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Exhibit 10.10
VOTING AND EXCHANGE TRUST AGREEMENT
MEMORANDUM OF AGREEMENT (the "Agreement") made as of the 8th day of
August, 1997.
BETWEEN:
BACKWEB TECHNOLOGIES LTD., a corporation organized under the laws
of the Israel ("BackWeb")
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BACKWEB CANADA INC., a corporation amalgamated under the laws of
the Province of Ontario (the "Corporation")
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THE TRUST COMPANY OF BANK OF MONTREAL, a trust company
incorporated under the laws of Canada (the "Trustee")
WHEREAS pursuant to an Agreement and Plan of Acquisition dated as of July
1, 1997, by and among BackWeb, BackWeb Canada Inc. ("Old BackWeb Canada"),
Lanacom Inc. and Xxxxxxx Xxxxx (the "Acquisition Agreement"), the parties
agreed that on the Closing Date (as such term is defined in the Acquisition
Agreement), BackWeb, the Corporation and a trust company would execute and
deliver a Voting Exchange Trust Agreement substantially in the form set forth
in Exhibit E to the Acquisition Agreement together with such other terms and
conditions as may be agreed to by the parties to the Acquisition Agreement
acting reasonably;
AND WHEREAS pursuant to the amalgamation effected by articles of
amalgamation dated August 8, 1997 (the "Amalgamation") filed pursuant to the
Business Corporation Act (Ontario), Lanacom Inc. and Old BackWeb Canada
amalgamated to continue as the Corporation;
AND WHEREAS pursuant to the amalgamation the issued and outstanding common
shares of Lanacom Inc. were changed into Class A shares of the Corporation (in
the manner set out in the Acquisition Agreement) and each issued and
outstanding common share of Old BackWeb Canada was changed into one common
share of the Corporation;
AND WHEREAS pursuant to and immediately following the above-mentioned
Amalgamation, articles of amendment were filed pursuant to the Business
Corporation Act (Ontario) on August 8, 1997 pursuant to which each issued and
outstanding Class A shares of the
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Corporation was exchanged for one issued and outstanding exchangeable
non-voting share of the Corporation (collectively, the "Exchangeable Shares");
AND WHEREAS the above-mentioned articles of amendment set forth the
rights, privileges, restrictions and conditions (collectively, the
"Exchangeable Share Provisions") attaching to the Exchangeable Shares;
AND WHEREAS BackWeb is the registered and beneficial owner of all of the
issued and outstanding common shares of the Corporation;
AND WHEREAS pursuant to the Acquisition Agreement and the Exchangeable
Share Provisions, BackWeb is to provide voting rights in BackWeb to each holder
(other than BackWeb and its Affiliates) from time to time of Exchangeable
Shares, such voting rights per Exchangeable Share to be equivalent to the
voting rights per share of Ordinary Shares of BackWeb ("BackWeb Ordinary
Shares");
AND WHEREAS pursuant to the Acquisition Agreement and the terms and
conditions of the Exchangeable Shares, BackWeb is to grant to and in favour of
the holders (other than its Affiliates) from time to time of Exchangeable
Shares the right, in the circumstances set forth herein, to require BackWeb 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 BackWeb shall be exercisable by
holders (other than BackWeb and its Affiliates) from time to time of
Exchangeable Shares by and through the Trustee, which will hold legal title to
one share of BackWeb Series E Special Preferred Stock to which voting rights
attach for the benefit of such holders, and whereby the right to require BackWeb
to purchase Exchangeable Shares from the holders thereof (other than its
Affiliates) 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 right for the benefit of such holders;
AND WHEREAS these recitals and any statements of fact in this Agreement
are made by BackWeb and the Corporation 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:
ARTICLE 1
DEFINITIONS AND INTERPRETATION
1.1 DEFINITIONS. In this Agreement, the following terms shall have the
following meanings:
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"Affiliate" of any person means any other person directly or indirectly
controlled by, or under common control of, that person. For the purposes of
this definition, "control" (including, with correlative meanings, the terms
"controlled by" and "under common control of"), as applied to any person, means
the possession by another person, directly or indirectly, of the power to
direct or cause the direction of the management and policies of that first
mentioned person, whether through the ownership of voting securities, by
contract or otherwise.
"Amalgamation Agreement" means the amalgamation agreement dated as of August 8,
1997 providing for the Amalgamation.
"Applicable Laws" has the meaning given to such term in section 5.10 of this
Agreement.
"Automatic Exchange Rights" means the benefit of the obligation of BackWeb to
effect the automatic exchange of Exchangeable Shares for BackWeb Ordinary
Shares pursuant to section 5.12 of this Agreement.
"BackWeb Consent" has the meaning given to such term in section 4.2 of this
Agreement.
"BackWeb Meeting" has the meaning given to such term in section 4.2 of this
Agreement.
"BackWeb Successor" has the meaning given to such term in section 11.1(a) of
this Agreement.
"Beneficiaries" means the registered holders from time to time of Exchangeable
Shares, other than BackWeb and its Affiliates.
"Beneficiary Votes" has the meaning given to such term in section 4.2 of this
Agreement.
"Board of Directors" means the board of directors of the Corporation.
"Business Day" means a day other than a Saturday, Sunday or a day when banks
are not open for business in Xxxxxxx, Xxxxxxx.
"Canadian Dollar Equivalent" means in respect of an amount expressed in a
foreign currency (the "Foreign Currency Amount") as 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
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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.
"Current Market Price" means, in respect of a BackWeb Ordinary Share on any
date: (a) if the BackWeb Ordinary Shares are listed or quoted on a stock
exchange or automated quotation system, the Canadian Dollar Equivalent of the
average of the closing prices of BackWeb Ordinary Shares on each of the 30
consecutive trading days ending not more than five trading days before such
date, or (b) if there is no public market for the BackWeb Ordinary Share, then
the Current Market Price of a BackWeb Ordinary Share on such date shall be
determined by the independent auditors of BackWeb, and any such determination
shall be conclusive and binding.
"Exchange Right" has the meaning given to such term in section 5.1 of this
Agreement.
"Indemnified Parties" has the meaning given to such term in section 9.1.
"Insolvency Event" means the institution by the Corporation of any proceeding
to be adjudicated a bankrupt or insolvent or to be dissolved or wound up, or
the consent of the Corporation to the institution of bankruptcy, insolvency,
dissolution or winding up proceedings against it, or the filing of a petition,
answer or consent seeking dissolution or winding up under any bankruptcy,
insolvency or analogous laws, including without limitation the Companies
Creditors' Arrangement Act (Canada) and the Bankruptcy and Insolvency Act
(Canada), and the failure by the Corporation to contest in good faith any such
proceedings commenced in respect of the Corporation within 15 days of becoming
aware of such proceedings, or the consent by the Corporation to the filing of
any such petition or to the appointment of a receiver, or the making by the
Corporation of a general assignment for the benefit of creditors, or the
admission in writing by the Corporation of its inability to pay its debts
generally as they become due, or the Corporation not being permitted, pursuant
to solvency requirements of applicable law, to redeem any Retracted Shares
pursuant to Section 6.6 of the Exchangeable Share Provisions.
"Liquidation Call Right" has the meaning given to such term in the Acquisition
Agreement.
"Liquidation Event" has the meaning given to such term in section 5.12(b) of
this Agreement.
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"Liquidation Event Effective Date" has the meaning given to such term in
section 5.12(c) of this Agreement.
"List" has the meaning given to such term in section 4.6 of this Agreement.
"Notice Event" has the meaning given to such term in section 7.17 of this
Agreement.
"Officer's Certificate" means, with respect to BackWeb or the Corporation,
as the case may be, a certificate signed by any one of the Chairman of the
Board, the Vice-Chairman of the Board, the President, any Vice-President or
any other senior officer of BackWeb or the Corporation, as the case may
be.
"person" includes an individual, partnership, corporation, company,
unincorporated syndicate or organization, trust, trustee, executor,
administrator and other legal representative.
"Redemption Call Right" has the meaning given to such term in the
Acquisition Agreement.
"Retracted Shares" has the meaning given to such term in section 5.7 of
this Agreement.
"Retraction Call Right" has the meaning given to such term in the
Exchangeable Share Provisions.
"Support Agreement" means the support agreement made as of the date hereof
between the Corporation and BackWeb.
"Trust" means the trust created by this Agreement.
"Trust Estate" means the Voting Share, the Exchange Right, the Automatic
Exchange Rights and any money other securities or other property which may
be held by the Trustee from time to time pursuant to this Agreement.
"Trustee" means The Trust Company of Bank of Montreal and, subject to the
provisions of Article 10 of this Agreement, includes any successor trustee.
"Voting Rights" means the voting rights attached to the Voting Shares.
"Voting Share" means the one share of BackWeb Series E Special Preferred
Stock with a par value of $.01, issued by BackWeb to and deposited with the
Trustee, which entitles the holder of record to a number of votes at
meetings of holders of
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BackWeb Ordinary Shares equal to that number of votes that holders of
the Exchangeable Shares outstanding from time to time (other than
Exchangeable Shares held by BackWeb and its Affiliates) would be
entitled to if such Exchangeable Shares were exchanged for BackWeb
Ordinary Shares.
1.2 Interpretation not Affected by Headings, etc. The division of this
Agreement into articles, sections and paragraphs and the insertion of
headings are for convenience of reference only and shall not affect the
construction or interpretation of this Agreement.
1.3 Date of any Action. If any date on which any action is required to be taken
under this Agreement is not a Business Day, such action shall be required
to be taken on the next succeeding Business Day.
ARTICLE 2
PURPOSE OF AGREEMENT
2.1 Establishment of Trust. The Trust is hereby created and constituted for the
benefit of the Beneficiaries, as provided in this Agreement. The Trustee
will hold the Voting Share in order to enable the Trustee to exercise the
Voting Rights and will hold the Exchange Right and the Automatic Exchange
Rights in order to enable the Trustee to exercise such rights, in each case
as trustee for and on behalf of the Beneficiaries as provided in this
Agreement.
ARTICLE 3
VOTING SHARE
3.1 Issue and Ownership of the Voting Share. BackWeb hereby issues to and
deposits with the Trustee a certificate representing the Voting Share to be
held by the Trustee as trustee for and on behalf of, and for the use and
benefit of, the Beneficiaries and in accordance with the provisions of this
Agreement. BackWeb hereby acknowledges receipt from the Trustee as trustee
for and on behalf of the Beneficiaries of good and valuable consideration
(and the adequacy thereof) for the issuance of the Voting Share by BackWeb
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 Voting Share and shall be entitled to exercise
all of the rights and powers of an owner with respect to the Voting Share,
provided that the Trustee shall:
(a) hold the Voting Share and the legal title thereto as trustee
solely for the use and benefit of the Beneficiaries in
accordance with the provisions of this Agreement; and
(b) except as specifically authorized by this Agreement, have no
power or authority to sell, transfer, vote or otherwise deal
in or with the Voting
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Share and Voting Share shall not be used or disposed of by the
Trustee for any purpose other than the purposes for which this Trust
is created pursuant to this Agreement.
3.2 Legended Share Certificates. The Corporation will cause each certificate
representing Exchangeable Shares to bear an appropriate legend notifying
the Beneficiaries of their right to instruct the trustee with respect to
the exercise of the Beneficiary Votes.
3.3 Safekeeping of Certificate. The certificate representing the Voting Share
shall at all times be held in safekeeping by the Trustee or its agent,
which may be an Affiliate of the Trustee.
ARTICLE 4
EXERCISE OF VOTING RIGHTS
4.1 Voting Rights. The Trustee, as the holder of record of the Voting Share,
shall be entitled to all of the Voting Rights, including the right to
consent to or to vote in person or by proxy the Voting Share, on any
matter, question or proposition whatsoever that may properly come before
the shareholders of BackWeb at a BackWeb Meeting or in connection with a
BackWeb Consent (in each case, as defined in section 4.2 of this
Agreement). The Voting Rights shall be and remain vested in and exercised
by the Trustee. Subject to section 7.15 of this Agreement, the Trustee
shall exercise the Voting Rights only on the basis of instructions
received pursuant to this Article 4 from Beneficiaries entitled to
instruct the Trustee as to the voting thereof at the time at which the
BackWeb Consent is sought or the BackWeb Meeting is held. To the extent
that no instructions are received from a Beneficiary with respect to the
Voting Rights to which such Beneficiary is entitled, the Trustee shall
exercise such Voting Rights pro rata in accordance with the instructions
received by the Trustee from the other Beneficiaries.
4.2 Number of Votes. With respect to all meetings of shareholders of BackWeb
at which holders of BackWeb Ordinary Shares are entitled to vote (a
"BackWeb Meeting") and with respect to all written consents sought by
BackWeb from its shareholders including the holders of BackWeb Ordinary
Shares (a "BackWeb Consent"), each Beneficiary shall be entitled to
instruct the Trustee to cast and exercise one of the votes comprised in
the Voting Rights for each Exchangeable Share owned of record by such
Beneficiary on the record date established by BackWeb or by applicable law
for such BackWeb Meeting or BackWeb Consent, as the case may be (the
"Beneficiary Votes") in respect of each matter, question or proposition to
be voted on at such BackWeb Meeting or to be consented to in connection
with such BackWeb Consent.
4.3 Mailings to Shareholders. With respect to each BackWeb Meeting and BackWeb
Consent, the Trustee will mail or cause to be mailed (or otherwise
communicate in the same manner as BackWeb utilizes in communications to
holders of BackWeb Ordinary
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Shares) to each of the Beneficiaries named in the List on the same day as
the initial mailing of notice (or other communication) with respect to
such BackWeb Meeting or BackWeb Consent is given by BackWeb to its
shareholders:
(a) a copy of such notice, together with any related materials to
be provided to shareholders of BackWeb;
(b) a statement that such Beneficiary is entitled to instruct the
Trustee as to the exercise of the Beneficiary Votes with
respect to such BackWeb Meeting or BackWeb Consent, as the
case may be, or, pursuant to section 4.7 of this Agreement, to
attend such BackWeb Meeting and to exercise personally the
Beneficiary Votes at such meeting;
(c) a statement as to the manner in which such instructions may be
given to the Trustee, including an express indication that
instructions may be given to the Trustee to give:
(i) a proxy to such Beneficiary or such Beneficiary's
designee to exercise personally the Beneficiary Votes;
or
(ii) a proxy to a designated agent or other representative of
the management of BackWeb to exercise such Beneficiary
Votes;
(d) a statement that if no such instructions are received from the
Beneficiary, the Beneficiary Votes to which such Beneficiary
is entitled will be exercised pro rata in accordance with the
instructions the Trustee receives from all other
Beneficiaries;
(e) a form of direction whereby the Beneficiary may so direct and
instruct the Trustee as contemplated herein; and
(f) a statement of the time and date by which such instructions
must be received by the Trustee in order to be binding upon
it, which in the case of a BackWeb Meeting shall not be
earlier than the close of business on the second Business Day
prior to such meeting, and of the method for revoking or
amending such instructions.
For the purpose of determining the Beneficiary Votes to which a
Beneficiary is entitled in respect of any such BackWeb Meeting or BackWeb
Consent, the number of Exchangeable Shares owned of record by the
Beneficiary shall be determined by the Corporation at the close of
business on the record date established by BackWeb or by applicable law
for purposes of determining shareholders entitled to vote at such BackWeb
Meeting or to give written consent in connection with such BackWeb
Consent. BackWeb
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will notify the Trustee of any decision of the Board of Directors of
BackWeb with respect to the calling of any such BackWeb Meeting or the
seeking of any such BackWeb 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 Shareholder Information. BackWeb will deliver to the Trustee
copies of all proxy materials, (including notices of BackWeb Meetings but
excluding proxies to vote BackWeb Ordinary Shares), information
statements, reports (including without limitation all interim and annual
financial statements) and other written communications that are to be
distributed from time to time to holders of BackWeb Ordinary Shares in
sufficient quantities and in sufficient time so as to enable the Trustee
to send or cause to be sent those materials to each Beneficiary at the
same time as such materials are first sent to holders of BackWeb Ordinary
Shares (but in any event, no later than 3 Business Days before the day on
which materials are first sent to holders of BackWeb Ordinary Shares). The
Trustee will mail or cause to be mailed or otherwise send or cause to be
sent to each Beneficiary,at the expense of BackWeb, copies of all such
materials (and all materials specifically directed to the Beneficiaries or
to the Trustee for the benefit of the Beneficiaries by BackWeb) received
by the Trustee from BackWeb at the same time as such materials are first
sent to holders of BackWeb Ordinary Shares. The Trustee will also make
available for inspection by any Beneficiary at the Trustee's principal
corporate trust office in the city of Toronto all proxy materials,
information statements, reports and other written communications that are:
(a) received by the Trustee as the registered holder of the Voting
Share and made available by BackWeb to the holders of BackWeb
Ordinary Shares; or
(b) specifically directed to the Beneficiaries or to the Trustee
for the benefit of the Beneficiaries by BackWeb.
4.5 Other Materials. Immediately after receipt by BackWeb or any shareholder
of BackWeb of any material sent or given to the holders of BackWeb
Ordinary 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), BackWeb shall use its best efforts to
obtain and deliver to the Trustee copies thereof in sufficient quantities
so as to enable the Trustee to forward such material (unless the same has
been provided directly to Beneficiaries by such third party) to each
Beneficiary as soon as possible thereafter. As soon as practicable after
receipt of such material, the Trustee will mail or cause to be mailed or
otherwise send or cause to be sent to each Beneficiary, at the expense of
BackWeb, copies of all such materials received by the Trustee from
BackWeb. The Trustee will also make available for inspection by any
Beneficiary at the Trustee's principal corporate trust office in the city
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of Toronto copies of all such materials. It shall be a condition precedent
to the Trustee's obligations under this Agreement including, in
particular, under sections 4.3, 4.4, 4.9, 5.9 and 5.12, that the
Corporation or BackWeb, as the case may be, prepare the applicable
material, List and mailing labels and to provide the Trustee with a
sufficient quantity thereof in a timely fashion.
4.6 List of Persons Entitled to Vote. The Corporation shall, (a) prior to each
annual, general and special BackWeb Meeting or the seeking of any BackWeb
Consent and (b) forthwith upon each request made at any time by the
Trustee in writing, prepare or cause to be prepared through the registrar
and transfer agent a list (a "List") of the names and addresses of the
Beneficiaries arranged in alphabetical order and showing the number of
Exchangeable Shares held of record by each such Beneficiary, in each case
at the close of business on the date specified by the Trustee in such
request or, in the case of a List prepared in connection with a BackWeb
Meeting or a BackWeb Consent, at the close of business on the record date
established by BackWeb or pursuant to applicable law for determining the
holders of BackWeb Ordinary Shares entitled to receive notice of and/or to
vote at such BackWeb Meeting or to give consent in connection with such
BackWeb Consent. Each such List shall be delivered to the Trustee promptly
after receipt by the Corporation of such request or the record date for
such meeting 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. BackWeb agrees to give the Corporation notice (with
a copy to the Trustee) of the calling of any BackWeb Meeting or the
seeking of any BackWeb 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 Corporation to perform its obligations
under this section 4.6.
4.7 Entitlement to Direct Votes. Any Beneficiary named in a List prepared in
connection with any BackWeb Meeting or any BackWeb Consent will be
entitled (a) to instruct the Trustee in the manner described in section
4.3 of this Agreement with respect to the exercise of the Beneficiary
Votes to which such Beneficiary is entitled or (b) to attend such meeting
and to personally exercise (or to exercise with respect to any written
consent), as the proxy of the Trustee, the Beneficiary Votes to which such
Beneficiary is entitled except, in each case, to the extent that such
Beneficiary has transferred the ownership of any Exchangeable Shares in
respect of which such Beneficiary is entitled to Beneficiary Votes after
the close of business on the record date for such meeting or seeking of
consent.
4.8 Voting Rights delivered by Proxy at Meeting.
(a) In connection with each BackWeb Meeting and BackWeb Consent,
the Trustee shall exercise in accordance with the instructions
received from a Beneficiary pursuant to section 4.3 of this
Agreement, the Beneficiary Votes as to which such Beneficiary
is entitled to direct the vote (or any lesser number thereof
as may be set forth in the instructions); provided,
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however, that such written instructions are received by the
Trustee from the Beneficiary prior to the time and date fixed by
it for receipt of such instructions in the notice given by the
Trustee to the Beneficiary pursuant to section 4.3 of this
Agreement.
(b) For each BackWeb Meeting, the Trustee shall sign and deliver to
BackWeb proxies for Voting Rights to be exercised at such
meeting. At a Beneficiary's request, the Trustee shall sign and
deliver to such Beneficiary (or such person as it designates in
writing) a proxy to exercise personally (at such Beneficiary's
expense) the Beneficiary Votes as to which such Beneficiary is
otherwise entitled hereunder to direct the vote, if such
Beneficiary either (i) has not previously given the Trustee
instructions pursuant to section 4.3 of this Agreement in respect
of such meeting, or (ii) submits to the Trustee written
revocation of any such previous instructions. At such meeting,
the Beneficiary exercising such Beneficiary Votes shall have the
same rights as a shareholder of BackWeb Ordinary Shares 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 distributed by
the Trustee pursuant to this Agreement shall be delivered or sent by mail
to each Beneficiary at its address as shown on the books of the
Corporation. The Corporation shall provide or cause to be provided to the
Trustee for this purpose, on a timely basis and without charge or other
expense:
(a) current Lists of the Beneficiaries; and
(b) mailing labels to enable the Trustee to carry out its duties
under this Agreement.
4.10 Termination of Voting Rights. All of the rights of a Beneficiary with
respect to the Beneficiary Votes in respect of the Exchangeable Shares
held by such Beneficiary, including the right to instruct the Trustee as
to the voting of or to vote personally such Beneficiary Votes, shall be
deemed to be surrendered by the Beneficiary to BackWeb and such
Beneficiary Votes and the Voting Rights represented thereby shall cease
immediately upon the delivery by such holder to the Corporation (and the
Corporation shall forthwith notify the Trustee in writing of such
delivery) of the certificates representing such Exchangeable Shares in
connection with the exercise by the Beneficiary of the Exchange Right or
the occurrence of the automatic exchange of Exchangeable Shares for
BackWeb Ordinary Shares, as specified in Article 5 hereof (unless in
either case BackWeb shall not have delivered the requisite BackWeb
Ordinary Shares
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issuable in exchange therefor, or any cash consideration payable in lieu
thereof shall not have been paid, to the Trustee for delivery to the
Beneficiaries), or upon the retraction; redemption or purchase for
cancellation of Exchangeable Shares pursuant to Article 6, Article 7 or
Article 8 of the Exchangeable Share Provisions, respectively, or upon the
effective date of the liquidation, dissolution or winding-up of the
Corporation pursuant to Article 5 of the Exchangeable Share Provisions, or
upon the purchase of Exchangeable Shares from the holder thereof by BackWeb
pursuant to the exercise by BackWeb of the Retraction Call Right, the
Redemption Call Right or the Liquidation Call Right.
ARTICLE 5
EXCHANGE RIGHT AND AUTOMATIC EXCHANGE
5.1 Grant and Ownership of the Exchange Right. BackWeb hereby grants to the
Trustee as trustee for and on behalf of, and for the use and benefit of,
the Beneficiaries the right (the "Exchange Right"), upon the occurrence and
during the continuance of an Insolvency Event, to require BackWeb (subject
to compliance with applicable securities laws) to purchase from each or any
Beneficiary all or any part of the Exchangeable Shares held by the
Beneficiary and the Automatic Exchange Rights, all in accordance with the
provisions of this Agreement. BackWeb hereby acknowledges receipt from the
Trustee, as trustee for and on behalf of the Beneficiaries, of good and
valuable consideration (and the adequacy thereof) for the issuance of the
Exchange Right 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 Rights and the Automatic Exchange Rights and
the legal title thereto as trustee solely for the use and benefit
of the Beneficiaries in accordance with the provisions of this
Agreement; and
(b) except as specifically authorized by this Agreement, have no
power or authority to exercise or otherwise deal in or with the
Exchange Right or the Automatic Exchange Rights, and the Trustee
shall not exercise any such rights for any purpose other than the
purposes for which this Trust is created pursuant to this
Agreement.
5.2 Legended Share Certificates. The Corporation will cause each certificate
representing Exchangeable Shares to bear an appropriate legend notifying
the Beneficiaries of:
(a) their right to instruct the Trustee with respect to the exercise
of the Exchange Right in respect of the Exchangeable Shares held
by a Beneficiary; and
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(b) the Automatic Exchange Rights.
5.3 General Exercise of Exchange Right. the Exchange Rights shall be and
remain vested in and exercised by the Trustee. Subject to section 7.15 of
this Agreement, the Trustee shall exercise the Exchange Right only on the
basis of written instructions received pursuant to this Article 5 from
Beneficiaries entitled to instruct the Trustee as to the exercise thereof.
If requested by BackWeb, the Trustee shall provide a copy of such
instructions to BackWeb. To the extent that no instructions are received
from a Beneficiary with respect to the Exchange Right, the Trustee shall
not exercise or permit the exercise of the Exchange Right.
5.4 Purchase Price. The purchase price payable by BackWeb for each
Exchangeable Share to be purchased by BackWeb under the Exchange Right
shall be an amount per share equal to (a) the Current Market Price of a
BackWeb Ordinary Share on the last Business Day prior to the day of
closing of the purchase and sale of such Exchangeable Share under the
Exchange Right plus (b) an additional amount equivalent to the full amount
of all dividends declared and unpaid on each such Exchangeable Share and
all dividends declared on BackWeb Ordinary Shares which have not been
declared on such Exchangeable Shares in accordance with Section 3.1 of the
Exchangeable Share Provisions (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 equivalent to such declared and unpaid dividends). In
connection with each exercise of the Exchange Right, BackWeb will provide
to the Trustee an Officer's Certificate setting forth the calculation of
the purchase price for each Exchangeable Share. The purchase price for
each such Exchangeable Share so purchased may be satisfied only by BackWeb
delivering or causing to be delivered to the Trustee, on behalf of the
relevant Beneficiary, (subject to compliance with applicable securities
laws), one BackWeb Ordinary Share and a cheque for the amount of the
purchase price (less any part thereof satisfied by the issuance of a
BackWeb Ordinary Share) without interest. The Trustee shall be entitled to
rely and be fully protected in so relying and acting upon such Officer's
Certificate.
5.5 Exercise Instructions. Subject to the terms and conditions herein set
forth, a Beneficiary shall be entitled, upon the occurrence and during the
continuance of an Insolvency Event, to instruct the Trustee to exercise the
Exchange Right with respect to all or any part of the Exchangeable Shares
registered in the name of such Beneficiary on the books of the Corporation.
To cause the exercise of the Exchange Right by the Trustee, the Beneficiary
shall deliver to the Trustee, in person or by certified or registered mail,
at its principal corporate trust office in Toronto, Ontario or at such
other places in Canada as the Trustee may from time to time designate by
written notice to the Beneficiaries, the certificates representing the
Exchangeable Shares which such Beneficiary desires BackWeb 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
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Business Corporations Act (Ontario) and the by-laws of the Corporation 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 (in the form attached as Schedule "A" to this
Agreement), contained on the reverse of or attached to the Exchangeable
Share certificates, stating (i) that the Beneficiary thereby instructs the
Trustee to exercise the Exchange Right so as to require BackWeb to
purchase from the Beneficiary the number of Exchangeable Shares specified
therein, (ii) that such Beneficiary has good title to and owns all such
Exchangeable Shares to be acquired by BackWeb free and clear of all liens,
claims and encumbrances, (iii) the names in which the certificates
representing BackWeb Ordinary Shares deliverable in connection with the
exercise of the Exchange Right and cheques for the balance of the purchase
price, if any, are to be issued, and (iv) the names and addresses of the
persons to whom such new certificates and cheques for the balance of the
purchase price, if any, should be delivered and (b) payment (or evidence
satisfactory to the Trustee, the Corporation and BackWeb 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 BackWeb under the Exchange Right, a new certificate for the balance of
such Exchangeable Shares shall be issued by the Corporation to the holder
at the expense of the Corporation.
5.6 DELIVERY OF BACKWEB ORDINARY SHARES; EFFECT OF EXERCISE.
(a) Promptly after receipt of the certificates representing the
Exchangeable Shares which the Beneficiary desires BackWeb 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), duly endorsed for transfer to BackWeb, the
Trustee shall provide notice (substantially in the form of Schedule
"B" to this Agreement) to BackWeb and the Corporation of its receipt
of the same, which notice to BackWeb and the Corporation shall
constitute exercise of the Exchange Right by the Trustee on behalf of
the holder of such Exchangeable Shares, and BackWeb shall immediately
thereafter deliver or cause to be delivered to the Trustee, for
delivery to the Beneficiary of such Exchangeable Shares (or to such
other persons, if any, properly designated by such Beneficiary),
(subject to compliance with applicable securities laws) the
certificates for the number of BackWeb Ordinary Shares deliverable 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 lien, claim or encumbrance, and cheques for the
total purchase price therefor (less any part thereof satisfied by the
issuance of BackWeb Ordinary Shares).
(b) Immediately upon the giving of notice by the Trustee to BackWeb and
the Corporation of the exercise of the Exchange Right, as provided in
this Section 5.6 but subject to section 5.13 of this Agreement
regarding withholding tax, the
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closing of the transaction of purchase and sale contemplated by the
Exchange Right shall be deemed to have occurred, and the Beneficiary
of such Exchangeable Shares shall be deemed to have transferred to
BackWeb 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 his proportionate part of the
total purchase price therefor, provided that if the requisite number
of BackWeb Ordinary Shares (together with a cheque for the total
purchase price therefor (less any part thereof satisfied by the
issuance of BackWeb Ordinary Shares)) is not allotted, issued an
delivered by BackWeb to the Trustee for delivery to such Beneficiary
(or to such other persons, if any, properly designated by such
Beneficiary), within five Business Days of the date of the giving of
such notice by the Trustee, the rights of the Beneficiary shall remain
unaffected until such BackWeb Ordinary Shares are so allotted, issued
and delivered by BackWeb and/or any such cheque is so delivered and
paid, as applicable. Concurrently with such Beneficiary ceasing to be
a holder of Exchangeable Shares, the Beneficiary shall be considered
and deemed for all purposes to be the holder of BackWeb Ordinary
Shares delivered to it pursuant to the Exchange Right.
5.7 Exercise of Exchange Right Subsequent to Retraction. In the event that a
Beneficiary has exercised its right under Article 6 of the Exchangeable
Share Provisions to require the Corporation to redeem any or all of the
Exchangeable Shares held by the Beneficiary (the "Retracted Shares") and is
notified by the Corporation pursuant to Section 6.6 of the Exchangeable
Shares Provisions that the Corporation will not be permitted as a result of
solvency requirements of applicable law to redeem all such Retracted
Shares, and provided that BackWeb shall not have exercised the Retraction
Call Right with respect to the Retracted Shares and that the Beneficiary
has not revoked the retraction request delivered by the Beneficiary to the
Corporation pursuant to Section 6.1 of the Exchangeable Share Provisions,
the retraction request will constitute and will be deemed to constitute
notice from the Beneficiary to the Trustee instructing the Trustee to
exercise the Exchange Right with respect to those Retracted Shares which
the Corporation is unable to redeem. In any such event, the Corporation
hereby agrees with the Trustee and in favour of the Beneficiary immediately
to notify the Trustee of such prohibition against the Corporation redeeming
all of the Retracted Shares and immediately to forward or cause to be
forwarded to the Trustee all relevant materials delivered by the
Beneficiary to the Corporation (including without limitation a copy of the
retraction request delivered pursuant to Section 6.1 of the Exchangeable
Share Provisions) in connection with such proposed redemption of the
Retracted Shares and the Trustee will thereupon exercise the Exchange Right
with respect to the Retracted Shares that the Corporation is not permitted
to redeem and will require BackWeb to purchase such shares in accordance
with the provisions of this Article 5.
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5.8 Stamp or Other Transfer Taxes. Upon any sale of Exchangeable Shares to
BackWeb pursuant to the Exchange Rights or the Automatic Exchange Rights,
the share certificate or certificates representing BackWeb Ordinary Shares
to be delivered in connection with the payment of the total purchase price
therefor shall be issued in the name of the Beneficiary of the Exchangeable
Shares so sold or in such name as such Beneficiary may otherwise direct in
writing without charge to the holder of the Exchangeable Shares so sold;
provided, however, that such Beneficiary (a) shall pay (and neither
BackWeb, the Corporation nor the Trustee shall be required to pay) any
documentary, stamp, transfer or other taxes that may be payable in respect
of any transfer involved in the issuance or delivery of such shares to a
person other than such Beneficiary or (b) shall have established to the
satisfaction of the Trustee, BackWeb and the Corporation that such taxes,
if any, have been paid.
5.9 Notice of Insolvency Event. Immediately upon the occurrence of an
Insolvency Event or any event which with the giving of notice or the
passage of time or both would be an Insolvency Event, the Corporation and
BackWeb shall give written notice thereof to the Trustee. As soon as
practicable after receiving notice from the Corporation and BackWeb or
from any other person of the occurrence of an Insolvency Event, the
Trustee will mail or cause to be mailed to each Beneficiary, at the
expense of BackWeb, a notice of such Insolvency Event, which notice shall
contain a brief statement of the right of the Beneficiaries with respect
to the Exchange Right. It shall be a condition precedent to the Trustee's
obligation to mail a Beneficiary a notice of Insolvency Event that the
Corporation prepare such notice and provide the Trustee with a sufficient
quantity in a timely fashion.
5.10 Qualification of BackWeb Ordinary Shares. BackWeb represents and warrants
that it has taken all actions and done all things as are necessary or
desirable under any Canadian or Israeli federal, provincial or state law
or regulation or pursuant to the rules and regulations of any regulatory
or any other legal requirement (collectively, the "APPLICABLE LAWS") as
they exist on the date hereof and will in good faith expeditiously take
all such actions and do all such things as are necessary or desirable under
Applicable Laws as they may exist in the future to cause the BackWeb
Ordinary Shares to be issued and delivered pursuant to the Exchangeable
Share Provisions, the Exchange Right or the Automatic Exchange Rights
(other than compliance with Applicable Laws relating to the ability of
holders to freely trade the BackWeb Ordinary Shares, as to which no
representation is given. To the extent that holders of Exchangeable Shares
have exercised registration rights in respect of BackWeb Ordinary Shares
issuable in accordance with the Exchangeable Share Provisions, BackWeb
will in good faith expeditiously take all such actions and do all things
as are necessary or desirable to cause all BackWeb Ordinary Shares to be
delivered pursuant to the Exchangeable Share Provisions, the Exchange
Right or the Automatic Exchange Rights to be listed, quoted or posted for
trading on all stock exchanges and quotation systems, if any, on which
outstanding BackWeb Ordinary Shares are listed, quoted or posted for
trading at such time.
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5.11 Reservation of BackWeb Ordinary Shares. BackWeb hereby represents,
warrants and covenants that it has irrevocably reserved for issuance and
will at all times keep available, free from pre-emptive and other rights,
out of its authorized and unissued capital stock such number of BackWeb
Ordinary Shares (a) as is equal to the sum of (i) the number of
Exchangeable Shares issued and outstanding from time to time and (ii) the
number of Exchangeable Shares issuable upon the exercise of all rights to
acquire Exchangeable Shares outstanding from time to time and (b) as are
now and may hereafter be required to enable and permit the Corporation and
BackWeb to meet their respective obligations hereunder, under the Support
Agreement, under the Exchangeable Share Provisions and under any other
security or commitment pursuant to which BackWeb may now or hereafter be
required to issue BackWeb Ordinary Shares.
5.12 Automatic Exchange on Liquidation of BackWeb.
(a) BackWeb will give the Trustee notice of each of the following
events at the time set forth below:
(i) in the event of any determination by the Board of Directors
of BackWeb to institute voluntary liquidation, dissolution
or winding up proceedings with respect to BackWeb or to
effect any other distribution of assets of BackWeb among
its shareholders for the purpose of winding up its affairs,
at least 60 days prior to the proposed effective date of
such liquidation, dissolution, winding up or other
distribution; and
(ii) immediately, upon the earlier of (A) receipt by BackWeb of
notice of and (B) BackWeb 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 BackWeb or to effect any other
distribution of assets of BackWeb among its shareholders
for the purpose of winding up its affairs.
(b) immediately following receipt by the Trustee from BackWeb of
notice of any event (a "Liquidation Event") contemplated by
section 5.12(a)(i) or 5.12(a)(ii) above, the Trustee will give
notice thereof to the Beneficiaries. Such notice shall include a
brief description of the automatic exchange of Exchangeable
Shares for BackWeb Ordinary Shares provided for in section
5.12(c).
(c) In order that the Beneficiaries will be able to participate on a
pro rata basis with the holders of BackWeb Ordinary Shares in
the distribution of assets of BackWeb in connection with a
Liquidation Event, on the fifth Business Day prior to the
effective date (the "Liquidation Event Effective Date")
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of a Liquidation Event all of the then outstanding Exchangeable
Shares shall be automatically exchanged for BackWeb Ordinary
Shares. To effect such automatic exchange, BackWeb shall purchase
each Exchangeable Share outstanding on the fifth Business Day
prior to the Liquidation Event Effective Date and held by
Beneficiaries, and each Beneficiary shall sell the Exchangeable
Shares held by it at such time, for a purchase price per
Exchangeable Share equal to (a) the Current Market Price of a
BackWeb Ordinary Share on the fifth Business Day prior to the
Liquidation Event Effective Date, which shall be satisfied in
full by BackWeb delivering or causing to be delivered to the
Beneficiary one BackWeb Ordinary Share, plus (b) an additional
amount equivalent to the full amount of all dividends declared
and unpaid on each such Exchangeable Share and all dividends
declared on BackWeb Ordinary Shares which have not been declared
on such Exchangeable Shares in accordance with section 3.1 of the
Exchangeable Share Provisions (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 equivalent to such declared
and unpaid dividends). In connection with such automatic
exchange, BackWeb will provide to the Trustee an Officer's
Certificate setting forth the calculation of the purchase price
for each Exchangeable Share. The Trustee shall be entitled to
rely and be fully protected in so relying and acting upon such
Officer's Certificate.
(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 BackWeb Ordinary Shares shall be deemed to have
occurred, and each Beneficiary shall be deemed to have
transferred to BackWeb all of the Beneficiary's right, title and
interest in and to its Exchangeable Shares and the related
interest in the Trust Estate and shall cease to be a holder of
such Exchangeable Shares and BackWeb shall deliver or cause to be
delivered to the Beneficiary BackWeb Ordinary Shares deliverable
upon the automatic exchange of Exchangeable Shares for BackWeb
Ordinary Shares and shall deliver to the Trustee for delivery to
the Beneficiary a cheque for the balance, if any, of the total
purchase price for such Exchangeable Shares. Concurrently with
such Beneficiary ceasing to be a holder of Exchangeable Shares,
the Beneficiary shall be considered and deemed for all purposes
to be the holder of BackWeb Ordinary Shares issued to it pursuant
to the automatic exchange of Exchangeable Shares for BackWeb
Ordinary Shares and the certificates held by the Beneficiary
previously representing the Exchangeable Shares exchanged by the
Beneficiary with BackWeb pursuant to such automatic exchange
shall thereafter be deemed to represent BackWeb Ordinary Shares
delivered to the Beneficiary by BackWeb pursuant to such
automatic
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exchange. Upon the request of a Beneficiary and the surrender by
the Beneficiary of Exchangeable Share certificates deemed to
represent BackWeb Ordinary Shares, duly endorsed in blank and
accompanied by such instruments of transfer as BackWeb may
reasonably require, BackWeb shall deliver or cause to be
delivered to the Beneficiary certificates representing BackWeb
Ordinary Shares of which the Beneficiary is the holder.
5.13 Withholding Rights. BackWeb and the Trustee shall be entitled to
deduct and withhold from the consideration otherwise payable pursuant
to this Agreement to any holder of Exchangeable Shares such amounts
as BackWeb or the Trustee is required or permitted to deduct and
withhold with respect to the making of such payment under the Income
Tax Act (Canada) or any provision of provincial tax law. To the
extent that amounts are so withheld, such withheld amounts shall be
treated for all purposes of this Agreement as having been paid to the
holder of the shares in respect of which such deduction and
withholding was made, provided that such withheld amounts are
actually remitted to the appropriate taxing authority. To the extent
that the amount so required or permitted to be deducted or withheld
from any payment to a holder exceeds the cash portion of the
consideration otherwise payable to the holder, BackWeb or the trustee
is hereby authorized to sell or otherwise dispose of at fair market
value such portion of the consideration as is necessary to provide
sufficient funds to BackWeb or the Trustee, as the case may be, in
order to enable it to comply with such deduction or withholding
requirement and shall account to the relevant holder for any balance
of such sale proceeds.
If, upon the occurrence of an Insolvency Event, a non-Canadian
resident Beneficiary instructs the Trustee to exercise the Exchange
Right, BackWeb shall provide the Trustee, in cash, with sufficient
funds to satisfy any withholding taxes applicable in connection with
the sale of such Beneficiary's Exchangeable Shares to BackWeb
otherwise such exchange shall not have occurred or be deemed to have
occurred. The "fair market value" of the BackWeb Ordinary Shares at a
particular date shall, for the purposes of calculating any such
applicable withholding taxes, shall be the Current Market Price or
shall be determined by such other method of valuation which has been
recommended or suggested by Revenue Canada as providing a satisfactory
assessment of such fair market value. Prior to making any distribution
to holders of Exchangeable Shares, BackWeb or the Corporation, as the
case may be, shall ensure that the Trustee has access to sufficient
funds (by directly providing, if necessary, such funds to the Trustee)
to enable the Trustee to comply with any applicable withholding taxes
in connection with such distribution.
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ARTICLE 6
RESTRICTIONS ON ISSUE OR AMENDMENT
OF BACKWEB SPECIAL VOTING STOCK
6.1 AMENDMENT/ISSUE OF ADDITIONAL SHARES. During the term of this Agreement,
BackWeb will not issue any shares of BackWeb Series E Special Preferred
Stock in addition to the Voting Share, and, for greater certainty will not
amend the terms of the BackWeb Series E Special Preferred Stock without
obtaining the prior written consent of the Trustee.
ARTICLE 7
CONCERNING THE TRUSTEE
7.1 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) the receipt and holding of the Voting Share from BackWeb as
trustee for and on behalf of the Beneficiaries in accordance
with the provisions of this Agreement;
(b) granting proxies and distributing materials to Beneficiaries as
provided in this Agreement;
(c) voting the Beneficiary Votes in accordance with the provisions
of this Agreement;
(d) receiving the grant of the Exchange Right and the Automatic
Exchange Rights from BackWeb as trustee for and on behalf of the
Beneficiaries in accordance with the provisions of this
Agreement;
(e) exercising the Exchange Right and enforcing the benefit of the
Automatic Exchange Rights, in each case in accordance with the
provisions of this Agreement, and in connection therewith
receiving from Beneficiaries Exchangeable Shares and other
requisite documents and distributing to such Beneficiaries
BackWeb Ordinary Shares and cheques, if any, to which such
Beneficiaries are entitled upon the exercise of the Exchange
Right or pursuant to the Automatic Exchange Rights, as the case
may be;
(f) holding title to the Trust Estate;
(g) investing any moneys forming, from time to time, a part of the
Trust Estate as provided in section 7.11 of this Agreement;
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(h) taking action on its own initiative or at the direction of a
Beneficiary or Beneficiaries to enforce the obligations of
BackWeb 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
may be 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 affected thereby
including the parties to this Agreement and the Beneficiaries. For greater
certainty, the Trustee shall have no duties or liabilities except those
which are expressly set forth in this Agreement. In particular, the
Trustee will have no liability or responsibility arising under any
agreement or instrument, including the Acquisition Agreement, the
Exchangeable Share Provisions or any other agreement or instrument
referred to in this Agreement, to which the Trustee is not a party and
shall not be bound by any notice of a claim or demand with respect thereto.
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 Beneficiaries and shall exercise the care, diligence and
skill that a reasonably prudent person would exercise in comparable
circumstances.
7.2 NO CONFLICT OF INTEREST. The Trustee represents to the Corporation and
BackWeb that at the date of execution and delivery of this Agreement there
exists no material conflict of interest between its role as Trustee under
this Agreement and its role in any other capacity. The Trustee shall,
within 90 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 10 of this
Agreement. If, notwithstanding the foregoing provisions of this section
7.2, the Trustee has such a material conflict of interest, the validity
and enforceability of this Agreement shall not be affected in any manner
whatsoever by reason only of the existence of such material conflict of
interest. If the Trustee contravenes the foregoing provisions of this
section 7.2, any interested party may apply to the Ontario Court (General
Division) for an order that the Trustee be replaced as trustee under this
Agreement.
7.3 DEALING WITH TRANSFER AGENTS, REGISTRARS, ETC. The Corporation and BackWeb
irrevocably authorize the Trustee, from time to time, to:
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(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
BackWeb Ordinary 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 registrar or transfer
agent of BackWeb Ordinary Shares, and any subsequent registrar
or 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 of this Agreement.
The Corporation and BackWeb irrevocably authorize their respective
registrars and transfer agents to comply with all such requests. BackWeb
covenants that it will supply BackWeb'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 of this Agreement.
7.4 Books and Records. The Trustee shall keep available for inspection by
BackWeb and the Corporation, at the Trustee's principal corporate trust
office in Toronto, Ontario, 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 Beneficiaries and all transactions pursuant to the Exchange
Right and the Automatic Exchange Rights. On or before March 31, 1998, and
on or before March 31 in every year thereafter, so long as the Voting
Share is on deposit with the Trustee, the Trustee shall transmit to
BackWeb and the Corporation 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;
(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 the Beneficiaries in consideration of
the issue and delivery by BackWeb of BackWeb Ordinary Shares
in connection with the Exchange Right, during the calendar
year ended on such date; and
(c) all other actions taken by the Trustee in the performance of
its duties under this Agreement which it had not previously
reported.
7.5 Income Tax Returns and Reports. The Trustee shall, if required under the
Income Tax Act (Canada) or any provincial law or if advised by BackWeb or
the Corporation, prepare
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and file on behalf of the Trust the appropriate 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 and, without limiting the generality of section 7.10 of this
Agreement, may obtain the advice and assistance of such experts as the
Trustee may consider necessary or advisable. If requested by the Trustee,
BackWeb shall retain such experts for purposes of providing such advice
and assistance.
7.6 Indemnification Prior to Certain Actions by Trustee. The Trustee shall
exercise any or all of the rights, duties, powers or authorities vested in
it by this Agreement at the request, order or direction of any Beneficiary
upon such Beneficiary furnishing to the Trustee reasonable funding,
security and indemnity against the costs, expenses and liabilities which
may be incurred by the Trustee, provided that no Beneficiary shall be
obligated to furnish to the Trustee any such funding, security or
indemnity in connection with the exercise by the Trustee of any of its
rights, duties, powers and authorities with respect to the Voting Share
pursuant to Article 4 of this Agreement, subject to section 7.15 of this
Agreement, and with respect to the Exchange Right pursuant to Article 5 of
this Agreement, subject to section 7.15 of this Agreement, and with
respect to the Automatic Exchange Rights pursuant to Article 5 of this
Agreement. None of the provisions contained in this Agreement shall
require the Trustee to expend or risk its own funds or otherwise incur
financial liability in the exercise of any of its rights, powers, duties
or authorities unless funded, given security and indemnified as provided
in this Agreement.
7.7 Actions by Beneficiaries. No Beneficiary shall have the right to institute
any action, suit or proceeding or to exercise any other remedy authorized
by this Agreement for the purpose of enforcing any of its rights or for
the execution of any trust or power hereunder unless the Beneficiary has
requested the Trustee to take or institute such action, suit or proceeding
and furnished the Trustee with the funding, security and indemnity
referred to in section 7.6 of this Agreement and the Trustee shall have
failed to act within a reasonable time thereafter. In such case, but not
otherwise, the Beneficiary shall be entitled to take proceedings in any
court of competent jurisdiction such as the Trustee might have taken; it
being understood and intended that no one or more Beneficiaries shall have
any right in any manner whatsoever to affect, disturb or prejudice the
rights hereby created by any such action, or to enforce any rights
hereunder or under the Voting Rights, the Exchange Right or the Automatic
Exchange Rights except subject to the conditions and in the manner
provided of this Agreement, and that all powers and trusts under this
Agreement shall be exercised and all proceedings at law shall be
instituted, had and maintained by the Trustee, except only as provided of
this Agreement, and in any event for the equal benefit of all
Beneficiaries.
7.8 Reliance upon Declarations. The Trustee shall not be considered to be in
contravention of any of its rights, powers, duties and authorities
hereunder if it acts and relies in good faith upon lists, mailing labels,
notices, statutory declarations, certificates, opinions,
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reports or other papers or documents furnished pursuant to the provisions
hereof or required by the Trustees to be furnished to it in the exercise
of its rights, powers, duties and authorities hereunder.
7.9 EVIDENCE AND AUTHORITY TO TRUSTEE. To the extent the Corporation and/or
BackWeb are required to 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 the Corporation and/or BackWeb
or the Trustee under this Agreement or as a result of any obligation
imposed under this Agreement, including, without limitation, in respect of
the Voting Rights or the Exchange Right or the Automatic Exchange Rights,
and the taking of any other action to be taken by the Trustee at the
request of or on the application of the Corporation and/or BackWeb, such
evidence shall consist of an Officer's Certificate of the Corporation
and/or BackWeb, as the case may be, or a statutory declaration or a
certificate made by persons entitled to sign an Officer's Certificate
stating that any such condition has been complied with in accordance with
the terms of this Agreement.
Whenever such evidence relates to a matter other than the Voting Rights or
the Exchange Right or the Automatic Exchange Rights 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 the Corporation
and/or BackWeb 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 or as the Trustee may otherwise request 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.
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7.10 Experts, Advisors and Agents. The Trustee may:
(a) in relation to these presents, act and rely on the opinion
or advice of or information obtained from any solicitor,
auditor, accountant, appraiser, valuer, engineer or other
expert, whether retained by the Trustee or by the
Corporation and/or BackWeb 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
under this Agreement and may pay proper and reasonable
compensation for all such legal and other advice or
assistance; and
(b) employ such agents and other assistants as it may
reasonably require for the proper discharge of its powers
and duties under this Agreement, and may pay reasonable
remuneration for all services performed for it (and shall
be entitled to receive reasonable remuneration for all
services performed by it) and compensation for all
disbursements, costs and expenses made or incurred by it in
the discharge of its duties under this Agreement and in the
management of the Trust.
7.11 Investment of Moneys Held By Trustee. Unless otherwise provided in this
Agreement, any moneys held by or on behalf of the Trustee shall, unless
otherwise directed in writing by the Corporation, be deposited in an
interest bearing account at any chartered bank in Canada, including Bank
of Montreal. At the end of each calendar year during which the Trustee
shall have held monies in trust in accordance with this Section 7.11,
the Trustee shall file on behalf of the Trust or, if required by law,
shall issue to the Beneficiaries of the Trust, all appropriate forms
under the Income Tax Act (Canada) in respect of any interest earned on
such monies and to the extent such income is allocated to the
Beneficiaries, it shall be allocated in proportions equivalent to the
Beneficiaries' respective percentage ownership of the Exchangeable
Shares outstanding at the relevant allocation date. The Corporation
shall provide or cause to be provided such information as the Trustee
may require in respect of the Beneficiaries' ownership of Exchangeable
Shares.
7.12 Trustee Not Required to Give Security. The Trustee shall not be required
to give any bond or security in respect of the execution of the trusts,
rights, duties, powers and authorities of this Agreement or otherwise in
respect of the premises.
7.13 Trustee Not Bound to Act on Corporation's 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 the
Corporation and/or BackWeb 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 and be protected in so
acting and relying upon any such copy purporting to be authenticated and
believed by the Trustee to be genuine.
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7.14 Authority to Carry on Business. The Trustee represents to the Corporation
and BackWeb that at the date of execution and delivery by it of this
Agreement it is authorized to carry on the business of a trust company in
the Province of Ontario but if, notwithstanding the provisions of this
section 7.14, it ceases to be so authorized to carry on business, the
validity and enforceability of this Agreement and the Voting Rights, the
Exchange Right and the Automatic Exchange Rights shall not be affected in
any manner whatsoever by reason only of such event but the Trustee shall,
within 90 days after ceasing to be authorized to carry on the business of
a trust company in the Province of Ontario, either become so authorized
or resign in the manner and with the effect specified in Article 10 of
this Agreement.
7.15 Conflicting Claims. If conflicting claims or demands are made or asserted
with respect to any interest of any Beneficiary in any Exchangeable
Shares, including any disagreement between the heirs, representatives,
successors or assigns succeeding to all or any part of the interest of
any Beneficiary in any Exchangeable Shares resulting in conflicting
claims or demands being made in connection with such interest, then the
Trustee shall be entitled, 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.
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.
7.16 Acceptance of Trust. The Trustee hereby accepts the Trust created and
provided for by and in this Agreement and agrees to perform the same upon
the terms and conditions herein set forth and to hold all rights,
privileges and benefits conferred hereby and by law
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in trust for the various persons who shall from time to time be
Beneficiaries, subject to all the terms and conditions set forth in this
Agreement.
7.17 Notice to Trustee. The Trustee shall not be bound to give any notice or
do or take any act, action or proceeding by virtue of the powers
conferred on it hereby unless and until it shall have been required so to
do under the terms of this Agreement; nor shall the Trustee be required
to take notice of, be deemed to have actual or constructive notice or
knowledge of any matter under this Agreement, or take any action in
connection with any notice of any BackWeb Meeting or the seeking of any
BackWeb Consent or any prohibition of the Corporation against redeeming
any Retracted Shares as set out in section 5.7 of this Agreement or of
any Insolvency Event or Liquidation Event as set out in sections 5.9 and
5.12 of this Agreement, respectively, (collectively, a "Notice Event"),
unless and until notified in writing of such Notice Event desired to be
brought to the attention of the Trustee and in the absence of any such
notice the Trustee may for all purposes of this Agreement conclusively
assume that no such Notice Event has occurred.
7.18 Merger or Consolidation of Trustee. Any corporation into or with which
the Trustee may be merged or consolidated or amalgamated, or any
corporation resulting therefrom to which the Trustee shall be a party, or
any corporation succeeding to the trust business of the Trustee shall be
the successor to the Trustee under this Agreement without any further act
on its part or any of the parties hereto, provided that such corporation
would be eligible for appointment as a successor trustee under the
provisions of this Agreement.
7.19 No Personal Liability. In the exercise of the powers, authorities or
discretion conferred upon the Trustee under this Agreement, the Trustee
is and shall be conclusively deemed to be acting as trustee of the Trust
and shall not be subject to any personal liability for any of the
liabilities, obligations, claims, demands, judgements, costs or expenses
against or with respect to the Trust.
7.20 Incumbency Certificate. Each of the Corporation and BackWeb shall file
with the Trustee a certificate of incumbency setting forth the names of
the individuals authorized to give instructions, directions or other
instruments to the Trustee ("Authorized Persons"), together with specimen
signatures of such persons, and the Trustee shall be entitled to rely on
the latest certificate of incumbency filed with it unless it receives
notice, in accordance with section 7.11, of a change in Authorized
Persons with updated specimen signature.
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ARTICLE 8
COMPENSATION
8.1 Fees and Expenses of the Trustee. BackWeb and the Corporation 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 (including taxes and the fees paid or
to be paid by the Trustee pursuant to section 7.10) 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 BackWeb and the Corporation shall have no obligation to
reimburse the Trustee for any expenses or disbursements paid, incurred or
suffered by the Trustee in any suit or litigation in which the Trustee is
determined to have acted fraudulently or with gross negligence or wilful
misconduct.
ARTICLE 9
INDEMNIFICATION AND LIMITATION OF LIABILITY
9.1 Indemnification of the Trustee. BackWeb and the Corporation jointly and
severally agree to indemnify and hold harmless the Trustee and each of its
directors, officers, employees and agents appointed and acting in
accordance with this Agreement (collectively, the "Indemnified Parties")
against all claims, losses, damages, costs, taxes, penalties, interest,
fines and reasonable expenses (including expenses of the Trustee's legal
counsel on a solicitor and its own client basis) which, without fraud,
gross negligence or wilful misconduct 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, any act, error or omission by the Trustee in carrying out its
duties and responsibilities set forth in this Agreement, the exercise of
any power, authority or discretion pertaining thereto, or any written or
oral instructions delivered to the Trustee by BackWeb or the Corporation
pursuant hereto including, for greater certainty, any obligations or
liability under applicable income tax legislation arising as a result of
the Trustee being the owner of the Voting Share, Exchange Right and
Automatic Exchange Right. In no case shall BackWeb or the Corporation be
liable under this indemnity for any claim against any of the Indemnified
Parties unless BackWeb and the Corporation shall be notified by the
Trustee of the written assertion of a claim or of any action commenced
against the Indemnified Parties, promptly after any of the Indemnified
Parties shall have received any such written assertion of a claim or shall
have been served with a summons or other first legal process giving
information as to the nature and basis of the claim. Subject to (ii),
below, BackWeb and the Corporation shall be entitled to participate at
their own expense in the defence and, if BackWeb or the Corporation so
elect at any time after receipt of such notice, either of them may assume
the defence of any suit brought to enforce any such claim. The Trustee
shall have the right to employ separate counsel in any such suit and
participate in the defence thereof but the fees and
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expenses of such counsel shall be at the expense of the Trustee unless; (i)
the employment of such counsel has been authorized by BackWeb or the
Corporation; or (ii) the named parties to any such suit include both the
Trustee and BackWeb or the Corporation and the Trustee shall have been
advised by counsel acceptable to BackWeb or the Corporation that there may
be one or more legal defenses available to the Trustee which are different
from or in addition to those available to BackWeb or the Corporation (in
which case BackWeb and the Corporation shall not have the right to assume
the defense of such suit on behalf of the Trustee but shall be liable to
pay the reasonable fees and expenses of counsel for the Trustee). This
indemnity shall survive the termination of this Agreement or the
resignation or replacement of the Trustee.
9.2 Limitation of Liability. The Trustee shall not be held liable for any loss
which may occur by reason of depreciation of the value of any part of the
Trust Estate pursuant to this Agreement, except to the extent that such
loss is attributable to the fraud, gross negligence or wilful misconduct on
the part of the Trustee.
ARTICLE 10
CHANGE OF TRUSTEE
10.1 Resignation. The Trustee, or any trustee hereafter appointed, may at any
time resign by giving written notice of such resignation to BackWeb and the
Corporation specifying the date on which it desires to resign, provided
that such notice shall never be given less than 30 days before such desired
resignation date unless BackWeb and the Corporation otherwise agree and
provided further that such resignation shall not take effect until the date
of the appointment of a successor trustee and the acceptance of such
appointment by the successor trustee. Upon receiving such notice of
resignation, BackWeb and the Corporation 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.
10.2 Removal. The Trustee, or any trustee hereafter appointed, may be removed at
any time on 30 days' prior notice by written instrument executed by BackWeb
and the Corporation, in duplicate, one copy of which shall be delivered to
the trustee so removed and one copy to the successor trustee.
In the event that a successor trustee has not been appointed at the time
the notice period for the Trustee's resignation or removal expires, the
Trustee, the Corporation, BackWeb or any Beneficiary may apply to a court
of competent jurisdiction for the appointment of a successor to the Trustee
and such appointment of a successor by such court shall not require the
approval of the Beneficiaries.
10.3 Successor Trustee. Any successor trustee appointed as provided under this
Agreement shall execute, acknowledge and deliver to BackWeb and the
Corporation and to its
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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. However, on the written request of
BackWeb and the Corporation 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 ceasing to act. Upon the request of any such successor trustee,
BackWeb, the Corporation and such predecessor trustee shall execute any and
all instruments in writing for more fully and certainly vesting in and
confirming to such successor trustee all such rights and powers.
10.4 Notice of Successor Trustee. Upon acceptance of appointment by a successor
trustee as provided in this Agreement, BackWeb and the Corporation shall
cause to be mailed notice of the succession of such trustee under this
Agreement to each Beneficiary specified in the List. If BackWeb or the
Corporation shall fail to cause such notice to be mailed within 10 days
after acceptance of appointment by the successor trustee, the successor
trustee shall cause such notice to be mailed at the expense of BackWeb and
the Corporation.
ARTICLE 11
BACKWEB SUCCESSORS
11.1 Certain Requirements in Respect of Combination, etc. BackWeb 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 corporation resulting therefrom unless, but may-do so if:
(a) such other person or continuing corporation is a duly
incorporated corporation (a "BackWeb Successor");
(b) BackWeb 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 to
this Agreement and such other instruments (if any) as are
satisfactory to the Trustee and in the opinion of legal counsel
to the Trustee are necessary or advisable to evidence the
assumption by BackWeb Successor of liability for all moneys
payable and property deliverable under this Agreement and the
covenant of such BackWeb Successor to pay and deliver or cause to
be delivered the same
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and its agreement to observe and perform all the covenants and
obligations of BackWeb under this Agreement; and
(c) such transaction shall, to the satisfaction of the Trustee and
in the opinion of legal counsel to the Trustee, be upon such
terms as substantially to preserve and not to impair in any
material respect any of the rights, duties, powers and
authorities of the Trustee or of the Beneficiaries under this
Agreement.
11.2 Vesting of Powers in Successor. Whenever the conditions of section 11.1 of
this Agreement have been duly observed and performed, the Trustee, if
required, by section 11.1 of this Agreement, BackWeb Successor and the
Corporation shall execute and deliver the supplemental Agreement
provided for in Article 12 and thereupon BackWeb Successor shall possess
and from time to time may exercise each and every right and power of
BackWeb under this Agreement in the name of BackWeb 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 BackWeb or any officers
of BackWeb may be done and performed with like force and effect by the
directors or officers of such BackWeb Successor.
11.3 Wholly-Owned Subsidiaries. Nothing in this Agreement shall be construed
as preventing the amalgamation or merger of any wholly-owned subsidiary
of BackWeb with or into BackWeb or the winding-up, liquidation or
dissolution of any wholly-owned subsidiary of BackWeb provided that all
of the assets of such subsidiary are transferred to BackWeb or another
wholly-owned subsidiary of BackWeb and any such transactions are
expressly permitted by this Article 11.
ARTICLE 12
AMENDMENTS AND SUPPLEMENTAL TRUST AGREEMENTS
12.1 Amendments, Modifications, etc. This Agreement may not be amended or
modified except by an agreement in writing executed by the Corporation,
BackWeb and the Trustee and approved by the Beneficiaries in accordance
with section 10.2 of the Exchangeable Share Provisions.
12.2 Ministerial Amendments. Notwithstanding the provisions of section 12.1 of
this Agreement, the parties to this Agreement may in writing, at any time
and from time to time, without the approval of the Beneficiaries, amend
or modify this Agreement for the purposes of:
(a) adding to the covenants of the parties to this Agreement for the
protection of the Beneficiaries hereunder;
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(b) making such amendments or modifications not inconsistent with this
Agreement as may be necessary or desirable with respect to matters
or questions which, in the opinion of the board of directors of
each of BackWeb and Corporation and in the opinion of the Trustee
and its counsel, having in mind the best interests of the
Beneficiaries as a whole, it may be expedient to make, provided
that such boards of directors and the Trustee and its counsel shall
be of the opinion that such amendments and modifications will not
be prejudicial to the rights of the Trustee or interests of the
Beneficiaries as a whole; or
(c) making such changes or corrections which, on the advice of counsel
to the Corporation, BackWeb and the Trustee, are required for the
purpose of curing or correcting any ambiguity or defect or
inconsistent provision or clerical omission or mistake or manifest
error, provided that the Trustee and its counsel and the Board of
Directors of each of the Corporation and BackWeb shall be of the
opinion that such changes or corrections will not be prejudicial to
the rights of the Trustee or interests of the Beneficiaries as a
whole.
12.3 Meeting to Consider Amendments. The Corporation, at the request of
BackWeb, shall call a meeting or meetings of the Beneficiaries for the
purpose of considering any proposed amendment or modification requiring
approval pursuant to this Agreement. Any such meeting or meetings shall be
called and held in accordance with the by-laws of the Corporation, the
Exchangeable Share Provisions and all applicable laws.
12.4 Changes in Capital of BackWeb and the Corporation. At all times after the
occurrence of any event, as a result of which either BackWeb Ordinary
Shares or the Exchangeable Shares or both are in any way changed, this
Agreement shall forthwith be amended and modified as necessary in order
that it shall apply with full force and effect, mutatis mutandis, to all
new securities into which BackWeb Ordinary 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.
12.5 Execution of Supplemental Trust Agreements. No amendment to or
modification or waiver of any of the provisions of this Agreement
otherwise permitted hereunder shall be effective unless made in writing
and signed by all of the parties hereto. From time to time the Corporation
(when authorized by a resolution of the Board of Directors), BackWeb (when
authorized by a resolution of its board of directors) and the Trustee may,
subject to the provisions of these presents, and they shall, when so
directed by these presents, execute and deliver by their proper officers,
Agreements or other instruments supplemental hereto, which thereafter
shall form part hereof, for any one or more of the following purposes:
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(a) evidencing the succession of BackWeb Successors to BackWeb and
the covenants of and obligations assumed by each such BackWeb
Successor in accordance with the provisions of Article 11 and
the successor of any successor trustee in accordance with the
provisions of Article 10;
(b) making any additions to, deletions from or alterations of the
provisions of this Agreement or the Voting Rights, the
Exchange Right or the Automatic Exchange Rights which, in the
opinion of the Trustee and its counsel, will not be
prejudicial to the rights of the Trustee or interests of the
Beneficiaries 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 BackWeb, the Corporation, the Trustee or this
Agreement; and
(c) for any other purpose 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 and its counsel, the rights of the Trustee and the
Beneficiaries as a whole will not be prejudiced thereby.
ARTICLE 13
TERMINATION
13.1 Term. The Trust created by this Agreement shall continue until the
earliest to occur of the following events:
(a) no outstanding Exchangeable Shares are held by a Beneficiary;
(b) each of the Corporation and BackWeb send the Trustee a notice
confirming that it elects in writing to terminate the Trust
and such termination has been approved by the Beneficiaries of
the Exchangeable Shares in accordance with section 10.2 of the
Exchangeable Share Provisions; and
(c) the agreement between The Trust Company of Bank of Montreal
and the Corporation in respect to registrar and transfer
agency services for the Corporation is terminated.
13.2 Survival of Agreement. The provisions of Articles 8 and 9 shall
survive any termination of this Agreement or the resignation or
removal of the Trustee.
ARTICLE 14
GENERAL
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14.1 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, illegal or
unenforceable, in the reasonable judgment of the parties to this
Agreement, is or are so fundamental to the intent of the parties to this
Agreement and the operation of this Agreement that the enforcement of the
other provisions hereof, in the absence of such invalid, illegal or
unenforceable provision or provisions, would damage irreparably the intent
of the parties in entering into this Agreement, the parties hereto 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.
14.2 Enurement. This Agreement shall be binding upon and enure to the benefit
of the parties to this Agreement and their respective successors and
permitted assigns and to the benefit of the Beneficiaries.
14.3 Notices to Parties. All notices and other communications between the
parties hereunder shall be in writing and shall be deemed to have been
given if delivered personally or by confirmed telecopy to the parties at
the following addresses (or at such other address for such party as shall
be specified in like notice):
(a) if to BackWeb or the Corporation at:
BackWeb Technologies Ltd.
5 Kiryat Mada, Har Hotzvim
JERUSALEM ISRAEL
Attention: Xxx Xxxxxx, Chairman of the Board
Telephone: 000-0-000-0000
Telecopy: 972-2-587-0449
with copies to:
BackWeb Technologies Ltd.
c/o BackWeb Technologies Inc.
0000 Xxxxxxx Xxxxx, Xxxxx 000
XXX XXXX XX 00000
Attention: Xxxxxxx Xxxx
Telephone: 0-000-000-0000
Telecopy: 0-000-000-0000
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(b) if to the Trustee at:
The Trust Company of Bank of Montreal
Corporate Trust Department
Suite 5104, 0 Xxxxx Xxxxxxxx Xxxxx
XXXXXXX XX X0X 0X0
Attention: Trust Officer
Telephone: 0-000-000-0000
Telecopy: 0-000-000-0000
Any notice or other communication given personally shall be deemed to have
been given and received upon delivery thereof (provided the day upon which
delivery is made is a Business Day, otherwise on the next Business Day)
and if given by telecopy shall be deemed to have been given and received
on the date of receipt thereof provided it is received by 3:00 p.m. (local
time in the jurisdiction of the recipient) on a Business Day, otherwise it
shall be deemed to have been given and received at 10:00 a.m. (local time
in the jurisdiction of the recipient) upon the immediately following
Business Day.
14.4 Notice of Beneficiaries. Any and all notices to be given and any documents
to be sent to any Beneficiaries may be given or sent to the address of
such Beneficiary shown on the register of holders of Exchangeable Shares
in any manner permitted by the by-laws of the Corporation from time to
time in force in respect of notices to shareholders and shall be deemed to
be received (if given or sent in such manner) at the time specified in
such by-laws, the provisions of which by-laws shall apply mutatis mutandis
to notices or documents sent to such holders.
14.5 Risk of Payments by Post. Whenever payments are to be made or documents
are to be sent to any Beneficiary by the Trustee or by the Corporation, or
by such Beneficiary to the Trustee or to BackWeb or the Corporation, the
making of such payment or sending of such document sent through the post
shall be at the risk of the Corporation, in the case of payments made or
documents sent by the Trustee or the Corporation, and the Beneficiary, in
the case of payments made or documents sent by the Beneficiary.
14.6 Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed an original, but all of which taken together shall
constitute one and the same instrument.
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14.7 Jurisdiction. This Agreement shall be governed by and construed in
accordance with the laws of Ontario, Canada, and the laws of Canada
applicable in Ontario, regardless of the laws that might otherwise
govern under applicable conflicts of laws thereof.
14.8 Attornment. BackWeb agrees that any action or proceeding arising out
of or relating to this Agreement may be instituted in the courts of
Ontario, waives any objection which it may have now or hereafter to
the venue of any such action or proceeding, irrevocably submits to
the non-exclusive jurisdiction of the said courts in any such action
or proceeding, agrees to be bound by any judgment of the said courts
and not to seek, and hereby waives, any review of the merits of any
such judgment by the courts of any other jurisdiction and hereby
appoints the Corporation at its registered office in the Province of
Ontario as BackWeb's attorney for service of process.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the date first above written.
BACKWEB TECHNOLOGIES LTD.
By:
-----------------------------
By: /s/ [Signature Illegible]
-----------------------------
BACKWEB CANADA INC.
By:
-----------------------------
By:
-----------------------------
THE TRUST COMPANY OF BANK OF
MONTREAL
By:
-----------------------------
By:
-----------------------------
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14.7 Jurisdiction. This Agreement shall be governed by and construed in
accordance with the laws of Ontario, Canada, and the laws of Canada
applicable in Ontario, regardless of the laws that might otherwise
govern under applicable conflicts of laws thereof.
14.8 Attornment. BackWeb agrees that any action or proceeding arising out
of or relating to this Agreement may be instituted in the courts of
Ontario, waives any objection which it may have now or hereafter to
the venue of any such action or proceeding, irrevocably submits to
the non-exclusive jurisdiction of the said courts in any such action
or proceeding, agrees to be bound by any judgment of the said courts
and not to seek, and hereby waives, any review of the merits of any
such judgment by the courts of any other jurisdiction and hereby
appoints the Corporation at its registered office in the Province of
Ontario as BackWeb's attorney for service of process.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the date first above written.
BACKWEB TECHNOLOGIES LTD.
By:
-----------------------------
By:
-----------------------------
BACKWEB CANADA INC.
By:
-----------------------------
By:
-----------------------------
THE TRUST COMPANY OF BANK OF
MONTREAL
By: /s/ [Signature Illegible]
-----------------------------
By: /s/ [Signature Illegible]
-----------------------------
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14.7 Jurisdiction. This Agreement shall be governed by and construed in
accordance with the laws of Ontario, Canada, and the laws of Canada
applicable in Ontario, regardless of the laws that might otherwise
govern under applicable conflicts of laws thereof.
14.8 Attornment. BackWeb agrees that any action or proceeding arising out
of or relating to this Agreement may be instituted in the courts of
Ontario, waives any objection which it may have now or hereafter to
the venue of any such action or proceeding, irrevocably submits to
the non-exclusive jurisdiction of the said courts in any such action
or proceeding, agrees to be bound by any judgment of the said courts
and not to seek, and hereby waives, any review of the merits of any
such judgment by the courts of any other jurisdiction and hereby
appoints the Corporation at its registered office in the Province of
Ontario as BackWeb's attorney for service of process.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the date first above written.
BACKWEB TECHNOLOGIES LTD.
By:
-----------------------------
By:
-----------------------------
BACKWEB CANADA INC.
By: /s/ [Signature Illegible]
-----------------------------
By:
-----------------------------
THE TRUST COMPANY OF BANK OF
MONTREAL
By:
-----------------------------
By:
-----------------------------
39
SCHEDULE A
NOTICE OF EXERCISE OF EXCHANGE RIGHT
TO: The Trust Company of Bank of Montreal
Corporate Trust Department
Suite 5104
1 First Xxxxxxxx Xxxxx
XXXXXXX XX X0X 0X0
The undersigned holder of Exchangeable Shares instructs The Trust Company
of Bank of Montreal (the "Trustee") to exercise the Exchange Right so as to
require BackWeb Technologies Ltd. ("BackWeb") to purchase from the undersigned
[insert number here] Exchangeable Shares and to issue and deliver certificates
representing BackWeb Ordinary Shares as follows:
Name in full:
(Please state full name in which --------------------------------------------
certificates are to be issued)
Address in full:
--------------------------------------------
--------------------------------------------
--------------------------------------------
Number of Exchangeable Shares:
--------------------------------------------
The undersigned hereby represents and warrants as follows:
(i) the undersigned has good title to and owns all such Exchangeable Shares to
be acquired by BackWeb free and clear of all liens, claims and
encumbrances.
(ii) the undersigned shall pay any documentary, stamp, transfer or other taxes
that may be payable in respect of any transfer involved in the issuance or
delivery of shares.
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All capitalized terms not defined herein shall have the meanings ascribed to
them in the Voting and Exchange Trust Agreement.
DATED this _______________ day of _____________, 199
_______________________________________
Name
_______________________________________
Signature
41
SCHEDULE B
NOTICE OF EXERCISE OF EXCHANGE RIGHT
TO: BackWeb Technologies Ltd. ("BackWeb"),
5 Kiryat Mada, Har Hotzvim, Jerusalem Israel
AND TO: BackWeb Canada, Inc.,
0 Xxxxxx Xxxx, Xxx Xxxxxxx, Xxxxxxxxx Xxxxxx
TAKE NOTICE that The Trust Company of Bank of Montreal (the "Trustee") hereby
exercises the Exchange Right on behalf of the holders of Exchangeable Shares
pursuant to Section 5.6 of the Voting and Exchange Trust Agreement entered into
between BackWeb, BackWeb Canada Inc. and the Trustee dated the [o] day of July,
1997.
The certificates for the BackWeb ordinary shares and cheques for the remainder
of the purchase price should be issued and delivered to, and registered in the
name of the person or persons indicated below.
--------------------------------------------------------------------------------
Name of Proposed Address Number of Shares to be
Registered Shareholder held
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
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All capitalized terms not defined herein shall have the meanings ascribed to
them in the Voting and Exchange Trust Agreement.
DATED this day of , 199
THE TRUST COMPANY OF BANK OF MONTREAL
By:
----------------------------------
Name:
Title:
By:
----------------------------------
Name:
Title:
