VOTING AND EXCHANGE TRUST AGREEMENT
BETWEEN
JAWS TECHNOLOGIES, INC.
a Delaware corporation
and
JAWS ACQUISITION CANADA CORP.
an Alberta corporation
and
MONTREAL TRUST COMPANY OF CANADA
a Canadian trust company
Entered into and effective as of August 1, 2000
299839.1
VOTING AND EXCHANGE TRUST AGREEMENT
THIS VOTING AND EXCHANGE TRUST AGREEMENT is entered into effective as of August
1, 2000, by and between JAWS TECHNOLOGIES, INC., a Delaware corporation ("Jaws
US"), JAWS ACQUISITION CANADA CORP., an Alberta corporation ("Jaws Canada"), and
MONTREAL TRUST COMPANY OF CANADA, a trust company incorporated under the laws of
Canada and authorized to carry on business in all provinces of Canada (the
"Trustee").
WHEREAS, Jaws US, through Jaws Canada, intends to make acquisitions from time to
time on the basis of Exchangeable Shares being issued as the consideration in
whole or in part for the entities or assets being acquired.
WHEREAS, the Articles of Incorporation of Jaws Canada sets forth the rights,
privileges, restrictions and conditions attaching to the Exchangeable Shares, a
copy of which (current to the date hereof) is attached as Schedule "A" hereto
(collectively, the "Exchangeable Share Provisions").
WHEREAS, Jaws US is to provide voting rights in Jaws US to each holder (other
than Jaws US 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 Jaws US Common Stock.
WHEREAS, Jaws US is to grant to and in favor of the holders (other than Jaws US
and its Subsidiaries) from time to time of Exchangeable Shares the right, in the
circumstances set forth herein, to require Jaws US to purchase from each such
holder all or any part of the Exchangeable Shares held by the holder.
WHEREAS, the parties desire to make appropriate provision and to establish a
procedure whereby voting rights in Jaws US shall be exercisable by holders
(other than Jaws US and its Subsidiaries) from time to time of Exchangeable
Shares by and through the Trustee, which will hold legal title to one share of
Jaws US Special Voting Stock (the "Jaws US Special Voting Stock") to which
voting rights attach for the benefit of such holders and whereby the rights to
require Jaws US to purchase Exchangeable Shares from the holders thereof (other
than Jaws US 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.
WHEREAS, these recitals and any statements of fact in this Agreement are made by
Jaws US and Jaws Canada and not by the Trustee.
NOW THEREFORE, in consideration of the respective covenants and agreements
provided in this Agreement and for other good and valuable consideration (the
receipt and sufficiency of which are hereby acknowledged), the parties agree as
follows:
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ARTICLE I
DEFINITIONS AND INTERPRETATION
_______________________________
1.1 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 Jaws US 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 Jaws US
to effect the automatic exchange of shares of Jaws US Common Stock for
Exchangeable Shares pursuant to Section 5.12 hereof.
"Board of Directors" means the Board of Directors of Jaws Canada.
"Business Day" has the meaning provided in the Exchangeable Share
Provisions.
"Equivalent Vote Amount" means, with respect any matter, proposition or
question on which holders of Jaws US Common Stock are entitled to vote,
consent or otherwise act, the number of votes to which a holder of one
share of Jaws US Common Stock is entitled with respect to such matter,
proposition or question.
"Exchange Put Right" has the meaning provided in the Exchangeable Share
Provisions.
"Exchange Right" has the meaning provided in Article 5 hereof.
"Exchangeable Share Consideration" has the meaning provided in the
Exchangeable Share Provisions.
"Exchangeable Share Price" has the meaning provided in the Exchangeable
Share Provisions.
"Exchangeable Share Provisions" has the meaning provided in the recitals
hereto.
"Exchangeable Shares" has the meaning provided in the Exchangeable Share
Provisions.
"Holder Votes" has the meaning provided in Section 4.2 hereof.
"Holders" means the registered holders from time to time of Exchangeable
Shares, other than Jaws US and its Subsidiaries.
"Insolvency Event" means the institution by Jaws Canada of any proceeding
to be adjudicated as bankrupt or insolvent or to be dissolved or wound-up,
or the consent of Jaws Canada 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
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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 Jaws Canada to
contest in good faith any such proceedings commenced in respect of Jaws
Canada within 15 days of becoming aware thereof, or the consent by Jaws
Canada to the filing of any such petition or to the appointment of a
receiver, or the making by Jaws Canada of a general assignment for the
benefit of creditors, or the admission in writing by Jaws Canada of its
inability to pay its debts generally as they become due, or Jaws Canada's
not being permitted, pursuant to liquidity or solvency requirements of
applicable law, to redeem any Retracted Shares pursuant to Section 6.6 of
the Exchangeable Share Provisions.
"Jaws US Common Stock" has the meaning provided in the Exchangeable Share
Provisions.
"Jaws US Consent" has the meaning provided in Section 4.2 hereof.
"Jaws US Meeting" has the meaning provided in Section 4.2 hereof.
"Jaws US Special Voting Stock" has the meaning provided in the recitals
hereto.
"Jaws US Successor" has the meaning provided in subsection 11.1(a) hereof.
"Liquidation Call Right" has the meaning provided in the Exchangeable
Share Provisions.
"Liquidation Event" has the meaning provided in subsection 5.12(b) hereof.
"Liquidation Event Effective Time" has the meaning provided in subsection
5.12(c) hereof.
"List" has the meaning provided in Section 4.6 hereof.
"Officer's Certificate" means, with respect to Jaws US or Jaws Canada, as
the case may be, a certificate signed by any one of the Chairman of the
Board, the Vice-Chairman of the Board (if there be one), the President or
the Chief Financial Officer of Jaws US or Jaws Canada, as the case may be.
"Person" includes an individual, body corporate, partnership, company,
unincorporated syndicate or organization, trust, trustee, executor,
administrator and other legal representative.
"Redemption Call Right" has the meaning provided in the Exchangeable Share
Provisions.
"Retracted Shares" has the meaning provided in Section 5.7 hereof.
"Retraction Call Right" has the meaning provided in the Exchangeable Share
Provisions.
"Subsidiary" has the meaning provided in the Exchangeable Share
Provisions.
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"Support Agreement" means that certain support agreement made as of even
date hereof by and between Jaws US and Jaws Canada, as amended or
supplemented to from time to time.
"Trust" means the trust created by this Agreement.
"Trust Estate" means the Voting Share, any other securities, the Exchange
Put Right, 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 Montreal Trust Company of Canada 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 share of Jaws US Special Voting Stock, U.S.
$0.001 par value, issued by Jaws US to and deposited with the Trustee,
which entitles the holder of record to a number of votes at meetings of
holders of Jaws US Common Stock equal to the Aggregate Equivalent Vote
Amount.
1.2 Interpretation Not Affected by Headings, Etc.
The division of this Agreement into articles, sections and paragraphs and
the insertion of headings are for convenience of reference only and shall not
affect the construction or interpretation of this Agreement.
1.3 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.
1.4 Date for Any Action
If any date on which any action is required to be taken under this
Agreement is not a Business Day, such action shall be required to be taken on
the next succeeding Business Day.
1.5 Payments
All payments to be made hereunder will be made without interest and less
any tax required by Canadian law to be deducted or withheld.
ARTICLE II
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
Put Right, the Exchange Right and the Automatic Exchange Rights in order to
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enable the Trustee to exercise such rights, in each case as trustee for and on
behalf of the Holders as provided in this Agreement.
ARTICLE III
VOTING SHARE
__________________
3.1 Issuance and Ownership of the Voting Share
Jaws US shall issue to and deposit with the Trustee the Voting Share to be
thereafter 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. Jaws US shall concurrently with issuing the Voting Share to the
Trustee acknowledge receipt from the Trustee as trustee for and on behalf of the
Holders of good and valuable consideration (and the adequacy thereof) for the
issuance of the Voting Share. During the term of the Trust and subject to the
terms and conditions of this Agreement and upon issuance of the Voting Share to
the Trustee, the Trustee shall possess and be vested with full legal ownership
of the Voting Share and shall be entitled to exercise all of the rights and
powers of an owner with respect to the Voting Share, provided that the Trustee
shall:
(a) hold the Voting Share and the legal title thereto as trustee solely
for the use and benefit of the Holders in accordance with the
provisions of this Agreement; and
(b) except as specifically authorized by this Agreement, have no power
or authority to sell, transfer, vote or otherwise deal in or with
the 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.
3.2 Legended Share Certificates
Jaws Canada 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.
3.3 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.
ARTICLE IV
EXERCISE OF VOTING RIGHTS
_____________________________
4.1 Voting Rights
The Trustee, as the holder of record of the Voting Share, shall be
entitled to all of the Voting Rights, including the right to consent to or to
vote in person or by proxy the Voting Share, on any matter, question or
proposition whatsoever that may properly come before the stockholders of Jaws US
at a Jaws US Meeting or in connection with a Jaws US Consent (in each case, as
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hereinafter defined). The Voting Rights shall be and remain vested in and
exercised by the Trustee. Subject to Section 7.15 hereof, the Trustee shall
exercise the Voting Rights only on the basis of instructions received pursuant
to this Article 4 from Holders entitled to instruct the Trustee as to the voting
thereof at the time at which a Jaws US Consent is sought or a Jaws US Meeting is
held. To the extent that no instructions are received from a Holder with respect
to the Voting Rights to which such Holder is entitled, the Trustee shall not
exercise or permit the exercise of such Holder's Voting Rights.
4.2 Number of Votes
With respect to all meetings of stockholders of Jaws US at which holders
of shares of Jaws US Common Stock are entitled to vote (a "Jaws US Meeting") and
with respect to all written consents sought by Jaws US from its stockholders
including the holders of shares of Jaws US Common Stock (a "Jaws US 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 Jaws US or by applicable law for such Jaws US Meeting or Jaws US
Consent, as the case may be, (the "Holder Votes") in respect of each matter,
question or proposition to be voted on at such Jaws US Meeting or to be
consented to in connection with such Jaws US Consent.
4.3 Mailings to Shareholders
With respect to each Jaws US Meeting and Jaws US Consent, the Trustee will
use all commercially reasonable efforts to mail or cause to be mailed (or
otherwise communicate in the same manner as Jaws US utilizes in communications
to holders of Jaws US 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 Jaws US to
its stockholders:
(a) a copy of such notice, together with any proxy or information
statement and related materials to be provided to stockholders of
Jaws US;
(b) a statement that such Holder is entitled to instruct the Trustee as
to the exercise of the Holder Votes with respect to such Jaws US
Meeting or Jaws US Consent, as the case may be, or, pursuant to
Section 4.7 hereof, to attend such Jaws US Meeting and to exercise
personally the Holder Votes thereat;
(c) a statement as to the manner in which such instructions may be given
to the Trustee, including an express indication that instructions
may be given to the Trustee to give:
(i) a direction to vote to the Trustee to exercise personally the
Holder Votes; or
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(ii) a proxy to a designated agent or other representative of the
management of Jaws US to exercise such Holder Votes;
(d) a statement that if no such instructions are received from the
Holder, the Holder Votes to which such Holder is entitled will not
be exercised;
(e) a form of direction whereby the Holder may so direct and instruct
the Trustee as contemplated herein; and
(f) a statement of (i) the time and date by which such instructions must
be received by the Trustee in order to be binding upon it, which in
the case of a Jaws US Meeting shall not be earlier than the close of
business on the second Business Day prior to such meeting, and (ii)
the method for revoking or amending such instructions.
The materials referred to above are to be provided by Jaws US 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 Jaws US Meeting or Jaws US 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 Jaws US or by applicable law
for purposes of determining stockholders entitled to vote at such Jaws US
Meeting or to give written consent in connection with such Jaws US Consent. Jaws
US will notify the Trustee in writing of any decision of the board of directors
of Jaws US with respect to the calling of any such Jaws US Meeting or the
seeking of any such Jaws US Consent and shall provide all necessary information
and materials to the Trustee in each case promptly and in any event in
sufficient time to enable the Trustee to perform its obligations contemplated by
this Section 4.3.
4.4 Copies of Stockholder Information
Jaws US will deliver to the Trustee copies of all proxy materials,
(including notices of Jaws US Meetings, but excluding proxies to vote shares of
Jaws US 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 Jaws
US 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 Jaws US Common Stock. The Trustee will
mail or otherwise send to each Holder, at the expense of Jaws US, copies of all
such materials (and all materials specifically directed to the Holders or to the
Trustee for the benefit of the Holders by Jaws US) received by the Trustee from
Jaws US at the same time as such materials are first sent to holders of Jaws US
Common Stock. The Trustee will make copies of all such materials available for
inspection by any Holder at the Trustee's principal transfer office in the city
of Calgary.
4.5 Other Materials
Immediately after receipt by Jaws US or any stockholder of Jaws US of any
material sent or given generally to the holders of Jaws US Common Stock by or on
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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), Jaws US shall
use its reasonable 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 Jaws US, copies of all such materials received by the Trustee
from Jaws US. The Trustee will also make copies of all such materials available
for inspection by any Holder at the Trustee's principal transfer office in the
city of Calgary.
4.6 List of Persons Entitled to Vote
Jaws Canada shall, (i) prior to each annual, general or special Jaws US
Meeting or the seeking of any Jaws US 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 Jaws US Meeting or a Jaws US Consent, at the close of business on the
record date established by Jaws US or pursuant to applicable law for determining
the holders of Jaws US Common Stock entitled to receive notice of and/or to vote
at such Jaws US Meeting or to give consent in connection with such Jaws US
Consent. Each such List shall be delivered to the Trustee promptly after receipt
by Jaws Canada 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. Jaws US
agrees to give Jaws Canada written notice (with a copy to the Trustee) of the
calling of any Jaws US Meeting or the seeking of any Jaws US 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 Jaws Canada to perform
its obligations under this Section 4.6.
4.7 Entitlement to Direct Votes
Any Holder named in a List prepared in connection with any Jaws US Meeting
or any Jaws US Consent will be entitled (i) to instruct the Trustee in the
manner described in Section 4.3 hereof with respect to the exercise of the
Holder Votes to which such Holder is entitled or (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.
4.8 Voting by Trustee, and Attendance of Trustee Representative, at Meeting
(a) In connection with each Jaws US Meeting and Jaws US Consent, the
Trustee shall exercise, either in person or by proxy, in accordance
with the instructions received from a Holder pursuant to Section 4.3
hereof, the Holder Votes as to which such Holder is entitled to
direct the vote (or any lesser number thereof as may be set forth in
the instructions); provided, however, that such written instructions
are received by the Trustee from the Holder prior to the time and
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date fixed by it for receipt of such instructions in the notice
given by the Trustee to the Holder pursuant to Section 4.3 hereof.
(b) If a Holder wishes to exercise personally the Holder Votes as to
which such Holder is otherwise entitled hereunder, then upon
submission by such 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 direction to vote to exercise personally the
Holder Votes as to which such Holder is otherwise entitled hereunder
to direct the vote, if such Holder either:
(i) has not previously given the Trustee instructions pursuant to
Section 4.3 hereof in respect of such meeting, or
(ii) submits to the Trustee's representatives written revocation of
any such previous instructions.
At such meeting, the Holder exercising such Holder Votes shall have the
same rights as the Trustee to speak at the meeting in respect of any matter,
question or proposition, to vote by way of ballot at the meeting in respect of
any matter, question or proposition and to vote at such meeting by way of a show
of hands in respect of any matter, question or proposition.
4.9 Distribution of Written Materials
Any written materials to be distributed by the Trustee to the Holders
pursuant to this Agreement shall be delivered or sent by mail (or otherwise
communicated in the same manner as Jaws US utilizes in communications to holders
of Jaws US 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
Holder at its address as shown on the books of Jaws Canada . Jaws Canada 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) on 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 Jaws Canada to the
Trustee, but shall be subject to review and comment by the Trustee.
4.10 Termination of Voting Rights
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, shall be deemed to be surrendered by the Holder to Jaws US, and
such Holder Votes and the Voting Rights represented thereby shall cease
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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 Put Right or the Exchange Right or the occurrence of the
automatic exchange of Exchangeable Shares for shares of Jaws US Common Stock, as
specified in Article 5 hereof (unless in any case Jaws US 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 6 or Article 7 of the Exchangeable Share
Provisions, or upon the effective date of the liquidation, dissolution or
winding-up of Jaws Canada or any other distribution of the assets of Jaws Canada
among its shareholders for the purpose of winding up its affairs pursuant to
Article 5 of the Exchangeable Share Provisions, or upon the purchase of
Exchangeable Shares from the holder thereof by Jaws US pursuant to the exercise
by Jaws US of the Retraction Call Right, the Redemption Call Right or the
Liquidation Call Right.
ARTICLE V
EXCHANGE RIGHT AND AUTOMATIC EXCHANGE
_______________________________________
5.1 Grant and Ownership of the Exchange Put Right, Exchange Right and Automatic
Exchange Right
Jaws US hereby grants to the Trustee as trustee for and on behalf of, and
for the use and benefit of, the Holders:
(a) the Exchange Put Right;
(b) the right (the "Exchange Right"), upon the occurrence and during the
continuance of an Insolvency Event, to require Jaws US to purchase
from each or any Holder all or any part of the Exchangeable Shares
held by the Holders; and
(c) the Automatic Exchange Rights,
all in accordance with the provisions of this Agreement and the Exchangeable
Share Provisions, as the case may be. Jaws US 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 Put
Right, the Exchange Right and the Automatic Exchange Rights by Jaws US 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 Put Right, 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 Put Right, the Exchange Right and the
Automatic Exchange Rights, provided that the Trustee shall:
(d) hold the Exchange Put Right, 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
(e) except as specifically authorized by this Agreement, have no power
or authority to exercise or otherwise deal in or with the Exchange
Put Right, the Exchange Right or the Automatic Exchange Rights, and
the Trustee shall not exercise any such rights for any purpose other
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than the purposes for which this Trust is created pursuant to this
Agreement.
5.2 Legended Share Certificates
Jaws Canada will cause each certificate representing Exchangeable Shares
to bear an appropriate legend notifying the Holders of:
(a) their right to instruct the Trustee with respect to the exercise of
the Exchange Put Right and the Exchange Right in respect of the
Exchangeable Shares held by a Holder; and
(b) the Automatic Exchange Rights.
5.3 General Exercise of Exchange Put Right and the Exchange Right
The Exchange Put Right and the Exchange Right shall be and remain vested
in and exercised by the Trustee. Subject to Section 7.15 hereof, the Trustee
shall exercise the Exchange Put Right and 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 Put Right
and the Exchange Right, the Trustee shall not exercise or permit the exercise of
the Exchange Put Right and the Exchange Right.
5.4 Purchase Price
The purchase price payable by Jaws US for each Exchangeable Share to be
purchased by Jaws US (i) under the Exchange Put Right shall be the amount
determined under the Exchangeable Share Provisions; and (ii) 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, Jaws US will provide to the Trustee an Officer's Certificate
setting forth the calculation of the applicable Exchangeable Share Price for
each Exchangeable Share. The applicable Exchangeable Share Price for each such
Exchangeable Share so purchased may be satisfied only by Jaws US's issuing and
delivering or causing to be delivered to the Trustee, on behalf of the relevant
Holder, the applicable Exchangeable Share Consideration representing the total
applicable Exchangeable Share Price.
5.5 Exercise Instructions for Exchange Right
Subject to the terms and conditions herein set forth, a Holder shall be
entitled, upon the occurrence and during the continuance of an Insolvency Event,
to instruct the Trustee to exercise the Exchange Right with respect to all or
any part of the Exchangeable Shares registered in the name of such Holder on the
books of Jaws Canada. 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 transfer 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 Jaws US to purchase, duly endorsed in blank,
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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
Jaws Canada and such additional documents and instruments as the Trustee may
reasonably require, together with:
(a) a duly completed form of notice of exercise of the Exchange Right,
contained on the reverse of or attached to the Exchangeable Share
certificates, stating:
(i) that the Holder thereby instructs the Trustee to exercise the
Exchange Right so as to require Jaws US to purchase from the
Holder the number of Exchangeable Shares specified therein,
(ii) that such Holder has good title to and owns all such
Exchangeable Shares to be acquired by Jaws US free and clear of
all liens, claims, encumbrances, security interests and adverse
claims or interests,
(iii) the names in which the certificates representing Jaws US Common
Stock issuable in connection with the exercise of the Exchange
Right are to be issued, and
(iv) the names and addresses of the persons to whom the Exchangeable
Share Consideration should be delivered; and
(b) payment (or evidence satisfactory to the Trustee, Jaws Canada and
Jaws US of payment) of the taxes (if any) payable as contemplated by
Section 5.8 of this Agreement.
If only a part of the Exchangeable Shares represented by any certificate or
certificates delivered to the Trustee are to be purchased by Jaws US under the
Exchange Right, a new certificate for the balance of such Exchangeable Shares
shall be issued to the Holder at the expense of Jaws Canada provided that no
fractional Exchangeable Shares shall be issued and fractional interests shall
instead be rounded up to the next whole number.
5.6 Delivery of Exchangeable Share Consideration; Effect of Exercise
As soon as practicable after receipt of the certificates representing the
Exchangeable Shares which the Holder desires Jaws US to purchase under the
Exchange Put Right or the Exchange Right (together with such documents and
instruments of transfer and a duly completed form of notice of exercise of the
Exchange Put Right or the Exchange Right), duly endorsed for transfer to Jaws
US, the Trustee shall notify Jaws US and Jaws Canada of its receipt of the same,
which notice to Jaws US and Jaws Canada shall constitute exercise of the
Exchange Put Right or the Exchange Right by the Trustee on behalf of the Holder
of such Exchangeable Shares, and Jaws US 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 Exchangeable Share Consideration deliverable in connection
with the exercise of the Exchange Put Right or the Exchange Right; provided,
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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, Jaws Canada and Jaws US 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 Jaws US and Jaws Canada of the exercise of the Exchange
Put Right or the Exchange Right, as provided in this Section 5.6, (i) the
closing of the transaction of purchase and sale contemplated by the Exchange Put
Right or the Exchange Right shall be deemed to have occurred, (ii) Jaws US shall
be required to take all action necessary to permit it to occur, including
delivery to the Trustee of the relevant Exchangeable Share Consideration, as
soon as reasonably practicable following the receipt by the Trustee of notice,
certificates and other documents as aforesaid and (iii) the Holder of such
Exchangeable Shares shall be deemed to have transferred to Jaws US all of its
right, title and interest in and to such Exchangeable Shares and the related
interest in the Trust Estate, 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 Jaws US to the Trustee by the date specified above, in which
case the rights of the Holder shall remain unaffected until such Exchangeable
Share Consideration is delivered by Jaws US 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 Jaws US Common Stock delivered to it pursuant to the
Exchange Put Right or the Exchange Right. Notwithstanding the foregoing, until
the Exchangeable Share Consideration is delivered to the Holder, the Holder
shall be deemed to still be a holder of the sold Exchangeable Shares for
purposes of voting rights with respect thereto under this Agreement.
5.7 Exercise of Exchange Right Subsequent to Retraction
In the event that a Holder has exercised its right under Article 6 of the
Exchangeable Share Provisions to require Jaws Canada to redeem any or all of the
Exchangeable Shares held by the Holder (the "Retracted Shares") and is notified
by Jaws Canada pursuant to Section 6.6 of the Exchangeable Share Provisions that
Jaws Canada will not be permitted as a result of liquidity or solvency
provisions of applicable law to redeem all such Retracted Shares, subject to
receipt by the Trustee of written notice to that effect from Jaws Canada and
provided that Jaws US 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 Jaws Canada pursuant to Section
6.1 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 Jaws Canada is unable to redeem. In any such event, Jaws
Canada hereby agrees with the Trustee and in favour of the Holder immediately to
notify the Trustee of such prohibition against Jaws Canada's 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 Jaws Canada 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 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 which Jaws Canada is not permitted to redeem and will
require Jaws US to purchase such shares in accordance with the provisions of
this Article 5.
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5.8 Stamp or Other Transfer Taxes
Upon any sale of Exchangeable Shares to Jaws US pursuant to the Exchange
Put Right, the Exchange Right or the Automatic Exchange Rights, the share
certificate or certificates representing Jaws US Common Stock to be delivered as
Exchangeable Share Consideration 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:
(a) shall pay (and neither Jaws US, Jaws Canada nor the Trustee shall be
required to pay) any documentary, stamp, transfer or other similar
taxes that may be payable in respect of any transfer involved in the
issuance or delivery of such shares to a person other than such
Holder; or
(b) shall have established to the satisfaction of the Trustee, Jaws US
and Jaws Canada that such taxes, if any, have been paid.
5.9 Notice of Insolvency Event
Immediately upon the occurrence of an Insolvency Event or any event which
with the giving of notice or the passage of time or both would be an Insolvency
Event, Jaws Canada and Jaws US shall give written notice thereof to the Trustee.
As soon as practicable after receiving notice from Jaws Canada or Jaws US of the
occurrence of an Insolvency Event, the Trustee will mail to each Holder, at the
expense of Jaws US, a notice of such Insolvency Event in the form provided by
Jaws US, which notice shall contain a brief statement of the right of the
Holders with respect to the Exchange Right.
5.10 Qualification of Jaws US Common Stock
Jaws shall use its reasonable commercial efforts to file such documents or
take such actions as may be reasonably necessary to ensure that any shares of
Jaws US Common Stock received by a holder of Exchangeable Shares upon the
exchange thereof may be freely traded in the United States without restriction
except for certain restrictions imposed upon directors, officers and affiliates
of Jaws.
5.11 Reservation of Shares of Jaws US Common Stock
Jaws US 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 Jaws US Common Stock:
(a) as is equal to the sum of
(i) the number of Exchangeable Shares issued and outstanding from
time to time, and
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(ii) the number of Exchangeable Shares issuable upon the exercise of
all rights to acquire Exchangeable Shares outstanding from time
to time; and
(b) as are now and may hereafter be required to enable and permit Jaws
Canada to meet its obligations hereunder, under the Certificate of
Incorporation of Jaws US, under the Support Agreement, under the
Exchangeable Share Provisions and under any other security or
commitment with respect to which Jaws US may now or hereafter be
required to issue shares of Jaws US Common Stock.
5.12 Automatic Exchange on Liquidation of Jaws US
(a) Jaws US will give the Trustee written notice of each of the
following events at the time set forth below:
(i) in the event of any determination by the board of directors of
Jaws US to institute voluntary liquidation, dissolution or
winding-up proceedings with respect to Jaws US or to effect any
other distribution of assets of Jaws US among its stockholders
for the purpose of winding-up its affairs, at least 60 days
prior to the proposed effective date of such liquidation,
dissolution, winding-up or other distribution; and
(ii) as soon as reasonably practicable, upon the earlier of
(A) receipt by Jaws US of notice of, and
(B) Jaws US's 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 Jaws US or to effect any other distribution
of assets of Jaws US among its stockholders for the
purpose of winding up its affairs.
(b) As soon as reasonably practicable following receipt by the Trustee
from Jaws US of notice of any event (a "Liquidation Event")
contemplated by Section 5.12(a) above, the Trustee will give notice
thereof to the Holders. Such notice will be provided by Jaws US to
the Trustee and shall include a brief description of the automatic
exchange of Exchangeable Shares for shares of Jaws US Common Stock
provided for in Section 5.12(c) below.
(c) In order that the Holders will be able to participate on a pro rata
basis with the holders of Jaws US Common Stock in the distribution
of assets of Jaws US 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
Jaws US Common Stock. To effect such automatic exchange, Jaws US
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, Jaws US will
299839.1
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provide to the Trustee an Officer's Certificate setting forth
the calculation of the purchase price for each Exchangeable Share.
(d) The closing of the transaction of purchase and sale contemplated by
Section 5.12(c) 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 Jaws US
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 Jaws US
shall deliver to the Holder the Exchangeable Share Consideration
deliverable upon the automatic exchange of Exchangeable Shares.
Concurrently with such Holder's 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 Jaws US Common Stock
issued to it pursuant to the automatic exchange of Exchangeable
Shares for Jaws US Common Stock, and the certificates held by the
Holder previously representing the Exchangeable Shares exchanged by
the Holder with Jaws US pursuant to such automatic exchange shall
thereafter be deemed to represent the shares of Jaws US Common Stock
issued to the Holder by Jaws US 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 Jaws
US Common Stock, duly endorsed in blank and accompanied by such
instruments of transfer as Jaws US may reasonably require, Jaws US
shall deliver or cause to be delivered to the Holder certificates
representing the shares of Jaws US Common Stock of which the Holder
is the holder. Notwithstanding the foregoing, until each Holder is
actually entered on the register of holders of Jaws US Common Stock,
such Holder shall be deemed to still be a holder of the transferred
Exchangeable Shares for purposes of all voting rights with respect
thereto under this Agreement.
ARTICLE VI
RESTRICTIONS ON ISSUANCE OF JAWS US SPECIAL VOTING STOCK
__________________________________________________________
During the term of this Agreement, Jaws US will not in addition to the
Voting Share issue any shares of Jaws US Special Voting Stock.
ARTICLE VII
CONCERNING THE TRUSTEE
________________________
7.1 Powers and Duties of the Trustee
The rights, powers and authorities of the Trustee under this Agreement, in
its capacity as trustee of the Trust, shall include:
(a) receipt and deposit of the Voting Share from Jaws US as trustee for
and on behalf of the Holders in accordance with the provisions of
this Agreement;
299839.1
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(b) granting proxies and distributing materials to Holders as provided
in this Agreement;
(c) voting the Holder Votes in accordance with the provisions of this
Agreement;
(d) receiving the grant of the Exchange Put Right and the Exchange Right
and the Automatic Exchange Rights from Jaws US as trustee for and on
behalf of the Holders in accordance with the provisions of this
Agreement;
(e) exercising the Exchange Put Right and 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 Jaws US Common Stock and cheques, if any, to which such
Holders are entitled upon the exercise of the Exchange Put Right and
the Exchange Right or pursuant to the Automatic Exchange Rights, as
the case may be;
(f) holding title to the Trust Estate;
(g) investing any moneys forming, from time to time, a part of the Trust
Estate as provided in this Agreement;
(h) taking action at the direction of a Holder or Holders to enforce the
obligations of Jaws US under this Agreement; and
(i) taking such other actions and doing such other things as are
specifically provided in this Agreement.
In the exercise of such rights, powers and authorities, the Trustee shall
have (and is granted) such incidental and additional rights, powers and
authority not in conflict with any of the provisions of this Agreement as the
Trustee, acting in good faith and in the reasonable exercise of its 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 in exercising its rights, powers, duties and authorities
hereunder shall act honestly and in good faith with a view to the best interests
of the Holders and shall exercise the care, diligence and skill that a
reasonably prudent trustee would exercise in comparable circumstances. The
Trustee shall not be bound to give any notice or do or take any act, action or
proceeding by virtue of the powers conferred on it hereby 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.
299839.1
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7.2 No Conflict of Interest
The Trustee represents to Jaws Canada and Jaws US 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 a material conflict of interest exists, either eliminate
such material conflict of interest or resign in the manner and with the effect
specified in Article 10 hereof. 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 superior court of the province in
which Jaws Canada has its registered office for an order that the Trustee be
replaced as trustee hereunder.
7.3 Dealings with Transfer Agents, Registrars, Etc.
Jaws Canada and Jaws US 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 Jaws US
Common Stock; 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 Jaws US Common Stock, and any
subsequent transfer agent of such shares, to complete the
exercise from time to time of the Exchange Put Right, the
Exchange Right and the Automatic Exchange Rights in the manner
specified in Article 5 hereof, the share certificates issuable
upon such exercise.
Jaws Canada and Jaws US irrevocably authorize their respective registrars
and transfer agents to comply with all such requests. Jaws US 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 Put Right,
the Exchange Right and the Automatic Exchange Rights, in each case pursuant to
Article 5 hereof.
7.4 Books and Records
The Trustee shall keep available for inspection by Jaws US and Jaws
Canada, at the Trustee's principal transfer office in Calgary, 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 Put Right, the Exchange Right and the Automatic
299839.1
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Exchange Rights for the term of this Agreement. On or before March 31, 2000, and
on or before March 31 in every year thereafter, so long as the Voting Share is
on deposit with the Trustee, the Trustee shall transmit to Jaws US and Jaws
Canada a brief report, dated as of the preceding December 31, with respect to:
(a) the property and funds comprising the Trust Estate as of that date;
(b) the number of exercises of the Exchange Put Right and 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 Jaws US of shares of Jaws US Common Stock in
connection with the Exchange Put Right and the Exchange Right,
during the calendar year ended on such date; and
(c) all other actions taken by the Trustee in the performance of its
duties under this Agreement which it had not previously reported.
7.5 Income Tax Returns and Reports
The Trustee shall, to the extent necessary, prepare and file on behalf of
the Trust appropriate United States and Canadian income tax returns and any
other returns or reports as may be required by applicable law or pursuant to the
rules and regulations of any securities exchange or other trading system through
which the Exchangeable Shares are traded and, in connection therewith, may
obtain the advice and assistance of such experts as the Trustee may consider
necessary or advisable. If requested by the Trustee, Jaws US shall retain such
experts for purposes of providing such advice and assistance.
7.6 Indemnification Prior to Certain Actions by Trustee
The Trustee shall exercise any or all of the rights, duties, powers or
authorities vested in it by this Agreement at the request, order or direction of
any Holder upon such Holder's furnishing to the Trustee reasonable funding,
security and indemnity against the costs, expenses and liabilities which may be
incurred by the Trustee therein or thereby; provided that no Holder shall be
obligated to furnish to the Trustee any such funding, security or indemnity in
connection with the exercise by the Trustee of any of its rights, duties, powers
and authorities with respect to the Voting Share pursuant to Article 4 hereof,
subject to Section 7.15 hereof, and with respect to the Exchange Put Right and
the Exchange Right pursuant to Article 5 hereof, subject to Section 7.15 hereof,
and with respect to the Automatic Exchange Rights pursuant to Article 5 hereof.
None of the provisions contained in this Agreement shall require the Trustee to
expend or risk its own funds or otherwise incur financial liability in the
exercise of any of its rights, powers, duties or authorities unless funded,
given funds, security and indemnified as aforesaid.
7.7 Actions by Holders
No Holder shall have the right to institute any action, suit or proceeding
or to exercise any other remedy authorized by this Agreement for the purpose of
enforcing any of its rights or for the execution of any trust or power hereunder
unless the Holder has requested the Trustee to take or institute such action,
suit or proceeding and furnished the Trustee with the funding, security and
299839.1
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indemnity referred to in Section 7.6 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 Put Right, 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.
7.8 Reliance upon Declarations
The Trustee shall not be considered to be in contravention of any of its
rights, powers, duties and authorities hereunder if, when required, it acts and
relies in good faith upon lists, mailing labels, notices, statutory
declarations, certificates, opinions, reports or other papers or documents
furnished pursuant to the provisions hereof or required by the Trustee to be
furnished to it in the exercise of its rights, powers, duties and authorities
hereunder, and such lists, mailing labels, notices, statutory declarations,
certificates, opinions, reports or other papers or documents comply with the
provisions of Section 7.9 hereof, if applicable, and with any other applicable
provisions of this Agreement.
7.9 Evidence and Authority to Trustee
Jaws Canada and/or Jaws US 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 Jaws Canada and/or Jaws US
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 Put Right, 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 Jaws Canada and/or Jaws US forthwith if and
when:
(a) such evidence is required by any other section of this Agreement to
be furnished to the Trustee in accordance with the terms of this
Section 7.9; or
(b) the Trustee, in the exercise of its rights, powers, duties and
authorities under this Agreement, gives Jaws Canada and/or Jaws US
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 Jaws Canada
and/or Jaws US 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 Put Right, 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
299839.1
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to a statement made by him, provided that, if such report or opinion is
furnished by a director, officer or employee of Jaws Canada and/or Jaws US, it
shall be in the form of an Officer's Certificate or a statutory declaration.
Each statutory declaration, certificate, opinion or report furnished to
the Trustee as evidence of compliance with a condition provided for in this
Agreement shall include a statement by the person giving the evidence:
(i) declaring that such person has read and understands the
provisions of this Agreement relating to the condition in
question;
(ii) describing the nature and scope of the examination or
investigation upon which such person based the statutory
declaration, certificate, statement or opinion; and
(iii) declaring that such person has made such examination or
investigation as such person believes is necessary to enable
such person to make the statements or give the opinions
contained or expressed therein.
7.10 Experts, Advisers and Agents
The Trustee may:
(a) in relation to these presents act and rely on the opinion or advice
of or information obtained from or prepared by any solicitor,
auditor, accountant, appraiser, valuer, engineer or other expert,
whether retained by the Trustee or by Jaws Canada and/or Jaws US or
otherwise, and may employ such assistants as may be necessary to the
proper determination and discharge of its powers and duties and
determination of its rights hereunder and may pay proper and
reasonable compensation for all such legal and other advice or
assistance as aforesaid; and
(b) employ such agents and other assistants as it may reasonably require
for the proper determination and discharge of its powers and duties
hereunder, and may pay reasonable remuneration for all services
performed for it (and shall be entitled to receive reasonable
remuneration for all services performed by it) in the discharge of
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.
The Trustee shall have no liability for such assistance employed and
relied upon and for accepting any such documents as genuine provided it is done
in good faith.
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, as Trustee for Jaws Canada, in securities in which,
under the laws of the Province of Alberta, trustees are authorized to invest
299839.1
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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 Jaws Canada. 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 Jaws Canada, in
the deposit department of the Trustee or any other 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 is otherwise specifically provided, the
Trustee shall not be bound to act in accordance with any direction or request of
Jaws Canada and/or Jaws US or of the directors thereof until a duly
authenticated copy of the instrument or resolution containing such direction or
request shall have been delivered to the Trustee, and the Trustee shall be
empowered to act and rely upon any such copy purporting to be authenticated and
believed by the Trustee to be genuine.
7.14 Authority to Carry on Business
The Trustee represents to Jaws Canada and Jaws US that at the date of
execution and delivery by it of this Agreement it is authorized to carry on the
business of a trust company in the Province of Alberta 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 Put Right, the Exchange Right and the Automatic Exchange
Rights shall not be affected in any manner whatsoever by reason only of such
event; provided, however, the Trustee shall, within 90 days after ceasing to be
authorized to carry on the business of a trust company in the Province of
Alberta, either become so authorized or resign in the manner and with the effect
specified in Article 10 hereof.
7.15 Conflicting Claims
If conflicting claims or demands are made or asserted with respect to any
interest of any Holder in any Exchangeable Shares, including any disagreement
between the heirs, representatives, successors or assigns succeeding to all or
any part of the interest of any Holder in any Exchangeable Shares resulting in
conflicting claims or demands being made in connection with such interest, then
the Trustee shall be entitled, at its sole discretion, to refuse to recognize or
to comply with any such claim or demand. In so refusing, the Trustee may elect
not to exercise any Voting Rights, Exchange Put Right, 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
299839.1
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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 Put Right, 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, the Exchange Put
Right, Exchange Right or Automatic Exchange Rights subject to such
conflicting claims or demands have been conclusively settled by a
valid written agreement binding on all such adverse claimants, and
the Trustee shall have been furnished with an executed copy of such
agreement.
If the Trustee elects to recognize any claim or comply with any demand
made by any such adverse claimant, it may in its discretion require such
claimant to furnish such surety bond or other security satisfactory to the
Trustee as it shall deem appropriate fully to indemnify it as between all
conflicting claims or demands.
7.16 Acceptance of Trust
The Trustee hereby accepts the Trust created and provided for by and in
this Agreement and agrees to perform the same upon the terms and conditions
herein set forth and to hold all rights, privileges and benefits conferred
hereby and by law in trust for the various persons who shall from time to time
be Holders, subject to all the terms and conditions herein set forth.
ARTICLE VIII
COMPENSATION
_______________
8.1 Compensation for Services
Jaws US and Jaws Canada 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 Jaws US and Jaws Canada shall have no
obligation to reimburse the Trustee for any expenses or disbursements paid,
incurred or suffered by the Trustee in any suit or litigation in which the
Trustee is determined to have acted in bad faith or with negligence or willful
misconduct.
299839.1
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ARTICLE IX
INDEMNIFICATION AND LIMITATION OF LIABILITY
____________________________________________
9.1 Indemnification of the Trustee
Jaws US and Jaws Canada jointly and severally agree to indemnify and hold
harmless the Trustee and each of its directors, officers, employees and agents
appointed and acting in accordance with this Agreement (collectively, the
"Indemnified Parties") against all claims, losses, damages, costs, penalties,
fines and reasonable expenses (including reasonable expenses of the Trustee's
legal counsel) which, without fraud, negligence, willful misconduct or bad faith
on the part of such Indemnified Party, may be paid, incurred or suffered by the
Indemnified Party by reason of or as a result of the Trustee's acceptance or
administration of the Trust, its compliance with its duties set forth in this
Agreement, or any written or oral instructions delivered to the Trustee by Jaws
US or Jaws Canada pursuant hereto. In no case shall Jaws US or Jaws Canada be
liable under this indemnity for any claim against any of the Indemnified Parties
unless Jaws US and Jaws Canada 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, Jaws US and Jaws Canada shall be entitled to participate
at their own expense in the defense and, if Jaws US or Jaws Canada so elect at
any time after receipt of such notice, either of them may assume the defense of
any suit brought to enforce any such claim. The Trustee shall have the right to
employ separate counsel in any such suit and participate in the defense thereof,
but the fees and expenses of such counsel shall be at the expense of the Trustee
unless: (i) the employment of such counsel has been authorized by Jaws US or
Jaws Canada, such authorization not to be unreasonably withheld; or (ii) the
named parties to any such suit include both the Trustee and Jaws US or Jaws
Canada and the Trustee shall have been advised by counsel acceptable to Jaws US
or Jaws Canada that there may be one or more legal defenses available to the
Trustee that are different from or in addition to those available to Jaws US or
Jaws Canada and that an actual or potential conflict of interest exists (in
which case Jaws US and Jaws Canada shall not have the right to assume the
defense of such suit on behalf of the Trustee, but shall be liable to pay the
reasonable fees and expenses of counsel for the Trustee). This indemnity shall
survive the resignation or removal of the Trustee and the termination of the
Trust.
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, negligence, willful
misconduct or bad faith on the part of the Trustee.
299839.1
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ARTICLE X
CHANGE OF TRUSTEE
______________________
10.1 Resignation
(a) The Trustee, or any trustee hereafter appointed, may at any time
resign by giving written notice of such resignation to Jaws US and
Jaws Canada specifying the date on which it desires to resign,
provided that such notice shall never be given less than 60 days
before such desired resignation date unless Jaws US and Jaws Canada
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, Jaws US and Jaws Canada
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 superior court of the province in which Jaws Canada has
its registered office upon application of one or more of the parties
hereto.
(b) Any corporation into which the Trustee may be merged or with which
it may be consolidated or amalgamated or any corporation resulting
from any merger, consolidation or amalgamation to which the Trustee
shall be a party, shall be the successor trustee under this
indenture without the execution of any instrument or any further
act. Nevertheless, upon the written request of the successor trustee
or of Jaws US and Jaws Canada, the Trustee ceasing to act, at Jaws
US and Jaws Canada's expense, shall execute and deliver an
instrument assigning and transferring to such successor trustee,
upon the trusts herein expressed, all the rights, powers and trusts
of the Trustee so ceasing to act, and at Jaws US and Jaws Canada's
expense shall duly assign, transfer and deliver all property and
money held by such Trustee to the successor trustee so appointed in
its place. Should any deed, conveyance or instrument in writing from
Jaws US and Jaws Canada be required by any new trustee for more
fully and certainly vesting in and confirming to it such estates,
properties, rights, powers and trusts, then any and all such deeds,
conveyances and instruments in writing shall on the request of such
new trustee, be made, executed, acknowledged and delivered by Jaws
US and Jaws Canada.
(c) Notwithstanding subsection 10.1(b), the parties hereto acknowledge
and agree, and as beneficiaries hereunder are hereby deemed to have
acknowledged and agreed:
(i) that effective June 30, 2000, Computershare Investor Services
Inc. ("Computershare") purchased the corporate trust business
of Montreal Trust Company of Canada, the Trustee; and
(ii) that the Trustee may, without the consent of any other party,
assign all of its rights and duties under this Agreement, and
under any ancillary agreements executed in connection herewith,
299839.1
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to such federal trust company as may result from Computershare
being continued as a trust company pursuant to the terms of the
Trust and Loan Companies Act. Any such assignment shall be
effective without the need for further notice or advice to, or
approval of, the parties hereto and without any further act or
formality whatsoever.
10.2 Removal
The Trustee, or any trustee hereafter appointed, may be removed with or
without cause, at any time on 60 days prior notice by written instrument
executed by Jaws US and Jaws Canada, 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 10.1.
10.3 Successor Trustee
Any successor trustee appointed as provided under this Agreement shall
execute, acknowledge and deliver to Jaws US and Jaws Canada 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 Jaws US and Jaws
Canada or of the successor trustee, the trustee ceasing to act shall, upon
payment of any amounts then due to 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, Jaws US, Jaws Canada 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,
Jaws US and Jaws Canada shall cause to be mailed notice of the succession of
such trustee hereunder to each Holder specified in a List. If Jaws US or Jaws
Canada 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 Jaws US and Jaws Canada.
ARTICLE XI
JAWS US SUCCESSORS
_____________________
11.1 Certain Requirements in Respect of Combination, Etc.
Jaws US 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
299839.1
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assets would become the property of any other Person or, in the case of a
merger, of the continuing corporation resulting therefrom, but may do so if:
(a) such other Person or continuing corporation (the "Jaws US
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 satisfactory to the Trustee and in the
opinion of legal counsel to the Trustee are necessary or advisable
to evidence the assumption by the Jaws US Successor of liability for
all moneys payable and property deliverable hereunder, the covenant
of such Jaws US 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 Jaws US under this Agreement; and
(b) such transaction shall, to the satisfaction of the Trustee and in
the opinion of legal counsel to the Trustee, be upon such terms
which substantially preserve and do not impair in any material
respect any of the rights, duties, powers and authorities of the
Trustee or of the Holders hereunder.
11.2 Vesting of Powers in Successor
Whenever the conditions of Section 11.1 hereof have been duly observed and
performed, the Trustee, if required by Section 11.1 hereof, the Jaws US
Successor and Jaws Canada shall execute and deliver the supplemental agreement
provided for in Article 12 hereof, and thereupon the Jaws US Successor shall
possess and from time to time may exercise each and every right and power of
Jaws US under this Agreement in the name of Jaws US 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 Jaws US or any officers of Jaws US may be done and
performed with like force and effect by the directors or officers of such Jaws
US Successor.
11.3 Wholly-owned Subsidiaries
Nothing herein shall be construed as preventing the amalgamation or merger
of any wholly-owned subsidiary of Jaws US with or into Jaws US or the
winding-up, liquidation or dissolution of any wholly-owned subsidiary of Jaws US
provided that all of the assets of such subsidiary are transferred to Jaws US or
another wholly-owned subsidiary of Jaws US, and any such transactions are
expressly permitted by this Article 11.
ARTICLE XII
AMENDMENTS AND SUPPLEMENTAL AGREEMENTS
_______________________________________
12.1 Amendments, Modifications, Etc.
Subject to Sections 12.2 and 12.4, this Agreement may not be amended,
modified or waived except by an agreement in writing executed by Jaws Canada,
Jaws US and the Trustee and approved by the Holders in accordance with Section
10.2 of the Exchangeable Share Provisions. No amendment to or modification or
299839.1
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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 hereof, the parties to this
Agreement may in writing, at any time and from time to time, without the
approval of the Holders, amend or modify this Agreement for the purposes of:
(a) adding to the covenants of any or all of the parties hereto for the
protection of the Holders hereunder subject to the receipt by the
Trustee of an opinion in satisfactory form of counsel of recognized
standing that the addition of the proposed covenant is not
prejudicial to the interests of the Holders as a whole or the
Trustee;
(b) making such amendments or modifications not inconsistent with this
Agreement as may be necessary or desirable with respect to matters
or questions which, in the opinion of the board of directors of each
of Jaws US and Jaws Canada and subject to the receipt by the Trustee
of an opinion in satisfactory form of counsel of recognized
standing, having in mind the best interests of the Holders as a
whole, it may be expedient to make, provided that such boards of
directors and the Trustee shall be of the opinion that such
amendments and modifications will not be prejudicial to the
interests of the Holders as a whole; or
(c) making such changes or corrections which, on the advice of counsel
to Jaws Canada and Jaws US, 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
board of directors of each of Jaws Canada and Jaws US shall be of
the opinion subject to the receipt by the Trustee of an opinion in
satisfactory form of counsel of recognized standing, that such
changes or corrections will not be prejudicial to the interests of
the Holders as a whole.
12.3 Meeting to Consider Amendments
Jaws Canada, at the request of Jaws US, 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 Jaws Canada, the
Exchangeable Share Provisions and all applicable laws.
12.4 Changes in Capital of Jaws US and Jaws Canada
At all times after the occurrence of any event effected pursuant to
Section 2.7 or Section 2.8 of the Support Agreement, as a result of which either
Jaws US Common Stock or the Exchangeable Shares or both are in any way changed,
notice thereof shall be provided to the Trustee and 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 Jaws
US Common Stock or the Exchangeable Shares or both are so changed, and the
299839.1
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parties hereto shall execute and deliver a supplemental agreement giving effect
to and evidencing such necessary amendments and modifications.
12.5 Execution of Supplemental Agreements
From time to time, Jaws Canada (when authorized by a resolution of its
board of directors), Jaws US (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:
(a) evidencing the succession of any Jaws US Successors to Jaws US and
the covenants of and obligations assumed by each such Jaws US
Successor in accordance with the provisions of Article 11 and the
successor of any successor trustee in accordance with the provisions
of Article 10;
(b) making any additions to, deletions from or alterations of the
provisions of this Agreement or the Voting Rights, the Exchange
Right or the Automatic Exchange Rights which, in the opinion of the
board of directors of Jaws US and Jaws Canada and subject to receipt
by the Trustee of an opinion in satisfactory form of counsel of
recognized standing that such changes, will not be prejudicial to
the interests of the Holders as a whole or are necessary or
advisable in order to incorporate, reflect or comply with any
legislation the provisions of which apply to Jaws US, Jaws Canada,
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 board of directors of Jaws US
and Jaws Canada and subject to receipt by the Trustee of an opinion
in satisfactory form of counsel of recognized standing that such
changes, the rights of the Trustee and the Holders as a whole will
not be prejudiced thereby.
ARTICLE XIII
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 Holder;
(b) each of Jaws Canada and Jaws US elects in writing to terminate the
Trust and such termination is approved by the Holders of the
Exchangeable Shares in accordance with Section 10.1 of the
Exchangeable Share Provisions; and
299839.1
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(c) 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.
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 Holder;
provided, however, that the provisions of Articles 8 and 9 hereof shall survive
any such termination of this Agreement.
ARTICLE XIV
GENERAL
_________
14.1 Severability
If any provision of this Agreement is held to be invalid, illegal or
unenforceable, the validity, legality or enforceability of the remainder of this
Agreement shall not in any way be affected or impaired thereby, and this
Agreement shall be carried out as nearly as possible in accordance with its
original terms and conditions.
14.2 Inurement
This agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and permitted assigns and to the
benefit of the Holders.
14.3 Notices to Parties
All notices and other communications between the parties hereunder shall
be in writing and shall be deemed to have been given if delivered personally or
by confirmed telecopy to the parties at the following addresses (or at such
other address for such party as shall be specified in like notice):
(a) if to Jaws US to: Jaws Technologies, Inc.
Suite 400, 630 - 8th Avenue S.W.
Calgary, Alberta
T2P 1G8
Attention: Director, Corporate Finance
Facsimile No. 403-209-6125
(b) if to Jaws Canada to: Jaws Acquisition Canada Corp.
Suite 400, 630 - 8th Avenue S.W.
Calgary, Alberta
T2P 1G8
299839.1
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Attention: Director, Corporate Finance
Facsimile No. 403-209-6125
(c) if to the Trustee to: Montreal Trust Company of Canada
710, 530 - 8th Avenue S.W.
Calgary, Alberta T2P 3S8
Attention: Manager, Corporate Trust Department
Telephone: 403-267-6872
Facsimile No. 403-267-6598
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 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 Exchangeable Share Provisions shall apply mutatis mutandis
to notices or documents as aforesaid sent to such Holders.
14.5 Risk of Payments by Post
Whenever payments are to be made or documents are to be sent to any Holder
by the Trustee, by Jaws Canada or by Jaws US or by such Holder to the Trustee or
to Jaws US or Jaws Canada, the making of such payment or sending of such
document sent through the mail shall be at the risk of Jaws Canada or Jaws US,
in the case of payments made or documents sent by the Trustee or Jaws Canada or
Jaws US, and the Holder, in the case of payments made or documents sent by the
Holder.
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 Alberta and the federal laws of Canada applicable therein.
299839.1
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14.8 Attornment
Jaws US 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 such courts in any such
action or proceeding, agrees to be bound by any judgment of such 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 Jaws Canada
at its registered office in the Province of Alberta as Jaws US's attorney for
service of process.
IN WITNESS WHEREOF, the parties hereby have caused this Agreement to be
duly executed on this 11th day of August, 2000, to be effective as of August 1,
2000.
JAWS TECHNOLOGIES, INC. JAWS ACQUISITION CANADA CORP.
(a Delaware corporation) (an Alberta corporation)
By:________________________________ By:_______________________________
Riaz Mamdani Riaz Mamdani
Director Director
By:_______________________________
Vikki Robinson
Secretary
MONTREAL TRUST COMPANY OF CANADA
By:_______________________________
By:_______________________________
299839.1
SCHEDULE "A"
299839.1
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS AND INTERPRETATION
1.1 Definitions......................................................2
1.2 Interpretation Not Affected by Headings, Etc.....................4
1.3 Number, Gender, Etc..............................................4
1.4 Date for Any Action..............................................4
1.5 Payments.........................................................4
ARTICLE II
PURPOSE OF AGREEMENT
ARTICLE III
VOTING SHARE
3.1 Issuance and Ownership of the Voting Share.......................5
3.2 Legended Share Certificates......................................5
3.3 Safe Keeping of Certificate......................................5
ARTICLE IV
EXERCISE OF VOTING RIGHTS
4.1 Voting Rights....................................................5
4.2 Number of Votes..................................................6
4.3 Mailings to Shareholders.........................................6
4.4 Copies of Stockholder Information................................7
4.5 Other Materials..................................................7
4.6 List of Persons Entitled to Vote.................................8
4.7 Entitlement to Direct Votes......................................8
4.8 Voting by Trustee, and Attendance of Trustee Representative, at
Meeting..........................................................8
4.9 Distribution of Written Materials................................9
4.10 Termination of Voting Rights.....................................9
ARTICLE V
EXCHANGE RIGHT AND AUTOMATIC EXCHANGE
5.1 Grant and Ownership of the Exchange Put Right, Exchange Right and
Automatic Exchange Right........................................10
5.2 Legended Share Certificates.....................................11
5.3 General Exercise of Exchange Put Right and the Exchange Right...11
5.4 Purchase Price..................................................11
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299839.1
TABLE OF CONTENTS
(continued)
Page
5.5 Exercise Instructions for Exchange Right........................11
5.6 Delivery of Exchangeable Share Consideration;
Effect of Exercise..............................................12
5.7 Exercise of Exchange Right Subsequent to Retraction.............13
5.8 Stamp or Other Transfer Taxes...................................14
5.9 Notice of Insolvency Event......................................14
5.10 Qualification of Jaws US Common Stock...........................14
5.11 Reservation of Shares of Jaws US Common Stock...................14
5.12 Automatic Exchange on Liquidation of Jaws US....................15
ARTICLE VI
RESTRICTIONS ON ISSUANCE OF JAWS US SPECIAL VOTING STOCK
ARTICLE VII
CONCERNING THE TRUSTEE
7.1 Powers and Duties of the Trustee................................16
7.2 No Conflict of Interest.........................................18
7.3 Dealings with Transfer Agents, Registrars, Etc..................18
7.4 Books and Records...............................................18
7.5 Income Tax Returns and Reports..................................19
7.6 Indemnification Prior to Certain Actions by Trustee.............19
7.7 Actions by Holders..............................................19
7.8 Reliance upon Declarations......................................20
7.9 Evidence and Authority to Trustee...............................20
7.10 Experts, Advisers and Agents....................................21
7.11 Investment of Moneys Held by Trustee............................21
7.12 Trustee Not Required to Give Security...........................22
7.13 Trustee Not Bound to Act on Request.............................22
7.14 Authority to Carry on Business..................................22
7.15 Conflicting Claims..............................................22
7.16 Acceptance of Trust.............................................23
ARTICLE VIII
COMPENSATION
8.1 Compensation for Services.......................................23
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299839.1
TABLE OF CONTENTS
(continued)
Page
ARTICLE IX
INDEMNIFICATION AND LIMITATION OF LIABILITY
9.1 Indemnification of the Trustee..................................24
9.2 Limitation of Liability.........................................24
ARTICLE X
CHANGE OF TRUSTEE
10.1 Resignation.....................................................25
10.2 Removal.........................................................26
10.3 Successor Trustee...............................................26
10.4 Notice of Successor Trustee.....................................26
ARTICLE XI
JAWS US SUCCESSORS
11.1 Certain Requirements in Respect of Combination, Etc.............26
11.2 Vesting of Powers in Successor..................................27
11.3 Wholly-owned Subsidiaries.......................................27
ARTICLE XII
AMENDMENTS AND SUPPLEMENTAL AGREEMENTS
12.1 Amendments, Modifications, Etc..................................27
12.2 Ministerial Amendments..........................................28
12.3 Meeting to Consider Amendments..................................28
12.4 Changes in Capital of Jaws US and Jaws Canada...................28
12.5 Execution of Supplemental Agreements............................29
ARTICLE XIII
TERMINATION
13.1 Term............................................................29
13.2 Survival of Agreement...........................................30
ARTICLE XIV
GENERAL
14.1 Severability....................................................30
14.2 Inurement.......................................................30
14.3 Notices to Parties..............................................30
14.4 Notice to Holders...............................................31
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299839.1
TABLE OF CONTENTS
(continued)
Page
14.5 Risk of Payments by Post........................................31
14.6 Counterparts....................................................31
14.7 Jurisdiction....................................................31
14.8 Attornment......................................................32
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299839.1