Fill and Sign the Trust Corporation Company Form

EXCHANGE TRUST AGREEMENT 2 TABLE OF CONTENTS ARTICLE 1 DEFINITIONS AND INTERPRETATION Section 1.1 Definitions..................................................................... ...........2 Section 1.2 Interpretation Not Affected by Headings, Etc...............................................4 Section 1.3 Number, Gender, Etc........................................................................4 Section 1.4 Date for Any Action........................................................................4 ARTICLE 2 PURPOSE OF AGREEMENT Section 2.1 Purpose......................................................................... ...........4 ARTICLE 3 PROVISION OF INFORMATION Section 3.1 Copies of Shareholder Information..........................................................5 Section 3.2 Other Materials....................................................................... .....5 Section 3.3 Distribution of Written Materials..........................................................5 ARTICLE 4 INSOLVENCY EXCHANGE RIGHT AND AUTOMATIC EXCHANGE RIGHTS Section 4.1 Grant and Ownership of the Insolvency Exchange Right.......................................6 Section 4.2 Legended Share Certificates................................................................7 Section 4.3 General Exercise of the Insolvency Exchange Right..........................................7 Section 4.4 Purchase Price........................................................................... ..7 Section 4.5 Exercise Instructions.................................................................... ..7 Section 4.6 Delivery of Exchangeable Share Consideration; Effect of Exercise...........................9 Section 4.7 Exercise of the Insolvency Exchange Right In Other Circumstances..........................10 Section 4.8 Stamp or Other Transfer Taxes.............................................................11 Section 4.9 Notice of Insolvency Event................................................................11 Section 4.10 Qualification of ParentCo Common Stock..................................................12 Section 4.11 Reservation of ParentCo Common Stock....................................................12 Section 4.12 Automatic Exchange on Liquidation of ParentCo...........................................13 Section 4.13 Withholding Rights......................................................................15 ARTICLE 5 CONCERNING THE TRUSTEE Section 5.1 Powers and Duties of the Trustee..........................................................15 Section 5.2 No Conflict of Interest...................................................................16 (i) 3 Section 5.3 Dealings with Transfer Agents, Registrars, Etc............................................17 Section 5.4 Books and Records......................................................................... 17 Section 5.5 Income Tax Returns and Reports............................................................18 Section 5.6 Indemnification Prior to Certain Actions by Trustee.......................................18 Section 5.7 Actions by Holders........................................................................1 8 Section 5.8 Reliance Upon Declarations................................................................19 Section 5.9 Evidence and Authority to Trustee.........................................................19 Section 5.10 Experts, Advisers and Agents............................................................20 Section 5.11 Investment of Moneys Held by Trustee....................................................21 Section 5.12 Trustee Not Required to Give Security...................................................21 Section 5.13 Trustee Not Bound to Act on Request.....................................................21 Section 5.14 Authority to Carry on Business..........................................................21 Section 5.15 Conflicting Claims......................................................................22 Section 5.16 Disbursements................................................................... ........22 Section 5.17 Acceptance of Trust.....................................................................22 Section 5.18 Trustee Not Liable......................................................................23 ARTICLE 6 COMPENSATION Section 6.1 Compensation and Reimbursement............................................................23 ARTICLE 7 INDEMNIFICATION AND LIMITATION OF LIABILITY Section 7.1 Indemnification of the Trustee............................................................23 Section 7.2 Limitation of Liability...................................................................24 ARTICLE 8 CHANGE OF TRUSTEE Section 8.1 Resignation..................................................................... ..........24 Section 8.2 Removal......................................................................... ..........25 Section 8.3 Successor Trustee......................................................................... 25 Section 8.4 Notice of Successor Trustee...............................................................25 ARTICLE 9 PARENTCO SUCCESSORS Section 9.1 Certain Requirements in Respect of Combination, Etc.......................................26 Section 9.2 Vesting of Powers in Successor............................................................26 Section 9.3 Wholly-owned Subsidiaries.................................................................26 ARTICLE 10 AMENDMENTS AND SUPPLEMENTAL AGREEMENTS Section 10.1 Amendments, Modifications, Etc..........................................................27 (ii) 4 Section 10.2 Ministerial Amendments..................................................................27 Section 10.3 Meeting to Consider Amendments..........................................................27 Section 10.4 Changes in Capital of ParentCo and the Company..........................................28 Section 10.5 Execution of Supplemental Agreements....................................................28 ARTICLE 11 TERMINATION Section 11.1 Term............................................................................ ........29 Section 11.2 Survival of Agreement...................................................................29 ARTICLE 12 GENERAL Section 12.1 Severability.................................................................... ........29 Section 12.2 Enurement....................................................................... ........29 Section 12.3 Notices to Parties......................................................................29 Section 12.4 Notice to Holders.......................................................................31 Section 12.5 Risk of Payments by Post................................................................32 Section 12.6 Counterparts.................................................................... ........32 Section 12.7 Jurisdiction.................................................................... ........32 Section 12.8 Attainment...................................................................... ........32 (iii) 5 EXCHANGE TRUST AGREEMENT THIS EXCHANGE TRUST AGREEMENT is entered into as of December 16, 1999, by and between DALEEN TECHNOLOGIES, INC., a corporation organized under the laws of the State of Delaware ("PARENTCO") DALEEN CALLCO CORPORATION, an unlimited liability company existing, under the laws of the Province of Nova Scotia ("CALLCO"), and DALEEN CANADA CORPORATION an unlimited liability company existing under the laws of the Province of Nova Scotia (the "COMPANY"), the Holders of Exchangeable Shares from time to time (the "HOLDERS"), and MONTREAL TRUST COMPANY OF CANADA ("TRUSTEE"). WHEREAS, pursuant to a Share Purchase Agreement dated as of December 16, 1999, by and between the Company, Inlogic Software Inc., ParentCo. and the holders of all of the issued and outstanding shares of Inlogic Software Inc. (such agreement is hereinafter referred to as the "PURCHASE AGREEMENT") the parties agreed that on the closing of the transaction contemplated under the Purchase Agreement, ParentCo, the Company, the Holders and a trustee would execute and deliver an Exchange Trust Agreement containing the terms and conditions set forth in an Exhibit to the Purchase Agreement together with such other terms and conditions as may be agreed to by the parties to the Purchase Agreement acting reasonably. WHEREAS, pursuant to the Purchase Agreement, the Company issued certain exchangeable shares (the "EXCHANGEABLE SHARES") having attached thereto certain rights, privileges, restrictions and conditions (collectively, the "EXCHANGEABLE SHARE PROVISIONS" attached hereto as Schedule A). WHEREAS, ParentCo is to grant to and in favour of the holders (other than ParentCo and its Affiliates and Subsidiaries) from time to time of Exchangeable Shares the right, in the circumstances set forth herein, to require ParentCo to purchase from each such holder all or any part of the Exchangeable Shares held by the holder; WHEREAS, these recitals and any statements of fact in this Agreement are made by ParentCo, CallCo and the Company 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: 6 -2- ARTICLE 1 DEFINITIONS AND INTERPRETATION SECTION 1.1 DEFINITIONS. In this agreement, the following terms shall have the following meanings: "ACT" means the Companies Act (Nova Scotia); "AFFILIATES" has the meaning provided in the Exchangeable Share Provisions; "AUTOMATIC EXCHANGE RIGHTS" means the benefit of the obligation of ParentCo to effect the automatic exchange of ParentCo Common Stock for Exchangeable Shares pursuant to Section 4.12 hereof; "BOARD OF DIRECTORS" means the Board of Directors of the Company; "BUSINESS DAY" has the meaning provided in the Exchangeable Share Provisions; "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 recitals hereto; "HOLDERS" means the registered holders from time to time of Exchangeable Shares, other than ParentCo and its Affiliates and Subsidiaries; "INSOLVENCY EVENT" means the institution by the Company of any proceeding to be adjudicated a bankrupt or insolvent or to be dissolved or wound-up, or the consent of the Company to the institution of bankruptcy, insolvency, dissolution or winding-up proceedings against it, or the filing of a petition, answer or consent seeking dissolution or winding-up under any bankruptcy, insolvency or analogous laws, including without limitation the Companies Creditor, Arrangement Act (Canada) and the Bankruptcy and Insolvency Act (Canada), and the failure by the Company to contest in good faith any such proceedings commenced in respect of the Company within 15 days of becoming aware thereof, or the consent by the Company to the filing of any such petition or to the appointment of a receiver, or the making by the Company of a general assignment for the benefit of creditors, or the 7 -3- admission in writing by the Company of its inability to pay its debts generally as they become due, or the Company's not being permitted, pursuant to solvency requirements of applicable law, to redeem any Retracted Shares pursuant to Section 6.6 of the Exchangeable Share Provisions; "INSOLVENCY EXCHANGE RIGHT" has the meaning provided in Article 4 hereof; "LIQUIDATION CALL RIGHT" has the meaning provided in the Exchangeable Share Provisions; "LIQUIDATION EVENT" has the meaning provided in Subsection 4.12(1)(b) hereof; "LIQUIDATION EVENT EFFECTIVE TIME" has the meaning provided in Subsection 4.12(3) hereof; "OFFICER'S CERTIFICATE" means, with respect to ParentCo, CallCo or the Company, as the case may be, a certificate signed by any one of the Chairman of the Board, the President, any Executive Vice-President, any Senior Vice-President, or any Vice-President of ParentCo, CallCo or the Company, as the case may be; "PARENTCO COMMON STOCK" has the meaning provided in the Exchangeable Share Provisions; "PARENTCO SUCCESSOR" has the meaning provided in Subsection 9.1(a) hereof; "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; "RETRACTION REQUEST" has the meaning provided in the Exchangeable Share Provisions; "RETRACTED SHARES" has the meaning provided in Section 6.1(i) of the Exchangeable Share Provisions hereof; "RETRACTION CALL RIGHT" has the meaning provided in the Exchangeable Share Provisions; 8 -4- "SUBSIDIARY" has the meaning provided in the Exchangeable Share Provisions; "SUPPORT AGREEMENT" means that certain support agreement made as of the date hereof by and between ParentCo, CallCo, the Holders and the Company and attached hereto as Schedule B; "TRUST" means the trust created by this Agreement; "TRUST ESTATE" means the Insolvency 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; and "TRUSTEE" means Montreal Trust Company of Canada and, subject to the provisions of Article 8 hereof, includes any successor trustee or permitted assigns. SECTION 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. SECTION 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. SECTION 1.4 DATE FOR ANY ACTION. If any date on which any action is required to be taken under this Agreement is not a Business Day, such action shall be required to be taken on the next succeeding Business Day. ARTICLE 2 PURPOSE OF AGREEMENT SECTION 2.1 PURPOSE. The purpose of this agreement is to create the Trust for the benefit of the Holders, as herein provided. The Trustee will hold the Insolvency Exchange Right and the Automatic Exchange Rights in order to enable the Trustee to exercise such rights, in each case as trustee for and on behalf of the Holders as provided in this Agreement. 9 -5- ARTICLE 3 PROVISION OF INFORMATION SECTION 3.1 COPIES OF SHAREHOLDER INFORMATION ParentCo will deliver to the Trustee copies of all proxy materials (including notices of meetings of holders of ParentCo Common Stock, but excluding proxies to vote ParentCo Common Stock), information statements, reports (including without limitation all interim and annual financial statements) and other written communications that there are to be distributed from time to time to all of the holders of ParentCo 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 ParentCo Common Stock. The Trustee will mail or otherwise send to each Holder, at the expense of ParentCo, copies of all such materials (and all materials specifically directed to the Holders or to the Trustee for the benefit of the Holders by ParentCo) received by the Trustee from ParentCo at the same time as such materials are first sent to holders of ParentCo Common Stock. The Trustee will make copies of all such materials available for inspection by any Holder at the Trustee's principal corporate trust office in the City of Toronto. SECTION 3.2 OTHER MATERIALS Immediately after receipt by ParentCo or any member of ParentCo of any material sent or given generally to the holders of ParentCo Common Stock by or on behalf of a third party, including without limitation dissident proxy and information circulars (and related information and material) and tender and exchange offer circulars (and related information and material), ParentCo shall 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 ParentCo, copies of all such materials received by the Trustee from ParentCo. The Trustee will also make copies of all such materials available for inspection by any Holder at the Trustee's principal corporate trust office at the City of Toronto. SECTION 3.3 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, subject to the Trustee being advised in writing of such method of communication and its ability to provide such method, as ParentCo uses in communications to holders of ParentCo Common Stock) to each Holder at its address as shown on the books of the Company. The Company shall provide or cause to be provided to the Trustee for this purpose, on a timely basis and without charge or other expense: 10 -6- (a) Current and accurate lists of the Holders as reflected in the Company records; 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 the Company to the Trustee in sufficient time to enable the Trustee to fulfil its obligations as set out in Article 3. ARTICLE 4 INSOLVENCY EXCHANGE RIGHT AND AUTOMATIC EXCHANGE RIGHTS SECTION 4.1 GRANT AND OWNERSHIP OF THE INSOLVENCY EXCHANGE RIGHT. (1) ParentCo hereby grants to the Trustee as trustee for and on behalf of, and for the use and benefit of, the Holders (a) the right (the "INSOLVENCY EXCHANGE RIGHT"), upon the occurrence and during the continuance of an Insolvency Event hereof, to require ParentCo to purchase from each or any Holder all or any part of the Exchangeable Shares held by the Holders, and (b) the Automatic Exchange Rights, all in accordance with the provisions of this Agreement. ParentCo 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 Insolvency Exchange Right and the Automatic Exchange Rights by ParentCo 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 Insolvency 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 Insolvency Exchange Right and the Automatic Exchange Rights, provided that the Trustee shall: (c) hold the Insolvency 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 (d) except as specifically authorized by this Agreement, have no power or authority to exercise or otherwise deal in or with the Insolvency Exchange Right and the Automatic Exchange Rights, and the Trustee shall not exercise any such rights for any purpose other than the purposes for which this Trust is created pursuant to this Agreement. 11 -7- SECTION 4.2 LEGENDED SHARE CERTIFICATES. (1) The Company shall ensure that each certificate representing Exchangeable Shares bears an appropriate legend notifying the Holders of: (a) their right to instruct the Trustee with respect to the exercise of the Insolvency Exchange Right in respect of the Exchangeable Shares held by a Holder; and (b) the Automatic Exchange Rights. SECTION 4.3 GENERAL EXERCISE OF THE INSOLVENCY EXCHANGE RIGHT (1) The Insolvency Exchange Right shall be and remain vested in and exercised by the Trustee. Subject to Section 5.15 hereof, the Trustee shall exercise the Insolvency Exchange Right only (i) on the basis of instructions received pursuant to this Article 4 from Holders entitled to instruct the Trustee as to the exercise thereof; or (ii) to the extent that no instructions are received from a Holder with respect to the Insolvency Exchange Right, the Trustee shall not exercise or permit the exercise of the Insolvency Exchange Right. SECTION 4.4 PURCHASE PRICE (1) The purchase price payable by ParentCo for each Exchangeable Share to be purchased by ParentCo under the Insolvency 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 Insolvency Exchange Right. In connection with each exercise of the Insolvency Exchange Right, ParentCo 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 ParentCo 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. In connection with payment of the Exchangeable Share Consideration, ParentCo shall be entitled to withhold, sell or dispose of that number of shares of ParentCo Common Stock otherwise deliverable to the particular holder of Exchangeable Shares in order to satisfy any statutory withholding tax obligation. SECTION 4.5 EXERCISE INSTRUCTIONS (1) 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 Insolvency Exchange Right with respect to all of or any part of the Exchangeable Shares registered in the name of such 12 -8- Holder on the books of the Company. To cause the exercise of the Insolvency Exchange Right by the Trustee, the Holder shall deliver to the Trustee, in person or by certified or registered mail, at its principal corporate trust office in Toronto, Ontario or at such other places in Canada as the Trustee may from time to time designate by written notice to the Holders, the certificates representing the Exchangeable Shares which such Holder desires ParentCo to purchase, duly endorsed for transfer to ParentCo, and accompanied by such other documents and instruments as may be required to effect a transfer of Exchangeable Shares under the Act and; the constating documents of the Company 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 Insolvency 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 Insolvency Exchange Right so as to require ParentCo 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 ParentCo free and clear of all liens, claims, encumbrances, security interests and adverse claims or interests, (iii) the name in which the certificates representing ParentCo Common Stock issuable in connection with the exercise of the Insolvency Exchange Right are to be issued (which must be the name of the Holder), 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, the Company, CallCo and ParentCo of payment) of the taxes (if any) payable as contemplated by Section 4.8 of this Agreement. (2) If only a part of the Exchangeable Shares represented by any certificate or certificates delivered to the Trustee are to be purchased by ParentCo under the Insolvency Exchange Right, a new certificate for the balance of such Exchangeable Shares shall be issued to the Holder at the expense of the Company. 13 -9- SECTION 4.6 DELIVERY OF EXCHANGEABLE SHARE CONSIDERATION; EFFECT OF EXERCISE. (1) Promptly after receipt of the certificates representing the Exchangeable Shares which the Holder desires ParentCo to purchase under the Insolvency Exchange Right (together with such documents and instruments of transfer and a duly completed form of notice of exercise of the Insolvency Exchange Right), duly endorsed for transfer to ParentCo, the Trustee shall notify ParentCo and the Company of its receipt of same, which notice to ParentCo and the Company shall constitute exercise of the Insolvency Exchange Right by the Trustee on behalf of the Holder of such Exchangeable Shares, and ParentCo 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 person, if any, properly designated by such Holder), the Exchangeable Share Consideration deliverable in connection with the exercise of the Insolvency Exchange Right; provided, however, that no such delivery shall be made unless and until the Holder requesting the same shall have paid (or provided evidence satisfactory to the Trustee, the Company, CallCo and ParentCo of the payment of) the taxes (if any) payable as contemplated by Section 4.8 of this Agreement. Immediately upon the giving of notice by the Trustee to ParentCo and the Company of the exercise of the Insolvency Exchange Right, as provided in this Section 4.6, the closing of the transaction of purchase and sale contemplated by the Insolvency Exchange Right shall be deemed to have occurred, and the Holder of such Exchangeable Shares shall be deemed to have transferred to ParentCo 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 the Exchangeable Share Consideration, unless such Exchangeable Share Consideration is not delivered or cause to be delivered by ParentCo to the Trustee, for delivery to such Holder (or to such other persons, if any, properly designated by such Holder), within three Business Days of the date of the giving of such notice by the Trustee, in which case the rights of the Holder shall remain unaffected until such Exchangeable Share Consideration is delivered by ParentCo and any cheque included therein is honoured. Upon delivery by ParentCo to the Trustee of such ParentCo Common Stock, the Trustee shall deliver such ParentCo Common Stock to such Holder (or to such other persons, if any, properly designated by such Holder). 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 ParentCo Common Stock delivered to it pursuant to the Insolvency Exchange Right. 14 -10- SECTION 4.7 EXERCISE OF THE INSOLVENCY EXCHANGE RIGHT IN OTHER CIRCUMSTANCES. (1) In the event that a Holder has exercised its right under Article 6 of the Exchangeable Share Provisions to require the Company to redeem any or all of the Exchangeable Shares held by the Holder (the "RETRACTED SHARES") and is notified by the Company pursuant to Section 6.6 of the Exchangeable Share Provisions that the Company will not be permitted as a result of solvency requirements under the Act to redeem all such Retracted Shares, subject to receipt by the Trustee of the Retraction Request from the Holder or the Company and provided that CallCo 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 the Company pursuant to Section 6.8 of the Exchangeable Share Provisions and provided further that the Trustee has received written notice of same from the Company or ParentCo, the Retraction Request will constitute and will be deemed to constitute notice from the Holder to the Trustee instructing the Trustee to exercise the Insolvency Exchange Right with respect to those Retracted Shares which the Company is unable to redeem. In any such event, the Company hereby agrees with the Trustee and in favour of the Holder immediately to notify the Trustee of such prohibition against the Company'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 the Company 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 Insolvency Exchange Right with respect to the Retracted Shares which the Company is not permitted to redeem and will require ParentCo to purchase such shares in accordance with the provisions of this Article 4. (2) In any of the following circumstances, namely: (a) Pursuant to Section 5.2 of the Exchangeable Share Provisions, a Holder has not received within 30 days of the Liquidation Date the full Exchangeable Share Consideration representing such Holder's total Liquidation Amount, or (b) Pursuant to Section 7.3 of the Exchangeable Share Provisions, a Holder has not received, within 30 days of the Automatic Redemption Date, the full Exchangeable Share Consideration representing such Holder's total Redemption Price; or (c) Pursuant to Section 6.5 of the Exchangeable Share Provisions, a Holder has not received, within 30 days of the Retraction Date, the full 15 -11- Exchangeable Share Consideration representing such Holder's total Retraction Price for any reason whatsoever (other than a circumstance set forth in Subsection 4.7(1) above); the Holder may notify the Trustee in writing of such circumstance, with a copy to CallCo and, provided that CallCo has not exercised its Liquidation Call Right, Retraction Call Right or Redemption Call Right, as the case may be, such notice will constitute and will be deemed to constitute notice from such Holder to the Trustee instructing the Trustee to exercise the Insolvency Exchange Right with respect to the Exchangeable Shares which are the subject of such notice. The Trustee will thereupon exercise the Insolvency Exchange Right with respect to the Exchangeable Shares which are the subject of such notice and will require ParentCo to purchase such Exchangeable Shares in accordance with the provisions of this Article 4, mutatis mutandis, with the provisions applicable upon the occurrence of an Insolvency Event. ParentCo hereby agrees to purchase such Exchangeable Shares for the full Exchangeable Share Consideration applicable thereto immediately following receipt of any such notice. SECTION 4.8 STAMP OR OTHER TRANSFER TAXES. (1) Upon any sale of Exchangeable Shares to ParentCo pursuant to the Insolvency Exchange Right or the Automatic Exchange Rights, the share certificate or certificates representing ParentCo Common Stock to be delivered in connection with the payment of the total purchase price therefor shall be issued in the name of the Holder of the Exchangeable Shares so sold or in such names as such Holder may otherwise direct in writing without charge to the holder of the Exchangeable Shares so sold, provided, however, that such Holder: (a) shall pay any documentary, stamp or transfer taxes required by law to be paid by the Holder 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, ParentCo and the Company acting in good faith and reasonably, that such taxes, if any, have been paid. SECTION 4.9 NOTICE OF INSOLVENCY EVENT (1) Immediately upon the occurrence of an Insolvency Event or any event that with the giving of notice or the passage of time or both would be an Insolvency Event, the Company and ParentCo shall give written notice 16 -12- thereof to the Trustee. As soon as practicable after receiving notice from the Company or ParentCo of the occurrence of an Insolvency Event, the Trustee will mail to each Holder, at the expense of ParentCo, a notice of such Insolvency Event in the form provided by ParentCo, which notice shall contain a brief statement of the right of the Holders with respect to the Insolvency Exchange Right. SECTION 4.10 QUALIFICATION OF PARENTCO COMMON STOCK (1) ParentCo covenants that if any ParentCo Common Stock to be issued and delivered pursuant to the Insolvency Exchange Right or the Automatic Exchange Rights require registration or qualification with or approval of or the filing of any document including any prospectus or similar document, the taking of any proceeding with or the obtaining of any order, ruling or consent from any governmental or regulatory authority under any Canadian or United States federal, provincial or state law or regulation or pursuant to the rules and regulations of any regulatory authority, or the fulfilment of any other legal requirement (collectively, the "Applicable Laws") before such shares may be issued and delivered by ParentCo to the initial holder thereof (other than the Company), ParentCo will in good faith expeditiously take all such actions and do all such things as are necessary or desirable to cause such ParentCo Common Stock to be and remain duly registered, qualified or approved to the extent expressly provided in the Purchase Agreement and the Registration Rights Agreement. ParentCo Common Stock shall be issued pursuant to an exemption from registration under Applicable Laws and shall not be freely tradeable. ParentCo will in good faith expeditiously take all such actions and do all such things as are reasonably necessary or desirable to cause all ParentCo Common Stock to be delivered pursuant to the Insolvency Exchange Rights or the Automatic Exchange Rights to be listed, quoted or posted for trading on all stock exchanges and quotation systems on which outstanding ParentCo Common Stock have been listed by ParentCo and remain listed and are quoted or posted for trading at such time. (2) ParentCo hereby represents, warrants and covenants that the ParentCo Common Stock issuable as described herein will be duly authorized and validly issued as fully paid and non-assessable. SECTION 4.11 RESERVATION OF PARENTCO COMMON STOCK. (1) ParentCo hereby represents, warrants and covenants that it has reserved for issuance and will at all times keep available, free from pre-emptive rights and out of its authorized and unissued capital shares such number of ParentCo Common Stock: (a) as is equal to the sum of 17 -13- (i) the number of Exchangeable Shares issued and outstanding from time to time, and (ii) the number of Exchangeable Shares issuable upon the exercise of all rights to acquire Exchangeable Shares outstanding from time to time; and (b) as are now and may hereafter be required to enable and permit ParentCo, the Company or CallCo to meet its obligations hereunder, under the Support Agreement and under the Exchangeable Share Provisions with respect to which ParentCo may now or hereafter be required to issue ParentCo Common Stock. (2) ParentCo shall provide notice on a timely basis to the Trustee with respect to any adjustment to the number of ParentCo Common Stock reserved for issuance pursuant to Section 4.11(1)(a) and (b). SECTION 4.12 AUTOMATIC EXCHANGE ON LIQUIDATION OF PARENTCO. (1) ParentCo shall give the Trustee written notice of each of the following events at the time set forth below: (a) in the event of any determination by the board of directors of ParentCo to institute voluntary liquidation, dissolution or winding-up proceedings with respect to ParentCo or to effect any other distribution of assets of ParentCo among its shareholders for the purpose of winding up its affairs, at least 60 days prior to the proposed effective date of such liquidation, dissolution, winding-up or other distribution; and (b) immediately, upon the earlier of (i) receipt by ParentCo of notice of; and (ii) ParentCo'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 ParentCo or to effect any other distribution of assets of ParentCo among its shareholders for the purpose of winding up its affairs. (2) Immediately following receipt by the Trustee from ParentCo of notice of any event (a "LIQUIDATION Event") contemplated by Section 4.12(1) above, the Trustee will give notice thereof to the Holders. Such notice provided by ParentCo to the Trustee shall include a brief description of the automatic 18 -14- exchange of Exchangeable Shares for ParentCo Common Stock provided for in Section 4.12(3) below. (3) In order that the Holders will be able to participate on a pro rata basis with the holders of ParentCo Common Stock in the distribution of assets of ParentCo 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 ParentCo Common Stock. To effect such automatic exchange, ParentCo shall be deemed to have purchased each Exchangeable Share outstanding immediately prior to the Liquidation Event Effective Time 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, ParentCo will provide to the Trustee an Officer's Certificate setting forth the calculation of the purchase price for each Exchangeable Share. (4) The closing of the transaction of purchase and sale contemplated by Section 4.12(3) 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 ParentCo 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 ParentCo shall deliver or cause to be delivered 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 ParentCo Common Stock issued to it pursuant to the automatic exchange of Exchangeable Shares for ParentCo Common Stock, and the certificates held by the Holder previously representing the Exchangeable Shares exchanged by the Holder with CallCo pursuant to such automatic exchange shall thereafter be deemed to represent the ParentCo Common Stock delivered to the Holder by ParentCo pursuant to such automatic exchange. Upon the request of a Holder and the surrender by the Holder of Exchangeable Share certificates to ParentCo deemed to represent ParentCo Common Stock, duly endorsed for transfer to ParentCo and accompanied by such instruments of transfer as ParentCo may reasonably require, ParentCo shall deliver or cause to be delivered to the Holder certificates representing the ParentCo Common Stock of which the Holder is the holder. 19 -15- SECTION 4.13 WITHHOLDING RIGHTS ParentCo and CallCo shall be entitled to deduct and withhold from the consideration otherwise payable pursuant to this Agreement to any holder of Exchangeable Shares such amounts as ParentCo and CallCo is required by law to deduct and withhold with respect to the making of such payment under the United States Internal Revenue Code of 1986, as amended, the Income Tax Act (Canada) or any applicable provision of state, local, provincial or foreign tax law. To the extent that amounts are so withheld, such withheld amounts shall be treated for all purposes of this Agreement as having been paid to the holder of the shares in respect of which such deduction and withholding was made, provided that such withheld amounts are actually remitted to the appropriate taxing authority within the applicable time limits. To the extent that the amount so required to be deducted or withheld from any payment to a holder exceeds the cash portion of the consideration otherwise payable to the holder and ParentCo are hereby authorized to withhold, sell, or otherwise dispose of at fair market value such portion of such consideration as is necessary to provide sufficient funds to ParentCo or CallCo, as the case may be, in order to enable it to comply with such deduction or withholding requirement and ParentCo and CallCo shall give an accounting to the holder with respect thereto and any balance of such sale proceeds. ARTICLE 5 CONCERNING THE TRUSTEE SECTION 5.1 POWERS AND DUTIES OF THE TRUSTEE. (1) The rights, powers and authorities of the Trustee under this Agreement, in its capacity as trustee of the Trust, shall include: (a) distributing materials to Holders as provided in this Agreement; (b) receiving the grant of the Insolvency Exchange Right and the Automatic Exchange Rights from CallCo as trustee for and on behalf of the Holders in accordance with the provisions of this Agreement; (c) exercising the Insolvency 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 CallCo Common Stock and cheques, if any, to which such Holders are entitled upon the exercise of the Insolvency Exchange Right or pursuant to the Automatic Exchange Rights, as the case may be; (d) holding title to the Trust Estate; 20 -16- (e) investing any moneys forming, from time to time, a part of the Trust Estate as provided in this Agreement; (f) taking action at the direction of a Holder or Holders to enforce the obligations of CallCo under this Agreement; and (g) taking such other actions and doing such other things as are specifically provided in this Agreement. (2) 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. SECTION 5.2 NO CONFLICT OF INTEREST. The Trustee represents to the Holders, the Company and CallCo 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 8 hereof. If, notwithstanding the foregoing provisions of this Section 5.2, the Trustee has such a material conflict of interest, the validity and enforceability of this Agreement shall 21 -17- 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 5.2, any interested party may apply to the Ontario Court (General Division) for an order that the Trustee be replaced as trustee hereunder. SECTION 5.3 DEALINGS WITH TRANSFER AGENTS, REGISTRARS, ETC. (1) The Company, CallCo and ParentCo 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 ParentCo Common Stock; and (b) requisition, from time to time, from any such registrar or transfer agent any information readily available from the records maintained by it which the Trustee may reasonably require for the discharge of its duties and responsibilities under this Agreement; and (2) The Company, CallCo and ParentCo irrevocably authorize their respective registrars and transfer agents to comply with all such requests. Each of CallCo and ParentCo 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 Insolvency Exchange Right and the Automatic Exchange Rights, in each case pursuant to Article 4 hereof. SECTION 5.4 BOOKS AND RECORDS. (1) The Trustee shall keep available for inspection by ParentCo, CallCo the Holders and the Company, at the Trustee's principal corporate trust office in Toronto, Ontario, correct and complete books and records of account relating to the Trustee's actions under this Agreement, including without limitation all information relating to mailings and instructions to and from Holders and all transactions pursuant to the Insolvency Exchange Right and the Automatic Exchange Rights for the term of this Agreement. On or before March 31 in every year after the date hereof, the Trustee shall transmit to CallCo, the Holders and the Company a brief report, dated as of the preceding December 30, with respect to: (a) property and funds comprising the Trust Estate as of that date; (b) the number of exercises of the Insolvency 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 CallCo of ParentCo Common Stock in connection with the Insolvency Exchange Right, during the calendar year ended on such date; and 22 -18- (c) all other actions taken by the Trustee in the performance of its duties under this Agreement which it had not previously reported. SECTION 5.5 INCOME TAX RETURNS AND REPORTS. The Trustee shall, if so advised by the Company or CallCo, prepare and file on behalf of the Trust appropriate United States and Canadian income tax returns and, if applicable, any other returns or reports as may be required by applicable law, 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, ParentCo or CallCo shall retain such experts for purposes of providing such advice and assistance. SECTION 5.6 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 Article 3 hereof, subject to Section 5.15 hereof, and with respect to the Insolvency Exchange Right pursuant to Article 4 hereof, subject to Section 5.15 hereof, and with respect to the Automatic Exchange Rights pursuant to Article 4 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. SECTION 5.7 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 indemnity referred to in Section 5.6 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 Insolvency 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 23 -19- be instituted, had and maintained by the Trustee, except only as herein provided, and in any event for the equal benefit of all Holders. SECTION 5.8 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 5.9 hereof, if applicable, and with any other applicable provisions of this Agreement. SECTION 5.9 EVIDENCE AND AUTHORITY TO TRUSTEE. (1) The Company and/or ParentCo and/or CallCo 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 the Company and/or ParentCo and/or CallCo or the Trustee under this Agreement or as a result of any obligation imposed under this Agreement, including, without limitation, in respect of and the Insolvency Exchange Right or the Automatic Exchange Rights and the taking of any other action to be taken by the Trustee at the request of or on the application of the Company and/or ParentCo and/or CallCo 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 5.9; or (b) the Trustee, in the exercise of its rights, powers, duties and authorities under this Agreement, gives the Company and/or ParentCo and/or CallCo written notice requiring it to furnish such evidence in relation to any particular action or obligation specified in such notice. (2) Such evidence shall consist of an Officer's Certificate of the Company and/or ParentCo and/or CallCo 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. (3) Whenever such evidence relates to a matter other than the Insolvency Exchange Right or the Automatic Exchange Rights, and except as otherwise specifically provided herein, such evidence may consist of a report or opinion of any solicitor, auditor, accountant, appraiser, valuer, engineer or other expert or any other person whose qualifications give authority to a statement 24 -20- made by him, provided that if such report or opinion is furnished by a director, officer or employee of the Company and/or ParentCo and/or CallCo it shall be in the form of an Officer's Certificate or a statutory declaration. (4) 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: (a) declaring that he has read and understands the provisions of this Agreement relating to the condition in question; (b) describing the nature and scope of the examination or investigation upon which he based the statutory declaration, certificate, statement or opinion; and (c) declaring that he has made such examination or investigation as he believes is necessary to enable him to make the statements or give the opinions contained or expressed therein. SECTION 5.10 EXPERTS, ADVISERS AND AGENTS. (1) 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,