EXHIBIT 9.1
VOTING AND EXCHANGE TRUST AGREEMENT
MEMORANDUM OF AGREEMENT made as of the 3rd day of December, 2001, by and
among Solectron Corporation, a corporation existing under the laws of Delaware
(hereinafter referred to as "PARENT"), Solectron Global Services Canada Inc., a
corporation existing under the laws of Canada (hereinafter referred to as
"EXCHANGECO"), and National Bank Trust Inc., a trust company incorporated under
the laws of Quebec (hereinafter referred to as "TRUSTEE").
RECITALS:
(a) In connection with a combination agreement ("COMBINATION
AGREEMENT") dated as of August 8, 2001, as amended by way of an
amending agreement dated as of September 7, 2001, by and among
Parent, Exchangeco, 3924548 Canada Inc. and C-MAC Industries Inc.
("COMPANY"), as further amended, supplemented and/or restated,
Exchangeco is to issue exchangeable shares to certain holders of
securities of Company pursuant to the plan of arrangement
contemplated in the Combination Agreement; and
(b) Pursuant to the Combination Agreement, Parent and Exchangeco are
required to execute a voting and exchange trust agreement
substantially in the form of this Agreement.
In consideration of the foregoing and the mutual agreements contained
herein (the receipt and adequacy of which are acknowledged), the parties agree
as follows:
ARTICLE 1
DEFINITIONS AND INTERPRETATION
1.1 DEFINITIONS
In this Agreement, the following terms shall have the following meanings:
"AFFILIATE" has the meaning ascribed thereto in the CBCA.
"ARRANGEMENT" means the arrangement under section 192 of the CBCA on the
terms and subject to the conditions set out in the Plan of Arrangement.
"AUTOMATIC EXCHANGE RIGHTS" means the benefit of the obligation of Parent
to effect the automatic exchange of Exchangeable Shares for Parent Common
Shares pursuant to section 5.12.
"BENEFICIARIES" means the registered holders from time to time of
Exchangeable Shares, other than Parent and Parent's Affiliates.
"BENEFICIARY VOTES" has the meaning ascribed thereto in section 4.2.
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"BOARD OF DIRECTORS" means the Board of Directors of Exchangeco.
"BUSINESS DAY" means any day on which commercial banks are open for
business in Milpitas, California, New York, New York and Montreal,
Quebec, other than a Saturday, a Sunday or a day observed as a holiday in
Milpitas, California under applicable laws, in Montreal, Quebec under
applicable laws or in New York, New York under applicable laws.
"CALLCO" means 3942163 Canada Inc., a corporation existing under the laws
of Canada, and being a wholly-owned indirect subsidiary of Parent and a
corporation for U.S. federal income tax purposes.
"CANADIAN DOLLAR EQUIVALENT" means, in respect of an amount expressed in
a currency other than Canadian dollars (the "FOREIGN CURRENCY AMOUNT") at
any date, the product obtained by multiplying (a) the Foreign Currency
Amount by (b) the noon spot exchange rate on such date for such foreign
currency expressed in Canadian dollars as reported by the Bank of Canada
or, in the event such spot exchange rate is not available, such exchange
rate on such date for such foreign currency expressed in Canadian dollars
as may be determined by the Board of Directors to be appropriate for such
purpose.
"CBCA" means the Canada Business Corporations Act, as amended from time
to time.
"COURT" means the Superior Court of Justice (Quebec).
"CURRENT MARKET PRICE" means, in respect of a Parent Common Share on any
date, the Canadian Dollar Equivalent of the average of the closing prices
of Parent Common Shares during a period of 20 consecutive trading days
ending not more than three trading days before such date on the NYSE, or,
if the Parent Common Shares are not then listed on the NYSE, on such
other stock exchange or automated quotation system on which the Parent
Common Shares are listed or quoted, as the case may be, as may be
selected by the Board of Directors for such purpose; provided however,
that if in the opinion of the Board of Directors the public distribution
or trading activity of Parent Common Shares during such period does not
create a market which reflects the fair market value of a Parent Common
Share, then the Current Market Price of a Parent Common Share shall be
determined by the Board of Directors, in good faith and in its sole
discretion, and provided further that any such selection, opinion or
determination by the Board of Directors shall be conclusive and binding.
"EXCHANGE RIGHT" has the meaning ascribed thereto in section 5.1.
"EXCHANGEABLE SHARES" means the non-voting exchangeable shares in the
capital of Exchangeco, having the rights, privileges, restrictions and
conditions set out in Appendix 1 to the Plan of Arrangement.
"GOVERNMENTAL ENTITY" means any court, administrative agency, tribunal,
bureau, board, commission, public authority, governmental or regulatory
authority, agency, ministry, crown corporation or other law, rule-or
regulation-making entity, domestic or foreign, or any quasi-governmental
body, self-regulatory organization or stock exchange, including without
limitation The Toronto Stock Exchange or the NYSE.
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"INDEMNIFIED PARTIES" has the meaning ascribed thereto in section 9.1.
"INSOLVENCY EVENT" means (i) the institution by Exchangeco of any
proceeding to be adjudicated a bankrupt or insolvent or to be wound up,
or the consent of Exchangeco to the institution of bankruptcy, insolvency
or winding-up proceedings against it, or (ii) the filing of a petition,
answer or consent seeking dissolution or winding-up under any bankruptcy,
insolvency or analogous laws, including without limitation the Companies
Creditors' Arrangement Act (Canada) and the Bankruptcy and Insolvency Act
(Canada), and the failure by Exchangeco to contest in good faith any such
proceedings commenced in respect of Exchangeco within 30 days of becoming
aware thereof, or the consent by Exchangeco to the filing of any such
petition or to the appointment of a receiver, or (iii) the making by
Exchangeco of a general assignment for the benefit of creditors, or the
admission in writing by Exchangeco of its inability to pay its debts
generally as they become due, or (iv) Exchangeco not being permitted,
pursuant to solvency requirements of applicable law, to redeem any
Retracted Shares pursuant to section 6.6 of the Share Provisions.
"LIQUIDATION CALL RIGHT" has the meaning ascribed thereto in the Plan of
Arrangement.
"LIQUIDATION EVENT" has the meaning ascribed thereto in section 5.12.
"LIQUIDATION EVENT EFFECTIVE DATE" has the meaning ascribed thereto in
section 5.12.
"LIST" has the meaning ascribed thereto in section 4.6.
"NOVA SCOTIA COMPANY" means Solectron Canada ULC, an unlimited liability
company existing under the laws of Nova Scotia, being a wholly-owned
direct subsidiary of Parent.
"NYSE" means the New York Stock Exchange, Inc. or its successors.
"OFFICER'S CERTIFICATE" means, with respect to Parent or Exchangeco, as
the case may be, a certificate signed by any officer or director of
Parent or Exchangeco, as the case may be.
"PARENT CALL RIGHT" has the meaning ascribed thereto in the Plan of
Arrangement.
"PARENT COMMON SHARE" means a share of common stock in the capital of
Parent and any other securities into which such shares may be changed
and, in the event of any transaction described in Section 11.1, the
corresponding shares in the capital of Parent Successor.
"PARENT CONSENT" has the meaning ascribed thereto in section 4.2.
"PARENT MEETING" has the meaning ascribed thereto in section 4.2.
"PARENT SUCCESSOR" has the meaning ascribed thereto in section 11.1(a).
"PERSON" means any individual, corporation (including any non-profit
corporation), general partnership, limited partnership, limited liability
partnership, joint venture, estate,
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trust, company (including any limited liability company or joint stock
company), firm or other enterprise, association, organization, entity or
Governmental Entity.
"PLAN OF ARRANGEMENT" means the plan of arrangement relating to the
arrangement of CMAC Industries Inc. under section 192 of the CBCA and any
amendments or variations thereto made in accordance with the Plan of
Arrangement or made at the direction of the Court.
"REDEMPTION CALL RIGHT" has the meaning ascribed thereto in the Plan of
Arrangement.
"RETRACTED SHARES" has the meaning ascribed thereto in section 5.7.
"RETRACTION CALL RIGHT" has the meaning ascribed thereto in the Share
Provisions.
"SHARE PROVISIONS" means the rights, privileges, restrictions and
conditions attaching to the Exchangeable Shares set forth in Appendix 1
to the Plan of Arrangement.
"SPECIAL VOTING SHARE" means the share of Series B Preferred Stock of
Parent which entitles the holder of record of such share to a number of
votes at meetings of holders of Parent Common Shares equal to the number
of votes that the holders of Exchangeable Shares outstanding from time to
time (other than Exchangeable Shares held by Parent or subsidiaries of
Parent or held by Persons directly or indirectly controlled by or under
common control with Parent, all as set out in the share provisions
attaching to such share of Series B Preferred Stock) would be entitled to
if all such Exchangeable Shares were exchanged by the holders thereof for
Parent Common Shares pursuant to the terms of the Exchangeable Shares,
which share is to be issued to, deposited with and voted by the Trustee
as described herein.
"SUPPORT AGREEMENT" means the Exchangeable Share support agreement made
among Exchangeco, Callco, Nova Scotia Company and Parent substantially in
the form and content of Exhibit D to the Combination Agreement, as
amended pursuant to the terms of the Support Agreement.
"TRUST" means the bare trust created by this Agreement under the laws of
the Province of Ontario.
"TRUST ESTATE" means the Special Voting Share, any other securities, the
Exchange Right, the Automatic Exchange Rights and any money or other
property which may be held by the Trustee from time to time pursuant to
this Agreement.
"TRUSTEE" means National Bank Trust Inc. and, subject to the provisions
of Article 10, includes any successor trustee.
"VOTING RIGHTS" means the voting rights attached to the Special Voting
Share.
1.2 INTERPRETATION NOT AFFECTED BY HEADINGS, ETC.
The division of this Agreement into Articles, Sections and other portions
and the insertion of headings are for convenience of reference only and should
not affect the construction or interpretation of this Agreement. Unless
otherwise indicated, all references to an "ARTICLE" or
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"SECTION" followed by a number or a letter refer to the specified Article or
section of this Agreement. The terms "THIS AGREEMENT", "HEREOF", "HEREIN" and
"HEREUNDER" and similar expressions refer to this Agreement and not to any
particular Article, section or other portion hereof and include any agreement or
instrument supplementary or ancillary hereto.
1.3 NUMBER, GENDER, ETC.
Words importing the singular number only shall include the plural and
vice versa. Words importing any gender shall include all genders.
1.4 DATE FOR ANY ACTION
If any date on which any action is required to be taken under this
Agreement is not a Business Day, such action shall be required to be taken on
the next succeeding Business Day.
ARTICLE 2
PURPOSE OF AGREEMENT
2.1 ESTABLISHMENT OF TRUST
The purpose of this Agreement is to create the Trust for the benefit of
the Beneficiaries, as herein provided. The Trustee will hold the Special Voting
Share in order to enable the Trustee to exercise the Voting Rights and will hold
the Exchange Right and the Automatic Exchange Rights in order to enable the
Trustee to exercise such rights, in each case as trustee for and on behalf of
the Beneficiaries as provided in this Agreement.
ARTICLE 3
SPECIAL VOTING SHARE
3.1 ISSUE AND OWNERSHIP OF THE SPECIAL VOTING SHARE
Immediately following execution of this Agreement, Parent shall issue to
and deposit with the Trustee the Special Voting Share (and shall deliver the
certificate representing such share to the Trustee) to be hereafter held of
record by the Trustee as trustee for and on behalf of, and for the use and
benefit of, the Beneficiaries and in accordance with the provisions of this
Agreement. Parent hereby acknowledges receipt from the Trustee as trustee for
and on behalf of the Beneficiaries of U.S.$1.00 and other good and valuable
consideration (and the adequacy thereof) for the issuance of the Special Voting
Share by Parent to the Trustee. During the term of the Trust and subject to the
terms and conditions of this Agreement, the Trustee shall possess and be vested
with full legal ownership of the Special Voting Share and shall be entitled to
exercise all of the rights and powers of an owner with respect to the Special
Voting Share, provided that the Trustee shall:
(a) hold the Special Voting Share and the legal title thereto as
trustee solely for the use and benefit of the Beneficiaries in
accordance with the provisions of this Agreement; and
(b) except as specifically authorized by this Agreement, have no
power or authority to sell, transfer, vote or otherwise deal in
or with the Special Voting Share and the Special Voting Share
shall not be used or disposed of by the Trustee for any
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purpose (including for exercising dissent or appraisal rights
relating to the Special Voting Share) other than the purposes
for which this Trust is created pursuant to this Agreement.
3.2 LEGENDED SHARE CERTIFICATES
Exchangeco will cause each certificate representing Exchangeable Shares
to bear an appropriate legend notifying the Beneficiaries of their right to
instruct the Trustee with respect to the exercise of the Voting Rights in
respect of the Exchangeable Shares of the Beneficiaries.
3.3 SAFE KEEPING OF CERTIFICATE
The certificate representing the Special Voting Share shall at all times
be held in safe keeping by the Trustee.
ARTICLE 4
EXERCISE OF VOTING RIGHTS
4.1 VOTING RIGHTS
The Trustee, as the holder of record of the Special Voting Share, shall
be entitled to all of the Voting Rights, including the right to vote in person
or by proxy the Special Voting Share on any matters, questions, proposals or
propositions whatsoever that may properly come before the stockholders of 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 the terms
of this Agreement. Subject to section 7.15:
(a) the Trustee shall exercise the Voting Rights only on the basis of
instructions received pursuant to this Article 4 from
Beneficiaries on the record date established by Parent or by
applicable law for such Parent Meeting or Parent Consent who are
entitled to instruct the Trustee as to the voting thereof; and
(b) to the extent that no instructions are received from a
Beneficiary with respect to the Voting Rights to which such
Beneficiary is entitled, the Trustee shall not exercise or permit
the exercise of such Voting Rights.
4.2 NUMBER OF VOTES
With respect to all meetings of stockholders of Parent at which holders
of Parent Common Shares are entitled to vote (each, a "PARENT MEETING") and with
respect to all written consents sought by Parent from its stockholders including
the holders of Parent Common Shares (each, a "PARENT CONSENT"), each Beneficiary
shall be entitled to instruct the Trustee to cast and exercise the votes
comprised in the Voting Rights for each Exchangeable Share owned of record by
such Beneficiary on the record date established by Parent or by applicable law
for such Parent Meeting or Parent Consent, as the case may be (the "BENEFICIARY
VOTES"), in respect of each matter, question, proposal or proposition to be
voted on at such Parent Meeting or in connection with such Parent Consent.
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4.3 MAILINGS TO STOCKHOLDERS
With respect to each Parent Meeting and Parent Consent, the Trustee will
promptly mail or cause to be mailed (or otherwise communicate in the same manner
as Parent utilizes in communications to holders of Parent Common Shares, subject
to applicable regulatory requirements and the Trustee being advised in writing
as to that manner of communications, and provided that such manner of
communications is reasonably available to the Trustee) to each of the
Beneficiaries named in the List, such mailing or communication to commence
wherever practicable on the same day as the mailing or notice (or other
communication) with respect thereto is commenced by Parent to its stockholders:
(a) a copy of such notice, together with any related materials,
including, without limitation, any circular or information
statement or listing particulars, to be provided to stockholders
of Parent in connection with the Parent Meeting or Parent
Consent;
(b) a statement that such Beneficiary is entitled to instruct the
Trustee as to the exercise of the Beneficiary Votes with respect
to such Parent Meeting or Parent Consent or, pursuant to section
4.7, to attend such Parent Meeting and to exercise personally the
Beneficiary Votes thereat;
(c) a statement as to the manner in which such instructions may be
given to the Trustee, including an express indication that
instructions may be given to the Trustee to give:
(i) a proxy to such Beneficiary or his designee to exercise
personally the Beneficiary Votes; or
(ii) a proxy to a designated agent or other representative of
the management of Parent to exercise such Beneficiary
Votes;
(d) a statement that if no such instructions are received from the
Beneficiary, the Beneficiary Votes to which such Beneficiary is
entitled will not be exercised;
(e) a form of direction whereby the Beneficiary may instruct the
Trustee as to voting and as otherwise contemplated herein; and
(f) a statement of the time and date by which such instructions must
be received by the Trustee in order to be binding upon it, which
in the case of a Parent Meeting shall not be earlier than the
close of business on the second Business Day prior to such
meeting, and of the method for revoking or amending such
instructions.
The materials referred to in this section 4.3 are to be provided to the
Trustee by Parent, and the materials referred to in section 4.3(c), section
4.3(e) and section 4.3(f) shall be subject to reasonable comment by the Trustee
in a timely manner. Parent shall ensure that the materials to be provided to the
Trustee are provided in sufficient time to permit the Trustee to comment as
aforesaid and to send all materials to each Beneficiary at the same time as such
materials are first sent to holders of Parent Common Shares. Parent agrees not
to communicate with holders of Parent Common Shares with respect to the
materials referred to in this section 4.3 otherwise than
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by mail unless such method of communication is also reasonably available to the
Trustee for communication with the Beneficiaries.
For the purpose of determining Beneficiary Votes to which a Beneficiary
is entitled in respect of any Parent Meeting or Parent Consent, the number of
Exchangeable Shares owned of record by the Beneficiary shall be determined at
the close of business on the record date established by Parent or by applicable
law for purposes of determining shareholders entitled to vote at such Parent
Meeting or in respect of such Parent Consent. Parent will notify the Trustee of
any decision of the Board of Directors of Parent with respect to the calling of
any Parent Meeting and shall provide all necessary information and materials to
the Trustee in each case promptly and in any event in sufficient time to enable
the Trustee to perform its obligations contemplated by this section 4.3.
4.4 COPIES OF SHAREHOLDER INFORMATION
Parent will deliver to the Trustee copies of all proxy materials
(including notices of Parent Meetings but excluding proxies to vote Parent
Common Shares), information statements, reports (including without limitation,
all interim and annual financial statements) and other written communications
that, in each case, are to be distributed by Parent from time to time to holders
of Parent Common Shares in sufficient quantities and in sufficient time so as to
enable the Trustee to send those materials to each Beneficiary at the same time
as such materials are first sent to holders of Parent Common Shares. The Trustee
will mail or otherwise send to each Beneficiary, at the expense of Parent,
copies of all such materials (and all materials specifically directed to the
Beneficiaries or to the Trustee for the benefit of the Beneficiaries by Parent)
received by the Trustee from Parent contemporaneously with the sending of such
materials to holders of Parent Common Shares. The Trustee will also make
available for inspection by any Beneficiary at the Trustee's principal office in
Toronto and in Montreal all proxy materials, information statements, reports and
other written communications that are:
(a) received by the Trustee as the registered holder of the Special
Voting Share and made available by Parent generally to the
holders of Parent Common Shares; or
(b) specifically directed to the Beneficiaries or to the Trustee for
the benefit of the Beneficiaries by Parent.
4.5 OTHER MATERIALS
As soon as reasonably practicable after receipt by Parent or shareholders
of Parent (if such receipt is known by Parent) of any material sent or given by
or on behalf of a third party to holders of Parent Common Shares generally,
including without limitation, dissident proxy and information circulars (and
related information and material) and take-over bid and securities exchange
take-over bid circulars (and related information and material), provided such
material has not been sent to the Beneficiaries by or on behalf of such third
party, Parent shall use its reasonable efforts to obtain and deliver to the
Trustee copies thereof in sufficient quantities so as to enable the Trustee to
forward such material (unless the same has been provided directly to
Beneficiaries by such third party) to each Beneficiary as soon as possible
thereafter. As soon as reasonably practicable after receipt thereof, the Trustee
will mail or otherwise send to each Beneficiary, at the expense of Parent,
copies of all such materials received by the Trustee from Parent. The Trustee
will also make available for inspection during regular business hours by any
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Beneficiary at the Trustee's principal office in Toronto and in Montreal copies
of all such materials.
4.6 LIST OF PERSONS ENTITLED TO VOTE
Exchangeco 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 Beneficiaries arranged in
alphabetical order and showing the number of Exchangeable Shares held of record
by each such Beneficiary, in each case at the close of business on the date
specified by the Trustee in such request or, in the case of a List prepared in
connection with a Parent Meeting or a Parent Consent, at the close of business
on the record date established by Parent or pursuant to applicable law for
determining the holders of Parent Common Shares entitled to receive notice of 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 Exchangeco 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
permit the Trustee to perform its obligations under this Agreement. Parent
agrees to give Exchangeco 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 Exchangeco to perform its
obligations under this section 4.6.
4.7 ENTITLEMENT TO DIRECT VOTES
Subject to sections 4.8 and 4.11, any Beneficiary named in a List
prepared in connection with any Parent Meeting or Parent Consent will be
entitled (a) to instruct the Trustee in the manner described in section 4.3 with
respect to the exercise of the Beneficiary Votes to which such Beneficiary is
entitled or (b) to attend such meeting and personally exercise thereat, as the
proxy of the Trustee, the Beneficiary Votes to which such Beneficiary is
entitled.
4.8 VOTING BY TRUSTEE AND ATTENDANCE OF TRUSTEE REPRESENTATIVE AT MEETING
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 Beneficiary pursuant to section 4.3, the
Beneficiary Votes as to which such Beneficiary is entitled to direct the vote
(or any lesser number thereof as may be set forth in the instructions);
provided, however, that such written instructions are received by the Trustee
from the Beneficiary prior to the time and date fixed by the Trustee for receipt
of such instructions in the notice given by the Trustee to the Beneficiary
pursuant to section 4.3.
The Trustee shall cause a representative who is empowered by it to sign
and deliver, on behalf of the Trustee, proxies for Voting Rights to attend each
Parent Meeting. Upon submission by a Beneficiary (or its designee) of
identification satisfactory to the Trustee's representative, and at the
Beneficiary's request, such representative shall sign and deliver to such
Beneficiary (or its designee) a proxy to exercise personally the Beneficiary
Votes as to which such Beneficiary is otherwise entitled hereunder to direct the
vote, if such Beneficiary either (i) has not previously given the Trustee
instructions pursuant to section 4.3 in respect of such meeting or (ii) submits
to such representative written revocation of any such previous instructions. At
such meeting, the Beneficiary exercising such Beneficiary Votes shall have the
same rights as the Trustee to speak
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at the meeting in favour of any matter, question, proposal or proposition, to
vote by way of ballot at the meeting in respect of any matter, question,
proposal or proposition, and to vote at such meeting by way of a show of hands
in respect of any matter, question or proposition.
4.9 DISTRIBUTION OF WRITTEN MATERIALS
Any written materials distributed by the Trustee pursuant to this
Agreement shall be sent by mail (or otherwise communicated in the same manner as
Parent utilizes in communications to holders of Parent Common Shares, subject to
applicable regulatory requirements and the Trustee being advised in writing as
to that manner of communications, and provided such manner of communications is
reasonably available to the Trustee) to each Beneficiary at its address as shown
on the books of Exchangeco. Exchangeco shall provide or cause to be provided to
the Trustee for purposes of communication, on a timely basis and without charge
or other expense:
(a) a current List; and
(b) upon the request of the Trustee, mailing labels to enable the
Trustee to carry out its duties under this Agreement.
4.10 TERMINATION OF VOTING RIGHTS
All of the rights of a Beneficiary with respect to the Beneficiary Votes
exercisable in respect of the Exchangeable Shares held by such Beneficiary,
including the right to instruct the Trustee as to the voting of or to vote
personally such Beneficiary Votes, shall be deemed to be surrendered by the
Beneficiary to Parent, Callco, Nova Scotia Company or Exchangeco, as the case
may be, and such Beneficiary Votes and the Voting Rights represented thereby
shall cease immediately upon (i) the valid exercise by the Beneficiary of the
Exchange Right, or the occurrence of the automatic exchange of Exchangeable
Shares for Parent Common Shares as specified in Article 5 (unless, in either
case, Parent shall not have delivered or caused to be delivered the requisite
Parent Common Shares issuable in exchange therefor to the Trustee pending
delivery to the Beneficiaries), or (ii) the retraction or redemption of
Exchangeable Shares pursuant to Article 6 or 7 of the Share Provisions, or (iii)
the effective date of the liquidation, dissolution or winding-up of Exchangeco
pursuant to Article 5 of the Share Provisions, or (iv) the purchase of
Exchangeable Shares from the holder thereof by Callco or Parent, as the case may
be, pursuant to the exercise by Callco of the Retraction Call Right, the
Redemption Call Right or the Liquidation Call Right or the exercise by Parent of
the Parent Call Right.
4.11 DISCLOSURE OF INTEREST IN EXCHANGEABLE SHARES
The Trustee or Exchangeco shall be entitled to require any Beneficiary or
any Person who the Trustee or Exchangeco know or have reasonable cause to
believe to hold any interest whatsoever in an Exchangeable Share to confirm that
fact or to give such details as to who has an interest in such Exchangeable
Share as would be required (if the Exchangeable Shares were a class of "equity
shares" of Exchangeco) under section 101 of the Securities Act (Ontario) or
under section 147.11 of the Securities Act (Quebec), as each may be amended from
time to time, or as would be required under the articles of Parent or any laws
or regulations, or pursuant to the rules or regulations of any regulatory
authority, of the United States if the Exchangeable Shares were Parent Common
Shares.
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ARTICLE 5
EXCHANGE RIGHT AND AUTOMATIC EXCHANGE RIGHTS
5.1 GRANT AND OWNERSHIP OF EXCHANGE RIGHTS
Parent hereby grants to the Trustee as trustee for and on behalf of, and
for the use and benefit of, the Beneficiaries the right (the "EXCHANGE RIGHT"),
upon the occurrence and during the continuance of an Insolvency Event, to
require Parent to purchase from each or any Beneficiary all or any part of the
Exchangeable Shares held by the Beneficiary and the Automatic Exchange Rights,
all in accordance with the provisions of this Agreement. Parent hereby
acknowledges receipt from the Trustee as trustee for and on behalf of the
Beneficiaries of good and valuable consideration (and the adequacy thereof) for
the grant of the Exchange Right and the Automatic Exchange Rights by Parent to
the Trustee. During the term of the Trust and subject to the terms and
conditions of this Agreement, the Trustee shall possess and be vested with full
legal ownership of the Exchange Right and the Automatic Exchange Rights and
shall be entitled to exercise all of the rights and powers of an owner with
respect to the Exchange Right and the Automatic Exchange Rights, provided that
the Trustee shall:
(a) hold the Exchange Right and the Automatic Exchange Rights and the
legal title thereto as trustee solely for the use and benefit of
the Beneficiaries in accordance with the provisions of this
Agreement; and
(b) except as specifically authorized by this Agreement, have no
power or authority to exercise or otherwise deal in or with the
Exchange Right or the Automatic Exchange Rights, and the Trustee
shall not exercise any such rights for any purpose other than the
purposes for which the Trust is created pursuant to this
Agreement.
The obligations of Parent to issue Parent Common Shares pursuant to the
Exchange Right or the Automatic Exchange Rights are subject to all applicable
laws and regulatory and stock exchange requirements.
5.2 LEGENDED SHARE CERTIFICATES
Exchangeco will cause each certificate representing Exchangeable Shares
to bear an appropriate legend notifying the Beneficiaries of:
(a) their right to instruct the Trustee with respect to the exercise
of the Exchange Right in respect of the Exchangeable Shares held
by a Beneficiary; and
(b) the Automatic Exchange Rights.
5.3 GENERAL EXERCISE OF EXCHANGE RIGHT
The Exchange Right shall be and remain vested in and exercisable by the
Trustee. Subject to section 7.15, the Trustee shall exercise the Exchange Right
only on the basis of instructions received pursuant to this Article 5 from
Beneficiaries entitled to instruct the Trustee as to the exercise thereof. To
the extent that no instructions are received from a Beneficiary with
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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 Parent for each Exchangeable Share to be
purchased by Parent under the Exchange Right shall be an amount per share equal
to the sum of (i) the Current Market Price of a Parent Common Share on the last
Business Day prior to the day of closing of the purchase and sale of such
Exchangeable Share under the Exchange Right, which shall be satisfied in full by
Parent delivering or causing to be delivered to the Trustee on behalf of such
holder one Parent Common Share, plus (ii) to the extent not paid by Exchangeco
on the designated payment date therefor, an additional amount equal to the full
amount of all declared and unpaid dividends on each such Exchangeable Share held
by such holder on any dividend record date which occurred prior to the closing
of the purchase and sale. In connection with each exercise of the Exchange
Right, Parent shall provide to the Trustee an Officer's Certificate setting
forth the calculation of the purchase price for each Exchangeable Share. The
total purchase price for each such Exchangeable Share so purchased may be
satisfied only by Parent delivering or causing to be delivered to the Trustee,
on behalf of the relevant Beneficiary, one Parent Common Share and on the
applicable payment date a cheque for the balance, if any, of the purchase price
without interest, less any amounts withheld pursuant to section 5.13. Upon
payment by Parent of such purchase price the relevant Beneficiary shall cease to
have any right to be paid by Exchangeco any amount in respect of declared and
unpaid dividends on each such Exchangeable Share and Exchangeco shall cease to
be obligated to pay any amount in respect of such dividends.
5.5 EXERCISE INSTRUCTIONS
Subject to the terms and conditions herein set forth, a Beneficiary shall
be entitled, upon the occurrence and during the continuance of an Insolvency
Event, to instruct the Trustee to exercise the Exchange Right with respect to
all or any part of the Exchangeable Shares registered in the name of such
Beneficiary on the books of Exchangeco. To cause the exercise of the Exchange
Right by the Trustee, the Beneficiary shall deliver to the Trustee, in person or
by certified or registered mail, at its principal office in Toronto or Montreal
or at such other places in Canada as the Trustee may from time to time designate
by written notice to the Beneficiaries, the certificates representing the
Exchangeable Shares which such Beneficiary desires Parent to purchase, duly
endorsed in blank for transfer, and accompanied by such other documents and
instruments as may be required to effect a transfer of Exchangeable Shares under
the CBCA and the by-laws of Exchangeco and such additional documents and
instruments as the Trustee, Parent and Exchangeco may reasonably require
together with (a) a duly completed form of notice of exercise of the Exchange
Right, contained on the reverse of or attached to the Exchangeable Share
certificates, stating (i) that the Beneficiary thereby instructs the Trustee to
exercise the Exchange Right so as to require Parent to purchase from the
Beneficiary the number of Exchangeable Shares specified therein, (ii) that such
Beneficiary has good title to and owns all such Exchangeable Shares to be
acquired by Parent free and clear of all liens, claims and encumbrances, (iii)
the names in which the certificates representing Parent Common Shares
transferable in connection with the exercise of the Exchange Right are to be
registered 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, Exchangeco and Parent of payment) of the taxes (if any) payable as
contemplated by section 5.8. If only a part of the Exchangeable Shares
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represented by any certificate or certificates delivered to the Trustee are to
be purchased by 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 Exchangeco.
5.6 DELIVERY OF PARENT COMMON SHARES
Promptly after the receipt of the certificates representing the
Exchangeable Shares which the Beneficiary desires 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, if any, payable as contemplated by section 5.8 or evidence thereof), duly
endorsed for transfer to Parent, the Trustee shall notify Parent and Exchangeco
of its receipt of the same, which notice to Parent and Exchangeco shall
constitute exercise of the Exchange Right by the Trustee on behalf of the holder
of such Exchangeable Shares, and Parent shall promptly thereafter deliver or
cause to be delivered to the Trustee, for delivery to the Beneficiary of such
Exchangeable Shares (or to such other Persons, if any, properly designated by
such Beneficiary) certificates representing the number of Parent Common Shares
issuable in connection with the exercise of the Exchange Right, and on the
applicable payment date cheques payable at par at any branch of the bankers of
Parent for the balance, if any, of the total purchase price therefor without
interest (but in each case less any amounts withheld pursuant to section 5.13);
provided, however, that no such delivery shall be made unless and until the
Beneficiary requesting the same shall have paid (or provided evidence
satisfactory to the Trustee, Exchangeco and Parent of the payment of) the taxes
(if any) payable as contemplated by section 5.8 of this Agreement. Immediately
upon the giving of notice by the Trustee to Parent and Exchangeco of the
exercise of the Exchange Right as provided in this section 5.6, the closing of
the transaction of purchase and sale contemplated by the Exchange Right shall be
deemed to have occurred and the holder of such Exchangeable Shares shall be
deemed to have transferred to Parent all of such holder's right, title and
interest in and to such Exchangeable Shares and the related interest in the
Trust Estate free and clear of any lien, claim or encumbrance and shall cease to
be a holder of such Exchangeable Shares and shall not be entitled to exercise
any of the rights of a holder in respect thereof, other than the right to
receive his proportionate part of the total purchase price therefor, unless the
requisite number of Parent Common Shares is not delivered by, or on behalf of,
Parent to the Trustee within five Business Days of the date of the giving of
such notice by the Trustee or the balance of the purchase price, if any, is not
paid by Parent on the applicable payment date therefor, in which case the rights
of the Beneficiary shall remain unaffected until such Parent Common Shares are
so delivered, and the balance of the purchase price, if any, has been paid, by
Parent. Upon delivery by Parent to the Trustee of such Parent Common Shares, and
the balance of the purchase price, if any, the Trustee shall deliver such Parent
Common Shares and the balance of the purchase price, if any, to such Beneficiary
(or to such other Persons, if any, properly designated by such Beneficiary).
Concurrently with such Beneficiary ceasing to be a holder of Exchangeable
Shares, the Beneficiary shall be considered and deemed for all purposes to be
the holder of the Parent Common Shares delivered to it pursuant to the Exchange
Right.
5.7 EXERCISE OF EXCHANGE RIGHT SUBSEQUENT TO RETRACTION
In the event that a Beneficiary has exercised its right under Article 6
of the Share Provisions to require Exchangeco to redeem any or all of the
Exchangeable Shares held by the Beneficiary (the "RETRACTED SHARES") and is
notified by Exchangeco pursuant to section 6.6 of the Share Provisions that
Exchangeco will not be permitted as a result of solvency requirements
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of applicable law to redeem all such Retracted Shares, and provided that Callco
shall not have exercised the Retraction Call Right with respect to the Retracted
Shares and that the Beneficiary has not revoked the retraction request delivered
by the Beneficiary to Exchangeco pursuant to section 6.7 of the Share Provisions
and provided further that the Trustee has received written notice of same from
Exchangeco or Callco, the retraction request will constitute and will be deemed
to constitute notice from the Beneficiary to the Trustee instructing the Trustee
to exercise the Exchange Right with respect to those Retracted Shares that
Exchangeco is unable to redeem. In any such event, Exchangeco hereby agrees with
the Trustee and in favour of the Beneficiary to promptly notify the Trustee of
such prohibition against Exchangeco redeeming all of the Retracted Shares and to
promptly forward or cause to be forwarded to the Trustee all relevant materials
delivered by the Beneficiary to Exchangeco or to the transfer agent of the
Exchangeable Shares (including without limitation, a copy of the retraction
request delivered pursuant to section 6.1 of the 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
Exchangeco is not permitted to redeem and in respect of which Callco has not
exercised its Retraction Call Right and will require Parent to purchase such
shares in accordance with the provisions of this Article 5.
5.8 TAXES
Upon any sale of Exchangeable Shares to Parent pursuant to the Exchange
Right or the Automatic Exchange Rights, the share certificate or certificates
representing Parent Common Shares to be delivered in connection with the payment
of the total purchase price therefor shall be issued in the name of the
Beneficiary of the Exchangeable Shares so sold or in such names as such
Beneficiary may otherwise direct in writing, provided such direction is received
by Parent prior to the time such shares are issued, without charge to the holder
of the Exchangeable Shares so sold; provided, however, that such Beneficiary (a)
shall pay (and none of Parent, Exchangeco or the Trustee shall be required to
pay) any documentary, stamp, transfer or other taxes that may be payable in
respect of any transfer of such Exchangeable Shares to Parent or in respect of
the issuance or delivery of such Parent Common Shares to such Beneficiary or any
other Person including, without limitation, in the event that Parent Common
Shares are being issued or transferred in the name of a clearing service or
depositary or a nominee thereof, or (b) shall have evidenced to the satisfaction
of the Trustee, Parent and Exchangeco that such taxes, if any, have been paid.
5.9 NOTICE OF INSOLVENCY EVENT
As soon as practicable following the occurrence of an Insolvency Event or
any event that with the giving of notice or the passage of time or both would be
an Insolvency Event, Exchangeco and Parent shall give written notice thereof to
the Trustee. As soon as practicable following the receipt of notice from
Exchangeco or Parent of the occurrence of an Insolvency Event, or upon the
Trustee becoming aware of an Insolvency Event, the Trustee will mail to each
Beneficiary, at the expense of Parent (such funds to be received in advance), a
notice of such Insolvency Event in the form provided by Parent, which notice
shall contain a brief statement of the rights of the Beneficiaries with respect
to the Exchange Right.
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5.10 QUALIFICATION OF PARENT COMMON SHARES
Parent covenants that if any Parent Common Shares to be issued and
delivered pursuant to the Exchange Right or the Automatic Exchange Rights
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 or stock exchange 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 fulfillment of any
other Canadian or United States federal, provincial or state legal requirement
before such shares may be issued and delivered by Parent to the initial holder
thereof or in order that such shares may be freely traded thereafter (other than
any restrictions of general application on transfer by reason of a holder being
a "control person" of Parent for purposes of Canadian provincial securities law
or an "affiliate" of Parent for purposes of United States federal or state
securities law), Parent will in good faith expeditiously take all such actions
and do all such things as are reasonably necessary or desirable to cause such
Parent Common Shares to be and remain duly registered, qualified or approved.
Parent will in good faith expeditiously take all such actions and do all such
things as are reasonably necessary or desirable to cause all Parent Common
Shares to be delivered pursuant to the Exchange Right or the Automatic Exchange
Rights to be listed, quoted or posted for trading on all stock exchanges and
quotation systems on which issued Parent Common Shares have been listed by
Parent and remain listed and are quoted or posted for trading at such time.
5.11 PARENT COMMON SHARES
Parent hereby represents, warrants and covenants that the Parent Common
Shares issuable as described herein will be duly authorized and validly issued
as fully paid and non-assessable and shall be free and clear of any lien, claim
or encumbrance.
5.12 AUTOMATIC EXCHANGE ON LIQUIDATION OF PARENT
Parent will give the Trustee written notice of each of the following
events at the time set forth below:
(a) in the event of any determination by the Board of Directors of
Parent to institute voluntary liquidation, dissolution or
winding-up proceedings with respect to Parent or to effect any
other distribution of assets of Parent among its stockholders for
the purpose of winding up its affairs, at least 60 days prior to
the proposed effective date of such liquidation, dissolution,
winding-up or other distribution; and
(b) as soon as practicable following the earlier of (A) receipt by
Parent of notice of, and (B) Parent otherwise becoming aware of,
any instituted claim, suit, petition or other proceedings with
respect to the involuntary liquidation, dissolution or winding-up
of Parent or to effect any other distribution of assets of Parent
among its stockholders for the purpose of winding up its affairs,
in each case where Parent has failed to contest in good faith any
such proceeding commenced in respect of Parent within 30 days of
becoming aware thereof.
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As soon as practicable following receipt by the Trustee from Parent of
notice of any event (a "LIQUIDATION EVENT") contemplated by section 5.12(a) or
5.12(b), the Trustee will give notice thereof to the Beneficiaries. Such notice
shall be provided to the Trustee by Parent and shall include a brief description
of the automatic exchange of Exchangeable Shares for Parent Common Shares
provided for in section 5.12.
In order that the Beneficiaries will be able to participate on a pro
rata basis with the holders of Parent Common Shares in the distribution of
assets of Parent in connection with a Liquidation Event, on the fifth Business
Day prior to the effective date (the "LIQUIDATION EVENT EFFECTIVE DATE") of a
Liquidation Event, all of the then outstanding Exchangeable Shares (other than
those owned by Parent and its Affiliates) shall be automatically exchanged for
Parent Common Shares. To effect such automatic exchange, Parent shall purchase
on the fifth Business Day prior to the Liquidation Event Effective Date each
Exchangeable Share then outstanding and held by Beneficiaries, and each
Beneficiary shall sell the Exchangeable Shares held by it at such time, free and
clear of any lien, claim or encumbrance, for a purchase price per share equal to
the sum of: (i) the Current Market Price of a Parent Common Share on the fifth
Business Day prior to the Liquidation Event Effective Date, which shall be
satisfied in full by Parent delivering to the Beneficiary one Parent Common
Share, and (ii) to the extent not paid by Exchangeco on the designated payment
date therefor, an additional amount equal to the full amount of all declared and
unpaid dividends on each such Exchangeable Share held by such holder on any
dividend record date which occurred prior to the date of the exchange. Parent
shall provide the Trustee with an Officer's Certificate in connection with each
automatic exchange setting forth the calculation of the purchase price for each
Exchangeable Share.
On the fifth Business Day prior to the Liquidation Event Effective Date,
the closing of the transaction of purchase and sale contemplated by the
automatic exchange of Exchangeable Shares for Parent Common Shares shall be
deemed to have occurred, and each Beneficiary shall be deemed to have
transferred to Parent all of the Beneficiary's right, title and interest in and
to such Beneficiary's Exchangeable Shares free and clear of any lien, claim or
encumbrance and the related interest in the Trust Estate, Exchangeco shall have
no liability to pay an amount in respect of declared and unpaid dividends to any
Beneficiary and each such Beneficiary shall cease to be a holder of such
Exchangeable Shares and Parent shall deliver or cause to be delivered to the
Beneficiary the Parent Common Shares deliverable upon the automatic exchange of
Exchangeable Shares for Parent Common Shares and on the applicable payment date
shall deliver to the Trustee for delivery to the Beneficiary a cheque for the
balance, if any, of the total purchase price for such Exchangeable Shares,
without interest, in each case less any amounts withheld pursuant to section
5.13. Concurrently with such Beneficiary ceasing to be a holder of Exchangeable
Shares, the Beneficiary shall be considered and deemed for all purposes to be
the holder of the Parent Common Shares issued pursuant to the automatic exchange
of such Beneficiary's Exchangeable Shares for Parent Common Shares and the
certificates held by the Beneficiary previously representing the Exchangeable
Shares exchanged by the Beneficiary with Parent pursuant to such automatic
exchange shall thereafter be deemed to represent Parent Common Shares issued to
the Beneficiary by Parent pursuant to such automatic exchange. Upon the request
of a Beneficiary and the surrender by the Beneficiary of Exchangeable Share
certificates deemed to represent Parent Common Shares, duly endorsed in blank
and accompanied by such instruments of transfer as Parent may reasonably
require, Parent shall deliver or cause to be delivered to the Beneficiary
certificates representing the Parent Common Shares of which the Beneficiary is
the holder.
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5.13 WITHHOLDING RIGHTS
Parent, Exchangeco and the Trustee shall be entitled to deduct and
withhold from any dividend or consideration otherwise payable under this
Agreement to any holder of Exchangeable Shares or Parent Common Shares such
amounts as Parent, Exchangeco or the Trustee is required to deduct and withhold
with respect to such payment under the Income Tax Act (Canada), the United
States Internal Revenue Code of 1986 or any provision of federal, provincial,
territorial, state, local or foreign tax law, in each case as amended or
succeeded, or entitled to withhold under section 116 of the Income Tax Act
(Canada) or any corresponding provisions of provincial law. The Trustee may act
on the advice of counsel with respect to such matters. To the extent that
amounts are so withheld, such withheld amounts shall be treated for all purposes
as having been paid to the holder of the shares in respect of which such
deduction and withholding was made, provided that such withheld amounts are
actually remitted to the appropriate taxing authority. To the extent that the
amount so required or entitled to be deducted or withheld from any payment to a
holder exceeds the cash portion of the consideration otherwise payable to the
holder, Parent, Exchangeco and the Trustee are hereby authorized to sell or
otherwise dispose of such portion of the consideration as is necessary to
provide sufficient funds to Parent, Exchangeco or the Trustee, as the case may
be, to enable it to comply with such deduction or withholding requirement or
entitlement and Parent, Exchangeco or the Trustee shall notify the holder
thereof and remit to such holder any unapplied balance of the net proceeds of
such sale. Parent and Exchangeco represent and warrant to the Trustee in its
capacity as trustee on behalf of the Beneficiaries that, based upon facts
currently known to them, they have no current intention, as at the date of this
Agreement, to deduct or withhold, from any dividend paid to holders of
Exchangeable Shares, any amounts under the United States Internal Revenue Code
of 1986.
5.14 NO FRACTIONAL SHARES
A holder of an Exchangeable Share shall not be entitled to any fraction
of a Parent Common Share upon the exercise of the Exchange Right or Automatic
Exchange Rights hereunder and no certificates representing any such fractional
interest shall be issued and such holder otherwise entitled to a fractional
interest will receive for such fractional interest from Parent on the designated
payment date to the extent not paid by Callco or Exchangeco a cash payment equal
to such fractional interest multiplied by the Current Market Price.
5.15 PROHIBITION ON VOLUNTARY LIQUIDATION
Parent covenants that it shall not, and agrees to cause Callco to not,
take any action relating to a voluntary liquidation, dissolution or winding-up
of Exchangeco or its successors or Callco or its successors, as the case may be,
prior to the Redemption Date (as defined in the Share Provisions) that results
in the recognition under the Income Tax Act (Canada) (or the provincial Quebec
equivalent) of any accrued gain on a holder's Exchangeable Shares, recognition
of which was deferred on the consummation of the transactions contemplated by
the Combination Agreement.
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ARTICLE 6
RESTRICTIONS ON ISSUE OF SPECIAL VOTING SHARES
6.1 ISSUE OF ADDITIONAL SHARES
During the term of this Agreement, Parent will not, without the consent
of the holders at the relevant time of Exchangeable Shares, given in accordance
with section 10.2 of the Share Provisions, issue any additional Special Voting
Shares.
ARTICLE 7
CONCERNING THE TRUSTEE
7.1 POWERS AND DUTIES OF THE TRUSTEE
The rights, powers, duties and authorities of the Trustee under this
Agreement, in its capacity as Trustee of the Trust, shall include:
(a) receipt and deposit of the Special Voting Share from Parent as
Trustee for and on behalf of the Beneficiaries in accordance with
the provisions of this Agreement;
(b) granting proxies and distributing materials to Beneficiaries as
provided in this Agreement;
(c) voting the Beneficiary Votes in accordance with the provisions of
this Agreement;
(d) receiving the grant of the Exchange Right and the Automatic
Exchange Rights from Parent as Trustee for and on behalf of the
Beneficiaries in accordance with the provisions of this
Agreement;
(e) exercising the Exchange Right and enforcing the benefit of the
Automatic Exchange Rights, in each case in accordance with the
provisions of this Agreement, and in connection therewith
receiving from Beneficiaries Exchangeable Shares and other
requisite documents and distributing to such Beneficiaries Parent
Common Shares and cheques, if any, to which such Beneficiaries
are entitled upon the exercise of the Exchange Right or pursuant
to the Automatic Exchange Rights, as the case may be;
(f) holding title to the Trust Estate;
(g) investing any moneys forming, from time to time, a part of the
Trust Estate as provided in this Agreement;
(h) taking action on its own initiative or at the direction of a
Beneficiary or Beneficiaries to enforce the obligations of Parent
and Exchangeco under this Agreement; and
(i) taking such other actions and doing such other things as are
specifically provided in this Agreement.
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In the exercise of such rights, powers, duties and authorities the
Trustee shall have (and is granted) such incidental and additional rights,
powers, duties and authority not in conflict with any of the provisions of this
Agreement as the Trustee, acting in good faith and in the reasonable exercise of
its discretion, may deem necessary, appropriate or desirable to effect the
purpose of the Trust. Any exercise of such discretionary rights, powers, duties
and authorities by the Trustee shall be final, conclusive and binding upon all
Persons.
The Trustee in exercising its rights, powers, duties and authorities
hereunder shall act honestly and in good faith and with a view to the best
interests of the Beneficiaries and shall exercise the care, diligence and skill
that a reasonably prudent trustee would exercise in comparable circumstances.
The Trustee shall not be bound to give notice or do or take any act,
action or proceeding by virtue of the powers conferred on it hereby unless and
until it shall be specifically required to do so under the terms hereof; nor
shall the Trustee be required to take any notice of, or to do, or to take any
act, action or proceeding as a result of any default or breach of any provision
hereunder, unless and until notified in writing of such default or breach, which
notices shall distinctly specify the default or breach desired to be brought to
the attention of the Trustee, and in the absence of such notice the Trustee may
for all purposes of this Agreement conclusively assume that no default or breach
has been made in the observance or performance of any of the representations,
warranties, covenants, agreements or conditions contained herein.
7.2 NO CONFLICT OF INTEREST
The Trustee represents to Parent and Exchangeco that at the date of
execution and delivery of this Agreement there exists no material conflict of
interest in the role of the Trustee as a fiduciary hereunder and the role of the
Trustee in any other capacity. The Trustee shall, within 90 days after it
becomes aware that such material conflict of interest exists, either eliminate
such material conflict of interest or resign in the manner and with the effect
specified in Article 10. If, notwithstanding the foregoing provisions of this
section 7.2, the Trustee has such a material conflict of interest, the validity
and enforceability of this Agreement shall not be affected in any manner
whatsoever by reason only of the existence of such material conflict of
interest. If the Trustee contravenes the foregoing provisions of this section
7.2, any interested party may apply to the Court for an order that the Trustee
be replaced as Trustee hereunder.
7.3 DEALINGS WITH TRANSFER AGENTS, REGISTRARS, ETC.
Parent and Exchangeco irrevocably authorize the Trustee, from time to
time, to:
(a) consult, communicate and otherwise deal with the respective
registrars and transfer agents, and with any such subsequent
registrar or transfer agent, of the Exchangeable Shares and
Parent Common Shares; and
(b) requisition, from time to time, (i) from any such registrar or
transfer agent any information readily available from the records
maintained by it which the Trustee may reasonably require for the
discharge of its duties and responsibilities under this Agreement
and (ii) from the transfer agent of Parent Common Shares, and any
subsequent transfer agent of such shares, the share certificates
issuable upon
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the exercise from time to time of the Exchange Right and pursuant
to the Automatic Exchange Rights in the manner specified in
Article 5.
Parent and Exchangeco irrevocably authorize their respective registrars
and transfer agents to comply with all such requests. Parent covenants that it
will supply its transfer agent with duly executed share certificates for the
purpose of completing the exercise from time to time of the Exchange Right and
the Automatic Exchange Rights, in each case pursuant to Article 5.
7.4 BOOKS AND RECORDS
The Trustee shall keep available for inspection by Parent and Exchangeco
at the Trustee's principal offices in Toronto and Montreal correct and complete
books and records of account relating to the Trust created by this Agreement,
including without limitation, all relevant data relating to mailings and
instructions to and from Beneficiaries and all transactions pursuant to the
Exchange Right and the Automatic Exchange Rights. On or before September 15,
2002, and on or before September 15th in every year thereafter, so long as the
Special Voting Share is registered in the name of the Trustee, the Trustee shall
transmit to Parent and Exchangeco a brief report, dated as of the preceding
August 31st, with respect to:
(a) the property and funds comprising the Trust Estate as of that
date;
(b) the number of exercises of the Exchange Right, if any, and the
aggregate number of Exchangeable Shares received by the Trustee
on behalf of Beneficiaries in consideration of the delivery by or
on behalf of Parent of Parent Common Shares in connection with
the Exchange Right, during the fiscal year of Parent ended on
such August 31st; and
(c) any action taken by the Trustee in the performance of its duties
under this Agreement which it had not previously reported and
which, in the Trustee's opinion, materially affects the Trust
Estate.
7.5 INCOME TAX RETURNS AND REPORTS
The Trustee shall, to the extent necessary, prepare and file on behalf of
the Trust appropriate United States and Canadian income tax returns and any
other returns or reports as may be required by applicable law or pursuant to the
rules and regulations of any securities exchange or other trading system through
which the Exchangeable Shares are traded. In connection therewith, the Trustee
may obtain the advice and assistance of such experts or advisors as the Trustee
considers necessary or advisable (who may be experts or advisors to Parent or
Exchangeco). If requested by the Trustee, Parent or Exchangeco shall retain
qualified experts or advisors for the purpose of providing such tax advice or
assistance.
7.6 INDEMNIFICATION PRIOR TO CERTAIN ACTIONS BY TRUSTEE
The Trustee shall exercise any or all of the rights, duties, powers or
authorities vested in it by this Agreement at the request, order or direction of
any Beneficiary upon such Beneficiary furnishing to the Trustee reasonable
funding, security or indemnity against the costs, expenses and liabilities which
may be incurred by the Trustee therein or thereby, provided that no
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Beneficiary shall be obligated to furnish to the Trustee any such security or
indemnity in connection with the exercise by the Trustee of any of its rights,
duties, powers and authorities with respect to the Special Voting Share pursuant
to Article 4, subject to section 7.15, and with respect to the Exchange Right
pursuant to Article 5, subject to section 7.15, and with respect to the
Automatic Exchange Rights pursuant to Article 5, subject to section 7.15.
None of the provisions contained in this Agreement shall require the
Trustee to expend or risk its own funds or otherwise incur financial liability
in the exercise of any of its rights, powers, duties, or authorities unless
funded, given security and indemnified as aforesaid.
7.7 ACTION OF BENEFICIARIES
No Beneficiary shall have the right to institute any action, suit or
proceeding or to exercise any other remedy authorized by this Agreement for the
purpose of enforcing any of its rights or for the execution of any trust or
power hereunder unless the Beneficiary has requested the Trustee to take or
institute such action, suit or proceeding and furnished the Trustee with the
funding, security or indemnity referred to in section 7.6 and the Trustee shall
have failed to act within a reasonable time thereafter. In such case, but not
otherwise, the Beneficiary shall be entitled to take proceedings in any court of
competent jurisdiction such as the Trustee might have taken; it being understood
and intended that no one or more Beneficiaries shall have any right in any
manner whatsoever to affect, disturb or prejudice the rights hereby created by
any such action, or to enforce any right hereunder or the Voting Rights, the
Exchange Right or the Automatic Exchange Rights, except subject to the
conditions and in the manner herein provided, and that all powers and trusts
hereunder shall be exercised and all proceedings at law shall be instituted, had
and maintained by the Trustee, except only as herein provided, and in any event
for the equal benefit of all Beneficiaries.
7.8 RELIANCE UPON DECLARATIONS
The Trustee shall not be considered to be in contravention of any of its
rights, powers, duties and authorities hereunder if, when required, it acts and
relies in good faith upon statutory declarations, certificates, opinions or
reports furnished pursuant to the provisions hereof or required by the Trustee
to be furnished to it in the exercise of its rights, powers, duties and
authorities hereunder if such statutory declarations, certificates, opinions or
reports comply with the provisions of section 7.9, if applicable, and with any
other applicable provisions of this Agreement.
7.9 EVIDENCE AND AUTHORITY TO TRUSTEE
Parent or Exchangeco shall furnish to the Trustee evidence of compliance
with the conditions provided for in this Agreement relating to any action or
step required or permitted to be taken by Parent or Exchangeco or the Trustee
under this Agreement or as a result of any obligation imposed under this
Agreement, including, without limitation, in respect of the Voting Rights or the
Exchange Right or the Automatic Exchange Rights and the taking of any other
action to be taken by the Trustee at the request of or on the application of
Parent and/or Exchangeco promptly if and when:
(a) such evidence is required by any other section of this Agreement
to be furnished to the Trustee in accordance with the terms of
this section 7.9; or
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(b) the Trustee, in the exercise of its rights, powers, duties and
authorities under this Agreement, gives Parent or Exchangeco
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 Parent or
Exchangeco or a statutory declaration or a certificate made by Persons entitled
to sign an Officer's Certificate stating that any such condition has been
complied with in accordance with the terms of this Agreement.
Whenever such evidence relates to a matter other than the Voting Rights
or the Exchange Right or the Automatic Exchange Rights or the taking of any
other action to be taken by the Trustee at the request or on the application of
Parent or Exchangeco, and except as otherwise specifically provided herein, such
evidence may consist of a report or opinion of any solicitor, attorney, auditor,
accountant, appraiser, valuer, engineer or other expert or any other Person
whose qualifications give authority to a statement made by him, provided that if
such report or opinion is furnished by a director, officer or employee of Parent
or Exchangeco it shall be in the form of an Officer's Certificate or a statutory
declaration.
Each statutory declaration, Officer's Certificate, opinion or report
furnished to the Trustee as evidence of compliance with a condition provided for
in this Agreement shall include a statement by the Person giving the evidence:
(a) declaring that he has read and understands the provisions of this
Agreement relating to the condition in question;
(b) describing the nature and scope of the examination or
investigation upon which he based the statutory declaration,
certificate, statement or opinion; and
(c) declaring that he has made such examination or investigation as
he believes is necessary to enable him to make the statements or
give the opinions contained or expressed therein.
7.10 EXPERTS, ADVISORS AND AGENTS
The Trustee may:
(a) in relation to these presents act and rely on the opinion or
advice of or information obtained from any solicitor, attorney,
auditor, accountant, appraiser, valuer, engineer or other expert,
whether retained by the Trustee or by Parent or Exchangeco or
otherwise, and may retain or employ such assistants as may be
necessary to the proper discharge of its powers and duties and
determination of its rights hereunder and may pay proper and
reasonable compensation for all such legal and other advice or
assistance as aforesaid;
(b) retain or employ such agents and other assistants as it may
reasonably require for the proper determination and discharge of
its powers and duties hereunder; and
(c) pay reasonable remuneration for all services performed for it
(and shall be entitled to receive reasonable remuneration for all
services performed by it) in the
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discharge of the trusts hereof and compensation for all
disbursements, costs and expenses made or incurred by it in the
discharge of its duties hereunder and in the management of the
Trust.
7.11 INVESTMENT OF MONEYS HELD BY TRUSTEE
Unless otherwise provided in this Agreement, any moneys held by or on
behalf of the Trustee which under the terms of this Agreement may or ought to be
invested or which may be on deposit with the Trustee or which may be in the
hands of the Trustee may be invested and reinvested in the name or under the
control of the Trustee in securities in which, under the laws of the Province of
Ontario, trustees are authorized to invest trust moneys, provided that such
securities are stated to mature within two years after their purchase by the
Trustee, and the Trustee shall so invest such moneys on the written direction of
Exchangeco. Pending the investment of any moneys as hereinbefore provided, such
moneys may be deposited in the name of the Trustee in any chartered bank in
Canada or, with the consent of Exchangeco, in the deposit department of the
Trustee or any other specified loan or trust company authorized to accept
deposits under the laws of Canada or any province thereof at the rate of
interest then current on similar deposits.
7.12 TRUSTEE NOT REQUIRED TO GIVE SECURITY
The Trustee shall not be required to give any bond or security in respect
of the execution of the trusts, rights, duties, powers and authorities of this
Agreement or otherwise in respect of the premises.
7.13 TRUSTEE NOT BOUND TO ACT ON REQUEST
Except as in this Agreement otherwise specifically provided, the Trustee
shall not be bound to act in accordance with any direction or request of Parent
or Exchangeco 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 upon any
such copy purporting to be authenticated and believed by the Trustee to be
genuine.
7.14 AUTHORITY TO CARRY ON BUSINESS
The Trustee represents to Parent and Exchangeco that at the date of
execution and delivery by it of this Agreement it is authorized to carry on the
business of a trust company in each of the provinces of Canada but if,
notwithstanding the provisions of this section 7.14, it ceases to be so
authorized to carry on business, the validity and enforceability of this
Agreement and the Voting Rights, the Exchange Right and the Automatic Exchange
Rights shall not be affected in any manner whatsoever by reason only of such
event but the Trustee shall, within 90 days after ceasing to be authorized to
carry on the business of a trust company in any province of Canada, either
become so authorized or resign in the manner and with the effect specified in
Article 10.
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7.15 CONFLICTING CLAIMS
If conflicting claims or demands are made or asserted with respect to any
interest of any Beneficiary in any Exchangeable Shares, including any
disagreement between the heirs, representatives, successors or assigns
succeeding to all or any part of the interest of any Beneficiary in any
Exchangeable Shares, resulting in conflicting claims or demands being made in
connection with such interest, then the Trustee shall be entitled, in its sole
discretion, to refuse to recognize or to comply with any such claims or demands.
In so refusing, the Trustee may elect not to exercise any Voting Rights,
Exchange Right or Automatic Exchange Rights subject to such conflicting claims
or demands and, in so doing, the Trustee shall not be or become liable to any
Person on account of such election or its failure or refusal to comply with any
such conflicting claims or demands. The Trustee shall be entitled to continue to
refrain from acting and to refuse to act until:
(a) the rights of all adverse claimants with respect to the Voting
Rights, Exchange Right or Automatic Exchange Rights subject to
such conflicting claims or demands have been adjudicated by a
final judgment of a court of competent jurisdiction and all
rights of appeal have expired; or
(b) all differences with respect to the Voting Rights, Exchange Right
or Automatic Exchange Rights subject to such conflicting claims
or demands have been conclusively settled by a valid written
agreement binding on all such adverse claimants, and the Trustee
shall have been furnished with an executed copy of such agreement
certified to be in full force and effect.
If the Trustee elects to recognize any claim or comply with any demand
made by any such adverse claimant, it may in its discretion require such
claimant to furnish such surety bond or other security satisfactory to the
Trustee as it shall deem appropriate to fully indemnify it as between all
conflicting claims or demands.
7.16 ACCEPTANCE OF TRUST
The Trustee hereby accepts the Trust created and provided for by and in
this Agreement and agrees to perform the same upon the terms and conditions
herein set forth and to hold all rights, privileges and benefits conferred
hereby and by law in trust for the various Persons who shall from time to time
be Beneficiaries, subject to all the terms and conditions herein set forth.
ARTICLE 8
COMPENSATION
8.1 FEES AND EXPENSES OF THE TRUSTEE
Parent and Exchangeco jointly and severally agree to pay the Trustee
reasonable compensation for all of the services rendered by it under this
Agreement and will reimburse the Trustee for all reasonable expenses (including,
but not limited to, taxes other than taxes based on the net income or capital of
the Trustee, fees paid to legal counsel and other experts 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 duties under
this Agreement; provided that Parent and
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Exchangeco 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
fraud, gross negligence, recklessness or wilful misconduct.
ARTICLE 9
INDEMNIFICATION AND LIMITATION OF LIABILITY
9.1 INDEMNIFICATION OF THE TRUSTEE
Parent and Exchangeco jointly and severally agree to indemnify and hold
harmless the Trustee and each of its directors, officers and agents appointed
and acting in accordance with this Agreement (collectively, the "INDEMNIFIED
PARTIES") against all claims, losses, damages, reasonable costs, penalties,
fines and reasonable expenses (including reasonable expenses of the Trustee's
legal counsel) which, without fraud, gross 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 or as a result of the Trustee's acceptance or
administration of the Trust, its compliance with its duties set forth in this
Agreement, or any written or oral instruction delivered to the Trustee by Parent
or Exchangeco pursuant hereto.
In no case shall Parent or Exchangeco be liable under this indemnity for
any claim against any of the Indemnified Parties unless Parent and Exchangeco
shall be notified by the Trustee of the written assertion of a claim or of any
action commenced against the Indemnified Parties, promptly after any of the
Indemnified Parties shall have received any such written assertion of a claim or
shall have been served with a summons or other first legal process giving
information as to the nature and basis of the claim. Subject to (ii) below,
Parent and Exchangeco shall be entitled to participate at their own expense in
the defence and, if Parent and Exchangeco so elect at any time after receipt of
such notice, either of them may assume the defence of any suit brought to
enforce any such claim. The Trustee shall have the right to employ separate
counsel in any such suit and participate in the defence thereof, but the fees
and expenses of such counsel shall be at the expense of the Trustee unless: (i)
the employment of such counsel has been authorized by Parent or Exchangeco; or
(ii) the named parties to any such suit include both the Trustee and Parent or
Exchangeco and the Trustee shall have been advised by counsel acceptable to
Parent or Exchangeco that there may be one or more legal defences available to
the Trustee that are different from or in addition to those available to Parent
or Exchangeco and that, in the judgment of such counsel, would present a
conflict of interest were a joint representation to be undertaken (in which case
Parent and Exchangeco shall not have the right to assume the defence of such
suit on behalf of the Trustee but shall be liable to pay the reasonable fees and
expenses of counsel for the Trustee). This indemnity shall survive the
termination of this Agreement and the resignation or removal of the Trustee.
9.2 LIMITATION OF LIABILITY
The Trustee shall not be held liable for any loss which may occur by
reason of depreciation of the value of any part of the Trust Estate or any loss
incurred on any investment of funds pursuant to this Agreement, except to the
extent that such loss is attributable to the fraud, gross negligence,
recklessness, wilful misconduct or bad faith on the part of the Trustee.
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ARTICLE 10
CHANGE OF TRUSTEE
10.1 RESIGNATION
The Trustee, or any trustee hereafter appointed, may at any time resign
by giving written notice of such resignation to Parent and Exchangeco specifying
the date on which it desires to resign, provided that such notice shall not be
given less than thirty (30) days before such desired resignation date unless
Parent and Exchangeco otherwise agree and provided further that such resignation
shall not take effect until the date of the appointment of a successor trustee
and the acceptance of such appointment by the successor trustee. Upon receiving
such notice of resignation, Parent and Exchangeco shall promptly appoint a
successor trustee, which shall be a corporation organized and existing under the
laws of Canada or a province thereof and authorized to carry on the business of
a trust company in all provinces of Canada, by written instrument in duplicate,
one copy of which shall be delivered to the resigning trustee and one copy to
the successor trustee. Failing the appointment and acceptance of a successor
trustee, a successor trustee may be appointed by order of the Court upon
application of one or more of the parties to this Agreement. If the retiring
trustee is the party initiating an application for the appointment of a
successor trustee by order of the Court, Parent and Exchangeco shall be jointly
and severally liable to reimburse the retiring trustee for its legal costs and
expenses in connection with same.
10.2 REMOVAL
The Trustee, or any trustee hereafter appointed, may (provided a
successor trustee is appointed) be removed at any time on not less than 30 days'
prior notice by written instrument executed by Parent and Exchangeco, in
duplicate, one copy of which shall be delivered to the trustee so removed and
one copy to the successor trustee.
10.3 SUCCESSOR TRUSTEE
Any successor trustee appointed as provided under this Agreement shall
execute, acknowledge and deliver to Parent and Exchangeco and to its predecessor
trustee an instrument accepting such appointment. Thereupon the resignation or
removal of the predecessor trustee shall become effective and such successor
trustee, without any further act, deed or conveyance, shall become vested with
all the rights, powers, duties and obligations of its predecessor under this
Agreement, with the like effect as if originally named as trustee in this
Agreement. However, on the written request of Parent and Exchangeco or of the
successor trustee, the trustee ceasing to act shall, upon payment of any amounts
then due it pursuant to the provisions of this Agreement, execute and deliver an
instrument transferring to such successor trustee all the rights and powers of
the trustee so ceasing to act. Upon the request of any such successor trustee,
Parent, Exchangeco and such predecessor trustee shall execute any and all
instruments in writing for more fully and certainly vesting in and confirming to
such successor trustee all such rights and powers.
10.4 NOTICE OF SUCCESSOR TRUSTEE
Upon acceptance of appointment by a successor trustee as provided herein,
Parent and Exchangeco shall cause to be mailed notice of the succession of such
trustee hereunder to each
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Beneficiary specified in a List. If Parent or Exchangeco shall fail to cause
such notice to be mailed within 10 days after acceptance of appointment by the
successor trustee, the successor trustee shall cause such notice to be mailed at
the expense of Parent and Exchangeco.
ARTICLE 11
PARENT SUCCESSORS
11.1 CERTAIN REQUIREMENTS IN RESPECT OF COMBINATION, ETC.
As long as any outstanding Exchangeable Shares are owned by any Person
other than Parent or any of its Affiliates, Parent shall not consummate any
transaction (whether by way of reconstruction, reorganization, consolidation,
arrangement, merger, transfer, sale, lease or otherwise) whereby all or
substantially all of its undertaking, property and assets would become the
property of any other Person or, in the case of a merger, of the continuing
corporation or other entity resulting therefrom unless, but may do so if:
(a) such other Person or continuing corporation or, in the event of
any merger, amalgamation or similar transaction pursuant to which
holders of shares in Parent are entitled to receive shares in the
capital of any corporation or other legal entity other than such
other Person or continuing corporation, then such corporation or
legal entity (in each case, the "PARENT SUCCESSOR") by operation
of law, becomes, without more, bound by the terms and provisions
of this Agreement or, if not so bound, executes, prior to or
contemporaneously with the consummation of such transaction, an
agreement supplemental hereto or otherwise agrees to become bound
by the terms and provisions of this Agreement, in either case
together with such other instruments (if any) as are reasonably
necessary or advisable to evidence the assumption by the Parent
Successor of liability for all moneys payable and property
deliverable hereunder and the covenant of such Parent Successor
to pay and deliver or cause to be delivered the same and its
agreement to observe and perform all the covenants and
obligations of Parent under this Agreement; and
(b) such transaction shall, to the satisfaction of the Trustee,
acting reasonably, and in the opinion of legal counsel to the
Trustee, be upon such terms and conditions as substantially to
preserve and not to impair in any material respect any of the
rights, duties, powers and authorities of the Trustee or of the
Beneficiaries hereunder.
11.2 VESTING OF POWERS IN SUCCESSOR
Whenever the conditions of section 11.1 have been duly observed and
performed, the Trustee, Parent Successor, Exchangeco and Parent, as applicable,
shall, if required by section 11.1, execute and deliver the supplemental trust
agreement provided for in Article 12 and thereupon Parent Successor shall
possess and from time to time may exercise each and every right and power of
Parent under this Agreement in the name of Parent or otherwise and any act or
proceeding by any provision of this Agreement required to be done or performed
by the Board of Directors of Parent, or any officers of Parent, may be done and
performed with like force and effect by the directors or officers of such Parent
Successor.
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11.3 WHOLLY-OWNED SUBSIDIARIES
Nothing herein shall be construed as preventing the amalgamation or
merger of any wholly-owned direct or indirect subsidiary of Parent with or into
Parent or the winding-up, liquidation or dissolution of any wholly-owned direct
or indirect subsidiary of Parent (if all of the assets of such subsidiary are
transferred to Parent or another wholly-owned direct or indirect subsidiary of
Parent) or any other distribution of the assets of any wholly-owned direct or
indirect subsidiary of Parent among the shareholders of such subsidiary for the
purpose of winding up its affairs, and any such transactions are expressly
permitted by this Article 11.
ARTICLE 12
AMENDMENTS AND SUPPLEMENTAL TRUST AGREEMENTS
12.1 AMENDMENTS, MODIFICATIONS, ETC.
Subject to Sections 12.2, 12.4 and 14.1, this Agreement may not be
amended or modified except by an agreement in writing executed by Parent,
Exchangeco and the Trustee and approved by the Beneficiaries in accordance with
section 12.3 and section 10.2 of the Share Provisions. No amendment or
modification or waiver of any of the provisions of this Agreement otherwise
permitted hereunder shall be effective unless made in writing and signed by all
of the parties hereto.
12.2 MINISTERIAL AMENDMENTS
Notwithstanding the provisions of section 12.1, the parties to this
Agreement may in writing, at any time and from time to time, without the
approval of the Beneficiaries, amend or modify this Agreement for the purposes
of:
(a) adding to the covenants of any or all parties hereto for the
protection of the Beneficiaries hereunder provided that the Board
of Directors of each of Parent and Exchangeco shall be of the
good faith opinion that such additions will not be prejudicial to
the rights or interests of the Beneficiaries;
(b) making such amendments or modifications not inconsistent with
this Agreement as may be necessary or desirable with respect to
matters or questions which, in the good faith opinion of the
Board of Directors of each of Parent and Exchangeco and in the
opinion of the Trustee, having in mind the best interests of the
Beneficiaries, it may be expedient to make, provided that such
Boards of Directors and the Trustee, acting on the advice of
counsel, shall be of the opinion that such amendments and
modifications will not be prejudicial to the interests of the
Beneficiaries; or
(c) making such changes or corrections which, on the advice of
counsel to Parent, Exchangeco 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, acting on the advice
of counsel, and the Board of Directors of each of Parent and
Exchangeco shall be of the opinion that such changes or
corrections will not be prejudicial to the rights and interests
of the Beneficiaries.
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12.3 MEETING TO CONSIDER AMENDMENTS
Exchangeco, at the request of Parent, shall call a meeting or meetings of
the Beneficiaries for the purpose of considering any proposed amendment or
modification requiring approval pursuant hereto. Any such meeting or meetings
shall be called and held in accordance with the by-laws of Exchangeco, the Share
Provisions and all applicable laws.
12.4 CHANGES IN CAPITAL OF PARENT AND EXCHANGECO
At all times after the occurrence of any event contemplated pursuant to
section 2.7 or 2.8 of the Support Agreement or otherwise, as a result of which
either Parent Common Shares or the Exchangeable Shares or both are in any way
changed, this Agreement shall forthwith be amended and modified as necessary in
order that it shall apply with full force and effect, mutatis mutandis, to all
new securities into which Parent Common Shares 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
From time to time Exchangeco (when authorized by a resolution of its
Board of Directors), Parent (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 and the covenants
of and obligations assumed by each such Parent Successor in
accordance with the provisions of Article 11 and the successors
of the Trustee or any successor trustee in accordance with the
provisions of Article 10;
(b) making any additions to, deletions from or alterations of the
provisions of this Agreement or the Voting Rights, the Exchange
Right or the Automatic Exchange Rights which, in the opinion of
the Trustee, will not be prejudicial to the interests of the
Beneficiaries or are, in the opinion of counsel to the Trustee,
necessary or advisable in order to incorporate, reflect or comply
with any legislation the provisions of which apply to Parent,
Exchangeco, the Trustee or this Agreement; and
(c) for any other purposes not inconsistent with the provisions of
this Agreement, including without limitation, to make or evidence
any amendment or modification to this Agreement as contemplated
hereby, provided that, in the opinion of the Trustee, the rights
of the Trustee and Beneficiaries will not be prejudiced thereby.
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ARTICLE 13
TERMINATION
13.1 TERM
The Trust created by this Agreement shall continue until the earliest to
occur of the following events:
(a) no outstanding Exchangeable Shares are held by a Beneficiary;
(b) each of Parent and Exchangeco elects in writing to terminate the
Trust and such termination is approved by the Beneficiaries in
accordance with section 10.2 of the Share Provisions; and
(c) 21 years after the death of the last survivor of the descendants
of His Majesty King George VI of Canada and the United Kingdom of
Great Britain and Northern Ireland living on the date of the
creation of the Trust.
13.2 SURVIVAL OF AGREEMENT
This Agreement shall survive any termination of the Trust and shall
continue until there are no Exchangeable Shares outstanding held by a
Beneficiary; provided, however, that the provisions of Articles 8 and 9 shall
survive any such termination of this Agreement.
ARTICLE 14
GENERAL
14.1 SEVERABILITY
If any term or other provision of this Agreement is invalid, illegal or
incapable of being enforced by any rule or law, or public policy, all other
conditions and provisions of this Agreement shall nevertheless remain in full
force and effect so long as the economic or legal substance of the transactions
contemplated hereby is not affected in any manner materially adverse to any
party. Upon such determination that any term or other provision is invalid,
illegal or incapable of being enforced, the parties hereto shall negotiate in
good faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible in an acceptable manner to the end that the
transactions contemplated hereby are fulfilled to the fullest extent possible.
14.2 ENUREMENT
This Agreement shall be binding upon and enure to the benefit of the
parties hereto and their respective successors and assigns and, subject to the
terms hereof, to the benefit of the Beneficiaries and is specifically assignable
to any Affiliate of Parent without the consent of the Beneficiaries or the
Trustee.
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
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parties at the following addresses (or at such other address for such party as
shall be specified in like notice):
(a) To Parent or Exchangeco at:
c/o Solectron Corporation
777 Gibraltar Drive, Building 5
Milpitas, CA 95035
Attention: Chairman, President and Chief Executive Officer
Facsimile: 408-956-6063
with a copy (which shall not constitute notice) to:
Osler, Hoskin & Harcourt LLP
800 Rene-Levesque Boulevard West
Suite 800
Montreal, Quebec
H3B 1X9
Attention: H.B. Clay Horner
E.A. (Ward) Sellers
Facsimile: (416) 862-6666 and
(514) 904-8101
(b) To the Trustee at:
National Bank Trust Inc.
1100 University Street
Suite 900
Montreal, Quebec
H3B 2G7
Attention: Manager, Share Ownership Management
Facsimile: (514) 871-7434
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 TO BENEFICIARIES
Any and all notices to be given and any documents to be sent to any
Beneficiary may be given or sent to the address of such Beneficiary shown on the
register of holders of Exchangeable Shares in any manner permitted by the
by-laws of Exchangeco from time to time in force in respect of notices to
shareholders and shall be deemed to be received (if given or sent
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in such manner) at the time specified in such by-laws, the provisions of which
by-laws shall apply mutatis mutandis to notices or documents as aforesaid sent
to such Beneficiary.
14.5 RISK OF PAYMENTS BY POST
Whenever payments are to be made or documents are to be sent to any
Beneficiary by the Trustee or by a Beneficiary to the Trustee, the making of
such payment or sending of such document sent through the post shall be at the
risk of Parent and Exchangeco, in the case of payments made or documents sent by
the Trustee, and at the risk of the Beneficiary, in the case of payments made or
documents sent by the Beneficiary.
14.6 COUNTERPARTS
This Agreement may be executed in counterparts, each of which shall be
deemed an original, but all of which taken together shall constitute one and the
same instrument.
14.7 JURISDICTION
This Agreement shall be construed and enforced in accordance with the
laws of the Province of Ontario and the laws of Canada applicable therein.
14.8 ATTORNMENT
Each of the Trustee, Parent and Exchangeco agrees that any action or
proceeding arising out of or relating to this Agreement may be instituted in the
Court, 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 not to seek, and hereby waives, any review of the merits
of any such judgment by the courts of any other jurisdiction, and Parent hereby
appoints Exchangeco at its registered office in the Province of Ontario as
attorney for service of process.
IN WITNESS WHEREOF the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
SOLECTRON CORPORATION
By: /s/ Susan Wang
--------------------------------------
Name: Susan Wang
Title: Executive Vice President
SOLECTRON GLOBAL SERVICES CANADA INC.
By: /s/ Robert Aeschliman
--------------------------------------
Name: Robert Aeschliman
Title: Secretary
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NATIONAL BANK TRUST INC.
By: /s/ JOSEE LEGAULT
--------------------------------------
Name: Josee Legault
Title: Section Manager
By: /s/ MARTINE GAUTHIER
--------------------------------------
Name: Martine Gauthier
Title: Account Manager