EXHIBIT 4.18
EXCHANGE RIGHTS AGREEMENT
THIS AGREEMENT made as of the 19th day of December, 2001
BETWEEN:
▇▇▇▇▇▇▇▇▇▇▇ INTERNATIONAL, INC., a corporation existing under
the laws of the State of Delaware (hereinafter referred to as
"WII")
and
▇▇▇▇▇▇▇▇▇▇▇ CANADA LTD., a corporation existing under the laws
of the Province of Alberta (hereinafter referred to as "WCL")
and
▇▇▇▇▇▇▇▇▇▇▇ ▇▇ ACQUIRECO INC., a corporation existing under
the laws of Alberta (hereinafter referred to as the
"CORPORATION")
and
▇▇▇▇▇ ▇. ▇▇▇▇▇, of the City of Red Deer, in the Province of
Alberta (hereinafter referred to as "▇▇▇▇▇")
and
N. ▇▇▇▇▇ ▇. ▇▇▇▇▇, of the City of Red Deer, in the Province of
Alberta (hereinafter referred to as "▇▇▇▇▇")
and
A. ▇▇▇▇ ▇▇▇▇▇, of the City of Red Deer, in the Province of
Alberta (hereinafter referred to as "▇▇▇▇")
and
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, of the City of Red Deer, in the Province of
Alberta (hereinafter referred to as "▇▇▇▇▇▇")
WHEREAS pursuant to a Share Purchase Agreement dated as of December 19,
2001, (such agreement as it may be amended or restated is hereinafter referred
to as the "SHARE PURCHASE AGREEMENT") by and among the Corporation and ▇▇▇▇▇,
▇▇▇▇▇, ▇▇▇▇ and ▇▇▇▇▇▇ (▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇ and ▇▇▇▇▇▇ are each individually
referred to as "Shareholder" and collectively referred to as the
"SHAREHOLDERS"), the Corporation has agreed to pay U.S.$13,750,000 (less certain
deductions) and has agreed to issue
1,375,000 Exchangeable Shares of the Corporation (the "Exchangeable Shares") to
the Shareholders in exchange for all the issued and outstanding shares of ER
Amalco Inc. and EP Amalco Inc.;
AND WHEREAS the Articles of the Corporation set forth the rights,
privileges, restrictions and conditions attaching to the Exchangeable Shares
(the "EXCHANGEABLE SHARE PROVISIONS");
AND WHEREAS certain parties have agreed to grant to other parties
rights to acquire or to sell outstanding Exchangeable Shares.
NOW THEREFORE in consideration of the respective covenants and
agreements provided in this Agreement and for other good and valuable
consideration (the receipt and sufficiency of which are hereby acknowledged),
the parties agree as follows:
ARTICLE 1
DEFINITIONS AND INTERPRETATION
1.1 DEFINITIONS.
In this Agreement, the following terms shall have the following
meanings:
"AGREEMENT" means this Exchange Rights Agreement, as the same may be amended,
supplemented or restated.
"APPLICABLE LAWS" has the meaning ascribed thereto in Section 2.6 of the Support
Agreement.
"AUTOMATIC EXCHANGE RIGHTS" means the benefit of the obligation of WCL to effect
the automatic exchange of WII Common Stock for Exchangeable Shares and any other
consideration provided for in Section 4.3 hereof.
"AUTOMATIC REDEMPTION DATE" has the meaning ascribed thereto in the Exchangeable
Share Provisions.
"BOARD OF DIRECTORS" means the Board of Directors of the Corporation or the
shareholders of the Corporation to the extent the shareholders exercise the
powers of the Board of Directors pursuant to a Unanimous Shareholder Agreement.
"BUSINESS DAY" has the meaning ascribed thereto in the Exchangeable Share
Provisions.
"EXCHANGE PUT DATE" has the meaning ascribed thereto in Section 3.2 hereof.
"EXCHANGE PUT RIGHT" has the meaning ascribed thereto in Section 3.1 hereof.
"EXCHANGE RIGHT" has the meaning ascribed thereto in Section 2.1 hereof.
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"EXCHANGEABLE SHARE CONSIDERATION" has the meaning ascribed thereto in the
Exchangeable Share Provisions.
"EXCHANGEABLE SHARE PRICE" has the meaning ascribed thereto in the Exchangeable
Share Provisions.
"EXCHANGEABLE SHARE PROVISIONS" has the meaning ascribed thereto in the recitals
hereto.
"EXCHANGEABLE SHARES" has the meaning set out in the recitals hereto.
"HOLDERS" means the registered holders from time to time of Exchangeable Shares,
other than WII, WCL and any other Subsidiary of WII.
"INSOLVENCY EVENT" means the institution by the Corporation of any proceeding to
be adjudicated a bankrupt or insolvent or to be dissolved or wound-up, or the
consent of the Corporation to the institution of bankruptcy, insolvency,
dissolution or winding-up proceedings against it, or the filing of a petition,
answer or consent seeking dissolution or winding-up under any bankruptcy,
insolvency or analogous laws, including without limitation the Companies'
Creditors Arrangement Act (Canada) and the Bankruptcy and Insolvency Act
(Canada), and the failure by the Corporation to contest in good faith any such
proceedings commenced in respect of the Corporation within thirty (30) days of
becoming aware thereof, or the consent by the Corporation to the filing of any
such petition or to the appointment of a receiver, or the making by the
Corporation of a general assignment for the benefit of creditors, or the
admission in writing by the Corporation of its inability to pay its debts
generally as they become due, or the Corporation not being permitted, pursuant
to liquidity or solvency requirements of applicable law, to redeem any
Exchangeable Shares in accordance with the terms thereof or to redeem any other
exchangeable shares of the Corporation in accordance with the terms thereof,
"LIQUIDATION AMOUNT" has the meaning ascribed thereto in the Exchangeable Share
Provisions.
"LIQUIDATION CALL RIGHT" has the meaning ascribed thereto in Section 5.1 hereof.
"LIQUIDATION CALL PURCHASE PRICE" has the meaning ascribed thereto in Section
5.1 hereof.
"LIQUIDATION DATE" has the meaning ascribed thereto in the Exchangeable Share
Provisions.
"LIQUIDATION EVENT" has the meaning ascribed thereto in Section 4.2 hereof,
"LIQUIDATION EVENT EFFECTIVE TIME" has the meaning ascribed thereto in Section
4.3 hereof.
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"OFFICER'S CERTIFICATE" means, with respect to the Corporation or WCL, as the
case may be, a certificate signed by any one of the directors or officers of the
Corporation or of WCL, as the case may be.
"PERSON" includes an individual, partnership, corporation, company,
unincorporated syndicate or organization, trust, trustee, executor,
administrator and other legal representative.
"REDEMPTION CALL PURCHASE PRICE" has the meaning ascribed thereto in Section 6.1
hereof.
"REDEMPTION CALL RIGHT" has the meaning ascribed thereto in Section 6.1 hereof.
"REDEMPTION PRICE" has the meaning ascribed thereto in the Exchangeable Share
Provisions.
"REGISTRATION RIGHTS AGREEMENT" has the meaning ascribed thereto in Section 2.6
of the Support Agreement.
"RETRACTED SHARES" has the meaning ascribed thereto in the Exchangeable Share
Provisions.
"RETRACTION CALL RIGHT" has the meaning ascribed thereto in the Exchangeable
Share Provisions.
"RETRACTION REQUEST" has the meaning ascribed thereto in the Exchangeable Share
Provisions.
"SHARE PURCHASE AGREEMENT" has the meaning ascribed thereto in the recitals
hereto.
"SHAREHOLDER" and "SHAREHOLDERS" have the meanings ascribed thereto in the
recitals hereto.
"SUBSIDIARY" has the meaning ascribed thereto in the Exchangeable Share
Provisions.
"SUPPORT AGREEMENT" means that certain support agreement made as of even date
hereof between the Corporation, WCL and WII as amended, supplemented or
restated.
"TRADES" has the meaning ascribed thereto in Section 11.13 hereof.
"TRANSACTION DOCUMENTS" has the meaning ascribed thereto in Section 11.13
hereof.
"WII COMMON STOCK" means the shares of common stock in the capital of WII, with
a par value of U.S.$1.00, having voting rights of one vote per share, and any
other securities into which such shares may be changed.
"WII SUCCESSOR" has the meaning ascribed thereto in Section 9.1(a) hereof.
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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 and/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 NUMBER, GENDER, ETC.
Words importing the singular number only shall include the plural and
vice versa. Words importing the use of any gender shall include all genders.
1.4 DATE FOR ANY ACTION.
If any date on which any action is required to be taken under this
Agreement is not a Business Day, such action shall be required to be taken on
the next succeeding Business Day.
ARTICLE 2
EXCHANGE RIGHT
2.1 GRANT OF THE EXCHANGE RIGHT.
The Holders shall have the right (the "EXCHANGE RIGHT"), upon the
occurrence and during the continuance of an Insolvency Event, to require WCL to
purchase from each or any Holder all or any part of the Exchangeable Shares held
by the Holder, all in accordance with the provisions of this Agreement. WCL
hereby acknowledges receipt from the Shareholders of good and valuable
consideration (and the adequacy thereof) for the grant of the Exchange Right to
the Shareholders.
2.2 PURCHASE PRICE.
The purchase price payable by WCL for each Exchangeable Share to be
purchased by WCL under the Exchange Right shall be an amount per share equal to
the Exchangeable Share Price on the last Business Day prior to the day of
closing of the purchase and sale of such Exchangeable Share under the Exchange
Right. In connection with each exercise of the Exchange Right, WCL will provide
to the Holders an Officer's Certificate setting forth the calculation of the
Exchangeable Share Price for each Exchangeable Share. The Exchangeable Share
Price for each such Exchangeable Share so purchased may be satisfied only by WCL
delivering or causing to be delivered to the Holders, the Exchangeable Share
Consideration representing the total Exchangeable Share Price.
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2.3 EXERCISE INSTRUCTIONS.
Subject to the terms and conditions herein set forth, a Holder shall be
entitled, upon the occurrence and during the continuance of an Insolvency Event,
to exercise the Exchange Right with respect to all or any part of the
Exchangeable Shares registered in the name of such Holder on the books of the
Corporation. To cause the exercise of the Exchange Right by the Holder, the
Holder shall deliver to WCL, in person or by registered mail, at its principal
office in Nisku, Alberta, the certificates representing the Exchangeable Shares
which such Holder desires WCL to purchase, duly endorsed in blank, and
accompanied by such other documents and instruments as may be required to effect
a transfer of Exchangeable Shares under the Business Corporations Act (Alberta),
other applicable laws, if any, and the by-laws of the Corporation and such
additional documents and instruments as the Corporation may reasonably require
together with (a) a duly completed form of notice of exercise of the Exchange
Right, contained on the reverse of or attached to the Exchangeable Share
certificates, stating (i) that the Holder thereby exercises the Exchange Right
so as to require WCL to purchase from the Holder the number of Exchangeable
Shares specified therein, (ii) that such Holder has good title to and owns all
such Exchangeable Shares to be acquired by WCL free and clear of all liens,
claims and encumbrances, (iii) the names in which the certificates representing
WII Common Stock issuable in connection with the exercise of the Exchange Right
are to be issued and (iv) the names and addresses of the persons to whom the
Exchangeable Share Consideration should be delivered and (b) payment (or
evidence satisfactory to the Corporation and WCL of payment) of the taxes (if
any) payable as contemplated by Section 11.10 hereof. If only a part of the
Exchangeable Shares represented by any certificate or certificates are to be
purchased by WCL under the Exchange Right, a new certificate for the balance of
such Exchangeable Shares shall be issued to the Holder at the expense of the
Corporation.
2.4 DELIVERY OF EXCHANGEABLE SHARE CONSIDERATION; EFFECT OF EXERCISE.
Promptly after receipt of the certificates representing the
Exchangeable Shares which the Holder desires WCL 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), duly endorsed for
transfer to WCL, WCL shall notify the Corporation of its receipt of the same,
which notice to the Corporation shall constitute exercise of the Exchange Right
by the Holder of such Exchangeable Shares, and WCL shall immediately thereafter
deliver or cause to be delivered to the Holder of such Exchangeable Shares (or
to such other persons, if any, properly designated by such Holder), the
Exchangeable Share Consideration deliverable in connection with the exercise of
the Exchange Right; provided, however, that no such delivery shall be made
unless and until the Holder requesting the same shall have paid or provided
evidence satisfactory to the Corporation and WCL of the payment of the taxes (if
any) payable as contemplated by Section 11.10 hereof. Immediately upon the
giving of notice by the Holder to WCL and the Corporation of the exercise of the
Exchange Right, as provided in this Section 2.4, the closing of the transaction
of purchase and sale contemplated by the Exchange Right shall be deemed to have
occurred, and the Holder of such Exchangeable Shares shall be deemed to have
transferred to WCL all of its right, title and interest in and
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to such Exchangeable Shares 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 its proportionate part of the
total purchase price therefor, unless such Exchangeable Share Consideration is
not delivered by WCL to the Holder, for delivery to such Holder (or to such
other persons, if any, properly designated by such Holder), within five (5)
Business Days of the date of the giving of such notice by the Holder, in which
case the rights of the Holder shall remain unaffected until such Exchangeable
Share Consideration is delivered by WCL and any cheque included therein is paid.
Concurrently with such Holder ceasing to be a holder of Exchangeable Shares, the
Holder shall be considered and deemed for all purposes to be the holder of the
WII Common Stock deliverable or delivered to it pursuant to the Exchange Right.
2.5 EXERCISE OF EXCHANGE RIGHT SUBSEQUENT TO RETRACTION.
In the event that a Holder has exercised its right under Article 6 of
the Exchangeable Share Provisions to require the Corporation to redeem all or
any Retracted Shares and is notified by the Corporation pursuant to Section 6(f)
of the Exchangeable Share Provisions that the Corporation will not be permitted
as a result of liquidity or solvency requirements of applicable law to redeem
all such Retracted Shares, and provided that WCL shall not have exercised the
Retraction Call Right with respect to the Retracted Shares and that the Holder
has not revoked the retraction request delivered by the Holder to the
Corporation pursuant to Section 6(a) of the Exchangeable Share Provisions, the
Retraction Request will constitute and will be deemed to constitute notice from
the Holder to WCL of exercise of the Exchange Right with respect to those
Retracted Shares which the Corporation is unable to redeem. In any such event,
the Corporation hereby agrees with WCL and the Holders to immediately notify WCL
of such prohibition against the Corporation redeeming all of the Retracted
Shares and immediately to forward or cause to be forwarded to WCL all relevant
materials delivered by the Holders to the Corporation (including without
limitation a copy of the Retraction Request delivered pursuant to Section 6(a)
of the Exchangeable Share Provisions) in connection with such proposed
redemption of the Retracted Shares and WCL will thereupon exercise the Exchange
Right with respect to the Retracted Shares that the Corporation is not permitted
to redeem and WCL will purchase such shares in accordance with the provisions of
this Article 2.
2.6 NOTICE OF INSOLVENCY EVENT.
Forthwith following the occurrence of an Insolvency Event or any event
which with the giving of notice or the passage of time or both would be an
Insolvency Event, the Corporation and WCL shall give written notice thereof to
the Holders, which notice shall contain a brief statement of the right of the
Holders with respect to the Exchange Right.
2.7 WII COMMON STOCK.
WII and WCL hereby represent, warrant and covenant that the WII Common
Stock deliverable as described herein will be duly authorized and validly issued
as fully
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paid and non-assessable and shall be free and clear of any lien, claim or
encumbrance subject to and conditional upon compliance with applicable
securities laws.
ARTICLE 3
EXCHANGE PUT RIGHT
3.1 GRANT OF THE EXCHANGE PUT RIGHT.
Upon and subject to the terms and conditions contained herein, a Holder
shall have the right (the "EXCHANGE PUT RIGHT") at any time to require WCL to
purchase all or any part of the Exchangeable Shares of the Holder.
3.2 EXERCISE OF THE EXCHANGE PUT RIGHT.
The Exchange Put Right provided in Section 3.1 hereof may be exercised
at any time by notice in writing in the form of Schedule A annexed hereto given
by the Holder to and received by WCL (the date of such receipt, the "EXCHANGE
PUT DATE") and accompanied by presentation and surrender of the certificates
representing such Exchangeable Shares, together with such documents and
instruments as may be required to effect a transfer of the Exchangeable Shares
under the applicable law and the by-laws of the Corporation and such additional
documents and instruments as WCL may reasonably require, at the principal office
in Nisku, Alberta of WCL, or at such other office or offices as WCL may
determine from time to time. Such notice shall stipulate the number of
Exchangeable Shares in respect of which the Exchange Put Right is exercised
(which may not exceed the numbers of shares represented by certificates
surrendered to WCL), shall be irrevocable unless the exchange is not completed
in accordance herewith and shall constitute the Holder's authorization to WCL
(and such other persons aforesaid) to effect the exchange on behalf of the
Holder.
3.3 COMPLETION OF PURCHASE AND SALE.
The completion of the sale and purchase referred to in Section 3.2
hereof shall be required to occur, and WCL shall be required to take all actions
on its part necessary to permit it to occur, not later than the close of
business on the tenth (10th) Business Day following the Exchange Put Date. If
only a part of the Exchangeable Shares represented by any certificate are to be
sold and purchased pursuant to the exercise of the Exchange Put Right, a new
certificate for the balance of such Exchangeable Shares shall be issued to the
Holder at the expense of the Corporation.
3.4 REPRESENTATION, WARRANTY AND COVENANT OF SHAREHOLDER.
The surrender by the Holder of Exchangeable Shares under Section 3.2
hereof shall constitute the representation, warranty and covenant of the Holder
to WCL that the Exchangeable Shares are sold to WCL free and clear of any lien,
encumbrance, security interest or adverse claim or interest.
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3.5 PURCHASE PRICE.
The purchase price payable by WCL for each Exchangeable Share to be
purchased by WCL under the Exchange Put Right shall be an amount per share equal
to the Exchangeable Share Price on the last Business Day prior to the day of
closing of the purchase and sale of such Exchangeable Share under the Exchange
Put Right. In connection with each exercise of the Exchange Put Right, WCL will
provide to the Holder an Officer's Certificate setting forth the calculation of
the Exchangeable Share Price for each Exchangeable Share. The Exchangeable Share
Price for each such Exchangeable Share so purchased may be satisfied only by WCL
delivering or causing to be delivered to the Holder the Exchangeable Share
Consideration representing the total Exchangeable Share Price.
3.6 WII COMMON STOCK.
WII and WCL hereby represent, warrant and covenant that the WII Common
Stock deliverable as described herein will be duly authorized and validly issued
as fully paid and non-assessable and shall be free and clear of any lien, claim
or encumbrance subject to and conditional upon compliance with applicable
securities laws.
3.7 RIGHTS OF HOLDERS.
On or after the close of business on the Exchange Put Date, the Holder
of the Exchangeable Shares in respect of which the Exchange Put Right is
exercised shall not be entitled to exercise any of the rights of a Holder in
respect thereof, other than the right to receive the total applicable
Exchangeable Share Price, unless upon presentation and surrender of certificates
in accordance with the foregoing provisions, payment of the Exchangeable Share
Consideration shall not be made, in which case the rights of such Holder shall
remain unaffected until such payment has been made. On and after the close of
business on the Exchange Put Date provided that presentation and surrender of
certificates and payment of the Exchangeable Share Consideration has been made
in accordance with the foregoing provisions, the Holder of the Exchangeable
Shares so purchased by WCL shall thereafter be considered and deemed for all
purposes to be the holder of the WII Common Stock deliverable or delivered to
it.
ARTICLE 4
AUTOMATIC EXCHANGE ON LIQUIDATION OF WII
4.1 NOTICE OF LIQUIDATION, DISSOLUTION OR WINDING-UP OF WII.
WII will give WCL written notice of any of the following events at the
time set forth below:
(a) in the event of any determination by the board of directors of
WII to institute voluntary liquidation, dissolution or winding-up
proceedings with respect to WII or to effect any other
distribution of assets of WII among its stockholders for the
purpose of winding-up its affairs, at least twenty-one
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(21) days prior to the proposed effective date of such
liquidation, dissolution, winding-up or other distribution; and
(b) immediately, upon the earlier of (i) receipt by WII of notice of,
and (ii) WII otherwise becoming aware of, any threatened or
instituted claim, suit, petition or other proceedings with
respect to the involuntary liquidation, dissolution or winding-up
of WII or to effect any other distribution of assets of WII among
its stockholders for the purpose of winding-up its affairs.
4.2 AUTOMATIC EXCHANGE RIGHT.
Immediately following receipt by WCL from WII of notice of any event (a
"LIQUIDATION EVENT") contemplated by Section 4.1 hereof, WCL will give notice
thereof to the Holders. Such notice to be provided by WCL shall include a brief
description of the automatic exchange of Exchangeable Shares for WII Common
Stock provided for in Section 4.3 hereof (the "AUTOMATIC EXCHANGE RIGHTS").
4.3 EXERCISE OF AUTOMATIC EXCHANGE RIGHTS.
In order that the Holders will be able to participate on a pro rata
basis with the holders of WII Common Stock in the distribution of assets of WII
in connection with a Liquidation Event, immediately prior to the effective time
(the "LIQUIDATION EVENT EFFECTIVE TIME") of a Liquidation Event all of the then
outstanding Exchangeable Shares shall be automatically exchanged for WII Common
Stock. To effect such automatic exchange WCL shall be deemed to have purchased
each Exchangeable Share outstanding immediately prior to the Liquidation Event
Effective Time, and held by the Holders, and each Holder shall be deemed to have
sold the Exchangeable Shares held by it at such time, free and clear of any
lien, claim or encumbrance, for a purchase price per share equal to the
Exchangeable Share Price applicable at such time. In connection with such
automatic exchange, WCL will provide to the Holders an Officer's Certificate
setting forth the calculation of the purchase price for each Exchangeable Share.
4.4 DELIVERY OF WII COMMON STOCK.
The closing of the transaction contemplated by Section 4.3 hereof shall
be deemed to have occurred immediately prior to the Liquidation Event Effective
Time, and each Holder shall be deemed to have transferred to WCL all of the
Holder's right, title and interest in the Exchangeable Shares and shall cease to
be a Holder of such Exchangeable Shares and WCL shall deliver to the Holder the
Exchangeable Share Consideration deliverable upon the automatic exchange of
Exchangeable Shares. Concurrently with such Holder ceasing to be a holder of
Exchangeable Shares, the Holder shall be considered and deemed for all purposes
to be the Holder of the WII Common Stock deliverable or delivered to it pursuant
to the automatic exchange of Exchangeable Shares for WII Common Stock and the
certificates held by the Holder previously representing the Exchangeable Shares
exchanged by the Holder with WCL pursuant to such automatic exchange shall
thereafter be deemed to represent the WII Common Stock
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delivered to the Holder by WCL pursuant to such transaction. Upon the request of
a Holder and the surrender by the Holder of Exchangeable Share certificates
deemed to represent WII Common Stock, duly endorsed in blank and accompanied by
such instruments of transfer as WCL may reasonably require, WCL shall deliver or
cause to be delivered to the Holder certificates representing the WII Common
Stock of which the Holder is the holder.
ARTICLE 5
WCL LIQUIDATION CALL RIGHT
5.1 LIQUIDATION CALL RIGHT.
WCL shall have the overriding right (the "LIQUIDATION CALL RIGHT"), in
the event of and notwithstanding the proposed liquidation, dissolution or
winding-up of the Corporation pursuant to Article 5 of the Exchangeable Share
Provisions, to purchase from all but not less than all of the Holders on the
Liquidation Date all but not less than all of the Exchangeable Shares held by
each such Holder on payment by WCL to the Holder of the Exchangeable Share Price
applicable on the last Business Day prior to the Liquidation Date (the
"LIQUIDATION CALL PURCHASE PRICE"). In the event of the exercise of the
Liquidation Call Right by WCL, each Holder shall be obligated to sell all the
Exchangeable Shares held by the Holder to WCL on the Liquidation Date on payment
by WCL to the Holder of the Liquidation Call Purchase Price for each such
Exchangeable Share.
5.2 NOTIFICATION.
To exercise the Liquidation Call Right, WCL must notify the Corporation
of WCL's intention to exercise such right at least thirty (30) days before the
Liquidation Date in the case of a voluntary liquidation, dissolution or
winding-up of the Corporation and at least five (5) Business Days before the
Liquidation Date in the case of an involuntary liquidation, dissolution or
winding-up of the Corporation. The Corporation will notify the Holders as to
whether or not WCL has exercised the Liquidation Call Right forthwith after the
expiry of the date by which the same may be exercised by WCL. If WCL exercises
the Liquidation Call Right, on the Liquidation Date, WCL will purchase and the
Holders will sell all of the Exchangeable Shares then outstanding for a price
per share equal to the Liquidation Call Purchase Price.
5.3 METHOD OF DISTRIBUTION.
For the purposes of completing the purchase of the Exchangeable Shares
pursuant to the Liquidation Call Right, WCL shall deliver to each Holder, on or
before the Liquidation Date, the Exchangeable Share Consideration representing
the total Liquidation Call Purchase Price. In connection with payment of the
Liquidation Call Purchase Price, WCL shall be entitled to liquidate some of the
WII Common Stock that would otherwise be deliverable to the particular Holder in
order to fund any statutory withholding tax obligation. Provided that such
Exchangeable Share Consideration has been so delivered to such Holder, on and
after the Liquidation Date the rights of each
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Holder of Exchangeable Shares will be limited to receiving such Holder's
proportionate part of the total Liquidation Call Purchase Price payable by WCL
without interest upon presentation and surrender by the holder of certificates
representing the Exchangeable Shares held by such Holder and the Holder shall on
and after the Liquidation Date be considered and deemed for all purposes to be
the holder of the WII Common Stock delivered to such Holder. Upon surrender to
WCL of a certificate or certificates representing Exchangeable Shares, together
with such other documents and instruments as may be required to effect a
transfer of Exchangeable Shares under the Business Corporations Act (Alberta)
and the bylaws of the Corporation and such additional documents and instruments
or as the Corporation may reasonably require, the Holder of such surrendered
certificate or certificates shall be entitled to receive in exchange therefor,
and WCL shall deliver to such Holder, the Exchangeable Share Consideration to
which the Holder is entitled. If WCL does not exercise the Liquidation Call
Right in the manner described above, on the Liquidation Date the Holders will be
entitled to receive in exchange for their Exchangeable Shares the Liquidation
Amount otherwise payable by the Corporation in connection with the liquidation,
dissolution or winding-up of the Corporation pursuant to Article 5 of the
Exchangeable Share Provisions.
ARTICLE 6
WCL REDEMPTION CALL RIGHT
6.1 REDEMPTION CALL RIGHT.
WCL shall have the overriding right (the "REDEMPTION CALL RIGHT"),
notwithstanding the proposed redemption of the Exchangeable Shares pursuant to
Article 7 of the Exchangeable Share Provisions, to purchase from all but not
less than all of the Holders on the Automatic Redemption Date all but not less
than all of the Exchangeable Shares held by each such Holder on payment by WCL
to the Holder of the Exchangeable Share Price applicable on the last Business
Day prior to the Automatic Redemption Date (the "REDEMPTION CALL PURCHASE
Price"). In the event of the exercise of the Redemption Call Right by WCL, each
Holder shall be obligated to sell all the Exchangeable Shares held by the Holder
to WCL on the Automatic Redemption Date on payment by WCL to the Holder of the
Redemption Call Purchase Price for each such Exchangeable Share.
6.2 NOTIFICATION.
To exercise the Redemption Call Right, WCL must notify the Corporation
of WCL's intention to exercise such right at least forty-five (45) days before
the Automatic Redemption Date. The Corporation will notify the Holders as to
whether or not WCL has exercised the Redemption Call Right forthwith after the
date by which the same may be exercised by WCL. If WCL exercises the Redemption
Call Right, on the Automatic Redemption Date WCL will purchase and the Holders
will sell all of the Exchangeable Shares then outstanding for a price per share
equal to the Redemption Call Purchase Price.
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6.3 DELIVERY OF REDEMPTION CALL PURCHASE PRICE.
For the purposes of completing the purchase of the Exchangeable Shares
pursuant to the Redemption Call Right, WCL shall deliver to each Holder, on or
before the Automatic Redemption Date, the Exchangeable Share Consideration
representing the total Redemption Call Purchase Price. In connection with
payment of the Redemption Call Purchase Price, WCL shall be entitled to
liquidate some of the WII Common Stock that would otherwise be deliverable to
the particular Holder in order to fund any statutory withholding tax obligation.
Provided WCL has complied with the immediately preceding sentence, on and after
the Automatic Redemption Date, the rights of each Holder will be limited to
receiving such Holder's proportionate part of the total Redemption Call Purchase
Price payable by WCL upon presentation and surrender by the Holder of
certificates representing the Exchangeable Shares held by such Holder and the
Holder shall on and after the Automatic Redemption Date be considered and deemed
for all purposes to be the holder of the WII Common Stock delivered to such
Holder. Upon surrender of a certificate or certificates representing
Exchangeable Shares, together with such other documents and instruments as may
be required to effect a transfer of Exchangeable Shares under the Business
Corporations Act (Alberta) and the bylaws of the Corporation and such additional
documents and instruments as the Corporation may reasonably require, the Holder
of such surrendered certificate or certificates shall be entitled to receive in
exchange therefor, and WCL shall deliver to such Holder, the Exchangeable Share
Consideration to which the Holder is entitled. If WCL does not exercise the
Redemption Call Right in the manner described above, on the Automatic Redemption
Date, the Holders will be entitled to receive in exchange therefor the
Redemption Price otherwise payable by the Corporation in connection with the
redemption of the Exchangeable Shares pursuant to Article 7 of the Exchangeable
Share Provisions.
ARTICLE 7
WCL RETRACTION CALL RIGHT
7.1 RETRACTION CALL RIGHT.
WCL shall have the overriding right, notwithstanding the proposed
redemption of a Holder's Exchangeable Shares by the Corporation pursuant to
Article 6 of the Exchangeable Share Provisions, to purchase directly from the
Holder all but not less than all of the Retracted Shares in accordance with
Section 6(c) of the Exchangeable Share Provisions.
7.2 ACKNOWLEDGEMENT OF RETRACTION CALL RIGHT.
The Holders acknowledge the overriding Retraction Call Right of WCL to
purchase all but not less than all the Retracted Shares directly from the Holder
pursuant to Section 6(c) of the Exchangeable Share Provisions.
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ARTICLE 8
WITHHOLDING RIGHTS
8.1 RIGHT TO WITHHOLD.
WCL and the Corporation shall be entitled to deduct and withhold from
any consideration otherwise payable under this Agreement to any Holder such
amounts as WCL or the Corporation is required or permitted to deduct and
withhold with respect to such payment under the Income Tax Act (Canada) (the
"ITA"), the United States Internal Revenue Code of 1986 or any provision of
provincial, state, local or foreign tax law, in each case as amended or
succeeded. To the extent that amounts are so withheld, such withheld amounts
shall be treated for all purposes as having been paid to such Holder in respect
of which such deduction and withholding was made, provided that such withheld
amounts are actually remitted to the appropriate taxing authority. To the extent
that the amount so required or permitted to be deducted and withheld from any
payment to a Holder exceeds the cash portion of the consideration otherwise
payable to the Holder, WCL and the Corporation are hereby authorized to sell or
otherwise dispose of such portion of the consideration as is necessary to
provide sufficient funds to WCL or the Corporation, as the case may be, to
enable it to comply with such deduction and withholding requirement and WCL or
the Corporation shall notify the Holder thereof and remit to such Holder any
unapplied balance of the net proceeds of such sale.
8.2 SECTION 116 CLEARANCE CERTIFICATE FOR NON-RESIDENT SHAREHOLDERS.
For greater clarification and without limiting the generality of
Section 8.1 hereof, each Holder that is a non-resident of Canada for purposes of
section 116 of the ITA and to whom the Exchangeable Shares are "taxable Canadian
property" and not "excluded property" for purposes of the ITA shall, prior to a
disposition of such shares to the Corporation or WCL, deliver a section 116
clearance certificate to the Corporation or WCL, as applicable, failing which
the Corporation or WCL will withhold that portion of the proceeds of disposition
otherwise deliverable to such Holder sufficient to remit the amount required to
the Receiver General for Canada pursuant to the provisions of section 116 of the
ITA, and for this purpose may sell or otherwise convert to cash any non-cash
property that would otherwise be distributed to such Holder.
ARTICLE 9
PARENT SUCCESSORS
9.1 CERTAIN REQUIREMENTS IN RESPECT OF REORGANIZATIONS, ETC.
WII shall not 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:
(a) such other Person or continuing corporation (the "WII SUCCESSOR")
(i) by operation of law, becomes bound by the terms and
provisions of this
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Agreement or, (ii) 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 WII Successor of liability for all moneys
payable and property deliverable hereunder and the covenant of
such WII 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 WII under this Agreement, unless the
board of directors of WII, in its sole discretion acting
reasonably, determines that the Corporation will not require that
the WII Successor assume the liabilities and obligations of WII
under this Agreement as a condition to such transaction; and
(b) 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.
9.2 VESTING OF POWERS IN SUCCESSOR.
Whenever the conditions of Section 9.1 hereof have been duly observed
and performed, the WII Successor and the Corporation shall execute and deliver
the supplemental agreement provided for in Section 9.1(a) hereof and thereupon
the WII Successor shall possess and from time to time may exercise each and
every right and power of WII under this Agreement in the name of WII 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 WII or any officers of WII
may be done and performed with like force and effect by the directors or
officers of such WII Successor.
9.3 WHOLLY-OWNED SUBSIDIARIES.
Nothing herein shall be construed as preventing the amalgamation or
merger of any wholly-owned subsidiary of WII with or into WII or the winding-up,
liquidation or dissolution of any wholly-owned subsidiary of WII provided that
all of the assets of such subsidiary are transferred to WII or another
wholly-owned subsidiary of WII. For greater certainty, any such transactions are
expressly permitted by this Article 9.
ARTICLE 10
AMENDMENTS AND SUPPLEMENTAL AGREEMENTS
10.1 AMENDMENTS, MODIFICATIONS, ETC.
This Agreement may not be amended or modified except by an agreement in
writing executed by the Corporation, WII, WCL and approved by the Holders in
accordance with Section 9(b) of the Exchangeable Share Provisions.
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10.2 MEETING TO CONSIDER AMENDMENTS.
The Corporation, at the request of WCL, shall call a meeting or
meetings of the Holders for the purpose of considering any proposed amendment or
modification requiring approval pursuant hereto. Any such meeting or meetings
shall be called and held in accordance with the by-laws of the Corporation, the
Exchangeable Share Provisions and all applicable laws.
10.3 CHANGES IN CAPITAL OF WII AND THE CORPORATION.
At all times after the occurrence of any event described in Section 2.7
or Section 2.8 of the Support Agreement, as a result of which either WII Common
Stock or Exchangeable Shares or both are in any way changed, this Agreement
shall forthwith be amended and modified as necessary in order that it shall
apply with full force and effect, mutatis mutandis, to all new securities into
which WII Common Stock or Exchangeable Shares or both are so changed and the
parties hereto shall execute and deliver a supplemental agreement giving effect
to and evidencing such necessary amendments and modifications.
ARTICLE 11
GENERAL
11.1 CALL RIGHTS.
The Liquidation Call Right, the Redemption Call Right, the Retraction
Call Right, the Exchange Right, the Exchange Put Right and the Automatic
Exchange Rights are hereby agreed, acknowledged and confirmed. WII also hereby
confirms and grants to the Corporation and WCL the rights of the Holders to be
issued WII Common Stock upon any exchange, redemption, or retraction of the
Exchangeable Shares in accordance with the terms of this Agreement or the
Exchangeable Share Provisions.
11.2 TERM.
This Agreement shall continue until the earliest to occur of the
following events:
(a) no outstanding Exchangeable Shares are held by a Holder; and
(b) each of the Corporation, WCL and WII elects in writing to
terminate this Agreement and such termination is approved by the
Holders in accordance with Section 9(b) of the Exchangeable Share
Provisions.
11.3 SEVERABILITY.
If any provision of this Agreement is held to be invalid, illegal or
unenforceable, the validity, legality or enforceability of the remainder of this
Agreement shall not in any way be affected or impaired thereby and this
Agreement shall be carried out as nearly as possible in accordance with its
original terms and conditions.
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11.4 ENUREMENT.
This Agreement shall be binding upon and enure to the benefit of the
parties hereto and their respective successors and permitted assigns and to the
benefit of the Holders. The Holders agree and acknowledge that the transfer of
the Exchangeable Shares (other than to WCL and any other Subsidiary of WII) is
subject to the assignee becoming a party to this Agreement.
11.5 NOTICES.
All notices, demands and requests required or permitted to be given
under the provisions of this Agreement shall be deemed duly given if mailed by
registered mail, postage prepaid, return receipt requested, or by Federal
Express or similar overnight delivery service, or if delivered personally, at
the following addresses pending the designation of another address in accordance
with the provisions hereof:
(a) If to WII, the Corporation and/or WCL:
▇▇▇▇▇▇▇▇▇▇▇ International, Inc.
Suite 600, ▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇
With a copy to:
Fraser ▇▇▇▇▇▇ Casgrain LLP
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ - ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
(b) If to ▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇ and/or ▇▇▇▇▇▇:
▇/▇ ▇▇▇▇▇▇ & ▇▇. ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ - ▇▇▇ ▇▇▇▇▇▇ ▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇
With a copy to:
▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
3rd Floor, Royal Bank Building
▇▇▇▇ - ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
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11.6 NOTICE OF SHAREHOLDERS.
Any and all notices to be given and any documents to be sent to any
Holder may be given or sent to the address of such Holder shown on the register
of holders of Exchangeable Shares in any manner permitted by the Exchangeable
Share Provisions and shall be deemed to be received (if given or sent in such
manner) at the time specified in such Exchangeable Share Provisions, the
provisions of which Exchangeable Share Provisions shall apply mutatis mutandis
to notices or documents as aforesaid sent to such Holders.
11.7 COUNTERPARTS.
This Agreement may be executed in counterparts, each of which shall be
deemed an original, but all of which taken together shall constitute one and the
same instrument. A counterpart delivered by facsimile is hereby deemed to be as
effective as a counterpart delivered in original form.
11.8 JURISDICTION.
This agreement shall be construed and enforced in accordance with the
laws of the Province of Alberta and the laws of Canada applicable therein.
11.9 ATTORNMENT.
Each of the parties hereto agrees that any action or proceeding arising
out of or relating to this Agreement may be instituted in the courts of the
Province of Alberta, waives any objection which it may have now or hereafter to
the venue of any such action or proceeding, irrevocably submits to the
jurisdiction of the said courts in any such action or proceeding, agrees to be
bound by any judgment of the said courts and agrees not to seek and hereby
waives, any review of the merits of any such judgment by the courts of any other
jurisdiction and hereby appoints the Corporation at its registered office in the
Province of Alberta as attorney for service of process.
11.10 STAMP OR OTHER TRANSFER TAXES
Upon any sale of Exchangeable Shares to WCL pursuant to the provisions
of this Agreement, the share certificate or certificates representing WII Common
Stock to be delivered in connection with the payment of the total purchase price
therefor shall be issued in the name of the Holder of the Exchangeable Shares so
sold or in such names as such Holder may otherwise direct in writing without
charge to the Holder of the Exchangeable Shares so sold; provided, however, that
such Holder (a) shall pay (and neither WCL nor the Corporation shall be required
to pay) any documentary, stamp, transfer or other taxes that may be payable in
respect of any transfer involved in the issuance or delivery of such shares to a
person other than such Holder or (b) shall have evidenced to the satisfaction of
WCL and the Corporation that such taxes, if any, have been paid.
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11.11 DELIVERY OF WII COMMON STOCK
(a) For greater certainty, whenever the Exchangeable Share Provisions
or this Agreement require the Corporation or WCL to deliver, or
cause to be delivered, WII Common Stock, the Corporation or WCL
shall deliver such WII Common Stock to the appropriate Holder, or
such Holder's legal representative.
(b) Notwithstanding anything else herein contained, any obligation of
a party in this Agreement to deliver, or cause to be delivered,
WII Common Stock, or any other security, shall be subject to and
conditional upon compliance with applicable securities laws.
11.12 ISSUANCE OF WII COMMON STOCK.
WII hereby represents, warrants and covenants that it has irrevocably
reserved for issuance and will at all times keep available, free from
pre-emptive and other rights, out of its authorized and unissued capital stock
such number of WII Common Stock (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 WCL and the Corporation to meet their
respective obligations hereunder and under the Exchangeable Share Provisions.
11.13 RULING
Nothing in this Agreement shall be construed as requiring WCL or the
Corporation to deliver WII Common Stock in contravention of any applicable laws.
The Corporation shall promptly after the date hereof prepare and file an
application for and use commercially reasonable efforts to obtain a ruling from
the Alberta Securities Commission pursuant to subsection 116(1) of the
Securities Act (Alberta) exempting certain trades (the "TRADES") contemplated by
the Exchangeable Share Provisions and this Agreement, (the "TRANSACTION
DOCUMENTS") from the prospectus and registration requirements of Alberta
securities laws and providing first trade relief in respect of the sale of WII
Common Stock, received upon an exchange of the Exchangeable Shares, such that
the WII Common Stock may be resold into the United States by the Holders in
accordance with the Registration Rights Agreement.
11.14 FURTHER STEPS
The parties hereto covenant and agree to take all commercially
reasonable steps within their power as may be necessary or desirable to
facilitate the Trades in the United States and Alberta, including, without
limitation, the filing of any document or the taking of any proceeding or
obtaining of any order, ruling or consent from any governmental or regulatory
authority under any Canadian or United States federal, provincial or state law
or regulation, provided that the parties have determined on advice of counsel
that such order, ruling or consent may be available. The parties acknowledge
that nothing herein shall give rise to an obligation on the part of WII, WCL, or
the Corporation to prepare or
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file a prospectus to qualify any WII Common Stock issuable under the Transaction
Documents for issuance to Holders.
- 20 -
IN WITNESS WHEREOF, the parties hereby have caused this Agreement to be
duly executed as of the date first above written.
▇▇▇▇▇▇▇▇▇▇▇ INTERNATIONAL, INC.
Per: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇ CANADA LTD.
Per: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇ ▇▇ ACQUIRECO INC.
Per: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------- --------------------------------------
Witness ▇▇▇▇▇ ▇. ▇▇▇▇▇
/s/ N. ▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------- --------------------------------------
Witness N. ▇▇▇▇▇ ▇. ▇▇▇▇▇
/s/ A. ▇▇▇▇ ▇▇▇▇▇
--------------------------------- --------------------------------------
Witness A. ▇▇▇▇ ▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------- --------------------------------------
Witness ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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SCHEDULE A
NOTICE OF EXCHANGE PUT
To: ▇▇▇▇▇▇▇▇▇▇▇ ▇▇ Acquireco Inc. (the "Corporation")
and Weatherford Canada Ltd. ("WCL")
This notice is given pursuant to Article 3 of the attached Exchange
Rights Agreement and all capitalized words and expressions have the meanings set
forth in the Exchange Rights Agreement.
The undersigned hereby notifies the parties described above that the
undersigned desires to have WCL purchase and exchange in accordance with Article
3 of the Exchange Rights Agreement:
o all share(s) represented by this certificate; or
o ___________ share(s) only.
The undersigned hereby notifies the parties described above that the
Exchange Put Date shall be ____________________________________.
NOTE: The Exchange Put Date must be a Business Day and must not be less
than ten (10) Business Days after the date upon which this notice is
received by the parties described above. In the event that no such
Business Day is specified above, the Exchange Put Date shall be deemed
to be the tenth (10th) Business Day after the date on which this notice
is received by the parties described above.
The undersigned hereby represents and warrants to WCL that the
undersigned has good title to, and owns, the share(s) represented by this
certificate to be acquired by WCL free and clear of all liens, claims and
encumbrances.
----------------- -------------------------- ------------------------
(Date) (Signature of Shareholder) (Guarantee of Signature)
[ ] Please check box if the legal or beneficial owner of the Exchangeable
Shares is a non-resident of Canada.
[ ] Please check box if the securities and any cheque(s) or other non-cash
assets resulting from the purchase and exchange of the Exchangeable Shares
are to be held for pick-up by the Holder at the principal office of the
Corporation in Nisku, Alberta failing which the securities and any
cheque(s) or other non-cash assets will be delivered to the last address of
the Holder as it appears on the register by such means as the Corporation
deems appropriate.
NOTE: This panel must be completed and this notice, together with such
additional documents as WCL may require, must be deposited with WCL at
its registered office in Nisku, Alberta. The securities and any
cheque(s) or other non-cash assets resulting from the purchase and
exchange of the Exchangeable Shares will be issued and registered in,
and made payable to, or transferred into, respectively, the name of the
shareholder as specified above.
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