VOTING TRUST AND EXCHANGE AGREEMENT
THIS AGREEMENT is dated for reference the 29th day of February 2000.
AMONG:
EFINANCIAL DEPOT.COM, INC.
150-1875 Century Park East
Century City, California, U.S.A. 90067
(hereinafter referred to as "Pubco")
OF THE FIRST PART
WESTCOR MORTGAGE INC.
#204, 1109 - 17th Avenue, S.W.
Calgary, Alberta T2T 5R9
(hereinafter referred to as "Westcor'')
OF THE SECOND PART
MILLER THOMSON
Barristers and Solicitors
3000, 700-9th Avenue S.W.
Calgary, Alberta T2P 3V4
(hereinafter referred to as the "Trustee'')
OF THE THIRD PART
PATRICIA KIRKHAM
c/o #204, 1109 - 17th Avenue, S.W.,
Calgary, Alberta, T2T 5R9 and
DENNIS PETERSEN
c/o #204, 1109 - 17th Avenue, S.W.,
Calgary, Alberta, T2T 5R9
(hereinafter referred to as the "Vendors'')
OF THE FOURTH PART
WHEREAS pursuant to the provisions of a share purchase agreement between Pubco
and the shareholders of Westcor dated for reference February 29, 2000
(hereinafter referred to as the "Share Purchase Agreement") the parties thereto
agree that Pubco and Westcor would enter into this Voting Trust and Exchange
Agreement; and
WHEREAS pursuant to the provisions of the Share Purchase Agreement the
shareholders of Westcor represented that the articles of Westcor will authorize
an unlimited number of Exchangeable Shares having the attributes as set out in
the Restated Articles and Articles of Amendment of Westcor (the "Exchangeable
Share Provisions"); and
WHEREAS Pubco agreed to provide voting rights in Pubco to each holder (other
than Pubco and its Subsidiaries) from time to time of Exchangeable Shares, such
voting rights per Exchangeable Share to be equivalent to the voting rights per
share of Pubco Common Stock (the "Pubco Common Stock''); and
WHEREAS Pubco is to grant to and in favour of the holders (other than Pubco and
its Subsidiaries) from time to time of Exchangeable Shares the right, in the
circumstances set forth herein, to require Pubco to purchase from each such
holder all or any part of the Exchangeable Shares held by the holder; and
WHEREAS the parties desire to make appropriate provision and to establish a
procedure whereby voting rights in Pubco shall be exercisable by holders (other
than Pubco and its Subsidiaries) from time to time of Exchangeable Shares by and
through the Trustee, which will hold legal title to one (1) share of Pubco
Special Preferred Voting Stock (the "Pubco Special Voting Stock") to which
voting rights attach for the benefit of such holders and whereby the rights to
require Pubco to purchase Exchangeable Shares from the holders thereof (other
than Pubco and its Subsidiaries) shall be exercisable by such holders from time
to time of Exchangeable Shares by and through the Trustee, which will hold legal
title to such rights for the benefit of such holders; and
WHEREAS these recitals and any statements of fact in this Agreement are made by
Pubco and Westcor and not by the Trustee;
NOW THEREFORE in consideration of the respective covenants and agreements
provided in this Agreement and for other good and valuable consideration (the
receipt and sufficiency of which are hereby acknowledged), the parties agree as
follows:
1. DEFINITIONS AND INTERPRETATION
(a) Definitions. In this Agreement, the following terms shall have the
following meanings:
"Aggregate Equivalent Vote Amount" means, with respect to any matter,
proposition or question on which holders of Pubco Common Stock are entitled to
vote, consent or otherwise act, the product of (i) the number of shares of
Exchangeable Shares issued and outstanding and held by Holders multiplied by
(ii) the Equivalent Vote Amount.
"Automatic Exchange Rights" means the benefit of the obligation of Pubco to
effect the automatic exchange of shares of Pubco Common Stock for Exchangeable
Shares pursuant to Section 5 (k) hereof.
"Board of Directors" means the Board of Directors of Westcor.
"Business Day" has the meaning attributed thereto in the Exchangeable Share
Provisions.
"Equivalent Vote Amount" means, with respect to any matter, proposition or
question on which holders of Pubco Common Stock are entitled to vote, consent or
otherwise act, the number of votes to which a holder of one share of Pubco
Common Stock is entitled with respect to such matter, proposition or question.
"Exchange Right" has the meaning attributed thereto in Article 5 hereof.
"Exchangeable Share Consideration" has the meaning attributed thereto in the
Exchangeable Share Provisions.
"Exchangeable Share Price" has the meaning attributed thereto in the
Exchangeable Share Provisions.
"Exchangeable Share Provisions" has the meaning attributed thereto in the
recitals hereto.
"Exchangeable Shares" has the meaning attributed thereto in the recitals hereto.
"Holder Votes" has the meaning attributed thereto in Section 4(b) hereof.
"Holders" means the registered holders from time to time of Exchangeable Shares,
other than Pubco and its Subsidiaries.
"Insolvency Event" means the institution by Westcor of any proceeding to be
adjudicated a bankrupt or insolvent or to be dissolved or wound-up, or the
consent of Westcor to the institution of bankruptcy, insolvency, dissolution or
winding-up proceedings against it, or the filing of a petition, answer or
consent seeking dissolution or winding-up under any bankruptcy, insolvency or
analogous laws, including without limitation the Companies' Creditors'
Arrangement Act (Canada) and the Bankruptcy and Insolvency Act (Canada), and the
failure by Westcor to contest in good faith any such proceedings commenced in
respect of Westcor within 15 days of becoming aware thereof, or the consent by
Westcor to the filing of any such petition or to the appointment of a receiver,
or the making by Westcor of a general assignment for the benefit of creditors,
or the admission in writing by Westcor of its inability to pay its debts
generally as they become due, or Westcor not being permitted, pursuant to
liquidity or solvency requirements of applicable law, to redeem any Retracted
Shares pursuant to Section 3.7(f) of the Exchangeable Share Provisions.
"Liquidation Call Right" has the meaning attributed thereto in the Exchangeable
Share Provisions.
"Liquidation Event" has the meaning attributed thereto in subsection 5(k)(ii)
hereof.
"Liquidation Event Effective Time" has the meaning attributed thereto in
subsection 5 (k) (iii) hereof.
"List" has the meaning attributed thereto in Section 4(f) hereof.
"Officers' Certificate" means, with respect to Pubco or Westcor, as the case may
be, a certificate signed by any two of the Chairman of the Board, the
Vice-Chairman of the Board, the President, any Vice-President or any other
senior officer of Pubco or Westcor, as the case may be.
"Person" includes an individual, partnership, corporation, company,
unincorporated syndicate or organization, trust, trustee, executor,
administrator and other legal representative.
"Pubco Common Stock" has the meaning attributed thereto in the recitals
hereto.
"Pubco Consent" has the meaning attributed thereto in Section 4(b) hereof.
"Pubco Meeting" has the meaning attributed thereto in Section 4(b) hereof.
"Pubco Special Voting Stock" has the meaning attributed thereto in the recitals
hereto.
"Pubco Successor" has the meaning attributed thereto in subsection 11 (a)
hereof.
"Redemption Call Right" has the meaning attributed thereto in the Exchangeable
Share Provisions.
"Retracted Shares" has the meaning attributed thereto in Section 5(g) hereof.
"Retraction Call Right" has the meaning attributed thereto in the Exchangeable
Share Provisions.
"Share Purchase Agreement" has the meaning attributed thereto in the recitals
hereof.
"Subsidiary" has the meaning attributed thereto in the Exchangeable Share
Provisions.
"Support Agreement" means that certain support agreement made as of even date
hereof between Westcor and Pubco.
"Trust" means the trust created by this Agreement.
"Trust Estate" means the 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 Miller Thomson and, subject to the provisions of Article 10
hereof, includes any successor trustee or permitted assigns.
"Voting Rights" means the voting rights attached to the Voting Share.
"Voting Share" means the one (1) share of Pubco Special Voting Stock, U.S. $1.00
par value, issued by Pubco to and deposited with the Trustee, which entitles the
holder of record to a number of votes at meetings of holders of Pubco Common
Stock equal to the Aggregate Equivalent Vote Amount.
(b) Interpretation Not Affected by Headings, etc. The division of this
Agreement into articles, sections and paragraphs and the insertion of headings
are for convenience of reference only and shall not affect the construction or
interpretation of this Agreement.
(c) Number, Gender, etc. Words importing the singular number only shall
include the plural and vice versa. Words importing the use of any gender shall
include all genders.
(d) 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.
2. PURPOSE OF AGREEMENT
The purpose of this Agreement is to create the Trust for the benefit of the
Holders, as herein provided. The Trustee will hold the Voting Share in order to
enable the Trustee to exercise the Voting Rights and will hold the Exchange
Right and the Automatic Exchange Rights in order to enable the Trustee to
exercise such rights, in each case as Trustee for and on behalf of the Holders
as provided in this Agreement. The Trust is hereby constituted on February 29,
2000, by the granting of the Exchange Rights and Automatic Exchange Rights to
the Trustee notwithstanding that the Voting Share entitling the Trustee to
Voting Rights is delivered after the date hereof.
3. VOTING SHARE
(a) Issuance and Ownership of the Voting Share. Immediately following
approval by the Shareholders of the creation and issuance of the Voting Share,
Pubco shall issue to and deposit with the Trustee the Voting Share to be
hereafter held of record by the Trustee as trustee for and on behalf of, and for
the use and benefit of the Holders and in accordance with the provisions of this
Agreement in consideration for the payment by the Trustee of $1.00 (the receipt
and sufficiency of which is hereby acknowledged) for and on behalf of the
Holders. During the term of the Trust and subject to the terms and conditions of
this Agreement, the Trustee shall possess and be vested with full legal
ownership of the Voting Share and shall be entitled to exercise all of the
rights and powers of an owner with respect to the Voting Share, provided that
the Trustee shall:
(i) hold the Voting Share and the legal title thereto as trustee solely for
the use and benefit of the Holders in accordance with the provisions of this
Agreement; and
(ii) except as specifically authorized by this Agreement, have no power or
authority to sell, transfer, vote or otherwise deal in or with the Voting Share
and the Voting Share shall not be used or disposed of by the Trustee for any
purpose other than the purposes for which this Trust is created pursuant to this
Agreement.
(b) Legended Share Certificates. Westcor will cause each certificate
representing Exchangeable Shares to bear an appropriate legend notifying the
Holders of their right to instruct the Trustee with respect to the exercise of
the Voting Rights with respect to the Exchangeable Shares held by a Holder.
(c) Safe Keeping of Certificate. The certificate representing the Voting
Share shall at all times be held in safe keeping by the Trustee or its agent.
4. EXERCISE OF VOTING RIGHTS
(a) Voting Rights. The Trustee, as the holder of record of the Voting
Share, shall be entitled to all of the Voting Rights, including the right to
consent to or to vote in person or by proxy the Voting Share, on any matter,
question or proposition whatsoever that may properly come before the
stockholders of Pubco at a Pubco Meeting or in connection with a Pubco Consent
(in each case, as hereinafter defined). The Voting Rights shall be and remain
vested in and exercised by the Trustee. Subject to Section 7(m) hereof, the
Trustee shall exercise the Voting Rights only on the basis of instructions
received pursuant to this Article 4 from Holders entitled to instruct the
Trustee as to the voting thereof at the time at which a Pubco Consent is sought
or a Pubco Meeting is held. To the extent that no instructions are received from
a Holder with respect to the Voting Rights to which such Holder is entitled, the
Trustee shall not exercise or permit the exercise of such Holder's Vote.
(b) Number of Votes. With respect to all meetings of stockholders of Pubco
at which holders of shares of Pubco Common Stock are entitled to vote (a "Pubco
Meeting") and with respect to all written consents sought by Pubco from its
stockholders including the holders of shares of Pubco Common Stock (a "Pubco
Consent"), each Holder shall be entitled to instruct the Trustee to cast and
exercise, in the manner instructed, a number of votes equal to the Equivalent
Vote Amount for each Exchangeable Share owned of record by such Holder on the
record date established by Pubco or by applicable law for such Pubco Meeting or
Pubco Consent, as the case may be (the "Holder Votes" ) in respect of each
matter, question or proposition to be voted on at such Pubco Meeting or to be
consented to in connection with such Pubco Consent.
(c) Mailings to Shareholders. With respect to each Pubco Meeting and Pubco
Consent, the Trustee will mail or cause to be mailed (or otherwise communicate
in the same manner as Pubco utilizes in communications to holders of Pubco
Common Stock, subject to the Trustee's ability to provide this method of
communication and upon being advised in writing of such method) to each of the
Holders named in the List on the same day as the initial mailing or notice (or
other communication) with respect thereto is given by Pubco to its stockholders:
(i) a copy of such notice, together with any proxy or information statement
and related materials to be provided to stockholders of Pubco;
(ii) a statement that such Holder is entitled to instruct the Trustee as to
the exercise of the Holder Votes with respect to such Pubco Meeting or Pubco
Consent, as the case may be, or, pursuant to Section 4(g) hereof, to attend such
Pubco Meeting and to exercise personally the Holder Votes thereat;
(iii) 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:
(A) a proxy to such Holder or his designee to exercise personally the Holder
Votes; or
(B) a proxy to a designated agent or other representative of the management
of Pubco to exercise such Holder Votes;
(iv) a statement that if no such instructions are received from the Holder,
the Holder Votes to which such Holder is entitled will not be exercised;
(v) a form of direction whereby the Holder may so direct and instruct the
Trustee as contemplated herein; and
(vi) a statement of (A) 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
Pubco Meeting shall not be later than the close of business on the Business Day
prior to such meeting, and (B) the method for revoking or amending such
instructions.
The materials referred to above are to be provided by Pubco to the Trustee, but
shall be subject to review and comment by the Trustee.
For the purpose of determining Holder Votes to which a Holder is entitled in
respect of any such Pubco Meeting or Pubco Consent, the number of Exchangeable
Shares owned of record by the Holder shall be determined at the close of
business on the record date established by Pubco or by applicable law for
purposes of determining stockholders entitled to vote at such Pubco Meeting or
to give written consent in connection with such Pubco Consent. Pubco will
notify the Trustee in writing of any decision of the board of directors of Pubco
with respect to the calling of any such Pubco Meeting or the seeking of any such
Pubco Consent and shall provide all necessary information and materials to the
Trustee in each case promptly and in any event in sufficient time to enable the
Trustee to perform its obligations contemplated by this Section 4(c).
(d) Copies of Stockholder Information. Pubco will deliver to the Trustee
copies of all proxy materials (including notices of Pubco Meetings but excluding
proxies to vote shares of Pubco Common Stock), information statements, reports
(including without limitation all interim and annual financial statements) and
other written communications that are to be distributed from time to time to
holders of Pubco Common Stock in sufficient quantities and in sufficient time so
as to enable the Trustee to send those materials to each Holder at the same time
as such materials are first sent to holders of Pubco Common Stock. The Trustee
will mail or otherwise send to each Holder, at the expense of Pubco, copies of
all such materials (and all materials specifically directed to the Holders or to
the Trustee for the benefit of the Holders by Pubco) received by the Trustee
from Pubco at the same time as such materials are first sent to holders of Pubco
Common Stock. The Trustee will make copies of all such materials available for
inspection by any Holder at the office of the Trustee in the city of Calgary.
(e) Other Materials. Immediately after receipt by Pubco or any stockholder
of Pubco of any material sent or given generally to the holders of Pubco Common
Stock by or on behalf of a third party, including without limitation dissident
proxy and information circulars (and related information and material) and
tender and exchange offer circulars (and related information and material),
Pubco shall use its best efforts to obtain and deliver to the Trustee copies
thereof in sufficient quantities so as to enable the Trustee to forward such
material (unless the same has been provided directly to Holders by such third
party) to each Holder as soon as possible thereafter. As soon as practicable
after receipt thereof, the Trustee will mail or otherwise send to each Holder,
at the expense of Pubco, copies of all such materials received by the Trustee
from Pubco. The Trustee will also make copies of all such materials available
for inspection by any Holder at the office of the Trustee in the city of
Edmonton.
(f) List of Persons Entitled to Vote. Westcor shall, (i) prior to each
annual, general and special Pubco Meeting or the seeking of any Pubco Consent
and (ii) forthwith upon each request made at any time by the Trustee in writing,
prepare or cause to be prepared a list (a "List") of the names and addresses of
the Holders arranged in alphabetical order and showing the number of
Exchangeable Shares held of record by each such Holder, in each case at the
close of business on the date specified by the Trustee in such request or, in
the case of a List prepared in connection with a Pubco Meeting or a Pubco
Consent, at the close of business on the record date established by Pubco or
pursuant to applicable law for determining the holders of Pubco Common Stock
entitled to receive notice of and/or to vote at such Pubco Meeting or to give
consent in connection with such Pubco Consent. Each such List shall be delivered
to the Trustee promptly after receipt by Westcor of such request or the record
date for such meeting or seeking of consent, as the case may be, and in any
event within sufficient time as to enable the Trustee to perform its obligations
under this Agreement. Pubco agrees to give Westcor written notice (with a copy
to the Trustee) of the calling of any Pubco Meeting or the seeking of any Pubco
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
Westcor to perform its obligations under this Section 4(f).
(g) Entitlement to Direct Votes. Any Holder named in a List prepared in
connection with any Pubco Meeting or any Pubco Consent will be entitled (i) to
instruct the Trustee in the manner described in Section 4(c) hereof with respect
to the exercise of the Holder Votes to which such Holder is entitled or (ii) to
attend such meeting and personally to exercise thereat (or to exercise with
respect to any written consent), as the proxy of the Trustee, the Holder Votes
to which such Holder is entitled.
(h) Stockholder Proposals. The Trustee shall forthwith submit to Pubco any
stockholder proposal (within the meaning of the United States Securities
Exchange Act of 1934) received by the Trustee from a Holder. Such stockholder
proposal may be considered at any meeting of Pubco at which the holders of Pubco
Common Stock are entitled to submit stockholder proposals. Pubco agrees to
receive all stockholder proposals submitted by the Trustee that are received by
Pubco within the applicable time limitation under the United States Securities
Exchange Act of 1934, provided that not more than one proposal is submitted on
behalf of any one Holder.
(i) Voting by Trustee, and Attendance of Trustee Representative, at Meeting.
(ii) In connection with each Pubco Meeting and Pubco Consent, the Trustee
shall exercise, either in person or by proxy, in accordance with the
instructions received from a Holder pursuant to Section 4(c) hereof, the Holder
Votes as to which such Holder is entitled to direct the vote (or any lesser
number thereof as may be set forth in the instructions); provided, however, that
such written instructions are received by the Trustee from the Holder prior to
the time and date fixed by it for receipt of such instructions in the notice
given by the Trustee to the Holder pursuant to Section 4(c) hereof.
(iii) The Trustee shall cause such representatives as are empowered by it to
sign and deliver, on behalf of the Trustee, proxies for Voting Rights to attend
each Pubco Meeting. Upon submission by a Holder (or its designee) of
identification satisfactory to the Trustee's representatives, and at the
Holder's request, such representatives shall sign and deliver to such Holder (or
its designee) a proxy to exercise personally the Holder Votes as to which such
Holder is otherwise entitled hereunder to direct the vote, if such Holder either
(A) has not previously given the Trustee instructions pursuant to Section 4(c)
hereof in respect of such meeting, or (B) submits to the Trustee's
representatives written revocation of any such previous instructions. At such
meeting, the Holder exercising such Holder Votes shall have the same rights as
the Trustee to speak at the meeting in respect of any matter, question or
proposition, to vote by way of ballot at the meeting in respect of any matter,
question or proposition and to vote at such meeting by way of a show of hands in
respect of any matter, question or proposition.
(i) Distribution of Written Materials. Any written materials to be
distributed by the Trustee to the Holders pursuant to this Agreement shall be
delivered or sent by mail (or otherwise communicated in the same manner as Pubco
utilizes in communications to holders of Pubco Common Stock) to each Holder at
its address as shown on the books of Westcor. Westcor shall provide or cause to
be provided to the Trustee for this purpose, on a timely basis and without
charge or other expense:
(A) current lists of the Holders; and
(B) upon the request of the Trustee, mailing labels to enable the Trustee to
carry out its duties under this Agreement.
The materials referred to above are to be provided by Pubco to the Trustee, but
shall be subject to review and comment by the Trustee.
(j) Termination of Voting Right. Except as otherwise provided herein or in
the Exchangeable Share Provisions, all of the rights of a Holder with respect to
the Holder Votes exercisable in respect of the Exchangeable Shares held by such
Holder, including the right to instruct the Trustee as to the voting of or to
vote personally such Holder Votes and including the right to submit a
stockholder proposal to the Trustee in accordance with Section 4(h) hereof,
shall be deemed to be surrendered by the Holder to Pubco and such Holder Votes
and the Voting Rights represented thereby shall cease immediately upon the
delivery by such Holder to the Trustee of the certificates representing such
Exchangeable Shares in connection with the exercise by the Holder of the
Exchange Right or the occurrence of the automatic exchange of Exchangeable
Shares for shares of Pubco Common Stock, as specified in Article 5 hereof
(unless in either case Pubco shall not have delivered the Exchangeable Share
Consideration deliverable in exchange therefor to the Trustee for delivery to
the Holders), or upon the redemption of Exchangeable Shares pursuant to Article
3.7 or Article 3.8 of the Exchangeable Share Provisions, or upon the effective
date of the liquidation, dissolution or winding-up of Westcor pursuant to
Article 3.6 of the Exchangeable Share Provisions, or upon the purchase of
Exchangeable Shares from the holder thereof by Pubco pursuant to the exercise by
Pubco of the Retraction Call Right, the Redemption Call Right or the Liquidation
Call Right.
5. EXCHANGE RIGHT AND AUTOMATIC EXCHANGE
(a) Grant and Ownership of the Exchange Right. Pubco hereby grants to the
Trustee as trustee for and on behalf of, and for the use and benefit of, the
Holders (i) the right (the "Exchange Right"), upon the occurrence and during the
continuance of an Insolvency Event, to require Pubco to purchase from each or
any Holder all or any part of the Exchangeable Shares held by such Holders, and
(ii) the Automatic Exchange Rights, all in accordance with the provisions of
this Agreement.
Pubco hereby acknowledges receipt from the Trustee as trustee for and on behalf
of the Holders of good and valuable consideration (and the adequacy thereof) for
the grant of the Exchange Right and the Automatic Exchange Rights by Pubco 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:
(i) hold the Exchange Right and the Automatic Exchange Rights and the legal
title thereto as trustee solely for the use and benefit of the Holders in
accordance with the provisions of this Agreement; and
(ii) except as specifically authorized by this Agreement, have no power or
authority to exercise or otherwise deal in or with the Exchange Right or the
Automatic Exchange Rights, and the Trustee shall not exercise any such rights
for any purpose other than the purposes for which this Trust is created pursuant
to this Agreement.
(b) Legended Share Certificates. Westcor will cause each certificate
representing Exchangeable Shares to bear an appropriate legend notifying the
Holders of:
(i) their right to instruct the Trustee with respect to the exercise of the
Exchange Right in respect of the Exchangeable Shares held by a Holder; and
(ii) the Automatic Exchange Rights.
(c) General Exercise of Exchange Right. The Exchange Right shall be and
remain vested in and exercised by the Trustee. Subject to Section 7(m) hereof,
the Trustee shall exercise the Exchange Right only on the basis of instructions
received pursuant to this Article 5 from Holders entitled to instruct the
Trustee as to the exercise thereof. To the extent that no instructions are
received from a Holder with respect to the Exchange Right, the Trustee shall not
exercise or permit the exercise of the Exchange Right.
(d) Purchase Price. The purchase price payable by Pubco for each
Exchangeable Share to be purchased by Pubco under the Exchange Right shall be an
amount equal to the Exchangeable Share Price on the last Business Day prior to
the day of closing of the purchase and sale of such Exchangeable Share under the
Exchange Right. In connection with each exercise of the Exchange Right, Pubco
will provide to the Trustee an Officer's Certificate setting forth the
calculation of the Exchangeable Share Price for each Exchangeable Share. The
Exchangeable Share Price for each such Exchangeable Share so purchased may be
satisfied only by Pubco issuing and delivering or causing to be delivered to the
Trustee, on behalf of the relevant Holder, the Exchangeable Share Consideration
representing the total Exchangeable Share Price.
(e) Exercise Instructions. Subject to the terms and conditions herein set
forth, a Holder shall be entitled, upon the occurrence and during the
continuance of an Insolvency Event, to instruct the Trustee to exercise the
Exchange Right with respect to all or any part of the Exchangeable Shares
registered in the name of such Holder. To cause the exercise of the Exchange
Right by the Trustee, the Holder shall deliver to the Trustee, in person or by
certified or registered mail, at its principal offices in Calgary, Alberta or at
such other places in Canada as the Trustee may from time to time designate by
written notice to the Holders, the certificates representing the Exchangeable
Shares which such Holder desires Pubco to purchase, duly endorsed in blank, and
accompanied by such other documents and instruments as may be required to effect
a transfer of Exchangeable Shares under applicable law and the by-laws of
Westcor and such additional documents and instruments as the Trustee may
reasonably require together with (i) 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 (A) that the Holder thereby instructs
the Trustee to exercise the Exchange Right so as to require Pubco to purchase
from the Holder the number of Exchangeable Shares specified therein, (B) that
such Holder has good title to and owns all such Exchangea-ble Shares to be
acquired by Pubco free and clear of all liens, claims and encumbrances, (C) the
names in which the certificates representing Pubco Common Stock issuable in
connection with the exercise of the Exchange Right are to be issued and (D) the
names and addresses of the persons to whom the Exchangeable Share Consideration
should be delivered and (ii) payment (or evidence satisfactory to the Trustee,
Westcor and Pubco of payment) of the taxes (if any) payable as contemplated by
Section 5(h) of this Agreement. If only a part of the Exchangeable Shares
represented by any certificate or certificates delivered to the Trustee are to
be purchased by Pubco under the Exchange Right, a new certificate for the
balance of such Exchangeable Shares shall be issued to the Holder at the expense
of Westcor.
(f) Delivery of Exchangeable Share Consideration; Effect of Exercise.
Promptly after receipt of the certificates representing the Exchangeable Shares
which the Holder desires Pubco 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), duly endorsed for transfer to Pubco
the Trustee shall notify Pubco and Westcor of its receipt of the same, which
notice to Pubco and Westcor shall constitute exercise of the Exchange Right by
the Trustee on behalf of the Holder of such Exchangeable Shares, and Pubco shall
immediately thereafter deliver or cause to be delivered to the Trustee, for
delivery to the Holder of such Exchangeable Shares (or to such other persons, if
any, properly designated by such Holder), the Exchangea-ble Share Consideration
deliverable in connection with the exercise of the Exchange Right; provided,
however, that no such delivery shall be made unless and until the Holder
requesting the same shall have paid (or provided evidence satisfactory to the
Trustee, Westcor and Pubco of the payment of) the taxes (if any) payable as
contemplated by Section 5(h) of this Agreement. Immediately upon the giving of
notice by the Trustee to Pubco and Westcor of the exercise of the Exchange
Right, as provided in this Section 5 (f), 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 Pubco all of its right, title and interest in and to such
Exchangeable Shares and in the related interest in the Trust Estate and shall
cease to be a holder of such Exchangeable Shares and shall not be entitled to
exercise any of the rights of a holder in respect thereof, other than the right
to receive his proportionate part of the total purchase price therefor, unless
such Exchangeable Share Consideration is not delivered by Pubco to the Trustee,
for delivery to such Holder (or to such other persons, if any, properly
designated by such Holder), within three Business Days of the date of the giving
of such notice by the Trustee, in which case the rights of the Holder shall
remain unaffected until such Exchangeable Share Consideration is delivered by
Pubco and any cheque included therein is paid. Concurrently with such Holder
ceasing to be a holder of Exchangeable Shares, the Holder shall be considered
and deemed for all purposes to be the holder of the shares of Pubco Common Stock
delivered to it pursuant to the Exchange Right.
(g) Exercise of Exchange Right Subsequent to Retraction. In the event that a
Holder has exercised its right under Article 3.7 of the Exchangeable Share
Provisions to require Westcor to redeem any or all of the Exchangeable Shares
held by the Holder (the "Retracted Shares") and is notified by Westcor pursuant
to Section 3.7(f) of the Exchangeable Share Provisions that Westcor will not be
permitted as a result of liquidity or solvency requirements of applicable law to
redeem all such Retracted Shares, subject to receipt by the Trustee of written
notice to that effect from Westcor and provided that Pubco shall not have
exercised the Retraction Call Right with respect to the Retracted Shares and
that the Holder has not revoked the retraction request delivered by the Holder
to Westcor pursuant to Section 3.7(a) of the Exchangeable Share Provisions, the
retraction request will constitute and will be deemed to constitute notice from
the Holder to the Trustee instructing the Trustee to exercise the Exchange Right
with respect to those Retracted Shares which Westcor is unable to redeem. In any
such event, Westcor hereby agrees with the Trustee and in favour of the Holder
immediately to notify the Trustee of such prohibition against Westcor redeeming
all of the Retracted Shares and immediately to forward or cause to be forwarded
to the Trustee all relevant materials delivered by the Holder to Westcor
(including without limitation a copy of the retraction request delivered
pursuant to Section 3.7(a) of the Exchangeable Share Provisions) in connection
with such proposed redemption of the Retracted Shares and the Trustee will
thereupon exercise the Exchange Right with respect to the Retracted Shares that
Westcor is not permitted to redeem and will require Pubco to purchase such
shares in accordance with the provisions of this Article 5.
(h) Stamp or Other Transfer Taxes. Upon any sale of Exchangeable Shares to
Pubco pursuant to the Exchange Right or the Automatic Exchange Rights, the share
certificate or certificates representing Pubco Common Stock to be delivered in
connection with the payment of the total purchase price therefor shall be issued
in the name of the Holder of the Exchangeable Shares so sold or in such names as
such Holder may otherwise direct in writing without charge to the holder of the
Exchangeable Shares so sold, provided, however, that such Holder (i) shall pay
(and neither Pubco, Westcor nor the Trustee shall be required to pay) any
documentary, stamp, transfer or other similar taxes that may be payable in
respect of any transfer involved in the issuance or delivery of such shares to a
person other than such Holder or (ii) shall have established to the satisfaction
of the Trustee, Pubco and Westcor that such taxes, if any, have been paid.
(i) Notice of Insolvency Event. Immediately upon the occurrence of an
Insolvency Event or any event which with the giving of notice or the passage of
time or both would be an Insolvency Event Westcor and Pubco shall give written
notice thereof to the Trustee. As soon as practicable after receiving notice
from Westcor and Pubco or from any other Person of the occurrence of an
Insolvency Event, the Trustee will mail to each Holder, at the expense of Pubco,
a notice of such Insolvency Event in the form provided by Pubco, which notice
shall contain a brief statement of the right of the Holders with respect to the
Exchange Right.
(j) Reservation of Shares of Pubco Common Stock. Pubco hereby represents,
warrants and covenants that it has irrevocably reserved for issuance and will at
all times keep available, free from pre-emptive and other rights, out of its
authorized and unissued capital stock such number of shares of Pubco Common
Stock (i) as is equal to the sum of (A) the number of Exchangeable Shares issued
and outstanding from time to time and (B) the number of Exchangeable Shares
issuable upon the exercise of all rights to acquire Exchangeable Shares
outstanding from time to time and (ii) as are now and may hereafter be required
to enable and permit Westcor and Pubco to meet their respective obligations
hereunder, under the Support Agreement, under the Exchangeable Share Provisions
and under any other security or commitment pursuant to the Share Purchase
Agreement with respect to which Pubco may now or hereafter be required to issue
shares of Pubco Common Stock.
(k) Automatic Exchange on Liquidation of Pubco
(i) Pubco 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 Pubco to
institute voluntary liquidation, dissolution or winding-up proceedings with
respect to Pubco or to effect any other distribution of assets of Pubco 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) immediately, upon the earlier of (I) receipt by Pubco of notice of and
(II) Pubco otherwise becoming aware of any threatened or instituted claim, suit,
petition or other proceedings with respect to the involuntary liquidation,
dissolution or winding-up of Pubco or to effect any other distribution of assets
of Pubco among its stockholders for the purpose of winding-up its affairs.
(ii) Immediately following receipt by the Trustee from Pubco of notice of
any event (a "Liquidation Event") contemplated by Section 5 (k) (i) above, the
Trustee will give notice thereof to the Holders. Such notice will be provided by
Pubco to the Trustee and shall include a brief description of the automatic
exchange of Exchangeable Shares for shares of Pubco Common Stock provided for in
Section 5(k) (iii) below.
(iii) In order that the Holders will be able to participate on a PRO RATA
basis with the holders of Pubco Common Stock in the distribution of assets of
Pubco in connection with a Liquidation Event, immediately prior to the effective
time (the "Liquidation Event Effective Time") of a Liquidation Event all of the
then outstanding Exchangeable Shares shall be automatically exchanged for shares
of Pubco Common Stock. To effect such automatic exchange, Pubco shall be deemed
to have purchased each Exchangeable Share outstanding immediately prior to the
Liquidation Event Effective Time and held by Holders, and each Holder shall be
deemed to have sold the Exchangeable Shares held by it at such time, for a
purchase price per share equal to the Exchangeable Share Price applicable at
such time. In connection with such automatic exchange, Pubco shall provide to
the Trustee an Officers' Certificate setting forth the calculation of the
purchase price for each Exchangeable Share.
(iv) The closing of the transaction of purchase and sale contemplated by
Section 5(k)(iii) above shall be deemed to have occurred immediately prior to
the Liquidation Event Effective Time, and each Holder of Exchangeable Shares
shall be deemed to have transferred to Pubco all of the Holder's right, title
and interest in and to such Exchangeable Shares and the related interest in the
Trust Estate and shall cease to be a holder of such Exchangeable Shares and
Pubco shall deliver to the Holder the Exchangeable Share Consideration
deliverable upon the automatic exchange of Exchangeable Shares. Concurrently
with such Holder ceasing to be a holder of Exchangeable Shares, the Holder shall
be considered and deemed for all purposes to be the holder of the shares of
Pubco Common Stock issued to it pursuant to the automatic exchange of
Exchangeable Shares for Pubco Common Stock and the certificates held by the
Holder previously representing the Exchangeable Shares exchanged by the Holder
with Pubco pursuant to such automatic exchange shall thereafter be deemed to
represent the shares of Pubco Common Stock issued to the Holder by Pubco
pursuant to such automatic exchange. Upon the request of a Holder and the
surrender by the Holder of Exchangeable Share certificates deemed to represent
shares of Pubco Common Stock, duly endorsed in blank and accompanied by such
instruments of transfer as Pubco may reasonably require, Pubco shall deliver or
cause to be delivered to the Holder certificates representing the shares of
Pubco Common Stock of which the Holder is the holder.
6. RESTRICTIONS ON ISSUANCE OF PUBCO SPECIAL VOTING STOCK
During the term of this Agreement, Pubco will not issue any shares of Pubco
Special Voting Stock in addition to the Voting Share.
7. CONCERNING THE TRUSTEE
(a) Powers and Duties of the Trustee. The rights, powers and authorities of
the Trustee under this Agreement, in its capacity as trustee of the Trust, shall
include:
(i) receipt and deposit of the Voting Share from Pubco as trustee for and on
behalf of the Holders in accordance with the provisions of this Agreement;
(ii) granting proxies and distributing materials to Holders as provided in
this Agreement;
(iii) voting the Holder Votes in accordance with the provisions of this
Agreement;
(iv) receiving the grant of the Exchange Right and the Automatic Exchange
Rights from Pubco as trustee for and on behalf of the Holders in accordance with
the provisions of this Agreement;
(v) exercising the Exchange Right and enforcing the benefit of the Automatic
Exchange Rights, in each case in accordance with the provisions of this
Agreement, and in connection therewith receiving from Holders Exchangeable
Shares and other requisite documents and distributing to such Holders the shares
of Pubco Common Stock and cheques, if any, to which such Holders are entitled
upon the exercise of the Exchange Right or pursuant to the Automatic Exchange
Rights, as the case may be;
(vi) holding title to the Trust Estate;
(vii) investing any monies forming, from time to time, a part of the Trust
Estate as provided in this Agreement;
(viii) taking action at the direction of a Holder or Holders to enforce the
obligations of Pubco under this Agreement; and
(ix) taking such other actions and doing such other things as are
specifically provided in this Agreement.
In the exercise of such rights, powers and authorities the Trustee shall have
(and is granted) such incidental and additional rights, powers and authority not
in conflict with any of the provisions of this Agreement as the Trustee, acting
in good faith and in the reasonable exercise of its discretion, may deem
necessary, appropriate or desirable to effect the purpose of the Trust. Any
exercise of such discretionary rights, powers and authorities by the Trustee
shall be final, conclusive and binding upon all persons. For greater certainty,
the Trustee shall have only those duties as are set out specifically in this
Agreement.
The Trustee shall not be bound to give any notice or do or take any act, action
or proceeding by virtue of the powers conferred on it hereby unless and until it
shall 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.
(b) 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 funds, security and indemnified; such costs and expenses shall be
paid for by Pubco. The Trustees shall not be required to take any action until
it has received reasonable funding, security and indemnity against the costs,
expenses and liabilities which may be incurred by the Trustee.
(c) Dealings with Transfer Agents, Registrars, etc. Pubco irrevocably
authorizes the Trustee, from time to time, to:
(i) consult, communicate and otherwise deal with the respective registrars
and transfer agents, and with any such subsequent registrar or transfer agent,
of the Pubco Common Stock; and
(ii) requisition (A) 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 (B) from the transfer agent of Pubco
Common Stock, and any subsequent transfer agent of such shares, the share
certificates issuable upon the exercise from time to time of the Exchange Right
and pursuant to the Automatic Exchange Rights in the manner specified in Article
5 hereof.
Pubco irrevocably authorizes and agrees to direct its registrars and transfer
agents to comply with all such requests. Pubco 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 hereof.
(d) Books and Records. The Trustee shall keep available for inspection by
Pubco and Westcor, at the Trustee's principal office in Edmonton, Alberta,
correct and complete books and records of account relating to the Trustee's
actions under this Agreement, including without limitation all information
relating to mailings and instructions to and from Holders and all transactions
pursuant to the Voting Rights, the Exchange Right and the Automatic Exchange
Rights for the term of this Agreement. On or before April 30, 2001, and on or
before April 30 in every year thereafter, so long as the Voting Share is on
deposit with the Trustee, the Trustee shall transmit to Pubco and Westcor a
brief report with respect to:
(i) the property and funds comprising the Trust Estate as of that date;
(ii) the number of exercises of the Exchange Right, if any, and the
aggregate number of Exchangeable Shares received by the Trustee on behalf of
Holders in consideration of the issue and delivery by Pubco of shares of Pubco
Common Stock in connection with the Exchange Right, during the calendar year
ended on such date; and
(iii) all other actions taken by the Trustee in the performance of its
duties at the expense of Pubco under this Agreement which it had not previously
reported.
(e) Income Tax Returns and Reports. The Trustee shall, to the extent
necessary, prepare and file or cause to be prepared and filed on behalf of the
Trust appropriate United States and Canadian income tax returns and any other
returns or reports as may be required by applicable law, may obtain the advice
and assistance of such experts as the Trustee may consider necessary or
advisable. If requested by the Trustee, Pubco shall retain such experts for
purposes of providing such advice and assistance.
(f) Actions by Holders. Neither of the Vendors, as long as they are
Holders, shall have the right to institute any action, suit or proceeding or to
exercise any other remedy authorized by this Agreement for the purpose of
enforcing any of its rights or for the execution of any trust or power hereunder
unless the Holder has requested the Trustee to take or institute such action,
suit or proceeding and furnished the Trustee with the funding, security and
indemnity referred to in Section 7(b) hereof and the Trustee shall have failed
to act within a reasonable time thereafter. In such case, but not otherwise, the
Holder shall be entitled to take proceedings in any court of competent
jurisdiction such as the Trustee might have taken; it being understood and
intended that no one or more Holders shall have any right in any manner
whatsoever to affect, disturb or prejudice the rights hereby created by any such
action, or to enforce any right hereunder or under the Voting Rights, the
Exchange Right or the Automatic Exchange Rights, except subject to the
conditions and in the manner herein provided, and that all powers and trusts
hereunder shall be exercised and all proceedings at law shall be instituted, had
and maintained by the Trustee, except only as herein provided, and in any event
for the equal benefit of all Holders.
(g) Reliance upon Declarations. The Trustee shall not be considered to be
in contravention of any of its rights, powers, duties and authorities hereunder
if, when required, it acts and relies in good faith upon lists, mailing labels,
notices, statutory declarations, certificates, opinions, reports or other papers
or documents furnished pursuant to the provisions hereof or required by the
Trustee to be furnished to it in the exercise of its rights, powers, duties and
authorities hereunder and such lists, mailing labels, notices, statutory
declarations, certificates, opinions, reports or other papers or documents
comply with the provisions of Section 7(i) hereof, if applicable, and with any
other applicable provisions of this Agreement.
(h) Evidence and Authority to Trustee. Westcor and/or Pubco 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
Westcor and/or Pubco 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 Westcor and/or Pubco forthwith if and when:
(i) 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(h); or
(ii) the Trustee, in the exercise of its rights, powers, duties and
authorities under this Agreement, gives Westcor and/or Pubco 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 Officers' Certificate of Westcor and/or Pubco
or a statutory declaration or a certificate made by persons entitled to sign an
Officer's Certificate stating that any such condition has been complied with in
accordance with the terms of this Agreement.
Whenever such evidence relates to a matter other than the Voting Rights or the
Exchange Right or the Automatic Exchange Rights, and except as otherwise
specifically provided herein, such evidence may consist of a report or opinion
of any solicitor, auditor, accountant, appraiser, valuer, engineer or other
expert or any other person whose qualifications give authority to a statement
made by him provided that if such report or opinion is furnished by a director,
officer or employee of Westcor and/or Pubco it shall be in the form of an
Officers' Certificate or a statutory declaration.
Each statutory declaration, certificate, opinion or report furnished to the
Trustee as evidence of compliance with a condition provided for in this
Agreement shall include a statement by the person giving the evidence:
(iii) declaring that he has read and understands the provisions of this
Agreement relating to the condition in question;
(iv) describing the nature and scope of the examination or investigation
upon which he based the statutory declaration, certificate, statement or
opinion; and
(v) 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.
(i) Experts, Advisors and Agents. The Trustee may:
(i) in relation to these presents act and rely on the opinion or advice of
or information obtained from or prepared by any solicitor, auditor, accountant,
appraiser, valuer, engineer or other expert, whether retained by the Trustee or
by Westcor and/or Pubco or otherwise, and may employ such assistants as may be
necessary to the proper determination and discharge of its powers and duties and
determination of its rights hereunder and may pay proper and reasonable
compensation for all such legal and other advice or assistance as aforesaid; and
(ii) employ such agents and other assistants as it may reasonably require
for the proper determina-tion and discharge of its powers and duties hereunder,
and may pay reasonable remuneration for all services performed for it (and shall
be entitled to receive reasonable remuneration for all services performed by it)
in the discharge of the trusts hereof and compensation for all disbursements,
costs and expenses made or incurred by it in the determination and discharge of
its duties hereunder and in the management of the Trust.
(j) Investment of Monies Held by Trustee. Unless otherwise provided in this
Agreement, any monies 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 Alberta trustees are authorized to
invest trust unit monies, provided that such securities are stated to mature
within two years after their purchase by the Trustee, and the Trustee shall so
invest such monies on the written direction of Westcor. Pending the investment
of any monies as hereinbefore provided, such monies may be deposited in the name
of the Trustee in any chartered bank in Canada or, with the consent of Westcor,
in the deposit department of the Trustee or any other loan or company authorized
to accept deposits under the laws of Canada or any province thereof at the rate
of interest then current on similar deposits.
(k) 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.
(l) 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 Westcor and/or Pubco or of the
directors thereof until a duly authenticated copy of the instrument or
resolution containing such direction or request shall have been delivered to the
Trustee, and the Trustee shall be empowered to act and rely upon any such copy
purporting to be authenticated and believed by the Trustee to be genuine.
(m) Conflicting Claims. If conflicting claims or demands are made or
asserted with respect to any interest of any Holder in any Exchangeable Shares,
including any disagreement between the heirs, representatives, successors or
assigns succeeding to all or any part of the interest of any Holder in any
Exchangeable Shares resulting in conflicting claims or demands being made in
connection with such interest, then the Trustee shall be entitled, at its sole
discretion, to refuse to recognize or to comply with any such claim or demand.
In so refusing, the Trustee may elect not to exercise any Voting Rights,
Exchange Right or Automatic Exchange Rights subject to such conflicting claims
or demands and, in so doing, the Trustee shall not be or become liable to any
person on account of such election or its failure or refusal to comply with any
such conflicting claims or demands. The Trustee shall be entitled to continue to
refrain from acting and to refuse to act until:
(i) the rights of all adverse claimants with respect to the Voting Rights,
Exchange Right or Automatic Exchange Rights subject to such conflicting claims
or demands have been adjudicated by a final judgment of a court of competent
jurisdiction; or
(ii) all differences with respect to the Voting Rights, Exchange Right or
Automatic Exchange Right subject to such conflicting claims or demands have been
conclusively settled by a valid written agreement binding on 'all such adverse
claimants, and the Trustee shall have been furnished with an executed copy of
such agreement.
If the Trustee elects to recognize any claim or comply with any demand made by
any such adverse claimant, it may in its discretion require such claimant to
furnish such surety bond or other security satisfactory to the Trustee as it
shall deem appropriate fully to indemnify it as between all conflicting claims
or demands.
(n) Acceptance of Trust. The Trustee hereby accepts the Trust created and
provided for by and in this Agreement and agrees to perform the same upon the
terms and conditions herein set forth and to hold all rights, privileges and
benefits conferred hereby and by law in trust for the various persons who shall
from time to time be Holders, subject to all the terms and conditions herein set
forth.
8. COMPENSATION
The Vendors jointly and severally agree to pay to the Trustee reasonable
compensation for all of the services rendered by it under this Agreement and
will reimburse the Trustee for all reasonable expenses (including but not
limited to taxes, compensation paid to experts, agents and advisors and travel
expenses) and disbursements, including the cost and expense of any suit or
litigation of any character and any proceedings before any governmental agency
reasonably incurred by the Trustee in connection with its rights and duties
under this Agreement; provided that the Vendors 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 with gross negligence or willful misconduct.
9. INDEMNIFICATION AND LIMITATION OF LIABILITY
(a) Indemnification of the Trustee. Subject to paragraph 8 above, the
Vendors, Pubco and Westcor jointly and severally agree to indemnify and hold
harmless the Trustee, its partners, employees, agents, successors and assigns
(collectively, the "Indemnified Parties") against all claims, losses, damages,
costs, penalties, and fines (including reasonable expenses of the legal counsel
on a solicitor-and-his-own-client basis) which, without gross negligence or
willful misconduct on the part of such Indemnified Party, may be paid, incurred
or suffered by the indemnified Party by reason of or as a result of the
Trustee's acceptance or administration of the Trust, its compliance with its
duties set forth in this Agreement, or any written or oral instructions
delivered to the Trustee by the Vendors, Pubco or Westcor pursuant hereto. In no
case shall either of the Vendors, Pubco or Westcor be liable under this
indemnity for any claim against any of the Indemnified Parties unless the
Vendors, Pubco and Westcor 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, the Vendors, Pubco and Westcor shall be entitled to
participate at their own expense in the defence and, if the Vendors, Pubco or
Westcor 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 the Vendors, Pubco or Westcor, such authorization not to be
unreasonably withheld; or (ii) the named parties to any such suit include both
the Trustee and at least one of the Vendors, Pubco or Westcor and the Trustee
shall have been advised by counsel acceptable to the Vendors, Pubco or Westcor
that there may be one or more legal defences available to the Trustee that are
different from or in addition to those available to the Vendors, Pubco or
Westcor and that an actual or potential conflict exists (in which case the
Vendors, Pubco and Westcor shall not have the right to assume the defense of
such suit on behalf of the Trustee but shall be liable to pay the reasonable
fees and expenses of counsel for the Trustee).
(b) 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 gross
negligence or willful misconduct on the part of the Trustee.
10. CHANGE OF TRUSTEE
(a) Resignation. The Trustee, or any trustee hereafter appointed, may at
any time resign by giving written notice of such resignation to Pubco and
Westcor specifying the date on which it desires to resign, provided that such
notice shall not be given less than 30 days before such desired resignation date
unless Pubco and Westcor otherwise agree. Upon receiving such notice of
resignation, Pubco and Westcor shall promptly appoint a successor trustee by
written instrument in duplicate, one copy of which shall be delivered to the
resigning trustee and one copy to the successor trustee. Failing acceptance by a
successor trustee, a successor trustee may be appointed by an order of the
Alberta Court of Queen's Bench upon application of one or more of the parties
hereto.
(b) Removal. The Trustee, or any Trustee hereafter appointed, may be
removed with or without cause, at any time on 30 days prior notice by written
instrument executed by Pubco and Westcor, in duplicate, one copy of which shall
be delivered to the trustee so removed and one copy to the successor trustee,
provided that, in connection with such removal, provision is made for a
replacement trustee similar to that contemplated in Section 10(a).
(c) Successor Trustee. Any successor trustee appointed as provided under
this Agreement shall execute, acknowledge and deliver to Pubco and Westcor and
to its predecessor trustee an instrument accepting such appointment. Thereupon
the resignation or removal of the predecessor trustee shall become effective and
such successor trustee, without any further act, deed or conveyance, shall
become vested with all the rights, powers, duties and obligations of its
predecessor under this Agreement, with like effect as if originally named as
trustee in this Agreement. However, on the written request of Pubco and Westcor
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, Pubco, Westcor 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.
(d) Notice of Successor Trustee. Upon acceptance of appointment by a
successor trustee as provided herein, Pubco and Westcor shall cause to be mailed
notice of the succession of such trustee hereunder to each Holder specified in a
List. If Pubco or Westcor 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 Pubco and
Westcor.
11. PUBCO SUCCESSORS
(a) Certain Requirements in Respect of Combination, etc. Pubco shall not
enter into any transaction (whether by way of reconstruction, reorganization,
consolidation, merger, transfer, sale, lease or otherwise) whereby all or
substantially all of its undertaking, property and assets would become the
property of any other Person or, in the case of a merger, of the continuing
corporation resulting therefrom unless:
(i) such other Person or continuing corporation (the "Pubco Successor"), by
operation of law, becomes, without further action, bound by the terms and
provisions of this Agreement or, if not so bound, executes, prior to or
contemporaneously with the consummation of such transaction an agreement
supplemental hereto and such other instruments (if any) as are necessary or
advisable to evidence the assumption by the Pubco Successor of liability for all
monies payable and property deliverable hereunder and the covenant of such Pubco
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 Pubco under this
Agreement; and such transaction shall be upon such terms as substantially to
preserve and not to impair in any material respect any of the rights, duties,
powers and authorities of the Trustee or of the Holders hereunder; or
(ii) doing so will not, in the reasonable opinion of Pubco, adversely affect
the rights of any holder of Exchangeable Shares, and Pubco provides to each
holder of Exchangeable Shares 15 days notice of such intended action.
(b) Vesting of Powers in Successor. Whenever the conditions of Section 11
(a) hereof have been duly observed and performed, the Trustee, if required, by
Section 11 (a) hereof, the Pubco Successor and Westcor shall execute and deliver
the supplemental agreement provided for in Article 12 hereof and thereupon the
Pubco Successor shall possess and from time to time may exercise each and every
right and power of Pubco under this Agreement in the name of Pubco 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 Pubco or any officers of Pubco may be
done and performed with like force and effect by the directors or officers of
such Pubco Successor.
(c) Wholly-Owned Subsidiaries. Nothing herein shall be construed as
preventing the amalgamation or merger of any wholly-owned subsidiary of Pubco
with or into Pubco or the winding-up, liquidation or dissolution of any
wholly-owned subsidiary of Pubco provided that all of the assets of such
subsidiary are transferred to Pubco or another wholly-owned subsidiary of Pubco,
and any such transactions are expressly permitted by this Article 11.
12. AMENDMENTS AND SUPPLEMENTAL AGREEMENTS
(a) Amendments, Modifications, etc. This Agreement may not be amended or
modified except by an agreement in writing executed by Westcor, Pubco and the
Trustee and approved by the Holders in accordance with Section 3.10(b) of the
Exchangeable Share Provisions.
(b) Ministerial Amendments. Notwithstanding the provisions of Section 12(a)
hereof, the parties to this Agreement may in writing, at any time and from time
to time, without the approval of the Holders, amend or modify this Agreement for
the purposes of:
(i) adding to the covenants of any or all of the parties hereto for the
protection of the Holders hereunder;
(ii) making such amendments or modifications not inconsistent with this
Agreement as may be necessary or desirable with respect to matters or questions
which, in the opinion of the board of directors of each of Pubco and Westcor and
in the opinion of the Trustee and its counsel having in mind the best interests
of the Holders as a whole, it may be expedient to make, provided that such
boards of directors and the Trustee and its counsel shall be of the opinion that
such amendments and modifications will not be prejudicial to the interests of
the Holders as a whole; or
(iii) making such changes or corrections which, on the advice of counsel to
Westcor, Pubco and the Trustee, are required for the purpose of curing or
correcting any ambiguity or defect or inconsistent provision or clerical
omission or mistake or manifest error, provided that the Trustee and its counsel
and the board of directors of each of Westcor and Pubco shall be of the opinion
that such changes or corrections will not be prejudicial to the interests of the
Holders as a whole.
(c) Meeting to Consider Amendments. Westcor, at the request of Pubco, shall
call a meeting or meetings of the Holders for the purpose of considering any
proposed amendment or modification requiring approval pursuant hereto. Any such
meeting or meetings shall be called and held in accordance with the by-laws of
Westcor, the Exchangeable Share Provisions and all applicable laws.
(d) Changes in Capital of Pubco and Westcor. At all times after the
occurrence of any event effected pursuant to Section 2(5) or Section 2(6) of the
Support Agreement, as a result of which either Pubco Common Stock 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 Pubco
Common Stock or the Exchangeable Shares or both are so changed and the parties
hereto shall execute and deliver a supplemental agreement giving effect to and
evidencing such necessary amendments and modifications.
(e) Execution of Supplemental Agreements. No amendment to or modification or
waiver of any of the provisions of this Agreement otherwise permitted hereunder
shall be effective unless made in writing and signed by all of the parties
hereto. From time to time Westcor (when authorized by a resolution of its Board
of Directors), Pubco (when authorized by a resolution of its board of directors)
and the Trustee may, subject to the provisions of these presents, and they
shall, when so directed by these presents, execute and deliver by their proper
officers, agreements or other instruments supplemental hereto, which thereafter
shall form part hereof, for any one or more of the following purposes:
(i) evidencing the succession of any Pubco Successors to Pubco and the
covenants of and obligations assumed by each such Pubco Successors in accordance
with the provisions of Article 11, and the successor of any successor trustee in
accordance with the provisions of Article 10;
(ii) making any additions to, deletions from or alterations of the
provisions of this Agreement or the Voting Rights, the Exchange Right or the
Automatic Exchange Rights which, in the opinion of the Trustee and its counsel,
will not be prejudicial to the interests of the Holders as a whole or are in the
opinion of counsel to the Trustee necessary or advisable in order to
incorporate, reflect or comply with any legislation the provisions of which
apply to Pubco, Westcor, the Trustee or this Agreement; and
(iii) 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 contem-plated hereby, provided that, in the
opinion of the Trustee and its counsel, the rights of the Trustee and the
Holders as a whole will not be prejudiced thereby.
13. TERMINATION
(a) Term. The Trust created by this Agreement shall continue until the
earliest to occur of the following events:
(i) no outstanding Exchangeable Shares are held by a Holder;
(ii) each of Westcor and Pubco elects in writing to terminate the Trust and
such termination is approved by the Holders of the Exchangeable Shares in
accordance with Section 3.10(b) Exchangeable Share Provisions; and
(iii) twenty-one (21) years after the death of the last survivor of the
descendants of His Majesty King George VI of the United Kingdom of Great Britain
and Northern Ireland living on the date of the creation of the Trust.
(b) 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 Holder, provided, however, that the provisions of Articles 8 and 9
hereof shall survive any such termination of this Agreement.
14. PIGGYBACK RIGHT
Pubco agrees that it shall provide a written notice (the "Pubco Notice") to each
of the Vendors at least 30 days prior to taking any steps to file with any
securities regulators any documents necessary to qualify for sale any of the
Pubco Common Stock for public distribution in any jurisdiction in Canada or the
United States of America. Thereafter, should either or both of the Vendors
provide written notice to Pubco within 20 days of receiving the Pubco Notice
requesting that any Exchangeable Share Consideration already received or which
may be received by the Vendor, be qualified in addition to the securities
proposed to be qualified by Pubco, Pubco shall take all steps necessary to
qualify the Exchangeable Share Consideration for distribution. Should the
Vendors choose to have their Exchangeable Share Consideration qualified for
sale, they shall pay their proportionate share of any applicable sales
commission and shall pay the reasonable incremental costs which may be incurred
in preparation of the documents necessary to qualify their securities for public
distribution.
15. GENERAL
(a) Severability. If any provision of this Agreement is held to be invalid,
illegal or unenforceable, the validity, legality or enforceability of the
remainder of this Agreement shall not in any way be affected or impaired thereby
and the agreement shall be carried out as nearly as possible in accordance with
its original terms and conditions.
(b) Enurement. This Agreement shall be binding upon and enure to the benefit
of the parties hereto and their respective successors and permitted assigns and
to the benefit of the Holders.
(c) Notices to Parties. All notices and other communications between the
parties hereunder shall be in writing and shall be deemed to have been given if
delivered personally or by confirmed telecopy to the parties at the following
addresses (or at such other address for such party as shall be specified in like
notice):
(i) if to Pubco at:
150-1875 Century Park East
Century City, California, U.S.A. 90067
Attention: President
Fax: 604.681.3652
(ii) if to Westcor at:
#204, 1109 - 17th Avenue, S.W.
Calgary, Alberta T2T 5R9
Attention: President
Fax: 403 228.7101
(iii) if to the Trustee at:
Miller Thomson
Barristers and Solicitors
3000, 700-9th Avenue S.W.
Calgary, Alberta T2P 3V4
Attention: Mike Hayduk Q.C.
Fax: 403.262.0007
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.
(d) Notice of Holders. Any and all notices to be given and any documents to
be sent to any Holders may be given or sent to the address of such Holder shown
on the register of Holders of Exchangeable Shares in any manner permitted by the
Exchangeable Share Provisions and shall be deemed to be received (if given or
sent in such manner) at the time specified in such Exchangeable Share
Provisions, the provisions of which the Exchangeable Share Provisions shall
apply mutatis mutandis to notices or documents as aforesaid sent to such
Holders.
(e) Risk of Payments by Post. Whenever payments are to be made or documents
are to be sent to any Holder by the Trustee, by Westcor or by Pubco or by such
Holder to the Trustee or to Pubco or Westcor, the making of such payment or
sending of such document sent through the post shall be at the risk of Westcor
or Pubco, in the case of payments made or documents sent by the Trustee or
Westcor or Pubco, and the Holder, in the case of payments made or documents sent
by the Holder.
(f) 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.
(g) Jurisdiction. This Agreement shall be construed and enforced in
accordance with the laws of the Province of Alberta and the laws of Canada
applicable therein;
(h) Attornment. Pubco agrees that any action or proceeding arising out of
or relating to this Agreement may be instituted in the courts of Alberta,
waives any objection which it may have now or hereafter to the venue of any such
action or proceeding, irrevocably submits to the jurisdiction of the said courts
in any such action or proceeding, agrees to be bound by any judgment of the said
courts and agrees not to seek, and hereby waives, any review of the merits of
any such judgment by the courts of any other jurisdiction and hereby appoints
Westcor at its registered office in the Province of Alberta as Pubco's attorney
for service of process.
(i) Recitals. The recitals form part of this agreement.
IN WITNESS WHEREOF, the parties hereby have caused this Agreement to be duly
executed as of the date first above written.
E-FINANCIAL DEPOT.COM, INC. (A DELAWARE CORPORATION)
Per: /s/ John Huguet
WESTCOR MORTGAGE INC.
(AN ALBERTA CORPORATION)
Per: /s/ Patricia Kirkham
MILLER THOMSON
(TRUSTEE)
Per: /s/ signed
Per: /s/ signed
/s/ signed /s/ Patricia Kirkham
Witness PATRICIA KIRKHAM
/s/ signed /s/ Dennis Petersen
Witness DENNIS PETERSEN