Exhibit 1
ACQUISITION AGREEMENT
THIS AGREEMENT made this 1st day of March, 2000.
B E T W E E N:
CANADIAN OCCIDENTAL PETROLEUM LTD., a
corporation governed by the laws of Canada,
("CanOxy")
- and -
OCCIDENTAL PETROLEUM CORPORATION, a
corporation governed by the laws of the State
of Delaware,
("Occidental")
- and -
ONTARIO TEACHERS' PENSION PLAN BOARD, a
corporation without share capital governed by
the laws of Ontario
("Teachers'")
WHEREAS:
A. CanOxy is a corporation governed by the Canada Business Corporations
Act;
B. The authorized capital of CanOxy consists of an unlimited number of
common shares, of which approximately 138,293,572 common shares are outstanding;
C. OCI 1 and OCI 2, which are indirect, wholly-owned subsidiaries of
Occidental, own, in the aggregate, 40,223,620 (approximately 29% of the
outstanding) common shares of CanOxy;
D. Teachers' wishes to purchase from OCI 1, OCI 2 and, if applicable,
OxyChem (Canada) an aggregate of 20,223,620 common shares of CanOxy; and
E. CanOxy wishes to purchase for cancellation from OCI 1 and, if
applicable, OCI 2, an aggregate of 20,000,000 common shares of CanOxy.
NOW THEREFORE in consideration of the mutual covenants set out in this
agreement and other good and valuable consideration, the receipt and sufficiency
of which are acknowledged, the parties agree that:
1. Definitions
In this agreement, and any amendments hereto, the following terms shall
have the following meanings:
"Agency" means any domestic or foreign court or tribunal or government
agency or other regulatory authority or administrative agency or
commission or any elected or appointed public official.
"business day" means any day other than Saturday, Sunday, a federal
holiday in Canada or a day on which banks are not open for business in
Toronto or Calgary.
"CanOxy Disclosure Documents" means the CanOxy Annual Report on Form
10-K filed with the Ontario Securities Commission and the United States
Securities and Exchange Commission in respect of the year ended
December 31, 1998 and all audited and interim financial statements,
reports to shareholders and other non-confidential reports and
documents filed by CanOxy with the Ontario Securities Commission and
the United States Securities and Exchange Commission from January 1,
1999 to the date of this agreement.
"CanOxy Purchased Shares" means the 20,000,000 common shares of CanOxy
to be purchased for cancellation by CanOxy, subject to the terms and
conditions of this agreement.
"Closing" means the closing of the transactions contemplated by this
agreement occurring on the Closing Date.
"Closing Date" means the business day following the approval referred
to in ss.3.A(b) or such other date as may be mutually agreed by the
parties, but in any event no later than May 16, 2000.
"Confidentiality Agreement" means the confidentiality agreement between
CanOxy and Teachers' dated February 18, 2000.
"CPEL" means Canadian Petroleum Ecuador Limited, a Jersey corporation.
"HSR Act" means the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of
1976, as amended.
"Law" means all laws, by-laws, rules, regulations, orders, ordinances,
protocols, codes, guidelines, policies, notices, directions and
judgments or other requirements of any Agency which are binding on a
person.
"OCC" means Occidental Chemical Corporation, a New York corporation.
"OCI 1" means Occidental Chemical Investment (Canada) 1 Inc., a
Delaware corporation owning 35,764,388 common shares of CanOxy.
"OCI 2" means Occidental Chemical Investment (Canada) 2 Inc., a
Delaware corporation owning 4,459,232 common shares of CanOxy.
"OPSA" means Occidental Petroleum (South America), Inc., a Delaware
corporation.
"OxyChem (Canada)" means OxyChem (Canada), Inc., an Alberta
corporation, owning limited partnership interests in CXY Chemicals
Canada Limited Partnership, a limited partnership formed under the Laws
of the Province of British Columbia.
"person" means an individual, corporation, incorporated or
unincorporated association, syndicate or organization, partnership,
trust, trustee, executor, administrator or other legal representative.
"Tax Act" means the Income Tax Act (Canada).
"Teachers' Purchased Shares" means the 20,223,620 common shares of
CanOxy to be purchased by Teachers', subject to the terms and
conditions of this agreement.
2. Purchase and Sale
A. Purchase and Sale of the CanOxy Purchased Shares.
Subject to the terms and conditions of this agreement, on the Closing
Date and immediately prior to the purchase by Teachers' of the Teachers'
Purchased Shares pursuant to ss.2.B Occidental shall cause OCI 1 and, if
notified by Occidental not less than 5 business days prior to the Closing Date,
OCI 2, to sell to CanOxy the CanOxy Purchased Shares free and clear of all
liens, charges, encumbrances and rights of others and CanOxy shall purchase for
cancellation the CanOxy Purchased Shares from OCI 1 and, if applicable, OCI 2.
The consideration to be paid by CanOxy for the CanOxy Purchased Shares shall be
$29.61 per share, which shall be paid by wire transfer to an account to be
specified in writing by Occidental at least one business day prior to the
Closing Date upon delivery by Occidental to CanOxy of certificates evidencing
the CanOxy Purchased Shares, duly endorsed in blank for transfer. In no event
shall CanOxy have any obligation to purchase the CanOxy Purchased Shares unless
Teachers' and Occidental have taken all steps necessary to effect the purchase
and sale of the Teachers' Purchased Shares pursuant to ss.2.B immediately after
the purchase and sale pursuant to this ss.2.A. CanOxy shall withhold, and remit
in accordance with Part XIII of the Tax Act and the Canada/United States Tax
Convention, all applicable withholdings in respect of the dividend deemed to be
paid by CanOxy on the disposition of the CanOxy Purchased Shares. If the Canada
Customs and Revenue Agency should later determine that a different amount should
have been withheld and remitted and requires the payment of additional amounts
by (or rebates a portion of the amounts paid to) CanOxy, Occidental and CanOxy,
as the case may be, shall make such payments as are necessary to reflect the
additional payment or rebate.
B. Purchase and Sale of Teachers' Purchased Shares.
Subject to the terms and conditions of this agreement, on the Closing
Date and immediately after the purchase by CanOxy of the CanOxy Purchased Shares
pursuant to ss.2.A, Occidental shall cause OCI 1, OCI 2 and OxyChem (Canada), as
the case may be, to sell to Teachers' the Teachers' Purchased Shares free and
clear from all liens, charges, encumbrances and rights of others and Teachers'
shall purchase the Teachers' Purchased Shares from OCI 1, OCI 2 and OxyChem
(Canada), as the case may be. The consideration to be paid by Teachers' for the
Teachers' Purchased Shares shall be $29.61 per share, which shall be paid by
wire transfer to an account to be specified in writing by Occidental at least
one business day prior to the Closing Date upon delivery by Occidental to
Teachers' of one or more share certificates evidencing the Teachers' Purchased
Shares duly endorsed for transfer to a person or persons designated by Teachers'
in writing prior to the Closing Date. CanOxy shall immediately thereafter cause
its transfer agent to issue one or more share certificates registered in the
name of such person or persons designated by Teachers', representing the
Teachers' Purchased Shares.
C. Distributions.
Concurrently with the delivery of the certificates referred to in
ss.2.A and B, Occidental shall cause OCI 1, OCI 2 and OxyChem (Canada), as the
case may be, to deliver to CanOxy and Teachers', as the case may be, all right,
title and interest they may have in and to any and all securities, rights,
warrants or other interests or amounts accrued, declared, paid, issued,
transferred, made or distributed on or in respect of the CanOxy Purchased Shares
and the Teachers' Purchased Shares, respectively, on or after February 16, 2000.
D. Exchange of Properties.
(a) On the Closing Date, Occidental shall:
(i) effective February 1, 2000, cause OxyChem (Canada) to
transfer free and clear from all liens, charges, encumbrances
or rights of others all of its right, title and interest in
CXY Chemicals Canada Limited Partnership, a British Columbia
limited partnership, to an entity designated by CanOxy for
value as agreed between Occidental and CanOxy; and
(ii) effective January 1, 2000, cause OCC to transfer free and
clear from all liens, charges, encumbrances or rights of
others, all of its right, title and interest in CXY Chemicals
U.S.A., a Delaware general partnership, to an entity
designated by CanOxy for value as agreed between Occidental
and CanOxy.
(b) On the Closing Date, CanOxy, as duly authorized agent of CPEL, will
take such steps as are necessary to transfer effective January 1, 2000
free and clear from all liens, charges, encumbrances or rights of
others, all of its right, title and interest in and to 150 shares of
Class B Common Stock, $1.00 par value per share, of OPSA to an entity
designated by Occidental for value as agreed between Occidental and
CanOxy.
(c) No adjustments shall be made in connection with the transfer of
interests and shares described in this ss.0 except those certain
advanced dividends relating to the OPSA shares made subsequent to
January 1, 2000.
(d) The respective obligations of CanOxy and Occidental to complete the
transfers contemplated by ss.2.D(a) and (b) above (the "Asset Swap")
shall be subject to the fulfilment, or the waiver by each of them, at
or prior to the Closing Date of the condition that any applicable
waiting periods under the HSR Act shall have expired or been earlier
terminated.
(e) Each of CanOxy and Occidental shall promptly prepare and submit all
necessary applications, notices and other documents required to be
filed by and in connection with the transactions contemplated by
ss.2.D(a)(ii) above pursuant to the HSR Act and shall promptly file
such additional information as may be properly requested pursuant to
the HSR Act and take such other reasonable action as may be required
to terminate the waiting period under the HSR Act.
(f) If the applicable waiting period under the HSR Act has not expired or
been earlier terminated by the Closing Date, the parties shall complete
the transactions contemplated by ss.2.A, B and C above in accordance
with the terms of the agreement and shall defer completion of the Asset
Swap until such time as such applicable waiting periods have expired or
been earlier terminated. Prior to December 31, 2000 each of Occidental
and CanOxy shall use their reasonable commercial efforts to complete
the Asset Swap but if it has not been completed by December 31, 2000
then the obligations of CanOxy and Occidental hereunder with respect to
the Asset Swap shall terminate.
(g) Each entity designated by CanOxy or Occidental, as the case may be,
shall itself be solely responsible for any transfer tax applicable in
respect of such entity in relation to the transactions contemplated by
this ss.2.D and, for greater certainty, the applicable purchase price
is exclusive of any such taxes. Under no circumstances shall Teachers'
be responsible for any such taxes.
E. Time and Place of Closing.
Closing shall take place at 8:00 am on the Closing Date at the offices
of Blake, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, Calgary, or at such time and place as the
parties may agree.
3. Conditions to this Agreement
A. Mutual Conditions.
The respective obligations of CanOxy, Occidental and Teachers' to
complete the transactions contemplated by this agreement shall be subject to the
fulfilment, or the waiver by each of them, of the following conditions on or
prior to the Closing Date:
(a) no judgment or order shall have been issued by any of the Agencies, no
action, suit or proceedings shall have been threatened or taken by any
of the Agencies, and no Law shall have been proposed, enacted, or
promulgated or applied, to cease trade, enjoin, or prohibit the
completion of the transactions contemplated in this agreement; and
(b) CanOxy shall have received discretionary relief from the Alberta
Securities Commission such that the purchase by CanOxy of the CanOxy
Purchased Shares shall not be subject to the issuer bid requirements of
the Securities Act (Alberta), and the acquisition by CanOxy of the
CanOxy Purchased Shares and, if necessary, the transfers referred to in
ss.2.D shall have been approved by a majority of the votes cast by
holders of common shares of CanOxy (disregarding any votes cast by
Teachers' and Occidental) at the Annual and Special Meeting of CanOxy
to be held on or before May 15, 2000.
B. Conditions in Favour of CanOxy.
The obligations of CanOxy to complete the transactions contemplated by
this agreement shall be subject to the fulfilment, or the waiver by CanOxy, of
the following conditions at or prior to the Closing Date, each of which is for
the exclusive benefit of CanOxy and may be waived by CanOxy at any time, in
whole or in part, in its sole discretion without prejudice to any other rights
that it may have:
(a) neither Teachers' nor Occidental shall have failed to perform or comply
with any of the material obligations, covenants and agreements to be
performed by it under this agreement on or prior to the Closing Date;
(b) the representations and warranties of Teachers' and Occidental,
respectively, set forth in this agreement shall be true and correct in
all material respects on and as of the Closing Date (as if made on and
as of that date);
(c) Dr. ▇▇▇ ▇▇▇▇▇ and ▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇▇ shall have resigned as directors of
CanOxy; and
(d) CanOxy shall have received a certificate from each of Occidental and
Teachers', in each case signed by two senior officers and dated the
Closing Date, to the effect that, to the best of the knowledge,
information and belief of each such officer (without personal
liability), each of the foregoing conditions (as it relates to
Occidental or Teachers', as the case may be) has been fulfilled.
C. Conditions in Favour of Occidental
The obligations of Occidental to complete the transactions contemplated
by this agreement shall be subject to the fulfilment, or the waiver by
Occidental, of the following conditions at or prior to the Closing Date, each of
which is for the exclusive benefit of Occidental and may be waived by Occidental
at any time, in whole or in part, in its sole discretion without prejudice to
any other rights that it may have:
(a) neither Teachers' nor CanOxy shall have failed to perform or comply
with any of the material obligations, covenants and agreements to be
performed by it under this agreement on or prior to the Closing Date;
(b) the representations and warranties of Teachers' and CanOxy,
respectively, set forth in this agreement shall be true and correct in
all material respects on and as of the Closing Date (as if made on and
as of that date, except the representations and warranties provided in
ss.4.A(d) and (f), which are given as of the date of this agreement and
shall have been true and correct on and as of that date); and
(c) Occidental shall have received a certificate from each of CanOxy and
Teachers', in each case signed by two senior officers and dated the
Closing Date, to the effect that, to the best of the knowledge,
information and belief of each such officer (without personal
liability), each of the foregoing conditions (as it relates to CanOxy
or Teachers', as the case may be) has been fulfilled.
D. Conditions in Favour of Teachers'.
The obligations of Teachers' to complete the transactions contemplated
by this agreement shall be subject to the fulfilment, or the waiver by
Teachers', of the conditions at or prior to the Closing Date, each of which is
for the exclusive benefit of Teachers' and may be waived by Teachers' at any
time, in whole or in part, in its sole discretion without prejudice to any other
rights that it may have:
(a) neither Occidental nor CanOxy shall have failed to perform or comply
with any of the material obligations, covenants and agreements to be
performed by it under this agreement on or prior to the Closing Date;
(b) the representations and warranties of Occidental and CanOxy set forth
in this agreement shall be true and correct in all material respects on
and as of the Closing Date (as if made on and as of that date, except
the representations and warranties provided in ss.4.A(d) and (f), which
are given as of the date of this agreement and shall have been true and
correct on and as of that date);
(c) no changes shall have occurred in the share capital of CanOxy that
would cause the 2,234,798 common shares of CanOxy currently held by
Teachers' together with the 1,500 common shares that Teachers' is
entitled to acquire pursuant to options that it currently holds and the
Teachers' Purchased Shares to represent 20% or more than the
outstanding common shares of CanOxy, after giving effect to the
purchase and cancellation by CanOxy of the CanOxy Purchased Shares;
(d) Dr. ▇▇▇ ▇▇▇▇▇ and ▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇▇ shall have resigned as directors of
CanOxy; and
(e) Teachers' shall have received a certificate from each of Occidental and
CanOxy, in each case signed by two senior officers and dated the
Closing Date, to the effect that, to the best of the knowledge,
information and belief of each such officer (without personal
liability), each of the foregoing conditions (as it relates to
Occidental or CanOxy, as the case may be) has been fulfilled.
E. Satisfaction, Waiver and Release of Conditions.
The conditions provided for in this ss.3 shall be deemed conclusively
to have been satisfied, waived or released on the Closing of the purchases and
sales pursuant to ss.2.
4. Representations and Warranties
A. Representations and Warranties of CanOxy.
CanOxy represents and warrants to Occidental and Teachers' that:
(a) Organization and Qualification.
(i) CanOxy is a corporation validly existing under the Canada
Business Corporations Act and has full corporate power and
authority to own its own property and conduct its businesses
as currently owned and conducted.
(ii) CPEL is a corporation validly existing under the Laws of
Jersey and has full power and authority to own its own
property and conduct its businesses as currently owned and
conducted.
(b) Capitalization. The authorized capital of CanOxy consists of an
unlimited number of common shares, of which approximately 138,293,572
shares are issued and outstanding. Except for the rights of persons
created pursuant to this agreement, CanOxy's stock option plan,
CanOxy's dividend reinvestment plan or as disclosed in the CanOxy
Disclosure Documents, there are no options, warrants, conversion
privileges, calls or other rights, agreements, arrangements,
commitments or obligations of CanOxy to issue, sell or acquire any
CanOxy common shares or securities or obligations of any kind
convertible into or exchangeable for any CanOxy common shares, nor are
there outstanding any stock appreciation rights, phantom equity or
similar rights, agreements, arrangements or commitments based upon the
book value, income or any other attribute of CanOxy.
(c) Authority Relative to this Agreement. CanOxy has the requisite
corporate power and authority to enter into this agreement and to
perform CanOxy's obligations under this agreement for itself, and as
agent for CPEL. The execution and delivery of this agreement by and the
completion by CanOxy for itself, and as agent for CPEL, of the
transactions contemplated by this agreement have been duly authorized
by the boards of directors of CanOxy and CPEL and no other proceedings
on the part of CanOxy or CPEL are necessary to authorize this agreement
and the transactions contemplated hereby, other than receiving the
approval set out in ss.3.A(b). This agreement has been duly executed
and delivered by CanOxy and constitutes a valid and binding obligation
of CanOxy, enforceable by Occidental and Teachers' against CanOxy in
accordance with its terms, subject to the availability of equitable
remedies and the enforcement of creditors' rights generally. The
execution and delivery by CanOxy of this agreement and the performance
by each of CanOxy and CPEL of the obligations of CanOxy hereunder will
not result in a violation or breach of any provision of or constitute a
default (or an event that with notice or lapse of time or both would
become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of or under:
(i) the constitutional documents (including articles or other
organization documents or by-laws) of CanOxy or CPEL;
(ii) any applicable Law; or
(iii) any agreement, arrangement or understanding to which CanOxy
or CPEL is a party or by which either of them or their
properties is bound or affected.
(d) Financial Statements and Disclosure Documents. The audited financial
statements of CanOxy prepared on a consolidated basis for and as at the
year ended December 31, 1998 and the unaudited interim financial
statements of CanOxy prepared on a consolidated basis for and as at the
periods ended March 31, 1999, June 30, 1999 and September 30, 1999 have
been prepared in accordance with generally accepted accounting
principles and fairly present the consolidated financial position of
CanOxy as at the respective dates thereof and consolidated results of
their operations and cash flows for the periods indicated therein. The
CanOxy Disclosure Documents include all the documents that CanOxy was
required to file with the Ontario Securities Commission or the United
States Securities and Exchange Commission on or after December 31,
1998. As of their respective dates, none of the CanOxy Disclosure
Documents or the draft Form 10-K provided by CanOxy to Teachers'
(including all exhibits and schedules to those documents and documents
incorporated by reference) contained any untrue statement of fact or
omitted to state a fact in either case material to CanOxy and which was
required to be stated therein or was necessary in order to make the
statements contained therein with respect to CanOxy, in light of the
circumstances under which they were made, not misleading, and each of
those documents was in compliance in all respects material to CanOxy
with applicable Laws.
(e) Ownership of Shares of Occidental Petroleum (South America), Inc. CPEL
is the legal and beneficial owner of the Class B shares of OPSA, free
and clear of any liens, charges, encumbrances or rights of others
(other than the rights of Occidental under this agreement). CPEL is an
indirect wholly-owned subsidiary of CanOxy. There is no contract,
option or other right of another Person binding upon or which at any
time in the future may become binding upon CanOxy or CPEL in relation
to the shares of OPSA (other than the rights of Occidental under this
agreement). The shares of OPSA are not "taxable Canadian property" for
purposes of the Tax Act.
(f) Absence of Certain Changes or Events. From December 31, 1998 to the
date of this agreement, except as disclosed in the CanOxy Disclosure
Documents:
(i) none of CanOxy or its subsidiaries has declared or made any
distributions (in cash, securities or other property) to
securityholders (other than dividends declared and paid by
CanOxy in accordance with established dividend policy) or
entered into any agreement, disposed of any their assets or
incurred any indebtedness which, either individually or in
the aggregate, is materially adverse to CanOxy and its
subsidiaries, taken as a whole, other than in the ordinary
course of business;
(ii) no liability or obligation of any nature (whether absolute,
accrued, contingent or otherwise) that is materially adverse
to CanOxy and its subsidiaries, taken as a whole, has been
incurred other than in the ordinary course of business; and
(iii) there has not been any change that, individually or in the
aggregate, is or has been materially adverse to CanOxy and
its subsidiaries, taken as a whole (including any decision to
implement such a change made by a board of directors or
senior management of a company who believe that confirmation
of the decision by the relevant board of directors is
probable).
B. Representations and Warranties of Occidental.
Occidental represents and warrants to CanOxy and Teachers' that:
(a) Organization and Qualification.
(i) Occidental is a corporation validly existing under the Laws
of the State of Delaware and has full power and authority to
own its property and conduct its businesses as currently
owned and conducted.
(ii) OCI 1 is a corporation validly existing under the Laws of the
State of Delaware and has full power and authority to own its
property and conduct its businesses as currently owned and
conducted.
(iii) OCI 2 is a corporation validly existing under the Laws of the
State of Delaware and has full power and authority to own its
property and conduct its businesses as currently owned and
conducted.
(iv) OCC is a corporation validly existing under the Laws of the
State of New York and has full power and authority to own its
property and conduct its businesses as currently owned and
conducted.
(v) OxyChem (Canada) is a corporation validly existing under the
Laws of Alberta and has full power and authority to own its
property and conduct its businesses as currently owned and
conducted. OxyChem (Canada) is not a non-resident for
purposes of the Tax Act.
(b) Authority Relative to this Agreement. Occidental has the requisite
corporate power and authority to enter into this agreement and to
perform, or cause OCI 1, OCI 2, OCC and OxyChem (Canada) to perform,
Occidental's obligations under this agreement. The execution and
delivery of this agreement by Occidental have been duly authorized by
the board of directors (directly or by a duly authorized committee of
the board of directors) and/or, if applicable, the shareholders of
Occidental, OCI 1, OCI 2, OCC and OxyChem (Canada) and no other
corporate proceedings on the part of Occidental, OCI 1, OCI 2, OCC or
OxyChem (Canada) are necessary to authorize this agreement and the
transactions contemplated hereby. This agreement has been duly executed
and delivered by Occidental and constitutes a legal, valid and binding
obligation of Occidental, enforceable by Teachers' and CanOxy against
Occidental in accordance with its terms, subject to the availability of
equitable remedies and the enforcement of creditors' rights generally.
The execution and delivery by Occidental of this agreement and the
performance by it (and OCI 1, OCI 2, OCC and OxyChem (Canada)) of its
obligations hereunder will not result in a violation or breach of any
provision of or constitute a default (or an event that with notice or
lapse of time or both would become a default) under, or give to others
any rights of termination, amendment, acceleration or cancellation of
or under,
(i) the constitutional documents (including articles or other
organizational documents or by-laws) of Occidental, OCI 1,
OCI 2, OCC or OxyChem (Canada);
(ii) any applicable Law; or
(iii) any agreement, arrangement or understanding to which
Occidental, OCI 1, OCI 2, OCC or OxyChem (Canada) is a party
or by which any of them or their properties is bound or
affected.
(c) Ownership of Purchased Shares. As at the date hereof, OCI 1 and OCI 2
are the legal and beneficial owners of the Teachers' Purchased Shares
and the CanOxy Purchased Shares, free and clear of any liens, charges,
encumbrances or rights of others (other than the rights of Teachers'
and CanOxy under this agreement). OCI 1 and OCI 2 are wholly-owned
subsidiaries of Occidental. There is no contract, option or other right
of another Person binding upon or which at any time in the future may
become binding upon Occidental, OCI 1 or OCI 2 in relation to the
Teachers' Purchased Shares or the CanOxy Purchased Shares (other than
the rights of Teachers' and CanOxy under this agreement).
(d) Ownership of Partnership Interests. OCC is the legal and beneficial
owner of a 15% general partnership interest in CXY Chemicals U.S.A.,
and OxyChem (Canada) is the legal and beneficial owner of a 15% limited
partnership interest in CXY Chemicals Canada Limited Partnership, in
each case, free and clear of any liens, charges, encumbrances or rights
of others (other than the rights of CanOxy under this agreement). There
is no contract, option or other right of another Person binding upon or
which at any time in the future may become binding upon Occidental or
OCC in relation to the interest in CXY Chemicals U.S.A., or Occidental
or OxyChem (Canada) in relation to the interest in CXY Chemicals Canada
Limited Partnership (other than the interest of CanOxy under this
agreement).
(e) Disclosure. Occidental has no reason to believe that, as of their
respective dates, any of the CanOxy Disclosure Documents (including all
exhibits and schedules to these documents and documents incorporated by
reference) contained any untrue statement of fact or omitted to state
any fact, in either case, material to CanOxy and which was required to
be stated therein or was necessary in order to make the statements
contained therein with respect to CanOxy, in light of the circumstances
under which they were made, not misleading, or that any of those
documents was not in compliance in all respects material to CanOxy with
applicable Laws. Occidental has no knowledge of any other material
adverse information with respect to the current and prospective
business operations of CanOxy that has not been generally disclosed.
C. Representations and Warranties of Teachers'.
Teachers' represents and warrants to Occidental and CanOxy that:
(a) Organization and Qualification. Teachers' is a corporation validly
existing under the Teachers' Pension Act (Ontario) and has full power
and authority to own its assets and conduct its businesses as currently
owned and conducted.
(b) Authority Relative to this Agreement. Teachers' has the requisite power
and authority to enter into this agreement and to perform its
obligations under this agreement. The execution and delivery of this
agreement by Teachers' and the completion by Teachers' of the
transactions contemplated by this agreement have been duly authorized
by the Teachers' Pension Plan Board and no other proceedings on the
part of Teachers' are necessary to authorize this agreement and the
transactions contemplated hereby. This agreement has been duly executed
and delivered by Teachers' and constitutes a legal, valid and binding
obligation of Teachers', enforceable by CanOxy and Occidental against
Teachers' in accordance with its terms, subject to the availability of
equitable remedies and the enforcement of creditors' rights generally.
The execution and delivery by Teachers' of this agreement and the
performance by it of its obligations hereunder will not result in a
violation or breach of any provision of or constitute a default (or an
event that with notice or lapse of time or both would become a default)
under, or give to others any rights of termination, amendment,
acceleration or cancellation of or under:
(i) its constitutional documents (including articles or other
organizational documents or by-laws);
(ii) any applicable Law; or
(iii) any agreement, arrangement or understanding by which it is a
party or by which it is bound or affected.
(c) Shareholdings. Teachers' beneficially owns (within the meaning of Part
XX of the Securities Act (Ontario)) only 2,234,798 common shares of
CanOxy (excluding the Teachers' Purchased Shares and 1,500 common
shares that are subject to an option in favour of Teachers').
(d) Purchaser Experience. Teachers' is an institutional investor and has
such knowledge and experience in financial and business matters as to
be capable of evaluating independently the merits, risks and
suitability of entering into this agreement and purchasing the
Teachers' Purchased Shares. Teachers' has made an independent
investigation into the business and financial condition of CanOxy, and,
other than the representations and warranties expressly provided in
this agreement, has not relied, and will not hereafter rely, on
Occidental or any of its affiliates (other than CanOxy and CanOxy's
officers, directors, employees, representatives and agents),
controlling persons, officers, directors, employees, representatives or
agents (collectively, "Representatives") with respect to such matters
or to update Teachers' with respect to such matters.
(e) Representatives. One or more of the Representatives are members of the
Board of Directors of CanOxy. Occidental and such Representatives may
have received, or may in the future receive, material non-public
information regarding CanOxy and its condition (financial and
otherwise), results of operations, businesses, properties, plans and
prospects, which Occidental and such Representatives are not permitted
to disclose. Teachers' acknowledges and agrees that neither Occidental
nor any of its Representatives have any obligation to disclose any such
information to Teachers'. Teachers' waives and releases, to the fullest
extent permitted by law, any and all claims, causes of action and
remedies Teachers' has or may have against Occidental and its
Representatives based upon, relating to or arising out of nondisclosure
of such information. Provided that nothing in this ss.4.C(e) shall
limit or qualify any representation or warranty given by Occidental to
Teachers' in the agreement or affect any rights of Teachers' pursuant
to this agreement or to take any action in respect of this agreement.
(f) Restricted Securities. Teachers' acknowledges that if Occidental is an
affiliate of CanOxy for the purposes of the U.S. Securities Act of
1933, as amended (the "Securities Act"), on the Closing Date, the
Teachers' Purchased Shares are restricted securities under the
Securities Act and the rules and regulations promulgated thereunder,
and are being acquired from Occidental in a transaction not involving
any public offering. Teachers' is acquiring the Teachers' Purchased
Shares as principal, for investment purposes, and not with a view to,
or for resale in connection with, any distribution of the CanOxy
Shares, other than resales contemplated by this agreement. Teachers'
agrees not to resell the Teachers' Purchased Shares except pursuant to
registration under the Securities Act or an applicable exemption
therefrom (including Rule 144 and Regulation S).
D. Survival of Representations, Warranties and Covenants.
The representations, warranties, covenants and agreements of CanOxy,
Occidental and Teachers' contained in this agreement shall merge upon, and shall
not survive, the closing of the acquisitions contemplated in ss.2, except for:
(a) the representations and warranties in ss.4.A(b), (c) and (e),
ss.4.B(b), (c), (d) and (e) and ss.4.C(b), which shall survive
indefinitely, and the representations and warranties in ss.4.A(d) and
(f) and ss.4.C(d), (e) and (f) which shall survive for one year after
the Closing; and
(b) the covenants contained in ss.5.A and ss.6, which shall survive
indefinitely.
5. Implementation
A. General.
Each of CanOxy, Occidental and Teachers' shall use all reasonable
efforts to satisfy each of the conditions precedent to be satisfied by it, as
soon as practical and in any event before the Closing Date, and to take, or
cause to be taken, all other action and to do, or cause to be done, all other
things necessary, proper or advisable to permit the completion of the
transactions contemplated in this agreement in accordance with this agreement,
and applicable Law and to co-operate with each other in connection therewith,
including using all reasonable efforts to effect or cause to be effected all
necessary registrations and filings and submissions of information requested of
it by Agencies, the failure of which to effect would prevent the completion of
this agreement or could reasonably be expected to be materially adverse to
CanOxy, Occidental or Teachers'.
B. Access to Information.
Until the Closing Date, CanOxy shall continue to afford to Teachers'
and its representatives and its officers, employees and agents, access to the
businesses, properties, assets, officers, employees, agents, books and records
of CanOxy and its subsidiaries relevant to the transactions contemplated by this
agreement in a manner consistent with the access afforded to Teachers' in the
period between that date of the Confidentiality Agreement and the date of this
agreement.
C. Shareholder Meeting.
CanOxy will duly call and hold a meeting of its shareholders for the
purpose of obtaining the approval referred to in ss.3.A(b) as soon as
practicable (and in any event not later than May 15, 2000) and in connection
therewith the directors of CanOxy will recommend, and the management of CanOxy
will solicit proxies in favour of, such approval.
6. Ongoing Obligations
A. Board of Directors.
From the Closing Date, so long as Teachers' continuously holds
(directly and indirectly) at least 10% of the outstanding common shares of
CanOxy, Teachers' shall be allowed one board member's position on the CanOxy
board. If, immediately after the time any person is to be elected or appointed
as a director of CanOxy the person last nominated by Teachers' to serve as a
member of the board would not be a director of CanOxy, at least 20 business days
before the date of notice of the meeting at which a director is to be elected or
appointed, CanOxy shall deliver to Teachers' a list of those directors who are
proposed for election or appointment. Teachers' shall, in its sole discretion,
have the right (by delivery of a written notice to CanOxy within 10 business
days of receipt from CanOxy of the proposed list) to designate one individual to
the list of persons to be nominated by CanOxy (or its management, as the case
may be) to serve as a member of the board of directors of CanOxy upon completion
of that process of election or appointment. CanOxy shall use all reasonable
efforts (including naming that nominee in the slate of directors proposed in
materials sent by CanOxy to its shareholders) to cause the nominee of Teachers'
to be elected or appointed to the board of directors.
B. Registration Rights.
CanOxy shall afford Teachers' registration rights on the basis set out
in Schedule "A" commencing on the Closing Date.
C. Occidental Standstill.
During the period of one year following the Closing Date, Occidental
and its Affiliates (including any person or entity, directly or indirectly,
through one or more intermediaries, controlled by or under common control with
Occidental and any other person or entity formed or organized for the purpose of
a transaction described below in which Occidental or its affiliates participate)
shall not, without the prior written authorisation of Teachers':
(a) acquire, agree to acquire, make any proposal to acquire or assist any
person in acquiring, in any manner, any common shares of CanOxy or any
securities convertible into or exchangeable for common shares of CanOxy
in an amount that would require disclosure pursuant to Section 13d of
the United States Securities Exchange Act of 1934, as amended; or
(b) solicit proxies of CanOxy's shareholders, or form, join or in any way
participate in a proxy group.
D. Use of Name and Marks
CanOxy agrees to: (a) use its commercially reasonable efforts to
eliminate the name "Occidental" from its name and the names of its subsidiaries
as promptly as practicable after the Closing Date; (b) cease using the
"Occidental" and "Oxy" names and marks within eighteen months after the Closing;
and (c) use the "Occidental" and "Oxy" names and marks during the period
specified in ss.6.D(b) only in the manner in which they were used by CanOxy
immediately prior to the Closing.
CanOxy further agrees that all uses of the "Occidental" and "Oxy" names
and marks by CanOxy shall be controlled by and inure to the benefit of
Occidental and that Occidental shall retain sole and exclusive ownership rights
in the names and marks.
7. Termination and Amendment of Agreement
A. Termination.
The provisions of this agreement may be terminated at any time before
the Closing:
(a) by agreement in writing executed by CanOxy, Occidental and Teachers';
(b) by CanOxy, at any time after May 16, 2000, if the conditions provided
in ss.3.A and B have not been satisfied on or before that date;
(c) by Occidental, at any time after May 16, 2000, if the conditions
provided in ss.3.A and C have not been satisfied on or before that
time; and
(d) by Teachers', at any time after May 16, 2000, if the conditions
provided in ss.3.A and D have not been satisfied on or before that
date.
B. Amendment.
This agreement and any rights under Schedule "A" may be amended only by
written agreement of the parties at any time.
8. Confidentiality and Public Disclosure
Prior to the first public announcement of this agreement and the
transactions that it contemplates, disclosure of this agreement, its terms and
conditions and the transactions that it contemplates shall be made only:
(a) with the approval of CanOxy, Occidental and Teachers', which approval
shall not be withheld unreasonably, may be oral, and may be given on
behalf of a party by its counsel;
(b) as required by any Law or Agency; or
(c) as may be necessary to implement this agreement.
9. Ongoing Consulting
The parties shall at all times consult with the others as to the timing
and wording of press releases and other public disclosure of or relating to this
agreement or the transactions that it contemplates; provided however that each
of the parties acknowledges and agrees that no such consultation shall delay or
otherwise restrict any other party's obligation under applicable Law to file
this agreement and disclose its contents in filings with securities or other
applicable regulatory authorities or stock exchanges.
10. General
A. Assignment.
This agreement and any rights under Schedule "A" shall not be
assignable by any party; provided this shall not in any way limit the rights of
nominees of Teachers' under Schedule "A" as provided in that Schedule.
B. Binding Effect.
This agreement shall be binding upon and shall enure to the benefit of
and be enforceable by the parties hereto and their respective successors and
permitted assigns.
C. Responsibility for Expenses.
Except as otherwise expressly provided in this agreement, each party to
this agreement shall pay its own expenses incurred in connection with this
agreement and the completion of the transactions that it contemplates including,
but not limited to, the fees and expenses of its legal and financial advisors,
and any commission, fee or other remuneration payable by such party or any of
its subsidiaries to any broker or agent who purports or may purport to act or
have acted for such party or any of its subsidiaries in connection with the
transactions contemplated in this agreement.
D. Time.
Time shall be of the essence of this agreement in each and every matter
or thing herein provided.
E. Notices.
Any notice or other communications required or permitted to be given
hereunder shall be sufficiently given if delivered in person or if sent by
facsimile transmission (provided such transmission is recorded as being
transmitted successfully):
(i) in the case of CanOxy, to the following address:
Canadian Occidental Petroleum Ltd.
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▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Chief Financial Officer
(ii) in the case of Occidental, to the following address:
Occidental Petroleum Corporation
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Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
With a copy to: Occidental Petroleum Corporation
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
(iii) in the case of Teachers', to the following address:
Ontario Teachers' Pension Plan Board
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▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇ ▇. ▇▇▇▇▇▇▇
or at such other address as the party to which such notice or other
communication is to be given has last notified the party giving the same in the
manner provided in this section, and if so given the same shall be deemed to
have been received on the date of such delivery or sending.
F. Governing Law.
This agreement and the rights, obligations and relations of the parties
shall be governed by and construed in accordance with the Laws of the Province
of Alberta (but without giving effect to the conflict of laws rules thereof) and
the Laws of Canada applicable therein. Each party hereto agrees that the courts
of the Province of Alberta shall have jurisdiction to entertain any action or
other legal proceedings based on any provisions of this agreement. Each party
does irrevocably attorn to the jurisdiction of the courts of the Province of
Alberta.
G. Currency.
Except as expressly indicated otherwise, all sums of money referred to
in this agreement are expressed and shall be paid in Canadian dollars.
H. Entire Agreement.
With respect to the subject matter of this agreement, this agreement
and the Confidentiality Agreement:
(a) set forth the entire agreement between the parties.
(b) supersede all prior understandings and communications between the
parties, oral or written.
I. Counterparts.
This agreement may be signed in any number of counterparts (by
facsimile or otherwise), each of which shall be deemed to be original and all of
which, when taken together, shall be deemed to constitute one and the same
instrument. It shall not be necessary in making proof of this agreement to
produce more than one counterpart.
J. Waiver.
The failure of either party to enforce at any time any of the
provisions of this agreement or any of its rights in respect thereto or to
insist upon strict adherence to any term of this agreement shall not be
considered to be a waiver of such provision, right or term or in any way to
affect the validity of this agreement or deprive the applicable party of the
right thereafter to insist upon strict adherence to that term or any other term
of this agreement. The exercise by either party of any of its rights provided by
this agreement shall not preclude or prejudice such party from exercising any
other right it may have under this agreement, irrespective of any previous
action or proceeding taken by it hereunder. Any waiver by either party of the
performance of any of the provisions of this agreement shall be effective only
if in writing and signed by a duly authorized representative of such party.
K. Severability.
If any provision of this agreement is invalid or unenforceable, such
provision shall be severed and the remainder of this agreement shall be
unaffected thereby, but shall continue to be valid and enforceable to the
fullest extent permitted by law.
L. Waiver of Confidentiality Agreement.
CanOxy and Teachers' hereby agree to waive ss.13 of the Confidentiality
Agreement.
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IN WITNESS WHEREOF the parties have hereunto duly executed this
agreement on the date first above written.
CANADIAN OCCIDENTAL PETROLEUM LTD.
Per: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Authorized Signatory
OCCIDENTAL PETROLEUM CORPORATION
Per: /s/ ▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇▇
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Authorized Signatory
ONTARIO TEACHERS' PENSION PLAN BOARD
Per: /s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------
Authorized Signatory
SCHEDULE A
REGISTRATION RIGHTS
1. Certain Definitions
In this Schedule "A", the following terms shall have the following
meanings:
"Canadian Prospectus" shall mean a prospectus prepared in accordance with
applicable Canadian Securities Laws for the purposes of qualifying
securities for distribution or distribution to the public, as the case may
be, in any province or territory of Canada.
"Canadian Securities Laws" shall mean the statutes and regulations
applicable to the trading of securities in any province or territory of
Canada including applicable rules, policy statements and blanket rulings
and orders promulgated by Canadian securities regulatory authorities.
"Commission" shall mean the United States Securities and Exchange
Commission.
"Common Shares" shall mean any common shares of CanOxy and any shares into
which such common shares may be exchanged.
"Long Demand Registration" shall mean a registration requested under ss.2.1
that, in order to be considered a Demand Registration, the applicable
registration statement must have been declared effective and remain
effective for not less than 90 days (or such shorter period as will
terminate when all Registrable Securities covered by such registration
statement have been sold or withdrawn by Teachers').
"Person" shall mean any natural person, corporation, partnership, firm,
association, trust, government, governmental agency or other entity,
whether acting in an individual, fiduciary or other capacity.
"register", "registered" and "registration" shall refer to a registration
effected by preparing and filing a registration statement in compliance
with the U.S. Securities Act and the declaration or ordering of the
effectiveness of such registration statement. In addition, unless
inconsistent with the context: (i) the term "registration" and any
references to the act of registering include the qualification under
Canadian Securities Laws of a Canadian Prospectus in respect of a
distribution or distribution to the public, as the case may be, of
securities; (ii) the term "registered" as applied to any securities
includes a distribution or distribution to the public, as the case may be,
of securities so qualified; (iii) the term "registration statement"
includes a Canadian Prospectus; (iv) any references to a registration
statement having become effective, or similar references, shall include a
Canadian Prospectus for which a final receipt has been obtained from the
relevant Canadian securities regulatory authorities; and (v) the provisions
of this Schedule shall be applied, mutatis mutandis, to any proposed
distribution of securities hereunder in any province or territory of Canada
or to which the prospectus requirements under any of the Canadian
Securities Laws shall otherwise apply.
"Registrable Securities" shall mean all Common Shares held by Teachers'
from time to time. As to any particular Registrable Securities, such
securities shall cease to be Registrable Securities when (i) a registration
statement with respect to the sale of such securities shall have been
declared effective under the applicable Securities Laws and such securities
shall have been disposed of in accordance with such registration statement
or (ii) such securities shall have been sold pursuant to Rule 144 (or any
successor provision) under the U.S. Securities Act and in compliance with
the requirements of Rule 144.
"Securities Laws" means the U.S. Securities Act together with the Canadian
Securities Laws.
"Short Demand Registration" shall mean a registration requested under ss.
2.1 that, in order to be considered a Demand Registration, the applicable
registration statement must have been declared effective and remain
effective for not less than 20 days (or such shorter period as will
terminate when all Registrable Securities covered by such registration
statement have been sold or withdrawn by Teachers').
"U.S. Securities Act" means the United States Securities Act of 1933, as
amended, and the rules and regulations promulgated thereunder.
2. Registration Rights
2.1 Demand Registrations
(a) Beginning 5 years after the Closing Date, and continuing so long as
Teachers' continuously owns (directly or indirectly) at least 10% of
the outstanding Common Shares, Teachers' shall have the right to
require CanOxy to file a registration statement (other than a shelf
registration statement) under the Securities Laws covering any of the
Registrable Securities (but not more than one Long Demand Registration
and one Short Demand Registration in any 12 month period) by
delivering a written request to CanOxy specifying (i) whether the
registration requested is a Long Demand Registration or a Short Demand
Registration, and (ii) the number of Registrable Securities to be
included in such registration by Teachers' and the intended method of
distribution. All requests pursuant to thisss.2.1 are referred to as
"Demand Registration Requests", and the registrations requested are
referred to as "Demand Registrations".
(b) CanOxy shall, as expeditiously as possible following a Demand
Registration Request, use its best efforts to (i) effect such
registration under the Securities Laws of the Registrable Securities
which CanOxy has been so requested to register, for distribution in
accordance with such intended method of distribution and (ii) if
requested by Teachers', obtain as soon as is practicable, acceleration
of the effective date of the registration statement relating to such
registration.
(c) The Demand Registration rights granted under this ss. 2.1 are subject
to the following limitations:
(i) CanOxy shall not be required to cause a registration pursuant to
this ss. 2.1 to be declared effective within a period of 90 days
after the last date of the "black out" or "lock-up" period
provided by CanOxy in any underwriting agreement entered into in
connection with the preceding registration statement of CanOxy
filed pursuant to a Demand Registration Request;
(ii) if the board of directors of CanOxy, in its good faith judgment,
determines that any registration of Registrable Securities should
not be made or continued because (x) it would materially
interfere with any material financing, acquisition, merger or
other similar transaction involving CanOxy, or (y) CanOxy is in
possession of material non-public information which, the board of
directors of CanOxy, in its good faith judgment, determines
(based on the advice of counsel) would be required to be
disclosed in any such registration of Registrable Securities and
that such disclosure would have a material adverse effect on
CanOxy or its securityholders (both being a "Valid Business
Reason"), (A) CanOxy may postpone filing a registration statement
relating to a Demand Registration Request until such Valid
Business Reason no longer exists, but in no event for more than
90 days, and (B) if a registration statement has been filed
relating to a Demand Registration Request, if the Valid Business
Reason has not resulted from actions taken by CanOxy, CanOxy may
cause such registration statement to be withdrawn and its
effectiveness terminated or may postpone amending or
supplementing such registration statement until such Valid
Business Reason no longer exists, but in no event for more than
90 days (such period of postponement or withdrawal
underss.2.1(c)(ii)(A) or (B), the "Postponement Period"); and
CanOxy shall give written notice of its determination to postpone
or withdraw a registration statement and of the fact that the
Valid Business Reason for such postponement or withdrawal no
longer exists, in each case, promptly after the occurrence
thereof; provided, however, that CanOxy shall not be permitted to
postpone or withdraw a registration statement after the
expiration of any Postponement Period until six months after the
expiration of such Postponement Period.
(iii) if CanOxy shall give any notice of postponement or withdrawal of
any registration statement underss. 2.1(c)(ii)(A) or (B), CanOxy
shall not, during the Postponement Period, register any of its
Common Shares under any of the Securities Laws (other than a
registration regarding a previously established employee benefit
plan, employee stock option plan, employee flow through share
purchase plan, dividend reinvestment plan or COPrS or a
registration statement on Form S-4 or S-8 (or an equivalent
registration form then in effect) or an equivalent Canadian
Prospectus relating to the transaction that constitutes the Valid
Business Reason). Upon receipt of any notice from CanOxy that
CanOxy has determined to withdraw or postpone any registration
statement pursuant toss. 2.1(c)(ii) above, Teachers' will
discontinue its disposition of Registrable Securities pursuant to
such registration statement and, if CanOxy has determined to
withdraw any registration statement and so directs Teachers',
Teachers' will deliver to CanOxy (at CanOxy's expense) all
copies, other than permanent file copies, then in Teachers'
possession, of the prospectus covering such Registrable
Securities that was in effect at the time of receipt of such
notice. If CanOxy shall have withdrawn or prematurely terminated
a registration statement filed under thisss.2.1 (whether pursuant
toss. 2.1(c) or as a result of any stop order, injunction or
other order or requirement of the Commission or any other
governmental agency or court), CanOxy shall not be considered to
have effected an effective Demand Registration for the purposes
of this Schedule until CanOxy shall have filed a new registration
statement covering the Registrable Securities covered by the
withdrawn registration statement and such registration statement
shall have been declared effective and shall not have been
withdrawn. If CanOxy shall give any notice of withdrawal or
postponement of a registration statement, CanOxy shall, at such
time as the Valid Business Reason that caused such withdrawal or
postponement no longer exists (but in no event later than 90 days
after the date of the withdrawal or postponement), use its best
efforts to effect the registration under the Securities Laws of
the Registrable Securities covered by the withdrawn or postponed
registration statement in accordance with thisss.2.1 (unless
Teachers' shall have withdrawn such request, in which case CanOxy
shall not be considered to have effected an effective
registration for the purposes of this Schedule).
2.2 "Piggyback" Registrations
(a) If CanOxy proposes to register any of its Common Shares under any of
the Securities Laws (other than Common Shares registered solely in
connection with a previously established employee benefit plan,
employee stock option plan, employee flow through share purchase plan,
dividend reinvestment plan, COPrS, take-over bid, tender offer,
reorganization or merger or a Demand Registration underss.2.1 of this
Schedule), so long as Teachers' has continuously since its acquisition
of the Teachers' Purchased Shares owned (directly or indirectly) at
least 5% of the outstanding Common Shares, CanOxy shall, subject
toss.2.2(b) and (d) use its best efforts to cause all such Registrable
Securities to be registered under the Securities Laws (with the
securities that CanOxy at the time proposes to register) to permit the
sale or other disposition by Teachers' (in accordance with the
intended method of distribution) of the Registrable Securities to be
so registered. No registration effected under thisss.2.2(a) shall
relieve CanOxy of its obligations to effect Demand Registrations). All
requests pursuant to thisss. 2.2 are referred to as "Piggyback
Registration Requests", and the registrations requested are referred
to as "Piggyback Registrations". If such registration refers to a
"bought deal", CanOxy shall consult with Teachers' as soon as is
practicable in advance of signing any agreement or commitment letter
in respect thereof, and Teachers' shall respond consistent with the
time periods typical for transactions of this nature.
(b) At any time, CanOxy may determine for any reason not to register or to
delay registration of such Common Shares. In such event, CanOxy shall
give written notice of such determination to Teachers' and CanOxy's
obligation to Teachers' to register any Registrable Securities in
connection with such registration shall terminate or be delayed for
the same period of delay, as the case may be (without prejudice to the
rights of Teachers' under ss. 2.1).
(c) Teachers' shall have the right to withdraw its Piggyback Registration
Request for inclusion of its Registrable Securities in any
registration statement pursuant to this ss. 2.2 by giving written
notice to CanOxy of its request to withdraw; provided, however, that
(i) such request to withdraw must be made in writing prior to the
execution of the underwriting agreement (or such other similar
agreement) with respect to such registration, and (ii) such withdrawal
shall be irrevocable and, after making such withdrawal, Teachers'
shall no longer have any right to include Registrable Securities in
the registration as to which such withdrawal was made.
(d) If any registration pursuant to this ss. 2.2 involves an underwritten
offering and the lead managing underwriter advises CanOxy that, in its
view, the number of securities requested to be included in that
registration exceeds the number (the "Orderly Sale Number") that can
be sold in an orderly manner in such registration within a price range
acceptable to CanOxy, CanOxy shall include in that registration:
(i) all Common Shares that CanOxy proposes to register for its own
account; and
(ii) that number of Registrable Securities (if any) that is equal to
the excess of the Orderly Sale Number over the number of Common
Shares that CanOxy proposes to register for its own account.
2.3 Registration Procedures
If and when CanOxy is required by the provisions of this Schedule to use
its best efforts to effect or cause the registration of any Registrable
Securities under the Securities Laws, CanOxy shall, subject to applicable law,
be required as expeditiously as possible to:
(a) prepare and file with the Commission (including under applicable "blue
sky" laws) and/or Canadian securities regulatory authorities, a
registration statement, prospectus and amendments and supplements
thereto on the appropriate form and in the appropriate languages of
the Commission and/or Canadian securities regulatory authorities for
the disposition of such Registrable Securities in accordance with the
intended method of disposition and to use its best efforts to cause
such registration statement to become effective under and pursuant to
the applicable Securities Laws. For the purposes ofss.2.1 and 2.2,
CanOxy shall not file any registration statement, prospectus or
amendment or supplement thereto to which Teachers' or the underwriters
of the offering (the "Underwriters"), if any, shall reasonably object;
(b) (i) cooperate in all reasonable respects with Teachers' and with its
respective directors, officers, employees, agents, counsel and
advisers (the "Representatives of Teachers'") and with the
Underwriters and their counsel in connection with each registration
proposed to be effected pursuant to ss.s 2.1 and 2.2 of this Schedule;
(ii) use its reasonable efforts to make available for consultation to
Teachers', the Representatives of Teachers', and the Underwriters
and their counsel, all such Persons (who are under the control or
direction of CanOxy) as any thereof may reasonably request;
(iii) provide (upon the terms of a confidentiality agreement
containing confidentiality provisions (but specifically excluding
any standstill provisions) substantially similar to those
contained in the Confidentiality Agreement) information about
CanOxy and its subsidiaries as may reasonably be requested to
assist Teachers' and the Underwriters, if any, to conduct their
due diligence investigations of CanOxy and its subsidiaries;
(iv) participate in such "due diligence" sessions in connection with
the Registration and in such "road show" presentations to
potential investors as may reasonably be requested; and
(v) make all such applications for and seek approval, relief or
listing from the Commission, Canadian Securities Commissions (as
applicable), the Toronto Stock Exchange (the "TSE"), or the
American Stock Exchange (the "AMEX") (or such other stock
exchange or quotation system upon which the Common Shares are
listed or quoted for trading) as may reasonably be necessary or
desirable in the opinions of Teachers' and CanOxy, acting
reasonably, in connection with the registration;
(c) promptly notify Teachers' and each managing underwriter, if any, of
the existence of any fact of which CanOxy becomes aware which results
in the registration statement, the prospectus related thereto, or any
document incorporated therein by reference containing an untrue
statement of a material fact or omitting to state a material fact
required to be stated therein or necessary to make any statement
therein not misleading, and CanOxy shall thereafter promptly prepare
and file in accordance with the Securities Laws an amendment or
supplement to such registration statement or prospectus which will
correct such statement or omissions;
(d) obtain an opinion from CanOxy's counsel and a "cold comfort" letter
from CanOxy independent public accountants in customary form and
covering such matters as are customarily covered by such opinions and
"cold comfort" letters delivered to the Underwriters in underwritten
public offerings, which opinion and letter shall be reasonably
satisfactory to the Underwriters, if any, and to Teachers' and furnish
to Teachers' and to the Underwriters, if any, a copy of such opinion
and letter addressed to Teachers' and the Underwriters;
(e) use its best efforts to obtain the withdrawal of any orders suspending
the effectiveness of the registration statement;
(f) comply and continue with all applicable continuous disclosure rules
and regulations of the Commission or any Canadian securities
regulatory authority;
(g) provide and cause to be maintained a transfer agent and registrar for
all such Registrable Securities covered by such registration statement
not later than the effective date of such registration statement;
(h) enter into such customary agreements (including, if applicable, an
underwriting agreement), including customary representations,
warranties and covenants and entering into provisions for
indemnification and contribution, and take such other actions as
Teachers' shall reasonably request in order to expedite or facilitate
the disposition of such Registrable Securities;
(i) deliver promptly to Teachers' and the Underwriters, if any, copies of
all correspondence between the Commission, any Canadian securities
regulatory authority and CanOxy, its counsel or auditors and all
memoranda relating to discussions with the Commission and any Canadian
securities regulatory authority and their respective staff with
respect to the registration statement;
(j) after the date of the applicable Demand Registration Request or
Piggyback Registration Request and prior to the filing of any document
which is to be incorporated by reference into the registration
statement or the prospectus relating thereto, provide copies of such
document to counsel to Teachers' and to the Underwriters, if any, and
make CanOxy's representatives reasonably available for discussion of
such document; and
(k) take all such other commercially reasonable actions as are necessary
or advisable in order to expedite or facilitate the disposition of
such Registrable Securities on a mutually agreed upon basis.
In no event shall CanOxy be required to qualify to do business as a foreign
corporation in any jurisdiction where it would not, but for the requirements of
this Schedule be required to be so qualified, to subject itself to taxation in
any such jurisdiction or to consent to general service of process in any such
jurisdiction.
CanOxy may require as a condition precedent to the CanOxy's obligations
under this ss. 2.3, that Teachers' furnish to CanOxy such information regarding
Teachers' and the distribution of such securities as CanOxy may from time to
time reasonably request, provided that such information shall be used only in
connection with such registration.
Teachers' agrees that upon receipt of any notice from CanOxy of the
happening of any event of the kind described in ss. 2.3(c), Teachers' will
discontinue Teachers' disposition of Registrable Securities pursuant to the
registration statement covering such Registrable Securities until Teachers'
receipt of the copies of a supplemented or amended prospectus and/or
registration statement, if CanOxy continues to proceed with the offering.
If any such registration statement or comparable statement under "blue sky"
laws refers to Teachers' by name or otherwise as the holder of any securities of
CanOxy, then Teachers' shall have the right to require (i) the insertion therein
of language, in form and substance satisfactory to Teachers', to the effect that
the holding by Teachers' of such securities is not to be construed as a
recommendation by Teachers' of the investment quality of CanOxy's securities
covered thereby and that such holding does not imply that Teachers' will assist
in meeting any future financial requirements of CanOxy, or (ii) in the event
that such reference to Teachers' by name or otherwise is not in the judgment of
CanOxy, as advised by counsel, required by applicable law, the deletion of the
reference to Teachers'.
2.4 Registration Expenses
Subject to applicable Law, all expenses with respect to any registration
pursuant to ss. 2.1 or 2.2 of this Schedule, whether or not such Registration
becomes effective, other than fees, commissions and expenses payable to
Underwriters, if any, pursuant to any Demand Registration or Teachers' pro rata
share of the fees, commissions and expenses payable to Underwriters pursuant to
any Piggyback Registration which shall be paid by Teachers', shall be paid by
CanOxy.
2.5 Limitations on Sale or Distribution of Other Securities
CanOxy hereby agrees that, if it shall previously have received a request
for registration pursuant to ss. 2.1 or ss. 2.2 of this Schedule, and if such
previous registration shall not have been withdrawn or abandoned, in the case of
ss. 2.1 at the request of Teachers', CanOxy shall not sell, transfer, or
otherwise dispose of any Common Shares, or any other equity security of CanOxy
or any security convertible into or exchangeable or exercisable for any equity
security of CanOxy (other than in connection with a registration regarding a
previously established employee benefit plan, employee stock option plan,
employee flow through share purchase plan, dividend reinvestment plan or COPrS
or a take-over bid, tender offer, merger or other acquisition) until the later
of (i) 90 days in the case of a Long Demand Registration or 20 days in the case
of a Short Demand Registration or in either case, such shorter period as will
terminate when all Registrable Securities covered by such registration statement
have been sold or withdrawn by Teachers', and (ii) if such registration relates
to an underwritten offering, such period as the Underwriters shall require, it
being acknowledged and agreed that Teachers' shall not object if CanOxy desires
to make submissions to such Underwriters as to the appropriate length of such
period; and CanOxy shall so provide in any registration rights agreements
hereafter entered into with respect to any of its securities.
2.6 No Required Sale
Nothing in this Schedule shall be deemed to create an independent
obligation on the part of Teachers' to sell any Registrable Securities pursuant
to any effective registration statement.
3. Underwritten Offerings
3.1 Requested Underwritten Offerings
If requested by the Underwriters for any underwritten offering by Teachers'
pursuant to a registration requested under ss. 2.1 of this Schedule, CanOxy
shall enter into a customary underwriting agreement with the Underwriters. Such
underwriting agreement shall be reasonably satisfactory in form and substance to
Teachers' and CanOxy and shall contain such representations and warranties by,
and such other agreements on the part of, CanOxy and such other terms as are
generally prevailing in agreements of that type, having due regard for the form
and extent of the offering then contemplated, including, without limitation,
customary indemnities and contribution agreements.
4. General
4.1 Nominees for Beneficial Owners
If Registrable Securities are held by a nominee for the beneficial owner
thereof, the beneficial owner thereof may, at its option, be treated as the
holder of such Registrable Securities for purposes of any request or other
action by Teachers' pursuant to this Schedule; provided however, that CanOxy
shall have received written assurances reasonably satisfactory to it of such
beneficial ownership.
4.2 No Inconsistent Agreements
CanOxy will not on or after the date of this agreement, enter into any
agreement with respect to its securities which is inconsistent with the rights
granted in this Schedule or otherwise conflicts with the provisions of this
Schedule, other than any lock-up agreement with the Underwriters in connection
with any registered offering effected hereunder, pursuant to which CanOxy shall
agree not to register for sale, and CanOxy shall agree not to sell or otherwise
dispose of, Common Shares or any securities convertible into or exercisable or
exchangeable for Common Shares for a period of not more than 90 days following
such registered offering.
4.3 Rule 144
CanOxy covenants that (a) so long as it remains subject to the reporting
provisions of the Exchange Act, it will timely file the reports required to be
filed by it under the U.S. Securities Act or the United States Securities
Exchange Act of 1934, as amended (the "Exchange Act") (including, without
limitation, the reports under ss.s 13 and 15(d) of the Exchange Act referred to
in subparagraph (c)(1) of Rule 144 under the U.S. Securities Act), and (b) will
take such further action as Teachers' may reasonably request, all to the extent
required from time to time to enable Teachers' to sell Registrable Securities
without registration under the U.S. Securities Act within the limitation of the
exemptions provided by (i) Rule 144 under the U.S. Securities Act, as such Rule
may be amended from time to time, or (ii) any similar rule or regulation
hereafter adopted by the Commission. Upon the request of Teachers', CanOxy will
deliver to Teachers' a written statement as to whether it has complied with such
requirements.
4.4 Notice of Shareholding
Teachers' covenants that it will notify CanOxy promptly after Teachers'
determines that the number of Common Shares then held by it constitutes less
than 10% or 5% of the outstanding Common Shares. For this purpose, Teachers' can
rely on the number of outstanding Common Shares stated in CanOxy's most recently
filed Form 10-K or 10-Q (or equivalent form then in effect) or on any more
current number of outstanding Common Shares provided by CanOxy to Teachers' in
writing; provided that the inadvertent failure by Teachers' to comply with the
first sentence of this ss. 4.4 shall not affect any right Teachers' may have
under ss. 2.2.