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EXHIBIT 4.9
VOTING AND EXCHANGE TRUST AGREEMENT
MEMORANDUM OF AGREEMENT made the 31stWaste Services, day of
July, 2004,
AMONG:
WASTE SERVICES, INC., a corporation existing under the laws
of the State of Delaware (hereinafter referred to as "WSI")
- and -
WASTE SERVICES (CA) INC. (FORMERLY CAPITAL ENVIRONMENTAL
RESOURCE INC.), a corporation existing under the laws of
the Province of Ontario (hereinafter referred to as "CERI")
- and -
COMPUTERSHARE TRUST COMPANY OF CANADA, a trust company
continued under the laws of Canada and authorized to carry
on the trust business in each province of Canada
(hereinafter referred to as "Trustee")
WHEREAS in connection with the Arrangement Agreement (defined
herein), certain holders of common shares
in the capital of CERI will receive
and hold exchangeable shares in the capital
of CERI pursuant to the plan of
arrangement contemplated by the Arrangement
Agreement;
AND WHEREAS pursuant to the Arrangement Agreement, WSI and
CERI have agreed to execute a voting and
exchange trust agreement substantially
in the form of this Agreement;
The foregoing recitals are made as representations and
statements of fact by WSI and CERI and not
by the Trustee.
NOW THEREFORE in consideration of the respective covenants and
agreements herein contained and for other
good and valuable consideration (the
receipt and sufficiency of which are hereby
acknowledged), the parties hereto
covenant and agree as follows:
ARTICLE 1
DEFINITIONS AND INTERPRETATION
1.1
DEFINITIONS
In this Agreement, unless there is something in the subject
matter or context inconsistent therewith,
the following terms shall have the
following meanings, respectively:
"AFFILIATE" of any person means any other person directly or
indirectly
controlled by, or under control of, that person. For the purposes
of
this definition, "control" (including, with correlative meanings,
the
terms "controlled by" and "under common control of"), as applied to
any
person,
means the possession by another person of the power to direct
or cause the direction of the
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management and policies of that first mentioned person through
the
direct or indirect ownership of over 50% of the voting
securities.
"AGREEMENT" means this agreement, including any Schedules or
Exhibits
to this agreement, as it may be amended or supplemented from time
to
time in accordance with the provisions hereof.
"ARRANGEMENT" means the arrangement under section 182 of the OBCA
on
the terms and subject to the conditions set out in the Plan of
Arrangement, subject to any amendments or variations thereto made
in
accordance with section 6.1 of the Arrangement Agreement or Article
6
of the Plan of Arrangement or made at the direction of the
Court.
"ARRANGEMENT AGREEMENT" means the agreement made June 9, 2004
among
WSI, CERI and Capital Holdings, a copy of which is attached as
Exhibit
A, as amended, supplemented or restated in accordance therewith
prior
to the Effective Date (as defined in the Arrangement
Agreement),
providing for, among other things, the Arrangement.
"AUTOMATIC EXCHANGE RIGHT" means the benefit of the obligation of
WSI
to effect the automatic exchange of Exchangeable Shares for WSI
Common
Shares pursuant to Section 5.12 hereof.
"BENEFICIARIES" means the registered holders from time to time
of
Exchangeable Shares, other than WSI and its Affiliates.
"BENEFICIARY VOTES" has the meaning ascribed thereto in Section
4.2
hereof.
"BOARD OF DIRECTORS" means the board of directors of WSI.
"BUSINESS DAY" means any day on which commercial banks are
generally
open for business in New York, New York and Toronto, Ontario,
other
than a Saturday, a Sunday or a day observed as a statutory holiday
in
New York, New York under the laws of the State of New York or
the
federal laws of the United States or in Toronto, Ontario under the
laws
of the Province of Ontario or the federal laws of Canada.
"CANADIAN DOLLAR EQUIVALENT" means, in respect of an amount
expressed
in a
currency other than Canadian dollars (the "FOREIGN CURRENCY
AMOUNT") at any date, the product obtained by multiplying (a)
the
Foreign Currency Amount by (b) the noon spot exchange rate on such
date
for such foreign currency expressed in Canadian dollars as reported
by
the Bank of Canada or, in the event such spot exchange rate is
not
available, such exchange rate on such date for such foreign
currency
expressed in Canadian dollars as may be deemed by the Board of
Directors to be appropriate for such purpose.
"CAPITAL HOLDINGS" means Capital Environmental Holdings Company,
an
unlimited liability company existing under the laws of the Province
of
Nova Scotia which, at the time of the consummation of the
Arrangement,
will be a direct wholly-owned subsidiary of WSI.
"COURT" means the Ontario Superior Court of Justice.
"CURRENT MARKET PRICE" means, in respect of a WSI Common Share on
any
date, the Canadian Dollar Equivalent of the average of the closing
bid
and ask prices of WSI Common Shares during a period of 20
consecutive
trading days ending not more than three trading days before such
date
on the NASDAQ, or, if the WSI Common Shares are not then quoted on
the
NASDAQ, on such other stock exchange or automated quotation system
on
which the WSI Common Shares are listed
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or quoted, as the case may be, as may be selected by the Board
of
Directors for such purpose; provided, however, that if in the
opinion
of the Board of Directors the public distribution or trading
activity
of WSI Common Shares during such period (whether or not traded on
a
stock exchange or automated quotation system) does not create a
market
which reflects the fair market value of a WSI Common Share, then
the
Current Market Price of a WSI Common Share shall be determined by
the
Board of Directors, in good faith and in its sole discretion,
and
provided further that any such selection, opinion or determination
by
the Board of Directors shall be conclusive and binding.
"EXCHANGE PUT RIGHT" has the meaning ascribed thereto in Section
5.14
hereof.
"EXCHANGE RIGHT" has the meaning ascribed thereto in Section
5.1
hereof.
"EXCHANGEABLE SHARES" means the exchangeable shares in the capital
of
CERI, having substantially the rights, privileges, restrictions
and
conditions set out in Appendix 1 to the Plan of Arrangement.
"INDEMNIFIED PARTIES" has the meaning ascribed thereto in Section
9.1
hereof.
"INSOLVENCY EVENT" means the institution by CERI of any proceeding
to
be adjudicated a bankrupt or insolvent or to be wound up, or
the
consent of CERI to the institution of bankruptcy, insolvency or
winding-up proceedings against it, or the filing of a petition,
answer
or consent
seeking dissolution or winding-up under any bankruptcy,
insolvency or analogous laws, including without limitation the
Companies Creditors' Arrangement Act (Canada) and the Bankruptcy
and
Insolvency Act (Canada), and the failure by CERI to contest in
good
faith any such proceedings commenced in respect of CERI within 30
days
of becoming aware thereof, or the consent by CERI to the filing of
any
such petition or to the appointment of a receiver, or the making
by
CERI of a general assignment for the benefit of creditors, or
the
admission in writing by CERI of its inability to pay its debts
generally as they become due, or CERI not being permitted, pursuant
to
solvency
requirements of applicable law, to redeem any Retracted Shares
pursuant to section 6.6 of the Share Provisions.
"LIQUIDATION CALL PURCHASE PRICE" has the meaning ascribed thereto
in
section 5.1 of the Plan of Arrangement.
"LIQUIDATION CALL RIGHT" has the meaning ascribed thereto in
section
5.1 of the Plan of Arrangement.
"LIQUIDATION EVENT" has the meaning ascribed thereto in Section
5.12(b)
hereof.
"LIQUIDATION EVENT EFFECTIVE DATE" has the meaning ascribed thereto
in
Section 5.12(c) hereof.
"LIST" has the meaning ascribed thereto in Section 4.6 hereof.
"NASDAQ" means the NASDAQ National Market.
"OBCA" means the Business Corporations Act (Ontario), as
amended.
"OFFICER'S CERTIFICATE" means, with respect to WSI or CERI, as the
case
may be, a certificate signed by any officer or director of WSI or
CERI,
as the case may be.
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"PERSON" includes any individual, firm, partnership, joint
venture,
venture capital fund, limited liability company, unlimited
liability
company, association, trust, trustee, executor, administrator,
legal
personal representative, estate, group, body corporate,
corporation,
unincorporated association or organization, government body,
syndicate
or other entity, whether or not having legal status.
"PLAN OF ARRANGEMENT" means the plan of arrangement substantially
in
the form and
content of Schedule C annexed to the Arrangement Agreement
and any amendments or variations thereto made in accordance
with
section 6.1 of the Arrangement Agreement or Article 6 of the Plan
of
Arrangement or made at the direction of the Court.
"PURCHASE PRICE" has the meaning ascribed thereto in section 6.3 of
the
Share Provisions.
"REDEMPTION CALL PURCHASE PRICE" has the meaning ascribed thereto
in
section 5.2 of the Plan of Arrangement.
"REDEMPTION CALL RIGHT" has the meaning ascribed thereto in section
5.2
of the Plan of Arrangement.
"REDEMPTION PRICE" has the meaning ascribed thereto in section 7.1
of
the Share Provisions.
"RETRACTED SHARES" has the meaning ascribed thereto in Section
5.7
hereof.
"RETRACTION CALL RIGHT" has the meaning ascribed thereto in section
6.1
of the Share Provisions.
"RETRACTION PRICE" has the meaning ascribed thereto in section 6.1
of
the Share Provisions.
"SHARE PROVISIONS" means the rights, privileges, restrictions
and
conditions attaching to the Exchangeable Shares.
"SUPPORT AGREEMENT" means that certain support agreement made as
of
even date herewith among CERI, WSI and Capital Holdings
substantially
in the form and content of Schedule D annexed to the
Arrangement
Agreement, with such changes thereto as the parties to the
Arrangement
Agreement, acting reasonably, may agree.
"TRUST" means the trust created by this Agreement.
"TRUST ESTATE" means the WSI Special Voting Share, any other
securities, the Exchange Right, the Automatic Exchange Right,
the
Exchange Put Right and any money or other property which may be
held by
the Trustee from time to time pursuant to this Agreement.
"TRUSTEE" means Computershare Trust Company of Canada and, subject
to
the provisions of Article 10, includes any successor trustee.
"VOTING RIGHTS" means the voting rights attached to the WSI
Special
Voting Share.
"WSI AFFILIATES" means Affiliates of WSI.
"WSI COMMON SHARE" means a share of voting common stock in the
capital
of WSI.
"WSI CONSENT" has the meaning ascribed thereto in Section 4.2
hereof.
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"WSI MEETING" has the meaning ascribed thereto in Section 4.2
hereof.
"WSI SPECIAL VOTING SHARE" means the one share of special voting
stock
of WSI issued in its own series which entitles the holder of record
to
a number of votes at meetings of holders of WSI Common Shares equal
to
the number of Exchangeable Shares outstanding from time to time
(other
than Exchangeable Shares held by WSI and WSI Affiliates), which
share
is to be issued to, deposited with, and voted by, the Trustee
as
described herein.
"WSI SUCCESSOR" has the meaning ascribed thereto in Section
11.1(a)
hereof.
1.2
INTERPRETATION NOT AFFECTED BY HEADINGS, ETC.
The division of this Agreement into Articles, Sections and
other
portions and the insertion of headings are
for convenience of reference only and
shall not affect the construction or
interpretation of this Agreement. Unless
otherwise indicated, all references to an
"Article" or "Section" followed by a
number or a letter refer to the specified
Article or Section of this Agreement.
The terms "this Agreement", "hereof",
"herein" and "hereunder" and similar
expressions refer to this Agreement and not
to any particular Article, Section
or other portion hereof and include any
agreement or instrument supplementary or
ancillary hereto.
1.3
DATE, NUMBER, GENDER, ETC.
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. Words
importing the singular number only
shall include the plural and vice versa.
Words importing any gender shall
include all genders.
1.4
CERTIFICATE OF INCUMBENCY
Each of the other parties to this Agreement shall file with the
Trustee a certificate of incumbency setting
forth the names and titles of the
individuals authorized to give
instructions, directions or other instruments
(including Officer's Certificates) to the
Trustee ("AUTHORIZED PERSONS"),
together with specimen signatures of such
persons, and the Trustee shall be
entitled to rely on the latest certificate
of incumbency filed with it unless it
receives notice, in accordance with this
agreement, of a change in Authorized
Persons with updated specimen
signatures.
ARTICLE 2
PURPOSE OF AGREEMENT
2.1
ESTABLISHMENT OF TRUST
The purpose of this Agreement is to create the Trust for the
benefit of the Beneficiaries, and to create
the Exchange Right, the Automatic
Exchange Right and the Exchange Put Right,
all as herein provided. The Trustee
will hold the WSI Special Voting Share in
order to enable the Trustee to
exercise the Voting Rights and will hold
the Exchange Right, the Automatic
Exchange Right and the Exchange Put Right
in order to enable the Trustee to
exercise or enforce such rights, in each
case as trustee for and on behalf of
the Beneficiaries as provided in this
Agreement.
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ARTICLE 3
WSI SPECIAL VOTING SHARE
3.1
ISSUE AND OWNERSHIP OF THE WSI SPECIAL VOTING SHARE
WSI concurrently with the execution and delivery hereof issues
to and deposits with the Trustee the WSI
Special Voting Share to be hereafter
held of record by the Trustee as trustee
for and on behalf of, and for the use
and benefit of, the Beneficiaries and in
accordance with the provisions of this
Agreement. WSI hereby acknowledges receipt
from the Trustee as trustee for and
on behalf of the Beneficiaries of good and
valuable consideration (and the
adequacy thereof) for the issuance of the
WSI Special Voting Share by WSI to the
Trustee (and, in the event a taxing
authority subsequently determines that the
amount of consideration paid by CERI to WSI
in exchange for the Special Voting
Share was inadequate, CERI shall promptly
pay out of its own funds the remaining
amount deemed to be owing to WSI (plus an
appropriate amount of interest)).
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 WSI Special Voting Share and shall be
entitled to exercise all of the rights
and powers of an owner with respect to the
WSI Special Voting Share, provided
that the Trustee shall:
(a) hold
the WSI Special Voting Share and the legal title thereto as
trustee solely for the use and benefit of the Beneficiaries in
accordance with the provisions of this Agreement; and
(b) except as specifically
authorized by this Agreement, have no
power or authority to sell, transfer, vote or otherwise deal in
or with the WSI Special Voting Share and the WSI Special Voting
Share shall not be used, or disposed of, by the Trustee for any
purpose other than the purposes for which this Trust is created
pursuant to this Agreement.
3.2
LEGENDED SHARE CERTIFICATES
CERI will cause each certificate representing Exchangeable
Shares to bear an appropriate legend
notifying the Beneficiaries of their right
to instruct the Trustee with respect to the
exercise of the Voting Rights in
respect of the Exchangeable Shares held by
the Beneficiaries. The Trustee shall
have no duty under the Agreement to monitor
or enforce compliance by CERI with
the aforesaid legending requirements.
3.3
SAFE KEEPING OF CERTIFICATE
The certificate representing the WSI Special Voting Share shall
at all times be held in safe keeping by the
Trustee.
ARTICLE 4
EXERCISE OF VOTING RIGHTS
4.1
VOTING RIGHTS
The Trustee, as the holder of record of the WSI Special Voting
Share, shall be entitled to all of the
Voting Rights, including the right to
vote in person or by proxy the WSI Special
Voting Share on any matters,
questions, proposals or propositions
whatsoever that may properly come before
the shareholders of WSI at a WSI Meeting or
in connection with a WSI Consent.
The Voting Rights shall be and remain
vested in and exercised by the Trustee
subject to the terms of this Agreement.
Subject to Section 7.14:
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(a) the
Trustee shall exercise the Voting Rights only on the basis
of instructions received pursuant to this Article 4 from
Beneficiaries on the record date established by WSI or by
applicable law for such WSI meeting who are entitled to
instruct
the Trustee as to the voting thereof at the time at which the
WSI Meeting is held or a WSI Consent is sought; and
(b) to the
extent that no instructions are received from a
Beneficiary with respect to the Voting Rights to which such
Beneficiary is entitled, the Trustee shall not exercise or
permit the exercise of such Voting Rights.
4.2
NUMBER OF VOTES
With respect to all meetings of shareholders of WSI at which
holders of WSI Common Shares are entitled
to vote (each, a "WSI MEETING") and
with respect to all written consents sought
by WSI from its shareholders
including the holders of WSI Common Shares
(each, a "WSI CONSENT"), each
Beneficiary shall be entitled to instruct
the Trustee to cast and exercise one
of the votes comprised in the Voting Rights
for each Exchangeable Share owned of
record by such Beneficiary on the record
date established by WSI or by
applicable law for such WSI Meeting or WSI
Consent, as the case may be (the
"BENEFICIARY VOTES"), in respect of each
matter, question, proposal or
proposition to be voted on at such WSI
Meeting or in connection with such WSI
Consent. WSI shall provide the Trustee with
notice by the close of business on
the third Business Day prior to a WSI
Meeting or WSI Consent, that neither WSI
nor its affiliates have exercised any votes
in respect of the Exchangeable
Shares.
4.3
MAILINGS TO SHAREHOLDERS
With respect to each WSI Meeting and WSI Consent, the Trustee
will use its reasonable efforts to mail
promptly or cause to be mailed (or
otherwise communicate in the same manner as
WSI utilizes in communications to
holders of WSI Common Shares, subject to
applicable regulatory requirements and
provided such manner of communication is
reasonably available to the Trustee) to
each of the Beneficiaries named in the List
(referred to in Section 4.6), such
mailing or communication to commence
whenever practicable on the same day as the
mailing or notice (or other communication)
with respect thereto is commenced by
WSI to its holders of WSI Common
Shares:
(a) a copy
of such notice (or other communication), together with
any related materials, including, without limitation, any proxy
or information statement, to be provided to shareholders of
WSI,
but excluding proxies to vote WSI Common Shares;
(b) a
statement that such Beneficiary is entitled to instruct the
Trustee as to the exercise of the Beneficiary Votes with
respect
to such WSI Meeting or WSI Consent or, pursuant to Section 4.7,
to attend such WSI Meeting and to exercise personally the
Beneficiary Votes thereat;
(c) a
statement as to the manner in which such instructions may be
given to the Trustee, including an express indication that
instructions may be given to the Trustee to give:
(i) a
proxy to such Beneficiary or his designee to exercise
personally the Beneficiary Votes; or
(ii) a proxy to
a designated agent or other representative of
the management of WSI to exercise such Beneficiary Votes;
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(d) a
statement that if no such instructions are received from the
Beneficiary, the Beneficiary Votes to which such Beneficiary is
entitled will not be exercised;
(e) a form
of direction whereby the Beneficiary may so direct and
instruct the Trustee as contemplated herein; and
(f) a
statement of the time and date by which such instructions must
be received by the Trustee in order to be binding upon it,
which
in the case of a WSI Meeting shall not be earlier than the
close
of business on the fourth Business Day prior to such meeting,
and of the method for revoking or amending such instructions.
The materials referred to in this Section 4.3 are to be
provided
to the Trustee by WSI and the materials
referred to in Section 4.3(c), (e) and
(f) shall be subject to reasonable comment
by the Trustee in a timely manner,
provided, however, that the Trustee shall
have no obligation to review such
materials. Subject to the foregoing, WSI
shall ensure that the materials to be
provided to the Trustee are provided in
sufficient time to permit the Trustee to
comment as aforesaid and to send all
materials to each Beneficiary at the same
time as such materials are first sent to
holders of WSI Common Shares. WSI
agrees not to communicate with holders of
WSI Common Shares with respect to the
materials referred to in this Section 4.3
otherwise than by mail unless such
method of communication is also reasonably
available to the Trustee for
communication with the Beneficiaries.
For the purpose of determining Beneficiary Votes to which a
Beneficiary is entitled in respect of any
WSI Meeting or WSI Consent, the number
of Exchangeable Shares owned of record by
the Beneficiary shall be determined at
the close of business on the record date
established by WSI or by applicable law
for purposes of determining shareholders
entitled to vote at such WSI Meeting or
consent in respect of such WSI Consent. WSI
will notify the Trustee of any
decision of the Board of Directors with
respect to the calling of any WSI
Meeting or the seeking of a WSI Consent and
shall provide all necessary
information and materials to the Trustee in
each case promptly and in any event
in sufficient time to enable the Trustee to
perform its obligations contemplated
by this Section 4.3.
4.4
COPIES OF SHAREHOLDER INFORMATION
WSI will deliver to the Trustee copies of all proxy materials
(including notices of WSI Meetings but
excluding proxies to vote WSI Common
Shares), information statements, reports
(including without limitation, all
interim and annual financial statements)
and other written communications that,
in each case, are to be distributed from
time to time to holders of WSI Common
Shares in sufficient quantities and in
sufficient time so as to enable the
Trustee to send or cause to be sent those
materials to each Beneficiary at the
same time as such materials are first sent
to holders of WSI Common Shares. The
Trustee will mail or otherwise send or
cause to be mailed or otherwise sent, to
each Beneficiary, at the expense of WSI,
copies of all such materials (and all
materials specifically directed to the
Beneficiaries or to the Trustee for the
benefit of the Beneficiaries by WSI)
received by the Trustee from WSI
contemporaneously with the sending of such
materials to holders of WSI Common
Shares. The Trustee will also make
available for inspection by any Beneficiary
at the Trustee's principal office in
Toronto, Ontario all proxy materials,
information statements, reports and other
written communications that are:
(a)
received by the Trustee as the registered holder of the WSI
Special Voting Share and made available by WSI generally to the
holders of WSI Common Shares; or
(b)
specifically directed to the Beneficiaries or to the Trustee
for
the benefit of
the Beneficiaries by WSI.
<PAGE>
4.5
OTHER MATERIALS
As soon as reasonably practicable after receipt by WSI or
holders of WSI Common Shares (if such
receipt is known by WSI) of any material
sent or given by or on behalf of a third
party to holders of WSI Common Shares
generally, including without limitation,
dissident proxy and information
circulars (and related information and
material) and tender and exchange offer
circulars (and related information and
material), WSI shall use its reasonable
efforts to obtain and deliver to the
Trustee copies thereof in sufficient
quantities so as to enable the Trustee to
forward or cause to be forwarded such
material (unless the same has been provided
directly to Beneficiaries by such
third party) or cause to be mailed or
otherwise sent, to each Beneficiary as
soon as possible thereafter. As soon as
reasonably practicable after receipt
thereof, the Trustee will mail or otherwise
send to each Beneficiary, at the
expense of WSI, copies of all such
materials received by the Trustee from WSI.
The Trustee will also make available for
inspection by any Beneficiary at the
Trustee's principal office in Toronto,
Ontario copies of all such materials.
4.6
LIST OF PERSONS ENTITLED TO VOTE
Unless the Trustee also acts as the transfer agent for the
Exchangeable Shares (in which case the
Trustee shall be able to prepare a list
of the Beneficiaries from time to time),
CERI shall, (a) prior to each annual,
general and special WSI Meeting or the
seeking of any WSI Consent and (b)
forthwith upon each request made at any
time by the Trustee in writing, prepare
or cause to be prepared a list (a "LIST")
of the names and addresses of the
Beneficiaries arranged in alphabetical
order and showing the number of
Exchangeable Shares held of record by each
such Beneficiary, in each case at the
close of business on the date specified by
the Trustee in such request or, in
the case of a List prepared in connection
with a WSI Meeting or a WSI Consent,
at the close of business on the record date
established by WSI or pursuant to
applicable law for determining the holders
of WSI Common Shares entitled to
receive notice of and/or to vote at such
WSI Meeting or to give consent in
connection with such WSI Consent. Each such
List shall be delivered to the
Trustee promptly after receipt by CERI of
such request or the record date for
such meeting or seeking of consent, as the
case may be, and in any event within
sufficient time as to permit the Trustee to
perform its obligations under this
Agreement and the Trustee may rely solely
on each such List to identify the
Beneficiaries in order to perform its
obligations hereunder in connection with a
WSI Meeting or a WSI Consent. WSI agrees to
give CERI notice (with a copy to the
Trustee) of the calling of any WSI Meeting
or the seeking of any WSI Consent,
together with the record dates therefor,
sufficiently prior to the date of the
calling of such meeting or seeking of such
consent so as to enable CERI to
perform its obligations under this Section
4.6.
4.7
ENTITLEMENT TO DIRECT VOTES
Any Beneficiary named in a List prepared in connection with any
WSI Meeting or WSI Consent will be entitled
(a) to instruct the Trustee in the
manner described in Section 4.3 with
respect to the exercise of the Beneficiary
Votes to which such Beneficiary is entitled
or (b) to attend such meeting and
personally exercise thereat, as the proxy
of the Trustee, the Beneficiary Votes
to which such Beneficiary is entitled.
4.8
VOTING BY TRUSTEE AND ATTENDANCE OF TRUSTEE REPRESENTATIVE AT
MEETING
(a) In
connection with each WSI Meeting and WSI Consent, the Trustee
shall exercise, either in person or by proxy, in accordance
with
the instructions received from a Beneficiary pursuant to
Section
4.3, the Beneficiary Votes as to which such Beneficiary is
entitled to direct the vote (or any lesser number thereof as
may
be set forth in the instructions), other than any Beneficiary
votes that are the subject of Section 4.8(b), provided,
however,
that
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such written instructions are received by the Trustee from the
Beneficiary prior to the time and date fixed by the Trustee for
receipt of such instruction in the notice given by the Trustee
to the Beneficiary pursuant to Section 4.3.
(b) The
Trustee shall cause a representative who is empowered by it
to sign and deliver, on behalf of the Trustee, proxies for
Voting Rights to attend each WSI Meeting. Upon submission by a
Beneficiary (or its designee) named in the List prepared in
connection with the relevant meeting, of identification
satisfactory to the Trustee's representative, and at the
Beneficiary's request, such representative shall sign and
deliver to such Beneficiary (or its designee) a proxy to
exercise personally the Beneficiary Votes as to which such
Beneficiary is otherwise entitled hereunder to direct the vote,
if such
Beneficiary either (i) has not previously given the
Trustee instructions pursuant to Section 4.3 in respect of such
meeting or (ii) submits to such representative written
revocation of any such previous instructions. At such meeting,
the Beneficiary (or its designee) exercising such Beneficiary
Votes shall have the same rights as the Trustee to speak at the
meeting in favour of any matter, question, proposal or
proposition, to vote by way of ballot at the meeting in respect
of any matter, question, proposal or proposition and to vote at
such meeting by way of a show of hands in respect of any
matter,
question or proposition.
4.9
DISTRIBUTION OF WRITTEN MATERIALS
Any written materials distributed by the Trustee pursuant to
this Agreement shall be sent by mail (or
otherwise communicated in the same
manner as WSI utilizes in communications to
holders of WSI Common Shares,
subject to applicable regulatory
requirements and provided such manner of
communication is reasonably available to
the Trustee) to each Beneficiary at its
address as shown on the register of holders
of Exchangeable Shares maintained by
the registrar and transfer agent. WSI
agrees not to communicate with holders of
WSI Common Shares with respect to such
written materials otherwise than by mail
unless such method of communication is also
reasonably available to the Trustee
for communication with the Beneficiaries.
CERI shall provide or cause to be
provided to the Trustee for purposes of
communication, on a timely basis and
without charge or other expense:
(a) a
current List; and
(b) upon the request of
the Trustee, mailing labels to enable the
Trustee to carry out its duties under this Agreement (unless
the
Trustee also acts as the transfer agent for the Exchangeable
Shares, in which case the Trustee shall prepare such mailing
labels itself).
4.10
TERMINATION OF VOTING RIGHTS
All of the rights of a Beneficiary with respect to the
Beneficiary Votes exercisable in respect of
the Exchangeable Shares held by such
Beneficiary, including the right to
instruct the Trustee as to the voting of or
to vote personally such Beneficiary Votes,
shall be deemed to be surrendered by
the Beneficiary to WSI or Capital Holdings,
as the case may be, and such
Beneficiary Votes and the Voting Rights
represented thereby shall cease
immediately upon (i) the delivery by such
holder to the Trustee of the
certificates representing such Exchangeable
Shares, in connection with the
exercise by the Beneficiary of the Exchange
Right or Exchange Put Right, or upon
the exercise of the Automatic Exchange
Right (unless, in any such case, WSI or
Capital Holdings shall not have delivered
the requisite WSI Common Shares
issuable in exchange therefor to the
Trustee for delivery to the Beneficiaries),
or (ii) upon the redemption of Exchangeable
Shares pursuant to Article 6 or 7 of
the Share Provisions, or (iii) upon the
effective date of the liquidation,
dissolution or winding-up of CERI pursuant
to Article 5 of the Share
<PAGE>
Provisions, or (iv) upon the purchase of
Exchangeable Shares from the holder
thereof by Capital Holdings pursuant to the
exercise by Capital Holdings of the
Retraction Call Right, the Redemption Call
Right or the Liquidation Call Right.
ARTICLE 5
EXCHANGE RIGHT AND AUTOMATIC EXCHANGE
5.1
GRANT AND OWNERSHIP OF THE EXCHANGE RIGHT
WSI hereby grants to the Trustee as trustee for and on behalf
of, and for the use and benefit of, the
Beneficiaries (i) the right (the
"EXCHANGE RIGHT"), upon the occurrence and
during the continuance of an
Insolvency Event, to require WSI to
purchase from each and every Beneficiary all
or any part of the Exchangeable Shares held
by the Beneficiary, (ii) the
Automatic Exchange Right, and (iii) the
Exchange Put Right, all in accordance
with the provisions of this Agreement. WSI
hereby acknowledges receipt from the
Trustee as trustee for and on behalf of the
Beneficiaries of good and valuable
consideration (and the adequacy thereof)
for the grant of the Exchange Right,
the Automatic Exchange Right and the
Exchange Put Right by WSI to the Trustee.
During the term of the Trust and subject to
the terms and conditions of this
Agreement, the Trustee shall possess and be
vested with full legal ownership of
the Exchange Right, the Automatic Exchange
Right and the Exchange Put Right and
shall be entitled to exercise all of the
rights and powers of an owner with
respect to the Exchange Right, the
Automatic Exchange Right and the Exchange Put
Right, provided that the Trustee shall:
(a) hold
the Exchange Right, the Automatic Exchange Right and the
Exchange Put Right and the legal title thereto as trustee
solely
for the use and benefit of the Beneficiaries in accordance with
the provisions of this Agreement; and
(b) except
as specifically authorized by this Agreement, have no
power or authority to exercise or otherwise deal in or with the
Exchange Right, the Automatic Exchange Right or the Exchange
Put
Right, and the Trustee shall not exercise any such rights for
any purpose other than the purposes for which the Trust is
created pursuant to this Agreement.
5.2
LEGENDED SHARE CERTIFICATES
CERI will cause each certificate representing Exchangeable
Shares to bear an appropriate legend
notifying the Beneficiaries of:
(a) their
right to instruct the Trustee with respect to the exercise
of the Exchange Right in respect of the Exchangeable Shares
held
by a Beneficiary;
(b) the
Automatic Exchange Right; and
(c) the
Exchange Put Right.
The Trustee shall have no duty under this Agreement to monitor
or enforce compliance by CERI with
aforesaid legending requirements.
5.3
GENERAL EXERCISE OF EXCHANGE RIGHT
The Exchange Right shall be and remain vested in and
exercisable
by the Trustee. Subject to Section 7.14,
the Trustee shall exercise the Exchange
Right only on the basis of instructions
<PAGE>
received pursuant to this Article 5 from
Beneficiaries entitled to instruct the
Trustee as to the exercise thereof. To the
extent that no instructions are
received from a Beneficiary with respect to
the Exchange Right, the Trustee
shall not exercise or permit the exercise
of the Exchange Right.
5.4
PURCHASE PRICE
The
purchase price payable by WSI (or Capital Holdings, as the
case may be) for each Exchangeable Share to
be purchased by WSI (or Capital
Holdings, as the case may be) under the
Exchange Right and the Exchange Put
Right shall be an amount per share equal to
(a) the Current Market Price of a
WSI Common Share on the last Business Day
prior to the day of closing of the
purchase and sale of such Exchangeable
Share under the Exchange Right or the
Exchange Put Right, which shall be
satisfied in full by WSI causing to be
delivered to such holder one WSI Common
Share, plus (b) to the extent not paid
by CERI on the designated payment date
therefor, an additional amount equal to
and in satisfaction of the full amount of
all declared and unpaid dividends on
each such Exchangeable Share held by such
holder on any dividend record date
which occurred prior to the closing of the
purchase and sale. In connection with
each exercise of the Exchange Right or the
Exchange Put Right, WSI shall provide
to the Trustee an Officer's Certificate
setting forth the calculation of the
purchase price for each Exchangeable Share.
The purchase price for each such
Exchangeable Share so purchased may be
satisfied only by WSI issuing and
delivering or causing to be delivered to
the Trustee, on behalf of the relevant
Beneficiary, one WSI Common Share and on
the applicable payment date a cheque
for the balance, if any, of the purchase
price without interest (but less any
amounts withheld pursuant to Section 5.13).
Upon payment by WSI (or Capital
Holdings, as the case may be) of such
purchase price, the relevant Beneficiary
shall cease to have any right to be paid
any amount in respect of declared and
unpaid dividends on each such Exchangeable
Share by CERI.
5.5
EXERCISE INSTRUCTIONS
Subject to the terms and conditions herein set forth, a
Beneficiary shall be entitled, upon the
occurrence and during the continuance of
an Insolvency Event, to instruct the
Trustee to exercise the Exchange Right with
respect to all or any part of the
Exchangeable Shares registered in the name of
such Beneficiary on the register of holders
of Exchangeable Shares maintained by
the registrar and transfer agent. To cause
the exercise of the Exchange Right by
the Trustee, the Beneficiary shall deliver
to the Trustee, in person or by
certified or registered mail, at its
principal office in Toronto, Ontario or at
such other places as the Trustee may from
time to time designate by written
notice to the Beneficiaries, the
certificates representing the Exchangeable
Shares which such Beneficiary desires WSI
to purchase, duly endorsed in blank
for transfer, and accompanied by such other
documents and instruments as may be
required to effect a transfer of
Exchangeable Shares under the OBCA and the
articles and by-laws of CERI and such
additional documents and instruments as
the Trustee, CERI and WSI may reasonably
require together with (a) a duly
completed form of notice of exercise of the
Exchange Right, contained on the
reverse of or attached to the Exchangeable
Share certificates, stating (i) that
the Beneficiary thereby instructs the
Trustee to exercise the Exchange Right so
as to require WSI to purchase from the
Beneficiary the number of Exchangeable
Shares specified therein, (ii) that such
Beneficiary has good title to and owns
all such Exchangeable Shares to be acquired
by WSI free and clear of all liens,
claims and encumbrances, (iii) the names in
which the certificates representing
WSI Common Shares issuable in connection
with the exercise of the Exchange Right
are to be issued and (iv) the names and
addresses of the persons to whom such
new certificates should be delivered and
(b) payment (or evidence satisfactory
to the Trustee, CERI and WSI of payment) of
the taxes (if any) payable as
contemplated by Section 5.8 of this
Agreement. If only a part of the
Exchangeable Shares represented by any
certificate or certificates delivered to
the Trustee are to be purchased by WSI
under the Exchange Right, a new
certificate for the balance of such
Exchangeable Shares shall be issued to the
holder at the expense of CERI.
<PAGE>
5.6
DELIVERY OF WSI COMMON SHARES; EFFECT OF EXERCISE
Promptly after the receipt of the certificates representing the
Exchangeable Shares which the Beneficiary
desires WSI to purchase under the
Exchange Right, together with such
documents and instruments of transfer and a
duly completed form of notice of exercise
of the Exchange Right (and payment of
taxes, if any payable as contemplated by
Section 5.8 or evidence thereof), duly
endorsed for transfer to WSI, the Trustee
shall notify WSI and CERI of its
receipt of the same, which notice to WSI
and CERI shall constitute exercise of
the Exchange Right by the Trustee on behalf
of the holder of such Exchangeable
Shares, and WSI shall promptly thereafter
deliver or cause to be delivered to
the Trustee, for delivery to the relevant
Beneficiary (or to such other persons,
if any, properly designated by such
Beneficiary) the number of WSI Common Shares
issuable in connection with the exercise of
the Exchange Right, and on the
applicable payment date cheques for the
balance, if any, of the total purchase
price therefor without interest (but less
any amounts withheld pursuant to
Section 5.13); provided, however, that no
such delivery shall be made unless and
until the Beneficiary requesting the same
shall have paid (or provided evidence
satisfactory to the Trustee, CERI and WSI
of the payment of) the taxes (if any)
payable as contemplated by Section 5.8 of
this Agreement. Immediately upon the
giving of notice by the Trustee to WSI and
CERI of the exercise of the Exchange
Right as provided in this Section 5.6, the
closing of the transaction of
purchase and sale contemplated by the
Exchange Right shall be deemed to have
occurred and the relevant Beneficiary shall
be deemed to have transferred to WSI
all of such Beneficiary's right, title and
interest in and to the Exchangeable
Shares which are the subject of the
Exchange Right and the related interest in
the Trust Estate and shall cease to be a
holder of such Exchangeable Shares and
shall not be entitled to exercise any of
the rights of a holder in respect
thereof, other than the right to receive
such Beneficiary's proportionate part
of the total purchase price t
