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EXHIBIT 2.4
VOTING AND EXCHANGE TRUST AGREEMENT
MEMORANDUM OF AGREEMENT made as of the 18th day of December, 1997,
AMONG:
PIONEER NATURAL RESOURCES COMPANY, a corporation incorporated
under the laws of the State of Delaware and having its head
and principal office at Irving, Texas (hereinafter referred to
as "US Co")
OF THE FIRST PART,
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PIONEER NATURAL RESOURCES (CANADA) LTD., a corporation
continued under the laws of the Province of Alberta and having
its head and principal office at Calgary, Alberta (hereinafter
referred to as "US Co Sub")
OF THE SECOND PART,
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MONTREAL TRUST COMPANY OF CANADA, a trust company existing
under the laws of Canada (hereinafter referred to as the
"Trustee")
OF THE THIRD PART.
WHEREAS pursuant to a combination agreement dated as of September 3,
1997, by and between US Co and Chauvco Resources Ltd. ("Chauvco") (such
agreement as it may be amended or restated is hereinafter referred to as the
"Combination Agreement"), the parties agreed that on the Effective Date (as
defined in the Combination Agreement), US Co and US Co Sub would execute and
deliver a Voting and Exchange Trust Agreement containing the terms and
conditions set forth in Exhibit C to the Combination Agreement together with
such other terms and conditions as may be agreed to by the parties to the
Combination Agreement acting reasonably;
AND WHEREAS pursuant to an arrangement (the "Arrangement") effected by
Articles of Arrangement dated December 18, 1997 filed pursuant to the Business
Corporations Act (Alberta), certain of the issued and outstanding common shares
of Chauvco ("Chauvco Common Shares") were
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exchanged for, among other things, issued and outstanding Exchangeable Shares
of US Co Sub (the "Exchangeable Shares");
AND WHEREAS the Articles of US Co Sub set forth the rights,
privileges, restrictions and conditions (collectively, the "Exchangeable Share
Provisions") attaching to the Exchangeable Shares;
AND WHEREAS US Co is to provide voting rights in US Co to each holder
(other than US Co and its Subsidiaries) from time to time of Exchangeable
Shares, such voting rights per Exchangeable Share to be equivalent to the
voting rights per share of US Co Common Stock (the "US Co Common Stock");
AND WHEREAS US Co is to grant to and in favour of the holders (other
than US Co and its Subsidiaries) from time to time of Exchangeable Shares the
right, in the circumstances set forth herein, to require US Co to purchase from
each such holder all or any part of the Exchangeable Shares held by the holder;
AND WHEREAS the parties desire to make appropriate provision and to
establish a procedure whereby voting rights in US Co shall be exercisable by
holders (other than US Co and its Subsidiaries) from time to time of
Exchangeable Shares by and through the Trustee, which will hold legal title to
one (1) share of US Co Special Preferred Voting Stock (the "US Co Special
Voting Stock") to which voting rights attach for the benefit of such holders
and whereby the rights to require US Co to purchase Exchangeable Shares from
the holders thereof (other than US Co and its Subsidiaries) shall be
exercisable by such holders from time to time of Exchangeable Shares by and
through the Trustee, which will hold legal title to such rights for the benefit
of such holders;
AND WHEREAS these recitals and any statements of fact in this
Agreement are made by US Co and US Co Sub and not by the Trustee;
NOW THEREFORE in consideration of the respective covenants and
agreements provided in this Agreement and for other good and valuable
consideration (the receipt and sufficiency of which are hereby acknowledged),
the parties agree as follows:
1. DEFINITIONS AND INTERPRETATION
(a) Definitions. In this Agreement, the following terms
shall have the following meanings:
"Aggregate Equivalent Vote Amount" means, with respect to any matter,
proposition or question on which holders of US Co Common Stock are
entitled to vote, consent or otherwise act, the product of (i) the
number of shares of Exchangeable Shares issued and outstanding and
held by Holders multiplied by (ii) the Equivalent Vote Amount.
"Arrangement" has the meaning attributed thereto in the recitals
hereto.
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"Automatic Exchange Rights" means the benefit of the obligation of US
Co to effect the automatic exchange of shares of US Co Common Stock
for Exchangeable Shares pursuant to Section 5(1) hereof.
"Board of Directors" means the Board of Directors of US Co Sub.
"Business Day" has the meaning attributed thereto in the Exchangeable
Share Provisions.
"Equivalent Vote Amount" means, with respect to any matter,
proposition or question on which holders of US Co Common Stock are
entitled to vote, consent or otherwise act, the number of votes to
which a holder of one share of US Co Common Stock is entitled with
respect to such matter, proposition or question.
"Exchange Right" has the meaning attributed thereto in Article 5
hereof.
"Exchangeable Share Consideration" has the meaning attributed thereto
in the Exchangeable Share Provisions.
"Exchangeable Share Price" has the meaning attributed thereto in the
Exchangeable Share Provisions.
"Exchangeable Share Provisions" has the meaning attributed thereto in
the recitals hereto.
"Exchangeable Shares" has the meaning attributed thereto in the
recitals hereto.
"Holder Votes" has the meaning attributed thereto in Section 4(b)
hereof.
"Holders" means the registered holders from time to time of
Exchangeable Shares, other than US Co and its Subsidiaries.
"Insolvency Event" means the institution by US Co Sub of any
proceeding to be adjudicated a bankrupt or insolvent or to be
dissolved or wound-up, or the consent of US Co Sub to the institution
of bankruptcy, insolvency, dissolution or winding-up proceedings
against it, or the filing of a petition, answer or consent seeking
dissolution or winding-up under any bankruptcy, insolvency or
analogous laws, including without limitation the Companies' Creditors'
Arrangement Act (Canada) and the Bankruptcy and Insolvency Act
(Canada), and the failure by US Co Sub to contest in good faith any
such proceedings commenced in respect of US Co Sub within 15 days of
becoming aware thereof, or the consent by US Co Sub to the filing of
any such petition or to the appointment of a receiver, or the making
by US Co Sub of a general assignment for the benefit of creditors, or
the admission in writing by US Co Sub of its inability to pay its
debts generally as they become due, or US Co Sub not being permitted,
pursuant to liquidity or 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 attributed thereto in the
Exchangeable Share Provisions.
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"Liquidation Event" has the meaning attributed thereto in subsection
5(l)(ii) hereof.
"Liquidation Event Effective Date" has the meaning attributed thereto
in subsection 5(l)(iii) hereof.
"List" has the meaning attributed thereto in Section 4(f) hereof.
"Officers' Certificate" means, with respect to US Co or US Co Sub, as
the case may be, a certificate signed by any two of the Chairman of
the Board, the Vice-Chairman of the Board, the President, any
Vice-President or any other senior officer of US Co or US Co Sub, as
the case may be.
"Person" includes an individual, partnership, corporation, company,
unincorporated syndicate or organization, trust, trustee, executor,
administrator and other legal representative.
"Plan of Arrangement" has the meaning attributed thereto in the
Exchangeable Share Provisions.
"Redemption Call Right" has the meaning attributed thereto in the
Exchangeable Share Provisions.
"Retracted Shares" has the meaning attributed thereto in Section 5(g)
hereof.
"Retraction Call Right" has the meaning attributed thereto in the
Exchangeable Share Provisions.
"Subsidiary" has the meaning attributed thereto in the Exchangeable
Share Provisions.
"Support Agreement" means that certain support agreement made as of
even date hereof between US Co Sub and US Co.
"Trust" means the trust created by this Agreement.
"Trust Estate" means the 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.
"Trustee" means Montreal Trust Company of Canada and, subject to the
provisions of Article 10 hereof, includes any successor trustee or
permitted assigns.
"US Co Common Stock" has the meaning attributed thereto in the
recitals hereto.
"US Co Consent" has the meaning attributed thereto in Section 4(b)
hereof.
"US Co Meeting" has the meaning attributed thereto in Section 4(b)
hereof.
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"US Co Special Voting Stock" has the meaning attributed thereto in the
recitals hereto.
"US Co Successor" has the meaning attributed thereto in subsection
11(a)(ii) hereof.
"Voting Rights" means the voting rights attached to the Voting Shares.
"Voting Share" means the one (1) share of US Co Special Voting Stock,
U.S. $0.01 par value, issued by US Co to and deposited with the
Trustee, which entitles the holder of record to a number of votes at
meetings of holders of US Co Common Stock equal to the Aggregate
Equivalent Vote Amount.
(b) Interpretation Not Affected by Headings, etc. The division of
this Agreement into articles, sections and paragraphs and the
insertion of headings are for convenience of reference only
and shall not affect the construction or interpretation of
this Agreement.
(c) Number, Gender, etc. Words importing the singular number only
shall include the plural and vice versa. Words importing the
use of any gender shall include all genders.
(d) Date for any Action. If any date on which any action is
required to be taken under this Agreement is not a Business
Day, such action shall be required to be taken on the next
succeeding Business Day.
2. PURPOSE OF AGREEMENT
The purpose of this Agreement is to create the Trust for the benefit
of the Holders, as herein provided. The Trustee will hold the 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 Holders as provided in this
Agreement.
3. VOTING SHARE
(a) Issuance and Ownership of the Voting Share. US Co hereby
issues to and deposits with the Trustee the 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 Holders and in
accordance with the provisions of this Agreement. US Co hereby
acknowledges receipt from the Trustee as the trustee for and
on behalf of the Holders of good and valuable consideration
(and the adequacy thereof) and $1 in hand paid for the
issuance of the Voting Share by US Co 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 Voting Share and shall be
entitled to exercise all of the rights and powers of an owner
with respect to the Voting Share, provided that the Trustee
shall:
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(i) hold the Voting Share and the legal title thereto as
trustee solely for the use and benefit of the Holders
in accordance with the provisions of this Agreement;
and
(ii) except as specifically authorized by this Agreement,
have no power or authority to sell, transfer, vote or
otherwise deal in or with the Voting Share and the
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.
(b) Legended Share Certificates. US Co Sub will cause each
certificate representing Exchangeable Shares to bear an
appropriate legend notifying the Holders of their right to
instruct the Trustee with respect to the exercise of the
Voting Rights with respect to the Exchangeable Shares held by
a Holder.
(c) Safe Keeping of Certificate. The certificate representing the
Voting Share shall at all times be held in safe keeping by the
Trustee or its agent.
4. EXERCISE OF VOTING RIGHTS
(a) Voting Rights. The Trustee, as the holder of record of the
Voting Share, shall be entitled to all of the Voting Rights,
including the right to consent to or to vote in person or by
proxy the Voting Share, on any matter, question or proposition
whatsoever that may properly come before the stockholders of
US Co at a US Co Meeting or in connection with a US Co Consent
(in each case, as hereinafter defined). The Voting Rights
shall be and remain vested in and exercised by the Trustee.
Subject to Section 7(o) hereof, the Trustee shall exercise the
Voting Rights only on the basis of instructions received
pursuant to this Article 4 from Holders entitled to instruct
the Trustee as to the voting thereof at the time at which a US
Co Consent is sought or a US Co Meeting is held. To the extent
that no instructions are received from a Holder with respect
to the Voting Rights to which such Holder is entitled, the
Trustee shall not exercise or permit the exercise of such
Holder's Vote.
(b) Number of Votes. With respect to all meetings of stockholders
of US Co at which holders of shares of US Co Common Stock are
entitled to vote (a "US Co Meeting") and with respect to all
written consents sought by US Co from its stockholders
including the holders of shares of US Co Common Stock (a "US
Co Consent"), each Holder 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 Holder on the
record date established by US Co or by applicable law for such
US Co Meeting or US Co Consent, as the case may be (the
"Holder Votes") in respect of each matter, question or
proposition to be voted on at such US Co Meeting or to be
consented to in connection with such US Co Consent.
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(c) Mailings to Shareholders. With respect to each US Co Meeting
and US Co Consent, the Trustee will mail or cause to be mailed
(or otherwise communicate in the same manner as US Co utilizes
in communications to holders of US Co Common Stock, subject to
the Trustee's ability to provide this method of communication
and upon being advised in writing of such method) to each of
the Holders named in the List on the same day as the initial
mailing or notice (or other communication) with respect
thereto is given by US Co to its stockholders:
(i) a copy of such notice, together with any proxy or
information statement and related materials to be
provided to stockholders of US Co;
(ii) a statement that such Holder is entitled to instruct
the Trustee as to the exercise of the Holder Votes
with respect to such US Co Meeting or US Co Consent,
as the case may be, or, pursuant to Section 4(g)
hereof, to attend such US Co Meeting and to exercise
personally the Holder Votes thereat;
(iii) 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:
(A) a proxy to such Holder or his designee to
exercise personally the Holder Votes; or
(B) a proxy to a designated agent or other
representative of the management of US Co to
exercise such Holder Votes;
(iv) a statement that if no such instructions are received
from the Holder, the Holder Votes to which such
Holder is entitled will not be exercised;
(v) a form of direction whereby the Holder may so direct
and instruct the Trustee as contemplated herein; and
(vi) a statement of (A) 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 US Co
Meeting shall not be later than the close of business
on the Business Day prior to such meeting, and (B)
the method for revoking or amending such
instructions.
The materials referred to above are to be provided by US Co to
the Trustee, but shall be subject to review and comment by the
Trustee.
For the purpose of determining Holder Votes to which a Holder
is entitled in respect of any such US Co Meeting or US Co
Consent, the number of Exchangeable Shares owned of record by
the Holder shall be determined at the close of business on the
record date established by US Co or by applicable law for
purposes of determining stockholders entitled to vote at such
US Co Meeting or to give written consent in connection with
such US Co Consent. US Co will notify the Trustee in writing
of
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any decision of the board of directors of US Co with respect
to the calling of any such US Co Meeting or the seeking of any
such US Co 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(c).
(d) Copies of Stockholder Information. US Co will deliver to the
Trustee copies of all proxy materials (including notices of US
Co Meetings but excluding proxies to vote shares of US Co
Common Stock), information statements, reports (including
without limitation all interim and annual financial
statements) and other written communications that are to be
distributed from time to time to holders of US Co Common Stock
in sufficient quantities and in sufficient time so as to
enable the Trustee to send those materials to each Holder at
the same time as such materials are first sent to holders of
US Co Common Stock. The Trustee will mail or otherwise send to
each Holder, at the expense of US Co, copies of all such
materials (and all materials specifically directed to the
Holders or to the Trustee for the benefit of the Holders by US
Co) received by the Trustee from US Co at the same time as
such materials are first sent to holders of US Co Common
Stock. The Trustee will make copies of all such materials
available for inspection by any Holder at the Trustee's
principal office in the cities of Calgary and Toronto.
(e) Other Materials. Immediately after receipt by US Co or any
stockholder of US Co of any material sent or given generally
to the holders of US Co Common Stock by or on behalf of a
third party, including without limitation dissident proxy and
information circulars (and related information and material)
and tender and exchange offer circulars (and related
information and material), US Co shall use its 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
Holders by such third party) to each Holder as soon as
possible thereafter. As soon as practicable after receipt
thereof, the Trustee will mail or otherwise send to each
Holder, at the expense of US Co, copies of all such materials
received by the Trustee from US Co. The Trustee will also make
copies of all such materials available for inspection by any
Holder at the Trustee's principal office in the cities of
Toronto and Calgary.
(f) List of Persons Entitled to Vote. US Co Sub shall, (i) prior
to each annual, general and special US Co Meeting or the
seeking of any US Co Consent and (ii) 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 Holders arranged in alphabetical order and
showing the number of Exchangeable Shares held of record by
each such Holder, in each case at the close of business on the
date specified by the Trustee in such request or, in the case
of a List prepared in connection with a US Co Meeting or a US
Co Consent, at the close of business on the record date
established by US Co or pursuant to applicable law for
determining the holders of US Co Common Stock entitled to
receive notice of and/or to vote at such US Co Meeting or to
give consent in connection with such US Co Consent. Each such
List shall be delivered to the Trustee promptly after receipt
by US Co Sub of such request or the
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record date for such meeting or seeking of consent, as the
case may be, and in any event within sufficient time as to
enable the Trustee to perform its obligations under this
Agreement. US Co agrees to give US Co Sub written notice (with
a copy to the Trustee) of the calling of any US Co Meeting or
the seeking of any US Co Consent together with the record
dates therefor, sufficiently prior to the date of the calling
of such meeting or seeking of such consent so as to enable US
Co Sub to perform its obligations under this Section 4(f).
(g) Entitlement to Direct Votes. Any Holder named in a List
prepared in connection with any US Co Meeting or any US Co
Consent will be entitled (i) to instruct the Trustee in the
manner described in Section 4(c) hereof with respect to the
exercise of the Holder Votes to which such Holder is entitled
or (ii) to attend such meeting and personally to exercise
thereat (or to exercise with respect to any written consent),
as the proxy of the Trustee, the Holder Votes to which such
Holder is entitled.
(h) Stockholder Proposals. The Trustee shall forthwith submit to
US Co any stockholder proposal (within the meaning of the
United States Securities Exchange Act of 1934) received by the
Trustee from a Holder. Such stockholder proposal may be
considered at any meeting of US Co at which the holders of US
Co Common Stock are entitled to submit stockholder proposals.
US Co agrees to accept all stockholder proposals submitted by
the Trustee that are received by US Co within the applicable
time limitation under the United States Securities Exchange
Act of 1934, provided that not more than one proposal is
submitted on behalf of any one Holder.
(i) Voting by Trustee, and Attendance of Trustee Representative,
at Meeting.
(i) In connection with each US Co Meeting and US Co
Consent, the Trustee shall exercise, either in person
or by proxy, in accordance with the instructions
received from a Holder pursuant to Section 4(c)
hereof, the Holder Votes as to which such Holder 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 Holder prior to the
time and date fixed by it for receipt of such
instructions in the notice given by the Trustee to
the Holder pursuant to Section 4(c) hereof.
(ii) The Trustee shall cause such representatives as are
empowered by it to sign and deliver, on behalf of the
Trustee, proxies for Voting Rights to attend each US
Co Meeting. Upon submission by a Holder (or its
designee) of identification satisfactory to the
Trustee's representatives, and at the Holder's
request, such representatives shall sign and deliver
to such Holder (or its designee) a proxy to exercise
personally the Holder Votes as to which such Holder
is otherwise entitled hereunder to direct the vote,
if such Holder either (A) has not previously given
the Trustee instructions pursuant to Section 4(c)
hereof in respect of such meeting, or (B) submits to
the Trustee's representatives written revocation of
any such previous instructions. At such meeting, the
Holder exercising such Holder Votes shall have the
same rights
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as the Trustee to speak at the meeting in respect of
any matter, question or proposition, to vote by way
of ballot at the meeting in respect of any matter,
question or proposition and to vote at such meeting
by way of a show of hands in respect of any matter,
question or proposition.
(j) Distribution of Written Materials. Any written materials to be
distributed by the Trustee to the Holders pursuant to this
Agreement shall be delivered or sent by mail (or otherwise
communicated in the same manner as US Co utilizes in
communications to holders of US Co Common Stock) to each
Holder at its address as shown on the books of US Co Sub. US
Co Sub shall provide or cause to be provided to the Trustee
for this purpose, on a timely basis and without charge or
other expense:
(A) current lists of the Holders; and
(B) upon the request of the Trustee, mailing
labels to enable the Trustee to carry out
its duties under this Agreement.
The materials referred to above are to be provided by US Co to
the Trustee, but shall be subject to review and comment by the
Trustee.
(k) Termination of Voting Right. Except as otherwise provided
herein or in the Exchangeable Share Provisions, all of the
rights of a Holder with respect to the Holder Votes
exercisable in respect of the Exchangeable Shares held by such
Holder, including the right to instruct the Trustee as to the
voting of or to vote personally such Holder Votes and
including the right to submit a stockholder proposal to the
Trustee in accordance with Section 4(h) hereof, shall be
deemed to be surrendered by the Holder to US Co and such
Holder Votes and the Voting Rights represented thereby shall
cease immediately upon the delivery by such Holder to the
Trustee of the certificates representing such Exchangeable
Shares in connection with the exercise by the Holder of the
Exchange Right or the occurrence of the automatic exchange of
Exchangeable Shares for shares of US Co Common Stock, as
specified in Article 5 hereof (unless in either case US Co
shall not have delivered the Exchangeable Share Consideration
deliverable in exchange therefor to the Trustee for delivery
to the Holders), 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 US Co Sub pursuant to Article 5
of the Exchangeable Share Provisions, or upon the purchase of
Exchangeable Shares from the holder thereof by US Co pursuant
to the exercise by US Co of the Retraction Call Right, the
Redemption Call Right or the Liquidation Call Right.
5. EXCHANGE RIGHT AND AUTOMATIC EXCHANGE
(a) Grant and Ownership of the Exchange Right. US Co hereby grants
to the Trustee as trustee for and on behalf of, and for the
use and benefit of, the Holders (i) the right (the "Exchange
Right"), upon the occurrence and during the continuance of an
Insolvency Event, to require US Co to purchase from each or
any Holder all or any
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part of the Exchangeable Shares held by such Holders, and (ii)
the Automatic Exchange Rights, all in accordance with the
provisions of this Agreement.
US Co hereby acknowledges receipt from the Trustee as trustee
for and on behalf of the Holders of good and valuable
consideration (and the adequacy thereof) for the grant of the
Exchange Right and the Automatic Exchange Rights by US Co 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:
(i) hold the Exchange Right and the Automatic Exchange
Rights and the legal title thereto as trustee solely
for the use and benefit of the Holders in accordance
with the provisions of this Agreement; and
(ii) 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 this Trust is created pursuant to
this Agreement.
(b) Legended Share Certificates. US Co Sub will cause each
certificate representing Exchangeable Shares to bear an
appropriate legend notifying the Holders of:
(i) their right to instruct the Trustee with respect to
the exercise of the Exchange Right in respect of the
Exchangeable Shares held by a Holder; and
(ii) the Automatic Exchange Rights.
(c) General Exercise of Exchange Right. The Exchange Right shall
be and remain vested in and exercised by the Trustee. Subject
to Section 7(o) hereof, the Trustee shall exercise the
Exchange Right only on the basis of instructions received
pursuant to this Article 5 from Holders entitled to instruct
the Trustee as to the exercise thereof To the extent that no
instructions are received from a Holder with respect to the
Exchange Right, the Trustee shall not exercise or permit the
exercise of the Exchange Right.
(d) Purchase Price. The purchase price payable by US Co for each
Exchangeable Share to be purchased by US Co under the Exchange
Right shall be an amount 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, US Co will 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 US Co issuing and delivering or causing
to be delivered to the Trustee, on behalf of the relevant
Holder,
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the Exchangeable Share Consideration representing the total
Exchangeable Share Price.
(e) Exercise Instructions. Subject to the terms and conditions
herein set forth, a Holder shall be entitled, upon the
occurrence and during the continuance of an Insolvency Event,
to 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 Holder on the books of US Co
Sub. To cause the exercise of the Exchange Right by the
Trustee, the Holder shall deliver to the Trustee, in person or
by certified or registered mail, at its principal offices in
Calgary, Alberta or Toronto, Ontario or at such other places
in Canada as the Trustee may from time to time designate by
written notice to the Holders, the certificates representing
the Exchangeable Shares which such Holder desires US Co to
purchase, duly endorsed in blank, and accompanied by such
other documents and instruments as may be required to effect a
transfer of Exchangeable Shares under applicable law and the
by-laws of US Co Sub and such additional documents and
instruments as the Trustee may reasonably require together
with (i) 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 (A) that the Holder
thereby instructs the Trustee to exercise the Exchange Right
so as to require US Co to purchase from the Holder the number
of Exchangeable Shares specified therein, (B) that such Holder
has good title to and owns all such Exchangeable Shares to be
acquired by US Co free and clear of all liens, claims and
encumbrances, (C) the names in which the certificates
representing US Co Common Stock issuable in connection with
the exercise of the Exchange Right are to be issued and (D)
the names and addresses of the persons to whom the
Exchangeable Share Consideration should be delivered and (ii)
payment (or evidence satisfactory to the Trustee, US Co Sub
and US Co of payment) of the taxes (if any) payable as
contemplated by Section 5(h) 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
US Co under the Exchange Right, a new certificate for the
balance of such Exchangeable Shares shall be issued to the
Holder at the expense of US Co Sub.
(f) Delivery of Exchangeable Share Consideration; Effect of
Exercise. Promptly after receipt of the certificates
representing the Exchangeable Shares which the Holder desires
US Co to purchase under the Exchange Right (together with such
documents and instruments of transfer and a duly completed
form of notice of exercise of the Exchange Right), duly
endorsed for transfer to US Co the Trustee shall notify US Co
and US Co Sub of its receipt of the same, which notice to US
Co and US Co Sub shall constitute exercise of the Exchange
Right by the Trustee on behalf of the Holder of such
Exchangeable Shares, and US Co shall immediately thereafter
deliver or cause to be delivered to the Trustee, for delivery
to the Holder of such Exchangeable Shares (or to such other
persons, if any, properly designated by such Holder), the
Exchangeable Share Consideration deliverable in connection
with the exercise of the Exchange Right; provided, however,
that no such delivery shall be made unless and until the
Holder requesting the same shall have paid (or provided
evidence satisfactory to the Trustee, US Co Sub and US Co of
the payment of) the taxes (if any) payable as contemplated by
Section 5(h) of this Agreement. Immediately upon
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the giving of notice by the Trustee to US Co and US Co Sub of
the exercise of the Exchange Right, as provided in this
Section 5(f), the closing of the transaction of purchase and
sale contemplated by the Exchange Right shall be deemed to
have occurred, and the Holder of such Exchangeable Shares
shall be deemed to have transferred to US Co all of its 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 US Co to the Trustee, for
delivery to such Holder (or to such other persons, if any,
properly designated by such Holder), within three Business
Days of the date of the giving of such notice by the Trustee,
in which case the rights of the Holder shall remain unaffected
until such Exchangeable Share Consideration is delivered by US
Co and any cheque included therein is paid. Concurrently with
such Holder ceasing to be a holder of Exchangeable Shares, the
Holder shall be considered and deemed for all purposes to be
the holder of the shares of US Co Common Stock delivered to it
pursuant to the Exchange Right.
(g) Exercise of Exchange Right Subsequent to Retraction. In the
event that a Holder has exercised its right under Article 6 of
the Exchangeable Share Provisions to require US Co Sub to
redeem any or all of the Exchangeable Shares held by the
Holder (the "Retracted Shares") and is notified by US Co Sub
pursuant to Section 6.6 of the Exchangeable Share Provisions
that US Co Sub will not be permitted as a result of liquidity
or solvency requirements of applicable law to redeem all such
Retracted Shares, subject to receipt by the Trustee of written
notice to that effect from US Co Sub and provided that US Co
shall not have exercised the Retraction Call Right with
respect to the Retracted Shares and that the Holder has not
revoked the retraction request delivered by the Holder to US
Co Sub pursuant to Section 6.1 of the Exchangeable Share
Provisions, the retraction request will constitute and will be
deemed to constitute notice from the Holder to the Trustee
instructing the Trustee to exercise the Exchange Right with
respect to those Retracted Shares which US Co Sub is unable to
redeem. In any such event, US Co Sub hereby agrees with the
Trustee and in favour of the Holder immediately to notify the
Trustee of such prohibition against US Co Sub redeeming all of
the Retracted Shares and immediately to forward or cause to be
forwarded to the Trustee all relevant materials delivered by
the Holder to US Co Sub or to the transfer agent of the
Exchangeable Shares (including without limitation a copy of
the retraction request delivered pursuant to Section 6.1 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 US Co Sub is not permitted to redeem and
will require US Co to purchase such shares in accordance with
the provisions of this Article 5.
(h) Stamp or Other Transfer Taxes. Upon any sale of Exchangeable
Shares to US Co pursuant to the Exchange Right or the
Automatic Exchange Rights, the share certificate or
certificates representing US Co Common Stock to be delivered
in connection with the payment of the total purchase price
therefor shall be issued in the
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name of the Holder of the Exchangeable Shares so sold or in
such names as such Holder may otherwise direct in writing
without charge to the holder of the Exchangeable Shares so
sold, provided, however, that such Holder (i) shall pay (and
neither US Co, US Co Sub nor the Trustee shall be required to
pay) any documentary, stamp, transfer or other similar taxes
that may be payable in respect of any transfer involved in the
issuance or delivery of such shares to a person other than
such Holder or (ii) shall have established to the satisfaction
of the Trustee, US Co and US Co Sub that such taxes, if any,
have been paid.
(i) Notice of Insolvency Event. Immediately upon the occurrence of
an Insolvency Event or any event which with the giving of
notice or the passage of time or both would be an Insolvency
Event US Co Sub and US Co shall give written notice thereof to
the Trustee. As soon as practicable after receiving notice
from US Co Sub and US Co or from any other Person of the
occurrence of an Insolvency Event, the Trustee will mail to
each Holder, at the expense of US Co, a notice of such
Insolvency Event in the form provided by US Co, which notice
shall contain a brief statement of the right of the Holders
with respect to the Exchange Right.
(j) Qualification of US Co Common Stock. US Co covenants that if
any shares of US Co Common Stock to be issued and delivered
pursuant to the Exchange Right or the Automatic Exchange
Rights require registration or qualification with or approval
of or the filing of document including any 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 or state law or regulation
or pursuant to the rules and regulations of any regulatory
authority or the fulfillment of any other legal requirement
(collectively, the "Applicable Laws") before such shares may
be issued and delivered by US Co to the initial holder thereof
(other than US Co Sub) or in order that such shares may be
freely traded thereafter (other than any restrictions on
transfer by reason of a holder being a "control person" of US
Co for purposes of Canadian federal or provincial securities
law or an "affiliate" of US Co or, prior to the date hereof,
of Chauvco for purposes of United States federal or state
securities law), US Co will in good faith expeditiously take
all such actions and do all such things as are necessary to
cause such shares of US Co Common Stock to be and remain duly
registered, qualified or approved. US Co represents and
warrants that it has in good faith taken all actions and done
all things as are necessary under Applicable Laws as they
exist on the date hereof to cause the shares of US Co Common
Stock to be issued and delivered pursuant to the Exchange
Right and the Automatic Exchange Rights and to be freely
tradeable thereafter (other than restrictions on transfer by
reason of a holder being a "control person" of US Co for the
purposes of Canadian federal and provincial securities law or
an "affiliate" of US Co or, prior to the date hereof, of
Chauvco for the purposes of United States federal or state
securities law). US Co will in good faith expeditiously take
all such actions and do all such things as are necessary to
cause all shares of US Co Common Stock 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 such shares are
listed, quoted or posted for trading at such time.
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(k) Reservation of Shares of US Co Common Stock. US Co hereby
represents, warrants and covenants that it has irrevocably
reserved for issuance and will at all times keep available,
free from pre-emptive and other rights, out of its authorized
and unissued capital stock such number of shares of US Co
Common Stock (i) as is equal to the sum of (A) the number of
Exchangeable Shares issued and outstanding from time to time
and (B) the number of Exchangeable Shares issuable upon the
exercise of all rights to acquire Exchangeable Shares
outstanding from time to time and (ii) as are now and may
hereafter be required to enable and permit US Co Sub and US Co
to meet their respective obligations hereunder, under the
Support Agreement, under the Exchangeable Share Provisions and
under any other security or commitment pursuant to the
Arrangement with respect to which US Co may now or hereafter
be required to issue shares of US Co Common Stock.
(l) Automatic Exchange on Liquidation of US Co.
(i) US Co will give the Trustee written notice of each of
the following events at the time set forth below:
(A) in the event of any determination by the
board of directors of US Co to institute
voluntary liquidation, dissolution or
winding-up proceedings with respect to US Co
or to effect any other distribution of
assets of US Co among its stockholders 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
(B) immediately, upon the earlier of (I) receipt
by US Co of notice of and (II) US Co
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 US
Co or to effect any other distribution of
assets of US Co among its stockholders for
the purpose of winding-up its affairs.
(ii) Immediately following receipt by the Trustee from US
Co of notice of any event (a "Liquidation Event")
contemplated by Section 5(l)(i) above, the Trustee
will give notice thereof to the Holders. Such notice
will be provided by US Co to the Trustee and shall
include a brief description of the automatic exchange
of Exchangeable Shares for shares of US Co Common
Stock provided for in Section 5(l)(iii) below.
(iii) In order that the Holders will be able to participate
on a PRO RATA basis with the holders of US Co Common
Stock in the distribution of assets of US Co 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 shares of US Co Common
Stock. To effect such automatic exchange, US
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Co shall be deemed to have purchased each
Exchangeable Share outstanding immediately prior to
the Liquidation Event Effective Time and held by
Holders, and each Holder shall be deemed to have sold
the Exchangeable Shares held by it at such time, for
a purchase price per share equal to the Exchangeable
Share Price applicable at such time. In connection
with such automatic exchange, US Co will provide to
the Trustee an Officers' Certificate setting forth
the calculation of the purchase price for each
Exchangeable Share.
(iv) The closing of the transaction of purchase and sale
contemplated by Section 5(l)(iii) above shall be
deemed to have occurred immediately prior to the
Liquidation Event Effective Time, and each Holder of
Exchangeable Shares shall be deemed to have
transferred to US Co all of the Holder's right, title
and interest in and to such Exchangeable Shares and
the related interest in the Trust Estate and shall
cease to be a holder of such Exchangeable Shares and
US Co shall deliver to the Holder the Exchangeable
Share Consideration deliverable upon the automatic
exchange of Exchangeable Shares. Concurrently with
such Holder ceasing to be a holder of Exchangeable
Shares, the Holder shall be considered and deemed for
all purposes to be the holder of the shares of US Co
Common Stock issued to it pursuant to the automatic
exchange of Exchangeable Shares for US Co Common
Stock and the certificates held by the Holder
previously representing the Exchangeable Shares
exchanged by the Holder with US Co pursuant to such
automatic exchange shall thereafter be deemed to
represent the shares of US Co Common Stock issued to
the Holder by US Co pursuant to such automatic
exchange. Upon the request of a Holder and the
surrender by the Holder of Exchangeable Share
certificates deemed to represent shares of US Co
Common Stock, duly endorsed in blank and accompanied
by such instruments of transfer as US Co may
reasonably require, US Co shall deliver or cause to
be delivered to the Holder certificates representing
the shares of US Co Common Stock of which the Holder
is the holder.
6. RESTRICTIONS ON ISSUANCE OF US CO SPECIAL VOTING STOCK
During the term of this Agreement, US Co will not issue any shares of
US Co Special Voting Stock in addition to the Voting Share.
7. CONCERNING THE TRUSTEE
(a) Powers and Duties of the Trustee. The rights, powers and
authorities of the Trustee under this Agreement, in its
capacity as trustee of the Trust, shall include:
(i) receipt and deposit of the Voting Share from US Co as
trustee for and on behalf of the Holders in
accordance with the provisions of this Agreement;
(ii) granting proxies and distributing materials to
Holders as provided in this Agreement;
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(xxx) voting the Holder Votes in accordance with the
provisions of this Agreement;
(iv) receiving the grant of the Exchange Right and the
Automatic Exchange Rights from US Co as trustee for
and on behalf of the Holders in accordance with the
provisions of this Agreement;
(v) 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
Holders Exchangeable Shares and other requisite
documents and distributing to such Holders the shares
of US Co Common Stock and cheques, if any, to which
such Holders are entitled upon the exercise of the
Exchange Right or pursuant to the Automatic Exchange
Rights, as the case may be;
(vi) holding title to the Trust Estate;
(vii) investing any monies forming, from time to time, a
part of the Trust Estate as provided in this
Agreement;
(viii) taking action at the direction of a Holder or Holders
to enforce the obligations of US Co under this
Agreement; and
(ix) taking such other actions and doing such other things
as are specifically provided in this Agreement.
In the exercise of such rights, powers and authorities the
Trustee shall have (and is granted) such incidental and
additional rights, powers 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 and authorities by the Trustee
shall be final, conclusive and binding upon all persons. For
greater certainty, the Trustee shall have only those duties as
are set out specifically in this Agreement.
The Trustee in exercising its rights, powers, duties and
authorities hereunder shall act honestly and in good faith
with a view to the best interests of the Holders 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 any 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
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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.
(b) No Conflict of Interest. The Trustee represents to US Co Sub
and US Co 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 a material conflict
of interest exists, either eliminate such material conflict of
interest or resign in the manner and with the effect specified
in Article 10 hereof. If, notwithstanding the foregoing
provisions of this Section 7(b), 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 7(b), any interested party may
apply to the Alberta Court of Queen's Bench for an order that
the Trustee be replaced as trustee hereunder.
(c) Dealings with Transfer Agents, Registrars, etc. US Co Sub and
US Co irrevocably authorize the Trustee, from time to time,
to:
(i) 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 US Co Common Stock; and
(ii) requisition, from time to time, (A) 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 (B) from the transfer agent of US Co Common
Stock, 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 in the
manner specified in Article 5 hereof.
US Co Sub and US Co irrevocably authorize their respective
registrars and transfer agents to comply with all such
requests. US Co 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, in each case pursuant
to Article 5 hereof.
(d) Books and Records. The Trustee shall keep available for
inspection by US Co and US Co Sub, at the Trustee's principal
office in Calgary, Alberta, correct and complete books and
records of account relating to the Trustee's actions under
this Agreement, including without limitation all information
relating to mailings and instructions to and from Holders and
all transactions pursuant to the Voting Rights, the Exchange
Right and the Automatic Exchange Rights for the term of this
Agreement. On or before March 31, 1998, and on or before March
31 in every year thereafter, so long as the Voting Share is on
deposit with the Trustee, the Trustee shall transmit to US
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Co and US Co Sub a brief report, dated as of the preceding
December 31, with respect to:
(i) the property and funds comprising the Trust Estate as
of that date;
(ii) the number of exercises of the Exchange Right, if
any, and the aggregate number of Exchangeable Shares
received by the Trustee on behalf of Holders in
consideration of the issue and delivery by US Co of
shares of US Co Common Stock in connection with the
Exchange Right, during the calendar year ended on
such date; and
(iii) all other actions taken by the Trustee in the
performance of its duties under this Agreement which
it had not previously reported.
(e) 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 and, in connection therewith,
may obtain the advice and assistance of such experts as the
Trustee may consider necessary or advisable. If requested by
the Trustee, US Co shall retain such experts for purposes of
providing such advice and assistance.
(f) 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 Holder upon such Holder
furnishing to the Trustee reasonable funding, security and
indemnity against the costs, expenses and liabilities which
may be incurred by the Trustee therein or thereby, provided
that no Holder shall be obligated to furnish to the Trustee
any such funding, security or indemnity in connection with the
exercise by the Trustee of any of its rights, duties, powers
and authorities with respect to the Voting Share pursuant to
Article 4 hereof, subject to Section 7(o) hereof, and with
respect to the Exchange Right pursuant to Article 5 hereof,
subject to Section 7(o) hereof, and with respect to the
Automatic Exchange Rights pursuant to Article 5 hereof.
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
funds, security and indemnified as aforesaid.
(g) Actions by Holders. No Holder 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 Holder has requested the Trustee
to take or institute such action, suit or proceeding and
furnished the Trustee with the funding, security and indemnity
referred to in Section 7(f) hereof and the Trustee shall have
failed to act within a reasonable time thereafter. In such
case, but not otherwise, the Holder shall be
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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 Holders 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 under the Voting Rights, the
Exchange Right 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 Holders.
(h) 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 lists, mailing labels,
notices, statutory declarations, certificates, opinions,
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 and such lists, mailing labels, notices,
statutory declarations, certificates, opinions, reports or
other papers or documents comply with the provisions of
Section 7(i) hereof, if applicable, and with any other
applicable provisions of this Agreement.
(i) Evidence and Authority to Trustee. US Co Sub and/or US Co
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 US Co Sub
and/or US Co or the Trustee under this Agreement or as a
result of any obligation imposed under this Agreement,
including, without limitation, 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 US Co Sub and/or US Co
forthwith if and when:
(i) 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 7(i); or
(ii) the Trustee, in the exercise of its rights, powers,
duties and authorities under this Agreement, gives US
Co Sub and/or US Co 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 Officers' Certificate of US
Co Sub and/or US Co 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, and except as otherwise specifically provided herein,
such evidence may consist of a report or opinion of any
solicitor, auditor, accountant, appraiser, valuer, engineer or
other expert or any other person whose qualifications give
authority to a statement made by him provided that
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if such report or opinion is furnished by a director, officer
or employee of US Co Sub and/or US Co it shall be in the form
of an Officers' Certificate or a statutory declaration.
Each statutory declaration, 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:
(iii) declaring that he has read and understands the
provisions of this Agreement relating to the
condition in question;
(iv) describing the nature and scope of the examination or
investigation upon which he based the statutory
declaration, certificate, statement or opinion; and
(v) declaring that he has made such examination or
investigation as he believes is necessary to enable
him to make the statements or give the opinions
contained or expressed therein.
(j) Experts, Advisors and Agents. The Trustee may:
(i) in relation to these presents act and rely on the
opinion or advice of or information obtained from or
prepared by any solicitor, auditor, accountant,
appraiser, valuer, engineer or other expert, whether
retained by the Trustee or by US Co Sub and/or US Co
or otherwise, and may employ such assistants as may
be necessary to the proper determination and
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
(ii) 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 determination
and discharge of its duties hereunder and in the
management of the Trust.
(k) Investment of Monies Held by Trustee. Unless otherwise
provided in this Agreement, any monies held by or on behalf of
the Truste 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 securities in which, under the laws of the
Province of Alberta trustees are authorized to invest trust
unit monies, provided that such securities are stated to
mature within two years after their purchase by the Trustee,
and the Trustee shall so invest such monies on the written
direction of US Co Sub. Pending the investment of any monies
as hereinbefore provided, such
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monies may be deposited in the name of the Trustee in any
chartered bank in Canada or, with the consent of US Co Sub, in
the deposit department of the Trustee or any other loan or
company authorized to accept deposits under the laws of Canada
or any province thereof at the rate of interest then current
on similar deposits.
(l) 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.
(m) 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 US Co Sub and/or US Co 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.
(n) Authority to Carry on Business. The Trustee represents to US
Co Sub and US Co 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 the Province of Alberta but if,
notwithstanding the provisions of this Section 7(n), 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 the
Province of Alberta, either become so authorized or resign in
the manner and with the effect specified in Article 10 hereof.
(o) Conflicting Claims. If conflicting claims or demands are made
or asserted with respect to any interest of any Holder 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 Holder 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 claim or demand. 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:
(i) 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; or
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(ii) all differences with respect to the Voting Rights,
Exchange Right or Automatic Exchange Right 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.
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 fully to indemnify it as between all conflicting
claims or demands.
(p) 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 Holders, subject to all the
terms and conditions herein set forth.
8. COMPENSATION
US Co and US Co Sub jointly and severally agree to pay to 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
but not limited to taxes, compensation paid to experts, agents 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 rights and
duties under this Agreement; provided that US Co and US Co Sub 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 negligence or willful
misconduct.
9. INDEMNIFICATION AND LIMITATION OF LIABILITY
(a) Indemnification of the Trustee. US Co and US Co Sub 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, costs, penalties, fines and reasonable
expenses (including reasonable expenses of the Trustee's legal
counsel on a solicitor and his own client basis) which,
without fraud, negligence, willful misconduct or bad faith on
the part of such Indemnified Party, may be paid, incurred or
suffered by the Indemnified Party by reason of 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 instructions delivered to the Trustee by
US Co or US Co Sub pursuant hereto. In no case shall US Co or
US Co Sub be liable under this indemnity for any claim against
any of the Indemnified Parties unless US Co and US Co Sub
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
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process giving information as to the nature and basis of the
claim. Subject to (ii), below, US Co and US Co Sub shall be
entitled to participate at their own expense in the defense
and, if US Co or US Co Sub 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 US
Co or US Co Sub, such authorization not to be unreasonably
withheld; or (ii) the named parties to any such suit include
both the Trustee and US Co or US Co Sub and the Trustee shall
have been advised by counsel acceptable to US Co or US Co Sub
that there may be one or more legal defenses available to the
Trustee that are different from or in addition to those
available to US Co or US Co Sub and that an actual or
potential conflict exists (in which case US Co and US Co Sub
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).
(b) 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,
negligence, willful misconduct or bad faith on the part of the
Trustee.
10. CHANGE OF TRUSTEE
(a) Resignation. The Trustee, or any trustee hereafter appointed,
may at any time resign by giving written notice of such
resignation to US Co and US Co Sub specifying the date on
which it desires to resign, provided that such notice shall
never be given less than 60 days before such desired
resignation date unless US Co and US Co Sub 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,
US Co and US Co Sub shall promptly appoint a successor trustee
by written instrument in duplicate, one copy of which shall be
delivered to the resigning trustee and one copy to the
successor trustee. Failing acceptance by a successor trustee,
a successor trustee may be appointed by an order of the
Alberta Court of Queen's Bench upon application of one or more
of the parties hereto.
(b) Removal. The Trustee, or any Trustee hereafter appointed, may
be removed with or without cause, at any time on 60 days'
prior notice by written instrument executed by US Co and US Co
Sub, in duplicate, one copy of which shall be delivered to the
trustee so removed and one copy to the successor trustee,
provided that, in connection with such removal, provision is
made for a replacement trustee similar to that contemplated in
Section 10(a).
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(c) Successor Trustee. Any successor trustee appointed as provided
under this Agreement shall execute, acknowledge and deliver to
US Co and US Co Sub 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 like effect as if originally named as trustee
in this Agreement. However, on the written request of US Co
and US Co Sub 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, US Co, US Co Sub 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.
(d) Notice of Successor Trustee. Upon acceptance of appointment by
a successor trustee as provided herein, US Co and US Co Sub
shall cause to be mailed notice of the succession of such
trustee hereunder to each Holder specified in a List. If US Co
or US Co Sub 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 US Co and US Co Sub.
11. US CO SUCCESSORS
(a) Certain Requirements in Respect of Combination, etc. US Co
shall not enter into any transaction (whether by way of
reconstruction, reorganization, consolidation, merger,
transfer, sale, lease or otherwise) whereby all or
substantially all of its undertaking, property and assets
would become the property of any other Person or, in the case
of a merger, of the continuing corporation resulting therefrom
unless:
(i) such other Person or continuing corporation (the "US
Co Successor"), by operation of law, becomes, without
further action, bound by the terms and provisions of
this Agreement or, if not so bound, executes, prior
to or contemporaneously with the consummation of such
transaction an agreement supplemental hereto and such
other instruments (if any) as are satisfactory to the
Trustee and in the opinion of legal counsel to the
Trustee are necessary or advisable to evidence the
assumption by the US Co Successor of liability for
all monies payable and property deliverable hereunder
and the covenant of such US Co 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 US Co under this Agreement; and
(ii) such transaction shall, to the satisfaction of the
Trustee and in the opinion of legal counsel to the
Trustee, be upon such terms 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 Holders hereunder.
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(b) Vesting of Powers in Successor. Whenever the conditions of
Section 11(a) hereof have been duly observed and performed,
the Trustee, if required, by Section 11(a) hereof, the US Co
Successor and US Co Sub shall execute and deliver the
supplemental agreement provided for in Article 12 hereof and
thereupon the US Co Successor shall possess and from time to
time may exercise each and every right and power of US Co
under this Agreement in the name of US Co 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 US Co or
any officers of US Co may be done and performed with like
force and effect by the directors or officers of such US Co
Successor.
(c) Wholly-Owned Subsidiaries. Nothing herein shall be construed
as preventing the amalgamation or merger of any wholly-owned
subsidiary of US Co with or into US Co or the winding-up,
liquidation or dissolution of any wholly-owned subsidiary of
US Co provided that all of the assets of such subsidiary are
transferred to US Co or another wholly-owned subsidiary of US
Co, and any such transactions are expressly permitted by this
Article 11.
12. AMENDMENTS AND SUPPLEMENTAL AGREEMENTS
(a) Amendments, Modifications, etc. This Agreement may not be
amended or modified except by an agreement in writing executed
by US Co Sub, US Co and the Trustee and approved by the
Holders in accordance with Section 9.2 of the Exchangeable
Share Provisions.
(b) Ministerial Amendments. Notwithstanding the provisions of
Section 12(a) hereof, the parties to that agreement may in
writing, at any time and from time to time, without the
approval of the Holders, amend or modify this Agreement for
the purposes of;
(i) adding to the covenants of any or all of the parties
hereto for the protection of the Holders hereunder;
(ii) 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 opinion of the board of directors of
each of US Co and US Co Sub and in the opinion of the
Trustee and its counsel having in mind the best
interests of the Holders as a whole, it may be
expedient to make, provided that such boards of
directors and the Trustee and its counsel shall be of
the opinion that such amendments and modifications
will not be prejudicial to the interests of the
Holders as a whole; or
(iii) making such changes or corrections which, on the
advice of counsel to US Co Sub, US Co and the Truste,
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 and its counsel and the
board of directors of each of US Co Sub and US Co
shall be
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of the opinion that such changes or corrections will
not be prejudicial to the interests of the Holders as
a whole.
(c) Meeting to Consider Amendments. US Co Sub, at the request of
US Co, shall call a meeting or meetings of the Holders for the
purpose of considering any proposed amendment or modification
requiring approval pursuant hereto. Any such meeting or
meetings shall be called and held in accordance with the
by-laws of US Co Sub, the Exchangeable Share Provisions and
all applicable laws.
(d) Changes in Capital of US Co and US Co Sub. At all times after
the occurrence of any event effected pursuant to Section 2(g)
or Section 2(h) of the Support Agreement, as a result of which
either US Co Common Stock or the Exchangeable Shares or both
are in any way changed, this Agreement shall forthwith be
amended and modified as necessary in order that it shall apply
with full force and effect, mutatis mutandis, to all new
securities into which US Co Common Stock or the Exchangeable
Shares or both are so changed and the parties hereto shall
execute and deliver a supplemental agreement giving effect to
and evidencing such necessary amendments and modifications.
(e) Execution of Supplemental 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 US Co Sub (when authorized by a
resolution of its Board of Directors), US Co (when authorized
by a resolution of its board of directors) 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, agreements or other instruments
supplemental hereto, which thereafter shall form part hereof,
for any one or more of the following purposes:
(i) evidencing the succession of any US Co Successors to
US Co and the covenants of and obligations assumed by
each such US Co Successors in accordance with the
provisions of Article 11, and the successor of any
successor trustee in accordance with the provisions
of Article 10;
(ii) 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 and its counsel, will not be prejudicial
to the interests of the Holders as a whole 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
US Co, US Co Sub, the Trustee or this Agreement; and
(iii) for any other purposes not inconsistent with the
provisions of this Agreement, including without
limitation to make or evidence any amendment or
modification to this Agreement as contemplated
hereby, provided that, in the opinion of the Trustee
and its counsel, the rights of the Trustee and the
Holders as a whole will not be prejudiced thereby.
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13. TERMINATION
(a) Term. The Trust created by this Agreement shall continue until
the earliest to occur of the following events:
(i) no outstanding Exchangeable Shares are held by a
Holder;
(ii) each of US Co Sub and US Co elects in writing to
terminate the Trust and such termination is approved
by the Holders of the Exchangeable Shares in
accordance with Section 9.2 of the Exchangeable Share
Provisions; and
(iii) twenty-one (21) years after the death of the last
survivor of the descendants of His Majesty King
Xxxxxx VI of the United Kingdom of Great Britain and
Northern Ireland living on the date of the creation
of the Trust.
(b) 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 Holder; provided,
however, that the provisions of Articles 8 and 9 hereof shall
survive any such termination of this Agreement.
14. GENERAL
(a) Severability. If any provision of this Agreement is held to be
invalid, illegal or unenforceable, the validity, legality or
enforceability of the remainder of this Agreement shall not in
any way be affected or impaired thereby and the agreement
shall be carried out as nearly as possible in accordance with
its original terms and conditions.
(b) Inurement. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective
successors and permitted assigns and to the benefit of the
Holders.
(c) Notices to Parties. All notices and other communications
between the parties hereunder shall be in writing and shall be
deemed to have been given if delivered personally or by
confirmed telecopy to the parties at the following addresses
(or at such other address for such party as shall be specified
in like notice):
(i) if to US Co at:
Pioneer Natural Resources Company
0000 Xxxxxxxx Xxxxxx Xxxx
0000 X. X'Xxxxxx Xxxx.
Xxxxxx, Xxxxx 00000-0000
Attention: President
Telecopy: (000) 000-0000
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(ii) if to US Co Sub at:
Pioneer Natural Resources (Canada) Ltd.
0000, 000 - 0xx Xxxxxx X.X.
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: President
Telecopy: (000) 000-0000
(iii) if to the Trustee at:
if by mail or delivery:
Montreal Trust Company of Canada
000, 000 - 0xx Xxxxxx X.X.
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: Xxxxxxxx Xxxxxxx
Telecopy: (000) 000-0000
Any notice or other communication given personally shall be
deemed to have been given and received upon delivery thereof
and if given by telecopy shall be deemed to have been given
and received on the date of receipt thereof unless such day is
not a Business Day in which case it shall be deemed to have
been given and received upon the immediately following
Business Day.
(d) Notice of Holders. Any and all notices to be given and any
documents to be sent to any Holders may be given or sent to
the address of such Holder shown on the register of Holders of
Exchangeable Shares in any manner permitted by the
Exchangeable Share Provisions and shall be deemed to be
received (if given or sent in such manner) at the time
specified in such Exchangeable Share Provisions, the
provisions of which the Exchangeable Share Provisions shall
apply mutatis mutandis to notices or documents as aforesaid
sent to such Holders.
(e) Risk of Payments by Post. Whenever payments are to be made or
documents are to be sent to any Holder by the Trustee, by US
Co Sub or by US Co or by such Holder to the Trustee or to US
Co or US Co Sub, the making of such payment or sending of such
document sent through the post shall be at the risk of US Co
Sub or US Co, in the case of payments made or documents sent
by the Trustee or US Co Sub or US Co, and the Holder, in the
case of payments made or documents sent by the Holder.
(f) Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed an original, but all of which
taken together shall constitute one and the same instrument.
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(g) Jurisdiction. This Agreement shall be construed and enforced
in accordance with the laws of the Province of Alberta and the
laws of Canada applicable therein.
(h) Attornment. US Co agrees that any action or proceeding arising
out of or relating to this Agreement may be instituted in the
courts of Alberta, waives any objection which it may have now
or hereafter to the venue of any such action or proceeding,
irrevocably submits to the jurisdiction of the said courts in
any such action or proceeding, agrees to be bound by any
judgment of the said courts and agrees not to seek, and hereby
waives, any review of the merits of any such judgment by the
courts of any other jurisdiction and hereby appoints US Co Sub
at its registered office in the Province of Alberta as US Co's
attorney for service of process.
IN WITNESS WHEREOF, the parties hereby have caused this Agreement to
be duly executed as of the date first above written.
PIONEER NATURAL
RESOURCES COMPANY
Per:
------------------------------------
Per:
------------------------------------
PIONEER NATURAL RESOURCES (CANADA) LTD.
Per:
------------------------------------
Per:
------------------------------------
MONTREAL TRUST COMPANY
OF CANADA
Per:
------------------------------------
Per:
------------------------------------
