VOTING AND EXCHANGE TRUST 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
-
OILSANDS
QUEST INC.,
a
corporation existing under the laws of the Province of Alberta
(hereinafter
referred to as "Canco")
-
and
-
COMPUTERSHARE
TRUST COMPANY OF CANADA,
a trust
company incorporated under the laws of Canada (hereinafter referred to as the
"Trustee")
WHEREAS
in
connection with the Reorganization Agreement, Canco may be required to issue
Exchangeable Shares to certain holders of its common shares pursuant to the
Reorganization contemplated in the Reorganization Agreement; and
WHEREAS
pursuant
to the Reorganization Agreement, Acquirer and Canco have agreed to execute
a
voting and exchange trust agreement substantially in the form of this
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
Section 1.1 Definitions
In
this
Agreement, unless the context otherwise requires, the following terms shall
have
the following meanings respectively:
"Acquirer
Consent"
has the
meaning ascribed thereto in Section 4.2;
"Acquirer
Control Transaction"
has the
meaning ascribed thereto in the Exchangeable Share Provisions;
"Acquirer
Meeting"
has the
meaning ascribed thereto in Section 4.2;
"Acquirer
Shares"
has the
meaning provided in the Exchangeable Share Provisions;
"Acquirer
Special Voting Share"
means
one share of preferred stock of Acquirer to which that number of voting rights
attach (each such voting right to be equal to the voting rights attached to
one
Acquirer Share) equal to the number of outstanding Exchangeable Shares held
by
Beneficiaries;
"Acquirer
Successor"
has the
meaning ascribed thereto in Section 10.1(a);
"Act"
means
the Business
Corporations Act (Alberta)
as the same has been and may hereafter from time to time be
amended;
"Affiliate"
has the
meaning ascribed thereto in the Act;
"Automatic
Exchange Rights"
means
the benefit of the obligation of Acquirer to effect the automatic exchange
of
Exchangeable Shares for Acquirer Shares pursuant to Section 5.12;
"Beneficiaries"
means
the registered holders from time to time of Exchangeable Shares, other than
Acquirer and its Affiliates;
"Beneficiary
Votes"
has the
meaning ascribed thereto in Section 4.2;
"Business
Day"
means
any day on which commercial banks are generally open for business in Vancouver,
British Columbia and Calgary, Alberta, other than a Saturday, a Sunday or a
day
observed as a holiday in Vancouver, British Columbia or in Calgary,
Alberta;
"Callco"
means
1259882 Alberta Ltd., a corporation existing under the laws of the Province
of
Alberta or any other direct or indirect Subsidiary of the Acquirer designated
by
the Acquirer from time to time;
"Change
of Law Call Right"
has the
meaning ascribed thereto in the Exchangeable Share Provisions;
"Equivalent
Vote Amount"
means,
with respect to any matter, proposition or question on which holders of Acquirer
Shares are entitled to vote, consent or otherwise act, the number of votes
to
which a holder of one Acquirer Share is entitled with respect to such matter,
proposition or question;
"Exchange
Right"
has the
meaning ascribed thereto in Section 5.1;
"Exchangeable
Share Consideration"
has the
meaning ascribed thereto in the Exchangeable Share Provisions;
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"Exchangeable
Share Price"
has the
meaning ascribed thereto in the Exchangeable Share Provisions;
"Exchangeable
Share Provisions"
means
the rights, privileges, restrictions and conditions attaching to the
Exchangeable Shares;
"Exchangeable
Shares"
means
the non-voting Exchangeable Shares in the capital of Canco, having substantially
the rights, privileges, restrictions and conditions set out in Schedule D to
the
Reorganization Agreement;
"Indemnified
Parties"
has the
meaning ascribed thereto in Section 8.1;
"Insolvency
Event"
means
(i) the institution by Canco of any proceeding to be adjudicated a bankrupt
or
insolvent or to be wound up, or the consent of Canco to the institution of
bankruptcy, insolvency or winding-up proceedings against it, or (ii) the filing
of a petition, answer or consent seeking dissolution or winding-up under any
bankruptcy, insolvency or analogous laws, including the Companies
Creditors' Arrangement Act
(Canada)
and the Bankruptcy
and Insolvency Act
(Canada), and the failure by Canco to contest in good faith any such proceedings
commenced in respect of Canco within 30 days of becoming aware thereof, or
the
consent by Canco to the filing of any such petition or to the appointment of
a
receiver, or (iii) the making by Canco of a general assignment for the benefit
of creditors, or the admission in writing by Canco of its inability to pay
its
debts generally as they become due, or (iv) Canco not being permitted, pursuant
to solvency requirements of applicable law, to redeem any Retracted Shares
pursuant to Section 6.6 of the Exchangeable Share Provisions;
"Liquidation
Call Right"
has the
meaning ascribed thereto in the Exchangeable Share Provisions;
"Liquidation
Event"
has the
meaning ascribed thereto in Section 5.12(b);
"Liquidation
Event Effective Time"
has the
meaning ascribed thereto in Section 5.12(c);
"List"
has the
meaning ascribed thereto in Section 4.6;
"Officer's
Certificate"
means,
with respect to Acquirer or Canco, as the case may be, a certificate signed
by
any one of the authorized signatories of Acquirer or Canco, as the case may
be;
"Person"
includes any individual, firm, partnership, joint venture, venture capital
fund,
limited liability company, unlimited liability company, association, trust,
trustee, executor, administrator, legal personal representative, estate, group,
body corporate, corporation, unincorporated association or organization,
government body, syndicate or other entity, whether or not having legal
status;
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"Redemption
Call Right"
has the
meaning ascribed thereto in the Exchangeable Share Provisions;
"Redemption
Date"
has the
meaning ascribed thereto in the Exchangeable Share Provisions;
"Reorganization"
means
the reorganization of Canco's share capital contemplated by the Reorganization
Agreement;
"Reorganization
Agreement"
means
the reorganization agreement made as of June 9, 2006 between Acquirer and Canco,
as amended, supplemented and/or restated in accordance therewith prior to the
date hereof, providing for, among other things, the Reorganization;
"Retracted
Shares"
has the
meaning ascribed thereto in Section 5.7;
"Retraction
Call Right"
has the
meaning ascribed thereto in the Exchangeable Share Provisions;
"Support
Agreement"
means
that certain support agreement made as of even date herewith between Canco,
Callco and Acquirer substantially in the form and content of Schedule F to
the
Reorganization Agreement, with such changes thereto as the parties to the
Reorganization Agreement, acting reasonably, may agree;
"Trust"
means
the trust created by this Agreement;
"Trust
Estate"
means
the Acquirer Special Voting Share, any other securities, the Exchange Right,
the
Automatic Exchange Rights and any money or other property which may be held
by
the Trustee from time to time pursuant to this Agreement; and
"Voting
Rights"
means
the voting rights of the Acquirer Special Voting Share held by the
Trustee.
Section 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 should 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.
Section 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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Section 1.4 Date
for Any Action
In
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.
Section 1.5 Payments
All
payments to be made hereunder will be made without interest and less any tax
required by Canadian law to be deducted or withheld.
ARTICLE 2
PURPOSE
OF AGREEMENT
Section 2.1 Establishment
of Trust
The
purpose of this Agreement is to create the Trust for the benefit of the
Beneficiaries and Acquirer, as herein provided. The Trustee will hold the
Acquirer Special Voting Share in order to enable the Trustee to exercise the
Voting Rights and will hold the Exchange Right and the Automatic Exchange Rights
in order to enable the Trustee to exercise such rights, in each case as trustee
for and on behalf of the Beneficiaries as provided in this Agreement. The
Trustee will hold the Acquirer Special Voting Share for and on behalf of
Acquirer for all other rights associated with such Acquirer Special Voting
Share
other than the Voting Rights.
ARTICLE 3
ACQUIRER
Special Voting SHARE
Section 3.1 Issue
and Ownership of the Acquirer Special Voting Share
Acquirer
hereby agrees to issue to, and deposit with, the Trustee the Acquirer Special
Voting Share to be hereafter held of record by the Trustee as trustee for and
on
behalf of, and for the use and benefit of, the Beneficiaries and in accordance
with the provisions of this Agreement. Acquirer hereby acknowledges receipt
from
the Trustee as trustee for and on behalf of the Beneficiaries of good and
valuable consideration (and the adequacy thereof) for the issuance of the
Acquirer Special Voting Share by Acquirer to the Trustee. During the term of
the
Trust and subject to the terms and conditions of this Agreement, the Trustee
shall possess and be vested with full legal ownership of such Acquirer Special
Voting Share and shall be entitled to exercise all of the rights and powers
of
an owner with respect to such Acquirer Special Voting Share provided that the
Trustee shall:
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(a)
|
hold
such Acquirer Special Voting Share and the legal title thereto as
trustee
solely for the use and benefit of the Beneficiaries in accordance
with the
provisions of this Agreement; and
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5
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(b)
|
except
as specifically authorized by this Agreement, have no power or authority
to sell, transfer, vote or otherwise deal in or with such Acquirer
Special
Voting Share and such Acquirer Special Voting Share shall not be
used or
disposed of by the Trustee for any purpose other than the purposes
for
which this Trust is created pursuant to this
Agreement.
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Section 3.2 Legended
Share Certificates
Canco
will cause each certificate representing Exchangeable Shares to bear an
appropriate legend notifying the Beneficiaries of their right to instruct the
Trustee with respect to the exercise of the portion of the Voting Rights in
respect of the Exchangeable Shares held by the Beneficiaries.
Section 3.3 Safe
Keeping of Certificate
The
physical certificate representing the Acquirer Special Voting Share shall at
all
times be held in safe keeping by the Trustee or its duly authorized
agent.
ARTICLE 4
EXERCISE
OF VOTING RIGHTS
Section 4.1 Voting
Rights
The
Trustee, as the holder of record of the Acquirer Special Voting Share forming
part of the Trust Estate, shall be entitled to all of the Voting Rights,
including the right to vote in person or by proxy the Acquirer Special Voting
Share held by the Trustee on any matter, question, proposal or proposition
whatsoever that may properly come before the shareholders of Acquirer at an
Acquirer Meeting or in connection with an Acquirer Consent. The Voting Rights
shall be and remain vested in and exercised by the Trustee. Subject to
Section 6.15
hereof:
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(a)
|
the
Trustee shall exercise the Voting Rights only on the basis of instructions
received pursuant to this Article 4
from Beneficiaries entitled to instruct the Trustee as to the voting
thereof at the time at which the Acquirer Meeting is held or an Acquirer
Consent is sought; and
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(b)
|
to
the extent that no instructions are received from a Beneficiary with
respect to the Voting Rights to which such Beneficiary is entitled,
the
Trustee shall not exercise or permit the exercise of such Voting
Rights.
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Section 4.2 Number
of Votes
With
respect to all meetings of shareholders of Acquirer at which holders of Acquirer
Shares are entitled to vote (each, an "Acquirer
Meeting")
and
with respect to all written consents sought from Acquirer's shareholders,
including the holders of Acquirer Shares (each, an "Acquirer
Consent"),
each
Beneficiary shall be entitled to instruct the Trustee to cast and exercise,
in
the manner instructed, a number of votes equal to the Equivalent Vote Amount
for
each Exchangeable Share owned of record by such Beneficiary on the record date
established by Acquirer or by applicable law for such Acquirer Meeting or
Acquirer Consent, as the case may be (collectively, the "Beneficiary
Votes"),
in
respect of each matter, question, proposal or proposition to be voted on at
such
Acquirer Meeting or consented to in connection with such Acquirer
Consent.
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Any
Beneficiary who chooses to attend an Acquirer Meeting in person will be entitled
to one vote on a show of hands.
Section 4.3 Mailings
to Shareholders
With
respect to each Acquirer Meeting and Acquirer Consent, the Trustee will use
its
reasonable efforts promptly to mail or cause to be mailed (or otherwise
communicate in the same manner as Acquirer utilizes in communications to holders
of Acquirer Shares subject to applicable regulatory requirements and provided
such manner of communications is reasonably available to the Trustee) to each
of
the Beneficiaries named in the List, such mailing or communication to commence
on the same day as the mailing or notice (or other communication) with respect
thereto is commenced by Acquirer to its shareholders:
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(a)
|
a
copy of such notice, together with any related materials, including
any
proxy or information statement, to be provided to shareholders of
Acquirer;
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(b)
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a
statement that such Beneficiary is entitled to instruct the Trustee
as to
the exercise of the Beneficiary Votes with respect to such Acquirer
Meeting or Acquirer Consent or, pursuant to Section 4.7,
to attend such Acquirer Meeting and to exercise personally thereat
the
Beneficiary Votes of such
Beneficiary;
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(c)
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a
statement as to the manner in which such instructions may be given
to the
Trustee, including an express indication that instructions may be
given to
the Trustee to give:
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(i)
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a
proxy to such Beneficiary or its designee to exercise personally
the
Beneficiary Votes; or
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(ii)
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a
proxy to a designated agent or other representative of the management
of
Acquirer to exercise such Beneficiary
Votes;
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(d)
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a
statement that if no such instructions are received from the Beneficiary,
the Beneficiary Votes to which such Beneficiary is entitled will
not be
exercised;
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(e)
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a
form of direction whereby the Beneficiary may so direct and instruct
the
Trustee as contemplated herein; and
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(f)
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a
statement of the time and date by which such instructions must be
received
by the Trustee in order to be binding upon it, which in the case
of a
Acquirer Meeting shall not be earlier than the close of business
on the
second Business Day prior to such meeting, and of the method for
revoking
or amending such instructions.
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7
For
the
purpose of determining Beneficiary Votes to which a Beneficiary is entitled
in
respect of any Acquirer Meeting or Acquirer Consent, the number of Exchangeable
Shares owned of record by the Beneficiary shall be determined at the close
of
business on the record date established by Acquirer or by applicable law for
purposes of determining shareholders entitled to vote at such Acquirer Meeting
or to give written consent in connection with such Acquirer Consent. Acquirer
will notify the Trustee of any decision of the Board of Directors of Acquirer
with respect to the calling of any Acquirer Meeting or the seeking of any
Acquirer Consent and shall provide all necessary information and materials
to
the Trustee in each case promptly and in any event in sufficient time to enable
the Trustee to perform its obligations contemplated by this Section 4.3.
The
materials referred to in this Section 4.3
are to
be provided to the Trustee by Acquirer and the materials referred to in
Section 4.3(c),
Section 4.3(e)
and
Section 4.3(f)
shall be
subject to reasonable comment by the Trustee in a timely manner. Acquirer shall
ensure that the materials to be provided to the Trustee are provided in
sufficient time to permit the Trustee to comment as aforesaid and to send all
materials to each Beneficiary at the same time as such materials are first
sent
to holders of Acquirer Shares. Acquirer agrees not to communicate with holders
of Acquirer Shares with respect to the materials referred to in this
Section 4.3
otherwise than by mail unless such method of communication is also reasonably
available to the Trustee for communication with the Beneficiaries.
Notwithstanding the foregoing, Acquirer may at its option exercise the duties
of
the Trustee to deliver copies of all materials to each Beneficiary as required
by this Section 4.3
so long
as in each case Acquirer delivers a certificate to the Trustee stating that
Acquirer has undertaken to perform the obligations set forth in this
Section 4.3.
Section 4.4 Copies
of Shareholder Information
Acquirer
will deliver to the Trustee copies of all proxy materials (including notices
of
Acquirer Meetings but excluding proxies to vote Acquirer Shares), information
statements, reports (including all interim and annual financial statements)
and
other written communications that, in each case, are to be distributed from
time
to time to holders of Acquirer Shares in sufficient quantities and in sufficient
time so as to enable the Trustee to send those materials to each Beneficiary,
to
the extent possible, at the same time as such materials are first sent to
holders of Acquirer Shares. The Trustee will mail or otherwise send to each
Beneficiary, at the expense of Acquirer, copies of all such materials (and
all
materials specifically directed to the Beneficiaries or to the Trustee for
the
benefit of the Beneficiaries by Acquirer) received by the Trustee from Acquirer,
to the extent possible, at the same time as such materials are sent to holders
of Acquirer Shares. The Trustee will make copies of all such materials available
for inspection by any Beneficiary at the Trustee's principal office in
Calgary,
Alberta.
Notwithstanding the foregoing, Acquirer at its option may exercise the duties
of
the Trustee to deliver copies of all materials to each Beneficiary as required
by this Section 4.4
so long
as in each case Acquirer delivers a certificate to the Trustee stating that
Acquirer has undertaken to perform the obligations set forth in this
Section 4.4.
8
Section 4.5 Other
Materials
As
soon
as reasonably practicable after receipt by Acquirer or holders of Acquirer
Shares (if such receipt is known by Acquirer) of any material sent or given
by
or on behalf of a third party to holders of Acquirer Shares generally, including
dissident proxy and information circulars (and related information and material)
and tender and exchange offer circulars (and related information and material),
Acquirer shall use its reasonable best efforts to obtain and deliver to the
Trustee copies thereof in sufficient quantities so as to enable the Trustee
to
forward such material (unless the same has been provided directly to
Beneficiaries by such third party) to each Beneficiary as soon as possible
thereafter. As soon as reasonably practicable after receipt thereof, the Trustee
will mail or otherwise send to each Beneficiary, at the expense of Acquirer,
copies of all such materials received by the Trustee from Acquirer. The Trustee
will also make available for inspection by any Beneficiary at the Trustee's
principal office in Calgary, Alberta, copies of all such materials.
Notwithstanding the foregoing, Acquirer at its option may exercise the duties
of
the Trustee to deliver copies of all such materials to each Beneficiary as
required by this Section 4.5
so long
as in each case Acquirer delivers a certificate to the Trustee stating that
Acquirer has undertaken to perform the obligations set forth in this
Section 4.5.
Section 4.6 List
of Persons Entitled to Vote
Canco
shall, (a) prior to each annual and special Acquirer Meeting or the seeking
of
any Acquirer Consent and (b) forthwith upon each request made at any time by
the
Trustee in writing, prepare or cause to be prepared a list (a "List")
of the
names and addresses of the Beneficiaries arranged in alphabetical order and
showing the number of Exchangeable Shares held of record by each such
Beneficiary, in each case at the close of business on the date specified by
the
Trustee in such request or, in the case of a List prepared in connection with
an
Acquirer Meeting or an Acquirer Consent, at the close of business on the record
date established by Acquirer or pursuant to applicable law for determining
the
holders of Acquirer Shares entitled to receive notice of and/or to vote at
such
Acquirer Meeting or to give consent in connection with such Acquirer Consent.
Each such List shall be delivered to the Trustee promptly after receipt by
Canco
of such request or the record date for such meeting or seeking of consent,
as
the case may be, and in any event within sufficient time as to permit the
Trustee to perform its obligations under this Agreement. Acquirer agrees to
give
Canco notice (with a copy to the Trustee) of the calling of any Acquirer Meeting
or the seeking of any Acquirer Consent by Acquirer or its management, together
with the record dates therefor, sufficiently prior to the date of the calling
of
such meeting or seeking of such consent so as to enable Canco to perform its
obligations under this Section 4.6.
Section 4.7 Entitlement
to Direct Votes
Any
Beneficiary named in a List prepared in connection with any Acquirer Meeting
or
Acquirer Consent will be entitled (a) to instruct the Trustee in the manner
described in Section 4.2 with respect to the exercise of the Beneficiary Votes
to which such Beneficiary is entitled or (b) to attend such meeting and
personally exercise thereat (or to personally exercise with respect to any
Acquirer Consent), as the proxy of the Trustee, the Beneficiary Votes to which
such Beneficiary is entitled.
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Section 4.8 Voting
by Trustee and Attendance of Trustee Representative at
Meeting
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(a)
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In
connection with each Acquirer Meeting and Acquirer Consent, the Trustee
shall exercise, either in person or by proxy, in accordance with
the
instructions received from a Beneficiary pursuant to Section 4.2,
the
Beneficiary Votes as to which such Beneficiary is entitled to direct
the
vote (or any lesser number thereof as may be set forth in the
instructions); provided, however, that such written instructions
are
received by the Trustee from the Beneficiary prior to the time and
date
fixed by the Trustee for receipt of such instruction in the notice
given
by the Trustee to the Beneficiary pursuant to Section 4.3.
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(b)
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The
Trustee shall cause a representative who is empowered by it to sign
and
deliver, on behalf of the Trustee, proxies for Voting Rights to attend
each Acquirer Meeting. Upon submission by a Beneficiary (or its designee)
of identification satisfactory to the Trustee's representative, and
at the
Beneficiary's request, such representative shall sign and deliver
to such
Beneficiary (or its designee) a proxy to exercise personally the
Beneficiary Votes as to which such Beneficiary is otherwise entitled
hereunder to direct the vote, if such Beneficiary either (i) has
not
previously given the Trustee instructions pursuant to Section 4.2
in
respect of such meeting or (ii) submits to such representative written
revocation of any such previous instructions. At such meeting, upon
receipt of a proxy from the Trustee's representative, the Beneficiary
exercising such Beneficiary Votes shall have the same rights as the
Trustee to speak at the meeting in respect of any matter, question,
proposal or proposition, to vote by way of ballot at the meeting
in
respect of any matter, question, proposal or proposition, and to
vote at
such meeting by way of a show of hands in respect of any matter,
question
or proposition.
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Section 4.9 Distribution
of Written Materials
Any
written materials distributed by or on behalf of the Trustee pursuant to this
Agreement shall be sent by mail (or otherwise communicated in the same manner
as
Acquirer utilizes in communications to holders of Acquirer Shares, subject
to
applicable regulatory requirements and provided such manner of communications
is
reasonably available to the Trustee) to each Beneficiary at its address as
shown
on the books of Canco. Acquirer agrees not to communicate with holders of
Acquirer Shares with respect to such written material otherwise than by mail
unless such method of communication is also reasonably available to the Trustee
for communication with the Beneficiaries. Canco shall provide or cause to be
provided to the Trustee for purposes of communication, on a timely basis and
without charge or other expense:
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(a)
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a
current List; and
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(b)
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upon
the request of the Trustee, mailing labels to enable the Trustee
to carry
out its duties under this
Agreement.
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Canco's
obligations under this Section 4.9
shall be
deemed satisfied to the extent Acquirer exercises its option to perform the
duties of the Trustee to deliver copies of materials to each Beneficiary and
Canco provides the required information and materials to Acquirer.
Section 4.10 Termination
of Voting Rights
Except
as
otherwise provided herein or in the Exchangeable Share Provisions, all of the
rights of a Beneficiary with respect to the Beneficiary Votes exercisable in
respect of the Exchangeable Shares held by such Beneficiary, including the
right
to instruct the Trustee as to the voting of or to vote personally such
Beneficiary Votes, shall be deemed to be surrendered by the Beneficiary to
Acquirer or Callco, as the case may be, and such Beneficiary Votes and the
Voting Rights represented thereby shall cease and be terminated immediately,
upon the delivery by such Beneficiary to the Trustee of the certificates
representing such Exchangeable Shares in connection with the exercise by the
Beneficiary of the Exchange Right or upon the occurrence of the automatic
exchange of Exchangeable Shares for Acquirer Shares, as specified in
Article 5
(unless,
in either case, Acquirer shall not have delivered the Exchangeable Share
Consideration deliverable in exchange therefor to the Trustee for delivery
to
the Beneficiaries), or upon the redemption of Exchangeable Shares pursuant
to
Article 6 or Article 7 of the Exchangeable Share Provisions, or upon the
effective date of the liquidation, dissolution or winding-up of Canco pursuant
to Article 5 of the Exchangeable Share Provisions, or upon the purchase of
Exchangeable Shares from the holder thereof by Callco pursuant to the exercise
by Callco of the Retraction Call Right, the Redemption Call Right or the
Liquidation Call Right, or upon the purchase of Exchangeable Shares from the
holders thereof by Acquirer or Callco pursuant to the exercise by Acquirer
or
Callco of the Change of Law Call Right.
ARTICLE 5
EXCHANGE
RIGHT AND AUTOMATIC EXCHANGE
Section 5.1 Grant
and Ownership of the Exchange Right
Acquirer
hereby grants to the Trustee as trustee for and on behalf of, and for the use
and benefit of, the Beneficiaries the right (the "Exchange
Right"),
upon
the occurrence and during the continuance of an Insolvency Event, to require
Acquirer to purchase from each or any Beneficiary all or any part of the
Exchangeable Shares held by such Beneficiary and the Automatic Exchange Rights,
all in accordance with the provisions of this Agreement. Acquirer hereby
acknowledges receipt from the Trustee as trustee for and on behalf of the
Beneficiaries of good and valuable consideration (and the adequacy thereof)
for
the grant of the Exchange Right and the Automatic Exchange Rights by Acquirer
to
the Trustee. During the term of the Trust and subject to the terms and
conditions of this Agreement, the Trustee shall possess and be vested with
full
legal ownership of the Exchange Right and the Automatic Exchange Rights and
shall be entitled to exercise all of the rights and powers of an owner with
respect to the Exchange Right and the Automatic Exchange Rights, provided that
the Trustee shall:
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(a)
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hold
the Exchange Right and the Automatic Exchange Rights and the legal
title
thereto as trustee solely for the use and benefit of the Beneficiaries
in
accordance with the provisions of this Agreement;
and
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(b)
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except
as specifically authorized by this Agreement, have no power or authority
to exercise or otherwise deal in or with the Exchange Right or the
Automatic Exchange Rights, and the Trustee shall not exercise any
such
rights for any purpose other than the purposes for which the Trust
is
created pursuant to this Agreement.
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Section 5.2 Legended
Share Certificates
Canco
will cause each certificate representing Exchangeable Shares to bear an
appropriate legend notifying the Beneficiaries of:
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(a)
|
their
right to instruct the Trustee with respect to the exercise of the
Exchange
Right in respect of the Exchangeable Shares held by a Beneficiary;
and
|
|
(b)
|
the
Automatic Exchange Rights.
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Section 5.3 General
Exercise of Exchange Right
The
Exchange Right shall be and remain vested in and exercisable by the Trustee.
Subject to Section 6.15,
the
Trustee shall exercise the Exchange Right only on the basis of instructions
received pursuant to this Article 5 from Beneficiaries entitled to instruct
the
Trustee as to the exercise thereof. To the extent that no instructions are
received from a Beneficiary with respect to the Exchange Right, the Trustee
shall not exercise or permit the exercise of the Exchange Right.
Section 5.4 Purchase
Price
The
purchase price payable by Acquirer for each Exchangeable Share to be purchased
by Acquirer 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, Acquirer shall provide
to
the Trustee 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
Acquirer delivering or causing to be delivered to the Trustee, on behalf of
the
relevant Beneficiary, the Exchangeable Share Consideration representing the
total Exchangeable Share Price. Upon payment by Acquirer of such purchase price
to the Trustee for the benefit of the Beneficiary, the relevant Beneficiary
shall cease to have any right to be paid any amount in respect of declared
and
unpaid dividends on each such Exchangeable Share by Canco.
12
Section 5.5 Exercise
Instructions
Subject
to the terms and conditions herein set forth, a Beneficiary shall be entitled,
upon the occurrence and during the continuance of an Insolvency Event, to
instruct the Trustee to exercise the Exchange Right with respect to all or
any
part of the Exchangeable Shares registered in the name of such Beneficiary
on
the books of Canco. To cause the exercise of the Exchange Right by the Trustee,
the Beneficiary shall deliver to the Trustee, in person or by certified or
registered mail, at its principal office in Calgary, Alberta or at such other
places in Canada as the Trustee may from time to time designate by written
notice to the Beneficiaries, the certificates representing the Exchangeable
Shares which such Beneficiary desires Acquirer to purchase, duly endorsed in
blank for transfer, and accompanied by such other documents and instruments
as
may be required to effect a transfer of Exchangeable Shares under the Act and
the by-laws of Canco and such additional documents and instruments as the
Trustee, Canco and Acquirer may reasonably require together with (a) a duly
completed form of notice of exercise of the Exchange Right, contained on the
reverse of or attached to the Exchangeable Share certificates, stating (i)
that
the Beneficiary thereby instructs the Trustee to exercise the Exchange Right
so
as to require Acquirer to purchase from the Beneficiary the number of
Exchangeable Shares specified therein, (ii) that such Beneficiary has good
title
to and owns all such Exchangeable Shares to be acquired by Acquirer free and
clear of all liens, claims, security interests and encumbrances, (iii) the
names
in which the certificates representing Acquirer Shares issuable in connection
with the exercise of the Exchange Right are to be issued and (iv) the names
and
addresses of the persons to whom such new certificates should be delivered,
and
(b) payment (or evidence satisfactory to the Trustee, Canco and Acquirer of
payment) of the taxes (if any) payable as contemplated by Section 5.8
of this
Agreement. If only a part of the Exchangeable Shares represented by any
certificate or certificates delivered to the Trustee are to be purchased by
Acquirer under the Exchange Right, a new certificate for the balance of such
Exchangeable Shares shall be issued to the holder at the expense of
Canco.
13
Section 5.6 Delivery
of Acquirer Shares; Effect of Exercise
Promptly
after the receipt by the Trustee of the certificates representing the
Exchangeable Shares which the Beneficiary desires Acquirer to purchase under
the
Exchange Right, together with such documents and instruments of transfer and
a
duly completed form of notice of exercise of the Exchange Right (and payment
of
taxes, if any payable as contemplated by Section 5.8
or
evidence thereof), duly endorsed for transfer to Acquirer, the Trustee shall
notify Acquirer and Canco of its receipt of the same, which notice to Acquirer
and Canco shall constitute exercise of the Exchange Right by the Trustee on
behalf of the Beneficiary in respect of such Exchangeable Shares, and Acquirer
shall promptly thereafter deliver or cause to be delivered to the Trustee,
for
delivery to the Beneficiary in respect of such Exchangeable Shares (or to such
other persons, if any, properly designated by such Beneficiary) 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 Beneficiary requesting the same shall have paid (or provided evidence
satisfactory to the Trustee, Canco and Acquirer of the payment of) the taxes
(if
any) payable as contemplated by Section 5.8 of this Agreement. Immediately
upon
the giving of notice by the Trustee to Acquirer and Canco of the exercise of
the
Exchange Right, as provided in this Section 5.6, the closing of the transaction
of purchase and sale contemplated by the Exchange Right shall be deemed to
have
occurred, and the Beneficiary of such Exchangeable Shares shall be deemed to
have transferred to Acquirer all of such Beneficiary's right, title and interest
in and to such Exchangeable Shares and in the related interest in the Trust
Estate and shall cease to be a holder of such Exchangeable Shares and shall
not
be entitled to exercise any of the rights of a holder in respect thereof, other
than the right to receive his proportionate part of the total purchase price
therefor, unless such Exchangeable Share Consideration is not delivered by
Acquirer to the Trustee for delivery to such Beneficiary (or to such other
person, if any, properly designated by such Beneficiary) within five Business
Days of the date of the giving of such notice by the Trustee, in which case
the
rights of the Beneficiary shall remain unaffected until such Exchangeable Share
Consideration is delivered by Acquirer and any cheque included therein is paid.
Upon delivery of such Exchangeable Share Consideration by Acquirer to the
Trustee, the Trustee shall deliver such Exchangeable Share Consideration to
such
Beneficiary (or to such other person, if any, properly designated by such
Beneficiary). Concurrently with such Beneficiary ceasing to be a holder of
Exchangeable Shares, the Beneficiary shall be considered and deemed for all
purposes to be the holder of the Acquirer Shares delivered to it pursuant to
the
Exchange Right.
Section 5.7 Exercise
of Exchange Right Subsequent to Retraction
In
the
event that a Beneficiary has exercised its right under Article 6 of the
Exchangeable Share Provisions to require Canco to redeem any or all of the
Exchangeable Shares held by the Beneficiary (the "Retracted
Shares")
and is
notified by Canco pursuant to Section 6.6 of the Exchangeable Share Provisions
that Canco will not be permitted as a result of solvency requirements of
applicable law to redeem all such Retracted Shares, and provided that Callco
shall not have exercised the Retraction Call Right with respect to the Retracted
Shares and that the Beneficiary has not revoked the retraction request delivered
by the Beneficiary to Canco pursuant to Section 6.7 of the Exchangeable Share
Provisions, and provided further that the Trustee has received written notice
of
same from Canco or Acquirer, the retraction request will constitute and will
be
deemed to constitute notice from the Beneficiary to the Trustee instructing
the
Trustee to exercise the Exchange Right with respect to those Retracted Shares
that Canco is unable to redeem. In any such event, Canco hereby agrees with
the
Trustee and in favour of the Beneficiary promptly to forward or cause to be
forwarded to the Trustee all relevant materials delivered by the Beneficiary
to
Canco or to the transfer agent of the Exchangeable Shares (including a copy
of
the retraction request delivered pursuant to Section 6.7 of the Exchangeable
Share Provisions) in connection with such proposed redemption of the Retracted
Shares and the Trustee will thereupon exercise the Exchange Right with respect
to the Retracted Shares that Canco is not permitted to redeem and will require
Acquirer to purchase such shares in accordance with the provisions of this
Article 5.
14
Section 5.8 Stamp
or Other Transfer Taxes
Upon
any
sale of Exchangeable Shares to Acquirer pursuant to the Exchange Right or the
Automatic Exchange Rights, the share certificate or certificates representing
Acquirer Shares to be delivered in connection with the payment of the purchase
price therefor shall be issued in the name of the Beneficiary in respect of
the
Exchangeable Shares so sold or in such names as such Beneficiary may otherwise
direct in writing without charge to the holder of the Exchangeable Shares so
sold; provided, however, that such Beneficiary (a) shall pay (and none of
Acquirer, Canco or the Trustee 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
Beneficiary or evidenced to the satisfaction of the such taxes, if any, have
been paid.
Section 5.9 Notice
of Insolvency Event
As
soon
as practicable following the occurrence of an Insolvency Event or any event
that
with the giving of notice or the passage of time or both would be an Insolvency
Event, Canco and Acquirer shall give written notice thereof to the Trustee.
As
soon as practicable following the receipt of notice from Canco and Acquirer
of
the occurrence of an Insolvency Event, or upon the Trustee becoming aware of
an
Insolvency Event, the Trustee will mail to each Beneficiary, at the expense
of
Acquirer (such funds to be received in advance), a notice of such Insolvency
Event in the form provided by Acquirer, which notice shall contain a brief
statement of the rights of the Beneficiaries with respect to the Exchange
Right.
Section 5.10 Qualification
of Acquirer Shares
Acquirer
covenants that if any Acquirer Shares issuable pursuant to the Exchange Right
or
the Automatic Exchange Rights require registration or qualification with or
approval of or the filing of any document, including any registration statement,
prospectus or similar document, or 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 law or regulation or pursuant to the rules and regulations of any
regulatory authority or stock exchange or the fulfilment of any other Canadian
or United States federal, provincial, territorial or state legal requirement
before such shares may be issued and delivered by Acquirer to the initial holder
thereof or in order that such shares 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 in good faith use its reasonable best efforts
to
take all such actions and do all such things as are necessary or desirable
to
cause such Acquirer Shares to be and remain duly registered, qualified or
approved under United States and/or Canadian law, as the case may be, to the
extent 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 to be delivered pursuant to the Exchange Right or the Automatic
Exchange Rights to be listed, quoted or posted for trading on all stock
exchanges and quotation systems on which outstanding Acquirer Shares are listed,
quoted or posted for trading at such time.
15
Section 5.11 Acquirer
Shares
Acquirer
hereby represents, warrants and covenants that the Acquirer Shares issuable
to
Beneficiaries as described herein will be duly authorized and validly issued,
fully paid and non-assessable and shall be free and clear of any lien, claim
or
encumbrance.
Section 5.12 Automatic
Exchange on Liquidation of Acquirer
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(a)
|
Acquirer
will give the Trustee written notice of each of the following events
at
the time set forth below:
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|
(i)
|
in
the event of any determination by the Board of Directors of Acquirer
to
institute voluntary liquidation, dissolution or winding-up proceedings
with respect to Acquirer or to effect any other distribution of assets
of
Acquirer among its shareholders for the purpose of winding up its
affairs,
at least 60 days prior to the proposed effective date of such liquidation,
dissolution, winding-up or other distribution;
and
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|
(ii)
|
promptly
following the earlier of (A) receipt by Acquirer of notice of, and
(B)
Acquirer 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 Acquirer or to effect any
other
distribution of assets of Acquirer among its shareholders for the
purpose
of winding up its affairs, in each case where Acquirer has failed
to
contest in good faith any such proceeding commenced in respect of
Acquirer
within 30 days of becoming aware
thereof.
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|
(b)
|
Promptly
following receipt by the Trustee from Acquirer of notice of any event
(a
"Liquidation
Event")
contemplated by Section 5.12(a)
above, the Trustee will give notice thereof to the Beneficiaries.
Such
notice shall be provided to the Trustee by Acquirer and shall include
a
brief description of rights of the Beneficiaries with respect to
the
Automatic Exchange Rights provided for in Section 5.12(c).
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(c)
|
In
order that the Beneficiaries will be able to participate on a pro
rata
basis with the holders of Acquirer Shares in the distribution of
assets of
Acquirer 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 Acquirer Shares. To effect such
automatic exchange, Acquirer shall purchase each Exchangeable Share
outstanding immediately prior to the Liquidation Event Effective
Time and
held by Beneficiaries, and each Beneficiary shall sell the Exchangeable
Shares held by such Beneficiary at such time, for a purchase price
per
share equal to the Exchangeable Share Price applicable at that time.
Acquirer shall provide the Trustee with an Officer's Certificate
in
connection with any automatic exchange setting forth the calculation
of
the Exchangeable Share Price for each Exchangeable
Share.
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16
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(d)
|
The
closing of the transaction of purchase and sale contemplated by the
automatic exchange of Exchangeable Shares for Acquirer Shares shall
be
deemed to have occurred immediately prior to the Liquidation Event
Effective Time, and each Beneficiary shall be deemed to have transferred
to Acquirer all of the Beneficiary's right, title and interest in
and to
such Beneficiary's Exchangeable Shares and the related interest in
the
Trust Estate. Any right of each such Beneficiary to receive declared
and
unpaid dividends from Canco shall be deemed to be satisfied and discharged
and each such Beneficiary shall cease to be a holder of such Exchangeable
Shares and Acquirer shall deliver to the Beneficiary the Exchangeable
Share Consideration deliverable upon the automatic exchange of
Exchangeable Shares. Concurrently with such Beneficiary ceasing to
be a
holder of Exchangeable Shares, the Beneficiary shall be considered
and
deemed for all purposes to be the holder of the Acquirer Shares issued
pursuant to the automatic exchange of Exchangeable Shares for Acquirer
Shares and the certificates held by the Beneficiary previously
representing the Exchangeable Shares exchanged by the Beneficiary
with
Acquirer pursuant to such automatic exchange shall thereafter be
deemed to
represent Acquirer Shares issued to the Beneficiary by Acquirer pursuant
to such automatic exchange. Upon the request of a Beneficiary and
the
surrender by the Beneficiary of Exchangeable Share certificates deemed
to
represent Acquirer Shares, duly endorsed in blank and accompanied
by such
instruments of transfer as Acquirer may reasonably require, Acquirer
shall
deliver or cause to be delivered to the Beneficiary certificates
representing Acquirer Shares of which the Beneficiary is the
holder.
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Section 5.13 Withholding
Rights
Acquirer,
Canco and the Trustee shall be entitled to deduct and withhold from any
consideration otherwise payable under this Agreement to any holder of
Exchangeable Shares or Acquirer Shares such amounts as Acquirer, Canco or the
Trustee is required to deduct and withhold with respect to such payment under
the Income
Tax Act
(Canada), the United States Internal Revenue Code of 1986 or any provision
of
federal, provincial, state, local or foreign tax law, in each case as amended
or
succeeded. The Trustee may act on the advice of counsel with respect to such
matters. To the extent that amounts are so withheld, such withheld amounts
shall
be treated for all purposes as having been paid to the holder of the shares
in
respect of which such deduction and withholding was made, provided that such
withheld amounts are actually remitted to the appropriate taxing authority.
To
the extent that the amount so required to be deducted or withheld from any
payment to a holder exceeds the cash portion of the consideration otherwise
payable to the holder, Acquirer, Canco and the Trustee are hereby authorized
to
sell or otherwise dispose of such portion of the consideration as is necessary
to provide sufficient funds to Acquirer, Canco or the Trustee, as the case
may
be, to enable it to comply with such deduction or withholding requirement and
Acquirer, Canco or the Trustee shall notify the holder thereof and remit to
such
holder any unapplied balance of the net proceeds of such sale.
17
ARTICLE 6
CONCERNING
THE TRUSTEE
Section 6.1 Powers
and Duties of the Trustee
The
rights, powers, duties and authorities of the Trustee under this Agreement,
in
its capacity as trustee of the Trust, shall include:
|
(a)
|
receipt
and deposit of the Acquirer Special Voting Share from Acquirer as
trustee
for and on behalf of the Beneficiaries in accordance with the provisions
of this Agreement;
|
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(b)
|
granting
proxies and distributing materials to Beneficiaries as provided in
this
Agreement;
|
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(c)
|
casting
and exercising the Beneficiary Votes in accordance with the provisions
of
this Agreement;
|
|
(d)
|
receiving
the grant of the Exchange Right and the Automatic Exchange Rights
from
Acquirer as trustee for and on behalf of the Beneficiaries in accordance
with the provisions of this
Agreement;
|
|
(e)
|
exercising
the Exchange Right and enforcing the benefit of the Automatic Exchange
Rights, in each case in accordance with the provisions of this Agreement,
and in connection therewith receiving from Beneficiaries Exchangeable
Shares and other requisite documents and distributing to such
Beneficiaries Acquirer Shares and cheques, if any, to which such
Beneficiaries are entitled upon the exercise of the Exchange Right
or
pursuant to the Automatic Exchange Rights, as the case may
be;
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|
(f)
|
holding
title to the Trust Estate;
|
|
(g)
|
investing
any moneys forming, from time to time, a part of the Trust Estate
as
provided in this Agreement;
|
18
|
(h)
|
taking
action on its own initiative or at the direction of a Beneficiary
or
Beneficiaries to enforce the obligations of Acquirer and Canco under
this
Agreement; and
|
|
(i)
|
taking
such other actions and doing such other things as are specifically
provided in this Agreement.
|
In
the
exercise of such rights, powers, duties and authorities, the Trustee shall
have
(and is granted) such incidental and additional rights, powers, duties and
authority not in conflict with any of the provisions of this Agreement as the
Trustee, acting in good faith and in the reasonable exercise of its discretion,
may deem necessary, appropriate or desirable to effect the purpose of the Trust.
Any exercise of such discretionary rights, powers, duties and authorities by
the
Trustee shall be final, conclusive and binding upon all persons.
The
Trustee in exercising its rights, powers, duties and authorities hereunder
shall
act honestly and in good faith and with a view to the best interests of the
Beneficiaries and shall exercise the care, diligence and skill that a reasonably
prudent trustee would exercise in comparable circumstances.
The
Trustee shall not be bound to give notice or do or take any act, action or
proceeding by virtue of the powers conferred on it hereby unless and until
it
shall be specifically required to do so under the terms hereof, nor shall the
Trustee be required to take any notice of, or to do, or to take any act, action
or proceeding as a result of any default or breach of any provision hereunder,
unless and until notified in writing of such default or breach, which notices
shall distinctly specify the default or breach desired to be brought to the
attention of the Trustee, and in the absence of such notice the Trustee may
for
all purposes of this Agreement conclusively assume that no default or breach
has
been made in the observance or performance of any of the representations,
warranties, covenants, agreements or conditions contained herein.
Section 6.2 No
Conflict of Interest
The
Trustee represents to Acquirer and Canco that at the date of execution and
delivery of this Agreement there exists no material conflict of interest in
the
role of the Trustee as a fiduciary hereunder and the role of the Trustee in
any
other capacity. The Trustee shall, within 90 days after it becomes aware that
such material conflict of interest exists, either eliminate such material
conflict of interest or resign in the manner and with the effect specified
in
Article 9. If, notwithstanding the foregoing provisions of this Section 6.2,
the
Trustee has such a material conflict of interest, the validity and
enforceability of this Agreement shall not be affected in any manner whatsoever
by reason only of the existence of such material conflict of interest. If the
Trustee contravenes the foregoing provisions of this Section 6.2,
any
interested party may apply to the Court of Queen's Bench of Alberta for an
order
that the Trustee be replaced as trustee hereunder.
19
Section 6.3 Dealings
with Transfer Agents, Registrars, etc.
Acquirer
and Canco irrevocably authorize the Trustee, from time to time, to:
|
(a)
|
consult,
communicate and otherwise deal with the respective registrars and
transfer
agents, and with any such subsequent registrar or transfer agent,
of the
Exchangeable Shares and Acquirer Shares;
and
|
|
(b)
|
requisition,
from time to time, (i) from any such registrar or transfer agent
any
information readily available from the records maintained by it which
the
Trustee may reasonably require for the discharge of its duties and
responsibilities under this Agreement and (ii) from the transfer
agent of
Acquirer Shares, and any subsequent transfer agent of such shares,
the
share certificates issuable upon the exercise from time to time of
the
Exchange Right and pursuant to the Automatic Exchange
Rights.
|
Acquirer
and Canco irrevocably authorize their respective registrars and transfer agents
to comply with all such requests. Acquirer covenants that it will supply its
transfer agent with duly executed share certificates for the purpose of
completing the exercise from time to time of the Exchange Right and the
Automatic Exchange Rights.
Section 6.4 Books
and Records
The
Trustee shall keep available for inspection by Acquirer and Canco at the
Trustee's principal office in Calgary, Alberta correct and complete books and
records of account relating to the Trust created by this Agreement, including
all relevant data relating to mailings and instructions to and from
Beneficiaries and all transactions pursuant to the Exchange Right and the
Automatic Exchange Rights. On or before January 15 in every year, so long as
any
Acquirer Shares are on deposit with the Trustee, the Trustee shall transmit
to
Acquirer and Canco a brief report, dated as of the preceding December 31, with
respect to:
|
(a)
|
the
property and funds comprising the Trust Estate as of that
date;
|
|
(b)
|
the
number of exercises of the Exchange Right, if any, and the aggregate
number of Exchangeable Shares received by the Trustee on behalf of
Beneficiaries in consideration of the issuance by Acquirer of Acquirer
Shares in connection with the Exchange Right, during the calendar
year
ended on such December 31; and
|
|
(c)
|
any
action taken by the Trustee in the performance of its duties under
this
Agreement which it had not previously reported and which, in the
Trustee's
opinion, materially affects the Trust
Estate.
|
20
Section 6.5 Income
Tax Returns and Reports
The
Trustee shall, to the extent necessary, prepare and file on behalf of the Trust
appropriate United States and Canadian income tax returns and any other returns
or reports as may be required by applicable law or pursuant to the rules and
regulations of any securities exchange or other trading system through which
the
Exchangeable Shares are traded. In connection therewith, the Trustee may obtain
the advice and assistance of such experts or advisors as the Trustee reasonably
considers necessary or advisable (who may be experts or advisors to Acquirer
or
Canco). If requested by the Trustee, Acquirer or Canco shall retain qualified
experts or advisors for the purpose of providing such tax advice or
assistance.
Section 6.6 Indemnification
Prior to Certain Actions by Trustee
The
Trustee shall exercise any or all of the rights, duties, powers or authorities
vested in it by this Agreement at the request, order or direction of any
Beneficiary upon such Beneficiary furnishing to the Trustee reasonable funding,
security or indemnity against the costs, expenses and liabilities which may
be
incurred by the Trustee therein or thereby, provided that no Beneficiary shall
be obligated to furnish to the Trustee any such security or indemnity in
connection with the exercise by the Trustee of any of its rights, duties, powers
and authorities with respect to the Acquirer Special Voting Share held by the
Trustee pursuant to Article 4,
subject
to Section 6.15,
with
respect to the Exchange Right pursuant to Article 5,
subject
to Section 6.15,
and
with respect to the Automatic Exchange Rights pursuant to Article 5,
subject
to Section 6.15.
None
of
the provisions contained in this Agreement shall require the Trustee to expend
or risk its own funds or otherwise incur financial liability in the exercise
of
any of its rights, powers, duties, or authorities unless funded, given security
or indemnified as aforesaid.
Section 6.7 Action
of Beneficiaries
No
Beneficiary shall have the right to institute any action, suit or proceeding
or
to exercise any other remedy authorized by this Agreement for the purpose of
enforcing any of its rights or for the execution of any trust or power hereunder
unless the Beneficiary has requested the Trustee to take or institute such
action, suit or proceeding and furnished the Trustee with the funding, security
or indemnity required by Section 6.6
and the
Trustee shall have failed to act within a reasonable time thereafter. In such
case, but not otherwise, the Beneficiary shall be entitled to take proceedings
in any court of competent jurisdiction such as the Trustee might have taken;
it
being understood and intended that no one or more Beneficiaries shall have
any
right in any manner whatsoever to affect, disturb or prejudice the rights hereby
created by any such action, or to enforce any right hereunder or the Voting
Rights, the Exchange Rights or the Automatic Exchange Rights except subject
to
the conditions and in the manner herein provided, and that all powers and trusts
hereunder shall be exercised and all proceedings at law shall be instituted,
had
and maintained by the Trustee, except only as herein provided, and in any event
for the equal benefit of all Beneficiaries.
21
Section 6.8 Reliance
Upon Declarations
The
Trustee shall not be considered to be in contravention of any of its rights,
powers, duties and authorities hereunder if, when required, it acts and relies
in good faith upon statutory declarations, certificates, opinions, Lists,
reports or other papers or documents furnished pursuant to the provisions hereof
or required by the Trustee to be furnished to it in the exercise of its rights,
powers, duties and authorities hereunder if such statutory declarations,
certificates, opinions, Lists, reports or other papers or documents comply
with
the provisions of Section 6.9,
if
applicable, and with any other applicable provisions of this
Agreement.
Section 6.9 Evidence
and Authority to Trustee
Acquirer
and/or Canco shall furnish to the Trustee evidence of compliance with the
conditions provided for in this Agreement relating to any action or step
required or permitted to be taken by Acquirer and/or Canco or the Trustee under
this Agreement or as a result of any obligation imposed under this Agreement,
including in respect of the Voting Rights or the Exchange Right or the Automatic
Exchange Rights and the taking of any other action to be taken by the Trustee
at
the request of or on the application of Acquirer and/or Canco promptly if and
when:
|
(a)
|
such
evidence is required by any other section of this Agreement to be
furnished to the Trustee in accordance with the terms of this Section 6.9;
or
|
|
(b)
|
the
Trustee, in the exercise of its rights, powers, duties and authorities
under this Agreement, gives Acquirer and/or Canco written notice
requiring
it to furnish such evidence in relation to any particular action
or
obligation specified in such
notice.
|
Such
evidence shall consist of an Officer's Certificate of Acquirer and/or Canco
or a
statutory declaration or a certificate made by persons entitled to sign an
Officer's Certificate stating that any such condition has been complied with
in
accordance with the terms of this Agreement.
Whenever
such evidence relates to a matter other than the Voting Rights or the Exchange
Right or the Automatic Exchange Rights or the taking of any other action to
be
taken by the Trustee at the request or on the application of Acquirer and/or
Canco, and except as otherwise specifically provided herein, such evidence
may
consist of a report or opinion of any solicitor, attorney, auditor, accountant,
appraiser, valuer, engineer or other expert or any other person whose
qualifications give authority to a statement made by him, provided that if
such
report or opinion is furnished by a director, officer or employee of Acquirer
and/or Canco it shall be in the form of an Officer's Certificate or a statutory
declaration.
22
Each
statutory declaration, Officer's Certificate, opinion or report furnished to
the
Trustee as evidence of compliance with a condition provided for in this
Agreement shall include a statement by the person giving the
evidence:
|
(c)
|
declaring
that such person has read and understands the provisions of this
Agreement
relating to the condition in
question;
|
|
(d)
|
describing
the nature and scope of the examination or investigation upon which
such
person based the statutory declaration, certificate, statement or
opinion;
and
|
|
(e)
|
declaring
that such person has made such examination or investigation as such
person
believes is necessary to enable such person to make the statements
or give
the opinions contained or expressed
therein.
|
Section 6.10 Experts,
Advisers and Agents
The
Trustee may:
|
(a)
|
in
relation to these presents act and rely on the opinion or advice
of or
information obtained from any solicitor, attorney, auditor, accountant,
appraiser, valuer, engineer or other expert, whether retained by
the
Trustee or by Acquirer and/or Canco or otherwise, and may retain
or employ
such assistants as may be necessary to the proper discharge of its
powers
and duties and determination of its rights hereunder and may pay
proper
and reasonable compensation for all such legal and other advice or
assistance as aforesaid; and
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|
(b)
|
employ
such agents and other assistants as it may reasonably require for
the
proper determination and discharge of its powers and duties hereunder,
and
may pay reasonable remuneration for all services performed for it
(and
shall be entitled to receive reasonable remuneration for all services
performed by it) in the discharge of the trusts hereof and compensation
for all disbursements, costs and expenses made or incurred by it
in the
discharge of its duties hereunder and in the management of the
Trust.
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Section 6.11 Investment
of Moneys Held by Trustee
Unless
otherwise provided in this Agreement, any moneys held by or on behalf of the
Trustee which under the terms of this Agreement may or ought to be invested
or
which may be on deposit with the Trustee or which may be in the hands of the
Trustee may be invested and reinvested in the name or under the control of
the
Trustee, in trust for Canco, in securities in which, under the laws of the
Province of Alberta, trustees are authorized to invest trust moneys, provided
that such securities are stated to mature within two years after their purchase
by the Trustee, and the Trustee shall so invest such moneys on the written
direction of Canco. Pending the investment of any moneys as hereinbefore
provided, such moneys may be deposited in the name of the Trustee in any
chartered bank in Canada or, with the consent of Canco, in the deposit
department of the Trustee or any other loan or trust company authorized to
accept deposits under the laws of Canada or any province thereof at the rate
of
interest then current on similar deposits.
23
Section 6.12 Trustee
Not Required to Give Security
The
Trustee shall not be required to give any bond or security in respect of the
execution of the trusts, rights, duties, powers and authorities of this
Agreement or otherwise in respect of the premises.
Section 6.13 Trustee
Not Bound to Act on Request
Except
as
in this Agreement otherwise specifically provided, the Trustee shall not be
bound to act in accordance with any direction or request of Acquirer and/or
Canco or of the directors thereof until a duly authenticated copy of the
instrument or resolution containing such direction or request shall have been
delivered to the Trustee, and the Trustee shall be empowered to act and rely
upon any such copy purporting to be authenticated and believed by the Trustee
to
be genuine.
Section 6.14 Authority
to Carry on Business
The
Trustee represents to Acquirer and Canco that at the date of execution and
delivery by it of this Agreement it is authorized to carry on the business
of a
trust company in each of the Provinces of Canada but if, notwithstanding the
provisions of this Section 6.14,
it
ceases to be so authorized to carry on business, the validity and enforceability
of this Agreement and the Voting Rights, the Exchange Right and the Automatic
Exchange Rights shall not be affected in any manner whatsoever by reason only
of
such event but the Trustee shall, within 90 days after ceasing to be authorized
to carry on the business of a trust company in any province of Canada, either
become so authorized or resign in the manner and with the effect specified
in
Article 9.
Section 6.15 Conflicting
Claims
If
conflicting claims or demands are made or asserted with respect to any interest
of any Beneficiary in any Exchangeable Shares, including any disagreement
between the heirs, representatives, successors or assigns succeeding to all
or
any part of the interest of any Beneficiary in any Exchangeable Shares,
resulting in conflicting claims or demands being made in connection with such
interest, then the Trustee shall be entitled, at its sole discretion, to refuse
to recognize or to comply with any such claims or demands. In so refusing,
the
Trustee may elect not to exercise any Voting Rights, Exchange Right or Automatic
Exchange Rights subject to such conflicting claims or demands and, in so doing,
the Trustee shall not be or become liable to any person on account of such
election or its failure or refusal to comply with any such conflicting claims
or
demands. The Trustee shall be entitled to continue to refrain from acting and
to
refuse to act until:
24
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(a)
|
the
rights of all adverse claimants with respect to the Voting Rights,
Exchange Right or Automatic Exchange Rights subject to such conflicting
claims or demands have been adjudicated by a final judgment of a
court of
competent jurisdiction and all rights of appeal have expired;
or
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|
(b)
|
all
differences with respect to the Voting Rights, Exchange Right or
Automatic
Exchange Rights subject to such conflicting claims or demands have
been
conclusively settled by a valid written agreement binding on all
such
adverse claimants, and the Trustee shall have been furnished with
an
executed copy of such agreement certified to be in full force and
effect.
|
If
the
Trustee elects to recognize any claim or comply with any demand made by any
such
adverse claimant, it may in its discretion require such claimant to furnish
such
surety bond or other security satisfactory to the Trustee as it shall deem
appropriate to fully indemnify it as between all conflicting claims or
demands.
Section 6.16 Acceptance
of Trust
The
Trustee hereby accepts the Trust created and provided for by and in this
Agreement and agrees to perform the same upon the terms and conditions herein
set forth and to hold all rights, privileges and benefits conferred hereby
and
by law in trust for the various persons who shall from time to time be
Beneficiaries, subject to all the terms and conditions herein set
forth.
Section 6.17 Maintenance
of Office or Agency
Acquirer
will maintain in Calgary, Alberta an office or agency where certificates
representing Exchangeable Shares may be presented or surrendered for exchange
by
Beneficiaries and where notices and demands to or upon Acquirer or Canco in
respect of the Exchangeable Shares may be served. Acquirer will give prompt
written notice to the Trustee of the location, and any change in the location,
of such office or agency. If at any time Acquirer shall fail to maintain any
such office or agency or shall fail to furnish the Trustee with the address
thereof, such presentations, surrenders, notices and demands may be served
at
the Corporate Trust Office of the Trustee, and Acquirer and Canco hereby appoint
the Trustee as their agent to receive all such presentations, surrenders,
notices and demands. Furthermore, copies of all Acquirer proxy materials will
be
made available for inspection by any Beneficiary at such office or
agency.
25
ARTICLE 7
COMPENSATION
Section 7.1 Fees
and Expenses of the Trustee
Acquirer
and Canco jointly and severally agree to pay the Trustee reasonable compensation
for all of the services rendered by it under this Agreement and will reimburse
the Trustee for all reasonable expenses (including taxes other than taxes based
on the net income of the Trustee, fees paid to legal counsel and other experts
and advisors and travel expenses) and disbursements, including the cost and
expense of any suit or litigation of any character and any proceedings before
any governmental agency reasonably incurred by the Trustee in connection with
its duties under this Agreement; provided that Acquirer and Canco shall have
no
obligation to reimburse the Trustee for any expenses or disbursements paid,
incurred or suffered by the Trustee in any suit or litigation in which the
Trustee is determined to have acted in bad faith or with gross negligence,
recklessness or wilful misconduct.
ARTICLE 8
INDEMNIFICATION
AND LIMITATION OF LIABILITY
Section 8.1 Indemnification
of the Trustee
Acquirer
and Canco jointly and severally agree to indemnify and hold harmless the Trustee
and each of its directors, officers, employees and agents appointed and acting
in accordance with this Agreement (collectively, the "Indemnified
Parties")
against all claims, losses, damages, reasonable costs, penalties, fines and
reasonable expenses (including reasonable expenses of the Trustee's legal
counsel) which, without fraud, gross negligence, recklessness, wilful misconduct
or bad faith on the part of such Indemnified Party, may be paid, incurred or
suffered by the Indemnified Party by reason or as a result of the Trustee's
acceptance or administration of the Trust, its compliance with its duties set
forth in this Agreement, or any written or oral instruction delivered to the
Trustee by Acquirer or Canco pursuant hereto.
Acquirer
or Canco shall not be liable under this indemnity for any claim against any
of
the Indemnified Parties unless Acquirer and Canco shall be notified by the
Trustee of the written assertion of a claim or of any action commenced against
the Indemnified Parties, promptly after any of the Indemnified Parties shall
have received any such written assertion of a claim or shall have been served
with a summons or other first legal process giving information as to the nature
and basis of the claim, but Acquirer and Canco shall not be liable only to
the
extent that a delay in such notification by the Trustee prejudices the claim.
Subject to (ii) below, Acquirer and Canco shall be entitled to participate at
their own expense in the defense and, if Acquirer and Canco so elect at any
time
after receipt of such notice, either of them may assume the defense of any
suit
brought to enforce any such claim. The Trustee shall have the right to employ
separate counsel in any such suit and participate in the defense thereof, but
the fees and expenses of such counsel shall be at the expense of the Trustee
unless: (i) the employment of such counsel has been authorized by Acquirer
or
Canco; or (ii) the named parties to any such suit include both the Trustee
and
Acquirer or Canco and the Trustee shall have been advised by counsel acceptable
to Acquirer or Canco that there may be one or more legal defenses available
to
the Trustee that are different from or in addition to those available to
Acquirer or Canco and that, in the judgment of such counsel, would present
a
conflict of interest were a joint representation to be undertaken (in which
case
Acquirer and Canco shall not have the right to assume the defense of such suit
on behalf of the Trustee but shall be liable to pay the reasonable fees and
expenses of counsel for the Trustee). This indemnity shall survive the
termination of this Agreement and the resignation or removal of the
Trustee.
26
Section 8.2 Limitation
of Liability
The
Trustee shall not be held liable for any loss which may occur by reason of
depreciation of the value of any part of the Trust Estate or any loss incurred
on any investment of funds pursuant to this Agreement, except to the extent
that
such loss is attributable to the fraud, gross negligence, recklessness, wilful
misconduct or bad faith on the part of the Trustee.
ARTICLE 9
CHANGE
OF TRUSTEE
Section 9.1 Resignation
The
Trustee, or any trustee hereafter appointed, may at any time resign by giving
written notice of such resignation to Acquirer and Canco specifying the date
on
which it desires to resign, provided that such notice shall not be given less
than thirty (30) days before such desired resignation date unless Acquirer
and
Canco otherwise agree and provided further that such resignation shall not
take
effect until the date of the appointment of a successor trustee and the
acceptance of such appointment by the successor trustee. Upon receiving such
notice of resignation, Acquirer and Canco shall promptly appoint a successor
trustee, which shall be a corporation organized and existing under the laws
of
Canada or any Province thereof, by written instrument in duplicate, one copy
of
which shall be delivered to the resigning trustee and one copy to the successor
trustee. Failing the appointment and acceptance of a successor trustee, a
successor trustee may be appointed by order of a court of competent jurisdiction
upon application of one or more of the parties to this Agreement. If the
retiring trustee is the party initiating an application for the appointment
of a
successor trustee by order of a court of competent jurisdiction, Acquirer and
Canco shall be jointly and severally liable to reimburse the retiring trustee
for its legal costs and expenses in connection with same.
Section 9.2 Removal
The
Trustee, or any trustee hereafter appointed, may (provided a successor trustee
is appointed) be removed at any time on not less than 30 days' prior notice
by
written instrument executed by Acquirer and Canco, in duplicate, one copy of
which shall be delivered to the trustee so removed and one copy to the successor
trustee.
27
Section 9.3 Successor
Trustee
Any
successor trustee appointed as provided under this Agreement shall execute,
acknowledge and deliver to Acquirer and Canco and to its predecessor trustee
an
instrument accepting such appointment. Thereupon the resignation or removal
of
the predecessor trustee shall become effective and such successor trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, duties and obligations of its predecessor under this Agreement,
with the like effect as if originally named as trustee in this Agreement.
However, on the written request of Acquirer and Canco or of the successor
trustee, the trustee ceasing to act shall, upon payment of any amounts then
due
it pursuant to the provisions of this Agreement, execute and deliver an
instrument transferring to such successor trustee all the rights and powers
of
the trustee so ceasing to act. Upon the request of any such successor trustee,
Acquirer, Canco and such predecessor trustee shall execute any and all
instruments in writing for more fully and certainly vesting in and confirming
to
such successor trustee all such rights and powers.
Section 9.4 Notice
of Successor Trustee
Upon
acceptance of appointment by a successor trustee as provided herein, Acquirer
and Canco shall cause to be mailed notice of the succession of such trustee
hereunder to each Beneficiary specified in a List. If Acquirer or Canco shall
fail to cause such notice to be mailed within 10 days after acceptance of
appointment by the successor trustee, the successor trustee shall cause such
notice to be mailed at the expense of Acquirer and Canco.
ARTICLE 10
ACQUIRER
SUCCESSORS
Section 10.1 Certain
Requirements in Respect of Combination, etc.
Acquirer
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, but may do so if:
|
(a)
|
such
other person or continuing corporation (herein called 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, a trust
agreement supplemental hereto and such other instruments (if any)
as are
satisfactory to the Trustee, acting reasonably, and in the opinion
of
legal counsel to the Trustee are reasonably necessary or advisable
to
evidence the assumption by the Acquirer Successor of liability for
all
moneys payable and property deliverable hereunder (including without
limitation one or more voting securities of such Acquirer Successor
to
allow Beneficiaries to exercise voting rights in respect of the Acquirer
Successor substantially similar to those provided for in this Agreement
in
respect of Acquirer) 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 under this
Agreement; and
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28
|
(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 Trustee or of the Beneficiaries
hereunder.
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Section 10.2 Vesting
of Powers in Successor
Whenever
the conditions of Section 10.1
have
been duly observed and performed, the Trustee, Acquirer Successor and Canco
shall, if required by Section 10.1,
execute
and deliver the supplemental trust agreement provided for in Article 11
and
thereupon Acquirer Successor shall possess and from time to time may exercise
each and every right and power of Acquirer 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.
Section 10.3 Wholly-Owned
Subsidiaries
Nothing
herein shall be construed as preventing the amalgamation or merger of any
wholly-owned direct or indirect subsidiary of Acquirer 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 10.
Section 10.4 Successorship
Transaction
Notwithstanding
the foregoing provisions of this Article 10,
in the
event of an Acquirer Control Transaction:
|
(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 Income
Tax Act (Canada)
(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;
|
29
then
(i) 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 this 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 this
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 this Agreement and without any further action required;
and (ii) Acquirer
shall cause the Other Corporation to deposit one or more voting securities
of
such Other Corporation to allow Beneficiaries to exercise voting rights in
respect of the Other Corporation substantially similar to those provided for
in
this Agreement.
ARTICLE 11
AMENDMENTS
AND SUPPLEMENTAL TRUST AGREEMENTS
Section 11.1 Amendments,
Modifications, etc.
This
Agreement may not be amended or modified except by an agreement in writing
executed by Acquirer, Canco and the Trustee and approved by the Beneficiaries
in
accordance with Section 10.2
of the
Exchangeable Share Provisions.
Section 11.2 Ministerial
Amendments
Notwithstanding
the provisions of Section 11.1,
the
parties to this Agreement may in writing, at any time and from time to time,
without the approval of the Beneficiaries, amend or modify this Agreement for
the purposes of
|
(a)
|
adding
to the covenants of any or all parties hereto for the protection
of the
Beneficiaries hereunder provided that the Board of Directors of each
of
Canco and Acquirer shall be of the good faith opinion that such additions
will not be prejudicial to the rights or interests of the
Beneficiaries;
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|
(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 Acquirer
and Canco and in the opinion of the Trustee, having in mind the best
interests of the Beneficiaries it may be expedient to make, provided
that
such Boards of Directors and the Trustee, acting on the advice of
counsel,
shall be of the opinion that such amendments and modifications will
not be
prejudicial to the interests of the Beneficiaries;
or
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30
|
(c)
|
making
such changes or corrections which, on the advice of counsel to Acquirer,
Canco and the Trustee, 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 Trustee,
acting
on the advice of counsel, and the Board of Directors of each of Acquirer
and Canco shall be of the opinion that such changes or corrections
will
not be prejudicial to the rights and interests of the
Beneficiaries.
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Section 11.3 Meeting
to Consider Amendments
Canco,
at
the request of Acquirer, shall call a meeting or meetings of the Beneficiaries
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 Canco, the Exchangeable Share Provisions
and
all applicable laws; 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 (as defined in the Exchangeable Share Provisions) to occur
or
transpire.
Section 11.4 Changes
in Capital of Acquirer and Canco
At
all
times after the occurrence of any event contemplated pursuant to Section 2.7
or
2.8 of the Support Agreement 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.
Section 11.5 Execution
of Supplemental Trust Agreements
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. From time to time Canco,
Acquirer and the Trustee may, subject to the provisions of these presents,
and
they shall, when so directed by these presents, execute and deliver by their
proper officers, trust agreements or other instruments supplemental hereto,
which thereafter shall form part hereof, for any one or more of the following
purposes:
|
(a)
|
evidencing
the succession of Acquirer Successors and the covenants of and obligations
assumed by each such Acquirer Successor in accordance with the provisions
of Article 10
and the successors of any successor trustee in accordance with the
provisions of Article 9;
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|
(b)
|
making
any additions to, deletions from or alterations of the provisions
of this
Agreement or the Voting Rights, the Exchange Right or the Automatic
Exchange Rights which, in the opinion of the Trustee, will not be
prejudicial to the interests of the Beneficiaries or are, in the
opinion
of counsel to the Trustee, necessary or advisable in order to incorporate,
reflect or comply with any legislation the provisions of which apply
to
Acquirer, Canco, the Trustee or this Agreement;
and
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31
|
(c)
|
for
any other purposes not inconsistent with the provisions of this Agreement,
including to make or evidence any amendment or modification to this
Agreement as contemplated hereby, provided that, in the opinion of
the
Trustee, the rights of the Trustee and Beneficiaries will not be
prejudiced thereby.
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ARTICLE 12
TERMINATION
Section 12.1 Term
The
Trust
created by this Agreement shall continue until the earliest to occur of the
following events:
|
(a)
|
no
outstanding Exchangeable Shares are held by a
Beneficiary;
|
|
(b)
|
each
of Acquirer and Canco elects in writing to terminate the Trust and
such
termination is approved by the Beneficiaries in accordance with Section
13.2 of the Exchangeable Share Provisions;
and
|
|
(c)
|
21
years after the death of the last survivor of the descendants of
His
Majesty King ▇▇▇▇▇▇ VI of Canada and the United Kingdom of Great
Britain
and Northern Ireland living on the date of the creation of the
Trust.
|
Section 12.2 Survival
of Agreement
This
Agreement shall survive any termination of the Trust and shall continue until
there are no Exchangeable Shares outstanding held by a Beneficiary; provided,
however, that the provisions of Article 7
and
Article 8
shall
survive any such termination of this Agreement.
ARTICLE 13
GENERAL
Section 13.1 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.
32
Section 13.2 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
Canco may assign in its sole discretion, any or all of its rights, interests
and
obligations hereunder to any wholly-owned subsidiary of Acquirer.
Section 13.3 Binding
Effect
Subject
to Section 13.2,
this
Agreement shall be binding upon, enure to the benefit of and be enforceable
by
the parties hereto and their respective successors and assigns and to the
benefit of the Beneficiaries.
Section 13.4 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:
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(a)
|
if
to Acquirer or Canco, at:
|
CanWest
Petroleum Corporation
Suite
205, 707 - 7th
Avenue
S.W.
▇▇▇▇▇▇▇,
▇▇ ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇
Attention:
Chief Executive Officer
Telecopier
Number: (▇▇▇) ▇▇▇-▇▇▇▇
With
a
copy to:
▇▇▇▇▇▇▇
▇▇▇▇▇ llp
▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Attention:
▇▇▇▇▇ ▇▇▇▇▇▇▇
Telecopier
Number: (▇▇▇) ▇▇▇-▇▇▇▇
33
|
(b)
|
if
to the Trustee, at:
|
Computershare
Trust Company of Canada
▇▇▇,
▇▇▇
- ▇▇▇
▇▇▇▇▇▇
▇.▇.
▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇
▇▇▇
▇▇▇
Attention:
Manager, Corporate Trust
Telecopier
Number: (▇▇▇) ▇▇▇-▇▇▇▇
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.
Section 13.5 Notice
to Beneficiaries
Any
and
all notices to be given and any documents to be sent to any Beneficiaries may
be
given or sent to the address of such Beneficiary shown on the register of
holders of Exchangeable Shares in any manner permitted by the by-laws of Canco
from time to time in force in respect of notices to shareholders and shall
be
deemed to be received (if given or sent in such manner) at the time specified
in
such by-laws, the provisions of which by-laws shall apply mutatis mutandis
to
notices or documents as aforesaid sent to such Beneficiaries.
Section 13.6 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.
Section 13.7 Governing
Laws; Consent to Jurisdiction
This
Agreement shall be governed by and construed in accordance with the laws of
Alberta. Each party hereby irrevocably attorns to the jurisdiction of the courts
of Alberta in respect of all matters arising under or in relation to this
Agreement and Acquirer hereby appoints ▇▇▇▇▇▇▇ ▇▇▇▇▇ llp
as its
registered office in Alberta as attorney for service of process.
▇▇▇▇▇▇▇ ▇▇.▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ Tax Characterization
The
parties hereto recognize and intend that, for United States federal, state
and
local income, franchise and similar tax purposes, the Trust will be disregarded
as an entity separate from Acquirer pursuant to Treas. Reg. 301.7701-3(b),
and
no party shall take any position on any tax return or otherwise that is
inconsistent with such treatment.
34
IN
WITNESS WHEREOF the
parties hereto have caused this Agreement to be duly executed as of the date
first above written.
|
CANWEST
PETROLEUM CORPORATION
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||
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By:
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||
|
Name:
|
||
|
Title:
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||
|
By:
|
||
|
Name:
|
||
|
Title:
|
||
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OILSANDS
QUEST INC.
|
||
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By:
|
||
|
Name:
|
||
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Title:
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||
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By:
|
||
|
Name:
|
||
|
Title:
|
||
|
COMPUTERSHARE
TRUST COMPANY OF CANADA
|
||
|
By:
|
||
|
Name:
|
||
|
Title:
|
||
|
By:
|
||
|
Name:
|
||
|
Title:
|
||
35