ARRANGEMENT AGREEMENT

Exhibit 10.25

ARRANGEMENT AGREEMENT

AMONG

HUMMINGBIRD LTD.

AND

OPEN TEXT CORPORATION

AND

6575064 CANADA INC.

August 4, 2006

ARRANGEMENT AGREEMENT

THIS ARRANGEMENT AGREEMENT dated August 4, 2006,

AMONG:

Open Text Corporation, a corporation existing under the Canada Business Corporations Act (“Parent”),

6575064 Canada Inc., a corporation existing under the Canada Business Corporations Act and a wholly-owned subsidiary of Parent (“Acquisition Sub”),

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Hummingbird Ltd., a corporation existing under the Canada Business Corporations Act (“Hummingbird”),

THIS AGREEMENT WITNESSES THAT, in consideration of the respective covenants and agreements herein contained and other good and valuable consideration (the receipt and sufficiency of which are hereby acknowledged), and intending to be legally bound hereby, Parent, Acquisition Sub and Hummingbird hereby agree as follows:

ARTICLE 1

INTERPRETATION

 

1.1	Definitions

In this Agreement, unless the context otherwise requires:

“Acquisition Proposal” means (i) any merger, amalgamation, arrangement, recapitalization, liquidation, dissolution, share exchange, business combination or similar transaction (other than a transaction the sole parties to which are one or more of Hummingbird and its wholly-owned subsidiaries), (ii) any acquisition, directly or indirectly, of assets which individually or in the aggregate exceed 20% of the market capitalization of Hummingbird on the date the proposal in respect of such acquisition is made (or any lease, long term supply agreement or other arrangement having the same economic effect as a material sale of assets), (iii) any tender offer, take-over bid or other acquisition, directly or indirectly, by any person or “group” within the meaning of Section 13(d) of the Exchange Act, of beneficial ownership of 20% or more of the outstanding Hummingbird Shares (or rights or interests in or to Hummingbird Shares), in the case of each of (i), (ii) and (iii) in a single transaction or a series of related transactions or similar transactions involving Hummingbird and/or its subsidiaries, or a proposal or offer (binding or non binding, oral or written, conditional or unconditional, or otherwise) or communication, announcement or other indication of an intention to do any of the foregoing, or any amendment or modification or proposed amendment or modification of any of the foregoing, excluding the Arrangement or any transaction to which Parent or an affiliate of Parent is a party;

“affiliate” has the meaning ascribed thereto in the Securities Act;

“Arrangement” means the arrangement contemplated herein to be made on the terms set out in the Plan of Arrangement, subject to any amendments or variations thereto made in accordance with this Agreement and Section 5.1 of the Plan of Arrangement or made at the direction of the Court in the Final Order (with the consent of Parent and Hummingbird, each acting reasonably);

“Arrangement Resolution” means the special resolution of the Hummingbird Shareholders to be considered at the Meeting, to be substantially in the form set out in Schedule B hereto;

“Articles of Arrangement” means the articles of arrangement of Hummingbird in respect of the Arrangement, to be filed with the Director after the Final Order is made;

“business day” means any day, other than a Saturday, a Sunday or a statutory holiday in Toronto, Ontario, Canada;

“Canadian Securities Administrators” means the securities regulatory authorities in each of the provinces of Canada;

“CBCA” means the Canada Business Corporations Act and the regulations made thereunder, as promulgated or amended from time to time;

“Certificate of Arrangement” means the certificate of arrangement giving effect to the Arrangement, issued pursuant to subsection 192(7) of the CBCA;

“Circular” means the notice of the meeting and accompanying management proxy circular and other materials to be sent by Hummingbird to Hummingbird Shareholders in connection with the Meeting;

“Code” has the meaning ascribed thereto in Section 2.13; “Commitment Letter” has the meaning ascribed thereto in Section 4.1(d); “Competition Act” means the Competition Act (Canada), as amended from time to time;

“Contract” means any contract, agreement, license, franchise, lease, arrangement, commitment, understanding or other right or obligation to which Hummingbird or any of its subsidiaries is a party or by which Hummingbird or any of its subsidiaries is bound or affected or to which any of their respective properties or assets is subject;

“Court” means the Ontario Superior Court of Justice (Commercial List);

“Depositary” means CIBC Mellon Trust Company and any other trust company, bank or equivalent financial institution agreed to in writing by Parent and Hummingbird and appointed to carry out any of the duties of the Depositary hereunder;

“Director” means the Director appointed pursuant to section 260 of the CBCA;

 

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“Disclosure Letter” means that certain letter dated as of even date herewith and delivered to Parent by Hummingbird;

“Dissent Rights” means the rights of dissent in respect of the Arrangement described in the Plan of Arrangement;

“Dissenting Shareholder” means any Hummingbird Shareholder who has duly exercised its Dissent Rights and has not withdrawn or been deemed to have withdrawn such Dissent Rights;

“Dissenting Shares” means all the Hummingbird Shares registered in the name of a holder and in respect of which Dissent Rights are exercised and not withdrawn in accordance with the Plan of Arrangement;

“Effective Date” means the date of the Certificate of Arrangement giving effect to the Arrangement;

“Effective Time” means 9:00 a.m. (Toronto time) on the Effective Date;

“Environmental Condition” means the presence of any Hazardous Substance in material breach of any Environmental Laws, or in quantities or conditions which exceed criteria published in any applicable Laws, policies, standards or guidance documents of any Governmental Entity of competent jurisdiction;

“Environmental Laws” means all applicable Laws, including applicable civil and common laws, relating to the protection of human health and safety or pollution or protection of the environment, or relating to the regulation of Hazardous Substances;

“Environmental Permits” means all Permits necessary under Environmental Laws for Hummingbird and its subsidiaries to own, lease, license and operate their properties and conduct their businesses as presently conducted;

“ERISA” has the meaning ascribed thereto in Section 3.1(s);

“Exchange” means the Toronto Stock Exchange or the Nasdaq, and “Exchanges” means both of them;

“Exchange Act” means the United States Securities Exchange Act of 1934, as amended;

“Exchange Factor” means 0.8879, which is the exchange rate for 1 Canadian dollar into United States dollars based on the noon rate of exchange of the Bank of Canada on the business day immediately preceding the date of this Agreement;

“Expiry Date” means the Expiry Date under the Open Text Offer;

“Final Order” means the final order of the Court approving the Arrangement, as such order may be amended by the Court (with the consent of Parent and Hummingbird, each acting reasonably) at any time prior to the Effective Date or, if appealed, then, unless such appeal is withdrawn or denied, as affirmed or amended on appeal (in each case with the consent of Parent and Hummingbird, each acting reasonably);

 

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“Financial Contract” means a Contract that creates, governs or guarantees, or that is otherwise entered into in connection with or with respect to, Financial Indebtedness;

“Financial Indebtedness” means in relation to a person (the “debtor”), an obligation or liability (contingent or otherwise) of the debtor (a) for borrowed money (including overdrafts and including amounts in respect of principal, premium, interest or any other sum payable in respect of borrowed money) or for the deferred purchase price of property or services, (b) under any loan, stock, bond, note, debenture or other similar instrument or debt security, (c) under any acceptance credit, bankers’ acceptance, letter of credit or other similar facilities, (d) under any conditional sale, hire purchase or title retention agreement with respect to property, under any capitalized lease arrangement, under any sale and lease back arrangement or under any lease or any other agreement having the commercial effect of a borrowing of money or treated as a finance lease or capital lease in accordance with applicable accounting principles, (e) under any foreign exchange transaction, any interest or currency swap transaction, any fuel or commodity hedging transaction or any other kind of derivative transaction, (f) in respect of any counterindemnity obligation in respect of a guarantee, indemnity, bond, standby or documentary letter of credit or any other instrument issued by a bank or financial institution, (g) in respect of preferred stock (namely capital stock of any class that is preferred as to the payment of dividends or distributions, or as to the distribution of assets upon any voluntary or involuntary liquidation or dissolution, over the capital stock of any other class) or redeemable capital stock (namely any class or series of capital stock that, either by its terms, by the terms of any security into which it is convertible or exchangeable or by contract or otherwise, is, or upon the happening of an event or passage of time would be, required to be redeemed on a specified date or is redeemable at the option of the holder thereof at any time, or is convertible into or exchangeable for debt securities at any time), or (h) for any amount raised under any transaction similar in nature to those described in paragraphs (a) to (g) of this definition, or otherwise having the commercial effect of borrowing money, or (i) under a guarantee, indemnity or similar obligation entered into by the debtor in respect of an obligation or liability of another person which would fall within paragraphs (a) to (h) of this definition if the references to the debtor referred to the other person; for greater certainty, Financial Indebtedness includes obligations and liabilities of another person which would fall within paragraphs (a) to (h) of this definition where such obligations or liabilities are secured by (or where such other person has a right to require that such obligations or liabilities be secured by) a security interest over any property of the debtor even though the debtor has not assumed or become liable for the payment of such obligations or liabilities or receivables sold, assigned, or discounted;

“GAAP” means United States generally accepted accounting principles;

“Governmental Entity” means (a) any multinational, federal, provincial, state, regional, municipal, local or other government, governmental or public department, central bank, court, tribunal, arbitral body (whether or not governmental), commission, board, bureau or agency, domestic or foreign, (b) any subdivision, agent or authority of any of the foregoing or (c) any quasi-governmental or private body, including any tribunal, commission, regulatory agency or self-regulatory organization, exercising any regulatory, expropriation or taxing authority under or for the account of any of the foregoing;

 

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“Hazardous Substance” means any pollutant, contaminant, petroleum, hydrocarbons, hazardous substance, waste, hazardous material, toxic substance, dangerous or potentially dangerous substance or dangerous good as defined, judicially interpreted or identified in, or any substance regulated pursuant to, any applicable Law;

“HSR Act” means the United States Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended from time to time;

“Hummingbird Financial Statements” has the meaning ascribed thereto in Section 3.1(i);

“Hummingbird IP” means all Intellectual Property Rights that are used or held for use by Hummingbird or any of its subsidiaries in connection with the business of Hummingbird and its subsidiaries;

“Hummingbird Option” means an option to purchase Hummingbird Shares pursuant to the Hummingbird Stock Option Plan;

“Hummingbird Plans” has the meaning ascribed thereto in Section 3.1(s);

“Hummingbird Public Disclosure Record” means all documents filed on the System for Electronic Document Analysis and Retrieval (SEDAR) or the Electronic Document Gathering, Analysis and Retrieval System (EDGAR) after September 30, 2003;

“Hummingbird Securityholders” means Hummingbird Shareholders and the holders of Hummingbird Options;

“Hummingbird Shareholders” means the registered holders of Hummingbird Shares;

“Hummingbird Shares” means the common shares in the capital of Hummingbird;

“Hummingbird Stock Option Plan” means the 1996 Employee Stock Option Plan of Hummingbird;

“Hummingbird Source Code” means all source code that is part of the Owned Hummingbird IP or the Hummingbird products;

“Identified Hummingbird Monetary Representations” means the representations and warranties of Hummingbird set forth in Section 3.l(d)(i)(C) and Section 3.1(ee);

“Identified Hummingbird Representations” means the representations and warranties of Hummingbird set forth in Section 3.1(e) and Section 3.1(gg);

“including” means including without limitation, and “include” and “includes” have a corresponding meaning;

“Intellectual Property Rights” means: (a) all United States, international and foreign patents and applications therefor and all reissues, divisions, divisional, renewals, extensions, provisionals, continuations and continuations-in-part thereof, and all patents, applications, documents and filings claiming priority to or serving as a basis for priority

 

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thereof (“Patents”); (b) all inventions (whether or not patentable), invention disclosures, improvements, trade secrets, proprietary information, know how, computer software programs (in both source code and object code form), technology, business methods, technical data and customer lists, tangible or intangible proprietary information, and all documentation relating to any of the foregoing; (c) all copyrights, copyrights registrations and applications therefor, and all other rights corresponding thereto throughout the world (“Copyrights”); (d) all industrial designs and any registrations and applications therefor throughout the world; (e) all trade names, logos, common law trademarks and service marks, trademark and service mark registrations and applications therefor throughout the world (“Trademarks”); (f) all databases and data collections and all rights therein throughout the world; (g) all moral and economic rights of authors and inventors, however denominated, throughout the world; (h) all Web addresses, domain names and numbers, uniform resource locators (“URLs”) and other names and locators associated with the Internet (“Domain Names”); and (i) any similar or equivalent rights to any of the foregoing anywhere in the world;

“Interim Order” means the interim order of the Court, as the same may be amended by the Court (with the consent of Parent and Hummingbird, each acting reasonably), containing a declaration and directions in respect of the notice to be given in respect of and the conduct of the Meeting;

“knowledge of Hummingbird” means collectively, the actual knowledge of Fred Sorkin, Alan Barry Litwin and Inder P.S. Duggal;

“Law” or “Laws” means all international trade agreements, codes and conventions, laws, by-laws, statutes, rules, regulations, principles of law and equity, orders, rulings, ordinances, judgments, injunctions, determinations, awards, decrees or other requirements and the terms and conditions of any grant of approval, permission, authority or license of any Governmental Entity or self-regulatory authority (including either of the Exchanges), and the term “applicable” with respect to such Laws and in a context that refers to one or more Parties, means such laws as are applicable to such Party or its business, undertaking, property or securities and emanate from, a person having jurisdiction over the Party or Parties or its or their business, undertaking, property or securities;

“Legal Requirements” means any and all applicable federal, state, local, municipal, foreign or other law, statute, constitution, principle of common law, resolution, ordinance, code, edict, decree, rule, regulation, ruling or requirement issues, enacted, adopted, promulgated, implemented or otherwise put into effect by or under the authority of any Governmental Entity;

“Lender Sub” means one or more wholly-owned subsidiaries of Hummingbird selected by Parent for purposes of making the loans contemplated under Section 5.5(1);

“Licensed Hummingbird IP” shall mean all Hummingbird IP other than the Owned Hummingbird IP;

“Lien” means any hypothec, mortgage, lien, charge, security interest, encumbrance and adverse right or claim;

 

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“Loan Alternative” means the provision by Lender Sub of the loans contemplated under Section 5.5(1) at the request of Parent in accordance with the terms and conditions of the Plan of Arrangement;

“Loan Amount” means an amount up to $58 million or such other amount requested in Section 5.5 (but which, for greater certainty, may be $0);

“Material Adverse Effect” means, when used in connection with a person, any change, effect, event, occurrence or state of facts that is, or could reasonably be expected to be, material and adverse to the business, assets, rights, liabilities, capitalization, operations, results of operations or financial condition of that person and its subsidiaries, taken as a whole, other than any change, effect, event, occurrence or state of facts resulting from (a) changes in the global economy or political conditions or securities markets in general, (b) changes in the worldwide industries or markets in which such party and its subsidiaries operate, (c) the commencement, occurrence, continuation or material worsening of any war, armed hostilities or acts of terrorism, (d) the announcement or pendency of the transactions contemplated by this Agreement, the Open Text Offer or the Symphony Arrangement Agreement, (e) any change in the trading price or volume of the Hummingbird Shares, provided, however, that this clause (e) shall not exclude from the definition of Material Adverse Effect any change, effect, event, occurrence or state of facts relating to the person or its subsidiaries which caused such change in trading price or volume, (f) any failure by Hummingbird to meet the published revenue or earnings predictions in respect of Hummingbird of equity analysts, provided, however, that this clause (f) shall not exclude from the definition of Material Adverse Effect any change, effect, event, occurrence or state of facts relating to the person or its subsidiaries which caused such failure, (g) the compliance with the terms of this Agreement, (h) generally applicable changes in Law, (i) generally applicable changes in GAAP, or (j) Hummingbird’s compliance with its obligations under the Symphony Arrangement Agreement including, to the extent applicable, the payment of fees by Hummingbird as required under Sections 7.3 or 7.4 thereof; provided, that nothing in clauses (a), (b) or (c) shall include any change, effect, event, occurrence or state of facts which disproportionately affects that person and its subsidiaries, taken as a whole;

“material fact” has the meaning ascribed thereto in the Securities Act;

“Maximum Cash Amount” means the aggregate amount of cash in United States dollars equal to (a) the product obtained by multiplying (i) the number of Hummingbird Shares outstanding immediately prior to the Effective Time by (ii) the Purchase Price less (b) the Share Loan Amount;

“MD&A” has the meaning ascribed thereto in Section 3.1(i);

“Meeting” means the special meeting of Hummingbird Shareholders, and all adjournments and postponements thereof, called and held to, among other things, consider and approve the Arrangement Resolution;

“Nasdaq” means The Nasdaq Global Market, or any successor inter-dealer quotation system operated by Nasdaq Stock Market Inc., or any successor thereto;

 

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“Non-Disclosure Agreement” means the letter agreement dated July 20, 2006 between Parent and Hummingbird providing Parent access to confidential information of Hummingbird in connection with or relating to this Agreement and the Transactions;

“Open Text Offer” means the offer dated July 10, 2006 by Acquisition Sub to purchase for cash all of the outstanding Common Shares of Hummingbird not currently owned by Open Text and its affiliates at a price of U.S.$27.75 per Common Share;

“Option Loan Amount” means the aggregate amount of cash required to be paid by or on behalf of Hummingbird pursuant to Section 2.3(b)(i) of the Plan of Arrangement in respect of the Hummingbird Options;

“Order” means any judgment, decision, decree, injunction, ruling, writ, assessment or order of any Governmental Entity that is binding on any person or its property under applicable Legal Requirements;

“Outside Date” means (a) October 21, 2006, subject to the right of either Hummingbird or Parent to postpone the Outside Date for up to an additional 90 days (in 30-day increments) if the Regulatory Approvals have not been obtained and have not been denied by a non-appealable decision of a Governmental Entity by giving written notice to the other to such effect no later than the date that is two (2) business days prior to the original Outside Date (or any subsequent Outside Date, as applicable) or (b) such later date as may be agreed to in writing by the Parties;

“Owned Hummingbird IP” means all Intellectual Property Rights owned by, or filed in the name of, Hummingbird or any of its subsidiaries;

“Parties” means Hummingbird, Acquisition Sub and Parent, and “Party” means any of them;

“Permit” means any material license, permit, certificate, consent, order, grant, approval, classification, registration or other authorization of and from any Governmental Entity;

“person” includes an individual, partnership, limited partnership, association, body corporate, trustee, trust, executor, administrator, legal representative, government (including any Governmental Entity) or any other entity, whether or not having legal status;

“Plan of Arrangement” means the plan of arrangement substantially in the form of Schedule C hereto as amended or varied pursuant to the terms hereof and thereof;

“Purchase Price” means the sum of $27.85 per Hummingbird Share, payable in cash;

“Regulatory Approvals” means those sanctions, rulings, consents, orders, exemptions, permits and other approvals (including the lapse, without objection, of a prescribed time under a statute or regulation that states that a transaction may be implemented if a prescribed time lapses following the giving of notice without an objection being made) of Governmental Entities as set out in Schedule A hereto;

“Response Period” has the meaning ascribed thereto in Section 7.2(l)(b);

 

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“Returns” means all reports, forms, elections, estimates, declarations of estimated tax, information statements and returns relating to, or required to be filed in connection with any Taxes;

“Securities Act” means the Securities Act (Ontario) and the rules and regulations made thereunder, as now in effect and as they may be promulgated or amended from time to time;

“Securities Regulators” means the Canadian Securities Administrators and the United States Securities and Exchange Commission;

“Securities Laws” means the Securities Act and all other applicable Canadian provincial and territorial and United States federal securities laws, rules and regulations thereunder;

“Shareholder Approval” has the meaning ascribed thereto in Section 2.7;

“Share Loan Amount” means the difference obtained by subtracting the Option Loan Amount from the Loan Amount; provided that if the Loan Amount is $0 the Share Loan Amount shall also be $0;

“subsidiary” means, with respect to a specified body corporate, any body corporate of which more than 50% of the outstanding shares ordinarily entitled to elect a majority of the board of directors thereof (whether or not shares of any other class or classes shall or might be entitled to vote upon the happening of any event or contingency) are at the time owned directly or indirectly by such specified body corporate and shall include any body corporate, partnership, joint venture or other entity over which such specified body corporate exercises direction or control or which is in a like relation to a subsidiary;

“Superior Proposal” has the meaning ascribed thereto in Section 7.1(1);

“Symphony Arrangement Agreement” means the arrangement agreement dated May 25, 2006 among Symphony Technology II-A, L.P., Linden Management Corporation, Linden Acquisition Ltd. and Hummingbird;

“Tax Act” means the Income Tax Act (Canada), as amended from time to time;

“Taxes” or “Tax” means all taxes, imposts, levies and withholdings, however denominated and instalments in respect thereof, including any interest, penalties, fines or other additions that have been, are or will become payable in respect thereof, imposed by any Governmental Entity;

“Transaction Documents” means this Agreement and the Plan of Arrangement;

“Transactions” means, collectively, the transactions contemplated herein and in the Plan of Arrangement; and

“Vendor Contract” means a Contract to which Hummingbird or any of its subsidiaries is a party and pursuant to which Hummingbird or any of subsidiaries contracts to purchase or acquire goods and services.

 

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1.2	Interpretation Not Affected by Headings

The division of this Agreement into Articles, Sections, subsections and paragraphs and the insertion of headings are for convenience of reference only and shall not affect in any way the meaning or interpretation of this Agreement. Unless the contrary intention appears, references in this Agreement to an Article, Section, subsection, paragraph or Schedule by number or letter or both refer to the Article, Section, subsection, paragraph or Schedule, respectively, bearing that designation in this Agreement.

 

1.3	Number and Gender

In this Agreement, unless the contrary intention appears, words importing the singular include the plural and vice versa, and words importing gender include all genders.

 

1.4	Date for Any Action

If the date on which any action is required to be taken hereunder by a Party is not a business day, such action shall be required to be taken on the next succeeding day which is a business day.

 

1.5

Currency

Unless otherwise stated, all references in this Agreement to sums of money are expressed in lawful money of United States of America and “$” refers to United States dollars.

 

1.6	Accounting Matters

Unless otherwise stated, all accounting terms used in this Agreement in respect of Hummingbird shall have the meanings attributable thereto under GAAP and all determinations of an accounting nature in respect of Hummingbird required to be made shall be made in a manner consistent with GAAP consistently applied.

 

1.7

Schedules

The following Schedules are annexed to this Agreement and are incorporated by reference into this Agreement and form a part hereof:

 

ARTICLE 2

THE ARRANGEMENT

 

2.1	The Arrangement

The Arrangement shall be comprised of substantially the events or transactions, taken in the sequence indicated, in Schedule C to this Agreement.

 

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2.2	News Release Announcing the Arrangement

Subject to compliance with Securities Laws, Parent and Hummingbird shall issue a mutually agreed joint news release as soon as possible after execution of this Agreement.

 

2.3	Interim Order

As soon as practicable following the execution and delivery of this Agreement, and in any event not later than August 25, 2006 (subject to the availability of the Court), Hummingbird shall apply to the Court pursuant to section 192 of the CBCA for the Interim Order for the purpose of obtaining the approval of the Hummingbird Shareholders set forth in Section 2.7 and the granting of Dissent Rights.

 

2.4	Final Order

If the Interim Order and the approval of Hummingbird Shareholders set forth in Section 2.7 are obtained, Hummingbird shall promptly thereafter take all steps necessary or desirable to submit the Arrangement to the Court and apply for the Final Order.

 

2.5	Articles of Arrangement and Effective Date

Subject to the satisfaction or waiver of the conditions set forth in Article 6 (other than delivery of items to be delivered at the Effective Time and other than satisfaction of those conditions that by their nature are to be satisfied at the Effective Time, it being understood that the occurrence of the Effective Time shall remain subject to the delivery of such items and the satisfaction or waiver of such conditions at the Effective Time), on (a) the earlier of (i) October 2, 2006, provided that such conditions shall have been satisfied and/or waived by such date, (ii) the date that is five (5) business days after the satisfaction and/or waiver of such conditions (provided that such date is not earlier than October 2, 2006 nor later than the Outside Date), and (iii) the Outside Date or (b) such other date as Hummingbird and Parent shall mutually agree, Hummingbird and Parent shall cause to be filed, pursuant to subsection 192(6) of the CBCA, articles of arrangement to give effect to the Arrangement and implement the Plan of Arrangement. The steps of the Arrangement shall become effective in the order set out in the Plan of Arrangement.

 

2.6

Meeting

Subject to receipt of the Interim Order:

 

(a)

Hummingbird shall, as promptly as practicable following the execution of this Agreement and in any event within three business days following the date of the Interim Order: (i) prepare and complete the Circular in consultation with Parent and provide Parent with a reasonable opportunity to review and comment on drafts of the Circular and Hummingbird shall give reasonable consideration to such comments; (ii) as promptly as practicable thereafter, subject to obtaining any Regulatory Approvals required in connection with the mailing of the Circular, file the Circular in all jurisdictions where the same is required to be filed by the Interim Order and applicable Law; and (iii) mail the Circular and other

 

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documentation required in connection with the Meeting to the Hummingbird Securityholders in accordance with the Interim Order and applicable Law;

 

(b)

Hummingbird shall, subject to Section 7.1, (i) through Hummingbird’s Board of Directors, recommend that Hummingbird Shareholders vote in favour of the Arrangement Resolution and include such recommendation in the Circular; and (ii) use its commercially reasonable efforts to secure the approval of the Arrangement Resolution by Hummingbird Shareholders;

 

(c)

subject to Section 7.1, Hummingbird shall duly call, convene and hold the Meeting in accordance with the Interim Order, the by-laws of Hummingbird and applicable Laws as soon as practicable for the purpose of considering the Arrangement Resolution (and, subject to the other terms and conditions herein, for any other proper purpose as may be set out in the notice of such meeting and agreed to by Parent, acting reasonably; provided that the Arrangement Resolution shall be voted on before any other matter at the Meeting, unless otherwise agreed by Parent) and Hummingbird shall provide notice to Parent and Acquisition Sub of the Meeting and allow the representatives of Parent and Acquisition Sub to attend the Meeting;

 

(d)

subject to Section 7.1 and except as required for quorum purposes or otherwise permitted under this Agreement, Hummingbird shall not adjourn (except as required by Law, by the Court or by valid Hummingbird Shareholder action), and Hummingbird shall not postpone or cancel (or propose for adjournment, postponement or cancellation) or fail to call the Meeting without Parent’s prior consent, such consent not to be unreasonably withheld or delayed;

 

(e)

subject to Section 7.1, Hummingbird shall use commercially reasonable efforts to solicit from Hummingbird Shareholders proxies in favour of the Arrangement Resolution, using the services of dealers and proxy solicitation services, and take all other action that is necessary or desirable to secure the approval of the Arrangement Resolution by Hummingbird Shareholders;

 

(f)

Hummingbird shall permit Parent and its counsel to review and comment upon drafts of all material to be filed or circulated by Hummingbird in connection with the Arrangement, including the applications for the Interim Order, the Circular and the Final Order and any supplement or amendment thereof and Hummingbird shall give reasonable consideration to any comments provided by Parent; and

 

(g)

subject to Section 2.5 and subject to obtaining the Final Order and the satisfaction or waiver of the other conditions herein contained in favour of each Party, Hummingbird shall file Articles of Arrangement and such other documents as may be required in connection therewith under the CBCA to give effect to the Arrangement.

 

2.7	Approval of Hummingbird Shareholders

Hummingbird’s application for the Interim Order will request that the Interim Order provide that the Arrangement Resolution be subject to the approval of two-thirds of the votes

 

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cast by or on behalf of those Hummingbird Shareholders present or represented by proxy at the Meeting (the “Shareholder Approval”).

 

2.8	Securities and Corporate Compliance

 

(a)

Hummingbird shall diligently do all such acts and things as may be necessary to comply, in all material respects, with applicable Laws, including National Instrument 54-101 of the Canadian Securities Administrators, in relation to the Meeting.

 

(b)

Each of Parent and Hummingbird shall furnish to the other all such information concerning it, its affiliates and its shareholders and, in the case of Hummingbird, the Hummingbird Securityholders, as may be required to prepare the Circular or any application to Securities Regulators or other Governmental Entity and effect the actions described in the Plan of Arrangement. Each of Parent and Hummingbird shall ensure that no information that is so furnished by it contains any untrue statement of a material fact or omits to state a material fact required to be stated in any such document or necessary in order to make any information so furnished for use in any such document not misleading in light of the circumstances in which it is furnished or to be used.

 

(c)

Parent and Hummingbird shall each promptly notify the other if at any time before the Effective Time it becomes aware that the Circular or any application to Securities Regulators or other Governmental Entity for an order contains any untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements contained therein not misleading in light of the circumstances in which they are made, or that otherwise requires an amendment or supplement to the Circular or such application.

 

(d)

In the event that notice is given by a Party under Section 2.8(c) in respect of a document, the Party which filed, distributed or delivered such document shall prepare a supplement or amendment to such document, as required and as the case may be, and, if required by applicable Law, shall cause the same to be distributed to Hummingbird Securityholders and filed with the applicable Securities Regulators and the Court, as applicable. For greater certainty, in the event that notice is given by a Party under Section 2.8(c) in respect of the Circular, Hummingbird shall, if and to the extent required by applicable Law, prepare a supplement or amendment to the Circular and cause the same to be distributed to Hummingbird Securityholders and filed with the applicable Securities Regulators and the Court, as applicable; and if such notice relates to a portion of the Circular provided by Parent or Acquisition Sub expressly for incorporation into the Circular, Parent shall cooperate in the preparation of the aforementioned supplement or amendment.

 

2.9

Dissent

Hummingbird shall give Parent: (a) prompt notice of any written demand for dissent received by Hummingbird prior to the Effective Time, any withdrawal of any such demand and any other demand, notice or instrument delivered to Hummingbird prior to the Effective Time

 

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that relates to such demand; and (b) the opportunity to participate in all negotiations and proceedings with respect to any such demand, notice or instrument. Hummingbird shall not make any payment or settlement offer prior to the Effective Time with respect to any such demand, notice or instrument unless Parent shall have given its written consent to such payment or settlement offer.

 

2.10

Closing

The closing of the Arrangement will take place at the offices of Goodmans LLP, 250 Yonge Street, Suite 2400 Toronto, Ontario, Canada, at 9:00 a.m. (Toronto time) on the Effective Date.

 

2.11	Preparation of Filings

Parent and Hummingbird shall co-operate in the preparation of any application for the Interim Order, the Final Order, the Articles of Arrangement, the Regulatory Approvals and any other orders, registrations, consents, filings, rulings, exemptions, no-action letters and approvals and the preparation of any documents reasonably deemed by either of the Parties to be necessary to discharge its respective obligations or otherwise advisable under applicable Laws in connection with this Agreement and the Transactions.

 

2.12	Communications

 

(a)

No Party nor any of its affiliates shall issue any press release or otherwise make public statements with respect to this Agreement or the Arrangement without the consent of Hummingbird and Parent (such consent not to be unreasonably withheld or delayed).

 

(b)

Neither Hummingbird nor Parent shall make any filing with any Governmental Entity with respect to the Transactions without giving the other Party a reasonable opportunity to review and comment on such filing. Each of Hummingbird and Parent shall reasonably consider comments provided by the other Party in respect of any such filing with a Government Entity.

 

(c)

Sections 2.12(a) and 2.12(b) shall be subject to each Party’s (and its affiliates’) overriding obligation to make any disclosure or filing required under applicable Laws and stock exchange rules, and the Party (or affiliate) making such disclosure shall use all commercially reasonable efforts to give prior oral or written notice to the other Party and reasonable opportunity to review or comment on the disclosure or filing, and if such prior notice is not possible, to give such notice immediately following the making of such disclosure or filing.