares") as is from time to time equal to
the number of Exchangeable Shares from time to time issued and outstanding,
multiplied by the Current Parent Common Share Equivalent for the benefit of such
holders and whereby the rights to require CDN2 to purchase Exchangeable Shares
from the holders thereof shall be exercisable by such holders from time to time
of Exchangeable Shares by and through the Trustee, which will hold legal title
to such rights for the benefit of such holders;
AND WHEREAS these recitals and any statements of fact in this Agreement
are made by Xxxxxx, XXX, XXX0 and Acquisition Sub and not by the Trustee;
NOW THEREFORE in consideration of the respective covenants and
agreements provided in this Agreement and for other good and valuable
consideration (the receipt and sufficiency of which are hereby acknowledged),
the parties agree as follows:
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ARTICLE 1
DEFINITIONS AND INTERPRETATION
1.1 DEFINITIONS.
In this Agreement, the following terms shall have the following
meanings:
"ACQUISITION SUB" means HH Acquisition Inc., a company existing under
the BC Company Act.
"AFFILIATE" means, as applied to any Person, (a) any other Person
directly or indirectly controlling, controlled by or under common control with,
that Person, (b) any other person that owns or controls 10% or more of any class
of equity securities (including any equity securities issuable upon the exercise
of any option or convertible security) of that Person or any of its Affiliates,
or (c) any director, partner, or officer of such Person. For the purposes of
this definition, "control" (including with correlative meanings, the terms
"controlling", "controlled by", and "under common control with") as applied to
any Person, means the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of that Person, whether
through ownership of voting securities or by contract or otherwise.
"ARRANGEMENT" has the meaning ascribed thereto in the recitals hereto.
"AUTOMATIC EXCHANGE RIGHTS" means the benefit of the obligation of
Parent to effect the automatic exchange of shares of Parent Common Shares for
Exchangeable Shares pursuant to subsection 5.11(c) hereof.
"BC COMPANY ACT" means the Company Act (British Columbia), and all
amendments and additions thereto.
"BOARD OF DIRECTORS" means the board of directors of the Acquisition
Sub.
"BUSINESS DAY" means any day other than a Saturday, a Sunday or a day
when banks located in the State of California or the Province of British
Columbia are authorized or obligated to close.
"BVI" means Broadcom (BVI) Limited a company existing pursuant to the
laws of the British Virgin Islands.
"CALL RIGHTS" means collectively the Liquidation Call Right, the
Redemption Call Right and the Retraction Call Right.
"CANADIAN DOLLAR EQUIVALENT" means in respect of an amount expressed in
a foreign currency (the "Foreign Currency Amount") at any date the product
obtained by multiplying (a) the Foreign Currency Amount by (b) the noon spot
exchange rate on such date for such foreign currency expressed in Canadian
dollars as reported by the Bank of Canada or, in the event such spot exchange
rate is not-available, such exchange rate on such date for such foreign currency
expressed in Canadian dollars as may be deemed by the Board of Directors to be
appropriate for such purpose.
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"CDN2" means HH Acquisition ULC a company existing under the Companies
Act (Nova Scotia) or a Permitted Assign as that term is defined in section 14
hereof.
"CURRENT MARKET PRICE" means, in respect of Parent Common Shares on any
date, the Canadian Dollar Equivalent of the closing sale price of Class A Common
Shares on such date (or, if no trades of Class A Common Shares occurred on such
day, on the last trading day prior thereto on which such trades occurred) as
traded on NASDAQ and reported by the Wall Street Journal, or, if the Class A
Shares are not the quoted on NASDAQ, on such other stock exchange or automated
quotation system on which the Class A Shares are listed or quoted, as the case
may be, as may be selected by the Board of Directors for such purpose, provided,
however, that if in the opinion of the Board of Directors:
(i) the public distribution or trading activity of Class A Shares
during such period does not create a market that reflects the
fair market value of Parent Common Share; or
(ii) the number of Class A Shares that a holder of Parent Common
Shares is entitled to receive on conversion of such Parent
Common Shares is such that one Parent Common Share is not equal
in value to one Class A Share,
the then current Market Price of a Parent Common Share shall be determined by
the Board of Directors in good faith based upon the advice of such qualified
independent financial advisors as the Board of Directors may deem to be
appropriate, and provided further that any such selection, opinion or
determination by the Board of Directors shall be conclusive and binding.
"CURRENT PARENT COMMON SHARE EQUIVALENT" has the meaning ascribed
thereto in the Exchangeable Share Provisions.
"DEFAULT EVENT" means any failure, other than by reason of an Insolvency
Event, of the Acquisition Sub to perform any of its obligations pursuant to the
Exchangeable Share Provisions, including without limitation its obligation to
redeem any Retracted Shares.
"DEPOSITED SHARES" has the meaning provided in the recitals hereto and
any shares delivered in addition or in substitution therefor pursuant to section
3.4 hereof.
"EXCHANGE RIGHT" has the meaning ascribed thereto in section 5.1 hereof.
"EXCHANGEABLE SHARE PROVISIONS" has the meaning ascribed thereto in the
recitals hereto.
"EXCHANGEABLE SHARES" has the meaning ascribed thereto in the recitals
hereto.
"HOLDER VOTES" has the meaning ascribed thereto in section 4.2 hereof.
"HOLDERS" means the registered holders from time to time of Exchangeable
Shares, other than Parent and its Affiliates.
"INSOLVENCY EVENT" means the institution by the Acquisition Sub of any
proceeding to be adjudicated a bankrupt or insolvent or to be dissolved or wound
up, or the consent of the Acquisition Sub to the institution of bankruptcy,
insolvency, dissolution or winding up proceedings
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against it, or the filing of a petition, answer or consent seeking dissolution
or winding up under any bankruptcy, insolvency or analogous laws, including
without limitation the Companies Creditors' Arrangement Act (Canada) and the
Bankruptcy and Insolvency Act (Canada), and the failure by the Acquisition Sub
to contest in good faith any such proceedings commenced in respect of the
Acquisition Sub within 15 days of becoming aware thereof, or the consent by the
Acquisition Sub to the filing of any such petition or to the appointment of a
receiver, or the making by the Acquisition Sub of a general assignment for the
benefit of creditors, or the admission in writing by the Acquisition Sub of its
inability to pay its debts generally as they become due, or the Acquisition Sub
not being permitted, pursuant to solvency requirements of applicable law, to
redeem any Retracted Shares pursuant to section 5.6 of the Exchangeable Share
Provisions.
"LIEN" has the meaning ascribed thereto in the Plan of Arrangement.
"LIQUIDATION CALL RIGHT" has the meaning ascribed thereto in the Plan of
Arrangement.
"LIQUIDATION EVENT" has the meaning ascribed thereto in subsection
5.11(a) hereof.
"LIQUIDATION EVENT EFFECTIVE DATE" has the meaning ascribed thereto in
subsection 5.11(c) hereof.
"LIST" has the meaning ascribed thereto in section 4.6 hereof.
"NASDAQ" means the distinct tier of the Nasdaq Stock Market referred as
the National Market.
"OFFICER'S CERTIFICATE" means, with respect to Xxxxxx, XXX, XXX0, or
Acquisition Sub, as the case may be, a certificate signed by any one of the
Chairman of the Board, the President, any Vice-President or any other senior
officer of Xxxxxx, XXX, XXX0 or Acquisition Sub, as the case may be.
"PARENT COMMON SHARES" has the meaning ascribed thereto in the recitals
hereto.
"PARENT CONSENT" has the meaning ascribed thereto in section 4.2 hereof.
"PARENT MEETING" has the meaning ascribed thereto in section 4.2 hereof.
"PARENT SUCCESSOR" has the meaning ascribed thereto in subsection
10.1(a) hereof.
"PARENT SUPPORT AGREEMENT" means that certain support agreement made as
of even date herewith between BVI, Acquisition Sub, CDN2 and Parent.
"PERSON" means any natural person, corporation, general partnership,
limited partnership, limited liability company or partnership, proprietorship,
other business organization, trust, union, association or Governmental or
Regulatory Authority.
"PLAN OF ARRANGEMENT" means the plan of arrangement of the Acquisition
Sub providing for the Arrangement.
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"REDEMPTION CALL RIGHT" has the meaning ascribed thereto in the Plan of
Arrangement.
"REPLACEMENT OPTION" has the meaning ascribed thereto in the Acquisition
Agreement.
"RETRACTED SHARES" has the meaning ascribed thereto in section 5.7
hereof.
"RETRACTION CALL RIGHT" has the meaning ascribed thereto in the Plan of
Arrangement.
"TRANSFER AGENT" means CIBC Mellon Trust Company or such other persons
as may from time to time be the registrar and transfer agent for the
Exchangeable Shares.
"TRUST" means the trust created by this Agreement.
"TRUST ESTATE" means the Deposited Shares, any other securities, the
Exchange Right, the Automatic Exchange Rights and any money or other property
that may be held by the Trustee from time to time pursuant to this Agreement.
"VOTING RIGHTS" means the voting rights attached to the Deposited
Shares.
1.2 SECTIONS AND HEADINGS.
The division of this Agreement into articles, sections and paragraphs
and the insertion of headings are for reference purposes only and shall not
affect the interpretation of this Agreement. Unless otherwise indicated, any
reference in this Agreement to an article, section and paragraph refers to the
specified article, section and paragraph of this Agreement.
1.3 NUMBER AND GENDER.
Words importing the singular number only shall include the plural and
vice versa. Words importing the use of any gender shall include all genders.
1.4 DATE FOR ANY ACTION.
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 WITHHOLDING TAX.
All amounts required to be paid, deposited or delivered under this
Agreement hereunder shall be paid, deposited or delivered after deduction of any
amount required by applicable law to be deducted or withheld on account of tax
and the deduction of such amounts and remittance to the applicable tax
authorities shall, to the extent thereof, satisfy such requirement to pay,
deposit or deliver hereunder.
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ARTICLE 2
PURPOSE OF AGREEMENT
2.1 ESTABLISHMENT OF TRUST.
The purpose of this Agreement is to create the Trust for the benefit of
the Holders, as herein provided. The Trustee will hold the Deposited Shares in
order to enable the Trustee to exercise the Voting Rights and will hold the
Exchange Right and the Automatic Exchange Rights in order to enable the Trustee
to exercise such rights, in each case as trustee for and on behalf of the
Holders as provided in this Agreement.
ARTICLE 3
DEPOSITED SHARES
3.1 ISSUE AND OWNERSHIP OF THE DEPOSITED SHARES.
Parent hereby issues to and deposits with the Trustee the Deposited
Shares to be hereafter held of record by the Trustee as trustee for and on
behalf of, and for the use and benefit of, the Holders and in accordance with
the provisions of this Agreement. Parent hereby acknowledges receipt from the
Trustee as trustee for and on behalf of the Holders of good and valuable
consideration (and the adequacy thereof) for the issuance of the Deposited
Shares by Parent to the Trustee. During the term of the Trust and subject to the
terms and conditions of this Agreement, the Trustee shall possess and be vested
with full legal ownership of the Deposited Shares and shall be entitled to
exercise all of the rights and powers of an owner with respect to the Deposited
Shares, provided that the Trustee shall:
(a) hold the Deposited Shares and the legal title thereto as trustee
solely for the use and benefit of the Holders in accordance with
the provisions of this Agreement; and
(b) except as specifically authorized by this Agreement, have no
power or authority to sell, transfer, vote or otherwise deal in
or with the Deposited Shares and the Deposited Shares 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 Acquisition Sub shall cause each certificate representing
Exchangeable Shares to bear an appropriate legend notifying the Holders of their
right to instruct the Trustee with respect to the exercise of the Voting Rights
with respect to the Exchangeable Shares held by Holders.
3.3 SAFE KEEPING OF CERTIFICATE.
The certificates representing the Deposited Shares shall at all times be
held in safe keeping by the Trustee.
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3.4 DISTRIBUTIONS AND RELEASE OF TRUST PROPERTY.
The Trustee shall hold the Trust Estate and shall at the request of
Parent release and deliver the Trust Estate to Parent provided that the Trustee
shall refuse to release and deliver to Parent the Trust Estate if, as a result
of such release and delivery, the Trustee would no longer hold sufficient
Deposited Shares to permit the Trustee to exercise Voting Rights on behalf of
all Holders. Parent may direct that the Trust Estate released be returned to
Parent or delivered to a third party.
3.5 SUBSTITUTION OF TRUST PROPERTY.
The Parent shall have the right at any time to deliver to the Trustee
any additional Parent Common Shares or any other class of shares of Parent in
substitution for the Deposited Shares provided that the Trustee at all times
holds sufficient Deposited Shares to permit the Trustee to exercise Voting
Rights on behalf of all Holders. Upon receipt and delivery to Parent by Trustee
of any shares delivered by Parent in substitution for Deposited Shares, the
Trustee shall deliver to Parent the appropriate number of Deposited Shares.
ARTICLE 4
VOTING RIGHTS
4.1 VOTING RIGHTS.
The Trustee, as the holder of record of the Deposited Shares, shall be
entitled to all of the Voting Rights, including the right to consent to or to
vote in person or by proxy the Deposited Shares, on any matter, question or
proposition whatsoever that may properly come before the stockholders of Parent
for their vote at a Parent Meeting or in connection with a Parent Consent. The
Voting Rights shall be and remain vested in and exercised by the Trustee.
Subject to section 6.15 hereof, the Trustee shall exercise the Voting Rights
only on the basis of instructions received pursuant to this Article 4 from
Holders entitled to instruct the Trustee as to the voting thereof at the time at
which a Parent Consent is sought or a Parent Meeting is held. To the extent that
no instructions are received from a Holder with respect to the Voting Rights to
which such Holder is entitled, the Trustee shall not exercise or permit the
exercise of such Holder's Voting Rights.
4.2 NUMBER OF VOTES.
With respect to all meetings of stockholders of Parent at which holders
of Parent Common Shares are entitled to vote (a "Parent Meeting") and with
respect to all written consents sought from the holders of Parent Common Shares
(a "Parent Consent"), each Holder shall be entitled to instruct the Trustee to
cast and exercise, in the manner instructed, such number of votes comprised in
the Voting Rights as is equal to the Current Parent Common Share Equivalent on
the record date established by Parent or by applicable law for such Parent
Meeting or Parent Consent, as the case may be, for each Exchangeable Share owned
of record by such Holder on such record date (the "Holder Votes") in respect of
each matter, question or proposition to be voted on at such Parent Meeting or to
be consented to in connection with such Parent Consent. Parent shall notify
Trustee of any change to the Current Parent Common Share Equivalent.
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4.3 MAILINGS TO SHAREHOLDERS.
With respect to each Parent Meeting and Parent Consent, the Trustee
shall mail or cause to be mailed (or otherwise communicate in the same manner as
Parent utilizes in communications to holders of Parent Common Shares) to each of
the Holders named in the List on the same day as the initial mailing of notice
(or other communication) with respect thereto is given by Parent or any third
party to its stockholders:
(a) a copy of such notice, together with any proxy or information
statement and related materials to be provided to stockholders
of Parent,
(b) a statement that such Holder is entitled to instruct the Trustee
as to the exercise of the Holder Votes with respect to such
Parent Meeting or Parent Consent, as the case may be, or,
pursuant to section 4.7 hereof, to attend such Parent Meeting
and to exercise personally the Holder 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 Holder or his designee to exercise
personally the Holder Votes; or
(ii) a proxy to a designated agent or other representative of
the management of Parent to exercise such Holder Votes;
(d) a statement that if no such instructions are received from the
Holder, the Holder Votes to which such Holder is entitled will
not be exercised;
(e) a form of direction whereby the Holder may so direct and
instruct the Trustee as contemplated herein; and
(f) a statement of (i) the time and date by which such instructions
must be received by the Trustee in order to be binding upon it,
which in the case of a Parent Meeting shall not be earlier than
the close of business on the second Business Day prior to such
meeting, and (ii) the method for revoking or amending such
instructions.
For the purpose of determining Holder Votes to which a Holder is entitled in
respect of any such Parent Meeting or Parent Consent, the number of Exchangeable
Shares owned of record by the Holder shall be determined at the close of
business on the record date established by Parent or by applicable law for
purposes of determining stockholders entitled to vote at such Parent Meeting or
to give written consent in connection with such Parent Consent. Parent shall
notify the Trustee of any decision of the board of directors of Parent with
respect to the calling of any such Parent Meeting or the seeking by Parent of
any such Parent Consent 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.
Parent shall deliver to the Trustee copies of all proxy materials,
(including notices of Parent Meetings), information statements, reports
(including without limitation all interim and
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annual financial statements) and other written communications that are to be
distributed by Parent from time to time to holders of Parent Common Shares in
sufficient quantities and in sufficient time so as to enable the Trustee to send
those materials to each Holder at the same time as such materials are first sent
to holders of Parent Common Shares. The Trustee shall mail or otherwise send to
each Holder, at the expense of Parent, copies of all such materials (and all
materials specifically directed to the Holders or to the Trustee for the benefit
of the Holders by Parent) received by the Trustee from Parent at the same time
as such materials are first sent to holders of Parent Common Shares. The Trustee
shall make copies of all such materials available for inspection by any Holder
at the Trustee's principal office.
4.5 OTHER MATERIALS.
Immediately after receipt by Parent or any stockholder of Parent of any
material sent or given generally to the holders of Parent Common Shares by or on
behalf of a third party, including without limitation dissident proxy and
information circulars (and related information and material) and tender and
exchange offer circulars (and related information and material), Parent shall
use all commercially reasonable efforts to obtain and deliver to the Trustee
copies thereof in sufficient quantities so as to enable the Trustee to forward
such material (unless the same has been provided directly to Holders by such
third party) to each Holder as soon as possible thereafter. As soon as
practicable after receipt thereof, the Trustee shall mail or otherwise send to
each Holder, at the expense of Parent, copies of all such materials received by
the Trustee from Parent. The Trustee shall also make copies of all such
materials available for inspection by any Holder at the Trustee's principal
office.
4.6 LIST OF PERSONS ENTITLED TO VOTE. The Acquisition Sub shall, (a) prior to
each annual, general and special Parent Meeting or the seeking of any Parent
Consent and (b) forthwith upon each request made at any time by the Trustee in
writing, prepare or cause to be prepared a list (a "List") of the names and
addresses of the Holders arranged in alphabetical order and showing the number
of Exchangeable Shares held of record by each such Holder, in each case at the
close of business on the date specified by the Trustee in such request or, in
the case of a List prepared in connection with a Parent Meeting or a Parent
Consent, at the close of business on the record date established by Parent or
pursuant to applicable law for determining the holders of Parent Common Shares
entitled to receive notice of and/or to vote at such Parent Meeting or to give
consent in connection with such Parent Consent. Each such List shall be
delivered to the Trustee promptly after receipt by the Acquisition Sub of such
request or the record date for such meeting or seeking of consent, as the case
may be, and in any event within sufficient time as to enable the Trustee to
perform its obligations under this Agreement. Parent agrees to give the
Acquisition Sub notice (with a copy to the Trustee) of the calling of any Parent
Meeting or the seeking of any Parent Consent, together with the record dates
therefor, sufficiently prior to the date of the calling of such meeting or
seeking of such consent so as to enable the Acquisition Sub to perform its
obligations under this section 4.6.
4.7 ENTITLEMENT TO DIRECT VOTES. Any Holder named in a List prepared in
connection with any Parent Meeting or any Parent Consent shall be entitled (a)
to instruct the Trustee in the manner described in section 4.3 hereof with
respect to the exercise of the Holder Votes to which such Holder is entitled or
(b) to attend such meeting and personally to exercise thereat (or to exercise
with respect to any written consent), as the proxy of the Trustee, the Holder
Votes to which such Holder is entitled.
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4.8 VOTING BY TRUSTEE, AND ATTENDANCE OF TRUSTEE REPRESENTATIVE, AT MEETING.
(a) In connection with each Parent Meeting and Parent Consent, the
Trustee shall exercise, either in person or by proxy, in
accordance with the instructions received from a Holder pursuant
to section 4.3 hereof, the Holder Votes as to which such Holder
is entitled to direct the vote (or any lesser number thereof as
may be set forth in the instructions); provided, however, that
such written instructions are received by the Trustee from the
Holder prior to the time and date fixed by it for receipt of
such instructions in the notice given by the Trustee to the
Holder pursuant to section 4.3 hereof.
(b) The Trustee shall cause such representatives as are empowered by
it to sign and deliver, on behalf of the Trustee, proxies for
Voting Rights to attend each Parent Meeting. Upon submission by
a Holder (or its designee) of identification satisfactory to the
Trustee's representatives, and at the Holder's request, such
representatives shall sign and deliver to such Holder (or its
designee) a proxy to exercise personally the Holder Votes as to
which such Holder is otherwise entitled hereunder to direct the
vote, if such Holder either (i) has not previously given the
Trustee instructions pursuant to section 4.3 hereof in respect
of such meeting, or (ii) submits to the Trustee's
representatives written revocation of any such previous
instructions. At such meeting, the Holder exercising such Holder
Votes shall have the same rights as the Trustee to speak at the
meeting in respect of any matter, question or proposition, to
vote by way of ballot at the meeting in respect of any matter,
question or proposition and to vote at such meeting by way of a
show of hands in respect of any matter, question or proposition.
4.9 DISTRIBUTION OF WRITTEN MATERIALS. Any written materials to be distributed
by the Trustee to the Holders pursuant to this Agreement shall be delivered or
sent by mail (or otherwise communicated in the same manner as Parent utilizes in
communications to holders of Parent Common Shares) to each Holder at its address
as shown on the books of the Acquisition Sub. The Acquisition Sub shall provide
or cause to be provided to the Trustee for this purpose, on a timely basis and
without charge or other expense:
(a) the most 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. Except with respect to a Parent Meeting or
Parent Consent for which the record date has occurred, all of the rights of a
Holder with respect to the Holder Votes exercisable in respect of the
Exchangeable Shares held by such Holder, including the right to instruct the
Trustee as to the voting of or to vote personally such Holder Votes, shall be
deemed to be surrendered by the Holder to Parent and such Holder Votes and the
Voting Rights represented thereby shall cease immediately upon the delivery by
such Holder to the Trustee of the certificates representing such Exchangeable
Shares in connection with the exercise by the Holder of the Exchange Right or
the occurrence of the automatic exchange pursuant to the Automatic Exchange
Rights (unless in either case CDN2 shall not have delivered the requisite Parent
Common Shares issuable in exchange therefor to the Trustee for delivery to the
Holders), or upon the redemption of Exchangeable Shares pursuant to Article 5 or
Article 6 of the Exchangeable Share
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Provisions, or upon the effective date of the liquidation, dissolution or
winding-up of the Acquisition Sub pursuant to Article 4 of the Exchangeable
Share Provisions, or upon the purchase of Exchangeable Shares from the holder
thereof by CDN2 pursuant to the exercise by CDN2 of the Retraction Call Right,
the Redemption Call Right or the Liquidation Call Right. Acquisition Sub shall
cause the Transfer Agent to notify the Trustee of a redemption of Exchangeable
Shares pursuant to Articles 5 and 6 of the Exchangeable Share Provisions or upon
the liquidation, dissolution or winding-up of Acquisition Sub pursuant to
Article 4 of the Exchangeable Share Provisions or upon the exercise by CDN2 of
the Retraction Call Right, Liquidation Call Right or Redemption Call Right.
ARTICLE 5
EXCHANGE RIGHT AND AUTOMATIC EXCHANGE
5.1 GRANT AND OWNERSHIP OF THE EXCHANGE RIGHT.
CDN2 hereby grants to the Trustee as trustee for and on behalf of, and
for the use and benefit of, the Holders (a) the right (the "Exchange Right"),
upon the occurrence and during the continuance of an Insolvency Event or Default
Event, to require CDN2 to purchase from each Holder all or any part of the
Exchangeable Shares held by such Holder and (b) the Automatic Exchange Rights,
all in accordance with the provisions of this agreement. CDN2 hereby
acknowledges receipt from the Trustee as trustee for and on behalf of the
Holders of good and valuable consideration (and the adequacy thereof) for the
grant of the Exchange Right and the Automatic Exchange Rights by CDN2 to the
Trustee. During the term of the Trust and subject to the terms and conditions of
this Agreement, the Trustee shall possess and be vested with full legal
ownership of the Exchange Right and the Automatic Exchange Rights and shall be
entitled to exercise all of the rights and powers of an owner with respect to
the Exchange Right and the Automatic Exchange Rights, provided that the Trustee
shall:
(a) hold the Exchange Right and the Automatic Exchange Rights and
the legal title thereto as trustee solely for the use and
benefit of the Holders in accordance with the provisions of this
Agreement; and
(b) except as specifically authorized by this Agreement, have no
power or authority to exercise or otherwise deal in or with the
Exchange Right or the Automatic Exchange Rights, and the Trustee
shall not exercise any such rights for any purpose other than
the purposes for which this Trust is created pursuant to this
Agreement.
5.2 LEGENDED SHARE CERTIFICATES.
The Acquisition Sub shall cause each certificate representing
Exchangeable Shares to bear an appropriate legend notifying the Holders of:
(a) their right to instruct the Trustee with respect to the exercise
of the Exchange Right in respect of the Exchangeable Shares held
by a Holder; and
(b) the Automatic Exchange Rights.
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5.3 GENERAL EXERCISE OF EXCHANGE RIGHT.
The Exchange Right shall be and remain vested in and exercisable by the
Trustee. Subject to section 6.15 hereof, the Trustee shall exercise the Exchange
Right only on the basis of instructions received pursuant to this Article 5 from
Holders entitled to instruct the Trustee as to the exercise thereof. To the
extent that no instructions are received from a Holder with respect to the
Exchange Right, the Trustee shall not exercise or permit the exercise of the
Exchange Right.
5.4 PURCHASE PRICE.
The purchase price payable by CDN2 for each Exchangeable Share to be
purchased by CDN2 under the Exchange Right shall be an amount per share equal to
(a) the Current Market Price multiplied by the Current Parent Common Share
Equivalent, in each case determined on the day of closing of the purchase and
sale of such Exchangeable Share under the Exchange Right, which shall be
satisfied in full in respect of the Exchangeable Shares in regard to which a
Holder has exercised the Exchange Right by causing to be delivered to such
Holder such whole number of Parent Common Shares as is equal to the product
obtained by multiplying the number of such Exchangeable Shares by the Current
Parent Common Share Equivalent (together with an amount in lieu of any
fractional Parent Common Share resulting from such calculation payable in
accordance with section 9.5 of the Exchangeable Share Provisions), plus (b) the
aggregate of all dividends declared and unpaid on each such Exchangeable Share
(provided that if the record date for any such declared and unpaid dividends
occurs on or after the day of closing of such purchase and sale the purchase
price shall not include such declared and unpaid dividends).
5.5 EXERCISE INSTRUCTIONS.
Subject to the terms and conditions herein set forth, a Holder 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 Holder on the
books of the Acquisition Sub. To cause the exercise of the Exchange Right by the
Trustee, the Holder shall deliver to the Trustee, in person or by certified or
registered mail, at its principal office or at such other place as the Trustee
may from time to time designate by written notice to the Holders, the
certificates representing the Exchangeable Shares that such Holder desires CDN2
to purchase, duly endorsed in blank, and accompanied by such other documents and
instruments as may be required to effect a transfer of Exchangeable Shares under
the BC Company Act and the articles of the Acquisition Sub and such additional
documents and instruments as the Trustee 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 Holder thereby instructs the Trustee to exercise the Exchange Right
so as to require CDN2 to purchase from the Holder the number of Exchangeable
Shares specified therein, (ii) that such Holder has good title to and owns all
such Exchangeable Shares to be acquired by CDN2 free and clear of all Liens,
(iii) the names in which the certificates representing Parent Common Shares
issuable in connection with the exercise of the Exchange Right are to be issued
and (iv) the names and addresses of the persons to whom such new certificates
should be delivered and (b) payment (or evidence satisfactory to the Trustee,
Acquisition Sub and CDN2 of payment) of the taxes (if any) payable as
contemplated by section 5.8 of this Agreement. If only a part of the
Exchangeable Shares represented by any certificate or certificates delivered to
the Trustee are to be purchased by CDN2 under the Exchange Right, a new
certificate for the balance of such Exchangeable Shares shall be issued to the
holder at the expense
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of Acquisition Sub. Upon written request from the Trustee, Acquisition Sub shall
provide the Trustee notice of the documents and instruments required to effect a
transfer of Exchangeable Shares under the BC Company Act.
5.6 DELIVERY OF PARENT COMMON SHARES: EFFECT OF EXERCISE.
Promptly after receipt of the certificates representing the Exchangeable
Shares that the Holder desires CDN2 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,
or evidence thereof in accordance with section 5.8), duly endorsed for transfer
to CDN2, the Trustee shall notify Xxxxxx, XXX, XXX0 and Acquisition Sub of its
receipt of the same, which notice to Xxxxxx, XXX, XXX0 and Acquisition Sub shall
constitute exercise of the Exchange Right by the Trustee on behalf of the holder
of such Exchangeable Shares, and CDN2 shall immediately thereafter deliver or
cause to be delivered to the Trustee, for delivery to the Holder of such
Exchangeable Shares (or to such other persons, if any, properly designated by
such Holder), the certificates for the number of Parent Common Shares issuable
in connection with the exercise of the Exchange Right, which shares shall be
duly issued as fully paid and non-assessable and shall be free and clear of any
Liens, and cheques for the balance, if any, of the total purchase price therefor
(or, if part of the purchase price consists of dividends payable in property,
such property or property the same as or economically equivalent to such
property). Immediately upon the giving of notice by the Trustee to Xxxxxx, XXX,
XXX0 and Acquisition Sub of the exercise of the Exchange Right, as provided in
this section 5.6, the closing of the transaction of purchase and sale
contemplated by the Exchange Right shall be deemed to have occurred, and the
Holder of such Exchangeable Shares shall be deemed to have transferred to CDN2
all of its right, title and interest in and to such Exchangeable Shares and in
the related interest in the Trust Estate and shall cease to be a holder of such
Exchangeable Shares and shall not be entitled to exercise any of the rights of a
holder in respect thereof, other than the right to receive the purchase price
therefor, unless the requisite number of Parent Common Shares (together with a
cheque for the balance, if any, of the purchase price therefor or, if part of
the purchase price consists of dividends payable in property, such property or
property the same as or economically equivalent to such property) is not
allotted, issued and delivered by CDN2 to the Trustee for delivery to such
Holder (or to other persons, if any, properly designated by such Holder) within
five Business Days of the date of the giving of such notice by the Trustee, in
which case the rights of the Holder shall remain unaffected until such Parent
Common Shares are so allotted, issued and delivered by CDN2 and any such cheque
is so delivered and paid. Concurrently with such Holder ceasing to be a holder
of Exchangeable Shares, the Holder shall be considered and deemed for all
purposes to be the holder of the Parent Common Shares delivered to it pursuant
to the Exchange Right.
5.7 EXERCISE OF EXCHANGE RIGHT SUBSEQUENT TO RETRACTION.
In the event that a Holder has exercised its right under Article 5 of
the Exchangeable Share Provisions to require the Acquisition Sub to redeem any
or all of the Exchangeable Shares held by the Holder (the "Retracted Shares")
and is notified by Acquisition Sub pursuant to section 5.6 of the Exchangeable
Share Provisions that Acquisition Sub is not permitted as a result of solvency
requirements of applicable law to redeem all of such Retracted Shares, and
provided that CDN2 shall not have exercised the Retraction Call Right with
respect to the Retracted Shares, and that the Holder has not revoked the
retraction request delivered by the Holder to Acquisition Sub pursuant to
Article 5 of the Exchangeable Share Provisions, the retraction request shall
constitute
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and shall be deemed to constitute notice from the Holder to the Trustee
instructing the Trustee to exercise the Exchange Right with respect to those
Retracted Shares that the Acquisition Sub is unable to redeem. In any such
event, Acquisition Sub hereby agrees with the Trustee and in favour of the
Holder immediately to notify the Trustee of such prohibition against Acquisition
Sub redeeming all of the Retracted Shares and immediately to forward or cause to
be forwarded to the Trustee all relevant materials delivered by the Holder to
Acquisition Sub or to the transfer agent of the Exchangeable Shares (including
without limitation a copy of the retraction request delivered pursuant to
section 5.1 of the Exchangeable Share Provisions) in connection with such
proposed redemption of the Retracted Shares and the Trustee shall thereupon
exercise the Exchange Right with respect to the Retracted Shares that
Acquisition Sub is not permitted to redeem and will require CDN2 to purchase
such shares in accordance with the provisions of this Article 5.
5.8 STAMP OR OTHER TRANSFER TAXES.
Upon any sale of Exchangeable Shares to CDN2 pursuant to the Exchange
Right or the Automatic Exchange Rights, the share certificate or certificates
representing Parent Common Shares to be delivered in connection with the payment
of the purchase price therefor shall be issued in the name of the Holder of the
Exchangeable Shares so sold or in such names as such Holder may otherwise direct
in writing without charge to the holder of the Exchangeable Shares so sold,
provided, however, that such Holder (a) shall pay (and neither Xxxxxx, XXX,
XXX0, Acquisition Sub nor the Trustee shall be required to pay) any documentary,
stamp, transfer or other similar taxes that may be payable in respect of any
transfer involved in the issuance or delivery of such shares to a person other
than such Holder or (b) shall establish to the satisfaction of Trustee, Parent,
BVI, CDN2 and Acquisition Sub that such taxes, if any, have been paid.
5.9 NOTICE OR INSOLVENCY EVENT OR DEFAULT EVENT.
Immediately upon the occurrence of an Insolvency Event or Default Event
or any event that with the giving of notice or the passage of time or both would
be an Insolvency Event or Default Event, Acquisition Sub, CDN2 and Parent shall
give written notice thereof to the Trustee. As soon as practicable after
receiving notice from Acquisition Sub, CDN2 and Parent or from any other person
of the occurrence of an Insolvency Event or Default Event, the Trustee shall
mail to each Holder, at the expense of Parent, a notice of such Insolvency Event
or Default Event, which notice shall contain a brief statement of the right of
the Holders with respect to the Exchange Right.
5.10 RESERVATION OF PARENT COMMON SHARES.
Parent hereby represents and warrants that it has irrevocably reserved
for issuance out of its authorized and unissued capital stock such number of
Parent Common Shares as is equal to the number of Exchangeable Shares
outstanding at the date hereof and all vested and unvested Replacement Options
and covenants that it will at all times keep available, free from pre-emptive
and other rights, out of its authorized and unissued capital stock such number
of Parent Common Shares (or other shares or securities into which Parent Common
Shares may be reclassified or changed) as is necessary to enable Xxxxxx, XXX,
XXX0 and Acquisition Sub to perform their respective obligations pursuant to
this Agreement, the Exchangeable Share Provisions, the Plan of Arrangement and
the Support Agreement.
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5.11 AUTOMATIC EXCHANGE ON LIQUIDATION OF PARENT.
(a) Parent shall give the Trustee notice of each of the following events
(a "Liquidation Event") at the time set forth below:
(i) in the event of any determination by the Board of
Directors of Parent to institute voluntary liquidation,
dissolution or winding-up proceedings with respect to
Parent or to effect any other distribution of assets of
Parent among its stockholders for the purpose of winding
up its affairs, at least 60 days prior to the proposed
effective date of such liquidation, dissolution,
winding-up or other distribution; and
(ii) immediately, upon the earlier of (A) receipt by Parent
of notice of and (B) Parent otherwise becoming aware of
any threatened or instituted claim, suit, petition or
other proceedings with respect to the involuntary
liquidation, dissolution or winding up of Parent or to
effect any other distribution of assets of Parent among
its stockholders for the purpose of winding up its
affairs.
(b) Immediately following receipt by the Trustee from Parent of notice
of any Liquidation Event, the Trustee shall give notice thereof to the Holders.
Such notice shall include a brief description of the automatic exchange of
Exchangeable Shares for Parent Common Shares provided for in subsection 5.11(c)
below.
(c) In order that the Holders will be able to participate on a pro rata
basis with the holders of Parent Common Shares in the distribution of assets of
Parent in connection with a Liquidation Event, on the fifth Business Day prior
to the effective date of a Liquidation Event (the "Liquidation Event Effective
Date") all of the then outstanding Exchangeable Shares shall be automatically
exchanged for Parent Common Shares. To effect such automatic exchange, CDN2
shall purchase each Exchangeable Share outstanding on the fifth Business Day
prior to the Liquidation Event Effective Date and held by Holders, and each
Holder shall sell the Exchangeable Shares held by it at such time, for a
purchase price per share equal to (a) the Current Market Price multiplied by the
Current Parent Common Share Equivalent on such fifth Business Day prior to the
Liquidation Event Effective Date, which shall be satisfied in full in respect of
the Exchangeable Shares held by each Holder by CDN2 issuing to such Holder such
whole number of Parent Common Shares as is equal to the product obtained by
multiplying the number of such Exchangeable Shares by the Current Parent Common
Share Equivalent (together with an amount in lieu of any fractional Parent
Common Share resulting from such calculation payable in accordance with section
9.4 of the Exchangeable Share Provisions), plus (b) an additional amount equal
to the aggregate of all dividends declared and unpaid on each such Exchangeable
Share (provided that if the record date for any such declared and unpaid
dividends occurs on or after the day of closing of such purchase and sale, the
purchase price shall not include such additional amount equal to such declared
and unpaid dividends).
(d) On the fifth Business Day prior to the Liquidation Event Effective
Date, the closing of the transaction of purchase and sale contemplated by the
automatic exchange of Exchangeable Shares for Parent Common Shares shall be
deemed to have occurred, and each Holder of Exchangeable Shares shall be deemed
to have transferred to CDN2 all of the Holder's right, title and interest in and
to such Exchangeable Shares and the related interest in the Trust Estate and
shall
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cease to be a Holder of such Exchangeable Shares and CDN2 shall issue to the
Holder the Parent Common Shares issuable upon the automatic exchange of
Exchangeable Shares for Parent Common Shares which shares shall be duly and
validly issued as fully paid and non-assessable and shall be free and clear of
any Liens and shall deliver to the Trustee for delivery to the Holder a cheque
for the balance, if any, of the purchase price for such Exchangeable Shares (or,
if any part of the purchase price consists of dividends payable in property,
such property or property that is the same as or economically equivalent to such
property). Concurrently with such Holder ceasing to be a holder of Exchangeable
Shares, the Holder shall be considered and deemed for all purposes to be the
holder of the Parent Common Shares issued to it pursuant to the automatic
exchange of Exchangeable Shares for Parent Common Shares and the certificates
held by the Holder previously representing the Exchangeable Shares exchanged by
the Holder with CDN2 pursuant to such automatic exchange shall thereafter be
deemed to represent the Parent Common Shares issued to the Holder by CDN2
pursuant to such automatic exchange. Upon the request of a Holder and the
surrender by the Holder of Exchangeable Share certificates deemed to represent
Parent Common Shares, duly endorsed in blank and accompanied by such instruments
of transfer as CDN2 may reasonably require, CDN2 shall deliver or cause to be
delivered to the Holder certificates representing the Parent Common Shares of
which the Holder is the holder.
5.12 WITHHOLDING RIGHTS.
Xxxxxx, XXX, XXX0, Acquisition Sub and the Trustee shall be entitled to
deduct and withhold from any consideration otherwise payable under this trust
agreement to any Holder of Exchangeable Shares such amounts as Xxxxxx, XXX,
XXX0, Acquisition Sub or the Trustee is required or permitted to deduct and
withhold with respect to such payment under the Income Tax Act (Canada), the
United States Internal Revenue Code of 1986 or any provision of provincial,
state, local or foreign tax law, in each case as amended or succeeded. To the
extent that amounts are so withheld, such withheld amounts shall be treated for
all purposes as having been paid to the holder of the Exchangeable Shares in
respect of which such deduction and withholding was made, provided that such
withheld amounts are actually remitted to the appropriate taxing authority. To
the extent that the amount so required or permitted to be deducted or withheld
from any payment to a holder exceeds the cash portion, if any, of the
consideration otherwise payable to the holder, Xxxxxx, XXX, XXX0, Acquisition
Sub and the Trustee are hereby authorized to sell or otherwise dispose of such
portion of the consideration as is necessary to provide sufficient funds to
Xxxxxx, XXX, XXX0, Acquisition Sub or the Trustee, as the case may be, to enable
it to comply with such deduction or withholding requirement and Xxxxxx, XXX,
XXX0, Acquisition Sub or the Trustee shall notify the holder thereof and remit
to such holder any unapplied balance of the net proceeds of such sale.
ARTICLE 6
CONCERNING THE TRUSTEE
6.1 POWERS AND DUTIES OF THE TRUSTEE.
The rights, powers and authorities of the Trustee under this Agreement,
in its capacity as trustee of the Trust, shall include:
(a) receipt and deposit of the Deposited Shares from Parent as
trustee for and on behalf of the Holders in accordance with the
provisions of this Agreement;
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(b) granting proxies and distributing materials to Holders as
provided in this Agreement;
(c) voting the Holder Votes in accordance with the provisions of
this Agreement;
(d) receiving the grant of the Exchange Right and the Automatic
Exchange Rights from CDN2 as trustee for and on behalf of the
Holders in accordance with the provisions of this Agreement;
(e) exercising the Exchange Right and enforcing the benefit of the
Automatic Exchange Rights, in each case in accordance with the
provisions of this Agreement and in connection therewith
receiving from Holders Exchangeable Shares and other requisite
documents and distributing to such Holders the Parent Common
Shares and cheques, if any, to which such Holders are entitled
upon the exercise of the Exchange Right or pursuant to the
Automatic Exchange Rights, as the case may be;
(f) holding title to the Trust Estate;
(g) investing any moneys forming, from time to time, a part of the
Trust Estate as provided in this Agreement;
(h) taking action at the direction of a Holder or Holders to enforce
the obligations of Xxxxxx, XXX, XXX0 and Acquisition Sub under
this Agreement and
(i) taking such other actions and doing such other things as are
specifically provided in this Agreement.
In the exercise of such rights powers 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 duties hereunder, may deem necessary, appropriate or desirable to effect the
purpose of the Trust. Any exercise of such rights, powers and authorities by the
Trustee shall be final, conclusive and binding upon all persons. For greater
certainty, the Trustee shall have only those duties as are set out specifically
in this Agreement.
The Trustee in exercising its rights, powers, duties and
authorities hereunder shall act honestly and in good faith with a view to the
best interests of the Holders and shall exercise the care, diligence and skill
that a reasonable person would exercise in comparable circumstances.
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6.2 NO CONFLICT OF INTEREST.
The Trustee represents to Xxxxxxxxxxx Xxx, XXX, XXX0 and Parent that at
the date of execution and delivery of this Agreement there exists no material
conflict of interest in the role of the Trustee as a fiduciary hereunder and the
role of the Trustee in any other capacity. The Trustee shall, within 30 days
after it becomes aware that such a material conflict of interest exists, either
eliminate such material conflict of interest or resign in the manner and with
the effect specified in Article 9 hereof. If, notwithstanding the foregoing
provisions of this section 6.2, 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 6.2, any interested party may apply to the courts of
the State of California for an order that the Trustee be replaced as trustee
hereunder.
6.3 DEALINGS WITH TRANSFER AGENTS, REGISTRARS, ETC.
Each of Xxxxxxxxxxx Xxx, XXX, XXX0 and Parent irrevocably authorize the
Trustee, from time to time, to:
(a) consult, communicate and otherwise deal with the respective
registrars and transfer agents, and with any such subsequent
registrar or transfer agent, of the Exchangeable Shares and
Parent Common Shares; and
(b) requisition, from time to time, (i) from any such registrar or
transfer agent any information readily available from the
records maintained by it which the Trustee may reasonably
require for the discharge of its duties and responsibilities
under this Agreement and (ii) from the transfer agent of Parent
Common Shares, and any subsequent transfer agent of such shares,
the share certificates issuable upon the exercise from time to
time of the Exchange Right and pursuant to the Automatic
Exchange Rights in the manner specified in Article 5 hereof.
Each of Acquisition Sub, CDN2, BVI and Parent irrevocably authorize their
respective registrars and transfer agents to comply with all such requests.
Parent, CDN2 and BVI covenant that they will supply Parent's transfer agent with
duly executed share certificates for the purpose of completing the exercise from
time to time of the Exchange Right and the Automatic Exchange Rights, in each
case pursuant to Article 5 hereof.
6.4 BOOKS AND RECORDS.
The Trustee shall keep available for inspection by Xxxxxx, XXX, XXX0 and
Acquisition Sub, at the Trustee's principal office, correct and complete books
and records of account relating to the Trustee's actions under this Agreement,
including without limitation all information relating to mailings and
instructions to and from Holders and all transactions pursuant to the Voting
Rights, the Exchange Right and the Automatic Exchange Rights for the term of
this Agreement. On or before October 1, 1999, and on or before March 1 in every
year thereafter, so long as the Deposited Shares are being held in the name of
the Trustee, the Trustee shall transmit to Xxxxxx, XXX, XXX0 and Acquisition Sub
a brief report, dated as of the preceding December 31, with respect to:
(a) the property and funds comprising the Trust Estate as of that
date;
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(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 Holders in consideration of the issue and delivery
by CDN2 of Parent Common Shares in connection with the Exchange
Right, during the calendar year ended on such date;
(c) the number of Deposited Shares held by the Trustee at December
31 of such calendar year; and
(d) all other actions taken by the Trustee in the performance of its
duties under this Agreement that it had not previously reported
and which, in the Trustee's opinion, materially affects the
Trust Estate.
6.5 INCOME TAX RETURNS AND REPORTS.
The Trustee shall, to the extent necessary, prepare and file on behalf
of the Trust appropriate United States and Canadian income tax returns and any
other returns or reports as may be required by applicable law or pursuant to the
rules and regulations of any securities exchange or other trading system through
which the Exchangeable Shares are traded and, in connection therewith, may
obtain the advice and assistance of such experts as the Trustee may consider
necessary or advisable.
6.6 INDEMNIFICATION PRIOR TO CERTAIN ACTIONS BY TRUSTEE.
The Trustee shall exercise any or all of the rights, duties, powers or
authorities vested in it by this Agreement at the request, order or direction of
any Holder upon such Holder furnishing to the Trustee reasonable funding,
security and indemnity against the costs, expenses and liabilities that may be
incurred by the Trustee therein or thereby, provided that no Holder 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 (i) the Deposited Shares pursuant to Article 4
hereof, subject to section 6.15 hereof, (ii) the Exchange Right pursuant to
Article 5 hereof, subject to section 6.15 hereof, and (iii) the Automatic
Exchange Rights pursuant to Article 5 hereof.
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 and given security and indemnity as aforesaid.
6.7 ACTIONS BY HOLDERS.
No Holder 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 Holder 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 6.6 hereof and the Trustee shall
have failed to so act within a reasonable time thereafter. In such case, but not
otherwise, the Holder 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 Holders shall have any right in any
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manner whatsoever to affect, disturb or prejudice the rights hereby created by
any such action, or to enforce any right hereunder or under the Voting Rights,
the Exchange Right or the Automatic Exchange Rights except subject to the
conditions and in the manner herein provided, and that all powers and trusts
hereunder shall be exercised and all proceedings at law shall be instituted, had
and maintained by the Trustee, except only as herein provided, and in any event
for the equal benefit of all Holders.
6.8 RELIANCE UPON DECLARATIONS.
The Trustee shall not be considered to be in contravention of any of its
rights, powers, duties and authorities hereunder if, when required, it acts and
relies in good faith upon lists, mailing labels, notices, statutory
declarations, certificates, opinions, 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 and such lists, mailing labels, notices, statutory declarations,
certificates, opinions, reports or other papers or documents comply with the
provisions of section 6.9 hereof, if applicable, and with any other applicable
provisions of this Agreement. The Trustee shall be protected and shall incur no
liability in acting or proceeding in good faith upon any resolution, notice,
telegram request, consent, direction, waiver, certificate, statement, affidavit,
voucher, bond, requisition or other paper or document which it shall in good
faith believe to be genuine and to have been passed or signed by the proper
board or person or to have been prepared and furnished pursuant to any of the
provisions of this Agreement, including the exercise of any rights by any
Holder, and the Trustee shall be under no duty to make any investigation or
inquiry as to any statements contained or matters referred to in any such
instrument, but may, in the absence of bad faith on its part, accept and rely
upon the same as conclusive evidence of the truth and accuracy of such
statements or instruction.
6.9 EVIDENCE AND AUTHORITY TO TRUSTEE.
Xxxxxxxxxxx Xxx, XXX, XXX0 and/or Parent 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 Xxxxxxxxxxx
Xxx, XXX, XXX0 and/or Parent or the Trustee under this Agreement or as a result
of any obligation imposed under this Agreement, including, without limitation,
in respect of the Voting Rights, the Exchange Right or the Automatic Exchange
Rights and the taking of any other action to be taken by the Trustee at the
request of or on the application of Xxxxxxxxxxx Xxx, XXX, XXX0 and/or Parent
forthwith 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 6.9; or
(b) the Trustee, in the exercise of its rights, powers, duties and
authorities under this Agreement, gives Xxxxxxxxxxx Xxx, XXX,
XXX0 and/or Parent written notice requiring it to furnish such
evidence in relation to any particular action or obligation
specified in such notice.
Such evidence shall consist of an Officer's Certificate of
Xxxxxxxxxxx Xxx, XXX, XXX0 and/or Parent 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.
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Whenever such evidence relates to a matter other than the
Voting Rights, the Exchange Right or the Automatic Exchange Rights, and except
as otherwise specifically provided herein, such evidence may consist of a report
or opinion of any solicitor, auditor, accountant, appraiser, valuer, engineer or
other expert or any other person whose qualifications give authority to a
statement made by him, provided that if such report or opinion is furnished by a
director, officer or employee of Xxxxxxxxxxx Xxx, XXX, XXX0 and/or Parent it
shall be in the form of an Officer's Certificate or a statutory declaration.
Each statutory declaration, certificate, opinion or report
furnished to the Trustee as evidence of compliance with a condition provided for
in this Agreement shall include a statement by the person giving the evidence:
(a) declaring that he has read and understands the provisions of
this Agreement relating to the condition in question;
(b) describing the nature and scope of the examination or
investigation upon which he based the statutory declaration,
certificate, statement or opinion; and
(c) declaring that he has made such examination or investigation as
he believes is necessary to enable him to make the statements or
give the opinions contained or expressed therein.
6.10 EXPERTS, ADVISERS AND AGENTS.
The Trustee may:
(a) in relation to this Agreement act and rely on the opinion or
advice of or information obtained from any solicitor, auditor,
accountant, appraiser, valuer, engineer or other expert, whether
retained by the Trustee or by Xxxxxxxxxxx Xxx, XXX, XXX0 and/or
Parent or otherwise, and may employ such assistants as may be
necessary to the proper discharge of its powers and duties and
determination of its rights hereunder and may pay proper and
reasonable compensation for all such legal and other advice or
assistance as aforesaid; and
(b) employ such agents and other assistants as it may reasonably
require for the proper discharge of its powers and duties
hereunder, and may pay reasonable remuneration for all services
performed for it in the discharge of the trusts hereof.
6.11 INVESTMENT OF MONEYS HELD BY TRUSTEE.
Unless otherwise provided in this Agreement, any moneys held by or on
behalf of the Trustee that under the terms of this Agreement may or ought to be
invested or which may be on deposit with the Trustee or that may be in the hands
of the Trustee shall be invested in the name or under the control of the Trustee
in Federated Investors U.S. Treasury Cash Reserve. Any income earned in respect
of the Trust Estate which is not used by the Trustee as provided in this
Agreement may be accumulated by the Trustee and added to the capital of the
Trust Estate.
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6.12 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.
6.13 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
Xxxxxxxxxxx Xxx, XXX, XXX0 and/or Parent or of the directors thereof until a
duly authenticated copy of the instrument or resolution containing such
direction or request shall have been delivered to the Trustee, and the Trustee
shall be empowered to act and rely upon any such copy purporting to be
authenticated and believed by the Trustee to be genuine.
6.14 AUTHORITY TO CARRY ON BUSINESS.
The Trustee represents to Xxxxxxxxxxx Xxx, XXX, XXX0 and Parent that at
the date of execution and delivery by it of this Agreement it is authorized to
perform its obligations pursuant to this Agreement under all applicable laws but
if, notwithstanding the provisions of this section 6.14, it ceases to be so
authorized, the validity and enforceability of this Agreement and the Voting
Rights, the Exchange Right and the Automatic Exchange Rights shall not be
affected in any manner whatsoever by reason only of such event but the Trustee
shall, within 30 days after ceasing to be so authorized, either become so
authorized or resign in the manner and with the effect specified in Article 9
hereof.
6.15 CONFLICTING CLAIMS.
If conflicting claims or demands are made or asserted with respect to
any interest of any Holder 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 Holder in any Exchangeable
Shares resulting in conflicting claims or demands being made in connection with
such interest, then the Trustee shall be entitled, at its sole discretion, to
refuse to recognize or to comply with any such claim or demand. In so refusing,
the Trustee may elect not to exercise any Voting Rights, Exchange Right or
Automatic Exchange Rights subject to such conflicting claims or demands and, in
so doing, the Trustee shall not be or become liable to any person on account of
such election or its failure or refusal to comply with any such conflicting
claims or demands. The Trustee shall be entitled to continue to refrain from
acting and to refuse to act until:
(a) the rights of all adverse claimants with respect to the Voting
Rights, Exchange Right or Automatic Exchange Rights subject to
such conflicting claims or demands have been adjudicated by a
final judgment of a court of competent jurisdiction; or
(b) all differences with respect to the Voting Rights, Exchange
Right or Automatic Exchange Rights subject to such conflicting
claims or demands have been conclusively settled by a valid
written agreement binding on all such adverse claimants, and the
Trustee shall have been furnished with an executed copy of such
agreement.
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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 fully to indemnify it as between all conflicting claims
or demands.
6.16 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 Holders, subject to all the terms and conditions herein set forth.
ARTICLE 7
COMPENSATION
7.1 FEES AND EXPENSES OF XXX XXXXXXX.
Xxxxxx, XXX, XXX0 and Acquisition Sub jointly and severally agree to pay
to the Trustee reasonable compensation for all of the services rendered by it
under this Agreement and will reimburse the Trustee for all reasonable expenses
and disbursements, including the cost and expense of any suit or litigation of
any character and any proceedings before any governmental agency reasonably
incurred by the Trustee in connection with its rights and duties under this
Agreement; provided that Xxxxxx, XXX, XXX0 and Acquisition Sub shall have no
obligation to reimburse the Trustee for any expenses or disbursements paid,
incurred or suffered by the Trustee in any suit or litigation in which the
Trustee is determined to have acted fraudulently, in bad faith or with
negligence or willful misconduct.
ARTICLE 8
INDEMNIFICATION AND LIMITATION OF LIABILITY
8.1 INDEMNIFICATION OF XXX XXXXXXX.
Xxxxxx, XXX, XXX0 and Acquisition Sub jointly and severally agree to
indemnify, and hold harmless the Trustee and each of its directors, officers,
employees and agents appointed and acting in accordance with this Agreement
(collectively the "Indemnified Parties") against all claims, losses, damages,
costs, penalties, fines and reasonable expenses (including reasonable expenses
of the Trustee's legal counsel) which, without fraud, negligence, willful
misconduct or bad faith on the part of such Indemnified Party, may be paid,
incurred or suffered by the Indemnified Party by reason of 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 instructions
delivered to the Trustee by Xxxxxx, XXX, XXX0 or Acquisition Sub pursuant
hereto. In no case shall Xxxxxx, XXX, XXX0 or Acquisition Sub be liable under
this indemnity for any claim against any of the Indemnified Parties unless
Xxxxxx, XXX, XXX0 and Acquisition Sub shall be notified by the Trustee of the
written assertion of a
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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, Xxxxxx, XXX, XXX0 and Acquisition Sub shall be entitled to participate at
their own expense in the defense and, if Xxxxxx, XXX, XXX0 or Acquisition Sub 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 Xxxxxx, XXX, XXX0 or Acquisition Sub; or (ii) the named parties to
any such suit include both the Trustee and Xxxxxx, XXX, XXX0 or Acquisition Sub
and the Trustee shall have been advised by counsel acceptable to Xxxxxx, XXX,
XXX0 or Acquisition Sub that there may be one or more legal defences available
to the Trustee that are different from or in addition to those available to
Xxxxxx, XXX, XXX0 or Acquisition Sub and that an actual or potential conflict of
interest exists (in which case Xxxxxx, XXX, XXX0 and Acquisition Sub 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).
8.2 LIMITATION OR LIABILITY.
The Trustee shall not be held liable for any loss that 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, willful
misconduct or bad faith on the part of the Trustee.
ARTICLE 9
CHANGE OF TRUSTEE
9.1 RESIGNATION.
The Trustee, or any trustee hereafter appointed, may at any time resign
by giving written notice of such resignation to Xxxxxx, XXX, XXX0 and
Acquisition Sub specifying the date on which it desires to resign, provided that
such notice shall never be given less than 60 days before such desired
resignation date unless Xxxxxx, XXX, XXX0 and Acquisition Sub 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, Xxxxxx,
XXX, XXX0 and Acquisition Sub shall promptly appoint a successor trustee by
written instrument in duplicate, one copy of which shall be delivered to the
resigning trustee and one copy to the successor trustee. Failing appointment of
and acceptance by a successor trustee in accordance with the foregoing, a
successor trustee may be appointed by an order of the Supreme Court of British
Columbia upon application of one or more of the parties hereto or any Holder.
9.2 REMOVAL.
The Trustee, or any trustee hereafter appointed may be removed with or
without cause, at any time on 30 days' prior notice by written instrument
executed by Xxxxxx, XXX, XXX0 and Acquisition Sub, in duplicate, one copy of
which shall be delivered to the trustee so removed and one copy to the successor
trustee.
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9.3 SUCCESSOR TRUSTEE.
Any successor trustee appointed as provided under this Agreement shall
execute, acknowledge and deliver to Xxxxxx, XXX, XXX0 and Acquisition Sub 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 like effect as if originally named as
trustee in this Agreement and all of the Trust Estate shall automatically rest
in such successor trustee. However, on the written request of Xxxxxx, XXX, XXX0
and Acquisition Sub or of the successor trustee, the trustee ceasing to act
shall, upon payment of any amounts then due it pursuant to the provisions of
this Agreement, execute and deliver an instrument transferring to such successor
trustee all the rights and powers of the trustee so ceasing to act. Upon the
request of any such successor trustee, Xxxxxx, XXX, XXX0, Acquisition Sub 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.
9.4 NOTICE OF SUCCESSOR TRUSTEE.
Upon acceptance of appointment by a successor trustee as provided
herein, Xxxxxx, XXX, XXX0 and Acquisition Sub shall cause to be mailed notice of
the succession of such trustee hereunder to each Holder specified in the most
current List. If Xxxxxx, XXX, XXX0 or Acquisition Sub 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 Xxxxxx, XXX, XXX0 and Acquisition Sub.
ARTICLE 10
PARENT SUCCESSORS
10.1 CERTAIN REQUIREMENTS IN RESPECT OF ACQUISITION, ETC.
Parent shall not enter into any transaction (whether by way of
reconstruction, reorganization, consolidation, 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 company resulting therefrom, unless:
(a) such other person or continuing company is a company (herein
called the 'Parent Successor") incorporated under the laws of
any state of the United States or the laws of Canada or any
province thereof, and
(b) Parent Successor, by operation of law, becomes, without more,
bound by the terms and provisions of this Agreement or, if not
so bound, executes, prior to or contemporaneously with the
consummation of such transaction an agreement supplemental
hereto and such other instruments (if any) as are satisfactory
to the Trustee acting reasonably to evidence the assumption by
Parent Successor of liability for all moneys payable and
property deliverable hereunder and the covenant of such Parent
Successor to pay and deliver or cause to be delivered the same
and its
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agreement to observe and perform all the covenants and
obligations of Parent under this Agreement.
10.2 VESTING OF POWERS IN SUCCESSOR.
Whenever the conditions of section 10.1 hereof have been duly observed
and performed, the Trustee, if required, by section 10.1 hereof, Parent
Successor, BVI, CDN2 and Acquisition Sub shall execute and deliver the
supplemental agreement provided for in Article 11 hereof and thereupon Parent
Successor shall possess and from time to time may exercise each and every right
and power of Parent under this Agreement in the name of Parent or otherwise and
any act or proceeding by any provision of this Agreement required to be done or
performed by the board of directors of Parent or any officers of Parent may be
done and performed with like force and effect by the directors or officers of
such Parent Successor.
10.3 WHOLLY-OWNED SUBSIDIARIES.
Nothing herein shall be construed as preventing the amalgamation or
merger of any wholly-owned subsidiary of Parent with or into Parent or the
winding-up, liquidation or dissolution of any wholly-owned subsidiary of Parent
provided that all of the assets of such subsidiary are transferred to Parent or
another wholly-owned direct or indirect subsidiary of Parent and any such
transactions are expressly permitted by this Article 10.
ARTICLE 11
AMENDMENTS AND SUPPLEMENTAL TRUST AGREEMENTS
11.1 AMENDMENTS, MODIFICATIONS, ETC.
This Agreement may not be amended or modified except by an agreement in
writing executed by Xxxxxxxxxxx Xxx, Xxxxxx, XXX, XXX0 and Trustee and approved
by the Holders in accordance with section 8.2 of the Exchangeable Share
Provisions.
11.2 MINISTERIAL AMENDMENTS.
Notwithstanding the provisions of section 11.1 hereof, the parties to
this Agreement may in writing, at any time and from time to time, without the
approval of the Holders, amend or modify this Agreement for the purposes of:
(a) adding to the covenants of any or all of the parties hereto for
the protection of the Holders hereunder;
(b) making such amendments or modifications not inconsistent with
this Agreement as may be necessary or desirable with respect to
matters or questions that, in the opinion of the board of
directors of each of Xxxxxx, XXX, XXX0 and Acquisition Sub and
in the opinion of the Trustee, having in mind the best interests
of the Holders as a whole, it may be expedient to make, provided
that such boards of directors and the Trustee shall be of the
opinion that such amendments and modifications will not be
prejudicial to the interests of the Holders as a whole; or
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(c) making such changes or corrections required for the purpose of
curing or correcting any ambiguity or defect or inconsistent
provision or clerical omission or mistake or manifest error,
provided that the Trustee and the board of directors of each of
Acquisition Sub, CDN2, BVI and Parent shall be of the opinion
that such changes or corrections will not be prejudicial to the
interests of the Holders as a whole.
11.3 MEETING TO CONSIDER AMENDMENTS.
The Acquisition Sub, at the request of Parent, shall call a meeting or
meetings of the Holders 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 articles of the Acquisition Sub,
the Exchangeable Share Provisions and all applicable laws.
11.4 CHANGES IN CAPITAL OF PARENT AND THE ACQUISITION SUB.
Notwithstanding section 11.1, at all times after the occurrence of any
Parent Common Share Reorganization or Capital Reorganization (as such terms are
respectively defined in the Exchangeable Share Provisions) or other change in
either the Parent Common Shares or the Exchangeable Shares or both, this
Agreement shall forthwith be amended and modified as necessary in order that it
shall apply with full force and effect, mutatis mutandis, to all new securities
into which Parent Common Shares or the Exchangeable Shares or both are so
changed and the parties hereto shall execute and deliver a supplemental
agreement giving effect to and evidencing such necessary amendments and
modifications.
11.5 EXECUTION OF SUPPLEMENTAL TRUST AGREEMENTS.
Notwithstanding section 11.1, from time to time Acquisition Sub (when
authorized by a resolution of the board of directors), Parent (when authorized
by a resolution of its board of directors), BVI (when authorized by a resolution
of its board of directors), CDN2 (when authorized by a resolution of its board
of directors) and Trustee may, subject to the provisions hereof, and they shall,
when so directed by these presents, execute and deliver by their proper
officers, Agreements or other instruments supplemental hereto, which thereafter
shall form part hereof, for any one or more of the following purposes:
(a) evidencing the succession of Parent Successors to Parent and the
covenants of and obligations assumed by each such Parent
Successor in accordance with the provisions of Article 10 and
the succession of any successor trustee in accordance with the
provisions of Article 9;
(b) making any additions to, deletions from or alterations of the
provisions of this Agreement or the Voting Rights, the Exchange
Right or the Automatic Exchange Rights that, in the opinion of
the Trustee acting reasonably will not be prejudicial to the
interests of the Holders as a whole 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 Xxxxxx, XXX, XXX0, Acquisition Sub,
the Trustee or this Agreement; and
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(c) for any other purposes not inconsistent with the provisions of
this Agreement including, without limitation, to make or
evidence any amendment or modification to this Agreement as
contemplated hereby, provided that, in the opinion of the
Trustee acting reasonably, the rights of the Trustee and the
Holders as a whole will not be prejudiced thereby.
ARTICLE 12
TERMINATION
12.1 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 any Holder;
(b) each of Xxxxxxxxxxx Xxx, XXX, XXX0 and Parent elect in writing
to terminate the Trust and such termination is approved by the
Holders of the Exchangeable Shares in accordance with Section
8.2 of the Exchangeable Share Provisions; and
(c) 21 years after the death of the last survivor of the descendants
of His Majesty King Xxxxxx VI of the United Kingdom of Great
Britain and Northern Ireland living on the date of the creation
of the Trust.
12.2 SURVIVAL.
The provisions of Articles 7 and 8 hereof shall survive any termination
of the Trust pursuant to section 12.1.
ARTICLE 13
GENERAL
13.1 SEVERABILITY.
If any provision of this Agreement is held to be invalid, illegal or
unenforceable, the validity, legality or enforceability of the remainder of this
Agreement shall not in any way be affected or impaired thereby and this
Agreement shall be carried out as nearly as possible in accordance with its
original terms and conditions; provided, however, that if the provision or
provisions so held to be invalid, in the reasonable judgment of the parties, is
or are so fundamental to the intent of the parties and the operation of this
Agreement that the enforcement of the other provisions hereof, in the absence of
such invalid provision or provisions, would damage irreparably the intent of the
parties in entering into this Agreement, the parties shall agree (i) to
terminate this Agreement, or (ii) to amend or otherwise modify this Agreement so
as to carry out the intent and purposes hereof and the transactions contemplated
hereby.
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13.2 ENUREMENT.
This Agreement shall be binding upon and enure to the benefit of the
parties hereto and their respective successors and permitted assigns and to the
benefit of the Holders.
13.3 NOTICES.
All notices, requests and other communications between the parties
hereunder shall be in writing and shall be deemed to have been given only if
delivered personally against written receipt or by facsimile transmission
against facsimile confirmation or mailed by registered mail, return receipt
requested, or mailed by overnight courier prepaid, to the parties at the
following addresses or facsimile numbers (or at such other address for such
party as shall be specified in like notice):
(a) if to Xxxxxx, XXX, XXX0 or Acquisition Sub to:
Broadcom Corporation
00000 Xxxxx Xxxxxxx
X.X. Xxx 00000
Xxxxxx, Xxxxxxxxxx 00000-0000
Facsimile No.: (000) 000-0000
Attention: President and Chief Executive Officer
and General Counsel
with a copy to:
Xxxxxxx, Phlegert & Xxxxxxxx LLP
00 Xxxxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxx
X.X.X. 00000
Facsimile No.: (000) 000-0000
Attention: Xxxxx Xxxxxx, ESQ
Farris, Vaughan, Xxxxx & Xxxxxx
0000-000 Xxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, X.X. X0X 0X0
Facsimile No.: (000) 000-0000
Attention: R. Xxxxxx XxxXxx-Xxxx
(b) if to Trustee to:
US Trust Company
000 Xxxxx Xxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Facsimile No.: (000) 000-0000
Attention: Xxxxxx Xxxxx
All such notices, requests and other communications shall (i) if delivered
personally to the address as provided in this Section, be deemed given upon
delivery, (ii) if delivered by facsimile transmission to the facsimile number as
provided for in this Section, be deemed given upon
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facsimile confirmation, (iii) if delivered by mail in the manner described above
to the address as provided for in this Section, be deemed given on the earlier
of the third Business Day following mailing or upon receipt and (iv) if
delivered by overnight courier to the address as provided in this Section, be
deemed given on the earlier of the first Business Day following the date sent by
such overnight courier or upon receipt (in each case regardless of whether such
notice, request or other communication is received by any other Person to whom a
copy of such notice is to be delivered pursuant to this Section). Any party from
time to time may change its address, facsimile number or other information for
the purpose of notices to that party by giving notice specifying such change to
the other party hereto.
13.4 NOTICE TO HOLDERS.
Any and all notices to be given and any documents to be sent to any
Holders may be given or sent to the address of such Holder shown on the register
of Holders in any manner permitted by the articles of the Acquisition Sub from
time to time in force in respect of notices to shareholders and shall be deemed
to be received (if given or sent in such manner) at the time specified in such
articles, the provisions of which articles shall apply mutatis mutandis to
notices or documents as aforesaid sent to such Holders.
13.5 RISK OF PAYMENTS BY POST.
Whenever payments are to be made or documents are to be sent to any
Holder by the Trustee or by the Acquisition Sub, or by such Holder to the
Trustee or to Xxxxxx, XXX0, BVI or Acquisition Sub, the making of such payment
or sending of such document sent through the post shall be at the risk of the
Acquisition Sub, in the case of payments made or documents sent by the Trustee
or the Acquisition Sub, and the Holder, in the case of payments made or
documents sent by the Holder.
13.6 COUNTERPARTS.
This Agreement may be executed in counterparts, each of which shall be
deemed an original, but all of which taken together shall constitute one and the
same instrument.
13.7 JURISDICTION.
This Agreement shall be construed and enforced in accordance with the
laws of the State of California.
13.8 ATTORNMENT.
Each of Parent, BVI, CDN2, Acquisition Sub and Trustee agree that any
action or proceeding arising out of or relating to this Agreement may be
instituted in the courts of the State of California waives any objection that it
may have now or hereafter to the venue of any such action or proceeding,
irrevocably submit to the jurisdiction of the said courts in any such action or
proceeding, agree to be bound by any judgment of the said courts and agree not
to seek, and hereby waives, any review of the merits of any such judgment by the
courts of any other jurisdiction and hereby appoints the Acquisition Sub at its
registered office as Parent's, CDN's and BVI's attorney for service of process.
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ARTICLE 14
GUARANTY AND ASSIGNMENT
14.1 BVI, or Parent in the event BVI fails to perform, hereby unconditionally
and irrevocably guarantee the prompt and full performance of all CDN2's and
Acquisition Sub's obligations hereunder. CDN2, upon prior notice to the Trustee,
may assign all of its rights and obligations hereunder to Parent or BVI
(collectively the "Permitted Assigns" and either individually a "Permitted
Assign") without the consent of Trustee or Acquisition Sub whereupon Trustee,
Acquisition Sub, Parent or BVI shall enter into a supplemental trust agreement
pursuant to section 11.5(c) reflecting such assignment, provided that CDN2 shall
not thereby be released from such obligations.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the date first above written.
BROADCOM CORPORATION
by ___________________________________
___________________________________
HH ACQUISITION INC.
by ___________________________________
___________________________________
BROADCOM (BVI) LIMITED
by ___________________________________
___________________________________
HH ACQUISITION ULC
by ___________________________________
___________________________________
US TRUST COMPANY
by ___________________________________
___________________________________
