VOTING, SUPPORT AND EXCHANGE TRUST AGREEMENT
AGREEMENT made as of the 13th day of May, 1999.
BETWEEN:
PLANET 000.XXX CORPORATION, a corporation existing under the laws of the
State of Nevada (the "Parent"),
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3560309 CANADA INC., a corporation existing under the laws of Canada (the
"Corporation"),
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PLANET 411 (NOVA SCOTIA) COMPANY, a company existing under the laws of Nova
Scotia ("NovaCo")
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XXXXXX XXXXX, XXXXXXXX XXXXXXXXX AND XXXXXXX XXXXXX, Businessmen, all of
the District of Montreal, Province of Quebec (collectively, the "Trustee")
WHEREAS, pursuant to a unanimous shareholders agreement and special mandate
(the "Mandate") entered into as of March 18, 1999 among the Trustee, the holders
of all of the outstanding shares (the "QuebecCo Shares") of 0000-0000 Xxxxxx
inc. (the "Shareholders") and 0000-0000 Xxxxxx Inc. ("QuebecCo"), the
Shareholders appointed the Trustee as mandataries of the Shareholders for the
purpose of selling, directly or indirectly, all of the QuebecCo Shares to
Parent, holding the Exchangeable Shares, holding the Voting Share and exercise
the voting rights attaching thereto and exercising the retraction rights
attaching to the Exchangeable Shares, including the Exchange Right;
WHEREAS, pursuant to a combination agreement dated as of April 20, 1999
among the Parent, the Corporation, NovaCo, QuebecCo and the Shareholders (such
agreement as it may be amended or restated is hereinafter referred to as the
"Combination Agreement"), the parties agreed that on the Effective Date (as
defined in the Combination Agreement), the Parent, the Corporation, NovaCo and
the Trustee would execute and deliver a Voting, Support and Exchange Trust
Agreement substantially in the form set forth in Annex I to the Combination
Agreement;
AND WHEREAS, pursuant to 46 separate agreements between the Corporation and
the Shareholders, the Shareholders sold, transferred and assigned to the
Corporation all of the outstanding shares in the capital of 90n66-4871 Quebec
Inc., in consideration for which the Corporation issued to the Shareholders the
25,094,996 Exchangeable Shares and 8,400 Preferred Shares which are currently
issued
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and outstanding;
AND WHEREAS NovaCo is to grant to and in favour of Non-Affiliated Holders
(as hereinafter defined) from time to time of Exchangeable Shares the right, in
the circumstances set forth herein, to require NovaCo to purchase from each
Non-Affiliated Holder all or any part of the Exchangeable Shares held by the
Non-Affiliated Holder;
AND WHEREAS the parties desire to make appropriate provision and to
establish a procedure whereby voting rights in the Parent shall be exercisable
by Non-Affiliated Holders from time to time of Exchangeable Shares by and
through the Trustee, which will hold registered title to the Voting Share (as
hereinafter defined) to which voting rights attach for the benefit of
Non-Affiliated Holders and whereby the rights to require NovaCo to purchase
Exchangeable Shares from the Non-Affiliated Holders shall be exercisable by
Non-Affiliated Holders from time to time of Exchangeable Shares by and through
the Trustee, which will exercise such rights in the name and for the benefit of
Non-Affiliated Holders;
AND WHEREAS the parties desire to make appropriate provision and to
establish a procedure whereby the Parent will take certain actions and make
certain payments and deliveries necessary to ensure that the Corporation or
NovaCo, as the case may be, will be able to make certain payments and to deliver
or cause to be delivered shares of Parent Common Stock (as hereinafter defined)
in satisfaction of the obligations of the Corporation or NovaCo, as the case may
be, under the Exchangeable Share Provisions (as hereinafter defined) and this
trust agreement;
AND WHEREAS these recitals and any statements of fact in this trust
agreement are made by the Parent, the Corporation and NovaCo and not by the
Trustee;
NOW THEREFORE, in consideration of the respective covenants and agreements
provided in this trust 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 trust agreement, unless something in the subject
matter or content is inconsistent therewith:
"Applicable Laws" has the meaning set out in Section 0 hereof.
"Automatic Exchange Right" has the meaning set out in Section 5.11 hereof.
"Board of Directors" means the board of directors of the Corporation.
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"Business Day" means a day other than a Saturday, a Sunday or a day when
banks are not open for business in either or both of New York, New York and
Montreal, Quebec.
"Canadian Dollar Equivalent" means in respect of an amount expressed in a
foreign currency (the "Foreign Currency Amount") at any date the product
obtained by multiplying (a) the Foreign Currency Amount by (b) the official noon
spot exchange rate on such date for such foreign currency as reported by the
Bank of Canada or, in the event such spot exchange rate is not available, such
exchange rate on such date for such foreign currency as may be deemed by the
Board of Directors, acting reasonably, to be appropriate for such purpose.
"CBCA" means the Canada Business Corporations Act, as amended.
"Combination Agreement" has the meaning set out in the recitals hereto.
"Code" means the United States Internal Revenue Code of 1986, as amended.
"Current Market Price" means, in respect of a share of Parent Common Stock
on any date, the Canadian Dollar Equivalent of the average closing sales price
of shares of Parent Common Stock during a period of 20 consecutive trading days
ending not more than five trading days before such date on such stock exchange
or automated quotation system on which the shares of Parent Common Stock are
listed or quoted, as the case may be, as may be selected by the Board of
Directors for such purpose; provided, however, that if in the opinion of the
Board of Directors the public distribution or trading activity of Parent Common
Stock during such period is inadequate to create a market that reflects the fair
market value of the Parent Common Stock, then the Current Market Price of a
share of the Parent Common Stock shall be determined by the Board of Directors
based upon the advice of such qualified independent financial advisors as the
Board of Directors may deem to be appropriate, and provided further that any
such selection, opinion or determination by the Board of Directors shall be
conclusive and binding.
"Dividend Amount" has the meaning set out in Section 1.1 of the
Exchangeable Share Provisions.
"Effective Date" has the meaning set out in the Combination Agreement.
"Exchange Right" has the meaning set out in Section 0 hereof.
"Exchangeable Share Provisions" means the rights, privileges, restrictions
and conditions attaching to the Exchangeable Shares.
"Exchangeable Shares" means the Exchangeable Shares of the Corporation.
"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
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without limitation the Companies Creditors' Arrangement Act (Canada) and the
Bankruptcy and Insolvency Act (Canada), and the failure by the Corporation to
contest in good faith any such proceedings commenced in respect of the
Corporation within 15 days of becoming aware thereof, or the consent by the
Corporation to the filing of any such petition or to the appointment of a
receiver, or the making by the Corporation of a general assignment for the
benefit of creditors, or the admission in writing by the Corporation of its
inability to pay its debts generally as they become due, or the Corporation not
being permitted, pursuant to solvency requirements or other provisions of
applicable law, to redeem any Retracted Shares pursuant to Section 0 of the
Exchangeable Share Provisions.
"Liquidation Amount" has the meaning set out in Section 5.1(1) of the
Exchangeable Share Provisions.
"Liquidation Call Right" has the meaning set out in Section 5.14 hereof.
"Liquidation Call Purchase Price" has the meaning set out in Section 5.14
hereof.
"Liquidation Date" has the meaning set out in Section 5.1(1) of the
Exchangeable Share Provisions.
"List" has the meaning set out in Section 0 hereof.
"Mandate" has the meaning set out in the recitals hereto.
"Non-Affiliated Holder Votes" has the meaning set out in Section 0 hereof.
"Non-Affiliated Holders" means the registered holders of Exchangeable
Shares other than the Parent and its Subsidiaries.
"NovaCo Call Notice" has the meaning set out in Section 5.17 hereof.
"Offer" has the meaning set out in Section 0 hereof.
"Officer's Certificate" means, with respect to the Parent, the Corporation
or NovaCo, 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 the Parent, the Corporation or NovaCo, as the
case may be.
"Parent Board of Directors" means the board of directors of the Parent.
"Parent Common Stock" and "shares of Parent Common Stock" each mean the
shares of Common Stock of the Parent, par value US$0.001 per share, having
voting rights of one vote per share, and any other securities into which such
shares may be changed or for which such shares may be exchanged (whether or not
the Parent shall be the issuer of such other securities) or any other
consideration which may be received by the holders of such shares, pursuant to a
recapitalization, reconstruction, reorganization or
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reclassification of, or amalgamation, merger, liquidation or similar
transaction, affecting such shares.
"Parent Consent" has the meaning set out in Section 0 hereof.
"Parent Liquidation Event" has the meaning set out in Section 5.10 hereof.
"Parent Liquidation Event Effective Date" has the meaning set out in
Section 5.12 hereof.
"Parent Meeting" has the meaning set out in Section 0 hereof.
"Parent Successor" has the meaning set out in Section 0 hereof.
"Preferred Shares" means the Preferred Shares of the Corporation.
"QuebecCo" means 0000-0000 Xxxxxx Inc.
"Retracted Shares" has the meaning set out in Section 0 hereof.
"Retraction Call Purchase Price" has meaning set out in Section 5.16
hereof.
"Retraction Call Right" has the meaning set out in Section 5.16 hereof.
"Retraction Date" has the meaning set out in Section 6.1(1) of the
Exchangeable Share Provisions.
"Retraction Price" has the meaning set out in Section 6.1(1) of the
Exchangeable Share Provisions.
"Retraction Request" has the meaning set out in Section 6.1(1) of the
Exchangeable Share Provisions.
"Subsidiary" of the Parent means any corporation more than 50% of the
outstanding stock of which, by vote or value, is owned, directly or indirectly,
by the Parent, by one or more other Subsidiaries of the Parent or by the Parent
and one or more other Subsidiaries of the Parent.
"Trust Estate" means the Voting Share, any other securities, the Exchange
Right and any money or other rights or assets that may be held or exercised by
the Trustee from time to time pursuant to this trust agreement in the name or on
behalf of the Shareholders.
"Trustee", subject to the provisions of Article 0 hereof, includes any
successor(s) to the Trustee.
"Voting Rights" means the voting rights attached to the Voting Share.
"Voting Share" means the one share of Special Voting Stock of the Parent,
par value US$0.001,
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issued by the Parent to and deposited with the Trustee, which entitles the
holder of record to a number of votes at meetings of holders of Parent Common
Stock equal to the number of Exchangeable Shares outstanding from time to time
that are held by Non-Affiliated Holders.
1.2 Interpretation Not Affected by Headings, etc. The division of this
trust agreement into articles and sections and the insertion of headings are for
reference purposes only and shall not affect the interpretation of this trust
agreement. Unless otherwise indicated, any reference in this trust agreement to
an article or section refers to the specified article or section of this trust
agreement.
1.3 Number, Gender and Persons. In this trust agreement, unless the context
otherwise requires, words importing the singular number include the plural and
vice versa, words importing any gender include all genders and words importing
persons include individuals, corporations, partnerships, companies,
associations, trusts, unincorporated organizations, governmental bodies and
other legal or business entities of any kind.
1.4 Date for Any Action. If any date on which any action is required to be
taken under this trust agreement is not a Business Day, such action shall be
required to be taken on the next succeeding Business Day.
1.5 Payments. All payments to be made hereunder will be made without
interest and less any tax required by law to be deducted and withheld.
ARTICLE 2
ADMINISTRATION OF PROPERTY
2.1 Establishment of Administration. One of the purposes of this trust
agreement is to give effect to the full administration by the Trustee of the
property comprised in the Trust Estate for the benefit of the Non-Affiliated
Holders, as herein and in the Mandate provided. The Trustee will hold the Voting
Share in order to enable the Trustee to exercise the Voting Rights and will hold
the Exchange Right in order to enable the Trustee to exercise such right and
will hold the other rights granted in or resulting from the Trustee being a
party to this trust agreement in order to enable the Trustee to exercise or
enforce such rights, in each case as mandataries with full administration for
and on behalf of the Non-Affiliated Holders as provided in this trust agreement
and in the Mandate.
2.2 The parties hereto acknowledge and agree that all of the rights and
obligations of the Shareholders and the Trustee hereunder are subject to the
rights and obligations of such parties set forth in the Mandate and the exercise
by the Shareholders of any of their rights hereunder shall at all times while
the Mandate is in force, be subject to the terms and conditions of the Mandate
and the rights of the Trustee thereunder.
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ARTICLE 3
VOTING SHARE
3.1 Issue and Ownership of the Voting Share. Simultaneously with the
execution and delivery of this trust agreement, the Parent will issue to and
deposit with the Trustee the Voting Share to be hereafter held of record by the
Trustee as mandatary for and on behalf of, and for the use and benefit of, the
Non-Affiliated Holders, in accordance with the provisions of this trust
agreement. The Parent hereby acknowledges receipt from the Trustee as trustee
for and on behalf of the Non-Affiliated Holders of good and valuable
consideration (and the adequacy thereof) for the issuance of the Voting Share by
the Parent to the Trustee. During the term of this agreement and subject to the
terms and conditions of this trust agreement, the Trustee shall possess and
retain registered title to the Voting Share and shall, in the Trustee's capacity
as mandatary with full administration, 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 registered title thereto as
mandatary solely for the use and benefit of the Non-Affiliated Holders in
accordance with the provisions of this trust agreement; and
(b) except as specifically authorized by this trust agreement, have no
power or authority to sell, transfer, vote or otherwise deal in or with the
Voting Share and the Voting Share shall not be used or disposed of by the
Trustee for any purpose other than the purposes set forth in this trust
agreement.
3.2 Legended Share Certificates. The Corporation will cause each
certificate representing Exchangeable Shares to bear an appropriate legend
notifying the Non-Affiliated Holders of their right to instruct the Trustee with
respect to the exercise of the Voting Rights with respect to the Exchangeable
Shares held by a Non-Affiliated Holder.
3.3 Safekeeping of Certificate. The certificate representing the Voting
Share shall at all times be held in safe keeping by the Trustee or its agent.
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 come before the stockholders of the
Parent at a Parent Meeting or in connection with a Parent Consent. The Voting
Rights shall be and remain vested in and exercised by the Trustee. Subject to
Section 0 hereof, the Trustee shall exercise the Voting Rights only on the basis
of instructions received pursuant to this Article 0 from Non-Affiliated Holders
entitled
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to instruct the Trustee as to the voting thereof at the time at which the Parent
Consent is sought or the Parent Meeting is held. To the extent that no
instructions are received from a Non-Affiliated Holder with respect to the
Voting Rights to which such Non-Affiliated Holder is entitled, the Trustee shall
not exercise or permit the exercise of the Voting Rights relating to such
Non-Affiliated Holder's Exchangeable Shares.
4.2 Number of Votes. With respect to all meetings of stockholders of the
Parent at which holders of shares of Parent Common Stock are entitled to vote (a
"Parent Meeting") and with respect to all written consents sought from the
holders of shares of Parent Common Stock (a "Parent Consent"), each
Non-Affiliated Holder shall be entitled to instruct the Trustee to cast and
exercise, in the manner instructed, one vote for each Exchangeable Share owned
of record by such Non-Affiliated Holder on the record date established by the
Parent or by applicable law for such Parent Meeting or Parent Consent, as the
case may be (the "Non-Affiliated Holder Votes") in respect of each matter,
question or proposition to be voted on at such Parent Meeting or to be consented
to in connection with such Parent Consent.
4.3 Mailings to Shareholders. With respect to each Parent Meeting and
Parent Consent, the Trustee will mail or cause to be mailed (or otherwise
communicate in the same manner that the Parent utilizes in communications to
holders of Parent Common Stock, subject to the Trustee being advised in writing
of such method and its ability to provide this method of communication) to each
of the Non-Affiliated Holders named in the List on the same day as the initial
mailing or notice (or other communication) with respect thereto is given by the
Parent to its stockholders:
(a) a copy of such notice, together with any proxy or information
statement and related materials to be provided to stockholders of the
Parent;
(b) a statement that such Non-Affiliated Holder is entitled, subject
to the provisions of Section 0 hereof, to instruct the Trustee as to the
exercise of the Non-Affiliated Holder Votes with respect to such Parent
Meeting or Parent Consent, as the case may be, or, pursuant and subject to
Section 0 hereof, to attend such Parent Meeting and to exercise personally
the Non-Affiliated Holder Votes thereat;
(c) a statement as to the manner in which such instructions may be
given to the Trustee, including an express indication that instructions may
be given to the Trustee to give:
(i) a proxy to such Non-Affiliated Holder or its designee to
exercise personally such holder's Non-Affiliated Holder Votes; or
(ii) a proxy to a designated agent or other representative of the
management of the Parent to exercise such Non-Affiliated Holder Votes;
(d) a statement that if no such instructions are received from the
Non-Affiliated Holder, the Non-Affiliated Holder Votes to which such
Non-Affiliated Holder is entitled will not be exercised;
(e) a form of direction whereby the Non-Affiliated Holder may so
direct and instruct the
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Trustee to the extent contemplated herein; and
(f) a statement of (i) the time and date by which such instructions
must be received by the Trustee in order to be binding upon it, which in
the case of a Parent Meeting shall not be earlier than the close of
business on the second Business Day prior to such meeting, and (ii) the
method for revoking or amending such instructions.
The materials referred to above are to be provided by the Parent to the
Trustee, but shall be subject to review and comment by the Trustee. For the
purpose of determining Non-Affiliated Holder Votes to which a Non-Affiliated
Holder is entitled in respect of any such Parent Meeting or Parent Consent, the
number of Exchangeable Shares owned of record by the Non-Affiliated Holder shall
be determined at the close of business on the record date established by the
Parent or by applicable law for purposes of determining stockholders entitled to
vote at such Parent Meeting or to give written consent in connection with such
Parent Consent. The Parent will notify the Trustee in writing of any decision of
the Parent Board of Directors with respect to the calling of any such Parent
Meeting or the seeking of any such Parent Consent and shall provide all
necessary information and materials to the Trustee in each case promptly and in
any event in sufficient time to enable the Trustee to perform its obligations
contemplated by this Section 0.
4.4 Copies of Stockholder Information. The Parent will deliver to the
Trustee copies of all proxy materials (including notices of Parent Meetings but
excluding proxies to vote shares of Parent Common Stock), 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 Parent Common Stock in sufficient
quantities and in sufficient time so as to enable the Trustee to send those
materials to each Non-Affiliated Holder at the same time as such materials are
first sent to holders of Parent Common Stock. The Trustee will mail or otherwise
send to each Non-Affiliated Holder, at the expense of Parent, copies of all such
materials (and all materials specifically directed to the Non-Affiliated Holders
or to the Trustee for the benefit of the Non-Affiliated Holders by the Parent)
received by the Trustee from the Parent at the same time as such materials are
first sent to holders of Parent Common Stock. The Trustee will make copies of
all such materials available for inspection by any Non-Affiliated Holder at the
principal office of QuebecCo in the City of Montreal.
4.5 Other Materials. Immediately after receipt by the Parent or any
stockholder of the Parent of any material sent or given generally to the holders
of Parent Common Stock 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), the Parent shall use reasonable efforts to obtain and deliver to
the Trustee copies thereof in sufficient quantities so as to enable the Trustee
to forward such material (unless the same has been provided directly to
Non-Affiliated Holders by such third party) to each Non-Affiliated Holder as
soon as practicable thereafter. As soon as practicable after receipt thereof,
the Trustee will mail or otherwise send to each Non-Affiliated Holder, at the
expense of the Parent, copies of all such materials received by the Trustee from
the Parent. The Trustee will also make copies of all such materials available
for inspection by any Non-Affiliated Holder at the principal office of QuebecCo
in the City of Montreal.
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4.6 List of Persons Entitled to Vote. The Corporation shall, (a) prior to
each annual, general and special Parent Meeting or the seeking of any Parent
Consent and (b) forthwith upon each request made at any time by the Trustee in
writing , prepare or cause to be prepared a list (a "List") of the names and
addresses of the Non-Affiliated Holders arranged in alphabetical order and
showing the number of Exchangeable Shares held of record by each such
Non-Affiliated Holder, in each case at the close of business on the date
specified by the Trustee in such request or, in the case of a List prepared in
connection with a Parent Meeting or a Parent Consent, at the close of business
on the record date established by the Parent or pursuant to applicable law for
determining the holders of Parent Common Stock entitled to receive notice of
and/or to vote at such Parent Meeting or to give consent in connection with such
Parent Consent. Each such List shall be delivered to the Trustee promptly after
receipt by the 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 trust
agreement. The Parent agrees to give the Corporation written notice (with a copy
to the Trustee) of the calling of any Parent Meeting or the seeking of any
Parent Consent, together with the record dates therefor, sufficiently prior to
the date of the calling of such meeting or seeking of such consent so as to
enable the Corporation to perform its obligations under this Section 0.
4.7 Entitlement to Direct Votes. Any Non-Affiliated Holder named in a List
prepared in connection with any Parent Meeting or any Parent Consent will be
entitled (a) to instruct the Trustee in the manner described in Section 0 hereof
with respect to the exercise of the Non-Affiliated Holder Votes to which such
Non-Affiliated Holder is entitled or (b) to attend such meeting and personally
to exercise thereat (or to exercise with respect to any written consent), as the
proxy of the Trustee, the Non-Affiliated Holder Votes to which such
Non-Affiliated Holder is entitled except, in each case, to the extent that such
Non-Affiliated Holder has transferred the ownership of any Exchangeable Shares
in respect of which such Non-Affiliated Holder is entitled to Non-Affiliated
Holder Votes after the close of business on the record date for such meeting or
seeking of consent.
4.8 Voting by Trustee, and Attendance of Trustee Representative at Meeting.
(a) In connection with each Parent Meeting and Parent Consent, the Trustee
shall exercise, either in person or by proxy, in accordance with the
instructions received from a Non-Affiliated Holder pursuant to Section 0 hereof,
the Non-Affiliated Holder Votes as to which such Non-Affiliated Holder is
entitled to direct the vote (or any lesser number thereof as may be set forth in
the instructions); provided, however, that such written instructions are
received by the Trustee from the Non-Affiliated Holder prior to the time and
date fixed by it for receipt of such instructions in the notice given by the
Trustee to the Non-Affiliated Holder pursuant to Section 0 hereof.
(b) The Trustee shall cause such representatives as are empowered by it to
sign and deliver, on behalf of the Trustee, proxies for Voting Rights enabling a
Non-Affiliated Holder to attend each Parent Meeting. Upon submission by a
Non-Affiliated Holder (or its designee) of identification satisfactory to the
Trustee's representatives, and at the Non-Affiliated Holder's request, such
representatives shall sign and deliver to such Non-Affiliated Holder (or its
designee) a proxy to exercise personally the Non-Affiliated Holder Votes as to
which such Non-Affiliated Holder is otherwise entitled hereunder to direct the
vote, if such Non-
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Affiliated Holder either (i) has not previously given the Trustee instructions
pursuant to Section 0 hereof in respect of such meeting, or (ii) submits to the
Trustee's representatives written revocation of any such previous instructions.
At such meeting, the Non-Affiliated Holder exercising such Non-Affiliated Holder
Votes shall, to the greatest extent permitted by applicable law, have the same
rights as the Trustee to speak at the meeting in respect of any matter, question
or proposition, to vote by way of ballot at the meeting in respect of any
matter, question or proposition and to vote at such meeting by way of a show of
hands in respect of any matter, question or proposition.
4.9 Distribution of Written Materials. Any written materials to be
distributed by the Trustee to the Non-Affiliated Holders pursuant to this trust
agreement shall be delivered or sent by mail (or otherwise communicated in the
same manner as the Parent utilizes in communications to holders of Parent Common
Stock, subject to the Trustee being advised in writing of such method of
communication and its ability to provide same) to each Non-Affiliated Holder 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 Non-Affiliated Holders; and
(b) upon the request of the Trustee, mailing labels to enable the
Trustee to carry out its duties under this trust agreement.
The materials referred to above are to be provided by the Parent to the
Trustee, but shall be subject to review and comment by the Trustee.
4.10 Termination of Voting Rights. All the rights of a Non-Affiliated
Holder with respect to the Non-Affiliated Holder Votes exercisable in respect of
the Exchangeable Shares held by such Non-Affiliated Holder, including the right
to instruct the Trustee as to the voting of or to vote personally such
Non-Affiliated Holder Votes, shall be deemed to be surrendered by the
Non-Affiliated Holder to the Parent or NovaCo, as the case may be, and such
Non-Affiliated Holder Votes and the Voting Rights represented thereby shall
cease immediately upon the delivery by such Non-Affiliated Holder to the Trustee
of the certificates representing such Exchangeable Shares in connection with the
exercise by the Non-Affiliated Holder of the Exchange Right, or upon the
redemption of Exchangeable Shares pursuant to Article 6 of the Exchangeable
Share Provisions, 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 NovaCo pursuant to the exercise by NovaCo of the Retraction Call Right or the
Liquidation Call Right (unless in any case the Corporation or NovaCo shall not
have delivered the requisite shares of Parent Common Stock and cheque, if any,
deliverable in exchange therefor to the Non-Affiliated Holders or to the Trustee
for delivery to the Non-Affiliated Holders).
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ARTICLE 5
EXCHANGE AND CALL RIGHTS AND PARENT SUPPORT
5.1 Grant and Ownership of the Exchange Right. The Parent hereby grants to
the Trustee as mandatary for and on behalf of, and for the use and benefit of,
the Non-Affiliated Holders the right (the "Exchange Right"), upon the occurrence
and during the continuance of an Insolvency Event, to require the Parent to
purchase from each or any Non-Affiliated Holder all or any part of the
Exchangeable Shares held by the Non-Affiliated Holder, all in accordance with
the provisions of this trust agreement. The Parent hereby acknowledges receipt
from the Trustee, as trustee for and on behalf of the Non-Affiliated Holders, of
good and valuable consideration (and the adequacy thereof) for the grant of the
Exchange Right by the Parent to the Trustee. During the term hereof and subject
to the terms and conditions of this trust agreement, the Trustee shall possess
and shall be entitled to exercise all of the rights and powers of an owner with
respect to the Exchange Right, provided that the Trustee shall:
(a) hold the Exchange Right and the legal title thereto as mandatary
solely for the use and benefit of the Non-Affiliated Holders in accordance
with the provisions of this trust agreement; and
(b) except as specifically authorized by this trust agreement, have no
power or authority to exercise or otherwise deal in or with the Exchange
Right, and the Trustee shall not exercise such right for any purpose other
than the purposes provided for or contemplated pursuant to this trust
agreement.
5.2 Legended Share Certificates. The Corporation will cause each
certificate representing Exchangeable Shares to bear an appropriate legend
notifying the Non-Affiliated Holders of their right to instruct the Trustee with
respect to the exercise of the Exchange Right in respect of the Exchangeable
Shares held by a Non-Affiliated Holder.
5.3 General Exercise of Exchange Right. The Exchange Right shall be and
remain vested in and exercisable by the Trustee. Subject to Section 0 hereof,
the Trustee shall exercise the Exchange Right only on the basis of instructions
received pursuant to this Article 0 from Non-Affiliated Holders entitled to
instruct the Trustee as to the exercise thereof. To the extent that no
instructions are received from a Non-Affiliated Holder with respect to the
Exchange Right, the Trustee shall not exercise or permit the exercise of the
Exchange Right.
5.4 Purchase Price. The purchase price payable by the Parent for each
Exchangeable Share to be purchased by the Parent under the Exchange Right shall
be an amount per share equal to (a) the Current Market Price of a share of
Parent Common Stock on the last Business Day prior to the day of closing of the
purchase and sale of such Exchangeable Share under the Exchange Right, which
shall be satisfied in full by causing to be delivered to such holder one share
of Parent Common Stock, plus (b) the Dividend Amount, if any. The purchase price
for each such Exchangeable Share so purchased may be satisfied only by the
Parent delivering or causing to be delivered to the Trustee, on behalf of the
relevant Non-Affiliated Holder,
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one share of Parent Common Stock and a cheque for the balance, if any, of the
purchase price.
5.5 Exercise Instructions. Subject to the terms and conditions herein set
forth, a Non-Affiliated Holder shall be entitled, upon the occurrence and during
the continuance of an Insolvency Event, to instruct the Trustee to exercise the
Exchange Right with respect to all or any part of the Exchangeable Shares
registered in the name of such Non-Affiliated Holder on the books of the
Corporation. To cause the exercise of the Exchange Right by the Trustee, the
Non-Affiliated Holder shall deliver to the Trustee, in person or by certified or
registered mail, at its address set forth in Section 14.3 hereof, the
certificates representing the Exchangeable Shares which such Non-Affiliated
Holder desires the Parent 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 CBCA and such additional documents and
instruments as the Trustee or the Corporation may reasonably require together
with (a) a duly completed form of notice of exercise of the Exchange Right,
contained on the reverse of or attached to the Exchangeable Share certificates,
stating (i) that the Non-Affiliated Holder thereby instructs the Trustee to
exercise the Exchange Right so as to require the Parent to purchase from the
Non-Affiliated Holder the number of Exchangeable Shares specified therein, (ii)
that such Non-Affiliated Holder has good title to and owns all such Exchangeable
Shares to be acquired by the Parent free and clear of all liens, claims and
encumbrances, (iii) the names in which the certificates representing Parent
Common Stock issuable in connection with the exercise of the Exchange Right are
to be issued and (iv) the names and addresses of the persons to whom such new
certificates should be delivered and (b) payment (or evidence satisfactory to
the Trustee, the Corporation and the Parent of payment) of the taxes (if any)
payable as contemplated by Section 5.8 hereof. If only a portion of the
Exchangeable Shares represented by any certificate delivered to the Trustee are
to be purchased by the Parent under the Exchange Right, a new certificate for
the balance of such Exchangeable Shares shall be issued to the holder at the
expense of the Corporation.
5.6 Delivery of Parent Common Stock: Effect of Exercise. Promptly after
receipt of the certificates representing the Exchangeable Shares that a
Non-Affiliated Holder desires the Parent 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 payable as
contemplated by Section 5.8 hereof, if any, or evidence thereof), duly endorsed
for transfer to the Parent, the Trustee shall notify the Parent and the
Corporation of its receipt of the same, which notice to the Parent and the
Corporation shall constitute exercise of the Exchange Right by the Trustee on
behalf of the holder of such Exchangeable Shares, and the Parent shall
immediately thereafter deliver or cause to be delivered to the Trustee, for
delivery to the Non-Affiliated Holder of such Exchangeable Shares (or to such
other persons, if any, properly designated by such Non-Affiliated Holder), a
certificate for the number of shares of Parent Common Stock deliverable in
connection with such 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, security interest or adverse claim) and a cheque for the
balance, if any, of the purchase price therefor, provided, however, that no such
delivery shall be made unless and until the Non-Affiliated Holder requesting the
same shall have paid (or provided evidence satisfactory to the Trustee, the
Corporation and the Parent of the payment of) the taxes (if any) payable as
contemplated by Section 5.8 hereof. Immediately upon the giving of notice by the
Trustee to the Parent and the Corporation of the exercise of the Exchange Right,
as provided in this Section 5.6, the closing of the transaction of purchase and
sale contemplated by the Exchange Right shall be deemed
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to have occurred, and the Non-Affiliated Holder of such Exchangeable Shares
shall be deemed to have transferred to the Parent all of its right, title and
interest in and to such Exchangeable Shares and the related interest in the
Trust Estate and shall not be entitled to exercise any of the rights of a holder
in respect thereof, other than the right to receive its proportionate part of
the total purchase price therefor, unless the requisite number of shares of
Parent Common Stock (together with a cheque for the balance, if any, of the
total purchase price therefor) is not delivered by the Parent to the Trustee,
for delivery to such Non-Affiliated Holder (or to such other persons, if any,
properly designated by such Non-Affiliated Holder), within five Business Days of
the date of the giving of such notice by the Trustee, in which case the rights
of the Non-Affiliated Holder shall remain unaffected until such shares of Parent
Common Stock are so delivered by the Parent and any such cheque is so delivered
and paid. Concurrently with the closing of the transaction of purchase and sale
contemplated by the Exchange Right, such Non-Affiliated Holder shall be
considered and deemed for all purposes to be the holder of the shares of Parent
Common Stock delivered to it pursuant to the Exchange Right.
5.7 Exercise of Exchange Right Subsequent to Retraction. In the event that
a Non-Affiliated Holder 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 Non-Affiliated Holder (the "Retracted
Shares") and is notified by the Corporation pursuant to Section 6.1(4) of the
Exchangeable Share Provisions that the Corporation will not be permitted as a
result of solvency requirements of applicable law to redeem all such Retracted
Shares, subject to receipt by the Trustee of written notice to that effect from
the Corporation and provided that NovaCo shall not have exercised its Retraction
Call Right with respect to the Retracted Shares and that the Non-Affiliated
Holder shall not have revoked the retraction request delivered by the
Non-Affiliated Holder to the Corporation pursuant to Section 6.1(5) of the
Exchangeable Share Provisions, the retraction request will constitute and will
be deemed to constitute notice from the Non-Affiliated Holder to the Trustee
instructing the Trustee to exercise the Exchange Right with respect to those
Retracted Shares that the Corporation is unable to redeem. In any such event,
the Corporation hereby agrees with the Trustee and in favour of the
Non-Affiliated Holder 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 Non-Affiliated Holder to the Corporation (including without limitation a
copy of the retraction request delivered pursuant to Section 6.1(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 the Parent to purchase such shares in accordance with
the provisions of this Article 0.
5.8 Stamp or Other Transfer Taxes. Upon any sale of Exchangeable Shares to
the Parent pursuant to the Exchange Right or the Automatic Exchange Right, the
share certificate or certificates representing the Parent Common Stock to be
delivered in connection with the payment of the total purchase price therefor
shall be issued in the name of the Non-Affiliated Holder of the Exchangeable
Shares so sold or in such names as such Non-Affiliated Holder may otherwise
direct in writing without charge to the holder of the Exchangeable Shares so
sold, provided, however, that such Non-Affiliated Holder (a) shall pay (and
neither the Parent, the Corporation nor the Trustee shall be required to pay)
any documentary, stamp, transfer or other similar taxes that may be payable in
respect of any transfer involved in the issuance or delivery of such shares
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to a person other than such Non-Affiliated Holder or (b) shall have established
to the satisfaction of the Trustee, the Parent 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 that with the giving of notice or the passage of
time or both would be an Insolvency Event, the Corporation and the Parent shall
give written notice thereof to the Trustee. As soon as practicable after
receiving notice from the Corporation or the Parent or from any other person of
the occurrence of an Insolvency Event, the Trustee will mail to each
Non-Affiliated Holder, at the expense of the Parent, a notice of such Insolvency
Event in the form provided by the Parent, which notice shall contain a brief
statement of the right of the Non-Affiliated Holders with respect to the
Exchange Right.
5.10 Parent Liquidation Event. The Parent shall give the Corporation
written notice of each of the following events (each a "Parent Liquidation
Event") at the time set forth below:
(a) in the event of any determination by the Parent Board of Directors
to institute voluntary liquidation, dissolution or winding-up proceedings
with respect to the Parent or to effect any other distribution of assets of
the Parent among its stockholders for the purpose of winding up it affairs,
at least 60 days prior to the proposed effective date of such liquidation,
dissolution, winding up or other distribution; and
(b) immediately, upon the earlier of (i) receipt by the Parent of
notice of and (ii) the Parent otherwise becoming aware of any threatened or
instituted claim, suit, petition or other proceedings with respect to the
involuntary liquidation, dissolution or winding up of the Parent or to
effect any other distribution of assets of the Parent among its
stockholders for the purpose of winding up its affairs.
5.11 Notice of Parent Liquidation Event. Immediately following receipt by
the Corporation from the Parent of notice of any Parent Liquidation Event
contemplated by Section 5.10(a) or (b), the Corporation will give notice thereof
to the holders of Exchangeable Shares. Such notice shall be provided by the
Parent to the Corporation and shall include a brief description of the automatic
exchange of Exchangeable Shares for shares of Parent Common Stock provided for
in Section 0 below (the "Automatic Exchange Right").
5.12 Automatic Exchange Right. In order that the holders of Exchangeable
Shares (other than the Parent or any Subsidiary thereof) will be able to
participate on a pro rata basis with the holders of Parent Common Stock in the
distribution of assets of the Parent in connection with a Parent Liquidation
Event, on the fifth Business Day prior to the effective date (the "Parent
Liquidation Event Effective Date") of a Parent Liquidation Event all of the then
outstanding Exchangeable Shares (other than Exchangeable Shares held by the
Parent or any Subsidiary thereof) shall be automatically exchanged for shares of
Parent Common Stock. To effect such automatic exchange, the Parent shall
purchase each Exchangeable Share outstanding on the fifth Business Day prior to
the Parent Liquidation Event Effective Date and held by a holder of Exchangeable
Shares (other than the Parent or any Subsidiary thereof), and each such holder
shall sell the Exchangeable Shares held by it at such time, for a purchase price
per share equal to (a) the Current Market Price of a share of Parent Common
Stock on the fifth Business Day prior to the Parent Liquidation Event
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Effective Date, which shall be satisfied in full by the Parent delivering to
such holder one share of Parent Common Stock, plus (b) the Dividend Amount, if
any.
5.13 Issuance of Parent Common Stock Upon Automatic Exchange. On the fifth
Business Day prior to the Parent Liquidation Event Effective Date, the closing
of the transaction of purchase and sale contemplated by the automatic exchange
of Exchangeable Shares for Parent Common Stock shall be deemed to have occurred,
and each holder of Exchangeable Shares (other than the Parent or any Subsidiary
thereof) shall be deemed to have transferred to the Parent all of such holder's
right, title and interest in and to such Exchangeable Shares and shall cease to
be a holder of such Exchangeable Shares and the Parent shall deliver or cause to
be delivered to the Trustee, for delivery to such holders, the certificates for
the number of shares of Parent Common Stock deliverable upon the automatic
exchange of Exchangeable Shares for shares of Parent Common Stock (which shares
shall be duly issued as fully paid and non-assessable and shall be free and
clear of any lien, claim or encumbrance, security interest or adverse claim) and
a cheque for the balance, if any, of the total purchase price for such
Exchangeable Shares and any interest on such deposit shall belong to the Parent.
Concurrently with each such holder ceasing to be a holder of Exchangeable
Shares, such holder shall be considered and deemed for all purposes to be the
holder of the shares of Parent Common Stock delivered to it, or to the Trustee
on its behalf, pursuant to the automatic exchange of Exchangeable Shares for
shares of Parent Common Stock and the certificates held by such holder
previously representing the Exchangeable Shares exchanged by such holder with
the Parent pursuant to such automatic exchange shall thereafter be deemed to
represent shares of Parent Common Stock delivered to such holder by the Parent
pursuant to such automatic exchange. Upon the request of any such former holder
of Exchangeable Shares and the surrender by such holder of Exchangeable Share
certificates deemed to represent Parent Common Stock, duly endorsed in blank and
accompanied by such instruments of transfer as the Parent may reasonably
require, the Parent shall deliver to such holder certificates representing the
shares of Parent Common Stock of which such holder is the holder and a cheque in
payment of the remaining portion, if any, of the purchase price.
5.14 Liquidation Call Right. NovaCo shall have the overriding right (a
"Liquidation Call Right"), in the event of and notwithstanding the proposed
liquidation, dissolution or winding up of the Corporation pursuant to Section
5.1 of the Exchangeable Share Provisions, to purchase from all but not less than
all of the holders of Exchangeable Shares on the Liquidation Date (other than
the Parent or any Subsidiary thereof) all but not less than all of the
Exchangeable Shares held by each such holder on payment by NovaCo of an amount
per share equal to (i) the Current Market Price share of a share of Parent
Common Stock on the last Business Day prior to the Liquidation Date, which shall
be satisfied in full by causing to be delivered to such holder one share of
Parent Common Stock, plus (ii) the Dividend Amount, if any (collectively, the
"Liquidation Call Purchase Price"). In the event of the exercise of a
Liquidation Call Right, each holder of Exchangeable Shares (other than the
Parent or any Subsidiary thereof) shall be obligated to sell all the
Exchangeable Shares held by such holder to NovaCo on the Liquidation Date on
payment by NovaCo to the holder of the Liquidation Call Purchase Price for each
such share.
5.15 Exercise of Liquidation Call Right. For the purposes of completing a
purchase of the Exchangeable Shares pursuant to the exercise of a Liquidation
Call Right, NovaCo shall deposit with the Trustee, on or before the Liquidation
Date, certificates representing the total number of shares of Parent
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Common Stock deliverable by NovaCo (which shares shall be duly issued as fully
paid and non-assessable and shall be free and clear of any lien, claim,
encumbrance, security interest or adverse claim) in payment of the total
Liquidation Call Purchase Price and a cheque in the amount of the remaining
portion, if any, of the total Liquidation Call Purchase Price and any interest
allowed on such deposit shall belong to NovaCo. Provided that the total
Liquidation Call Purchase Price has been so deposited with the Trustee, on and
after the Liquidation Date the rights of each holder of Exchangeable Shares
(other than the Parent or any Subsidiary thereof) will be limited to receiving
such holder's proportionate part of the total Liquidation Call Purchase Price
payable by NovaCo, upon presentation and surrender by the holder of Exchangeable
Shares of certificates representing the Exchangeable Shares held by such holder
in accordance with the following provisions and such holder shall on and after
the Liquidation Date be considered and deemed for all purposes to be the holder
of shares of Parent Common Stock delivered to such holder. Upon surrender to
NovaCo of a certificate representing Exchangeable Shares, together with such
other documents and instruments as may be required to effect a transfer of
Exchangeable Shares under the CBCA, and such additional documents and
instruments as the Corporation or NovaCo may reasonably require, the holder of
such surrendered certificate shall be entitled to receive in exchange therefor,
and NovaCo shall deliver to such holder or to the Trustee on behalf of such
holder, a certificate representing the shares of Parent Common Stock to which
such holder is entitled and a cheque in payment of the remaining portion, if
any, of the holder's proportionate part of the total Liquidation Call Purchase
Price. If NovaCo does not exercise its Liquidation Call Right in the manner
described above, on the Liquidation Date the holders of Exchangeable Shares
shall be entitled to receive in exchange therefor the liquidation price
otherwise payable by the Corporation in connection with the liquidation,
dissolution or winding up of the Corporation pursuant to Section 5.1 of the
Exchangeable Share Provisions.
5.16 Retraction Call Right. In the event that a holder of Exchangeable
Shares delivers a Retraction Request pursuant to Section 6.1 of the Exchangeable
Share Provisions and subject to the limitations set forth in Section 5.17,
NovaCo shall have the overriding right (a "Retraction Call Right"),
notwithstanding the proposed redemption of the Exchangeable Shares by the
Corporation pursuant to Section 6.1 of the Exchangeable Share Provisions, to
purchase from such holder on the Retraction Date all but not less than all of
the Retracted Shares held by such holder on payment by NovaCo of an amount per
share equal to (i) the Current Market Price of a share of Parent Common Stock on
the last Business Day prior to the Retraction Date, which shall be satisfied in
full by NovaCo causing to be delivered to such holder one share of Parent Common
Stock for each Exchangeable Share presented and surrendered by the holder, plus
(ii) the Dividend Amount, if any (collectively, the "Retraction Call Purchase
Price"). In the event of the exercise of a Retraction Call Right, a holder of
Exchangeable Shares who has delivered a Retraction Request shall be obligated to
sell all the Retracted Shares to NovaCo on the Retraction Date on payment by
NovaCo of an amount per share equal to the Retraction Call Purchase Price.
5.17 Exercise of Retraction Call Right. Upon receipt by the Corporation of
a Retraction Request, the Corporation shall immediately notify NovaCo thereof.
In order to exercise its Retraction Call Right, NovaCo must notify the
Corporation in writing of its determination to do so (a "NovaCo Call Notice")
within two Business Days of notification to NovaCo by the Corporation of the
receipt by the Corporation of the Retraction Request. If NovaCo so notifies the
Corporation within such two Business Day period, the Corporation shall notify
the holder as soon possible thereafter as to the exercise of a Retraction Call
Right.
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If NovaCo delivers a NovaCo Call Notice within such two Business Day period and
duly exercises its Retraction Call Right in accordance with the terms hereof,
the obligation of the Corporation to redeem the Retracted Shares shall terminate
and, provided that the Retraction Request is not revoked by the holder in the
manner specified in Section 6.1(5) of the Exchangeable Share Provisions, NovaCo
shall purchase from such holder and such holder shall sell to NovaCo on the
Retraction Date the Retracted Shares for the Retraction Call Purchase Price. For
the purposes of completing a purchase pursuant to a Retraction Call Right,
NovaCo shall deposit with the Corporation, on or before the Retraction Date,
certificates representing the number of shares of Parent Common Stock to which
such holder is entitled and a cheque in the amount of the remaining portion, if
any, of the aggregate Retraction Call Purchase Price to which such holder is
entitled. Provided that the aggregate Retraction Call Purchase Price has been so
deposited with the Corporation, the closing of the purchase and sale of the
Retracted Shares pursuant to the Retraction Call Right shall be deemed to have
occurred as at the close of business on the Retraction Date and, for greater
certainty, no redemption by the Corporation of such Retracted Shares shall take
place on the Retraction Date. In the event that NovaCo does not deliver a NovaCo
Call Notice within such two Business Day period, and provided that the
Retraction Request is not revoked by the holder in the manner specified in
Section 6.1(5) of the Exchangeable Share Provisions, the Corporation shall
redeem the Retracted Shares on the Retraction Date and in the manner otherwise
contemplated in Section 6.1 of the Exchangeable Share Provisions.
5.18 Payment of Retraction Call Purchase Price. For the purposes of
completing a purchase of Exchangeable Shares pursuant to the exercise of a
Retraction Call Right, NovaCo shall deliver or cause the Corporation to deliver
to the relevant holder, at the address of the holder recorded in the securities
register of the Corporation for the Exchangeable Shares or at the address
specified in the holder's Retraction Request or by holding for pick-up by the
holder at the registered office of the Corporation a certificate representing
the number of shares of Parent Common Stock to which such holder is entitled
(which shares shall be duly issued as fully paid and non-assessable and shall be
free and clear of any lien, claim, encumbrance, security interest or adverse
claim) registered in the name of the holder or in such other name as the holder
may request in payment of the Retraction Call Purchase Price and a cheque of
NovaCo payable at par and in Canadian dollars at any branch of the bankers of
NovaCo or of the Corporation in Canada in payment of the remaining portion, if
any, of such aggregate Retraction Call Purchase Price and such delivery of such
certificate and cheque on behalf of NovaCo by the Corporation shall be deemed to
be payment of and shall satisfy and discharge all liability for the Retraction
Call Purchase Price to the extent that the same is represented by such share
certificates and cheque, unless such cheque is not paid on due presentation.
5.19 Rights of Holder Following Exercise of Retraction Call Right. On and
after the close of business on the Retraction Date, the holder of the Retracted
Shares shall not be entitled to exercise any of the rights of a holder in
respect thereof, other than the right to receive its proportionate part of the
total Retraction Call Purchase Price unless upon presentation and surrender of
certificates in accordance with the foregoing provisions, payment of the
aggregate Retraction Call Purchase Price payable to such holder shall not be
made, in which case the rights of such holder shall remain unaffected until such
aggregate Retraction Call Purchase Price has been paid in the manner
hereinbefore provided. On and after the close of business on the Retraction
Date, provided that presentation and surrender of certificates and payment of
such aggregate Retraction Call Purchase Price has been made in accordance with
the foregoing provisions, the holder of the Retracted Shares so purchased by
NovaCo shall thereafter be considered and deemed for all
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purposes to be a holder of the shares of Parent Common Stock delivered to such
holder.
ARTICLE 6
COVENANTS, REPRESENTATIONS AND WARRANTIES
6.1 Covenants of Parent Regarding Exchangeable Shares. So long as any
Exchangeable Shares are outstanding, the Parent will:
(a) not declare or pay any dividend on the Parent Common Stock unless
(i) the Corporation will have sufficient money or other assets or
authorized but unissued securities available to enable the due declaration
and the due and punctual payment in accordance with applicable law, of an
equivalent dividend on the Exchangeable Shares and (ii) the Corporation
shall simultaneously declare or pay, as the case may be, an equivalent
dividend on the Exchangeable Shares;
(b) advise the Corporation sufficiently in advance of the declaration
by the Parent of any dividend on the Parent Common Stock and take all such
other actions as are necessary, in cooperation with the Corporation, to
ensure that the respective declaration date, record date and payment date
for a dividend on the Exchangeable Shares shall be the same as the
declaration date, record date and payment date for the corresponding
dividend on the Parent Common Stock;
(c) ensure that the record date for determining shareholders entitled
to receive any dividend declared on the Parent Common Stock is not less
than 10 Business Days after the declaration date for such dividend or such
shorter period within which applicable law may be complied with;
(d) take all such actions and do all such things as are necessary or
desirable to enable and permit the Corporation, in accordance with
applicable law, to pay and otherwise perform its obligations with respect
to the satisfaction of the Liquidation Amount in respect of each issued and
outstanding Exchangeable Share upon the liquidation, dissolution or winding
up of the Corporation, including without limitation all such actions and
all such things as are necessary or desirable to enable and permit the
Corporation to cause to be delivered shares of Parent Common Stock to the
holders of Exchangeable Shares in accordance with the provisions of Article
5 of the Exchangeable Share Provisions;
(e) take all such actions and do all such things as are necessary or
desirable to enable and permit the Corporation, in accordance with
applicable law, to pay and otherwise perform its obligations with respect
to the satisfaction of the Retraction Price, including without limitation
all such actions and all such things as are necessary or desirable to
enable and permit the Corporation to cause to be delivered shares of Parent
Common Stock to the holders of Exchangeable Shares, upon the retraction of
the Exchangeable Shares in accordance with the provisions of Article 6 of
the Exchangeable Share Provisions;
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(f) take all such actions and do all such things as are necessary or
desirable to enable and permit NovaCo, in accordance with applicable law,
to pay and otherwise perform its obligations arising upon the exercise by
it of the Liquidation Call Right or the Retraction Call Right, including
without limitation all such actions and all such things as are necessary or
desirable to enable and permit NovaCo to cause to be delivered shares of
Parent Common Stock to the holders of Exchangeable Shares in accordance
with the provisions of the Liquidation Call Right or the Retraction Call
Right, as the case may be; and
(g) cause NovaCo to not exercise its vote as a shareholder to initiate
the voluntary liquidation, dissolution or winding up of the Corporation nor
take any action or omit to take any action that is designed to result in
the liquidation, dissolution or winding up of the Corporation.
6.2 Segregation of Funds. The Parent will cause the Corporation to deposit
a sufficient amount of funds in a separate account and segregate a sufficient
amount of such other assets as is necessary to enable the Corporation to pay or
otherwise satisfy the applicable dividends, Liquidation Amount or Retraction
Price, in each case for the benefit of Non-Affiliated Holders from time to time
of the Exchangeable Shares, and to use such funds and other assets so segregated
exclusively for the payment of dividends and the payment or other satisfaction
of the Liquidation Amount or the Retraction Price, as applicable.
6.3 Certain Representations. The Parent hereby represents, warrants and
covenants that:
(a) 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 shares of Parent
Common Stock (or other shares or securities into which the Parent Common
Stock may be reclassified or changed as contemplated by Section 0 hereof)
(i) as is equal to the sum of (x) the number of Exchangeable Shares issued
and outstanding from time to time and (y) the number of Exchangeable Shares
issuable upon the exercise of all rights to acquire Exchangeable Shares
outstanding from time to time and (ii) as are now and may hereafter be
required to enable and permit each of the Corporation and NovaCo to meet
its obligations hereunder, under the Exchangeable Share Provisions and
under any other security or commitment pursuant to which the Corporation,
NovaCo or the Parent may now or hereafter be required to issue and/or
deliver shares of Parent Common Stock; and
(b) it is not as of the Effective Date, and has not been at any time
within the last year prior to the Effective Date, a "United States real
property holding corporation" within the meaning of Section 897 of the
Code.
6.4 Notification of Certain Events. In order to assist the Parent to comply
with its obligations hereunder and to permit NovaCo to exercise the Liquidation
Call Right or the Retraction Call Right, the Corporation will give the Parent
and NovaCo notice of each of the following events at the time set forth below:
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(a) in the event of any determination by the Board of Directors to
institute voluntary liquidation, dissolution or winding up proceedings with
respect to the Corporation or to effect any other distribution of the
assets of the Corporation 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;
(b) immediately, upon the earlier of (i) receipt by the Corporation of
notice of, and (ii) the Corporation 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 the
Corporation or to effect any other distribution of the assets of the
Corporation among its shareholders for the purpose of winding up its
affairs;
(c) immediately, upon receipt by the Corporation of a Retraction
Request;
(d) as soon as practicable upon the issuance by the Corporation of any
Exchangeable Shares or rights to acquire Exchangeable Shares.
6.5 Delivery of Shares of Parent Common Stock. Upon notice of any event
that requires the Corporation or NovaCo to cause to be delivered shares of
Parent Common Stock to any holder of Exchangeable Shares, the Parent shall, in
any manner deemed appropriate by it, provide such shares or cause such shares to
be provided to the Corporation or NovaCo, as the case may be, which shall
forthwith deliver the requisite shares of Parent Common Stock to or to the order
of the former holder of the surrendered Exchangeable Shares, as the Corporation
or NovaCo shall direct. All such shares of Parent Common Stock shall be duly
issued as fully paid, non-assessable, free of pre-emptive rights and shall be
free and clear of any lien, claim, encumbrance, security interest or adverse
claim.
6.6 Qualification of Shares of Parent Common Stock. The Parent covenants
that if any shares of Parent Common Stock (or other shares or securities into
which the Parent Common Stock may be reclassified or changed as contemplated by
Section 0 hereof) to be issued and delivered hereunder, including for greater
certainty, pursuant to the Exchangeable Share Provisions or Article 5 hereof,
require registration or qualification with or approval of or the filing of any
document including any prospectus or similar document or the taking of any
proceeding with or the obtaining of any order, ruling or consent from any
governmental or regulatory authority under any Canadian or United States
federal, provincial or state law or regulation or pursuant to the rules and
regulations of any regulatory authority or the fulfilment of any other legal
requirement (collectively, the "Applicable Laws") before such shares (or other
shares or securities into which the Parent Common Stock may be reclassified or
changed as contemplated by Section 0 hereof) may be issued and delivered by the
Parent to the initial holder thereof or in order that such shares may be freely
traded in the United States thereafter (other than any restrictions on transfer
by reason of a holder being an "affiliate" of the Parent or, prior to the
Effective Date, of QuebecCo for purposes of United States federal or state
securities law), the Parent will in good faith expeditiously take all such
actions and do all such things as are necessary to cause such shares of Parent
Common Stock (or other shares or securities into which the Parent Common Stock
may be reclassified or changed as contemplated by Section 0 hereof) to be and
remain duly registered, qualified or approved. The Parent will in good faith
expeditiously take all such actions
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and do all such things as are necessary to cause all shares of Parent Common
Stock (or other shares or securities into which the Parent Common Stock may be
reclassified or changed as contemplated by Section 0 hereof) to be delivered
hereunder, including for greater certainty, pursuant to the Exchangeable Share
Provisions or Article 5 hereof, to be listed, quoted or posted for trading on
all stock exchanges and quotation systems on which such shares are listed,
quoted or posted for trading at such time.
6.7 Economic Equivalences.
(a) The Parent will not without the prior approval of the Corporation and
the prior approval of the holders of the Exchangeable Shares given in accordance
with Section 8.2 of the Exchangeable Share Provisions:
(i) issue or distribute shares of Parent Common Stock (or securities
exchangeable for or convertible into or carrying rights to acquire shares
of Parent Common Stock) to the holders of all or substantially all of the
then outstanding shares of Parent Common Stock by way of stock dividend or
other distribution, other than an issue of shares of Parent Common Stock
(or securities exchangeable for or convertible into or carrying rights to
acquire shares of Parent Common Stock) to holders of shares of Parent
Common Stock who exercise an option to receive dividends in shares of
Parent Common Stock (or securities exchangeable for or convertible into or
carrying rights to acquire shares of Parent Common Stock) in lieu of
receiving cash dividends;
(ii) issue or distribute rights, options or warrants to the holders of
all or substantially all of the then outstanding shares of Parent Common
Stock entitling them to subscribe for or to purchase shares of Parent
Common Stock (or securities exchangeable for or convertible into or
carrying rights to acquire shares of Parent Common Stock); or
(iii) issue or distribute to the holders of all or substantially all
of the then outstanding shares of Parent Common Stock (A) shares or
securities of the Parent of any class other than Parent Common Stock (other
than shares convertible into or exchangeable for or carrying rights to
acquire shares of Parent Common Stock), (B) rights, options or warrants
other than those referred to in Section 6.7(a)(ii) above, (C) evidences of
indebtedness of the Parent or (D) assets of the Parent;
unless (x) the Corporation is permitted under applicable law to issue
or distribute the economic equivalent on a per share basis of such rights,
options, warrants, securities, shares, evidences of indebtedness or other
assets to holders of the Exchangeable Shares and (y) the Corporation shall
issue or distribute such rights, options, warrants, securities, shares,
evidences of indebtedness or other assets simultaneously to holders of the
Exchangeable Shares.
(b) The Parent will not without the prior approval of the Corporation and
the prior approval of the holders of the Exchangeable Shares given in accordance
with Section 8.2 of the Exchangeable Share Provisions:
(i) subdivide or change the then outstanding shares of Parent Common
Stock into a
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greater number of shares of Parent Common Stock; or
(ii) reduce, combine, consolidate or change the then outstanding
shares of Parent Common Stock into a lesser number of shares of Parent
Common Stock; or
(iii) reclassify or otherwise change the shares of Parent Common Stock
or effect an amalgamation, merger, reorganization or other transaction
affecting the shares of Parent Common Stock;
unless (x) the Corporation is permitted under applicable law to simultaneously
make the same or an economically equivalent change to, or in the rights of
holders of, the Exchangeable Shares and (y) the same or an economically
equivalent change is made to, or in the rights of the holders of, the
Exchangeable Shares.
(c) The Parent will ensure that the record date for any event referred to
in Section 0 or 0 above, or (if no record date is applicable for such event) the
effective date for any such event, is not less than 20 Business Days after the
date on which such event is declared or announced by the Parent (with
simultaneous notice thereof to be given by the Parent to the Corporation).
(d) The Board of Directors shall determine, in good faith and in its sole
discretion (with the assistance of such reputable and qualified independent
financial advisors and/or other experts as the Board of Directors may require),
economic equivalence for the purposes of any event referred to in Section 0 or 0
and each such determination shall be conclusive and binding on the Parent. In
making each such determination, the following factors shall, without excluding
other factors determined by the Board of Directors to be relevant, be considered
by the Board of Directors:
(i) in the case of any stock dividend or other distribution payable in
shares of Parent Common Stock, the number of such shares issued in
proportion to the number of shares of Parent Common Stock previously
outstanding;
(ii) in the case of the issuance or distribution of any rights,
options or warrants to subscribe for or purchase shares of Parent Common
Stock (or securities exchangeable for or convertible into or carrying
rights to acquire shares of Parent Common Stock), the relationship between
the exercise price of each such right, option or warrant and the current
market value (as determined by the Board of Directors in the manner above
contemplated) of a share of Parent Common Stock;
(iii) in the case of the issuance or distribution of any other form of
property (including without limitation any shares or securities of the
Parent of any class other than Parent Common Stock, any rights, options or
warrants other than those referred to in Section 0 above, any evidences of
indebtedness of the Parent or any assets of the Parent), the relationship
between the fair market value (as determined by the Board of Directors in
the manner above contemplated) of such property to be issued or distributed
with respect to each outstanding share of Parent Common Stock and the
current market value (as determined by the Board of Directors in the manner
above contemplated) of a share of Parent Common Stock;
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(iv) in the case of any subdivision or change of the then outstanding
shares of Parent Common Stock into a greater number of shares of Parent
Common Stock or the reduction, combination or consolidation or change of
the then outstanding shares of Parent Common Stock into a lesser number of
shares of Parent Common Stock or any amalgamation, merger, reorganization
or other transaction affecting the Parent Common Stock, the effect thereof
upon the then outstanding shares of Parent Common Stock; and
(v) in all such cases, the general taxation consequences of the
relevant event to holders of Exchangeable Shares to the extent that such
consequences may differ from the taxation consequences to holders of shares
of Parent Common Stock as a result of differences between taxation laws of
Canada and the United States (except for any differing consequences arising
as a result of differing marginal taxation rates and without regard to the
individual circumstances of holders of Exchangeable Shares).
For purposes of the foregoing determinations, the current value of any
security listed and traded or quoted on a securities exchange or automated
quotation system shall be the weighted average of the daily trading prices of
such security during a period of not less than 20 consecutive trading days
ending not more than five trading days before the date of determination on the
principal securities exchange or automated quotation system on which such
securities are listed and traded or quoted; provided, however, that if in the
opinion of the Board of Directors the public distribution or trading activity of
such securities during such period does not create a market that reflects the
fair market value of such securities, then the current market value thereof
shall be determined by the Board of Directors, in good faith and in its sole
discretion (with the assistance of such reputable and qualified independent
financial advisors and/or other experts as the board may require), and provided
further that any such determination by the Board of Directors shall be
conclusive and binding on the Parent.
6.8 Tender Offers, etc. In the event that a tender offer, share exchange
offer, issuer bid, take-over bid or similar transaction with respect to Parent
Common Stock (each, an "Offer") is proposed by the Parent or is proposed to the
Parent or its shareholders and is recommended by the Parent Board of Directors,
or is otherwise effected or to be effected with the consent or approval of the
Parent Board of Directors, the Parent will use reasonable efforts (to the
extent, in the case of an Offer by a third party, within its control)
expeditiously and in good faith to take all such actions and do all such things
as are necessary or desirable to enable and permit holders of Exchangeable
Shares to participate in such Offer to the same extent and on an economically
equivalent basis as the holders of shares of Parent Common Stock, without
discrimination. Without limiting the generality of the foregoing, the Parent
will use reasonable efforts expeditiously and in good faith to ensure that
holders of Exchangeable Shares may participate in all such Offers without being
required to retract Exchangeable Shares as against the Corporation (or, if so
required, to ensure that any such retraction shall be effective only upon, and
shall be conditional upon, the closing of the Offer and only to the extent
necessary to tender or deposit to the Offer).
6.9 Ownership of Outstanding Shares. Without the prior approval of the
Corporation and the prior approval of the Non-Affiliated Holders given in
accordance with Section 8.2 of the Exchangeable
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Share Provisions, the Parent covenants and agrees that, as long as any
outstanding Exchangeable Shares are owned by any person or entity other than the
Parent or any of its Subsidiaries, the Parent will be and remain the direct or
indirect beneficial owner of all issued and outstanding securities of the
Corporation and of NovaCo carrying or otherwise entitled to voting rights in any
circumstances, other than the Exchangeable Shares and the Preferred Shares.
6.10 Parent Not to Vote Exchangeable Shares. The Parent covenants and
agrees that it will appoint and cause to be appointed proxyholders with respect
to all Exchangeable Shares held by the Parent and its Subsidiaries for the sole
purpose of attending each meeting of holders of Exchangeable Shares in order to
be counted as part of the quorum for each such meeting. The Parent further
covenants and agrees that it will not, and will cause its Subsidiaries not to,
exercise any voting rights that may be exercisable by holders of Exchangeable
Shares from time to time pursuant to the Exchangeable Share Provisions or
pursuant to the provisions of the CBCA (or any successor or other corporate
statute by which the Corporation may in the future be governed) with respect to
any Exchangeable Shares held by it or by its direct or indirect Subsidiaries in
respect of any matter considered at any meeting of holders of Exchangeable
Shares.
6.11 Due Performance. On or after the Effective Date, the Parent and NovaCo
shall duly and timely perform all of their obligations provided for in the
Combination Agreement, including any obligations that may arise upon the
exercise of rights by any holder of Exchangeable Shares (including the Parent)
under the Exchangeable Share Provisions.
6.12 Issue of Additional Shares. During the term of this trust agreement,
the Parent will not issue any shares of Special Voting Stock of the Parent, par
value US$0.001, other than the Voting Share.
ARTICLE 7
CONCERNING THE TRUSTEE
7.1 Power and Duties of the Trustee. The rights, powers and authorities of
the Trustee under this trust agreement, in their capacity as mandataries of the
Shareholders, shall include:
(a) receipt and deposit of the Voting Share from the Parent as
mandataries for and on behalf of the Non-Affiliated Holders in accordance
with the provisions of this trust agreement;
(b) granting proxies and distributing materials to Non-Affiliated
Holders as provided in this trust agreement;
(c) voting the Non-Affiliated Holder Votes in accordance with the
provisions of this trust agreement;
(d) receiving the grant of the Exchange Right from the Parent as
mandataries for and on behalf of the Non-Affiliated Holders in accordance
with the provisions of this trust agreement;
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(e) exercising the Exchange Right and enforcing the benefit of the
Automatic Exchange Right in accordance with the provisions of this trust
agreement, and in connection therewith receiving from Non-Affiliated
Holders Exchangeable Shares and other requisite documents and distributing
to such Non-Affiliated Holders the shares of Parent Common Stock and
cheques, if any, to which such Non-Affiliated Holders are entitled upon the
exercise of the Exchange Right or pursuant to the Automatic Exchange Right,
as the case may be;
(f) holding registered title, if applicable, to the Trust Estate;
(g) investing any money forming, from time to time, a part of the
Trust Estate as provided in this trust agreement;
(h) taking action at the direction of a Non-Affiliated Holder to
enforce the obligations of the Corporation and/or NovaCo and/or the Parent
under this trust agreement and/or the Exchangeable Share Provisions; and
(i) taking such other actions and doing such other things as are
specifically provided in this trust 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 trust agreement as
the Trustee, acting in good faith and in the reasonable exercise of its
discretion, may deem necessary, appropriate or desirable to effect the purpose
of its mandate. Any exercise of such discretionary rights,powers and authorities
by the Trustee shall be final, conclusive and binding upon all persons. For
greater certainty, the Trustee shall have only those duties as are set out
specifically in this trust agreement or the Mandate. The Trustee in exercising
its rights, powers, duties and authorities hereunder and thereunder shall act
honestly and in good faith with a view to the best interests of the
Non-Affiliated Holders and shall exercise the care, diligence and skill that a
reasonably prudent mandatary would exercise in comparable circumstances. 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 or by the Mandate
unless and until it shall be specifically required to do so under the terms
hereof or thereof, nor shall the Trustee be required to take any notice of, or
to do or to take any act, action or proceeding as a result of any default or
breach of any provision hereunder, unless and until notified in writing of such
default or breach, which notice shall distinctly specify the default or breach
desired to be brought to the attention of the Trustee and in the absence of such
notice the Trustee may for all purposes of this trust agreement conclusively
assume that no default or breach has been made in the observance or performance
of any of the representations, warranties, covenants, agreements or conditions
contained herein.
7.2 Intentionally deleted.
7.3 Dealings with Transfer Agents, Registrars, etc. The Corporation and the
Parent 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, if any, and with any such subsequent
registrar or transfer agent, if any, of the Exchangeable Shares and the
Parent Common Stock; and
(b) requisition, from time to time, 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 trust agreement. The Parent
covenants that, to the extent required under the Exchangeable Share
Provisions or hereunder, it will supply the Trustee in a timely manner with
duly executed share certificates for the purpose of completing the exercise
from time to time of all rights to acquire Parent Common Stock hereunder,
under the Exchangeable Share Provisions and under any other security or
commitment given to the Non-Affiliated Holders pursuant thereto, in each
case pursuant to the provisions hereof or of the Exchangeable Share
Provisions or otherwise.
7.4 Books and Records. The Trustee shall keep available for inspection by
the Parent and the Corporation, at the principal office of QuebecCo, correct and
complete books and records of account relating to the Trustee's actions under
this trust agreement, including without limitation all information relating to
mailings and instructions to and from Non-Affiliated Holders and all
transactions pursuant to the Voting Rights, Exchange Right and Automatic
Exchange Right for the term of this trust agreement. On or before March 31,
2000, 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 the Parent
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
Non-Affiliated Holders in consideration of the issue and delivery by the Parent
of shares of Parent Common Stock 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 trust agreement which it had
not previously reported.
7.5 Intentionally deleted.
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 trust agreement at the request, order or direction of any Non-Affiliated
Holder upon such Non-Affiliated Holder furnishing to the Trustee reasonable
funding, security and indemnity against the costs, expenses and liabilities that
may be incurred by the Trustee therein or thereby, provided that no
Non-Affiliated Holder shall be obligated to furnish to the Trustee any such
funding, security or indemnity in connection with the exercise by the Trustee of
any of its rights, duties, powers and authorities with respect to the Voting
Share pursuant to Article 0 hereof and with respect to the Exchange Right
pursuant to Article 0 hereof, subject to the provisions of Section 0 hereof.
None of the provisions contained in this trust 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 funds, security and indemnified as aforesaid.
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7.7 Actions by Non-Affiliated Holders. No Non-Affiliated Holder shall have
the right to institute any action, suit or proceeding or to exercise any other
remedy authorized by this trust agreement for the purpose of enforcing any of
its rights or for the execution of any trust or power hereunder unless the
Non-Affiliated Holder has requested the Trustee to take or institute such
action, suit or proceeding and furnished the Trustee with the funding, security
and indemnity referred to in Section 0 hereof and the Trustee shall have failed
to act within a reasonable time thereafter. In such case, but not otherwise, the
Non-Affiliated Holder shall be entitled to take proceedings in any court of
competent jurisdiction such as the Trustee might have taken; it being understood
and intended that no one or more Non-Affiliated Holders shall have any right in
any manner whatsoever to effect, disturb or prejudice the rights hereby created
by any such action, or to enforce any right hereunder or under the Voting Rights
or the Exchange Right except subject to the conditions and in the manner herein
provided, and that all powers and trusts hereunder shall be exercised and all
proceedings at law shall be instituted, had and maintained by the Trustee,
except only as herein provided, and in any event for the equal benefit of all
Non-Affiliated Holders.
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, when required, it acts and relies in good faith upon lists, mailing labels,
notices, statutory declarations, certificates, opinions, reports or other papers
or documents furnished pursuant to the provisions hereof or required by the
Trustee to be furnished to it in the exercise of its rights, powers, duties and
authorities hereunder and such lists, mailing labels, notices, statutory
declarations, certificates, opinions, reports or other papers or documents
comply with the provisions of Section 0 hereof, if applicable, and with any
other applicable provisions of this trust agreement.
7.9 Evidence and Authority to Trustee. The Corporation and/or NovaCo and/or
the Parent shall furnish to the Trustee evidence of compliance with the
conditions provided for in this trust agreement relating to any action or step
required or permitted to be taken by the Corporation and/or NovaCo and/or the
Parent or the Trustee under this trust agreement or as a result of any
obligation imposed under this trust agreement including, without limitation, in
respect of the Voting Rights, the Exchange Right or Automatic Exchange Right and
the taking of any other action to be taken by the Trustee at the request of or
on the application of the Corporation and/or NovaCo and/or the Parent forthwith
if and when:
(a) such evidence is required by any other section of this trust
agreement to be furnished to the Trustee in accordance with the terms of
this Section 0; or
(b) the Trustee, in the exercise of its rights, powers, duties and
authorities under this trust agreement, gives the Corporation and/or NovaCo
and/or the Parent written notice requiring it to furnish such evidence in
relation to any particular action or obligation specified in such notice.
Such evidence shall consist of an Officer's Certificate of the Corporation
and/or NovaCo and/or the Parent or a statutory declaration or a certificate made
by persons entitled to sign an Officer's Certificate stating that any such
condition has been complied with in accordance with the terms of this trust
agreement. Whenever such evidence relates to a matter other than the Voting
Rights or the Exchange Right 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
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authority to a statement made by such person, provided that if such report or
opinion is furnished by a director, officer or employee of the Corporation
and/or NovaCo and/or the Parent it shall be in the form of an Officer's
Certificate or a statutory declaration. Each statutory declaration, certificate,
opinion or report furnished to the Trustee as evidence of compliance with a
condition provided for in this trust agreement shall include a statement by the
person giving the evidence:
(c) declaring that such person has read and understands the provisions
of this trust agreement relating to the condition in question;
(d) describing the nature and scope of the examination or
investigation upon which such person based the statutory declaration,
certificate, statement or opinion; and
(e) declaring that such person has made such examination or
investigation as such person believes is necessary to enable such person to
make the statements or give the opinions contained or expressed therein.
7.10 Experts, Advisors and Agents. The Trustee may:
(a) in relation to these presents act and rely on the opinion or
advice of or information obtained from or prepared by any solicitor,
auditor, accountant, appraiser, valuer, engineer or other expert, whether
retained by the Trustee or by the Corporation and/or NovaCo and/or the
Parent or otherwise, and may employ such assistants as may be necessary to
the proper determination and discharge of its powers and duties and
determination of its rights hereunder and may pay proper and reasonable
compensation for all such legal and other advice or assistance as
aforesaid; and
(b) employ such agents and other assistants as it may reasonably
require for the proper determination and discharge of its powers and duties
hereunder and may pay reasonable remuneration for all services performed
for it (and shall be entitled to receive reasonable remuneration for all
services performed by it) in the discharge of its obligations hereunder and
compensation for all disbursements, costs and expenses made or incurred by
it in the determination and discharge of its duties hereunder and in the
management of the Trust Estate.
7.11 Investment of Money Held by Trustee. Unless otherwise provided in this
trust agreement, any money held by or on behalf of the Trustee which under the
terms of this trust agreement may or ought to be invested or which may be on
deposit with the Trustee or which may be in the hands of the Trustee may be
invested and reinvested in the name or under the control of the Trustee in
securities in which, under the applicable laws of the Province of Quebec,
mandataries with full administration are authorized to invest money under
administration, provided that such securities are stated to mature within two
years after their purchase by the Trustee, and the Trustee shall so invest such
money on the written direction of the Corporation. Pending the investment of any
money as herein before provided, such money may be deposited in the name of the
Trustee in any chartered bank in Canada or, with the consent of the Corporation,
in the deposit department of any loan or trust company authorized to accept
deposits under the laws of Canada or any province thereof at the rate of
interest then current on similar deposits.
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7.12 Trustee Not Required to Give Security. The Trustee shall not be
required to give any bond or security in respect of the execution of the trusts,
rights, duties, powers and authorities of this trust agreement or otherwise in
respect of the premises.
7.13 Trustee Not Bound to Act on Corporation's Request. Except as in this
trust agreement otherwise specifically provided the Trustee shall not be bound
to act in accordance with any direction or request of the Corporation and/or
NovaCo and/or the Parent or of the directors thereof until a duly authenticated
copy of the instrument or resolution containing such direction or request shall
have been delivered to the Trustee, and the Trustee shall be empowered to act
and rely upon any such copy purporting to be authenticated and believed by the
Trustee to be genuine.
7.14 Intentionally deleted.
7.15 Conflicting Claims. If conflicting claims or demands are made or
asserted with respect to any interest of any Non-Affiliated Holder in any
Exchangeable Shares, including any disagreement between the heirs,
representatives, successors or assigns succeeding to all or any part of the
interest of any Non-Affiliated Holder in any Exchangeable Shares resulting in
conflicting claims or demands being made in connection with such interest, then
the Trustee shall be entitled, at its sole discretion, to refuse to recognize or
to comply with any such claim or demand. In so refusing, the Trustee may elect
not to exercise any Voting Rights, the Exchange Right or other 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 other 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 other 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.
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ARTICLE 8
COMPENSATION
8.1 Expenses of the Trustee. The Parent and the Corporation solidarily
agree to reimburse the Trustee for all reasonable expenses (including but not
limited to taxes, compensation paid to experts, agents and advisors and travel
expenses) and disbursements, including the cost and expense of any suit or
litigation of any character and any proceedings before any governmental agency
reasonably incurred by the Trustee in connection with its rights and duties
under this trust agreement; provided that the Parent 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 in bad faith or with negligence or wilful
misconduct.
ARTICLE 9
INDEMNIFICATION AND LIMITATION OF LIABILITY
9.1 Indemnification of the Trustee. The Parent and the Corporation
solidarily agree to indemnity and hold harmless the Trustee and each of its
agents appointed and acting in accordance with this trust agreement
(collectively, the "Indemnified Parties") against all claims, losses, damages,
costs, penalties, fines and reasonable expenses (including reasonable expenses
of the Trustee's legal counsel) which, without fraud, negligence, wilful
misconduct or bad faith on the part of such Indemnified Party, may be paid,
incurred or suffered by the Indemnified Party by reason of or as a result of the
Trustee's administration of the Trust Estate, its compliance with its duties set
forth in this trust agreement, or any written or oral instructions delivered to
the Trustee by the Parent or the Corporation pursuant hereto. In no case shall
the Parent or the Corporation be liable under this indemnity for any claim
against any of the Indemnified Parties if such claim is incurred or suffered by
reason of or as a result of the fraud, negligence, wilful misconduct or bad
faith of an Indemnified Party and unless the Parent 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 information as to the nature and basis of
the claim. Subject to 0, below, the Parent and the Corporation shall be entitled
to participate at their own expense in the defense and, if the Parent or the
Corporation so elect at any time after receipt of such notice, any of them may
assume the defense 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 defense thereof but the fees and expenses of such counsel shall be at the
expense of the Trustee unless: (a) the employment of such counsel has been
authorized by the Parent or the Corporation, such authorization not to be
unreasonably withheld; or (b) the named parties to any such suit include both
the Trustee and the Parent or the Corporation and the Trustee shall have been
advised by counsel acceptable to the Parent or the Corporation that there may be
one or more legal defenses available to the Trustee that are different from or
in addition to those available to the Parent or the Corporation and that an
actual or potential conflict of interest exists (in which case the Parent 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). Such indemnification
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shall survive the resignation or removal of the Trustee and the termination of
this trust agreement.
9.2 Limitation of Liability. The Trustee shall not be held liable for any
loss which may occur by reason of depreciation of the value of any part of the
Trust Estate or any loss incurred on any investment of funds pursuant to this
trust agreement, except to the extent that such loss is attributable to the
fraud, negligence, wilful misconduct or bad faith on the part of the Trustee.
ARTICLE 10
CHANGE OF TRUSTEE
10.1 Filling of Vacancy. The provisions of Part VII of the Mandate shall
apply hereto, mutatis mutandis, with the intent that the Trustee hereunder shall
at all times be the Mandataries thereunder. For greater certainty, any
individual ceasing to be a mandatary under the Mandate shall cease to be a
mandatary of the Shareholders hereunder and any person becoming a Mandatary in
accordance with Part VII of the Mandate shall, subject to the other provisions
of this Article 10, become a mandatary of the Shareholders hereunder.
10.2 Successor Trustee. Any successor mandatary of the Shareholders
appointed as provided under this trust agreement shall execute, acknowledge and
deliver to the Parent, NovaCo and the Corporation an instrument accepting such
appointment. Thereupon such successor, without any further act, deed or
conveyance, shall become vested with all the rights, powers, duties and
obligations of its predecessor under this trust agreement, with like effect as
if originally named as mandatary in this trust agreement. Upon the request of
any such successor, the Parent, NovaCo and the Corporation shall execute any and
all instruments in writing for more fully and certainly vesting in and
confirming to such successor all such rights and powers.
10.3 Notice of Successor Trustee. Upon acceptance of appointment by a
successor mandatary as provided herein, the Parent, NovaCo and the Corporation
shall cause to be mailed notice of such succession to each Non-Affiliated Holder
specified in a List. If the Parent, NovaCo or the Corporation shall fail to
cause such notice to be mailed within 10 days after acceptance of appointment by
the successor, the successor shall cause such notice to be mailed at the expense
of the Parent, NovaCo and the Corporation.
ARTICLE 11
PARENT SUCCESSORS
11.1 Certain Requirements in Respect of Combination, etc. The Parent shall
not enter into any transaction (whether by way of reconstruction,
reorganization, consolidation, merger, transfer, sale, lease of 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:
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(a) such other person or continuing corporation (the "Parent
Successor"), by operation of law, becomes, without more, bound by the terms
and provisions of this trust agreement or, if not so bound, executes, prior
to or contemporaneously with the consummation of such transaction a trust
agreement supplemental hereto and such other instruments (if any) as are
satisfactory to the Trustee and in the opinion of legal counsel to the
Trustee are necessary or advisable to evidence the assumption by the Parent
Successor of liability for all money payable and property deliverable
hereunder and the covenant of such Parent Successor to pay and deliver or
cause to be delivered the same and its agreement to observe and perform all
the covenants and obligations of the Parent under this trust agreement; and
(b) 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
Non-Affiliated Holders hereunder.
11.2 Vesting of Powers in Successor. Whenever the conditions of Section 0
hereof have been duly observed and performed, if required by Section 0 hereof,
the Trustee, the Parent Successor, NovaCo and the Corporation shall execute and
deliver the supplemental trust agreement provided for in Article 0 hereof and
thereupon the Parent Successor shall possess and from time to time may exercise
each and every right and power of the Parent under this trust agreement in the
name of the Parent or otherwise and any act or proceeding by any provision of
this trust agreement required to be done or performed by the Parent Board of
Directors or any officers of the Parent may be done and performed with like
force and effect by the directors or officers of such Parent Successor.
11.3 Wholly-Owned Subsidiaries. Nothing herein shall be construed as
preventing the amalgamation or merger of any wholly-owned Subsidiary of the
Parent with or into the Parent or the winding up, liquidation or dissolution of
any wholly-owned Subsidiary of the Parent provided that all of the assets of
such Subsidiary are transferred to the Parent or another wholly-owned Subsidiary
of the Parent, and any such transactions are expressly permitted by this Article
0.
ARTICLE 12
AMENDMENTS AND SUPPLEMENTAL TRUST AGREEMENTS
12.1 Amendments, Modifications, etc. This trust agreement may not be
amended or modified except by an agreement in writing executed by the
Corporation, the Parent, NovaCo and the Trustee and approved by the
Non-Affiliated Holders in accordance with Section 8.2 of the Exchangeable Share
Provisions.
12.2 Ministerial Amendments. Notwithstanding the provisions of Section 0
hereof, the parties to this trust agreement may in writing, at any time and from
time to time, without the approval of the Non-Affiliated Holders, amend or
modify this trust agreement for the purposes of:
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(a) adding to the covenants of any or all of the parties hereto for
the protection of the Non-Affiliated Holders hereunder;
(b) making such amendments or modifications not inconsistent with this
trust agreement as may be necessary or desirable with respect to matters or
questions which, in the opinion of the Board of Directors and the Parent
Board of Directors and in the opinion of the Trustee and its counsel,
having in mind the best interests of the Non-Affiliated Holders 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 interests of the
Non-Affiliated Holders as a whole; or
(c) making such changes or corrections which, on the advice of counsel
to the Corporation, the Parent 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 and the Parent Board
of Directors shall be of the opinion that such changes or corrections will
not be prejudicial to the interests of the Non-Affiliated Holders as a
whole.
12.3 Meeting to Consider Amendments. The Corporation, at the request of the
Parent, shall call a meeting or meetings of the Non-Affiliated Holders for the
purpose of considering any proposed amendment or modification requiring approval
pursuant hereto. Any such meeting or meetings shall be called and held in
accordance with the by-laws of the Corporation, the Exchangeable Share
Provisions and all applicable laws.
12.4 Changes in Capital of Parent and the Corporation. At all times after
the occurrence of any event effected pursuant to Section 0 or Section 0 hereof,
as a result of which either the Parent Common Stock or the Exchangeable Shares
or both are in any way changed, this trust agreement shall forthwith be amended
and modified as necessary in order that it shall apply with full force and
effect, mutatis mutandis, to all new securities into which the Parent Common
Stock or the Exchangeable Shares or both are so changed and the parties hereto
shall execute and deliver a supplemental trust agreement giving effect to and
evidencing such necessary amendments and modifications.
12.5 Execution of Supplemental Trust Agreements. No amendment to or
modification or waiver of any of the provisions of this trust 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), the Parent (when
authorized by a resolution of the Parent Board of Directors), NovaCo (when
authorized by a resolution of its board of directors) and the Trustee may,
subject to the provisions of these presents, and they shall, when so directed by
these presents, execute and deliver by their proper officers, trust agreements
or other instruments supplemental hereto, which thereafter shall form part
hereof, for any one or more of the following purposes.
(a) evidencing the succession of Parent Successors to the Parent and
the covenants of and obligations assumed by each such Parent Successor in
accordance with the provisions of
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Article 0 hereof and the successor of any successor mandatary in accordance
with the provisions of Article 0 hereof;
(b) making any additions to, deletions from or alterations of the
provisions of this trust agreement or the Voting Rights or the Exchange
Right which, in the opinion of the Trustee and its counsel, will not be
prejudicial to the interests of the Non-Affiliated Holders as a whole or
are in the opinion of counsel to the Trustee necessary or advisable in
order to incorporate, reflect or comply with any legislation the provisions
of which apply to the Parent, the Corporation, the Trustee or this trust
agreement; and
(c) for any other purposes not inconsistent with the provisions of
this trust agreement, including without limitation to make or evidence any
amendment or modification to this trust agreement as contemplated hereby,
provided that, in the opinion of the Trustee and its counsel, the rights of
the Trustee and the Non-Affiliated Holders as a whole will not be
prejudiced thereby.
ARTICLE 13
TERMINATION
13.1 Term. This trust agreement shall continue in effect until the earliest
to occur of the following events:
(a) no outstanding Exchangeable Shares are held by any Non-Affiliated
Holder; and
(b) each of the Corporation, NovaCo and the Parent elects in writing
to terminate this trust agreement and such termination is approved by the
Non-Affiliated Holders of the Exchangeable Shares in accordance with
Section 8.2 of the Exchangeable Share Provisions.
13.2 Survival of Agreement. This trust agreement shall survive and shall
continue until there are no Exchangeable Shares outstanding held by any
Non-Affiliated Holder, provided, however, that the provisions of Articles 0 and
0 hereof and the representation contained in Section 0 hereof shall survive any
such termination of this trust agreement.
ARTICLE 14
GENERAL
14.1 Severability. If any provision of this trust agreement is held to be
invalid, illegal or unenforceable, the validity, legality or enforceability of
the remainder of this trust agreement shall not in any way be affected or
impaired thereby and this trust agreement shall be carried out as nearly as
possible in accordance with its original terms and conditions.
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14.2 Enurements. This trust agreement shall be binding upon and enure to
the benefit of the parties hereto and their respective successors and permitted
assigns and to the benefit of the Non-Affiliated Holders, and with respect to
the representations contained in Section 0, all shareholders of the Corporation
who receive Parent Common Stock through holding Exchangeable Shares.
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 the Parent, NovaCo 440 Xxxx Xxxxxxxx West
or the Corporation, at: Xxxxx 000
Xxxxxxxx, Xxxxxx
X0X 0X0
Attention: Xxxxxx Xxxxx
Telecopy: (000) 000-0000
(b) if to the Trustee at: c/o Xxxxxx Xxxxx
000 Xxxx Xxxxxxxx Xxxx Xxxxx 000
Xxxxxxxx, Xxxxxx
X0X 0X0
Telecopy: (000) 000-0000
Any notice or other communication given personally shall be deemed to have
been given and received upon delivery thereof and if given by telecopy shall be
deemed to have been given and received on the date of receipt thereof unless
such day is not a Business Day in which case it shall be deemed to have been
given and received upon the immediately following Business Day.
14.4 Notice of Non-Affiliated Holders. Any and all notices to be given and
any documents to be sent to any Non-Affiliated Holders may be given or sent to
the address of such holder shown on the register of holders of Exchangeable
Shares in any manner permitted by the CBCA 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 Act, the provisions of which Act
shall apply mutatis mutandis to notices or documents as aforesaid 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 Non-Affiliated Holder by the Trustee, by the
Corporation, by NovaCo or the Parent or by such Non-Affiliated Holder to the
Trustee, the Parent, NovaCo or the Corporation, the making of such payment or
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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, the
Corporation, NovaCo or the Parent and the Non-Affiliated Holder, in the case of
payments made or documents sent by the Non-Affiliated Holder.
14.6 Counterparts. This trust agreement may be executed in counterparts,
each of which shall be deemed an original, but all of which taken together shall
constitute one and the same instrument.
14.7 Jurisdiction. This trust agreement shall be construed and enforced in
accordance with the laws of the Province of Quebec and the laws of Canada
applicable therein.
14.8 Attornment. The Parent, NovaCo and the Corporation each agree that any
action or proceeding arising out of or relating to this trust agreement may be
instituted in the courts of Quebec, waives any objection which it may have now
or hereafter to the venue of any such action or proceeding, irrevocably submits
to the jurisdiction of the said courts in any such action or proceeding, agrees
to be bound by any judgment of the said courts and agrees not to seek, and
hereby waives, any review of the merits of any such judgment by the courts of
any other jurisdiction and hereby appoints the Trustee at its address set forth
in Section 14.3 hereof as its attorney for service of process.
14.9 Plural, Singular, Gender. When the context in which the words are used
in this agreement indicates that such is the intent, words in the singular
number shall include the plural and vice versa. References to any gender shall
include any other gender as may be applicable under the circumstances.
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14.10 Language. The parties acknowledge that they have requested that this
agreement and all ancillary documents be drawn up in the English language only.
Les parties reconnaissent avoir exige que cette convention ainsi que tous les
documents y afferents soient rediges en anglais seulement.
IN WITNESS WHEREOF, the parties hereto have caused this trust agreement to
be duly executed as of the date first above written.
PLANET 000.XXX CORPORATION
By: /s/ Xxxxxxxx Xxxxxxxxx
---------------------------------
Name: Xxxxxxxx Xxxxxxxxx
Title:
3560309 CANADA INC.
By: /s/ Xxxxxxx Xxxxxx
---------------------------------
Name: Xxxxxxx Xxxxxx
Title:
PLANET 411 (NOVA SCOTIA) COMPANY
By: /s/ Xxxxxx Xxxxx
---------------------------------
Name: Xxxxxx Xxxxx
Title:
/s/ Xxxxxx Xxxxx
XXXXXX XXXXX
/s/ Xxxxxxxx Xxxxxxxxx
XXXXXXXX XXXXXXXXX
/s/ Xxxxxxx Xxxxxx
XXXXXXX XXXXXX
