SUPPORT AGREEMENT ("Agreement") made as of the 14th day of August, 2006.
SUPPORT
AGREEMENT
("Agreement")
made
as of the 14th
day
of
August, 2006.
BETWEEN:
CANWEST
PETROLEUM CORPORATION,
a
corporation existing under the laws of the State of Colorado (hereinafter
referred to as "Acquirer")
-
and
-
1259882
ALBERTA LTD.,
a
corporation existing under the laws of the Province of Alberta (hereinafter
referred to as "Callco")
-
and
-
OILSANDS
QUEST INC.,
a
corporation existing under the laws of Alberta (hereinafter referred to as
"Canco")
WHEREAS
in connection with a reorganization agreement (the "Reorganization
Agreement")
made
as of June 9, 2006, as amended and restated from time to time, between Acquirer
and Canco, Canco is to reorganize its share capital and issue exchangeable
shares (the "Exchangeable
Shares")
to
certain holders of common shares in the capital of Canco pursuant to the
Reorganization contemplated by the Reorganization Agreement; and
WHEREAS
pursuant to the Reorganization Agreement, Acquirer has agreed to, and to cause
Canco to, execute a support agreement substantially in the form of this
Agreement on the Effective Time (as defined in the Reorganization
Agreement);
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 hereto covenant
and
agree as follows:
ARTICLE 1
INTERPRETATION
|
1.1
|
DEFINED
TERMS
|
Each
term
denoted herein by initial capital letters and not otherwise defined herein
shall
have the meaning ascribed thereto in the rights, privileges, restrictions and
conditions (collectively, the "Exchangeable
Share Provisions")
attaching to the Exchangeable Shares attached as Schedule D to the
Reorganization Agreement and as set out in the Articles of Canco, unless the
context requires otherwise.
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1.2
|
INTERPRETATION
NOT AFFECTED BY HEADINGS
|
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 hereof. Unless otherwise indicated, all
references to an "Article" or "Section" followed by a number 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.
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1.3
|
RULES
OF CONSTRUCTION
|
Unless
otherwise specifically indicated or the context otherwise requires, (a) all
references to "dollars" or "$" mean United States dollars, (b) words importing
the singular shall include the plural and vice versa and words importing any
gender shall include all genders, and (c) "include," "includes" and "including"
shall be deemed to be followed by the words "without limitation."
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1.4
|
DATE
FOR ANY ACTION
|
If
the
event that any date on which any action is required to be taken hereunder by
any
of the parties hereto is not a Business Day, such action shall be required
to be
taken on the next succeeding day that is a Business Day.
ARTICLE 2
COVENANTS
OF ACQUIRER AND CANCO
|
2.1
|
COVENANTS
REGARDING EXCHANGEABLE
SHARES
|
So
long
as any Exchangeable Shares not owned by Acquirer or its affiliates as defined
in
the ABCA ("Affiliates")
are
outstanding, Acquirer will:
|
(a)
|
not
declare or pay any dividend on the Acquirer Shares unless (i) Canco
shall
(w) simultaneously declare or pay, as the case may be, an equivalent
dividend or other distribution economically equivalent thereto (as
provided for in the Exchangeable Share Provisions) on the Exchangeable
Shares (an "Equivalent
Dividend")
and (x) Canco shall have sufficient money or other assets or authorized
but unissued securities available to enable the due declaration and
the
due and punctual payment, in accordance with applicable law and the
terms
of the Exchangeable Share Provisions, of any such Equivalent Dividend,
or,
if the dividend or other distribution is a stock dividend or distribution
of stock, in lieu of such dividend (ii) Canco shall (y) effect a
corresponding, contemporaneous and economically equivalent subdivision
of
the Exchangeable Shares (as provided for in the Exchangeable Share
Provisions) (an "Equivalent
Stock Subdivision"),
and (z) have sufficient authorized but unissued securities available
to
enable the Equivalent Stock
Subdivision;
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2
|
(b)
|
advise
Canco sufficiently in advance of the declaration by Acquirer of any
dividend on Acquirer Shares and take all such other actions as are
reasonably necessary, in cooperation with Canco, to ensure that (i)
the
respective declaration date, record date and payment date for an
Equivalent Dividend on the Exchangeable Shares shall be the same
as the
declaration date, record date and payment date for the corresponding
dividend on the Acquirer Shares, or (ii) the record date and effective
date for an Equivalent Stock Subdivision shall be the same as the
record
date and payment date for the stock dividend on the Acquirer Shares
and
that such dividend on the Exchangeable Shares will correspond with
any
requirement of the principal stock exchange on which the Exchangeable
Shares are listed;
|
|
(c)
|
ensure
that the record date for any dividend declared on Acquirer Shares
is not
less than 10 Business Days after the declaration date of such
dividend;
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(d)
|
take
all such actions and do all such things as are reasonably necessary
or
desirable to enable and permit Canco, in accordance with applicable
law,
to pay and otherwise perform its obligations with respect to the
satisfaction of the Liquidation Amount, the Retraction Price or the
Redemption Price in respect of each issued and outstanding Exchangeable
Share (other than Exchangeable Shares owned by Acquirer or its Affiliates)
upon the liquidation, dissolution or winding-up of Canco or any other
distribution of the assets of Canco among its shareholders for the
purpose
of winding-up its affairs, the delivery of a Retraction Request by
a
holder of Exchangeable Shares or a redemption of Exchangeable Shares
by
Canco, as the case may be, including all such actions and all such
things
as are necessary or desirable to enable and permit Canco to cause
to be
delivered Acquirer Shares to the holders of Exchangeable Shares in
accordance with the provisions of Article 5, 6 or 7, as the case
may be,
of the Exchangeable Share Provisions and cash and other property
in
respect of declared and unpaid dividends;
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(e)
|
take
all such actions and do all such things as are reasonably necessary
or
desirable to enable and permit Callco, in accordance with applicable
law,
to perform its obligations arising upon the exercise by it of the
Liquidation Call Right, the Retraction Call Right or the Redemption
Call
Right, including all such actions and all such things as are necessary
or
desirable to enable and permit Callco to cause to be delivered Acquirer
Shares to the holders of Exchangeable Shares in accordance with the
provisions of the Liquidation Call Right, the Retraction Call Right
or the
Redemption Call Right, as the case may be, and cash and other property
in
respect of declared and unpaid dividends;
and
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3
|
(f)
|
not
(and will ensure that Callco or any of its Affiliates does not) exercise
its vote as a shareholder to initiate the voluntary liquidation,
dissolution or winding-up of Canco or any other distribution of the
assets
of Canco among its shareholders for the purpose of winding up its
affairs
nor take any action or omit to take any action (and Acquirer will
not
permit Callco or any of its Affiliates to take any action or omit
to take
any action) that is designed to result in the liquidation, dissolution
or
winding up of Canco or any other distribution of the assets of Canco
among
its shareholders for the purpose of winding up its
affairs.
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2.2
|
SEGREGATION
OF FUNDS
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(a)
|
Acquirer
will cause Canco to deposit a sufficient amount of funds in a separate
account of Canco and segregate a sufficient amount of such other
assets
and property as is necessary to enable Canco to pay dividends when
due and
to pay or otherwise satisfy its respective obligations under
Article 5, 6 or 7 of the Exchangeable Share Provisions or, if
required, to pay the purchase price for Acquirer Shares as contemplated
by
Section 2.5,
as applicable.
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(b)
|
Acquirer
will cause Callco to deposit a sufficient amount of funds in a separate
account of Callco and segregate a sufficient amount of such other
assets
and property as is necessary to enable Callco to pay the purchase
price
for Acquirer Shares as contemplated by Section 2.5.
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2.3
|
RESERVATION
OF ACQUIRER SHARES
|
Acquirer
hereby represents, warrants and covenants in favour of Canco and Callco that
Acquirer has reserved for issuance and will, at all times while any Exchangeable
Shares (other than Exchangeable Shares held by Acquirer or its Affiliates)
are
outstanding, keep available, free from preemptive and other rights, out of
its
authorized and unissued capital stock such number of Acquirer Shares (or other
shares or securities into which Acquirer Shares may be reclassified or changed
as contemplated by Section 2.7
hereof):
(a) as is equal to the sum of (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 Acquirer to meet its obligations under the Voting and
Exchange Trust Agreement, to enable and permit Callco to meet its obligations
arising upon exercise by it of each of the Liquidation Call Right, the
Retraction Call Right and the Redemption Call Right and to enable and permit
Canco to meet its obligations hereunder and under the Exchangeable Share
Provisions.
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2.4
|
NOTIFICATION
OF CERTAIN EVENTS
|
In
order
to assist Acquirer in compliance with its obligations hereunder and to permit
Callco to exercise the Liquidation Call Right, the Retraction Call Right and
the
Redemption Call Right, Canco will notify Acquirer and Callco of each of the
following events at the times set forth below:
4
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(a)
|
in
the event of any determination by the Board of Directors of Canco
to
institute voluntary liquidation, dissolution or winding-up proceedings
with respect to Canco or to effect any other distribution of the
assets of
Canco 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;
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(b)
|
promptly,
upon the earlier of receipt by Canco of notice of or Canco otherwise
becoming aware of any threatened or instituted claim, suit, petition
or
other proceeding with respect to the involuntary liquidation, dissolution
or winding-up of Canco or to effect any other distribution of the
assets
of Canco among its shareholders for the purpose of winding up its
affairs;
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(c)
|
promptly,
upon receipt by Canco of a Retraction
Request;
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(d)
|
promptly
following the date on which notice of redemption is given to holders
of
Exchangeable Shares, upon the determination of a Redemption Date
in
accordance with the Exchangeable Share Provisions;
and
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(e)
|
promptly
upon the issuance by Canco of any Exchangeable Shares or rights to
acquire
Exchangeable Shares.
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2.5
|
DELIVERY
OF ACQUIRER SHARES TO CANCO AND
CALLCO
|
In
furtherance of its obligations under Sections 2.1(d)
and
(e)
hereof,
upon notice from Canco or Callco of any event that requires Canco or Callco
to
cause to be delivered Acquirer Shares to any holder of Exchangeable Shares,
Acquirer shall forthwith issue and deliver the requisite number of Acquirer
Shares to be received by, and issued to or to the order of, the former holder
of
the surrendered Exchangeable Shares, as Canco or Callco shall direct. All such
Acquirer Shares shall be duly authorized, validly issued and fully paid and
non-assessable and shall be free and clear of any lien, claim or encumbrance.
In
consideration of the issuance and delivery of such Acquirer Shares, Callco
or
Canco, as the case may be, shall pay a purchase price equal to the fair market
value of such Acquirer Shares.
5
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2.6
|
QUALIFICATION
OF ACQUIRER SHARES
|
Acquirer
covenants that if any Acquirer Shares (or other shares or securities into which
Acquirer Shares may be reclassified or changed as contemplated by
Section 2.7
hereof)
to be issued and delivered hereunder (including for greater certainty, pursuant
to the Exchangeable Share Provisions, or pursuant to the Change of Law Call
Right, Exchange Right or the Automatic Exchange Rights (all as defined in the
Voting and Exchange Trust Agreement)) 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, territorial or state
securities or other law or regulation or pursuant to the rules and regulations
of any securities or other regulatory authority, or the fulfilment of any other
United States or Canadian legal requirement (collectively, the "Applicable
Laws")
before
such shares (or other shares or securities into which Acquirer Shares may be
reclassified or changed as contemplated by Section 2.7
hereof)
may be issued and delivered by Acquirer at the direction of Canco or Callco,
if
applicable, to the holder of surrendered Exchangeable Shares or in order that
such shares (or other shares or securities into which Acquirer Shares may be
reclassified or changed as contemplated by Section 2.7
hereof)
may be freely traded thereafter (other than any restrictions of general
application on transfer by reason of a holder being a "control person" of
Acquirer for purposes of Canadian provincial securities law or an "affiliate"
of
Acquirer for purposes of United States federal or state securities law),
Acquirer will use its reasonable best efforts and in good faith expeditiously
take all such actions and do all such things as are necessary or desirable
and
within its power to cause such Acquirer Shares (or other shares or securities
into which Acquirer Shares may be reclassified or changed as contemplated by
Section 2.7
hereof)
to be and remain duly registered, qualified or approved under United States
and/or Canadian law, as the case may be, to the extent expressly provided in
the
Reorganization Agreement. Acquirer will use its reasonable best efforts and
in
good faith expeditiously take all such actions and do all such things as are
reasonably necessary or desirable to cause all Acquirer Shares (or other shares
or securities into which Acquirer Shares may be reclassified or changed as
contemplated by Section 2.7
hereof)
to be delivered hereunder to be listed, quoted or posted for trading on all
stock exchanges and quotation systems on which outstanding Acquirer Shares
(or
other shares or securities into which Acquirer Shares may be reclassified or
changed as contemplated by Section 2.7
hereof)
are listed and are quoted or posted for trading at such time.
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2.7
|
ECONOMIC
EQUIVALENCE
|
So
long
as any Exchangeable Shares not owned by Acquirer or its Affiliates are
outstanding:
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(a)
|
Acquirer
will not, without prior approval of Canco and the prior approval
of the
holders of the Exchangeable Shares given in accordance with Section
13.2
of the Exchangeable Share
Provisions:
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(i)
|
issue
or distribute Acquirer Shares (or securities exchangeable for or
convertible into or carrying rights to acquire Acquirer Shares) to
the
holders of all or substantially all of the then outstanding Acquirer
Shares by way of stock dividend or other distribution, other than
an issue
of Acquirer Shares (or securities exchangeable for or convertible
into or
carrying rights to acquire Acquirer Shares) to holders of Acquirer
Shares
who (A) exercise an option to receive dividends in Acquirer Shares
(or
securities exchangeable for or convertible into or carrying rights
to
acquire Acquirer Shares) in lieu of receiving cash dividends, or
(B)
pursuant to any dividend reinvestment plan or scrip dividend;
or
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(ii)
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issue
or distribute rights, options or warrants to the holders of all or
substantially all of the then outstanding Acquirer Shares entitling
them
to subscribe for or to purchase Acquirer Shares (or securities
exchangeable for or convertible into or carrying rights to acquire
Acquirer Shares); or
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6
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(iii)
|
issue
or distribute to the holders of all or substantially all of the then
outstanding Acquirer Shares (A) shares or securities of Acquirer
of any
class other than Acquirer Shares (other than shares convertible into
or
exchangeable for or carrying rights to acquire Acquirer Shares),
(B)
rights, options or warrants other than those referred to in
Section 2.7(a)(ii)
above, (C) evidences of indebtedness of Acquirer or (D) assets of
Acquirer,
|
unless
the economic equivalent on a per Exchangeable Share basis of such rights,
options, warrants, securities, shares, evidences of indebtedness or other assets
is issued or distributed simultaneously to holders of the Exchangeable Shares;
provided that, for greater certainty, the above restrictions shall not apply
to
any securities issued or distributed by Acquirer in order to give effect to
and
to consummate the transactions contemplated by, and in accordance with, the
Reorganization Agreement.
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(b)
|
Acquirer
will not without the prior approval of Canco and the prior approval
of the
holders of the Exchangeable Shares given in accordance with Section
13.2
of the Exchangeable Share
Provisions:
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(i)
|
subdivide,
redivide or change the then outstanding Acquirer Shares into a greater
number of Acquirer Shares; or
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(ii)
|
reduce,
combine, consolidate or change the then outstanding Acquirer Shares
into a
lesser number of Acquirer Shares;
or
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(iii)
|
reclassify
or otherwise change Acquirer Shares or effect an amalgamation, merger,
reorganization or other transaction affecting the Acquirer
Shares,
|
unless
the same or an economically equivalent change shall simultaneously be made
to,
or in the rights of the holders of, the Exchangeable Shares; provided that,
for
greater certainty, the above restrictions shall not apply to any securities
issued or distributed by Acquirer in order to give effect to and to consummate
the transactions contemplated by, and in accordance with, the Reorganization
Agreement.
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(c)
|
Acquirer
will ensure that the record date for any event referred to in
Section 2.7(a)
or
2.7(b)
above, or (if no record date is applicable for such event) the effective
date for any such event, is not less than five Business Days after
the
date on which such event is declared or announced by Acquirer (with
contemporaneous notification thereof by Acquirer to
Canco).
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7
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(d)
|
The
Board of Directors of Canco shall determine, in good faith and in
its sole
discretion, economic equivalence for the purposes of any event referred
to
in Section 2.7(a)
or
2.7(b)
above and each such determination shall be conclusive and binding
on
Acquirer and the holders of Exchangeable Shares. In making each such
determination, the following factors shall, without excluding other
factors determined by the Board of Directors of Canco to be relevant,
be
considered by the Board of Directors of
Canco:
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(i)
|
in
the case of any stock dividend or other distribution payable in Acquirer
Shares, the number of such shares issued as a result of any stock
dividend
or other distribution in proportion to the number of Acquirer Shares
previously outstanding;
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(ii)
|
in
the case of the issuance or distribution of any rights, options or
warrants to subscribe for or purchase Acquirer Shares (or securities
exchangeable for or convertible into or carrying rights to acquire
Acquirer Shares), the relationship between the exercise price of
each such
right, option or warrant and the Current Market Price, the volatility
of
the Acquirer Shares and the term of any such
instrument;
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(iii)
|
in
the case of the issuance or distribution of any other form of property
(including any shares or securities of Acquirer of any class other
than
Acquirer Shares, any rights, options or warrants other than those
referred
to in Section 2.7(d)(ii)
above, any evidences of indebtedness of Acquirer or any assets of
Acquirer), the relationship between the fair market value (as determined
by the Board of Directors of Canco in the manner above contemplated)
of
such property to be issued or distributed with respect to each outstanding
Acquirer Share and the Current Market
Price;
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(iv)
|
in
the case of any subdivision, redivision or change of the then outstanding
Acquirer Shares into a greater number of Acquirer Shares or the reduction,
combination, consolidation or change of the then outstanding Acquirer
Shares into a lesser number of Acquirer Shares or any amalgamation,
merger, reorganization or other transaction affecting Acquirer Shares,
the
effect thereof upon the then outstanding Acquirer Shares;
and
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(v)
|
in
all such cases, the general taxation consequences of the relevant
event to
holders of Exchangeable Shares to the extent that such consequences
may
differ from the taxation consequences to holders of Acquirer Shares
as a
result of differences between taxation laws of Canada and the United
States (except for any differing consequences arising as a result
of
differing marginal taxation rates and without regard to the individual
circumstances of holders of Exchangeable
Shares).
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8
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(e)
|
Canco
agrees that, to the extent required, upon due notice from Acquirer,
Canco
will use its best efforts to take or cause to be taken such steps
as may
be necessary for the purposes of ensuring that appropriate dividends
are
paid or other distributions are made by Canco, or subdivisions,
redivisions or changes are made to the Exchangeable Shares, in order
to
implement the required economic equivalent with respect to the Acquirer
Shares and Exchangeable Shares as provided for in this Section
2.7.
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2.8
|
TENDER
OFFERS
|
For
so
long as Exchangeable Shares remain outstanding (not including Exchangeable
Shares held by Acquirer and its Affiliates), in the event that a tender offer,
share exchange offer, issuer bid, take-over bid or similar transaction with
respect to Acquirer Shares (an "Offer")
is
proposed by Acquirer or is proposed to Acquirer or its shareholders and is
recommended by the Board of Directors of Acquirer, or is otherwise effected
or
to be effected with the consent or approval of the Board of Directors of
Acquirer, and the Exchangeable Shares are not redeemed by Canco or purchased
by
Callco pursuant to the Redemption Call Right, Acquirer will use its reasonable
best efforts expeditiously and in good faith to take all such actions and do
all
such things as are necessary or desirable to enable and permit holders of
Exchangeable Shares (other than Acquirer and its Affiliates) to participate
in
such Offer to the same extent and on an economically equivalent basis as the
holders of Acquirer Shares, without discrimination. Without limiting the
generality of the foregoing, Acquirer will use its reasonable best efforts
expeditiously and in good faith to ensure that holders of Exchangeable Shares
may participate in each such Offer without being required to retract
Exchangeable Shares as against Canco (or, if so required, to ensure that any
such retraction, shall be effective only upon, and shall be conditional upon,
the closing of such Offer and only to the extent necessary to tender or deposit
to the Offer). Nothing herein shall affect the rights of Canco to redeem (or
Callco to purchase pursuant to the Redemption Call Right) Exchangeable Shares,
as applicable, in the event of an Acquirer Control Transaction.
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2.9
|
OWNERSHIP
OF OUTSTANDING SHARES
|
Without
the prior approval of Canco and the prior approval of the holders of the
Exchangeable Shares given in accordance with Section 13.2 of the Exchangeable
Share Provisions, Acquirer covenants and agrees in favour of Canco that, as
long
as any outstanding Exchangeable Shares are owned by any Person other than
Acquirer or any of its Affiliates, Acquirer will be and remain the direct or
indirect beneficial owner of all issued and outstanding voting shares in the
capital of Canco and Callco. Notwithstanding the foregoing, Acquirer shall
not
be in violation of this section if any person or group of persons acting jointly
or in concert acquires all or substantially all of the assets of Acquirer or
the
Acquirer Shares pursuant to any merger of Acquirer pursuant to which Acquirer
was not the surviving corporation.
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2.10
|
ACQUIRER
AND AFFILIATES NOT TO VOTE EXCHANGEABLE
SHARES
|
Acquirer
and Callco each covenants and agrees that it will not, and will cause its
Affiliates not to, exercise any voting rights which may be exercisable by
holders of Exchangeable Shares from time to time pursuant to the Exchangeable
Share Provisions or pursuant to the provisions of the ABCA (or any successor
or
other corporate statute by which Canco may in the future be governed) with
respect to any Exchangeable Shares held by it or by its Affiliates in respect
of
any matter considered at any meeting of holders of Exchangeable
Shares.
9
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2.11
|
RULE
10B-18 PURCHASES
|
For
greater certainty, nothing contained in this Agreement, including the
obligations of Acquirer contained in Section 2.8
hereof,
shall limit the ability of Acquirer or Canco to make a "Rule ▇▇▇-▇▇ ▇▇▇▇▇▇▇▇"
of
Acquirer Shares pursuant to Rule 10b-18 of the United States Securities
Exchange Act of
1934,
as
amended, or any successor rule.
ARTICLE 3
ACQUIRER
SUCCESSORS
|
3.1
|
CERTAIN
REQUIREMENTS IN RESPECT OF COMBINATION,
ETC.
|
Neither
Acquirer nor Callco shall consummate any transaction (whether by way of
reconstruction, reorganization, consolidation, merger, transfer, sale, lease
or
otherwise) whereby all or substantially all of its undertaking, property and
assets would become the property of any other Person or, in the case of a
merger, of the continuing corporation resulting therefrom unless, but may do
so
if:
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(a)
|
such
other Person or continuing corporation (the "Acquirer
Successor")
by operation of law, becomes, without more, bound by the terms and
provisions of this Agreement or, if not so bound, executes, prior
to or
contemporaneously with the consummation of such transaction, an agreement
supplemental hereto and such other instruments (if any) as are reasonably
necessary or advisable to evidence the assumption by the Acquirer
Successor of liability for all moneys payable and property deliverable
hereunder and the covenant of such Acquirer Successor to pay and
deliver
or cause to be delivered the same and its agreement to observe and
perform
all the covenants and obligations of Acquirer or Callco, as the case
may
be, under this Agreement;
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(b)
|
in
the event that the Acquirer Shares are reclassified or otherwise
changed
as part of such transaction, the same or an economically equivalent
change
is simultaneously made to, or in the rights of the holders of, the
Exchangeable Shares; and
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(c)
|
such
transaction shall be upon such terms and conditions as substantially
to
preserve and not to impair in any material respect any of the rights,
duties, powers and authorities of the other parties hereunder or
the
holders of Exchangeable Shares.
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10
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3.2
|
VESTING
OF POWERS IN SUCCESSOR
|
Whenever
the conditions of Section 3.1
have
been duly observed and performed, the parties, if required by
Section 3.1,
shall
execute and deliver the supplemental agreement provided for in
Section 3.1(a)
and
thereupon the Acquirer Successor shall possess and from time to time may
exercise each and every right and power of Acquirer or Callco, as the case
may
be, under this Agreement in the name of Acquirer or otherwise and any act or
proceeding by any provision of this Agreement required to be done or performed
by the Board of Directors of Acquirer or any officers of Acquirer may be done
and performed with like force and effect by the directors or officers of such
Acquirer Successor.
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3.3
|
WHOLLY-OWNED
SUBSIDIARIES
|
Nothing
herein shall be construed as preventing the amalgamation or merger of any
wholly-owned direct or indirect subsidiary of Acquirer (other than Canco or
Callco) with or into Acquirer or the winding-up, liquidation or dissolution
of
any wholly-owned subsidiary of Acquirer provided that all of the assets of
such
subsidiary are transferred to Acquirer or another wholly-owned direct or
indirect subsidiary of Acquirer and any such transactions are expressly
permitted by this Article 3.
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3.4
|
SUCCESSORSHIP
TRANSACTION
|
Notwithstanding
the foregoing provisions of Article 3,
in the
event of an Acquirer Control Transaction:
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(a)
|
in
which Acquirer merges or amalgamates with, or in which all or
substantially all of the then outstanding Acquirer Shares are acquired
by,
one or more other corporations to which Acquirer is, immediately
before
such merger, amalgamation or acquisition, "related" within the meaning
of
the ITA (otherwise than by virtue of a right referred to in paragraph
251(5)(b) thereof);
|
|
(b)
|
which
does not result in an acceleration of the Redemption Date in accordance
with paragraph (b) of that definition;
and
|
|
(c)
|
in
which all or substantially all of the then outstanding Acquirer Shares
are
converted into or exchanged for shares or rights to receive such
shares
(the "Other Shares") of another corporation (the "Other Corporation")
that, immediately after such Acquirer Control Transaction, owns or
controls, directly or indirectly,
Acquirer;
|
then
all
references herein to "Acquirer" shall thereafter be and be deemed to be
references to "Other Corporation" and all references herein to "Acquirer Shares"
shall thereafter be and be deemed to be references to "Other Shares" (with
appropriate adjustments, if any, as are required to result in a holder of
Exchangeable Shares on the exchange, redemption or retraction of such shares
pursuant to the Exchangeable Share Provisions or exchange of such shares
pursuant to the Voting and Exchange Trust Agreement immediately subsequent
to
the Acquirer Control Transaction being entitled to receive that number of Other
Shares equal to the number of Other Shares such holder of Exchangeable Shares
would have received if the exchange, redemption or retraction of such shares
pursuant to the Exchangeable Share Provisions or exchange of such shares
pursuant to the Voting and Exchange Trust Agreement had occurred immediately
prior to the Acquirer Control Transaction and the Acquirer Control Transaction
was completed) without any need to amend the terms and conditions of the
Exchangeable Shares and without any further action required.
11
ARTICLE 4
GENERAL
|
4.1
|
TERM
|
This
Agreement shall come into force and be effective as of the date hereof and
shall
terminate and be of no further force and effect at such time as no Exchangeable
Shares (or securities or rights convertible into or exchangeable for or carrying
rights to acquire Exchangeable Shares) are held by any Person other than
Acquirer and any of its Affiliates.
|
4.2
|
CHANGES
IN CAPITAL OF ACQUIRER AND
CANCO
|
At
all
times after the occurrence of any event contemplated pursuant to
Sections 2.7
and
2.8
hereof
or otherwise, as a result of which either Acquirer Shares or the Exchangeable
Shares or both are in any way changed, this Agreement shall forthwith be deemed
amended and modified as necessary in order that it shall apply with full force
and effect, mutatis
mutandis,
to all
new securities into which Acquirer Shares or the Exchangeable Shares or both
are
so changed and the parties hereto shall execute and deliver an agreement in
writing giving effect to and evidencing such necessary amendments and
modifications.
|
4.3
|
NOTICES
TO PARTIES
|
All
notices and other communications hereunder shall be in writing and shall be
deemed given when delivered personally, telecopied (which is confirmed) or
dispatched (postage prepaid) to a nationally recognized overnight courier
service with overnight delivery instructions, in each case addressed to the
particular party at:
CanWest
Petroleum Corporation
▇▇▇▇▇
▇▇▇, ▇▇▇ - ▇▇▇
▇▇▇▇▇▇
▇.▇.
▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Attention:
Chief Executive Officer
Telecopier
Number: (▇▇▇) ▇▇▇-▇▇▇▇
With
a
copy to:
▇▇▇▇▇▇▇
▇▇▇▇▇ llp
▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Attention:
▇▇▇▇▇ ▇▇▇▇▇▇▇
Telecopier
Number: (▇▇▇) ▇▇▇-▇▇▇▇
12
or
at
such other address of which any party may, from time to time, advise the other
parties by notice in writing given in accordance with the
foregoing.
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4.4
|
ASSIGNMENT
|
No
party
hereto may assign this Agreement or any of its rights, interests or obligations
under this Agreement (whether by operation of law or otherwise) except that
each
of Canco and Callco may assign in its sole discretion, any or all of its rights,
interests and obligations hereunder to any wholly-owned subsidiary of
Acquirer.
|
4.5
|
BINDING
EFFECT
|
Subject
to Section 4.4,
this
Agreement shall be binding upon, enure to the benefit of and be enforceable
by
the parties hereto and their respective successors and assigns.
|
4.6
|
AMENDMENTS,
MODIFICATIONS
|
Subject
to Sections 4.2,
4.7
and
4.11,
this
Agreement may not be amended or modified except by an agreement in writing
executed by Canco, Callco and Acquirer and approved by the holders of the
Exchangeable Shares in accordance with Section 13.2 of the Exchangeable Share
Provisions.
|
4.7
|
MINISTERIAL
AMENDMENTS
|
Notwithstanding
the provisions of Section 4.6,
the
parties to this Agreement may in writing at any time and from time to time,
without the approval of the holders of the Exchangeable Shares, amend or modify
this Agreement for the purposes of:
|
(a)
|
adding
to the covenants of any or all parties provided that the board of
directors of each of Canco, Callco and Acquirer shall be of the good
faith
opinion that such additions will not be prejudicial to the rights
or
interests of the holders of the Exchangeable
Shares;
|
|
(b)
|
making
such amendments or modifications not inconsistent with this Agreement
as
may be necessary or desirable with respect to matters or questions
which,
in the good faith opinion of the board of directors of each of Canco,
Callco and Acquirer, it may be expedient to make, provided that each
such
board of directors shall be of the good faith opinion that such amendments
or modifications will not be prejudicial to the rights or interests
of the
holders of the Exchangeable Shares;
or
|
|
(c)
|
making
such changes or corrections which, on the advice of counsel to Canco,
Callco and Acquirer, are required for the purpose of curing or correcting
any ambiguity or defect or inconsistent provision or clerical omission
or
mistake or manifest error, provided that the board of directors of
each of
Canco, Callco and Acquirer shall be of the good faith opinion that
such
changes or corrections will not be prejudicial to the rights or interests
of the holders of the Exchangeable
Shares.
|
13
|
4.8
|
MEETING
TO CONSIDER AMENDMENTS
|
Canco,
at
the request of Acquirer, shall call a meeting or meetings of the holders of
the
Exchangeable Shares for the purpose of considering any proposed amendment or
modification requiring approval pursuant to Section 4.6
hereof;
provided that any such meeting shall only be called for a bona fide business
purpose and not for the principal purpose of causing a Redemption Date to occur
or transpire. Any such meeting or meetings shall be called and held in
accordance with the bylaws of Canco, the Exchangeable Share Provisions and
all
applicable laws.
|
4.9
|
AMENDMENTS
ONLY IN WRITING
|
No
amendment to or modification or waiver of any of the provisions of this
Agreement otherwise permitted hereunder shall be effective unless made in
writing and signed by all of the parties hereto.
|
4.10
|
GOVERNING
LAWS; CONSENT TO
JURISDICTION
|
This
Agreement shall be governed by and construed in accordance with the laws of
the
Province of Alberta and the laws of Canada applicable therein and shall be
treated in all respects as an Alberta contract. Each party hereby irrevocably
attorns to the jurisdiction of the courts of the Province of Alberta in respect
of all matters arising under or in relation to this Agreement.
|
4.11
|
SEVERABILITY
|
If
any
term or other provision of this Agreement is invalid, illegal or incapable
of
being enforced by any rule of law or public policy, all other conditions and
provisions of this Agreement shall nevertheless remain in full force and effect
so long as the economic or legal substance of the transactions contemplated
hereby is not affected in any manner materially adverse to any party. Upon
such
determination that any term or other provision is invalid, illegal or incapable
of being enforced, the parties hereto shall negotiate in good faith to modify
this Agreement so as to effect the original intent of the parties as closely
as
possible in an acceptable manner to the end that transactions contemplated
hereby are fulfilled to the extent possible.
|
4.12
|
COUNTERPARTS
|
This
Agreement may be executed in counterparts, each of which shall be deemed to
be
an original but all of which together shall constitute one and the same
instrument.
14
IN
WITNESS WHEREOF the parties hereto have caused this Agreement to be duly
executed as of the date first above written.
CANWEST
PETROLEUM
CORPORATION
By:________________________________
Name:
Title:
1259882
ALBERTA
LTD.
By:________________________________
Name:
Title:
OILSANDS
QUEST
INC.
By:________________________________
Name:
Title:
15